What is Bitcoin

Bitcoin launched in January 2009. Its designer published the Bitcoin white paper under the pseudonym "Satoshi Nakamoto," whose real identity remains unknown. For the first time, Bitcoin allowed two strangers to complete a transfer over the internet securely, without going through a bank.

The problem it solved

Before Bitcoin, an online transfer required a bank or payment institution to keep the books, preventing the same money from being spent twice—a problem known as double-spending. Bitcoin solved this with a public set of rules and a ledger maintained collectively by the network: every transaction must be verified by the network before it is written into the ledger.

How it works

• Blocks: New transactions are bundled roughly every 10 minutes into a block, chained in order to the previous one, forming the blockchain.
• Mining: The nodes that bundle transactions are called miners. Miners compete for the right to record transactions by performing large amounts of computation. The successful miner earns newly issued bitcoin and transaction fees. This is called proof of work.
• Tamper-resistance: Altering an old transaction would require recalculating every block after it, and doing so faster than all other miners combined. In practice, this is nearly impossible.

Why some call it digital gold

• Fixed supply: The Bitcoin protocol caps supply at 21 million coins. No one can issue more.
• Decreasing issuance: The rate of new coin creation roughly halves every four years. The most recent halving occurred in April 2024.
• Scarce and verifiable: Because supply is capped and fully public, some treat Bitcoin as a long-term store of value similar to gold.

Risks to know

• Price volatility: Bitcoin has fallen more than 70% from its peak multiple times—for example in 2018 and 2022.
• Confirmation time: Bitcoin transactions require block confirmations. Depositing to SleeplessNode requires 2 confirmations, typically about 20 minutes—longer when the network is congested.
• Address and network: Bitcoin addresses typically begin with 1, 3, or bc1. When depositing, you must select the Bitcoin network. Sending on the wrong network may make the funds unrecoverable.