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.
According to a University of Cambridge study, much of bitcoin mining is done in China, where electricity is subsidized by the government.
In 2013, The Washington Post reported that most of the world’s bitcoin trading volume was processed by Mt. Gox, a now-defunct cryptocurrency exchange based in Japan.
As of 2018, the value of all bitcoins in circulation exceeded $180 billion.
Despite its popularity, Bitcoin remains largely unregulated by government agencies around the world. This has led to concerns about its potential for illegal activity.
In October 2013, the FBI seized more than $2 million worth of bitcoins from Silk Road, an online black market that allowed users to anonymously buy and sell illegal drugs and other items.
While most countries have yet to make explicit regulations surrounding cryptocurrency usage, some have taken steps to do so. In March 2014, the People’s Bank of China issued a notice banning financial institutions from handling Bitcoin transactions.
However, this ban has been largely ineffective as Bitcoin continues to be traded on Chinese exchanges despite the country’s crackdown on cryptocurrency trading.
The majority of Bitcoin ownership is concentrated in a few countries at this time:
1) United States – The U.S. is home to many major exchanges such as Coinbase and Gemini, and over 15 million Americans are estimated to own Bitcoin.
2) Japan – Despite its recent crypto crackdowns, Japan still remains one of the friendliest countries towards cryptocurrency with roughly 3 million Japanese owning Bitcoin.
3) United Kingdom – The UK has been relatively open-minded when it comes to crypto with major exchanges such as Coinfloor operating within its borders.
It’s estimated that 1% of the British population owns Bitcoin – amounting to over 600 thousand people.
4) China – As mentioned before, China houses many Bitcoin miners and has played an important role in its development. However, ownership is not as widespread due to the Chinese government’s negative stance on cryptocurrency trading.
5) South Korea – South Korea has seen tremendous growth in both cryptocurrency trading and adoption with major exchanges like Bithumb dominating the market there. It’s estimated that around 20% of South Koreans own Bitcoin or another cryptocurrency.