Encyclopedia Bitcoin basics · Entry 376

What is Bitcoin? Money that runs on a public network instead of a bank

Degrees of Satoshi editorial projectAI-assisted research · separate automated verificationCorrections

Theme: Bitcoin basics
Sources: 6 cited records
Reading time: About 8 minutes
Automated verification: 2 October 2026
Substantive update: 2 October 2026

In this article

At a glance

Key facts

Key facts for What is Bitcoin? Money that runs on a public network instead of a bank
Fact	Detail	Source
White paper	Announced 31 October 2008 on a cryptography mailing list	[2]
First block	Timestamped 3 January 2009, the genesis block	[5]
Software released	8 January 2009, Bitcoin v0.1, Windows only, open source	[3]
First transaction	Ten coins sent by Satoshi to Hal Finney as a test	[6]
Supply cap	21,000,000 coins, stated in the release announcement	[3]
Creator	Satoshi Nakamoto, a pseudonym; the paper, emails and posts do not identify a person	[1][2]

Bitcoin is a way to send value without asking anyone’s permission

Bitcoin is money that lives on a computer network rather than in a bank. Anyone can download the software, receive coins and send them to anyone else in the world. There is no company that runs it, no account to open and no one who can freeze a payment. The rules are enforced by the software itself, and every computer on the network checks that everyone else is following them.

The design was laid out in a short paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” written under the name Satoshi Nakamoto. Its first sentence states the goal: a version of electronic cash that lets online payments go “directly from one party to another without going through a financial institution.” Peer-to-peer means the users’ computers talk to each other directly, the way file-sharing programs do, instead of everyone talking to one central server.

In a forum post in February 2009, the author put it more bluntly. Bitcoin, they wrote, is “completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust.” Crypto proof here means mathematics you can check for yourself, rather than a promise from an institution.

The problem it solves is trust, and the trick is a shared record

Digital cash had been tried before Bitcoin, and the sticking point was always the same. A digital coin is just data, and data can be copied. If I pay you with a file, what stops me paying someone else with the same file? The white paper calls this double-spending, and it notes that the usual fix was a central authority, a “mint,” that checks every payment. That works, but then “the fate of the entire money system depends on the company running the mint.”

Bitcoin’s answer is to make the record of payments public and shared. Every transaction is broadcast to the whole network. Computers bundle them into blocks, and each block is stamped onto the end of a chain that everyone keeps a copy of. Once a payment is in the chain, everyone can see the coins have moved, so spending them twice fails. The February 2009 post summarizes it in one line: “In a nutshell, the network works like a distributed timestamp server.” That shared record is what people mean by Bitcoin’s blockchain.

The same post explains why the author thought this mattered. “The root problem with conventional currency is all the trust that’s required to make it work,” it says: trust that a central bank will not debase the currency, and trust that banks will hold your money rather than lend it out “in waves of credit bubbles with barely a fraction in reserve.” Whatever you make of that argument, it is the stated motive, in the author’s own words.

New coins come from the computers that keep the record, on a fixed schedule

Nobody prints bitcoin. New coins appear only as a reward to the computers that add blocks to the chain, a process called mining. The white paper describes it as a convention: the first transaction in each block “starts a new coin owned by the creator of the block.” It compares this to gold miners spending effort to add gold to circulation, except that here what gets spent is “CPU time and electricity.”

The schedule was fixed from the start. The email announcing the first software release in January 2009 said total circulation “will be 21,000,000 coins,” handed out to the computers that make blocks, “with the amount cut in half every 4 years.” It even listed the first four steps: 10,500,000 coins in the first four years, then 5,250,000, then 2,625,000, then 1,312,500. When new coins run out, the same email said, the system “can support transaction fees if needed.”

This is the part of Bitcoin that most surprises newcomers. Most currencies have someone who decides how much to issue. Bitcoin has a rule written into the software, and changing it would require nearly everyone running the software to agree to change it. Our dossier on halvings and the 21 million supply goes through the exact code and the block heights at which each cut has happened.

It began with a paper, a program and one test payment

The paper came first. On 31 October 2008, an email to a cryptography mailing list announced: “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” It listed the main properties, including that double-spending is prevented by a peer-to-peer network, that there is no mint, and that new coins are made from “Hashcash style proof-of-work,” and it linked to the paper.

The network started a little over two months later. The first block, known as the genesis block, carries a timestamp of 3 January 2009 and contains a headline from that day’s edition of The Times: “Chancellor on brink of second bailout for banks.” Whether that was meant as a comment on banking or simply as proof of the date, it fixes the earliest moment the chain could have existed. The next block did not arrive for six days.

On 8 January 2009 the software itself was released, “Windows only for now,” with the open source code included. A cryptographer named Hal Finney downloaded it right away and later recalled being “the first person besides Satoshi to run bitcoin.” He became “the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test.” Finney’s recollection documents an early participant and test payment; it is not a census of every machine then running. The site’s origins dossier lays out the evidence for each of these steps.

What Bitcoin is not, and what nobody knows

Bitcoin is not a company. It has no head office, no customer service and no one who can reverse a payment. That is a feature to its users and a hazard to the careless: if you send coins to the wrong place, there is nobody to call. The white paper treats this as the point of the design, describing transactions that are “computationally impractical to reverse” as the thing that protects sellers from fraud.

It is not anonymous either, at least not in the way people assume. Every payment is public forever. The paper’s privacy section says the network keeps the keys anonymous, so “the public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone.” Keeping that link hidden is up to the user, and it is easy to get wrong.

And nobody knows who wrote it. Satoshi Nakamoto is the name on the paper, the emails and the forum posts, and those documents are the whole public record. They do not identify a person, and this site does not guess. Our page on what is actually known about Satoshi sticks to the documents.

Direct answers

Questions people ask

Who created Bitcoin?

Someone using the name Satoshi Nakamoto wrote the white paper, announced it on a cryptography mailing list on 31 October 2008 and released the software in January 2009. The name is a pseudonym. The public record consists of the paper, emails and forum posts, and none of it identifies a person.

How many bitcoins will there ever be?

The January 2009 release announcement said total circulation would be 21,000,000 coins, issued to the computers that make blocks and cut in half every four years. The exact figure is slightly different once you count in whole units; the site’s halvings dossier does that arithmetic.

When did Bitcoin start?

The white paper was announced on 31 October 2008. The first block carries a timestamp of 3 January 2009, and the software was publicly released on 8 January 2009. Hal Finney received the first transaction, ten coins sent by Satoshi as a test, in those first days.

Can a Bitcoin payment be reversed?

No. There is no operator to appeal to, and the white paper describes transactions that are computationally impractical to reverse as the way sellers are protected from fraud. Once a payment is buried in the chain, undoing it would mean redoing the work of every block after it.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

Bitcoin is a form of digital money that people can send to each other over the internet without a bank or payment company in the middle. A worldwide network of computers checks every payment against a shared public record, and new coins are created on a fixed schedule that tops out at 21 million. It was described in a nine-page paper in October 2008 by a pseudonymous author, Satoshi Nakamoto, and the software went live in January 2009.