Bitcoin is the first and arguably most successful decentralized digital currency in the world. Users can send or receive payments in bitcoin through a peer-to- peer (P2P) network, which is supported by its underlying blockchain protocol.1 It was conceptualized in the form of a whitepaper in October 2008 by Satoshi Nakamoto, whose identity remains unknown to this day. In January 2009, the first transaction of ten bitcoins was sent by Nakamoto, an event that marked the genesis of the Bitcoin network and led to the subsequent expansion of the digital currency ecosystem with the proliferation of other digital assets.

At inception, the purpose of Bitcoin was to eliminate many of the problems created by transacting through financial intermediaries, including costly fees, long processing times, and the inevitability of fraudulent transactions. Built on the foundational principles of consensus, transparency, and immutability, its increasing acceptance as a method of payment reflects changing attitudes towards traditional forms of money and incumbent financial institutions (e.g., central governments and commercial banks).

More recently, Bitcoin has evolved to become the star of a rising digital asset class. It dominates as the largest network by a wide margin, accounting for more than half of overall market cap across all digital currencies. In addition, its characteristics has led to the emergence of its different use cases, some of which include being an alternative store-of-value asset to gold2 and a potential hedge against global financial crises.3

Learn more about the history and defining characteristics of Bitcoin in our report, which is part of the Building Blocks series:

1. When referring to the network, blockchain protocol, or asset class, we will use Bitcoin, with an uppercase “B”. When referring to the currency denomination, we will use bitcoin(s), with a lowercase ‘b’.
2. For more, please refer to the full Bitcoin & the Rise of Digital Gold report.
3. For more, please refer to the full Hedging Global Liquidity Risk with Bitcoin report.