Bitcoin is a peer-to-peer electronic cash system and a scarce digital asset recorded on a public blockchain. Users authorize spending with private keys, miners use proof of work to propose blocks, and independently operated full nodes enforce the consensus rules. No company, miner or wallet provider can change a full node’s rules by itself.
The fourth subsidy halving occurred at block 840,000 on 20 April 2024, reducing the new-coin subsidy from 6.25 BTC to 3.125 BTC per block. The next halving is defined by block height 1,050,000, not a guaranteed calendar date; it is expected around 2028 because blocks average roughly ten minutes over time.
Safety warning: Bitcoin transactions are generally irreversible. Verify the address, amount, network and fee on a trusted display before signing. Never share a wallet seed phrase or private key. A person who obtains it can spend the funds, and no Bitcoin administrator can reverse the theft.
Bitcoin facts in 2026
| Topic in the original guide | Current status |
|---|---|
| Last halving in May 2020 | Outdated; the latest halving was block 840,000 on 20 April 2024 |
| Subsidy of 6.25 BTC | Outdated; the current subsidy is 3.125 BTC per block |
| Next halving in 2024 | Completed; the next is at block 1,050,000, expected around 2028 |
| Miners validate the entire ledger | Incomplete; miners propose valid blocks and full nodes independently verify them |
| “Bitcoin has never been hacked” | Too broad; Bitcoin’s consensus history differs from bugs in software, wallets, bridges and exchanges |
| Paper wallets are the safest | Unsafe generalization; modern backed-up hardware or offline wallets are usually less error-prone |
| Mining fees disappear near 2140 | Incorrect; the subsidy trends to zero while transaction fees remain |
| SegWit as the newest major upgrade | Taproot activated at block 709,632 in 2021; later proposals are not active unless deployed by consensus |
How a Bitcoin transaction works
Bitcoin uses unspent transaction outputs, or UTXOs. A wallet selects existing UTXOs, creates new outputs for recipients and usually a change output, then signs the transaction with the required private keys. Peers validate it before relaying it, and miners may include it in a block.
A transaction appearing in the peer-to-peer mempool is not final. Each additional valid block built above it raises the cost of replacing its history, but the appropriate confirmation count depends on the value, threat model and recipient. Fees are market-driven and pay for block space; a higher fee rate can improve priority but does not guarantee a precise confirmation time.
What miners and full nodes do
Miners repeatedly hash candidate block headers in search of proof of work below the current target. A successful miner proposes a block and may claim the subsidy plus transaction fees. It cannot create arbitrary coins or include invalid spends that current full nodes will accept.
Each full node independently downloads and validates blocks and transactions against its consensus rules. This separation is central to Bitcoin: hash power orders valid transactions, while validation by nodes constrains what miners can add to the accepted chain.
Bitcoin wallets and custody
A wallet manages keys and constructs transactions; bitcoin itself remains represented by UTXOs on the shared ledger. A custodial exchange controls the keys on a user’s behalf, while a self-custody wallet makes the user responsible for signing, backup and recovery.
For meaningful savings, use a maintained wallet, create the backup offline, test recovery safely and keep redundant copies in separate secure locations. Paper wallets generated by a website or printer can leak keys, omit change addresses or fail through physical damage, so a printout is not automatically safer than a well-managed hardware wallet.
Supply, halvings and the fee market
The block subsidy halves every 210,000 blocks. This produces a supply limit just under 21 million BTC because the subsidy eventually rounds down to zero. Lost keys reduce spendable supply but do not create new coins or change the consensus cap.
Around 2140, miners are expected to receive transaction fees without a meaningful new-coin subsidy. Whether the fee market will provide enough long-term security is an economic question, not a guaranteed outcome. No credible price can be calculated merely from the final halving date.
Main Bitcoin risks
- Key-loss risk: lost seed phrases or private keys can make funds permanently inaccessible.
- Theft risk: malware, phishing, fake wallets and compromised signing devices can redirect transactions.
- Custody risk: an exchange can freeze withdrawals, fail or lose customer funds.
- Price risk: BTC can experience large and prolonged drawdowns.
- Fee risk: congestion can make urgent on-chain settlement expensive or slow.
- Privacy risk: addresses are pseudonymous, and transaction history can often be clustered or linked to identities.
- Software risk: node and wallet implementations can have bugs even when consensus continues operating.
- Mining and network risk: concentrated infrastructure, regulation, energy markets and attacks can affect participation and reliability.
Original Bitcoin beginner guide (historical archive)
The original author-written sections below are preserved substantially intact. Its halving dates and subsidy, wallet advice, adoption claims, mining description and price prediction are historical and should be read with the corrections above.
Bitcoin (BTC) is by far the best-known digital asset with the largest trade volume.
Bitcoin is both a currency and a technology. At its core, Bitcoin is peer to peer electronic money with one express objective. The objective is to replace the intermediation and trust vested on centralised financial institutions. It aims to be a replacement for traditional fiat currency and an innovative settlement layer for processing transactions without requiring a third party.
To learn more about Bitcoin and how to get started with cryptocurrencies, check out our beginner’s guide series.
Bitcoin is Decentralized
Before Bitcoin was invented, the only way to use money digitally, it was through an intermediary, like a Bank or PayPal. Even then, the money used was still government issued and controlled currency. However, Bitcoin changed all that by creating a decentralized form of currency that individuals could trade directly without the need for an intermediary. Instead of trusting a centralized bank to process transactions, we would trust a Protocol that is run by different individuals all over the world.
Each Bitcoin transaction is validated and confirmed by the entire Bitcoin network. There is no single point of failure, so the system is virtually impossible to shut down, manipulate, or control.
Main Features of Bitcoin
- Decentralized control: There is no authority that controls Bitcoin. All transactions are visible on a public ledger called the blockchain.
- Bitcoin is a store of value: You can use Bitcoin to purchase goods and services.
- Security: Bitcoin has never been hacked.
- Open source: the Bitcoin source code is publicly available and community members can update it.
- Public: All transactions are visible on the Bitcoin blockchain.
- Pseudonymous: You can use a pseudonymous identity to make Bitcoin transactions. It is not truly anonymous because the transaction addresses are visible on the public chain.
- Limited supply: Bitcoin has a limited and predictable supply.
How do Bitcoin transactions work? How do you earn Bitcoin?
The Bitcoin network is essentially a decentralized public ledger that relies on the combined computing power of its community. Bitcoin works as follows:
- Bitcoin transactions are unconfirmed until they are updated on the bitcoin transaction ledger. This is called the blockchain. This is a decentralised public ledger, i.e. everyone can update it and no one person controls this ledger.
- People can help update this ledger by using specialised computers. The computers will generate random numbers. The aim is to generate the correct answer to the mathematical problem generated by the system.
- The computer that guesses the solution gets to decide which of the pending bitcoin transactions will be grouped together into a block.
- The block and the answer to the mathematical problem is sent to the bitcoin network. This is a network of computers.
- The bitcoin network will check if the answer is correct. If it is, they will update their copies of the bitcoin transaction ledger with the block you had created. The process is then repeated. Hence the name “Blockchain“.
- The computer which guessed the correct number receives an award of Bitcoins and the transaction fees for the transactions in the block.
This process is called mining. This is because you mine (earn) Bitcoins by helping update the bitcoin transaction ledger.
What is the halving in Bitcoin mining?
The Bitcoin halving is an important concept for Bitcoin miners. When Bitcoin was first mined, miners were rewarded 50 BTC for generating the correct answer to the mathematical problem. Every 210,000 blocks which occur around every 4 years, this reward is cut in half. This is known as the Bitcoin halving.
The last Bitcoin halving occurred on 11th May 2020 at around 3:00p.m. EST. Following this halving, the block reward was reduced to 6.25 BTC. The next halving is therefore expected to be in 2024 when the block rewards will be cut down to 3.125 BTC.
Learn more about Bitcoin halving in our article: Bitcoin halving explained
Where are Bitcoins kept?
Bitcoin owners store their coins using wallets. You do not actually hold your Bitcoins, rather you hold a private key that allows you to access your Bitcoin address i.e. your public key.
Click here to learn more about private keys and public keys.
Wallets can come in several major forms:
- Hardware wallets: Physical offline devices which store your private keys. Click here for our wallet reviews and tutorials.
- Mobile wallets: These are mobile phone applications e.g. the Enjin wallet. Click here for a review of the Enjin wallet.
- Online wallets: Run on a cloud server and so can be accessed by multiple computers. Most common online wallets are cryptocurrency exchanges. Check out our review of the top exchanges.
- Paper wallets: A printout which contains your public and private keys. Though the most rudimentary, it is the safest method of keeping your cryptocurrencies safe.
- Desktop wallets: They are downloaded and installed onto your computer.
Who is Satoshi Nakamoto
It is the invention of a “Satoshi Nakamoto” in 2008 as a decentralised virtual currency that runs on blockchain technology. We still do not know the true identity(ies) of Satoshi Nakamoto, though there are people who claim to be him.
What’s the future of Bitcoin?
Bitcoin is getting more adoption for payments across the world. At the moment, many stores and merchants accept payment in Bitcoin. The list of merchants are increasing by the day.
Bitcoin is even usable with some credit and debit cards.
However, Bitcoin is not as easily scalable as most other subsequent coins. Accordingly, a future where Bitcoin replaces traditional currency is highly unlikely.
However, Bitcoin will remain an excellent Store of Value (SOV). This is because of its immutability and periodic price appreciation. That said, the question of regulatory policies across the world may be the actual obstacle to Bitcoin’s long-term success.
Can Bitcoin disappear?
Despite what some naysayers will say about Bitcoin having no value or being a scam, Bitcoin cannot and will not disappear. Bitcoin is widely accepted as a value accept and can be converted into fiat currencies. There are also many places that accept Bitcoin as a form of payment such as Home Depot, Microsoft, and Virgin Airlines.
Bitcoin is also decentralized (i.e. not held by any central authority). This means that no single person or entity can confiscate your Bitcoins or shut Bitcoin down.
What will happen after all 21 million Bitcoins are mined?
The total supply of Bitcoin is capped at 21 million and it is expected that all 21 million Bitcoins will be mined in around 2140. When this happens, Bitcoin mining fees will disappear. Bitcoin miners instead will only earn income from transaction processing fees instead of both block rewards and transaction fees.
BTC price predictions once the last Bitcoin is mined?
In an interview with Cointelegraph, Mohamed El Masri, Founder of mining solutions provider PermianChain predicts that BTC would be worth US$430,500 once the last Bitcoin is mined.
El Masri also feels positive that Bitcoin miners will still be able to profit from Bitcoin mining despite all of them being mined. This is despite the fact that by then, Bitcoin miners can only earn transaction fees as a source of income. His positivity stems from the fact that transaction fees will still generate almost US$3 billion a year at his predicted BTC price. This is because Bitcoin miners will still be a necessary part of supporting the Bitcoin infrastructure operating at any cost.
Frequently asked questions
What is Bitcoin?
Bitcoin is a peer-to-peer electronic cash system whose ledger is maintained through proof-of-work mining and independently validated by full nodes.
Who controls Bitcoin?
No single organization controls it. Users choose software and rules, full nodes validate, miners propose blocks, and developers publish code that participants may accept or reject.
What is the current Bitcoin block subsidy?
The new-coin subsidy is 3.125 BTC per block following the fourth halving at block 840,000 on 20 April 2024. Miners also receive transaction fees.
When is the next Bitcoin halving?
It occurs at block 1,050,000 and is expected around 2028. The precise date cannot be fixed in advance because block timing varies.
What is a Bitcoin full node?
A full node downloads and independently validates blocks and transactions. It rejects blocks that violate the consensus rules even if a miner produced them.
Where is bitcoin stored?
Bitcoin is represented by UTXOs on the blockchain. A wallet stores or controls the keys needed to authorize spending rather than containing physical coins.
Are Bitcoin transactions anonymous?
No. They are pseudonymous and publicly recorded. Address reuse, exchange records and transaction analysis can connect activity to identities.
Is a paper wallet the safest Bitcoin wallet?
Not automatically. Paper-wallet generation and spending are error-prone. A maintained hardware or offline wallet with tested, redundant backups is usually a safer starting point.
What happens when the Bitcoin subsidy ends?
The subsidy approaches zero around 2140, while transaction fees remain available to miners. The future security budget will depend increasingly on demand for block space.
Can Bitcoin be hacked?
Bitcoin's proof-of-work ledger has strong security, but node software, wallets, exchanges, bridges and users can still have bugs or be compromised. The distinction matters.
Sources and further reading
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