Bitcoin facts for kids
Quick facts for kids Bitcoin |
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Logo of Bitcoin
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| Denominations | |
| Plural | Bitcoins |
| Symbol | ₿ (Unicode: Error using : Input "20BF" is not a hexadecimal value.) |
| {{{subunit_ratio_3}}} | Satoshi |
| Development | |
| Original author(s) | Satoshi Nakamoto |
| White paper | "Bitcoin: A Peer-to-Peer Electronic Cash System" |
| Initial release | 9 January 2009 |
| Source model | Free and open-source software |
| License | MIT License |
| Ledger | |
| Ledger start | 3 January 2009 |
| Timestamping scheme | Proof-of-work |
| Issuance schedule | Decentralized (block reward) Initially ₿50 per block, halved every 210,000 blocks |
| Block reward | ₿6.25 (as of 2023[update]) |
| Block time | 10 minutes |
| Circulating supply | ₿19,591,231 (as of 6 January 2024[update]) |
| Supply limit | ₿21,000,000 |
| This article contains special characters. Without proper rendering support, you may see question marks, boxes, or other symbols. |
Bitcoin (short for BTC or XBT; sign: ₿) is the very first decentralized cryptocurrency. This means it's a digital money that isn't controlled by a bank or government.
Bitcoin was created in 2008 by someone known as Satoshi Nakamoto. Nobody knows who Satoshi Nakamoto really is! People started using Bitcoin as a currency in 2009. In 2021, El Salvador made Bitcoin a legal currency in their country.
Today, Bitcoin is often used like a "digital gold" or an investment. It's less often used for everyday shopping. Many experts have said its value can change a lot, sometimes going up very quickly.
In 2020, some big companies started buying Bitcoin. MicroStrategy, Square, Inc., and MassMutual all invested money in it. In November 2020, PayPal also allowed its users in the US to use Bitcoin.
In February 2021, the total value of all Bitcoins in the world reached $1 trillion for the first time. In 2023, a new type of digital item called "ordinals" (like non-fungible tokens or NFTs) became popular on the Bitcoin network.
Contents
How Did Bitcoin Start?
The website bitcoin.org was registered in August 2008. On October 31, 2008, a special document called a white paper was shared. It was written by Satoshi Nakamoto and was titled Bitcoin: A Peer-to-Peer Electronic Cash System.
Nakamoto then released the Bitcoin software in January 2009. This software was open-source, meaning anyone could see and use its code.
On January 3, 2009, the Bitcoin network officially began. This happened when Nakamoto "mined" the very first block of the Bitcoin blockchain. This first block is called the genesis block. Inside it was a message: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". This was a headline from The Times newspaper on that day.
Nine days later, the first Bitcoin transaction ever happened. Hal Finney received ten Bitcoins from Nakamoto. In 2010, the first known real-world purchase with Bitcoin took place. A programmer named Laszlo Hanyecz bought two Papa John's pizzas for ₿10,000!
What Are Bitcoin Units?
The main unit in the Bitcoin system is called a bitcoin. It can be shown with the codes BTC or XBT, and its symbol is ₿. Sometimes people write Bitcoin with a capital B when talking about the technology. They use a lowercase bitcoin when talking about the actual money.
One bitcoin can be divided into very small pieces, up to eight decimal places. This means you can have 0.00000001 of a bitcoin!
- A millibitcoin (mBTC) is like 1/1000 of a bitcoin.
- A satoshi (sat) is the smallest amount possible. It's like 1/100,000,000 (one hundred millionth) of a bitcoin.
- 100,000 satoshis make one mBTC.
How Bitcoin Keeps You Private
One cool thing about Bitcoin is that you don't have to link your real name to it. Unless you choose to share your identity, it's hard to know who owns a Bitcoin address. Bitcoin doesn't track people; it tracks the addresses where the money is.
Each Bitcoin address has two important secret codes, or "keys": a public key and a private key.
Public Key: Your Bitcoin Address
Your public key is what your "bitcoin address" is made from. Think of it like an email address. Anyone can see it and send bitcoins to it. If someone wants to send you bitcoins, you just give them your Bitcoin address.
For example, if your friend Bob has 1 bitcoin at address "ABC123," and you have no bitcoins at address "DEF456," Bob can send 0.5 bitcoins to "DEF456." After the transaction, you and Bob both have 0.5 bitcoins. Anyone using the system can see how much money "ABC123" and "DEF456" have. But they can't tell who owns those addresses.
Private Key: Your Secret Password
Your private key is like the password for your email. Only you should know it! This key lets you send bitcoins from your address. It's super important to keep this private key secret. If someone else sees your private key, they can take your bitcoins. This actually happened once on live TV!
To send bitcoins, you use your private key to prove you own the bitcoins. You do this without actually showing the private key to anyone. This is done using a special kind of math called public-key cryptography.
How Bitcoin Works
Blockchain: The Big Record Book
Everyone using Bitcoin uses a huge shared record called the blockchain. Imagine it as a giant digital book that records every single Bitcoin transaction ever made. It also keeps track of new bitcoins as they are created. With all this information, the blockchain always knows who has how much Bitcoin.
Mining: Creating New Bitcoins
To create new bitcoins, people called "miners" use powerful computers to solve very complex math problems. The harder the problem is, the more people are trying to mine. Because these problems are so hard, they need a lot of computer power. Some people worry about how much energy this process uses.
Miners use special computer parts like CPUs, graphics cards, or dedicated machines called ASICs. The first miner or group of miners to solve a puzzle gets new bitcoins as a reward.
Each puzzle is linked to the latest transactions and the solution to the puzzle before it. This means every new puzzle is different. If someone tried to change an old transaction (like trying to fake sending bitcoins), they would have to solve that old puzzle again. Then they'd have to solve every puzzle that came after it! This is incredibly difficult. It means the Bitcoin blockchain is very safe and hard to cheat.
QR Codes: Easy Scanning
You might have seen QR codes associated with Bitcoin. These are like barcodes but are made of black and white squares. Bitcoin uses QR codes because they can hold a lot of information in a small space. Your smartphone camera can easily scan them. The QR codes on a Bitcoin "paper wallet" usually show your public and private addresses.
Exchanges: Buying and Selling Bitcoin
In the Bitcoin network, everyone is equal. You can send Bitcoin directly to another person. But there are also websites called "exchanges" that make it easier. Exchanges let you buy Bitcoin with regular money or trade it for other digital currencies. Most exchanges also offer a basic "wallet" service.
Wallets: Keeping Your Bitcoins Safe
A Bitcoin wallet is a handy way to keep track of all your public and private addresses. Since you can have as many addresses as you want, a wallet helps you manage them all in one place. It's like a real wallet for your digital money. Making a backup of your wallet is important so you don't "lose" your bitcoins!
Images for kids
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How data is structured in blocks on the blockchain.
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How much electricity the Bitcoin network has used since 2016, compared to countries.
See also
In Spanish: Bitcoin para niños
- Alternative currency
