Bitcoin
Quick Answer
Bitcoin is the first and largest cryptocurrency by market capitalization — a decentralized digital currency that operates on a peer-to-peer network without a central bank or single administrator.
Definition
Bitcoin is the first and largest cryptocurrency by market capitalization — a decentralized digital currency that operates on a peer-to-peer network without a central bank or single administrator.
Explanation
Bitcoin was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It introduced blockchain technology — a distributed ledger recording all transactions transparently and immutably. Bitcoin has a fixed supply of 21 million coins making it deflationary by design. It is used as a store of value, medium of exchange, and speculative investment. Bitcoin is highly volatile — prices can fluctuate dramatically in short periods and investors can lose their entire investment.
Example
An investor who bought Bitcoin at $10,000 and sold at $60,000 made a significant gain, but Bitcoin has also dropped more than 80 percent from its all-time highs multiple times.
Frequently Asked Questions
What is Bitcoin?
Bitcoin is the first and largest cryptocurrency by market capitalization — a decentralized digital currency that operates on a peer-to-peer network without a central bank or single administrator.
How does Bitcoin work?
Bitcoin was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It introduced blockchain technology — a distributed ledger recording all transactions transparently and immutably. Bitcoin has a fixed supply of 21 million coins making it deflationary by design. It is used as a store of value, medium of exchange, and speculative investment. Bitcoin is highly volatile — prices can fluctuate dramatically in short periods and investors can lose their entire investment.
Can you give an example of Bitcoin?
An investor who bought Bitcoin at $10,000 and sold at $60,000 made a significant gain, but Bitcoin has also dropped more than 80 percent from its all-time highs multiple times.