Digital assets
Bitcoin
The first and largest cryptocurrency, with a supply capped at 21 million units.
How it works
Bitcoin was designed as a peer-to-peer payment system. In practice it is held mostly as a speculative store of value, with the fixed supply cited as its central property.
New units are issued to miners as a reward for validating transactions, on a schedule that halves roughly every four years.
Where it misleads people
Bitcoin has been described as digital gold and as an inflation hedge. Its price history so far correlates more closely with risk assets than with gold, particularly during liquidity stress.
Related terms
- CryptocurrencyA digital asset recorded on a distributed ledger rather than by a bank or government.
- BlockchainA shared record of transactions maintained by many computers rather than one authority.
- Consensus mechanismThe method a blockchain uses to agree which transactions are valid.
- HalvingThe scheduled reduction in the rate of new bitcoin issuance, roughly every four years.
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Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.