Each node maintains an independent copy of a public distributed ledger of transactions, called a blockchain, without central oversight.

The mining process is primarily intended to prevent double-spending and get all nodes to agree on the content of the blockchain, but it also has desirable side-effects such as making it infeasible for adversaries to stifle valid transactions or alter the historical record of transactions, since doing so generally requires the adversary to have access to more mining power than the rest of the network combined.[7]: ch.

[11] The first proposals for distributed digital scarcity-based cryptocurrencies came from cypherpunks Wei Dai (b-money) and Nick Szabo (bit gold) in 1998.

[14] These various attempts were not successful:[11] Chaum's concept required centralized control and no banks wanted to sign on, Hashcash had no protection against double-spending, while b-money and bit gold were not resistant to Sybil attacks.

[15] On 31 October 2008, a link to a white paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list.

[11] Nakamoto's innovation was their complex interplay resulting in the first decentralized, Sybil resistant, Byzantine fault tolerant digital cash system, that would eventually be referred to as the first blockchain.

[20] Blockchain analysts estimate that Nakamoto had mined about one million bitcoins[21] before disappearing in 2010 when he handed the network alert key and control of the code repository over to Gavin Andresen.

[24] After early "proof-of-concept" transactions, the first major users of bitcoin were black markets, such as the dark web Silk Road.

[33] Research produced by the University of Cambridge estimated that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

[46] In November 2021, the Taproot soft-fork upgrade was activated, adding support for Schnorr signatures, improved functionality of smart contracts and Lightning Network.

[4] In October 2021, the first bitcoin futures exchange-traded fund (ETF), called BITO, from ProShares was approved by the SEC and listed on the CME.

[49] In early 2022, during the Canadian trucker protests opposing COVID-19 vaccine mandates, organizers turned to bitcoin to receive donations after traditional financial platforms restricted access to funding.

[52][53] In May and June 2022, the bitcoin price fell following the collapses of TerraUSD, a stablecoin,[54] and the Celsius Network, a cryptocurrency loan company.

Unlike a traditional ledger that tracks physical currency, bitcoins exist digitally as unspent outputs of transactions.[7]: ch.

One common example is "multisig", in which multiple distinct private keys must mutually sign any transaction that attempts to spend the funds.[7]: ch.

[78] Bitcoin mining's environmental impact is controversial and has attracted the attention of regulators, leading to restrictions or incentives in various jurisdictions.

[83] As of 2022[update], a non-peer-reviewed study by the Cambridge Centre for Alternative Finance (CCAF) estimated that bitcoin mining represented 0.4% of global electricity consumption.

[84] Another 2022 non-peer-reviewed commentary published in Joule estimated that bitcoin mining was responsible for 0.2% of world greenhouse gas emissions.

This public record allows for chain analysis, where users can identify and potentially reject bitcoins from controversial sources.

1, glossary  The first wallet program, simply named Bitcoin, and sometimes referred to as the Satoshi client, was released in 2009 by Nakamoto as open-source software.

[96] Cold storage protects bitcoins from such hacks by keeping private keys offline, either through specialized hardware wallets or paper printouts.[97][7]: ch.

[98] The limited block size and frequency can lead to delayed processing of transactions, increased fees and a bitcoin scalability problem.

[102]: 22  Sociologist Nigel Dodd argues that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control.

[103] The Economist 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".

[107] In 2015, The Economist noted that bitcoins had three qualities useful in a currency: they are "hard to earn, limited in supply and easy to verify".

[109] François R. Velde, Senior Economist at the Chicago Fed, described bitcoin as "an elegant solution to the problem of creating a digital currency".

[120] As of 2015[update], there was little sign of bitcoin use in international remittances despite high fees charged by banks and Western Union who compete in this market.

[125] In April 2022, the Central African Republic (CAR) adopted bitcoin as legal tender alongside the CFA franc,[126] but repealed the reform one year later.

[148] The same year, Federal Reserve Chair Jerome Powell described bitcoin as a digital competitor to gold but not to the dollar as he argued it is a highly volatile speculative asset not used as a form of payment.

[154][155][156] Legal scholar Eric Posner disagrees, however, as "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion".