Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
The unit of account of the bitcoin system is a bitcoin. Ticker symbols used to represent bitcoin are BTC and XBT. Its Unicode character is ₿. Small amounts of bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat).
Named in homage to bitcoin’s creator, a satoshi is the smallest amount within bitcoin representing 0.00000001 bitcoins, one hundred millionth of a bitcoin. A millibitcoin equals 0.001 bitcoins; one thousandth of a bitcoin or 100,000 satoshis.
There will only ever be 21 million bitcoins created in total. This number cannot be increased as it is hardcoded into the protocol.
This means that once all 21 million have been mined, that’s it – nobody can mine anymore bitcoins. However, it’s possible that transaction fees will continue to incentivize miners to stay on the network even when all the bitcoins have been mined because they’ll still receive rewards for verifying transactions.
The last block halving occurred on May 11th, 2020 and reduced the block reward from 12.5 BTC to 6.25 BTC – meaning that every time a block is mined (every 10 minutes on average), miners receive 6.25 BTC instead of 12.
5 BTC. Once all 21 million bitcoins have been mined, there will never be any new bitcoins created – unlike fiat currencies (like the US dollar) which can be printed by central banks at will. This means that once all the bitcoins have been mined, transaction fees will be the only incentive for miners to continue verifying transactions and maintaining the blockchain – making sure it stays secure and efficient.
While transaction fees will keep miners incentivized after the last bitcoin has been mined, it’s possible that they won’t be enough to keep them motivated – which could lead to centralization or 51% attacks on the network (where one group of miners takes control of more than 50% of the mining power and therefore has enough power to control the blockchain). While this is unlikely given how decentralized Bitcoin is today, it’s still something to keep in mind for the future since it could jeopardize the security and efficiency of Bitcoin’s blockchain if not enough miners are motivated to stay on the network after all the bitcoins have been mined.