Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, an unknown person.[6] Use of bitcoin as a currency began in 2009,[7] with the release of its open-source implementation.[8]: ch. 1 In 2021, El Salvador adopted it as legal tender.[4] Bitcoin is currently used more as a store of value and less as a medium of exchange or unit of account. It is mostly seen as an investment and has been described by many scholars as an economic bubble.[9] As bitcoin is pseudonymous, its use by criminals has attracted the attention of regulators, leading to its ban by several countries as of 2021.[10]
Use for investment and status as an economic bubble
Further information: Cryptocurrency bubble
Government website with El Salvador reserves in May 2024
As of 2018, the overwhelming majority of bitcoin transactions took place on cryptocurrency exchanges.[108] Since 2014, regulated bitcoin funds also allow exposure to the asset or to futures as an investment.[125][126] Individuals and companies such as the Winklevoss twins[127] and Elon Musk’s companies SpaceX and Tesla have massively invested in Bitcoin.[128][129] Bitcoin wealth is highly concentrated, with 0.01% holding 27% of in-circulation currency, as of 2021.[130] As of September 2023, El Salvador had $76.5 million worth of bitcoin in its international reserves.[131]
In 2018, research published in the Journal of Monetary Economics concluded that price manipulation occurred during the Mt. Gox bitcoin theft and that the market remained vulnerable to manipulation.[132] Research published in The Journal of Finance also suggested that trading associated with increases in the amount of the Tether cryptocurrency and associated trading at the Bitfinex exchange accounted for about half of the price increase in bitcoin in late 2017.[133][134]
Ledger start3 January 2009 (15 years ago)Timestamping schemeProof of work (partial hash inversion)Hash functionSHA-256 (two rounds)Issuance scheduleDecentralized (block reward)
Initially ₿50 per block, halved every 210,000 blocksBlock reward₿3.125 (as of 2024)Block time10 minutesCirculating supply₿19,591,231 (as of 6 January 2024)Supply limit₿21,000,000[b]
Recognition as a currency and legal status
Legal status of bitcoin
Legal tender (bitcoin is officially recognized as a medium of exchange)
Permissive (legal to use bitcoin, with minimal or no restrictions)
Restricted (some legal restrictions on the usage of bitcoin)
Contentious (interpretation of old laws, but bitcoin is not directly prohibited)
Prohibited (full or partial prohibition on the use of bitcoin)
No data (no information available)