- What is Bitcoin and how does it work?
- Bitcoin is the world’s first decentralized cryptocurrency, created in 2009 by Satoshi Nakamoto. It operates on a peer-to-peer network powered by a public blockchain and uses Proof of Work (PoW) mining with the SHA-256 algorithm. Transactions are broadcast, verified by miners, and grouped into blocks roughly every 10 minutes. The network has a fixed supply cap of 21 million coins, making Bitcoin a scarce digital asset. Miners are rewarded with newly minted BTC and transaction fees, and rewards halve every ~4 years, reducing new supply over time. This design enables censorship-resistant, permissionless transfers without intermediaries, while the blockchain provides a transparent, immutable ledger of all transactions.
- How many Bitcoins are in circulation and what is the max supply?
- As of now, about 19.98 million BTC are in circulation out of a hard cap of 21 million. The total maximum supply is fixed at 21,000,000 BTC, a fundamental feature that introduces scarcity. New BTC enter circulation through mining rewards, which are halved approximately every four years to slow supply growth. This supply schedule creates a deflationary dynamic intended to maintain scarcity and long-term value. For investors, this means that the rate of new BTC entering the market decreases over time, while demand can influence price movements.
- Is Bitcoin a good hedge against inflation or a store of value?
- Bitcoin is often described as digital gold due to its fixed supply and durable scarcity. Many investors use BTC as a store of value and a potential hedge against currency debasement. However, Bitcoin is still volatile and influenced by macroeconomic factors, market sentiment, and adoption trends. Its long-term narrative as a decentralized, censorship-resistant asset has attracted institutions and corporate treasuries. As with any investment, consider portfolio diversification, risk tolerance, and a long-term horizon when evaluating Bitcoin as an inflation hedge.
- What are Ordinals and BRC-20, and do they affect Bitcoin's use as a currency?
- Ordinals, introduced in 2023, enable NFT-like inscriptions directly on the Bitcoin blockchain, enriching the ecosystem with ordinal data attached to satoshis. BRC-20 is an experimental standard for creating fungible tokens via Ordinals. These innovations expand Bitcoin’s functionality beyond simple value transfer, offering new use cases such as collectibles and tokenized assets. While they broaden capabilities, they also contribute to on-chain data growth and potential fee dynamics. For everyday payments, core BTC transactions remain the primary use case, but the ecosystem continues to experiment with layered solutions and token standards.
- How can I safely buy, store, and transfer Bitcoin?
- To buy Bitcoin, use regulated exchanges, broker platforms, or OTC desks, ensuring you follow KYC/AML requirements. For storage, choose a secure wallet: a hardware wallet (air-gapped device) offers strong protection for long-term holdings, while software wallets (mobile or desktop) are convenient for frequent trading. Always keep your recovery seed phrases offline in a secure place and enable 2FA where available. When transferring BTC, verify the recipient’s address carefully, consider network fees (miner fees vary with network activity), and use a trusted wallet with good security practices. Regularly back up wallets and consider multi-signature solutions for added security.
