Bitcoin

What Is Bitcoin (BTC)?

Bitcoin is a decentralized digital currency, symbolized as BTC, enabling anyone to transfer value directly over the internet through peer-to-peer transactions without the need for a bank or intermediary. It leverages blockchain technology to organize transactions into blocks in chronological order, recording them permanently on a public ledger maintained by a global network of nodes.

Decentralization means no single entity controls the issuance or transfer of Bitcoin. The blockchain serves as a transparent ledger where blocks are linked sequentially. Peer-to-peer refers to users interacting and transferring funds directly, without third-party involvement.

Bitcoin issuance follows a Proof of Work (PoW) consensus mechanism, where miners compete using computational power to validate transactions, earning new coins and transaction fees as rewards. The maximum supply is capped at 21 million BTC.

Current Price, Market Cap, and Circulating Supply of Bitcoin (BTC)

As of 2025-12-26:

• Price: approximately $88,693.20
• Circulating supply: around 19,967,271 BTC
• Total supply: about 19,967,271 BTC
• Maximum supply: fixed at 21,000,000 BTC
• Circulating market cap: about $1,770,961,160,257.20
• Fully diluted market cap: about $1,770,961,160,257.20
• Market dominance: approximately 55.17%
• 24-hour trading volume: about $893,086,357.82
• Short-term changes: 1 hour -0.05%, 24 hours +1.39%, 7 days +0.79%, 30 days +1.56%

These figures are based on available information as of 2025-12-26. Bitcoin’s price and market data are volatile and can change rapidly—always check live order books for the latest quotes and liquidity before making transactions.

Who Created Bitcoin (BTC) and When?

Bitcoin was conceptualized by an individual or group using the pseudonym Satoshi Nakamoto in 2008. The details were outlined in the whitepaper "Bitcoin: A Peer-to-Peer Electronic Cash System" published on 2008-10-31. The Bitcoin network launched with the creation of the Genesis Block on 2009-01-03.

Satoshi Nakamoto was active in the early stages of development and communication but gradually stepped away from public involvement. Since then, Bitcoin has been maintained by a global open-source community. Protocol upgrades are proposed and implemented collaboratively by developers, node operators, and miners.

How Does Bitcoin (BTC) Work?

Bitcoin operates on a Proof of Work (PoW) consensus mechanism. Miners compete to solve cryptographic puzzles using computational power; the first to solve the problem earns the right to add a block of validated transactions to the chain and receives a block reward plus transaction fees. Consensus ensures all network participants agree on the state of the ledger.

Its transaction model uses UTXO (Unspent Transaction Output), where each amount of Bitcoin is represented as one or more UTXOs. When spending BTC, previous UTXOs are used as inputs to generate new UTXOs. This design supports parallel verification and enhances security.

Bitcoin addresses are derived from hashed public keys, while private keys serve as the sole credentials to control funds. Anyone with a private key can sign transactions; nodes verify these signatures and propagate valid transactions across the network until miners include them in blocks.

Blocks are produced approximately every 10 minutes, with mining difficulty dynamically adjusted to maintain this interval. Halving events occur roughly every four years, reducing block rewards by half and reinforcing scarcity and declining inflation rates.

What Are the Main Use Cases for Bitcoin (BTC)?

Bitcoin is primarily used as a store of value and for long-term holding due to its fixed supply and decreasing inflation rate through halvings. For cross-border payments, users can send funds globally without relying on traditional clearing systems.

For payments, mainnet transactions require network confirmation and incur miner fees, making them suitable for larger or less time-sensitive transfers. Layer 2 solutions such as the Lightning Network are designed for faster and lower-cost micro-payments but require additional tools and channel management.

Institutions and individuals may also allocate Bitcoin as part of a diversified portfolio, balancing their risk tolerance and regulatory requirements.

What Are the Key Risks and Regulatory Considerations for Bitcoin (BTC)?

• Price Volatility: Bitcoin’s value can fluctuate significantly due to macroeconomic factors, liquidity conditions, and market sentiment.
• Regulatory Compliance: Laws and tax policies regarding crypto assets differ by jurisdiction. Users must adhere to local KYC (Know Your Customer), reporting, and anti-money laundering regulations.
• Private Key Security: Losing or exposing your private key results in irreversible loss of funds. Always back up recovery phrases offline and beware of phishing links, fake wallets, or impersonated customer support.
• Exchange Risk: Trading platforms may face operational issues or withdrawal congestion. Enable security features, diversify holdings across platforms, and consider self-custody options.
• Technical Risks: While Bitcoin benefits from robust hash power and strong network effects, users should be aware of protocol upgrades, potential soft or hard forks, node compatibility issues, and the remote possibility of mining centralization.

What Gives Bitcoin (BTC) Long-Term Value?

• Scarcity and Predictable Rules: The 21 million BTC cap and scheduled halving events make supply transparent and predictable. Open-source code and broad node participation enforce these rules.
• Network Effect and Security: A vast global network of nodes and miners strengthens resistance against tampering—over time, it becomes increasingly difficult to reorganize historical blocks.
• Brand Recognition and Liquidity: As one of the oldest crypto assets, Bitcoin enjoys widespread ownership and deep markets that facilitate entry and exit.
• Macro Positioning: Within diversified portfolios, Bitcoin’s decentralization and global accessibility offer unique risk-return characteristics compared to traditional assets.

How Can I Buy and Safely Store Bitcoin (BTC) on Gate?

Step 1: Register & Secure Your Account
Sign up on the Gate website with your email or mobile number. Enable two-factor authentication (2FA) and anti-phishing codes. Complete KYC verification to increase account limits and comply with regulations.

Step 2: Deposit or Purchase Crypto with Fiat
Deposit digital assets or use fiat channels to buy stablecoins like USDT as your trading funds. Pay attention to deposit networks and confirmation requirements.

Step 3: Place a Spot Trade
Go to the "Spot" section, search for BTC, then select your preferred trading pair and order type. Market orders execute at current prices; limit orders allow you to set custom prices and quantities. Review price quotes, order book depth, and trading fees before placing an order.

Step 4: Withdraw to a Personal Wallet
For self-custody, navigate to "Withdraw," select the Bitcoin mainnet as the network, paste your Bitcoin address, perform a small test withdrawal first, then transfer larger amounts after confirmation. Enable address whitelisting and withdrawal protection features.

Step 5: Safekeeping & Backup
Hot wallets are suitable for daily small balances; cold wallets (including hardware wallets) offer higher security for medium or long-term holdings. Back up your recovery phrase offline—avoid photos, cloud storage, or email—and regularly check wallet device firmware updates.

How Is Bitcoin (BTC) Different from Ethereum?

• Purpose & Positioning: Bitcoin is focused on being a store of value and decentralized currency; Ethereum is built for smart contracts and decentralized application ecosystems.
• Consensus Mechanism: Bitcoin uses Proof of Work (PoW); Ethereum has transitioned to Proof of Stake, securing its network through staking.
• Supply & Issuance: Bitcoin’s supply is capped at 21 million with halving events; Ethereum has no fixed supply cap—issuance varies based on network parameters and its burn mechanism.
• Programmability: Bitcoin’s scripting language is intentionally limited; Ethereum’s EVM supports robust smart contract functionality for diverse applications.
• Neutral Comparison: The two serve distinct needs and are often held together in portfolios—Bitcoin emphasizes monetary stability and security; Ethereum focuses on application-layer innovation and flexibility.

Summary of Bitcoin (BTC)

Bitcoin is a decentralized monetary system maintained by open-source code and a global node network—its transparent rules, fixed supply cap, PoW consensus, and halving schedule secure its long-term issuance path. Market data shows Bitcoin remains dominant in market share and liquidity; however, price volatility and regulatory developments introduce uncertainty. For those considering exposure, follow step-by-step guidance on Gate for purchasing BTC—prioritizing self-custody, security backups, risk tolerance assessment, compliance with local regulations, staged allocation strategies, and long-term perspective.

FAQ

Is Bitcoin’s Total Supply Fixed?

Yes. The total supply of Bitcoin is permanently limited to 21 million coins—a hardcoded rule in its software that cannot be changed. Over 92% of this supply has already been mined (approximately 21 million), with the remainder expected to be mined around the year 2140. This scarcity mechanism is essential for Bitcoin’s resistance to inflation.

Why Does Bitcoin’s Price Fluctuate So Much?

Bitcoin’s price volatility is driven by market supply-demand dynamics, macroeconomic policy changes, institutional investor actions, and overall market sentiment. As an emerging asset class, it lacks deep liquidity and mature pricing models; leveraged trading also amplifies price swings. Beginners are advised to avoid chasing rallies or panic selling—use reputable platforms like Gate and practice sound risk management.

Is Bitcoin Really Decentralized? Why Does It Matter?

Bitcoin achieves decentralization through its distributed network architecture and consensus mechanism—no single entity can control the system. This means no bank or government can freeze your BTC or unilaterally change the rules—protecting asset security and transactional freedom. Decentralization is what sets Bitcoin apart from traditional currencies.

Where Do Lost Bitcoins Go?

Lost Bitcoins—due to forgotten private keys or accidental transfers to wrong addresses—are permanently inaccessible. These coins remain visible on the blockchain, but no one can spend them; effectively they are removed from circulation. This underscores the importance of strong passwords and secure backup phrases on platforms like Gate.

Why Is Bitcoin Called “Digital Gold”?

Bitcoin is dubbed “digital gold” because it shares key attributes with physical gold: finite supply, high extraction cost (mining), ease of storage/transferability, and independence from any government control. In times of economic uncertainty or inflation fears, investors turn to Bitcoin as a hedge—though its volatility is much higher than gold’s, which also means greater risks.

Glossary of Key Bitcoin (BTC) Terms

• Proof of Work (PoW): A consensus mechanism that secures the network by requiring miners to solve complex computational problems.
• Mining: The process where miners use cryptographic computation to validate transactions and create new blocks—earning BTC rewards.
• Block: A data unit containing transaction records; blocks are linked in sequence to form a blockchain.
• Hash Value: The cryptographic fingerprint of a transaction or block that ensures data integrity and prevents tampering.
• Halving: An event that occurs approximately every four years where miner rewards are cut in half—controlling BTC’s supply growth rate.
• Wallet: A tool for storing and managing BTC; includes both public keys for receiving funds and private keys for sending transactions.

Further Reading & References on Bitcoin (BTC)

• Official Site / Whitepaper:

  • https://bitcoin.org/
  • https://bitcoin.org/en/developer-documentation
  • https://whitepaper.io/document/12/bitcoin-whitepaper

• Development / Documentation:

  • https://developer.bitcoin.org/
  • https://github.com/bitcoin/bitcoin
  • https://bitcoincore.org/en/doc/

• Authoritative Media / Research:

  • https://www.coindesk.com/learn/what-is-bitcoin/
  • https://www.investopedia.com/terms/b/bitcoin.asp
  • https://www.reuters.com/technology/bitcoin/