What is Bitcoin?

Bitcoin is the first decentralized digital currency, created in 2009 by the pseudonymous Satoshi Nakamoto, operating without a central bank or single administrator. Its supply is mathematically capped at 21 million coins — a hard limit enforced by protocol code that no single party can override. That fixed scarcity, combined with proof-of-work security, is what distinguishes it from every government-issued currency and from most competing cryptocurrencies.

Bitcoin's security model relies on proof-of-work (PoW) mining: miners compete to solve SHA-256 computational puzzles, and the longest valid chain wins. This makes rewriting history astronomically expensive at scale — an attacker would need to outpace the entire global hash rate, which has grown to exahash-per-second levels. Transactions settle in roughly 10-minute blocks, with most exchanges requiring 3–6 confirmations for meaningful finality. The Lightning Network, a layer-2 payment channel protocol, enables near-instant micropayments off-chain, addressing Bitcoin's limited base-layer throughput of roughly 7 transactions per second.

The core criticism of Bitcoin is energy intensity: PoW mining consumes electricity comparable to mid-sized countries, and the mix of renewable versus fossil-fuel power varies widely by mining region. A second structural risk is miner revenue post-halving — block rewards halve approximately every four years, and the long-term security model assumes transaction fees eventually replace subsidies. Whether fee revenue alone can sustain sufficient miner participation is an open, unresolved question in Bitcoin's long-term design.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.