Bitcoin (
abbreviation: BTC;
sign
A sign is an Physical object, object, quality (philosophy), quality, event, or Non-physical entity, entity whose presence or occurrence indicates the probable presence or occurrence of something else. A natural sign bears a causal relation to ...
: ₿) is a decentralized
digital currency
Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital ...
that can be transferred on the peer-to-peer
bitcoin network
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally-signed messages to the network using bitcoin cryptocurrenc ...
.
Bitcoin transactions are verified by network
nodes
In general, a node is a localized swelling (a "knot") or a point of intersection (a vertex).
Node may refer to:
In mathematics
*Vertex (graph theory), a vertex in a mathematical graph
*Vertex (geometry), a point where two or more curves, lines, ...
through
cryptography
Cryptography, or cryptology (from grc, , translit=kryptós "hidden, secret"; and ''graphein'', "to write", or ''-logia'', "study", respectively), is the practice and study of techniques for secure communication in the presence of adve ...
and recorded in a public
distributed ledger
A distributed ledger (also called a shared ledger or distributed ledger technology or DLT) is the consensus of replicated, shared, and synchronized digital data that is geographically spread (distributed) across many sites, countries, or institutio ...
called a
blockchain
A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, ...
. The
cryptocurrency
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It ...
was invented in 2008 by an unknown person or group of people using the name
Satoshi Nakamoto
Satoshi Nakamoto is the name used by the presumed pseudonymous person or persons who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. As part of the implementation, Nakam ...
.
The currency began use in 2009,
when its implementation was released as
open-source software
Open-source software (OSS) is computer software that is released under a license in which the copyright holder grants users the rights to use, study, change, and distribute the software and its source code to anyone and for any purpose. Ope ...
.
The word "''bitcoin''" was defined in a
white paper
A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. A white pape ...
published on October 31, 2008.
It is a
compound
Compound may refer to:
Architecture and built environments
* Compound (enclosure), a cluster of buildings having a shared purpose, usually inside a fence or wall
** Compound (fortification), a version of the above fortified with defensive struct ...
of the words ''
bit
The bit is the most basic unit of information in computing and digital communications. The name is a portmanteau of binary digit. The bit represents a logical state with one of two possible values. These values are most commonly represented a ...
'' and ''
coin
A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in orde ...
''.
The legality of bitcoin
varies by region. Nine countries have fully banned bitcoin use, while a further fifteen have implicitly banned it. A few governments have used bitcoin in some capacity.
El Salvador has adopted Bitcoin as legal tender, although use by merchants remains low.
Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian invas ...
has accepted cryptocurrency donations to fund the resistance to the
2022 Russian invasion
On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has resulted in tens of thousands of deaths on both sides. It has caused Europe's largest refugee crisis since World War II. An ...
.
Iran
Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkm ...
has used bitcoin to bypass
sanctions
A sanction may be either a permission or a restriction, depending upon context, as the word is an auto-antonym.
Examples of sanctions include:
Government and law
* Sanctions (law), penalties imposed by courts
* Economic sanctions, typically a b ...
.
Bitcoin has been described as an
economic bubble
An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be ...
by at least eight recipients of the
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
.
The
environmental impact of bitcoin
One environmental impact of Bitcoin is that it worsens climate change. This is because bitcoins are made using electricity partially generated by gas and coal-fired power plants. When burned, coal and natural gas emit greenhouse gases, which he ...
is significant. Its
proof-of-work
Proof of work (PoW) is a form of cryptographic proof in which one party (the ''prover'') proves to others (the ''verifiers'') that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this exp ...
algorithm for
bitcoin mining
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally-signed messages to the network using bitcoin cryptocurrency ...
is designed to be computationally difficult, which requires the consumption of increasing quantities of electricity, the generation of which has contributed to
climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
. According to the
University of Cambridge
, mottoeng = Literal: From here, light and sacred draughts.
Non literal: From this place, we gain enlightenment and precious knowledge.
, established =
, other_name = The Chancellor, Masters and Schola ...
, bitcoin has emitted an estimated 200 million metric tonnes of carbon dioxide since its launch.
Design
Units and divisibility
The
unit of account
In economics, unit of account is one of the money functions. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of rela ...
of the bitcoin system is the ''bitcoin''.
Currency code
ISO 4217 is a standard published by the International Organization for Standardization (ISO) that defines alpha codes and numeric codes for the representation of currencies and provides information about the relationships between individual cu ...
s for representing bitcoin are BTC and XBT.
Its
Unicode
Unicode, formally The Unicode Standard,The formal version reference is is an information technology standard for the consistent encoding, representation, and handling of text expressed in most of the world's writing systems. The standard, ...
character is ₿.
One bitcoin is divisible to eight decimal places.
Units for smaller amounts of bitcoin are the millibitcoin (mBTC), equal to bitcoin, and the satoshi (sat), which is the smallest possible division, and named in homage to bitcoin's creator, representing (one hundred millionth) bitcoin.
100,000 satoshis are one mBTC.
Blockchain

The bitcoin
blockchain
A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, ...
is a public
ledger
A ledger is a book or collection of accounts in which account transactions are recorded. Each account has an opening or carry-forward balance, and would record each transaction as either a debit or credit in separate columns, and the ending o ...
that records bitcoin transactions. It is implemented as a chain of ''blocks'', each block containing a
cryptographic hash
A cryptographic hash function (CHF) is a hash algorithm (a map of an arbitrary binary string to a binary string with fixed size of n bits) that has special properties desirable for cryptography:
* the probability of a particular n-bit output ...
of the previous block up to the genesis block in the chain. A
network
Network, networking and networked may refer to:
Science and technology
* Network theory, the study of graphs as a representation of relations between discrete objects
* Network science, an academic field that studies complex networks
Mathematics ...
of communicating nodes running bitcoin software maintains the blockchain.
Transactions of the form ''payer X sends Y bitcoins to payee Z'' are
broadcast
Broadcasting is the distribution (business), distribution of sound, audio or video content to a dispersed audience via any electronic medium (communication), mass communications medium, but typically one using the electromagnetic spectrum (radio ...
to this network using readily available software applications.
Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. To achieve independent verification of the chain of ownership, each network node stores its own copy of the blockchain.
At varying intervals of time averaging to every 10 minutes, a new group of accepted transactions, called a block, is created, added to the blockchain, and quickly published to all nodes, without requiring central oversight. This allows bitcoin software to determine when a particular bitcoin was spent, which is needed to prevent
double-spending
Double-spending is a fundamental flaw in a digital cash protocol in which the same single digital token can be spent more than once. Due to the nature of information space, in comparison to physical space (as in: valuable physical resources), a ...
. A conventional ledger records the transfers of actual
bills or
promissory note
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
s that exist apart from it, but the blockchain is the only place where bitcoins can be said to exist in the form of
unspent outputs of transactions
In cryptocurrencies, an unspent transaction output (UTXO) represents some amount of digital currency which has been authorized by one account to be spent by another. UTXOs use public key cryptography to identify and transfer ownership between holde ...
.
Individual blocks, public addresses, and transactions within blocks can be examined using a blockchain explorer.
Transactions
Transactions are defined using a
Forth
Forth or FORTH may refer to:
Arts and entertainment
* ''forth'' magazine, an Internet magazine
* ''Forth'' (album), by The Verve, 2008
* ''Forth'', a 2011 album by Proto-Kaw
* Radio Forth, a group of independent local radio stations in Scotla ...
-like scripting language. Transactions consist of one or more ''inputs'' and one or more ''outputs''. When a user sends bitcoins, the user designates each address and the amount of bitcoin being sent to that address in an output. To prevent double spending, each input must refer to a previous unspent output in the blockchain.
The use of multiple inputs corresponds to the use of multiple coins in a cash transaction. Since transactions can have multiple outputs, users can send bitcoins to multiple recipients in one transaction. As in a cash transaction, the sum of inputs (coins used to pay) can exceed the intended sum of payments. In such a case, an additional output is used, returning the change back to the payer.
Any input ''satoshis'' not accounted for in the transaction outputs become the transaction fee.
Though transaction fees are optional, miners can choose which transactions to process and prioritize those that pay higher fees.
Miners may choose transactions based on the fee paid relative to their storage size, not the absolute amount of money paid as a fee. These fees are generally measured in ''satoshis per byte (sat/b)''. The size of transactions is dependent on the number of inputs used to create the transaction and the number of outputs.
The blocks in the blockchain were originally limited to 32
megabyte
The megabyte is a multiple of the unit byte for digital information. Its recommended unit symbol is MB. The unit prefix ''mega'' is a multiplier of (106) in the International System of Units (SI). Therefore, one megabyte is one million bytes o ...
s in size. The block size limit of one megabyte was introduced by Satoshi Nakamoto in 2010. Eventually, the block size limit of one megabyte created
problems
A problem is a difficulty which may be resolved by problem solving.
Problem(s) or The Problem may also refer to:
People
* Problem (rapper), (born 1985) American rapper Books
* ''Problems'' (Aristotle), an Aristotelian (or pseudo-Aristotelian) co ...
for transaction processing, such as increasing transaction fees and delayed processing of transactions.
Andreas Antonopoulos
Andreas M. Antonopoulos (born 1972 in London) is a British-Greek Bitcoin advocate, tech entrepreneur, and author. He is a host on the ''Speaking of Bitcoin'' podcast (formerly called ''Let's Talk Bitcoin!'') and a teaching fellow for the M.Sc. ...
has stated
Lightning Network
The Lightning Network (LN) is a "layer 2" payment protocol layered on top of Bitcoin (and other blockchains and cryptocurrencies). It is intended to enable fast transactions among participating nodes and has been proposed as a solution to the b ...
is a potential scaling solution and referred to lightning as a second-layer routing network.
Ownership

In the blockchain, bitcoins are registered to bitcoin addresses. Creating a bitcoin address requires nothing more than picking a random valid private key and computing the corresponding bitcoin address. This computation can be done in a split second. But the reverse, computing the private key of a given bitcoin address, is practically unfeasible.
Users can tell others or make public a bitcoin address without compromising its corresponding private key. Moreover, the number of valid private keys is so vast that it is extremely unlikely someone will compute a key pair that is already in use and has funds. The vast number of valid private keys makes it unfeasible that brute force could be used to compromise a private key. To be able to spend their bitcoins, the owner must know the corresponding
private key
Public-key cryptography, or asymmetric cryptography, is the field of cryptographic systems that use pairs of related keys. Each key pair consists of a public key and a corresponding private key. Key pairs are generated with cryptographic alg ...
and
digitally sign the transaction. The network verifies the signature using the
public key
Public-key cryptography, or asymmetric cryptography, is the field of cryptographic systems that use pairs of related keys. Each key pair consists of a public key and a corresponding private key. Key pairs are generated with cryptographic a ...
; the private key is never revealed.
If the private key is lost, the
bitcoin network
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally-signed messages to the network using bitcoin cryptocurrenc ...
will not recognize any other evidence of ownership;
the coins are then unusable, and effectively lost. For example, in 2013 one user claimed to have lost ₿7,500, worth $7.5 million at the time, when he accidentally discarded a hard drive containing his private key. About 20% of all bitcoins are believed to be lost—they would have had a market value of about $20 billion at July 2018 prices.
To ensure the security of bitcoins, the private key must be kept secret.
If the private key is revealed to a third party, e.g. through a
data breach
A data breach is a security violation, in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an individual unauthorized to do so. Other terms are unintentional information disclosure, data leak, info ...
, the third party can use it to
steal any associated bitcoins.
, around ₿980,000 have been stolen from
cryptocurrency exchange
A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may acce ...
s.
Regarding ownership distribution, as of 16 March 2018, 0.5% of bitcoin wallets own 87% of all bitcoins ever mined.
Mining

''Mining'' is a record-keeping service done through the use of computer
processing power
In computing, computer performance is the amount of useful work accomplished by a computer system
A computer is a machine that can be programmed to carry out sequences of arithmetic or logical operations ( computation) automatically. Moder ...
. Miners keep the blockchain consistent, complete, and unalterable by repeatedly grouping newly broadcast transactions into a ''block'', which is then broadcast to the network and verified by recipient nodes.
Each block contains a
SHA-256
SHA-2 (Secure Hash Algorithm 2) is a set of cryptographic hash functions designed by the United States National Security Agency (NSA) and first published in 2001. They are built using the Merkle–Damgård construction, from a one-way compressi ...
cryptographic hash
A cryptographic hash function (CHF) is a hash algorithm (a map of an arbitrary binary string to a binary string with fixed size of n bits) that has special properties desirable for cryptography:
* the probability of a particular n-bit output ...
of the previous block,
thus linking it to the previous block and giving the blockchain its name.
To be accepted by the rest of the network, a new block must contain a ''
proof-of-work
Proof of work (PoW) is a form of cryptographic proof in which one party (the ''prover'') proves to others (the ''verifiers'') that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this exp ...
'' (PoW).
The PoW requires miners to find a number called a ''
nonce
Nonce may refer to:
* Cryptographic nonce, a number or bit string used only once, in security engineering
* Nonce word, a word used to meet a need that is not expected to recur
* The Nonce, American rap duo
* Nonce orders, an architectural term
...
'' (a number used just once), such that when the block content is
hashed along with the nonce, the result is numerically smaller than the network's ''difficulty target''.
This proof is easy for any node in the network to verify, but extremely time-consuming to generate, as for a secure cryptographic hash, miners must try many different nonce values (usually the sequence of tested values is the ascending natural numbers: 0, 1, 2, 3, ...) before a result happens to be less than the difficulty target. Because the difficulty target is extremely small compared to a typical SHA-256 hash, block hashes have many
leading zero
A leading zero is any 0 digit that comes before the first nonzero digit in a number string in positional notation.. For example, James Bond's famous identifier, 007, has two leading zeros. Any zeroes appearing to the left of the first non-zero di ...
s
as can be seen in this example block hash:
:
By adjusting this difficulty target, the amount of work needed to generate a block can be changed. Every 2,016 blocks (approximately 14 days given roughly 10 minutes per block), nodes
deterministically adjust the difficulty target based on the recent rate of block generation, with the aim of keeping the average time between new blocks at ten minutes. In this way the system automatically adapts to the total amount of mining power on the network.
, it takes on average 122 sextillion (122 thousand billion billion) attempts to generate a block hash smaller than the difficulty target.
Computations of this magnitude are extremely expensive and utilize specialized hardware.
The proof-of-work system, alongside the chaining of blocks, makes modifications to the blockchain extremely hard, as an attacker must modify all subsequent blocks in order for the modifications of one block to be accepted. As new blocks are being generated continuously, the difficulty of modifying an old block increases as time passes and the number of subsequent blocks (also called ''confirmations'' of the given block) increases.
The vast majority of mining power is grouped together in
mining pool
In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of find ...
s to reduce variance in miner income. Independent miners may have to work for several years to mine a single block of transactions and receive payment. In a mining pool, all participating miners get paid every time any participant generates a block. This payment is proportionate to the amount of work an individual miner contributed to the pool.
Supply

The successful miner finding the new block is allowed by the rest of the network to collect for themselves all transaction fees from transactions they included in the block, as well as a predetermined reward of newly created bitcoins.
, this reward is currently ₿6.25 in newly created bitcoins per block.
To claim this reward, a special transaction called a ''coinbase'' is included in the block, with the miner as the payee.
All bitcoins in existence have been created through this type of transaction. The
bitcoin protocol
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally-signed messages to the network using bitcoin cryptocurrency ...
specifies that the reward for adding a block will be reduced by half every 210,000 blocks (approximately every four years). Eventually, the reward will round down to zero, and the limit of ₿21 million is expected to be reached 2140 at current rates; the record keeping will then be rewarded by transaction fees only.
Decentralization
Bitcoin is decentralized thus:
* Bitcoin does not have a central authority.
* The bitcoin network is peer-to-peer, without central servers.
* The network also has no central storage; the bitcoin ledger is distributed.
* The ledger is public; anybody can store it on a computer.
* There is no single administrator; the ledger is maintained by a network of equally privileged miners.
* Anyone can become a miner.
* The additions to the ledger are maintained through competition. Until a new block is added to the ledger, it is not known which miner will create the block.
* The issuance of bitcoins is decentralized. They are issued as a reward for the creation of a new block.
* Anybody can create a new bitcoin address (a bitcoin counterpart of a bank account) without needing any approval.
* Anybody can send a transaction to the network without needing any approval; the network merely confirms that the transaction is legitimate.
Conversely, researchers have pointed out a "trend towards centralization". Although bitcoin can be sent directly from user to user, in practice intermediaries are widely used. Bitcoin miners join large mining pools to minimize the variance of their income.
Because transactions on the network are confirmed by miners, decentralization of the network requires that no single miner or mining pool obtains 51% of the hashing power, which would allow them to double-spend coins, prevent certain transactions from being verified and prevent other miners from earning income.
just six mining pools controlled 75% of overall bitcoin hashing power.
In 2014 mining pool
Ghash.io obtained 51% hashing power which raised significant controversies about the safety of the network. The pool has voluntarily capped its hashing power at 39.99% and requested other pools to act responsibly for the benefit of the whole network. Around the year 2017, over 70% of the hashing power and 90% of transactions were operating from China.
According to researchers, other parts of the ecosystem are also "controlled by a small set of entities", notably the maintenance of the client software, online wallets, and simplified payment verification (SPV) clients.
Privacy and fungibility
Bitcoin is
pseudonym
A pseudonym (; ) or alias () is a fictitious name that a person or group assumes for a particular purpose, which differs from their original or true name (orthonym). This also differs from a new name that entirely or legally replaces an individua ...
ous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through "idioms of use" (e.g., transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses. Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information.
To heighten financial privacy, a new bitcoin address can be generated for each transaction.
Wallets and similar software technically handle all bitcoins as equivalent, establishing the basic level of
fungibility
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of whose parts is indistinguishable from any other part. Fungible tokens can be exchanged or replaced; for exam ...
. Researchers have pointed out that the history of each bitcoin is registered and publicly available in the blockchain ledger, and that some users may refuse to accept bitcoins coming from controversial transactions, which would harm bitcoin's fungibility. For example, in 2012, Mt. Gox froze accounts of users who deposited bitcoins that were known to have just been stolen.
Wallets
A ''wallet'' stores the information necessary to transact bitcoins. While wallets are often described as a place to hold or store bitcoins, due to the nature of the system, bitcoins are inseparable from the blockchain transaction ledger. A wallet is more correctly defined as something that "stores the digital credentials for your bitcoin holdings" and allows one to access (and spend) them. Bitcoin uses
public-key cryptography
Public-key cryptography, or asymmetric cryptography, is the field of cryptographic systems that use pairs of related keys. Each key pair consists of a public key and a corresponding private key. Key pairs are generated with cryptographic a ...
, in which two cryptographic keys, one public and one private, are generated.
At its most basic, a wallet is a collection of these keys.
Software wallets
The first wallet program, simply named ''Bitcoin'', and sometimes referred to as the ''Satoshi client'', was released in 2009 by Satoshi Nakamoto as
open-source software
Open-source software (OSS) is computer software that is released under a license in which the copyright holder grants users the rights to use, study, change, and distribute the software and its source code to anyone and for any purpose. Ope ...
.
In version 0.5 the client moved from the
wxWidgets
wxWidgets (formerly wxWindows) is a widget toolkit and tools library for creating graphical user interfaces (GUIs) for cross-platform applications. wxWidgets enables a program's GUI code to compile and run on several computer platforms with min ...
user interface toolkit to
Qt, and the whole bundle was referred to as ''Bitcoin-Qt''.
After the release of version 0.9, the software bundle was renamed ''Bitcoin Core'' to distinguish itself from the underlying network. Bitcoin Core is, perhaps, the best known implementation or client. Alternative clients (
forks
In cutlery or kitchenware, a fork (from la, furca 'pitchfork') is a utensil, now usually made of metal, whose long handle terminates in a head that branches into several narrow and often slightly curved tines with which one can spear foods eit ...
of Bitcoin Core) exist, such as
Bitcoin XT
Bitcoin forks are defined variantly as changes in the protocol of the bitcoin network or as the situations that occur "when two or more blocks have the same block height". A fork influences the validity of the rules. Forks are typically conducte ...
,
Bitcoin Unlimited
Bitcoin Unlimited (BU) is a full node implementation for the bitcoin and Bitcoin Cash networks. The Bitcoin Core client, from which Bitcoin Unlimited is forked, has a hard coded one megabyte block limit; Bitcoin Unlimited differs by allowing us ...
,
and Parity Bitcoin.
There are several modes in which wallets can operate in. They have an inverse relationship with regard to trustlessness and computational requirements.
* ''Full clients'' verify transactions directly by downloading a full copy of the blockchain (over 150 GB ). They are the most secure and reliable way of using the network, as trust in external parties is not required. Full clients check the validity of mined blocks, preventing them from transacting on a chain that breaks or alters network rules. Because of its size and complexity, downloading and verifying the entire blockchain is not suitable for all computing devices.
* ''Lightweight clients'' consult full nodes to send and receive transactions without requiring a local copy of the entire blockchain (see ''
simplified payment verification'' – ''SPV''). This makes lightweight clients much faster to set up and allows them to be used on low-power, low-bandwidth devices such as smartphones. When using a lightweight wallet, however, the user must trust full nodes, as it can report faulty values back to the user. Lightweight clients follow the longest blockchain and do not ensure it is valid, requiring trust in full nodes.
Third-party internet services called ''online wallets'' or ''webwallets'' offer similar functionality but may be easier to use. In this case, credentials to access funds are stored with the online wallet provider rather than on the user's hardware. As a result, the user must have complete trust in the online wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. An example of such a security breach occurred with Mt. Gox in 2011.
Cold storage
Wallet software is targeted by
hackers
A hacker is a person skilled in information technology who uses their technical knowledge to achieve a goal or overcome an obstacle, within a computerized system by non-standard means. Though the term ''hacker'' has become associated in popu ...
because of the lucrative potential for
stealing bitcoins.
A technique called "cold storage" keeps private keys out of reach of hackers; this is accomplished by keeping private keys offline at all times
by generating them on a device that is
not connected to the internet.
The credentials necessary to spend bitcoins can be stored offline in a number of different ways, from specialized hardware wallets to simple paper printouts of the private key.
Hardware wallets
A hardware wallet is a computer
peripheral
A peripheral or peripheral device is an auxiliary device used to put information into and get information out of a computer. The term ''peripheral device'' refers to all hardware components that are attached to a computer and are controlled by th ...
that signs transactions as requested by the user. These devices store private keys and carry out signing and encryption internally,
and do not share any sensitive information with the host computer except already signed (and thus unalterable) transactions.
Because hardware wallets never expose their private keys, even computers that may be compromised by malware do not have a vector to access or steal them.
The user sets a passcode when setting up a hardware wallet.
As hardware wallets are
tamper-resistant
Tamperproofing, conceptually, is a methodology used to hinder, deter or detect unauthorised access to a device or circumvention of a security system. Since any device or system can be foiled by a person with sufficient knowledge, equipment, and ti ...
,
the passcode will be needed to extract any money.
Paper wallets
A paper wallet is created with a keypair generated on a
computer with no internet connection; the private key is written or printed onto the paper and then erased from the computer.
The paper wallet can then be stored in a safe physical location for later retrieval.
Physical wallets can also take the form of metal
token coin
In numismatics, token coins or trade tokens are coin-like objects used instead of coins. The field of token coins is part of exonumia and token coins are token money. Their denomination is shown or implied by size, color or shape. They are o ...
s
with a private key accessible under a
security hologram
Security holograms are labels with a hologram printed onto it for sale security reasons. Holograms on security labels are very difficult to forge because they are replicated from a master hologram which requires expensive, specialized and techn ...
in a recess struck on the
reverse side.
The security hologram
self-destructs when removed from the token, showing that the private key has been accessed. Originally, these tokens were struck in brass and other
base metal
A base metal is a common and inexpensive metal, as opposed to a precious metal such as gold or silver. In numismatics, coins often derived their value from the precious metal content; however, base metals have also been used in coins in the past ...
s, but later used
precious metal
Precious metals are rare, naturally occurring metallic chemical elements of high economic value.
Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lu ...
s as bitcoin grew in value and popularity. Coins with stored face value as high as ₿1,000 have been struck in gold. The
British Museum
The British Museum is a public museum dedicated to human history, art and culture located in the Bloomsbury area of London. Its permanent collection of eight million works is among the largest and most comprehensive in existence. It docume ...
's
coin collection
Coin collecting is the collecting of coins or other forms of minted legal tender.
Coins of interest to collectors often include those that were in circulation for only a brief time, coins with mint errors, and especially beautiful or histo ...
includes four specimens from the earliest series of funded bitcoin tokens; one is currently on display in the museum's money gallery. In 2013, a
Utah
Utah ( , ) is a state in the Mountain West subregion of the Western United States. Utah is a landlocked U.S. state bordered to its east by Colorado, to its northeast by Wyoming, to its north by Idaho, to its south by Arizona, and to its ...
manufacturer of these tokens was ordered by the
Financial Crimes Enforcement Network
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, ter ...
(FinCEN) to register as a
money services business A money services business (MSB) is a legal term used by financial regulators to describe businesses that transmit or convert money. The definition was created to encompass more than just banks which normally provide these services to include non-ba ...
before producing any more funded bitcoin tokens.
History
Creation
The domain name ''bitcoin.org'' was registered on 18 August 2008. On 31 October 2008, a link to a paper authored by
Satoshi Nakamoto
Satoshi Nakamoto is the name used by the presumed pseudonymous person or persons who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. As part of the implementation, Nakam ...
titled ''Bitcoin: A Peer-to-Peer Electronic Cash System''
was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as
open-source code and released it in January 2009.
Nakamoto's identity remains unknown.
No uniform convention for ''bitcoin'' capitalization exists; some sources use ''Bitcoin'', capitalized, to refer to the technology and
network
Network, networking and networked may refer to:
Science and technology
* Network theory, the study of graphs as a representation of relations between discrete objects
* Network science, an academic field that studies complex networks
Mathematics ...
and ''bitcoin'', lowercase, for the unit of account.
''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', ''
The Chronicle of Higher Education
''The Chronicle of Higher Education'' is a newspaper and website that presents news, information, and jobs for college and university faculty and student affairs professionals (staff members and administrators). A subscription is required to r ...
'', and the ''
Oxford English Dictionary
The ''Oxford English Dictionary'' (''OED'') is the first and foundational historical dictionary of the English language, published by Oxford University Press (OUP). It traces the historical development of the English language, providing a com ...
'' advocate the use of lowercase ''bitcoin'' in all cases.
On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the ''
genesis block''.
Embedded in the
coinbase
Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work and the company lacks a physical headquar ...
of this block was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks".
This note references a headline published by ''
The Times
''The Times'' is a British daily national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its current name on 1 January 1788. ''The Times'' and its sister paper '' The Sunday Times'' ...
'' and has been interpreted as both a timestamp and a comment on the instability caused by
fractional-reserve banking
Fractional-reserve banking is the system of banking operating in almost all countries worldwide, under which banks that take deposits from the public are required to hold a proportion of their deposit liabilities in liquid assets as a reserv ...
.
The receiver of the first bitcoin transaction was
Hal Finney, who had created the first
reusable proof-of-work system (RPoW) in 2004. Finney downloaded the bitcoin software on its release date, and on 12 January 2009 received ten bitcoins from Nakamoto. Other early cypherpunk supporters were creators of bitcoin predecessors:
Wei Dai
Wei Dai ( zh, c=戴伟) is a computer engineer known for contributions to cryptography and cryptocurrencies. He developed the Crypto++ cryptographic library, created the b-money cryptocurrency system, and co-proposed the VMAC message authentic ...
, creator of b-money, and
Nick Szabo
Nicholas Szabo is a computer scientist, legal scholar, and cryptographer known for his research in digital contracts and digital currency. He graduated from the University of Washington in 1989 with a degree in computer science and received a J ...
, creator of
bit gold
The bit is the most basic unit of information in computing and digital communications. The name is a portmanteau of binary digit. The bit represents a logical state with one of two possible values. These values are most commonly represented ...
.
In 2010, the first known
commercial transaction
A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...
using bitcoin occurred when programmer Laszlo Hanyecz bought two
Papa John's
Papa John's International, Inc., d/b/a Papa Johns, is an American pizza restaurant chain. It is the fourth largest pizza delivery restaurant chain in the United States, with headquarters in Louisville, Kentucky and Atlanta, Georgia metropolit ...
pizzas for ₿10,000 from Jeremy Sturdivant.
Blockchain analysts estimate that Nakamoto had mined about one million bitcoins before disappearing in 2010 when he handed the network alert key and control of the code repository over to
Gavin Andresen
Gavin Andresen (Formerly known as Gavin Bell) is an American software developer known for his involvement with bitcoin. He is based in Amherst, Massachusetts.
Originally a developer of 3D graphics and virtual reality software, Andresen became inv ...
. Andresen later became lead developer at the
Bitcoin Foundation
The Bitcoin Foundation is an American organization that was formerly a nonprofit corporation. It was founded in September 2012 in an effort to restore the reputation of Bitcoin after several scandals, and to try to promote its development and up ...
.
Andresen then sought to decentralize control. This left opportunity for controversy to develop over the future development path of bitcoin, in contrast to the perceived authority of Nakamoto's contributions.
2011–2012
After early "
proof-of-concept
Proof of concept (POC or PoC), also known as proof of principle, is a realization of a certain method or idea in order to demonstrate its feasibility, or a demonstration in principle with the aim of verifying that some concept or theory has prac ...
" transactions, the first major users of bitcoin were
black market
A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the ...
s, such as
Silk Road. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting ₿9.9 million, worth about $214 million.
In 2011, the price started at $0.30 per bitcoin, growing to $5.27 for the year. The price rose to $31.50 on 8 June. Within a month, the price fell to $11.00. The next month it fell to $7.80, and in another month to $4.77.
In 2012, bitcoin prices started at $5.27, growing to $13.30 for the year.
By 9 January the price had risen to $7.38, but then crashed by 49% to $3.80 over the next 16 days. The price then rose to $16.41 on 17 August, but fell by 57% to $7.10 over the next three days.
The Bitcoin Foundation was founded in September 2012 to promote bitcoin's development and uptake.
On 1 November 2011, the
reference implementation
In the software development process, a reference implementation (or, less frequently, sample implementation or model implementation) is a program that implements all requirements from a corresponding specification. The reference implementation ...
Bitcoin-Qt version 0.5.0 was released. It introduced a
front end that used the
Qt user interface toolkit.
The software previously used
Berkeley DB
Berkeley DB (BDB) is an unmaintained embedded database software library for key/value data, historically significant in open source software. Berkeley DB is written in C with API bindings for many other programming languages. BDB stores arbit ...
for database management. Developers switched to
LevelDB
LevelDB is an open-source on-disk key-value store written by Google fellows Jeffrey Dean and Sanjay Ghemawat. Inspired by Bigtable, LevelDB is hosted on GitHub under the New BSD License and has been ported to a variety of Unix-based systems, ma ...
in release 0.8 in order to reduce blockchain
synchronization time. The update to this release resulted in a minor blockchain fork on 11 March 2013. The fork was resolved shortly afterwards. Seeding nodes through
IRC
Internet Relay Chat (IRC) is a text-based chat system for instant messaging. IRC is designed for Many-to-many, group communication in discussion forums, called ''#Channels, channels'', but also allows one-on-one communication via instant messa ...
was discontinued in version 0.8.2. From version 0.9.0 the software was renamed to Bitcoin Core. Transaction fees were reduced again by a factor of ten as a means to encourage
microtransactions
Microtransactions, often abbreviated as mtx, are a business model where users can purchase virtual goods with micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers. While microtransact ...
. Although Bitcoin Core does not use
OpenSSL
OpenSSL is a software library for applications that provide secure communications over computer networks against eavesdropping or need to identify the party at the other end. It is widely used by Internet servers, including the majority of HT ...
for the operation of the network, the software did use OpenSSL for remote procedure calls. Version 0.9.1 was released to remove the network's vulnerability to the
Heartbleed bug
Heartbleed was a security bug in the OpenSSL cryptography library, which is a widely used implementation of the Transport Layer Security (TLS) protocol. It was introduced into the software in 2012 and publicly disclosed in April 2014. Heartble ...
.
2013–2016
In 2013, prices started at $13.30 rising to $770 by 1 January 2014.
In March 2013 the
blockchain
A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, ...
temporarily split into two independent chains with different rules due to a bug in version 0.8 of the bitcoin software. The two blockchains operated simultaneously for six hours, each with its own version of the transaction history from the moment of the split. Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software, selecting the backwards-compatible version of the blockchain. As a result, this blockchain became the longest chain and could be accepted by all participants, regardless of their bitcoin software version.
During the split, the
Mt. Gox
Mt. Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan. Launched in 2010, it was handling over 70% of all bitcoin (BTC) transactions worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the l ...
exchange briefly halted bitcoin deposits and the price dropped by 23% to $37
before recovering to the previous level of approximately $48 in the following hours.
The US
Financial Crimes Enforcement Network
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, ter ...
(FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as Money Service Businesses (MSBs), that are subject to registration or other legal obligations.
In April, exchanges
BitInstant
Charles Shrem IV (born November 25, 1989)Max Raskin“Meet the Bitcoin Millionaires,”''Bloomberg Businessweek'', April 10, 2013. is an American entrepreneur and bitcoin advocate. He co-founded the now-defunct startup company BitInstant, and is ...
and Mt. Gox experienced processing delays due to insufficient capacity resulting in the bitcoin price dropping from $266 to $76 before returning to $160 within six hours. The bitcoin price rose to $259 on 10 April, but then crashed by 83% to $45 over the next three days.
On 15 May 2013, US authorities seized accounts associated with Mt. Gox after discovering it had not registered as a
money transmitter
In the legal code of the United States, a money transmitter or money transfer service is a business entity that provides money transfer services or payment instruments. Money transmitters in the US are part of a larger group of entities called m ...
with FinCEN in the US.
On 23 June 2013, the US
Drug Enforcement Administration
The Drug Enforcement Administration (DEA; ) is a Federal law enforcement in the United States, United States federal law enforcement agency under the U.S. Department of Justice tasked with combating drug trafficking and distribution within th ...
listed ₿11.02 as a seized asset in a
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the United States government tasked with the enforcement of federal law and a ...
seizure notice pursuant to 21 U.S.C. § 881. This marked the first time a government agency had seized bitcoin. The FBI seized about ₿30,000
in October 2013 from the
dark web
The dark web is the World Wide Web content that exists on '' darknets'': overlay networks that use the Internet but require specific software, configurations, or authorization to access. Through the dark web, private computer networks can commu ...
website Silk Road, following the arrest of
Ross William Ulbricht
Ross William Ulbricht (born March 27, 1984) is an American serving life imprisonment for creating and operating the darknet market website Silk Road (marketplace), Silk Road from 2011 until his arrest in 2013. The site operated as a hidden servi ...
. These bitcoins were sold at
blind auction
A first-price sealed-bid auction (FPSBA) is a common type of auction. It is also known as blind auction. In this type of auction, all bidders simultaneously submit sealed bids so that no bidder knows the bid of any other participant. The highest bi ...
by the
United States Marshals Service
The United States Marshals Service (USMS) is a Federal law enforcement in the United States, federal law enforcement agency in the United States. The USMS is a Government agency, bureau within the United States Department of Justice, U.S. Depa ...
to venture capital investor
Tim Draper
Timothy Cook Draper (born June 11, 1958) is an American venture capital investor, and founder of Draper Fisher Jurvetson (DFJ), .
Bitcoin's price rose to $755 on 19 November and crashed by 50% to $378 the same day. On 30 November 2013, the price reached $1,163 before starting a long-term crash, declining by 87% to $152 in January 2015.
On 5 December 2013, the
People's Bank of China
The People's Bank of China (officially PBC or informally PBOC; ) is the central bank of the People's Republic of China, responsible for carrying out monetary policy and regulation of financial institutions in mainland China, as determined by ...
prohibited Chinese financial institutions from using bitcoin.
After the announcement, the value of bitcoin dropped, and
Baidu
Baidu, Inc. ( ; , meaning "hundred times") is a Chinese multinational technology company specializing in Internet-related services and products and artificial intelligence (AI), headquartered in Beijing's Haidian District. It is one of th ...
no longer accepted bitcoins for certain services.
Buying real-world goods with any virtual currency had been illegal in China since at least 2009.
In 2014, prices started at $770 and fell to $314 for the year.
On 30 July 2014, the
Wikimedia Foundation
The Wikimedia Foundation, Inc., or Wikimedia for short and abbreviated as WMF, is an American 501(c)(3) nonprofit organization headquartered in San Francisco, California and registered as a charitable foundation under local laws. Best kno ...
started accepting donations of bitcoin.
In 2015, prices started at $314 and rose to $434 for the year. In 2016, prices rose and climbed up to $998 by 1 January 2017.
Release 0.10 of the software was made public on 16 February 2015. It introduced a consensus library which gave programmers easy access to the rules governing
consensus on the network. In version 0.11.2 developers added a new feature which allowed transactions to be made unspendable until a specific time in the future.
Bitcoin Core 0.12.1 was released on 15 April 2016, and enabled multiple soft forks to occur concurrently.
Around 100 contributors worked on Bitcoin Core 0.13.0 which was released on 23 August 2016.
In July 2016, the CheckSequenceVerify soft fork activated. In August 2016, the Bitfinex cryptocurrency exchange platform was
hacked in the second-largest breach of a Bitcoin exchange platform up to that time, and ₿119,756,
worth about $72 million at the time, were stolen.
In October 2016, Bitcoin Core's 0.13.1 release featured the "Segwit" soft fork that included a scaling improvement aiming to optimize the bitcoin blocksize. The patch was originally finalized in April, and 35 developers were engaged to deploy it. This release featured Segregated Witness (
SegWit
Segregated Witness, or SegWit, is the name used for an implemented soft fork change in the transaction format of Bitcoin.
The formal title "Segregated Witness (Consensus layer)" had Bitcoin Improvement Proposal number BIP141. The declared purpose ...
) which aimed to place downward pressure on transaction fees as well as increase the maximum transaction capacity of the network.
The 0.13.1 release endured extensive testing and research leading to some delays in its release date. SegWit prevents various forms of transaction
malleability
Ductility is a mechanical property commonly described as a material's amenability to drawing (e.g. into wire). In materials science, ductility is defined by the degree to which a material can sustain plastic deformation under tensile stres ...
.
2017–2019
Research produced by the
University of Cambridge
, mottoeng = Literal: From here, light and sacred draughts.
Non literal: From this place, we gain enlightenment and precious knowledge.
, established =
, other_name = The Chancellor, Masters and Schola ...
estimated that in 2017, there were 2.9 to 5.8 million unique users using a
cryptocurrency wallet
A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often al ...
, most of them using bitcoin.
On 15 July 2017, the controversial
Segregated Witness
Segregated Witness, or SegWit, is the name used for an implemented soft fork change in the transaction format of Bitcoin.
The formal title "Segregated Witness (Consensus layer)" had Bitcoin Improvement Proposal number BIP141. The declared purpos ...
egWitsoftware upgrade was approved ("locked-in"). Segwit was intended to support the
Lightning Network
The Lightning Network (LN) is a "layer 2" payment protocol layered on top of Bitcoin (and other blockchains and cryptocurrencies). It is intended to enable fast transactions among participating nodes and has been proposed as a solution to the b ...
as well as improve scalability.
SegWit was subsequently activated on the network on 24 August 2017. The bitcoin price rose almost 50% in the week following SegWit's approval.
On 21 July 2017, bitcoin was trading at $2,748, up 52% from 14 July 2017's $1,835.
Supporters of large blocks who were dissatisfied with the activation of SegWit forked the software on 1 August 2017 to create
Bitcoin Cash
Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017.
In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV.
History
Sin ...
, becoming one of many
forks of bitcoin such as
Bitcoin Gold
Bitcoin Gold (BTG) is a cryptocurrency. It is a hard fork of Bitcoin, the open source cryptocurrency. It is an open source, decentralized digital currency without a central bank or intermediary that can be sent from user to user on the peer-to-pe ...
.
Prices started at $998 in 2017 and rose to $13,412.44 on 1 January 2018,
after reaching its all-time high of $19,783.06 on 17 December 2017.
China banned trading in bitcoin, with first steps taken in September 2017, and a complete ban that started on 1 February 2018. Bitcoin prices then fell from $9,052 to $6,914 on 5 February 2018.
The percentage of bitcoin trading in the Chinese
renminbi fell from over 90% in September 2017 to less than 1% in June 2018.
Throughout the rest of the first half of 2018, bitcoin's price fluctuated between $11,480 and $5,848. On 1 July 2018, bitcoin's price was $6,343.
The price on 1 January 2019 was $3,747, down 72% for 2018 and down 81% since the all-time high.
In September 2018, an anonymous party discovered and reported an invalid-block denial-of-server vulnerability to developers of Bitcoin Core, Bitcoin ABC and Bitcoin Unlimited. Further analysis by bitcoin developers showed the issue could also allow the creation of blocks violating the 21 million coin limit and was assigned and the issue resolved.
Bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges, including thefts from
Coincheck
Coincheck is a Japanese bitcoin wallet and exchange service headquartered in Tokyo, Japan, founded by Koichiro Wada and Yusuke Otsuka. It operates exchanges between bitcoin, ether and fiat currencies in Japan, and bitcoin transactions and stor ...
in January 2018,
Bithumb
Bithumb is a South Korean cryptocurrency exchange. Founded in 2014, Bithumb Korea has 8 million registered users, 1 million mobile app users, and a current cumulative transaction volume has exceeded USD $1 trillion.
History
In October 2018, BK ...
in June, and Bancor in July. For the first six months of 2018, $761 million worth of cryptocurrencies was reported stolen from exchanges.
Bitcoin's price was affected even though other cryptocurrencies were stolen at Coinrail and Bancor as investors worried about the security of cryptocurrency exchanges.
In September 2019 the
Intercontinental Exchange
Intercontinental Exchange, Inc. (ICE) is an American company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russell ...
(the owner of the
NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed co ...
) began trading of bitcoin futures on its exchange called Bakkt.
Bakkt also announced that it would launch options on bitcoin in December 2019.
In December 2019,
YouTube
YouTube is a global online video sharing and social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by Google, and is the second most ...
removed bitcoin and cryptocurrency videos, but later restored the content after judging they had "made the wrong call".
In February 2019, Canadian cryptocurrency exchange
Quadriga Fintech Solutions
Quadriga Fintech Solutions was the owner and operator of QuadrigaCX, which was believed to be Canada's largest cryptocurrency exchange. In 2019 the exchange ceased operations and the company filed for bankruptcy with C$215.7 million in liabili ...
failed with approximately $200 million missing.
By June 2019 the price had recovered to $13,000.
2020–present

On 13 March 2020, bitcoin fell below $4,000 during a broad market selloff, after trading above $10,000 in February 2020. On 11 March 2020, 281,000 bitcoins were sold, held by owners for only thirty days.
This compared to ₿4,131 that had laid dormant for a year or more, indicating that the vast majority of the bitcoin volatility on that day was from recent buyers. During the week of 11 March 2020, cryptocurrency exchange
Kraken
The kraken () is a legendary sea monster of enormous size said to appear off the coasts of Norway.
Kraken, the subject of sailors' superstitions and mythos, was first described in the modern age at the turn of the 18th century, in a travel ...
experienced an 83% increase in the number of account signups over the week of bitcoin's price collapse, a result of buyers looking to capitalize on the low price.
These events were attributed to the onset of the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identified ...
.
In August 2020,
MicroStrategy
MicroStrategy Incorporated is an American company that provides business intelligence (BI), mobile software, and cloud-based services. Founded in 1989 by Michael J. Saylor, Sanju Bansal, and Thomas Spahr, the firm develops software to analyze i ...
invested $250 million in bitcoin as a treasury reserve asset. In October 2020,
Square, Inc.
Block, Inc. (formerly Square, Inc.) is an American multinational technology conglomerate founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first platform in 2010. It has been traded as a public company on the New York Stock E ...
placed approximately 1% of total assets ($50 million) in bitcoin. In November 2020,
PayPal
PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional paper ...
announced that US users could buy, hold, or sell bitcoin. On 30 November 2020, the bitcoin value reached a new all-time high of $19,860, topping the previous high of December 2017.
Alexander Vinnik
Alexander Vinnik (russian: Александр Винник) is a Russian computer expert. From 2011 to 2017, he worked at BTC-e, a Russian cryptocurrency exchange.
BTC-e
Vinnik is alleged to have directed and supervised the operations and fin ...
, founder of
BTC-e
BTC-e was a cryptocurrency trading platform primarily targeting Russian auditory with servers located in USA - until the U.S. government seized their website and all funds in 2017. It was founded in July 2011 by Alexander Vinnik and Aleksandr Bi ...
, was convicted and sentenced to five years in prison for money laundering in France while refusing to testify during his trial.
In December 2020,
Massachusetts Mutual Life Insurance Company
The Massachusetts Mutual Life Insurance Company, also known as MassMutual, is a Springfield, Massachusetts-based life insurance company.
MassMutual provides financial products such as life insurance, disability income insurance, long term care ...
announced a bitcoin purchase of US$100 million, or roughly 0.04% of its general investment account.
On 19 January 2021,
Elon Musk
Elon Reeve Musk ( ; born June 28, 1971) is a business magnate and investor. He is the founder, CEO and chief engineer of SpaceX; angel investor, CEO and product architect of Tesla, Inc.; owner and CEO of Twitter, Inc.; founder of The ...
placed the handle ''#Bitcoin'' in his
Twitter
Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
profile, tweeting "In retrospect, it was inevitable", which caused the price to briefly rise about $5,000 in an hour to $37,299.
On 25 January 2021, Microstrategy announced that it continued to buy bitcoin and as of the same date it had holdings of ₿70,784 worth $2.38 billion.
On 8 February 2021
Tesla's announcement of a bitcoin purchase of US$1.5 billion and the plan to start accepting bitcoin as payment for vehicles, pushed the bitcoin price to $44,141.
On 18 February 2021, Elon Musk stated that "owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold". After 49 days of accepting the digital currency, Tesla reversed course on 12 May 2021, saying they would no longer take bitcoin due to concerns that "mining" the cryptocurrency was contributing to the consumption of fossil fuels and climate change. The decision resulted in the price of bitcoin dropping around 12% on 13 May. During a July bitcoin conference, Musk suggested Tesla could possibly help bitcoin miners switch to renewable energy in the future and also stated at the same conference that if bitcoin mining reaches, and trends above 50 percent renewable energy usage, that "Tesla would resume accepting bitcoin." The price for bitcoin rose after this announcement.
In June 2021, the
Taproot
A taproot is a large, central, and dominant root from which other roots sprout laterally. Typically a taproot is somewhat straight and very thick, is tapering in shape, and grows directly downward. In some plants, such as the carrot, the taproo ...
network software upgrade was approved, adding support for
Schnorr signature
In cryptography, a Schnorr signature is a digital signature produced by the Schnorr signature algorithm that was described by Claus Schnorr. It is a digital signature scheme known for its simplicity, among the first whose security is based on the ...
s, improved functionality of
Smart contract
A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the re ...
s and
Lightning Network
The Lightning Network (LN) is a "layer 2" payment protocol layered on top of Bitcoin (and other blockchains and cryptocurrencies). It is intended to enable fast transactions among participating nodes and has been proposed as a solution to the b ...
. The upgrade was activated in November.
In September 2021,
Bitcoin in El Salvador
El Salvador became the first country in the world to use Bitcoin as legal tender, after having been adopted as such by the Legislative Assembly of El Salvador in 2021. It has been promoted by Nayib Bukele, the president of El Salvador, who claimed ...
became
legal tender
Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in pa ...
, alongside the US dollar.
On 16 October 2021, the
SEC approved the ProShares Bitcoin Strategy ETF, a cash-settled
futures
Futures may mean:
Finance
*Futures contract, a tradable financial derivatives contract
*Futures exchange, a financial market where futures contracts are traded
* ''Futures'' (magazine), an American finance magazine
Music
* ''Futures'' (album), a ...
exchange-traded fund (ETF). The first bitcoin ETF in the United States gained 5% on its first trading day on 19 October 2021.
On 25 March 2022,
Pavel Zavalny
Pavel Nikolayevich Zavalny (russian: Павел Николаевич Завальный) is a deputy for the United Russia party in the 7th State Duma of the Russian Federation. He is the head of the committee on Energy. He is president of the Rus ...
stated that Russia might accept bitcoin for payment for oil and gas exports, in response to sanctions stemming from the
2022 Russian invasion of Ukraine.
On 27 April 2022
Central African Republic
The Central African Republic (CAR; ; , RCA; , or , ) is a landlocked country in Central Africa. It is bordered by Chad to the north, Sudan to the northeast, South Sudan to the southeast, the DR Congo to the south, the Republic of the C ...
adopted bitcoin as legal tender alongside the
CFA franc
The CFA franc (french: franc CFA, , Franc of the Financial Community of Africa, originally Franc of the French Colonies in Africa, or colloquially ; abbreviation: F.CFA) is the name of two currencies, the West African CFA franc, used in eight W ...
.
On May 10, 2022, the bitcoin price fell to $31,324, as a result of a collapse of a UST
stablecoin
Stablecoins are cryptocurrencies where the price is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities (such as precious metals or industrial metals), or another cryptocurrency.
In theory, the p ...
experiment named Terra, with bitcoin down more than 50% since the November 2021 high.
By June 13, 2022, the
Celsius Network
Celsius Network LLC is a bankrupt cryptocurrency lending company. Headquartered in Hoboken, New Jersey, Celsius maintained offices in four countries and operated globally. Users could deposit a range of cryptocurrency digital assets, including ...
(a
decentralized finance
Decentralized finance (often stylized as DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain. DeFi platforms allow people to lend or borrow funds ...
loan company) halted withdrawals and resulted in the bitcoin price falling below $20,000.
In May 2022, following a vote by
Wikipedia
Wikipedia is a multilingual free online encyclopedia written and maintained by a community of volunteers, known as Wikipedians, through open collaboration and using a wiki-based editing system. Wikipedia is the largest and most-read ref ...
editors the previous month, the Wikimedia Foundation announced it would stop accepting donations in bitcoin or other cryptocurrencies—eight years after it had first started taking contributions in bitcoin.
Associated ideologies
Satoshi Nakamoto stated in an essay accompanying bitcoin's code that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."
Austrian economics roots
According to the
European Central Bank
The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important centra ...
, the decentralization of money offered by bitcoin has its theoretical roots in the
Austrian school of economics
The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian school ...
, especially with
Friedrich von Hayek
Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...
in his book ''Denationalisation of Money: The Argument Refined'', in which Hayek advocates a complete
free market
In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
in the production, distribution and management of money to end the monopoly of
central banks.
Anarchism and libertarianism
According to ''
The New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'',
libertarian
Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's e ...
s and
anarchist
Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not necessari ...
s were attracted to the philosophical idea behind bitcoin. Early bitcoin supporter
Roger Ver
Roger Keith Ver (born 27 January 1979) is an early investor in Bitcoin, Bitcoin-related startups and an early promoter of Bitcoin. Ver has sometimes been referred to as "Bitcoin Jesus". He now primarily promotes Bitcoin Cash as Ver sees it as fu ...
said: "At first, almost everyone who got involved did so for philosophical reasons. We saw bitcoin as a great idea, as a way to separate money from the state."
''
The Economist
''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econ ...
'' describes bitcoin as "a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks".
Economist
Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was t ...
argues that cryptocurrencies like bitcoin are "something of a cult" based in "paranoid fantasies" of government power.
Nigel Dodd argues in ''The Social Life of Bitcoin'' that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control.
Dodd quotes a
YouTube
YouTube is a global online video sharing and social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by Google, and is the second most ...
video, with
Roger Ver
Roger Keith Ver (born 27 January 1979) is an early investor in Bitcoin, Bitcoin-related startups and an early promoter of Bitcoin. Ver has sometimes been referred to as "Bitcoin Jesus". He now primarily promotes Bitcoin Cash as Ver sees it as fu ...
,
Jeff Berwick
Jeffrey David Berwick (born November 24, 1970) is a Canadian-Dominican entrepreneur, libertarian and anarcho-capitalist activist.
Berwick founded Stockhouse.com in 1994. In the late ‘90s, the company expanded into eight different countries a ...
,
Charlie Shrem
Charles Shrem IV (born November 25, 1989)Max Raskin“Meet the Bitcoin Millionaires,”''Bloomberg Businessweek'', April 10, 2013. is an American entrepreneur and bitcoin advocate. He co-founded the now-defunct startup company BitInstant, and is ...
,
Andreas Antonopoulos
Andreas M. Antonopoulos (born 1972 in London) is a British-Greek Bitcoin advocate, tech entrepreneur, and author. He is a host on the ''Speaking of Bitcoin'' podcast (formerly called ''Let's Talk Bitcoin!'') and a teaching fellow for the M.Sc. ...
,
Gavin Wood
Gavin James Wood (born 1980) is an English computer scientist, a founder of Ethereum and creator of Polkadot and Kusama.
Early life
Wood was born in Lancaster, England, United Kingdom. He attended the Lancaster Royal Grammar School. He graduat ...
, Trace Meyer and other proponents of bitcoin reading ''The Declaration of Bitcoin's Independence''. The declaration includes a message of crypto-anarchism with the words: "Bitcoin is inherently anti-establishment, anti-system, and anti-state. Bitcoin undermines governments and disrupts institutions because bitcoin is fundamentally humanitarian."
David Golumbia says that the ideas influencing bitcoin advocates emerge from right-wing extremist movements such as the
Liberty Lobby
Liberty Lobby was a far-right think tank and lobby group founded in 1958 by Willis Carto. Carto was known for his promotion of antisemitic conspiracy theories, white nationalism, and Holocaust denial.
The organization produced a daily five-mi ...
and the
John Birch Society
The John Birch Society (JBS) is an American right-wing political advocacy group. Founded in 1958, it is anti-communist, supports social conservatism, and is associated with ultraconservative, radical right, far-right, or libertarian ideas.
...
and their anti-Central Bank rhetoric, or, more recently,
Ron Paul
Ronald Ernest Paul (born August 20, 1935) is an American author, activist, physician and retired politician who served as the U.S. representative for Texas's 22nd congressional district from 1976 to 1977 and again from 1979 to 1985, as we ...
and
Tea Party
A tea party is a social gathering event held in the afternoon. For centuries, many societies have cherished drinking tea with a company at noon. Tea parties are considered for formal business meetings, social celebrations or just as an afternoon ...
-style libertarianism.
Steve Bannon
Stephen Kevin Bannon (born November 27, 1953) is an American media executive, political strategist, and former investment banker. He served as the White House's chief strategist in the administration of U.S. president Donald Trump during the ...
, who owns a "good stake" in bitcoin, considers it to be "disruptive populism. It takes control back from central authorities. It's revolutionary."
A 2014 study of
Google Trends
Google Trends is a website by Google that analyzes the popularity of top web search query, search queries in Google Search across various regions and languages. The website uses graphs to compare the search volume of different queries over time. ...
data found correlations between bitcoin-related searches and ones related to computer programming and illegal activity, but not libertarianism or investment topics.
Economics

Bitcoin is a
digital asset
A digital asset is anything that exists only in digital form and comes with a distinct usage right. Data that do not possess that right are not considered assets.
''Digital assets'' include but are not exclusive to: digital documents, audible ...
designed to work in peer-to-peer transactions as a
currency
A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins.
A more general ...
. Bitcoins have three qualities useful in a currency, according to ''The Economist'' in January 2015: they are "hard to earn, limited in supply and easy to verify".
Per some researchers, , bitcoin functions more as a
payment system
A payment system is any system used to settle financial transactions through the transfer of monetary value. This includes the institutions, instruments, people, rules, procedures, standards, and technologies that make its exchange possible.Bi ...
than as a currency.
Economists define
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...
as serving the following three purposes: a
store of value
A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved.
The mo ...
, a
medium of exchange
In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency.
The origin of "mediums of exchange" in human societies is ass ...
, and a
unit of account
In economics, unit of account is one of the money functions. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of rela ...
.
According to ''The Economist'' in 2014, bitcoin functions best as a medium of exchange.
However, this is debated, and a 2018 assessment by ''The Economist'' stated that cryptocurrencies met none of these three criteria.
Yale economist
Robert J. Shiller
Robert James Shiller (born March 29, 1946) is an American economist, academic, and author. As of 2019, he serves as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center ...
writes that bitcoin has potential as a unit of account for measuring the relative value of goods, as with Chile's
Unidad de Fomento
The Unidad de Fomento (UF) is a unit of account used in Chile. It is a non-circulating currency; the exchange rate between the UF and the Chilean peso is constantly adjusted for inflation so that the value of the Unidad de Fomento remains almost ...
, but that "Bitcoin in its present form ... doesn't really solve any sensible economic problem".
According to research by the
University of Cambridge
, mottoeng = Literal: From here, light and sacred draughts.
Non literal: From this place, we gain enlightenment and precious knowledge.
, established =
, other_name = The Chancellor, Masters and Schola ...
, between 2.9 million and 5.8 million unique users used a
cryptocurrency wallet
A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often al ...
in 2017, most of them for bitcoin. The number of users has grown significantly since 2013, when there were 300,000–1.3 million users.
Acceptance by merchants
Dish Network
DISH Network Corporation (DISH, an acronym for DIgital Sky Highway) is an American television provider and the owner of the direct-broadcast satellite provider Dish, commonly known as Dish Network, and the over-the-top IPTV service, Sling TV ...
, a ''Fortune'' 500 subscription TV provider, has been described as the first large company to accept bitcoin, in 2014.
Bloomberg reported that the largest 17 crypto merchant-processing services handled $69 million in June 2018, down from $411 million in September 2017. Bitcoin is "not actually usable" for retail transactions because of high costs and the inability to process
chargeback
A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit car ...
s, according to Nicholas Weaver, a researcher quoted by ''Bloomberg''. High price volatility and transaction fees make paying for small retail purchases with bitcoin impractical, according to economist Kim Grauer. However, bitcoin continues to be used for large-item purchases on sites such as
Overstock.com
Overstock.com, Inc. is an American internet retailer selling primarily furniture headquartered in Midvale, Utah, near Salt Lake City. Businessman Patrick M. Byrne founded Overstock.com in 1999. The company initially sold exclusively surplus and ...
, and for cross-border payments to
freelancers and other vendors.
In 2017 and 2018, bitcoin's acceptance among major online retailers included only three of the top 500 U.S. online merchants, down from five in 2016.
Reasons for this decline include high transaction fees due to bitcoin's scalability issues and long transaction times.
As of 2018, the overwhelming majority of bitcoin transactions took place on
cryptocurrency exchange
A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may acce ...
s, rather than being used in transactions with merchants.
Delays processing payments through the blockchain of about ten minutes make bitcoin use very difficult in a retail setting. Prices are not usually quoted in units of bitcoin and many trades involve one, or sometimes two, conversions into conventional currencies.
Merchants that do accept bitcoin payments may use payment service providers to perform the conversions.
Financial institutions
Bitcoins can be bought on
digital currency exchange
A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may acce ...
s.
Per researchers, "there is little sign of bitcoin use" in international remittances despite high fees charged by banks and
Western Union
The Western Union Company is an American multinational financial services company, headquartered in Denver, Colorado.
Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the company ch ...
who compete in this market.
The ''
South China Morning Post'', however, mentions the use of bitcoin by Hong Kong workers to transfer money home.
In 2014, the
National Australia Bank
National Australia Bank (abbreviated NAB, branded nab) is one of the four largest financial institutions in Australia (colloquially referred to as "The Big Four") in terms of market capitalisation, earnings and customers. NAB was ranked 21st-la ...
closed accounts of businesses with ties to bitcoin, and
HSBC
HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...
refused to serve a hedge fund with links to bitcoin. Australian banks in general have been reported as closing down bank accounts of operators of businesses involving the currency.
On 10 December 2017, the
Chicago Board Options Exchange
The Chicago Board Options Exchange (CBOE), located at 433 West Van Buren Street in Chicago, is the largest U.S. options exchange with an annual trading volume of around 1.27 billion at the end of 2014. CBOE offers options on over 2,200 companies, ...
started trading bitcoin futures, followed by the
Chicago Mercantile Exchange
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, a ...
, which started trading bitcoin futures on 17 December 2017.
In September 2019 the
Central Bank of Venezuela
The Central Bank of Venezuela ( es, Banco Central de Venezuela, BCV) is the central bank of Venezuela. It maintains a fixed exchange rate for the Venezuelan bolívar and since 1996 is the governing agent of the Venezuelan Clearing House System ...
, at the request of
PDVSA
Petróleos de Venezuela, S.A. (PDVSA, ) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and production ...
, ran tests to determine if bitcoin and
ether
In organic chemistry, ethers are a class of compounds that contain an ether group—an oxygen atom connected to two alkyl or aryl groups. They have the general formula , where R and R′ represent the alkyl or aryl groups. Ethers can again b ...
could be held in central bank's reserves. The request was motivated by oil company's goal to pay its suppliers.
François R. Velde, Senior Economist at the
Chicago Fed
The Federal Reserve Bank of Chicago (informally the Chicago Fed) is one of twelve regional Reserve Banks that, along with the Federal Reserve Board of Governors, make up the United States' central bank.
The Chicago Reserve Bank serves the Sevent ...
, described bitcoin as "an elegant solution to the problem of creating a digital currency". David Andolfatto, Vice President at the
Federal Reserve Bank of St. Louis
The Federal Reserve Bank of St. Louis is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, D.C., make up the United States' central bank. Missouri is the only state to have two main Federal Reserve Banks ( K ...
, stated that bitcoin is a threat to the establishment, which he argues is a good thing for the
Federal Reserve System
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
and other
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a centra ...
s, because it prompts these institutions to operate sound policies.
As an investment
The
Winklevoss twins Winklevoss twins refers collectively to:
* Cameron Winklevoss (born 1981), American investor, rower, and entrepreneur
* Tyler Winklevoss (born 1981), American investor, rower, and entrepreneur
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