How it works
The 2008 white paper by "Satoshi Nakamoto" describes a peer-to-peer electronic cash system that solves double-spending without a trusted third party. Transactions are grouped into blocks; miners compete to find a proof-of-work (a SHA-256 hash with enough leading zeros), and each block links to the previous one, forming a chain that can't be changed without redoing the work.[1]
New coins are the reward for mining a block. The reward halves every 210,000 blocks (roughly every four years), so the total supply approaches but never exceeds about 21 million. Difficulty adjusts every 2,016 blocks to target about one block every 10 minutes.[2]
History
Halvings: 2012 → 25 · 2016 → 12.5 · 2020 → 6.25 · 2024 → 3.125Source: Bitcoin Wiki, Controlled supply (community-maintained)
On January 10, 2024 the SEC approved the listing and trading of spot bitcoin exchange-traded products, after disapproving more than 20 such filings from 2018 through March 2023 and losing the Grayscale case in the D.C. Circuit.[3]
Watch out: risks
- Volatility: the SEC chair called bitcoin "primarily a speculative, volatile asset" and noted its use in illicit activity, and stressed the approval did not endorse bitcoin.[3]
- Lost keys = lost coins: lose the private key and the coins are effectively gone forever.[2]
- Platform risk: the SEC noted most crypto trading platforms were, in its view, non-compliant with securities laws and often had conflicts of interest.[3]
- Irreversible transactions make scams hard to undo.
Sources
- S. Nakamoto, "Bitcoin: A Peer-to-Peer Electronic Cash System" (2008)
- Bitcoin Wiki, "Controlled supply"
- SEC, Chair Gensler statement on spot bitcoin ETPs (Jan 10, 2024)
Fetched Oct 13, 2026.