Bitcoin (sign: BTC) is a decentralized digital currency[9][10] based on an open-source,[11] peer-to-peer internet protocol. It was introduced by a pseudonymous developer named Satoshi Nakamoto in 2009.[12]
Bitcoins can be exchanged through a computer or smartphone locally or internationally without an intermediate financial institution.[13] In trade, one bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal points.[4]
Bitcoin is not managed like typical currencies: it has no central bank or central organization. Instead, it relies on an internet-based peer-to-peer network. The money supply is automated and given to servers or "bitcoin miners" that confirm bitcoin transactions as they add them to a decentralized and archived transaction log every 10 minutes.
The log is authenticated by end-users through hashed ECDSA digital signatures (similar to a username and password) and confirmed by intense calculations of varying difficulty, performed by dedicated servers called bitcoin miners. Each 10-minute portion or "block" of the transaction log has an assigned money supply that is awarded to the miners once a "block" is confirmed. The amount per block depends on how long the network has been running and how much in transaction fees has been paid. Currently, 25 new bitcoins are generated with every 10-minute block. This will be halved to 12.5 BTC during the year 2017 and halved continuously every 4 years after until a hard limit of 21 million bitcoins is reached during the year 2140.[1][12]
Bitcoin is the most widely used alternative currency[3][14] and accepted by various merchants and services internationally. As of March 2013, the monetary base of bitcoin is valued at over $1 billion USD.[15][16][17] The large fluctuation in the dollar value of a bitcoin has evoked criticism of bitcoin's economic suitability as a currency.[18]
