Bitcoin Price

What Is Bitcoin?

Bitcoin is a digital currency that runs on a public network of computers instead of through a bank or government. Anyone with an internet connection can send it to anyone else, and the network itself keeps the record of who owns what.

A person or group using the name Satoshi Nakamoto described the system in a nine-page white paper in October 2008 and mined the first block on January 3, 2009. The paper pitched bitcoin as electronic cash that two people could trade directly, with no trusted middleman in between.

Nakamoto stopped posting publicly around 2011 and has never been identified. No company or foundation runs bitcoin today. Volunteer developers maintain the main software, Bitcoin Core, and a change only takes hold if the people running the network choose to install it.

How Bitcoin Works

Bitcoin uses proof of work. Computers called miners race to solve a math puzzle built on the SHA-256 algorithm, and the winner adds the next block of transactions to the blockchain, a shared ledger that every node keeps a copy of. The winning miner collects newly created bitcoin plus the fees users paid. A new block arrives about every 10 minutes on average.

The supply rule is written into the software. Bitcoin's developer documentation sets a hard cap of 21 million coins and cuts the block reward in half every 210,000 blocks.

That cut, called the halving, lands roughly every four years. The reward started at 50 bitcoin per block and fell to 3.125 at the fourth halving in April 2024. The next halving is expected around 2028.

Bitcoin had no pre-sale, no venture funding round and no token unlock schedule. Every coin in circulation was mined, and the live data on this page shows how much of the 21 million already exists.

Confirmed transactions can't be reversed by anyone, including the sender. Our piece on proof of work vs. proof of stake vs. proof of history sets this design against newer networks.

What People Use It For

Most people hold bitcoin as a long-term investment, on the theory that a fixed supply will hold value as demand grows. Since January 2024, US investors can also own it through spot bitcoin exchange-traded funds (ETFs), which hold real bitcoin and trade like a stock, after the SEC approved the first group of spot bitcoin ETFs.

Bitcoin also moves money across borders without a bank wire. The Lightning Network, a second layer built on top of bitcoin, handles small payments faster and for lower fees than the main chain. Governments hold it too. A March 2025 executive order set up a US Strategic Bitcoin Reserve stocked with bitcoin the government had already seized in criminal and civil cases.

Risks To Know

Bitcoin's price swings hard. It has lost more than half its value in several downturns since 2015, and no earnings stream or government backstop sits behind it.

For most people, the bigger risk is where the coins are kept. Exchanges and crypto lenders have failed with customer bitcoin inside, and the SEC charged FTX founder Sam Bankman-Fried with defrauding investors after FTX collapsed in 2022. Self-custody carries its own danger: lose your recovery phrase and the coins are gone for good, and a payment sent to a scammer can't be pulled back.

Mining is also concentrated. A small number of mining pools find most new blocks, which mempool.space tracks in real time, and some researchers see that as a centralization risk. Mining uses large amounts of electricity as well, which the Cambridge Bitcoin Electricity Consumption Index measures and which has drawn criticism from environmental groups.

How To Buy Bitcoin

Every major US crypto exchange sells bitcoin, including Coinbase, Kraken, Gemini, Bitstamp, Binance.US, Crypto.com and OKX. Bitstamp's US service stops taking new deposits and purchases on Feb. 1, 2027. Outside the US, Bitget, MEXC and Gate list it. The table below shows how much bitcoin each exchange actually gives you for the same amount of money after fees and spreads, which vary by platform.

You can also skip the exchange and buy a spot bitcoin ETF in a regular brokerage account. If you buy the coin itself, you can leave it on the exchange or move it to a wallet you control. Our piece on what "not your keys, not your coins" means walks through that choice.

Bitcoin And Your Taxes

The IRS treats bitcoin as property, not currency. Selling it, swapping it for another coin or spending it triggers a capital gain or loss, and coins held longer than a year qualify for long-term capital gains rates. Mined bitcoin counts as ordinary income when you receive it. US brokers now report your sales on Form 1099-DA.

Spot bitcoin ETFs can be held in an IRA, where gains grow tax-deferred, or tax-free in a Roth. Read more on how taxes on crypto work.

FAQ

Is Bitcoin A Good Investment?

That depends on your goals, your timeline and how much of a loss you can live with. Bitcoin has the longest track record of any cryptocurrency and the widest access through US exchanges and ETFs, but its price has fallen by more than half several times. Weigh whether you could hold through a long drop, how large a share of your savings it would be, and whether owning the coin or an ETF fits you better.

What Is The Max Supply Of Bitcoin?

The max supply is 21 million bitcoin. The cap is part of the network's code, and new coins only enter circulation as mining rewards, which get cut in half every 210,000 blocks. Raising the cap would take nearly everyone who runs the network agreeing to new software, a break from the rule bitcoin has followed since 2009.

Who Created Bitcoin?

Bitcoin was created by Satoshi Nakamoto, a pseudonym for a person or group whose real identity has never been confirmed. Nakamoto published the white paper in 2008, released the first software in early 2009 and handed off development to other volunteers before going quiet around 2011. Today no single person or company controls bitcoin.

Can I Buy Bitcoin In An IRA?

Yes. Spot bitcoin ETFs trade on US stock exchanges, so a brokerage IRA can hold them like any other fund, with an annual expense ratio instead of exchange trading fees. Some specialty providers offer crypto IRAs that hold the coin directly. Our breakdown of how to invest in crypto in your IRA or 401k compares both routes.

Where Can I Buy Bitcoin In The US?

Coinbase, Kraken, Gemini, Bitstamp, Binance.US, Crypto.com and OKX all sell bitcoin to US customers. Spot bitcoin ETFs are available through any brokerage that offers ETFs. Fees and spreads differ across exchanges, so the cost table on this page compares what you'd actually receive at each one.

Should I Keep My Bitcoin On An Exchange Or In A Wallet?

Leaving bitcoin on an exchange is simpler, but you're trusting that company to stay solvent and secure. Moving it to your own wallet puts you in control, along with full responsibility for your recovery phrase. A hardware wallet keeps your keys on a device that stays offline. Compare options in our roundup of the best crypto wallets.