1. What Is Bitcoin?

Bitcoin (abbreviated as BTC) is currently the most widely used cryptocurrency. Founded on January 3, 2009, it is a digital cryptocurrency of peer-to-peer (P2P) transfer with a total supply of 21 million Bitcoins. The Bitcoin network releases a certain number of Bitcoins every 10 minutes and it's estimated that the last bitcoin will be mined around 2140. Bitcoin is dubbed "digital gold" by investors. Bitcoin is generated through extensive computation based on a specific algorithm and is not issued by a specific institution. It utilizes a distributed database formed by numerous nodes across the entire P2P network to confirm and record all transaction activities. Its cryptographic design ensures the security of various aspects of currency circulation and prevents the artificial manipulation of Bitcoin's value through mass production. The cryptography-based design allows only legitimate owners to transfer, pay with, and redeem Bitcoin. It ensures the anonymity of ownership and transaction circulation.

Bitcoin is favored by tech enthusiasts due to its features such as decentralization, global circulation, low transaction fees, and anonymous transactions. Recently, traditional financial institutions like Wall Street and central banks in various countries have begun researching Bitcoin's blockchain technology. As the Japanese government officially recognizes Bitcoin as a legal form of payment, more and more Japanese merchants have started accepting Bitcoin payments.

2. What Are the Advantages of Bitcoin?

Payment freedom – It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money.

Extremely low fees – Processing Bitcoin payments involves no fees or extremely low fees. Users can include fees in their transactions to prioritize processing and encourage faster confirmation of transactions from the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.

Fewer risks for merchants – Bitcoin transactions are secure, irreversible, and do not contain customers' sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.

Security and control – Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft.  Bitcoin users can also protect their money with backup and encryption.

Transparent and neutral – All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.

3. What Are the Disadvantages of Bitcoin?

Degree of acceptance – Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.

Volatility – The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.

Ongoing development – Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.

4. Other Basics

English Name: Bitcoin

Abbreviation: BTC

Developer: Satoshi Nakamoto

Core Algorithm: SHA-256

Release Date: January 3, 2009

Total Supply: 21 million

Proof of Consensus: POW

Risks: Debate over scalability, potential risks of forks

Currency Display:

1       Bitcoins (BTC)

10⁻²     Bitcent (cBTC)

10⁻³      Milli-Bitcoins (mBTC)

10⁻⁶      Micro-Bitcoins (μBTC)

10⁻⁸      Satoshi​

Note: The project introduction comes from the materials published or provided by the official project team, which is for reference only and does not constitute investment advice. Some of the content may be out of date, error, or omission. HTX does not take responsibility for any resulting direct or indirect losses.