What is Bitcoin?

So, what the heck is Bitcoin? And does it really have a chance to compete against the almighty dollar or euro?

Photo: BTCKeyChain/Flickr

Photo: BTCKeyChain/Flickr

Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.

Conventionally, the capitalized word ‘Bitcoin’ refers to the technology and network, whereas lowercase ‘bitcoin’ refers to the currency itself.
Bitcoins are created by a process called mining, in which participants verify and record payments into a public ledger in exchange for transaction fees and newly minted bitcoins.

Users send and receive bitcoins using wallet software on a personal computer, mobile device, or a web application. Bitcoins can be obtained by mining or in exchange for products, services, or other currencies.

Bitcoin has been a subject of scrutiny amid concerns that it can be used for illegal activities. In October 2013 the U.S. FBI shut down the Silk Road online black market and seized 144,000 bitcoins worth US$28.5 million at the time.

The U.S. is considered Bitcoin-friendly compared to other governments, however. In China new rules restrict bitcoin exchange for local currency. The European Banking Authority has warned that Bitcoin lacks consumer protections.

Bitcoins can be stolen and chargebacks are impossible.
Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use by speculators, which has fueled price volatility.

Bitcoin as a form of payment for products and services has seen growth, however, and merchants have an incentive to accept the currency because transaction fees are lower than the 2–3% typically imposed by credit card processors.

Most Popular Questions about Bitcoin from Google Search

Here’re the answers to the most relevant (as per Google search queries) questions about Bitcoin (BTC):

  • How Many Bitcoins Are There Now in Circulation?

There are currently 17,385,437.5 bitcoins in existence. This number changes about every 10 minutes when new blocks are mined. Right now, each new block adds 12.5 bitcoins into circulation.

  • What is the Total Number of Bitcoins?

The maximum and total amount of bitcoins that can ever exist is 21 million.

  • How Many Bitcoins Are Left to Be Mined?

There are 3,614,562.5 bitcoins left to be mined.

  • How Many Bitcoins Are Lost?

There’s no exact answer. One recent estimate guess that about 3-4 million bitcoins are lost forever.

  • How Many Bitcoins Are Mined Everyday?

144 blocks per day are mined on average, and there are 12.5 bitcoins per block. 144 x 12.5 is 1,800, so that’s the average amount of new bitcoins mined per day.

Because many miners are adding new hashpower, over the last few years blocks have often been found at 9.5 minute intervals rather than 10. This creates new bitcoins faster, so on most days there are actually more than 1,800 new bitcoins created.

  • How Many Bitcoins Have Been Mined Already?

Since bitcoins can only be created by being mined, all the bitcoins in existence are all bitcoins that have been mined. The total is 17,385,437.5 BTC.

  • How Many Bitcoin Blocks Are There Today?

There have been 550,835 blocks mined.

  • How Many Bitcoins Does Satoshi Nakamoto Have?

Some analytics estimate Satoshi Nakamoto has around 900,000 bitcoins (BTC). This number is heavily debated, though, as some claim he has around 300,000 BTC.

  • How Many Bitcoin Have Been Stolen?

It’s unclear exactly how many bitcoins have been stolen. 850,000 BTC were stolen in the Mt. Gox hack, which was the largest Bitcoin hack ever. Another 120,000 BTC were stolen from Bitfinex in 2016. Together, that adds up to about 970,000 BTC. Stolen BTC, however, does mean lost BTC. It’s likely these stolen coins are still circulating, and may not even be in the hands of the original thieves.

  • How Many Bitcoins Does Satoshi Have?

There are estimates that Satoshi has around 1 million bitcoins. Many debate this number and claim that Satoshi only has 300,000 bitcoins. It’s impossible to know though.

  • What Happens When All 21 Million Bitcoins Are Mined?

Right now, miners earn most of their income via the block reward. When all 21 million bitcoins are mined, there won’t be a block reward to pay to miners. When a Bitcoin user sends a BTC transaction, a small fee is attached. These fees go to miners and this is what will be used to pay miners instead of the block reward.

How Many Bitcoins Will Be Mined Before the Next Halving?

There are 989,562.5 BTC left to be mined until the next block reward halving.

How Many Bitcoin Billionaire Are There?

With Bitcoin prices hitting $6,200, there may not be any Bitcoin billionaires. The Winklevoss twins were Bitcoin billionaires while the price was above $10,000, since they own more than 100,000 BTC.

How Many Coins Copied Bitcoin?

Most coins are exact copies of Bitcoin’s source code. Bcash is a fork of Bitcoin with a few things taken out. Litecoin is also a fork of Bitcoin with the block time and mining algorithm changed.