View source for Software:Bitcoin

{{Short description|Decentralized digital currency}}
{{pp-30-500|small=yes}}
{{infobox cryptocurrency
| currency_name = Bitcoin
| image_1 = File:Bitcoin.svg
| image_2 = 
| image_width_1 = 150
| image_width_2 = 110
| image_title_1 = Official logo of Bitcoin
| alt1 = Prevailing bitcoin logo
| precision = 10<sup>−8</sup>
| subunit_ratio_1 = {{frac|1000}}
| subunit_name_1 = Millibitcoin
| subunit_ratio_2 = {{frac|{{val|1000000}}}}
| subunit_name_2 = Microbitcoin
| subunit_ratio_3 = {{frac|{{val|100000000}}}}
| subunit_name_3 = {{lang|ja-Latn|Satoshi|italic=no}}<ref name="satoshi unit">{{cite web |last=Mick |first=Jason |date=12 June 2011 |title=Cracking the Bitcoin: Digging Into a $131M USD Virtual Currency |url=http://www.dailytech.com/Cracking+the+Bitcoin+Digging+Into+a+131M+USD+Virtual+Currency/article21878.htm |url-status=dead |archive-url=https://archive.today/20130120051306/http://www.dailytech.com/Cracking+the+Bitcoin+Digging+Into+a+131M+USD+Virtual+Currency/article21878.htm |archive-date=20 January 2013 |access-date=30 September 2012 |publisher=Daily Tech}}</ref>
| plural = Bitcoins
| symbol = '''₿'''<br/>(Unicode: {{unichar|20BF|BITCOIN SIGN|html=}}){{efn|group=infobox|Encoded [[Unicode]] version 10.0 (2017) in [[Finance:Currency Symbols (Unicode block)|Currency Symbols block]]<ref name="unicode-10">{{cite web |date=20 June 2017 |title=Unicode 10.0.0 |url=https://www.unicode.org/versions/Unicode10.0.0/ |url-status=live |archive-url=https://web.archive.org/web/20170620130342/http://www.unicode.org/versions/Unicode10.0.0/ |archive-date=20 June 2017 |access-date=20 June 2017 |publisher=Unicode Consortium}}</ref>}}
| code = BTC,{{efn|group=infobox|Very early software versions used the code "BC".}} XBT{{efn|group=infobox|Compatible with ISO 4217.}}
| implementations = Bitcoin Core
| initial_release_version = 0.1.0
| initial_release_date = {{Start date and age|df=yes|2009|1|9|p=y}}
| code_repository = {{URL|https://github.com/bitcoin/bitcoin}}
| status = Active
| latest_release_version = 25.0
| latest_release_date = {{Start date and age|df=yes|2023|05|26|p=y}}<ref>{{cite web|title=Bitcoin Core Releases |url=https://github.com/bitcoin/bitcoin/releases/ |via=[[GitHub]]|access-date=14 June 2023}}</ref>
| forked_from = 
| programming_languages = 
| operating_system = 
| author = Satoshi Nakamoto
| developer = 
| white_paper = [https://bitcoin.org/bitcoin.pdf "Bitcoin: A Peer-to-Peer Electronic Cash System"]<ref name="paper" />
| source_model = [[Free and open-source software]]
| license = [[Software:MIT License|MIT License]]
| website = {{URL|https://bitcoin.org}}
| ledger_start = {{Start date and age|df=yes|2009|1|3|p=y}}
| hash_function = SHA-256 (two rounds)
| circulating_supply = ₿18,925,000{{efn|group=infobox|As of 2022-01-10}}
| timestamping = Proof-of-work (partial hash inversion)
| issuance_schedule = Decentralized (block reward)<br />Initially ₿50 per block, halved every 210,000 blocks<ref name="JSC">{{cite web |date=19 November 2013 |title=Statement of Jennifer Shasky Calvery, Director Financial Crimes Enforcement Network United States Department of the Treasury Before the United States Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on National Security and International Trade and Finance Subcommittee on Economic Policy |url=https://www.fincen.gov/sites/default/files/2016-08/20131118.pdf |url-status=live |archive-url=https://web.archive.org/web/20161009183700/https://www.fincen.gov/sites/default/files/2016-08/20131118.pdf |archive-date=9 October 2016 |access-date=1 June 2014 |website=fincen.gov |publisher=Financial Crimes Enforcement Network}}</ref>
| block_time = 10 minutes
| block_reward = ₿6.25{{efn|group=infobox|May 2020 to approximately 2024, halved approximately every four years}}
| exchange_rate = Floating
| market_cap = <!--A reliable source is required -->
| footnotes = {{notelist|group=infobox}}
| using_countries = {{unbulleted list 
| El Salvador<ref name="BTCSVSept7FT"/>
| Central African Republic<ref name="CAF Bloom" />
}}
}}
{{Special characters}}

'''Bitcoin''' ([[ISO 4217#Cryptocurrencies|abbreviation]]: '''BTC'''{{efn|name=BTCcode}} or '''XBT'''{{efn|name=XBTcode}}; [[Finance:Currency symbol|sign]]: '''₿''') is a [[Communication protocol|protocol]] which implements a public, permanent, and decentralized [[Finance:Ledger|ledger]]. In order to add to the ledger, a user must prove they control an entry in the ledger. The protocol specifies that the entry indicates an amount of a token, '''bitcoin''' with a minuscule b. The user can update the ledger, assigning some of their bitcoin to another entry in the ledger. Because the token has characteristics of money, it can be thought of as a [[Finance:Digital currency|digital currency]].<ref>{{Cite web |url=https://www.bis.org/cpmi/publ/d174.pdf |title=Central bank digital currencies |date=March 2018 |access-date=2023-01-21 |website=BIS }}</ref>

Bitcoin transactions are verified by network [[Node (networking)|nodes]] through [[Cryptography|cryptography]] and recorded in a public [[Distributed ledger|distributed ledger]] called a [[Finance:Blockchain|blockchain]]. The [[Finance:Cryptocurrency|cryptocurrency]] was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.<ref name="whoissn">{{Cite news |last=S. |first=L. |date=2 November 2015 |title=Who is Satoshi Nakamoto? |newspaper=The Economist |publisher=The Economist Newspaper Limited |url=https://www.economist.com/blogs/economist-explains/2015/11/economist-explains-1 |url-status=live |access-date=23 September 2016 |archive-url=https://web.archive.org/web/20160821154511/http://www.economist.com/blogs/economist-explains/2015/11/economist-explains-1 |archive-date=21 August 2016}}</ref> The currency began use in 2009,<ref name="NY2011">{{Cite magazine |last=Davis |first=Joshua |date=10 October 2011 |title=The Crypto-Currency: Bitcoin and its mysterious inventor |url=https://www.newyorker.com/magazine/2011/10/10/the-crypto-currency |url-status=live |archive-url=https://web.archive.org/web/20141101014157/http://www.newyorker.com/magazine/2011/10/10/the-crypto-currency |archive-date=1 November 2014 |access-date=31 October 2014 |magazine=The New Yorker}}</ref> when its implementation was released as [[Open-source software|open-source software]].<ref name="Antonopoulos2014" />{{rp|ch. 1}}
The word "bitcoin" was defined in a [[White paper|white paper]] published on October 31, 2008.<ref name="paper" /><ref name="ageofcr">{{Cite book |last1=Vigna |first1=Paul |title=The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order |last2=Casey |first2=Michael J. |year=2015 |publisher=St. Martin's Press |isbn=978-1-250-06563-6 |edition=1 |location=New York}}</ref> It is a compound of the words ''[[Bit|bit]]'' and ''[[Finance:Coin|coin]]''.<ref name="btox">{{cite web |title=bitcoin |url=http://www.oxforddictionaries.com/definition/english/bitcoin |url-status=dead |archive-url=https://web.archive.org/web/20150102041748/http://www.oxforddictionaries.com/definition/english/bitcoin |archive-date=2 January 2015 |access-date=28 December 2014 |publisher=OxfordDictionaries.com}}</ref>

The Library of Congress reports that, as of November 2021, nine countries have fully banned bitcoin use, and a further forty-two have implicitly banned it.<ref>{{cite web |url=https://tile.loc.gov/storage-services/service/ll/llglrd/2021687419/2021687419.pdf |publisher=United States Library of Congress |title=Regulation of Cryptocurrency Around the World: November 2021 Update}}</ref> A few governments have used bitcoin in some capacity. [[Finance:Bitcoin in El Salvador|El Salvador has adopted Bitcoin]] as legal tender.<ref name="low usage"/> {{wipe|Ukraine}} has accepted cryptocurrency donations to fund the resistance to the 2022 Russian invasion. [[Religion:Iran|Iran]] has used bitcoin to bypass sanctions.

In 2018, Bitcoin has been described as an [[Finance:Economic bubble|economic bubble]] by at least eight recipients of the Nobel Memorial Prize in Economic Sciences.<ref name="4Nobels">{{Cite news |last=Wolff-Mann |first=Ethan |date=27 April 2018 |title='Only good for drug dealers': More Nobel prize winners snub bitcoin |work=Yahoo Finance |url=https://finance.yahoo.com/news/good-drug-dealers-nobel-prize-winners-snub-bitcoin-184903784.html |url-status=live |access-date=7 June 2018 |archive-url=https://web.archive.org/web/20180612141128/https://finance.yahoo.com/news/good-drug-dealers-nobel-prize-winners-snub-bitcoin-184903784.html |archive-date=12 June 2018}}</ref> 

The [[Finance:Environmental impact of bitcoin|environmental effects of bitcoin]] are substantial.<ref>{{Cite journal |title=Economic estimation of Bitcoin mining's climate damages demonstrates closer resemblance to digital crude than digital gold |journal=Scientific Reports |last1=Jones |first1=Benjamin A. |date=2022-09-29 |issue=12 |last2=Goodkind |first2=Andrew L. |doi=10.1038/s41598-022-18686-8 |last3=Berrens |first3=Robert P.|volume=12 |page=14512 |pmid=36175441 |pmc=9522801 |bibcode=2022NatSR..1214512J }}</ref> Its proof-of-work algorithm for bitcoin mining is designed to be computationally difficult, which requires the consumption of increasing quantities of electricity, the generation of which has contributed to [[Earth:Climate change|climate change]].<ref>{{Cite news |last1=Huang |first1=Jon |last2=O’Neill |first2=Claire |last3=Tabuchi |first3=Hiroko |date=2021-09-03 |title=Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? |language=en-US |work=The New York Times |url=https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html |access-date=2022-10-26 |issn=0362-4331}}</ref><ref>{{Cite web |last=Gonzalez |first=Oscar |title=Bitcoin Mining: How Much Electricity It Takes and Why People Are Worried |url=https://www.cnet.com/personal-finance/crypto/bitcoin-mining-how-much-electricity-it-takes-and-why-people-are-worried/ |access-date=2022-10-26 |website=CNET |language=en}}</ref> According to the [[Organization:University of Cambridge|University of Cambridge]], bitcoin has emitted an estimated 200 million tonnes of carbon dioxide since its launch,<ref>{{Cite web |last=Sparkes |first=Matthew |date=28 September 2022 |title=Bitcoin has emitted 200 million tonnes of CO2 since its launch |url=https://www.newscientist.com/article/2339629-bitcoin-has-emitted-200-million-tonnes-of-co2-since-its-launch/ |access-date=2022-10-23 |website=New Scientist |url-access=subscription}}</ref> or about 0.04% of all carbon dioxide released since 2009.<ref>{{Cite web |publisher=Int'l Energy Agency|url=https://www.iea.org/reports/global-energy-review-2021/co2-emissions|access-date=25 Jan 2023|title=Global energy-related CO2 emissions, 1990-2021
}}</ref>


==Design==
===Units and divisibility===
The [[Finance:Unit of account|unit of account]] of the bitcoin system is the ''bitcoin''. Currency codes for representing bitcoin are BTC{{efn|name=BTCcode|{{as of | 2014}}, BTC is a commonly used code. It does not conform to [[ISO 4217]] as BT is the country code of Bhutan, and ISO 4217 requires the first letter used in global commodities to be 'X'.}} and XBT.{{efn|name=XBTcode|{{as of | 2014}}, XBT, a code that conforms to ISO 4217 though is not officially part of it, is used by [[Company:Bloomberg L.P.|Bloomberg L.P.]],<ref>{{Cite news |last=Romain Dillet |date=9 August 2013 |title=Bitcoin Ticker Available On Bloomberg Terminal For Employees |work=TechCrunch |url=https://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/ |url-status=live |access-date=2 November 2014 |archive-url=https://web.archive.org/web/20141101232825/http://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/ |archive-date=1 November 2014}}</ref> CNNMoney,<ref>{{Cite news |title=Bitcoin Composite Quote (XBT) |work=CNN Money |publisher=CNN |url=https://money.cnn.com/quote/quote.html?symb=XBT |url-status=live |access-date=2 November 2014 |archive-url=https://web.archive.org/web/20141027100208/https://money.cnn.com/quote/quote.html?symb=xbt |archive-date=27 October 2014}}</ref> and xe.com.<ref>{{cite web |title=XBT – Bitcoin |url=http://www.xe.com/currency/xbt-bitcoin |url-status=live |archive-url=https://web.archive.org/web/20141102111801/http://www.xe.com/currency/xbt-bitcoin |archive-date=2 November 2014 |access-date=2 November 2014 |publisher=xe.com}}</ref>}}<ref name="btcregs">{{cite web |date=January 2014 |title=Regulation of Bitcoin in Selected Jurisdictions |url=https://www.loc.gov/law/help/bitcoin-survey/regulation-of-bitcoin.pdf |url-status=live |archive-url=https://web.archive.org/web/20141014012832/http://www.loc.gov/law/help/bitcoin-survey/regulation-of-bitcoin.pdf |archive-date=14 October 2014 |access-date=26 August 2014 |publisher=The Law Library of Congress, Global Legal Research Center}}</ref>{{rp|2}} Its [[Unicode]] character is ₿.<ref name="unicode-10" /> One bitcoin is divisible to eight decimal places.<ref name="Antonopoulos2014" />{{rp|ch. 5}} Units for smaller amounts of bitcoin are the millibitcoin (mBTC), equal to {{frac|1|1000}} bitcoin, and the satoshi (sat), which is the smallest possible division, and named in homage to bitcoin's creator, representing {{frac|1|{{val|100000000}}}} (one hundred millionth) bitcoin.<ref name="satoshi unit" /> 100,000 satoshis are one mBTC.<ref>{{Cite news |last1=Katie Pisa |last2=Natasha Maguder |date=9 July 2014 |title=Bitcoin your way to a double espresso |work=cnn.com |publisher=CNN |url=http://edition.cnn.com/2014/06/18/business/bitcoin-your-way-to-a-double-espresso/ |url-status=live |access-date=23 April 2015 |archive-url=https://web.archive.org/web/20150618072429/http://edition.cnn.com/2014/06/18/business/bitcoin-your-way-to-a-double-espresso/ |archive-date=18 June 2015 |name-list-style=amp}}</ref>

===Blockchain===
[[File:Bitcoin Block Data.png|thumb|upright=1.8|Data structure of blocks in the ledger]]

The bitcoin [[Finance:Blockchain|blockchain]] is a public [[Finance:Ledger|ledger]] that records bitcoin transactions.{{r|econbc}} It is implemented as a chain of ''blocks'', each block containing a [[Cryptographic hash function|cryptographic hash]] of the previous block up to the genesis block{{efn|The genesis block is block number 0. The timestamp of the block is 2009-01-03 18:15:05. This block is unlike all other blocks in that it does not have a previous block to reference.}} in the chain. A [[Computer network|network]] of communicating nodes running bitcoin software maintains the blockchain.<ref name="JEP" />{{rp|215–219}} Transactions of the form ''payer X sends Y bitcoins to payee Z'' are [[Broadcasting (networking)|broadcast]] to this network using readily available software applications.

Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. To achieve independent verification of the chain of ownership, each network node stores its own copy of the blockchain.<ref name="f_c2">{{Cite news |last=Sparkes, Matthew |date=9 June 2014 |title=The coming digital anarchy |work=The Daily Telegraph |location=London |url=https://www.telegraph.co.uk/technology/news/10881213/The-coming-digital-anarchy.html |url-status=live |access-date=7 January 2015 |archive-url=https://web.archive.org/web/20150123190900/http://www.telegraph.co.uk/technology/news/10881213/The-coming-digital-anarchy.html |archive-date=23 January 2015}}</ref> At varying intervals of time averaging to every 10 minutes, a new group of accepted transactions, called a block, is created, added to the blockchain, and quickly published to all nodes, without requiring central oversight. This allows bitcoin software to determine when a particular bitcoin was spent, which is needed to prevent [[Finance:Double-spending|double-spending]]. A conventional ledger records the transfers of actual [[Engineering:Banknote|bills]] or [[Finance:Promissory note|promissory note]]s that exist apart from it, but as a digital ledger, bitcoins only exist by virtue of the blockchain; they are represented by the unspent outputs of transactions.<ref name="Antonopoulos2014" />{{rp|ch. 5}}

Individual blocks, public addresses, and transactions within blocks can be examined using a blockchain explorer.<ref>{{Cite web| url=https://nvlpubs.nist.gov/nistpubs/ir/2021/NIST.IR.8301.pdf| publisher=National Institute of Standards Technology (NIST)| access-date=29 December 2022| title=Blockchain Networks: Token Design and Management Overview| page=32}}</ref>

===Transactions===

Transactions are defined using a [[Forth (programming language)|Forth]]-like scripting language.{{r|Antonopoulos2014|p=ch. 5}} Transactions consist of one or more ''inputs'' and one or more ''outputs''. When a user sends bitcoins, the user designates each address and the amount of bitcoin being sent to that address in an output. To prevent double spending, each input must refer to a previous unspent output in the blockchain.<ref name="EconOfBTC">{{cite web |last1=Joshua A. Kroll |last2=Ian C. Davey |last3=Edward W. Felten |date=11–12 June 2013 |title=The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries |url=http://www.econinfosec.org/archive/weis2013/papers/KrollDaveyFeltenWEIS2013.pdf |url-status=live |archive-url=https://web.archive.org/web/20160509053819/http://www.econinfosec.org/archive/weis2013/papers/KrollDaveyFeltenWEIS2013.pdf |archive-date=9 May 2016 |access-date=26 April 2016 |website=The Twelfth Workshop on the Economics of Information Security (WEIS 2013) |quote=A transaction fee is like a tip or gratuity left for the miner.}}</ref> The use of multiple inputs corresponds to the use of multiple coins in a cash transaction. Since transactions can have multiple outputs, users can send bitcoins to multiple recipients in one transaction. As in a cash transaction, the sum of inputs (coins used to pay) can exceed the intended sum of payments. In such a case, an additional output is used, returning the change back to the payer.<ref name="EconOfBTC" /> Any input ''satoshis'' not accounted for in the transaction outputs become the transaction fee.<ref name="EconOfBTC" />

Though transaction fees are optional, miners can choose which transactions to process and prioritize those that pay higher fees.<ref name="EconOfBTC" /> Miners may choose transactions based on the fee paid relative to their storage size, not the absolute amount of money paid as a fee. These fees are generally measured in ''satoshis per byte (sat/b)''. The size of transactions is dependent on the number of inputs used to create the transaction and the number of outputs.<ref name="Antonopoulos2014" />{{rp|ch. 8}}

The blocks in the blockchain were originally limited to 32 [[Megabyte|megabyte]]s in size. The block size limit of one megabyte was introduced by Satoshi Nakamoto in 2010.{{clarify| reason=If Satoshi introduced the 1 MB block size, how was the original limit set at 32 MB? Spoiler alert, it wasn't. Please clarify.|date=December 2022}} Eventually, the block size limit of one megabyte created [[Finance:Bitcoin scalability problem|problems]] for transaction processing, such as increasing transaction fees and delayed processing of transactions.<ref>{{Cite news |last=Orcutt |first=Mike |date=19 May 2015 |title=Leaderless Bitcoin Struggles to Make Its Most Crucial Decision |work=MIT Technology Review |url=https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |url-status=live |access-date=22 June 2017 |archive-url=https://wayback.archive-it.org/all/20171018075515/https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |archive-date=18 October 2017}}</ref> Andreas Antonopoulos has stated [[Finance:Lightning Network|Lightning Network]] is a potential scaling solution and referred to lightning as a second-layer routing network.<ref name="Antonopoulos2014"/>{{rp|ch. 8}}

===Ownership===
[[File:Bitcoin Transaction Visual.svg|thumb|upright=1.6|Simplified chain of ownership as illustrated in the bitcoin whitepaper.<ref name="paper" /> In practice, a transaction can have more than one input and more than one output.<ref name="EconOfBTC" />]]

In the blockchain, bitcoins are registered to bitcoin addresses. Creating a bitcoin address requires nothing more than picking a random valid private key and computing the corresponding bitcoin address. This computation can be done in a split second. But the reverse, computing the private key of a given bitcoin address, is practically unfeasible.<ref name="Antonopoulos2014" />{{rp|ch. 4}} Users can tell others or make public a bitcoin address without compromising its corresponding private key. Moreover, the number of valid private keys is so vast that it is extremely unlikely someone will compute a key pair that is already in use and has funds. The vast number of valid private keys makes it unfeasible that brute force could be used to compromise a private key. To be able to spend their bitcoins, the owner must know the corresponding private key and [[Digital signature|digitally sign]] the transaction.{{efn|Bitcoin uses a custom elliptic curve called "''secp256k1''" with the ECDSA algorithm to produce [[Digital signature|signatures]]. The equation for this curve is {{math|y{{sup|2}}{{=}}x{{sup|3}}+7}}.<ref>{{cite journal |last1=Houria |first1=Azine |last2=Mohamed Abdelkader |first2=Bencherif |last3=Abderezzak |first3=Guessoum |title=A comparison between the secp256r1 and the koblitz secp256k1 bitcoin curves |journal=Indonesian Journal of Electrical Engineering and Computer Science |date=1 March 2019 |volume=13 |issue=3 |page=910 |doi=10.11591/ijeecs.v13.i3.pp910-918 |s2cid=196058538}}</ref> A proposed upgrade that would add support for [[Schnorr signature]]s is in development.<ref name="BP A Look">{{Cite book |last1=Van Hijfte |first1=Stijn |title=Blockchain Platforms: A Look at the Underbelly of Distributed Platforms |publisher=Morgan & Claypool Publishers |year=2020 |isbn=978-1681738925}}</ref>{{rp|101}}}} The network verifies the signature using the public key; the private key is never revealed.<ref name="Antonopoulos2014" />{{rp|ch. 5}}

If the private key is lost, the [[Finance:Bitcoin network|bitcoin network]] will not recognize any other evidence of ownership;<ref name="JEP" /> the coins are then unusable, and effectively lost. For example, in 2013 one user claimed to have lost ₿7,500, worth $7.5 million at the time, when he accidentally discarded a hard drive containing his private key.<ref>{{Cite news |date=29 November 2013 |title=Man Throws Away 7,500 Bitcoins, Now Worth $7.5 Million |work=CBS DC |url=http://washington.cbslocal.com/2013/11/29/man-throws-away-7500-bitcoins-now-worth-7-5-million/ |url-status=live |access-date=23 January 2014 |archive-url=https://web.archive.org/web/20140115062630/http://washington.cbslocal.com/2013/11/29/man-throws-away-7500-bitcoins-now-worth-7-5-million/ |archive-date=15 January 2014}}</ref> About 20% of all bitcoins are believed to be lost&mdash;they would have had a market value of about $20 billion at July 2018 prices.<ref name="wsjlost">{{Cite news |last=Krause |first=Elliott |date=5 July 2018 |title=A Fifth of All Bitcoin Is Missing. These Crypto Hunters Can Help |work=The Wall Street Journal |url=https://www.wsj.com/articles/a-fifth-of-all-bitcoin-is-missing-these-crypto-hunters-can-help-1530798731 |url-status=live |access-date=8 July 2018 |archive-url=https://web.archive.org/web/20180709010939/https://www.wsj.com/articles/a-fifth-of-all-bitcoin-is-missing-these-crypto-hunters-can-help-1530798731 |archive-date=9 July 2018}}</ref>

To ensure the security of bitcoins, the private key must be kept secret.<ref name="Antonopoulos2014" />{{rp|ch. 10}} If the private key is revealed to a third party, e.g. through a [[Data breach|data breach]], the third party can use it to [[Finance:Cryptocurrency and security#Bitcoin|steal any associated bitcoins]].<ref name="Jeffries">{{Cite news |last=Jeffries |first=Adrianne |date=19 December 2013 |title=How to steal Bitcoin in three easy steps |work=The Verge |url=https://www.theverge.com/2013/12/19/5183356/how-to-steal-bitcoin-in-three-easy-steps |url-status=live |access-date=17 January 2014 |archive-url=https://web.archive.org/web/20190727141228/https://www.theverge.com/2013/12/19/5183356/how-to-steal-bitcoin-in-three-easy-steps |archive-date=27 July 2019}}</ref> {{Asof|2017|12}}, around ₿980,000 have been stolen from [[Finance:Cryptocurrency exchange|cryptocurrency exchange]]s.<ref name="harney">{{Cite news |last1=Harney |first1=Alexandra |last2=Stecklow |first2=Steve |date=16 November 2017 |title=Twice burned – How Mt. Gox's bitcoin customers could lose again |work=Reuters |url=https://www.reuters.com/investigates/special-report/bitcoin-gox/ |url-status=live |access-date=6 September 2018 |archive-url=https://web.archive.org/web/20190829052101/https://www.reuters.com/investigates/special-report/bitcoin-gox/ |archive-date=29 August 2019}}</ref>

Regarding ownership distribution, as of 28 December 2022, 9.62% of bitcoin addresses own 98.51% of all bitcoins ever mined.<ref>{{Cite web |url=https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html |title=Bitcoin Rich List |publisher=bitinfocharts.com |access-date=28 December 2022}}</ref> The largest of these addresses are thought to belong to exchanges, which are keeping their bitcoin in cold storage.<ref>{{Cite news |last=Martindale |first=Jon |date=16 March 2018 |title=Who owns all the Bitcoin? A few billionaire whales in a small pond |work=Digital Trends |url=https://www.digitaltrends.com/computing/who-owns-all-the-bitcoin/ |url-status=live |access-date=1 July 2019 |archive-url=https://web.archive.org/web/20190630234800/https://www.digitaltrends.com/computing/who-owns-all-the-bitcoin/ |archive-date=30 June 2019}}</ref>

==Mining==

{{multiple image
|total_width=480
|image1=Minage de crypto-monnaie (2).jpg
|caption1=Early bitcoin miners [[General-purpose computing on graphics processing units|used GPUs for mining]], as they were better suited to the proof-of-work algorithm than [[Central processing unit|CPUs]].<ref>{{cite web |title=Bitcoin mania is hurting PC gamers by pushing up GPU prices |date=30 January 2018 |url=https://www.theverge.com/2018/1/30/16949550/bitcoin-graphics-cards-pc-prices-surge |url-status=live |archive-url=https://web.archive.org/web/20180202070911/https://www.theverge.com/2018/1/30/16949550/bitcoin-graphics-cards-pc-prices-surge |archive-date=2 February 2018 |access-date=2 February 2018}}</ref>
|image2=USB Erupter.jpg
|caption2=Later amateurs mined bitcoins with specialized [[Engineering:Field-programmable gate array|FPGA]] and [[Engineering:Application-specific integrated circuit|ASIC]] chips. The chips pictured have become obsolete due to increasing difficulty.
|image3=Cryptocurrency Mining Farm.jpg
|caption3=Today, bitcoin mining companies [[Data center|dedicate facilities]] to housing and operating large amounts of high-performance mining hardware.<ref name="worldoil">{{cite web |date=26 January 2018 |title=Cryptocurrency mining operation launched by Iron Bridge Resources |url=http://www.worldoil.com/news/2018/1/26/cryptocurrency-mining-operation-launched-by-iron-bridge-resources |url-status=live |archive-url=https://web.archive.org/web/20180130091353/http://www.worldoil.com/news/2018/1/26/cryptocurrency-mining-operation-launched-by-iron-bridge-resources |archive-date=30 January 2018 |website=World Oil}}</ref>
}}
[[File:History of Bitcoin difficulty.svg|thumb|[[Semi-log plot|Semi-log plot]] of relative mining difficulty{{efn|Relative mining difficulty is defined as the ratio of the difficulty target on 9 January 2009 to the current difficulty target.}}<ref name="Blockchain.info">{{cite web |title=Charts |url=https://blockchain.info/charts |url-status=live |archive-url=https://web.archive.org/web/20141103020741/http://blockchain.info/charts |archive-date=3 November 2014 |access-date=2 November 2014 |publisher=Blockchain.info}}</ref>{{better source needed|date=March 2023|reason=Blockchain.info is not a reliable outlet}}]]

''Mining'' is a record-keeping service done through the use of computer processing power.{{efn|It is misleading to think that there is an analogy between gold mining and bitcoin mining. The fact is that gold miners are rewarded for producing gold, while bitcoin miners are not rewarded for producing bitcoins; they are rewarded for their record-keeping services.<ref name="Andolfatto2014-03">{{cite web |last=Andolfatto, David |date=31 March 2014 |title=Bitcoin and Beyond: The Possibilities and Pitfalls of Virtual Currencies |url=http://www.stlouisfed.org/dialogue-with-the-fed/assets/Bitcoin-3-31-14.pdf |url-status=live |archive-url=https://web.archive.org/web/20140409044505/http://www.stlouisfed.org/dialogue-with-the-fed/assets/Bitcoin-3-31-14.pdf |archive-date=9 April 2014 |access-date=16 April 2014 |website=Dialogue with the Fed |publisher=Federal Reserve Bank of St. Louis}}</ref>}} Miners keep the blockchain consistent, complete, and unalterable by repeatedly grouping newly broadcast transactions into a ''block'', which is then broadcast to the network and verified by recipient nodes.<ref name="econbc">{{Cite news |date=31 October 2015 |title=The great chain of being sure about things |newspaper=The Economist |publisher=The Economist Newspaper Limited |url=https://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable |url-status=live |access-date=3 July 2016 |archive-url=https://web.archive.org/web/20160703000844/http://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable |archive-date=3 July 2016}}</ref> Each block contains a SHA-256 cryptographic hash of the previous block,<ref name="econbc" /> thus linking it to the previous block and giving the blockchain its name.<ref name="Antonopoulos2014" />{{rp|ch. 7}}<ref name="econbc" />

To be accepted by the rest of the network, a new block must contain a ''[[Finance:Proof-of-work system#Bitcoin-type proof of work|proof-of-work]]'' (PoW).<ref name="econbc" />{{efn|The system used is based on [[Biography:Adam Back|Adam Back]]'s 1997 anti-[[Email spam|spam]] scheme, [[Hashcash]].<ref>{{cite journal |last1=Sherman |first1=Alan |last2=Javani |first2=Farid |last3=Golaszewski |first3=Enis |date=25 March 2019 |title=On the Origins and Variations of Blockchain Technologies |journal=IEEE Security & Privacy  |volume=17 |issue=1 |pages=72–77 |arxiv=1810.06130 |doi=10.1109/MSEC.2019.2893730 |s2cid=53114747}}</ref>{{failed verification|reason=the source confirms that the white paper cites Back's article, not the formulation used here|date=July 2019}}<ref name="paper" />}} The PoW requires miners to find a number called a ''[[Cryptographic nonce|nonce]]'' (a number used just once), such that when the block content is hashed along with the nonce, the result is numerically smaller than the network's ''difficulty target''.<ref name="Antonopoulos2014" />{{rp|ch. 8}} This PoW is easy for any node in the network to verify, but extremely time-consuming to generate. Miners must try many different nonce values (usually the sequence of tested values is the ascending natural numbers: 0, 1, 2, 3,&nbsp;...) before a result happens to be less than the difficulty target. Because the difficulty target is extremely small compared to a typical SHA-256 hash, block hashes have many [[Leading zero|leading zero]]s<ref name="Antonopoulos2014" />{{rp|ch. 8}} as can be seen in this example block hash:

:{{mono|0000000000000000000590fc0f3eba193a278534220b2b37e9849e1a770ca959}}

By adjusting this difficulty target, the amount of work needed to generate a block can be changed. Every 2,016 blocks (approximately 14 days given roughly 10 minutes per block), nodes [[Deterministic algorithm|deterministically adjust]] the difficulty target based on the recent rate of block generation, with the aim of keeping the average time between new blocks at ten minutes. In this way the system automatically adapts to the total amount of mining power on the network.<ref name="Antonopoulos2014" />{{rp|ch. 8}} {{as of|April 2022}}, it takes on average 122 sextillion (122 thousand billion billion) attempts to generate a block hash smaller than the difficulty target.<ref name="diffhistory">{{cite web |title=Difficulty History |url=https://blockchain.info/charts/difficulty?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= |url-status=live |archive-url=https://web.archive.org/web/20150408212548/https://blockchain.info/charts/difficulty?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= |archive-date=8 April 2015 |access-date=8 April 2022 |publisher=Blockchain.info |type=The ratio of all hashes over valid hashes is D x 4,295,032,833, where D is the published "Difficulty" figure.}}</ref>{{better source needed|date=March 2023|reason=[[Company:Blockchain.info|Blockchain.info]] is not a reliable outlet}} Computations of this magnitude are extremely expensive and utilize specialized hardware.<ref>{{cite news |date=4 January 2014 |url=http://www.taipeitimes.com/News/biz/archives/2014/01/04/2003580449 |title=Bitcoin boom benefiting TSMC: report |newspaper=Taipei Times}}</ref>

The proof-of-work system, alongside the chaining of blocks, makes modifications to the blockchain extremely hard, as an attacker must modify all subsequent blocks in order for the modifications of one block to be accepted.<ref>{{Cite news |last=Hampton |first=Nikolai |date=5 September 2016 |title=Understanding the blockchain hype: Why much of it is nothing more than snake oil and spin |work=Computerworld |publisher=IDG |url=http://www.computerworld.com.au/article/606253/understanding-blockchain-hype-why-much-it-nothing-more-than-snake-oil-spin/ |url-status=live |access-date=5 September 2016 |archive-url=https://web.archive.org/web/20160906171838/http://www.computerworld.com.au/article/606253/understanding-blockchain-hype-why-much-it-nothing-more-than-snake-oil-spin/ |archive-date=6 September 2016}}</ref> As new blocks are being generated continuously, the difficulty of modifying an old block increases as time passes and the number of subsequent blocks (also called ''confirmations'' of the given block) increases.<ref name="econbc" />

The vast majority of mining power is grouped together in [[Finance:Mining pool|mining pool]]s to reduce variance in miner income. Independent miners may have to work for several years to mine a single block of transactions and receive payment. In a mining pool, all participating miners get paid every time any participant generates a block. This payment is proportionate to the amount of work an individual miner contributed to the pool.<ref name="Techcrunch12">{{cite web |last=Biggs |first=John |date=8 April 2013 |title=How To Mine Bitcoins |url=https://techcrunch.com/2013/04/08/how-to-mine-bitcoins/ |url-status=live |archive-url=https://web.archive.org/web/20170706132517/https://techcrunch.com/2013/04/08/how-to-mine-bitcoins/ |archive-date=6 July 2017 |publisher=Techcrunch}}</ref>{{better source needed|date=October 2022|reason=This source is doesn't support these specific claims, and is badly out-of-date, also. }}

==Supply==
[[File:Total-bitcoins.svg|thumb|Total bitcoins in circulation<ref name="Blockchain.info" />{{better source needed|date=March 2023|reason=Blockchain.info is not a reliable outlet}}]]

Every 10 minutes,<ref>{{cite book |last=Woods |first=Nick |date=2021 |title=Bitcoin for Beginners: An Introduction to Bitcoin, Blockchain and Cryptocurrency|publisher=Publishing Forte|at=Chapter 4, Section 2 |isbn=9781954937000}}</ref> the successful miner finding the new block is allowed by the rest of the network to collect for themselves all transaction fees from transactions they included in the block, as well as a predetermined reward of newly created bitcoins.<ref name="bloombergvance111413">{{Cite magazine |last=Ashlee Vance |date=14 November 2013 |title=2014 Outlook: Bitcoin Mining Chips, a High-Tech Arms Race |url=http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race |url-status=dead |magazine=BusinessWeek |archive-url=https://web.archive.org/web/20131121225123/http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race |archive-date=21 November 2013 |access-date=24 November 2013}}</ref> {{as of|2020|05|11}}, this reward is ₿6.25 in newly created bitcoins per block.<ref name=CNBCHalving>{{cite news |last1=Browne |first1=Ryan |title=Bitcoin investors are bracing for a key technical event — here's what you need to know |url=https://www.cnbc.com/2020/05/11/bitcoin-halving-heres-what-you-need-to-know.html |work=CNBC |date=11 May 2020}}</ref> To claim this reward, a special transaction called a ''coinbase'' is included in the block, with the miner as the payee.<ref name="Antonopoulos2014" />{{rp|ch. 8}} All bitcoins in existence have been created through this type of transaction. The [[Finance:Bitcoin protocol|bitcoin protocol]] specifies that the reward for adding a block will be reduced by half every 210,000 blocks (approximately every four years), until ₿21&nbsp;million{{efn|The exact number is ₿20,999,999.9769.{{r|Antonopoulos2014|page=ch. 8}}}} are generated. The last new bitcoin will be generated around the year 2140. After that, a successful miner would be rewarded by transaction fees only.<ref name="KWY">{{cite web |last1=Ritchie S. King |last2=Sam Williams |last3=David Yanofsky |date=17 December 2013 |title=By reading this article, you're mining bitcoins |url=http://qz.com/154877/by-reading-this-page-you-are-mining-bitcoins/ |url-status=live |archive-url=https://web.archive.org/web/20131217221429/http://qz.com/154877/by-reading-this-page-you-are-mining-bitcoins/ |archive-date=17 December 2013 |access-date=17 December 2013 |website=qz.com |publisher=Atlantic Media Co}}</ref>

==Decentralization==
Bitcoin is decentralized thus:{{r|JSC}}
* Bitcoin does not have a central authority.{{r|JSC}}
* The bitcoin network is peer-to-peer,{{r|NY2011}} without central servers.
* The network also has no central storage; the bitcoin ledger is distributed.<ref name="DLT">{{Cite news |last=Meola |first=Andrew |date=5 October 2017 |title=How distributed ledger technology will change the way the world works |work=Business Insider |url=https://www.businessinsider.com/blockchain-distributed-ledgers-2017-10 |url-status=live |access-date=26 July 2018 |archive-url=https://web.archive.org/web/20180427142806/http://www.businessinsider.com/blockchain-distributed-ledgers-2017-10 |archive-date=27 April 2018}}</ref>
* The ledger is public; anybody can store it on a computer.{{r|Antonopoulos2014|page=ch. 1}}
* There is no single administrator;{{r|JSC}} the ledger is maintained by a network of equally privileged miners.{{r|Antonopoulos2014|page=ch. 1}}
* Anyone can become a miner.{{r|Antonopoulos2014|page=ch. 1}}
* The additions to the ledger are maintained through competition. Until a new block is added to the ledger, it is not known which miner will create the block.{{r|Antonopoulos2014|page=ch. 1}}
* The issuance of bitcoins is decentralized. They are issued as a reward for the creation of a new block.{{r|bloombergvance111413}}
* Anybody can create a new bitcoin address (a bitcoin counterpart of a bank account) without needing any approval.{{r|Antonopoulos2014|page=ch. 1}}
* Anybody can send a transaction to the network without needing any approval; the network merely confirms that the transaction is legitimate.<ref name="primer">{{cite web |last1=Jerry Brito |last2=Andrea Castillo |year=2013 |title=Bitcoin: A Primer for Policymakers |url=http://mercatus.org/sites/default/files/Brito_BitcoinPrimer.pdf |url-status=live |archive-url=https://web.archive.org/web/20130921060724/http://mercatus.org/sites/default/files/Brito_BitcoinPrimer.pdf |archive-date=21 September 2013 |access-date=22 October 2013 |website=Mercatus Center |publisher=[[Organization:George Mason University|George Mason University]] |name-list-style=amp}}</ref>{{rp|32}}

Conversely, researchers have pointed out a "trend towards centralization". Although bitcoin can be sent directly from user to user, in practice intermediaries are widely used.{{r|JEP|page=220–222}} Bitcoin miners join large mining pools to minimize the variance of their income.<ref name="JEP">{{Cite journal |last1=Rainer Böhme |last2=Nicolas Christin |last3=Benjamin Edelman |last4=Tyler Moore |year=2015 |title=Bitcoin: Economics, Technology, and Governance |journal=[[Finance:Journal of Economic Perspectives|Journal of Economic Perspectives]] |volume=29 |issue=2 |pages=213–238 |doi=10.1257/jep.29.2.213 |doi-access=free}}</ref>{{rp|215, 219–222}}<ref name="ieeesurvey">{{Cite journal |last1=Tschorsch |first1=Florian |last2=Scheuermann |first2=Björn |year=2016 |title=Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies |journal=IEEE Communications Surveys & Tutorials |volume=18 |issue=3 |pages=2084–2123 |doi=10.1109/comst.2016.2535718 |s2cid=5115101}}</ref>{{rp|3}}<ref>{{Cite book |last1=Beikverdi |first1=A. |title=Trend of centralization in Bitcoin's distributed network |last2=Song |first2=J. |year=2015 |work=2015 IEEE/ACIS 16th International Conference on Software Engineering, Artificial Intelligence, Networking and Parallel/Distributed Computing (SNPD) |isbn=978-1-4799-8676-7 |pages=1–6 |doi=10.1109/SNPD.2015.7176229 |s2cid=15516195}}</ref> Because transactions on the network are confirmed by miners, decentralization of the network requires that no single miner or mining pool obtains 51% of the hashing power, which would allow them to double-spend coins, prevent certain transactions from being verified and prevent other miners from earning income.<ref name=":0" /> {{as of|2013}} just six mining pools controlled 75% of overall bitcoin hashing power.<ref name=":0" /> In 2014 mining pool [[Company:Ghash.io|Ghash.io]] obtained 51% hashing power which raised significant controversies about the safety of the network. The pool has voluntarily capped its hashing power at 39.99% and requested other pools to act responsibly for the benefit of the whole network.<ref>{{Cite news |last=Wilhelm |first=Alex |title=Popular Bitcoin Mining Pool Promises To Restrict Its Compute Power To Prevent Feared '51%' Fiasco |work=TechCrunch |url=https://techcrunch.com/2014/07/16/popular-bitcoin-mining-pool-promises-to-restrict-its-compute-power-to-prevent-feared-51-fiasco/ |url-status=live |access-date=25 January 2018 |archive-url=https://web.archive.org/web/20171205042008/https://techcrunch.com/2014/07/16/popular-bitcoin-mining-pool-promises-to-restrict-its-compute-power-to-prevent-feared-51-fiasco/ |archive-date=5 December 2017}}</ref> Around the year 2017, over 70% of the hashing power and 90% of transactions were operating from China.<ref>{{Cite news |last=Chan |first=Edwin |title=China Plans to Ban Cryptocurrency Mining in Renewed Clampdown |url=https://www.bloomberg.com/news/articles/2019-04-09/china-plans-to-ban-cryptocurrency-mining-in-renewed-clampdown |url-status=live |archive-url=https://web.archive.org/web/20191218152525/https://www.bloomberg.com/news/articles/2019-04-09/china-plans-to-ban-cryptocurrency-mining-in-renewed-clampdown |archive-date=18 December 2019 |access-date=10 April 2019 |newspaper=Bloomberg.com |date=9 April 2019 |quote=While China was once home to about 70 percent of Bitcoin mining and 90 percent of trades, authorities have waged a nearly two-year campaign to shrink the crypto industry amid concerns over speculative bubbles, fraud and wasteful energy consumption.}}</ref>

According to researchers, other parts of the ecosystem are also "controlled by a small set of entities", notably the maintenance of the client software, online wallets, and simplified payment verification (SPV) clients.<ref name=":0">{{cite web |last1=Gervais |first1=Arthur |last2=Karame |first2=Ghassan O. |last3=Capkun |first3=Vedran |last4=Capkun |first4=Srdjan |title=Is Bitcoin a Decentralized Currency? |url=https://www.infoq.com/articles/is-bitcoin-a-decentralized-currency/ |url-status=live |archive-url=https://web.archive.org/web/20161010042659/https://www.infoq.com/articles/is-bitcoin-a-decentralized-currency/ |archive-date=10 October 2016 |access-date=11 October 2016 |website=InfoQ |publisher=InfoQ & [[Organization:IEEE Computer Society|IEEE Computer Society]]}}</ref>

==Privacy and fungibility==
Bitcoin is [[Pseudonym|pseudonym]]ous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through "idioms of use" (e.g., transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses.<ref>{{cite web |last=Simonite, Tom |date=5 September 2013 |title=Mapping the Bitcoin Economy Could Reveal Users' Identities |url=https://www.technologyreview.com/2013/09/05/176558/mapping-the-bitcoin-economy-could-reveal-users-identities/ |access-date=2 April 2014 |website=MIT Technology Review}}</ref> Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information.<ref name="5facts">{{Cite news |last=Lee, Timothy |date=21 August 2013 |title=Five surprising facts about Bitcoin |newspaper=The Washington Post |url=https://www.washingtonpost.com/blogs/the-switch/wp/2013/08/21/five-surprising-facts-about-bitcoin-2/ |url-status=live |access-date=2 April 2014 |archive-url=https://web.archive.org/web/20131012035053/http://www.washingtonpost.com/blogs/the-switch/wp/2013/08/21/five-surprising-facts-about-bitcoin-2/ |archive-date=12 October 2013}}</ref> To heighten financial privacy, a new bitcoin address can be generated for each transaction.<ref>{{Cite magazine |last=McMillan, Robert |date=6 June 2013 |title=How Bitcoin lets you spy on careless companies |url=https://www.wired.com/2013/06/bitcoin-retai/ |url-status=live |archive-url=https://web.archive.org/web/20140209202222/http://www.wired.co.uk/news/archive/2013-06/06/bitcoin-retail |archive-date=9 February 2014 |access-date=3 April 2020 |magazine=Wired UK |publisher=Conde Nast}}</ref>

While the Bitcoin network treats each bitcoin the same, thus establishing the basic level of fungibility, applications and individuals who use the network are free to break that principle. For instance, wallets and similar software technically handle all bitcoins equally, none is different from another. Still, the history of each bitcoin is registered and publicly available in the blockchain ledger, and that can allow users of [[Blockchain analysis|chain analysis]] to refuse to accept bitcoins coming from controversial transactions.<ref>{{cite web |title=Learning Center > Glossary > T > Taint |url=https://river.com/learn/terms/t/taint/ |access-date=27 December 2022|website=River Financial, Inc.}}</ref> For example, in 2012, Mt. Gox froze accounts of users who deposited bitcoins that were known to have just been stolen.<ref>{{Cite conference |last1=Möser |first1=Malte |last2=Böhme |first2=Rainer |last3=Breuker |first3=Dominic |year=2013 |title=An Inquiry into Money Laundering Tools in the Bitcoin Ecosystem |url=https://maltemoeser.de/paper/money-laundering.pdf |conference=2013 APWG eCrime Researchers Summit |publisher=[[Organization:Institute of Electrical and Electronics Engineers|IEEE]] |isbn=978-1-4799-1158-5 |archive-url=https://web.archive.org/web/20180626110754/https://maltemoeser.de/paper/money-laundering.pdf |archive-date=26 June 2018 |access-date=19 June 2019 |url-status=live}}</ref>

==Wallets==
{{multiple image
| total_width = 416
| image1 = Screenshot of Bitcoin-qt-0.5.2.png
| caption1 = Bitcoin Core, a full client
| image2 = Electrum Bitcoin Wallet.png
| caption2 = Electrum, a lightweight client
| align =
| direction =
| alt1 =
}}

A ''wallet'' stores the information necessary to transact bitcoins. While wallets are often described as a place to hold<ref>{{cite web |last1=Adam Serwer |last2=Dana Liebelson |date=10 April 2013 |title=Bitcoin, Explained |url=https://www.motherjones.com/politics/2013/04/what-is-bitcoin-explained |url-status=live |archive-url=https://web.archive.org/web/20140427022315/https://www.motherjones.com/politics/2013/04/what-is-bitcoin-explained |archive-date=27 April 2014 |access-date=26 April 2014 |website=motherjones.com |publisher=Mother Jones |name-list-style=amp}}</ref> or store bitcoins, due to the nature of the system, bitcoins are inseparable from the blockchain transaction ledger. A wallet is more correctly defined as something that "stores the digital credentials for your bitcoin holdings" and allows one to access (and spend) them. {{r|Antonopoulos2014|p=ch. 1, glossary}} Bitcoin uses [[Public-key cryptography|public-key cryptography]], in which two cryptographic keys, one public and one private, are generated.<ref name="Economist113013Pressure">{{Cite news |date=30 November 2013 |title=Bitcoin: Bitcoin under pressure |newspaper=The Economist |url=https://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly |url-status=live |access-date=30 November 2013 |archive-url=https://web.archive.org/web/20131130032403/http://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly |archive-date=30 November 2013}}</ref> At its most basic, a wallet is a collection of these keys.

===Software wallets===
The first wallet program, simply named ''Bitcoin'', and sometimes referred to as the ''Satoshi client'', was released in 2009 by Satoshi Nakamoto as [[Open-source software|open-source software]].<ref name="NY2011" /> In version 0.5 the client moved from the [[Software:WxWidgets|wxWidgets]] user interface toolkit to [[Software:Qt|Qt]], and the whole bundle was referred to as ''Bitcoin-Qt''.<ref name="Bitcoin Clients">{{Cite thesis |last=Skudnov |first=Rostislav |title=Bitcoin Clients |publisher=Turku University of Applied Sciences |url=http://publications.theseus.fi/bitstream/handle/10024/47166/Skudnov_Rostislav.pdf?sequence=1 |type=Bachelor's Thesis |year=2012 |access-date=16 January 2014 |url-status=live |archive-url=https://web.archive.org/web/20140118104507/http://publications.theseus.fi/bitstream/handle/10024/47166/Skudnov_Rostislav.pdf?sequence=1 |archive-date=18 January 2014}}</ref> After the release of version 0.9, the software bundle was renamed ''Bitcoin Core'' to distinguish itself from the underlying network.<ref>{{cite web |title=Bitcoin Core version 0.9.0 released |url=https://bitcoin.org/en/release/v0.9.0 |url-status=live |archive-url=https://web.archive.org/web/20150227213613/https://bitcoin.org/en/release/v0.9.0 |archive-date=27 February 2015 |access-date=8 January 2015 |website=bitcoin.org}}</ref><ref>{{Cite news |last=Metz |first=Cade |date=19 August 2015 |title=The Bitcoin Schism Shows the Genius of Open Source |magazine=Wired |publisher=Condé Nast |url=https://www.wired.com/2015/08/bitcoin-schism-shows-genius-open-source/ |url-status=live |access-date=3 July 2016 |archive-url=https://web.archive.org/web/20160630230101/http://www.wired.com/2015/08/bitcoin-schism-shows-genius-open-source |archive-date=30 June 2016}}</ref> Bitcoin Core is, perhaps, the best known implementation or client. [[Software:Fork (software development)|Forks]] of Bitcoin Core exist, such as [[Software:Bitcoin XT|Bitcoin XT]], [[Software:Bitcoin Unlimited|Bitcoin Unlimited]],<ref name="breakingup">{{Cite news |last=Vigna |first=Paul |date=17 January 2016 |title=Is Bitcoin Breaking Up? |work=The Wall Street Journal |url=https://www.wsj.com/articles/is-bitcoin-breaking-up-1453044493 |url-status=live |access-date=8 November 2016 |archive-url=https://web.archive.org/web/20160820144312/http://www.wsj.com/articles/is-bitcoin-breaking-up-1453044493 |archive-date=20 August 2016}}</ref> and Parity Bitcoin.<ref>{{Cite news |last=Allison |first=Ian |date=28 April 2017 |title=Ethereum co-founder Dr Gavin Wood and company release Parity Bitcoin |work=International Business Times |url=http://www.ibtimes.co.uk/ethereum-co-founder-dr-gavin-wood-company-release-parity-bitcoin-1619025 |url-status=live |access-date=28 April 2017 |archive-url=https://web.archive.org/web/20170428032027/http://www.ibtimes.co.uk/ethereum-co-founder-dr-gavin-wood-company-release-parity-bitcoin-1619025 |archive-date=28 April 2017}}</ref>

There are several modes in which wallets can operate. They have an inverse relationship with regard to trustlessness and computational requirements.
* ''Full clients'' verify transactions directly by downloading a full copy of the blockchain (over 150&nbsp;GB {{as of|2018|January|lc=y}}).{{cn|date=March 2023}} They do not require trust in any external parties. Full clients check the validity of mined blocks, preventing them from transacting on a chain that breaks or alters network rules.{{r|Antonopoulos2014|p=ch. 1}} Because of its size and complexity, downloading and verifying the entire blockchain is not suitable for all computing devices.
* ''Lightweight clients'' consult full nodes to send and receive transactions without requiring a local copy of the entire blockchain (see ''[[Finance:Bitcoin network#Payment verification|simplified payment verification]]'' – ''SPV''). This makes lightweight clients much faster to set up and allows them to be used on low-power, low-bandwidth devices such as smartphones. When using a lightweight wallet, however, the user must trust full nodes, as it can report faulty values back to the user. Lightweight clients follow the longest blockchain and do not ensure it is valid, requiring trust in full nodes.<ref name="LBC">{{cite web |last1=Gervais |first1=Arthur |last2=O. Karame |first2=Ghassan |last3=Gruber |first3=Damian |last4=Capkun |first4=Srdjan |title=On the Privacy Provisions of Bloom Filters in Lightweight Bitcoin Clients |url=https://eprint.iacr.org/2014/763.pdf |url-status=live |archive-url=https://web.archive.org/web/20161005045518/https://eprint.iacr.org/2014/763.pdf |archive-date=5 October 2016 |access-date=3 September 2016}}</ref>

Third-party internet services called ''online wallets'' or ''webwallets'' offer similar functionality but may be easier to use. In this case, credentials to access funds are stored with the online wallet provider rather than on the user's hardware.<ref>{{Cite news |last=Bill Barhydt |date=4 June 2014 |title=3 reasons Wall Street can't stay away from bitcoin |publisher=NBCUniversal |url=https://www.cnbc.com/id/101711220 |url-status=live |access-date=2 April 2015 |archive-url=https://web.archive.org/web/20150403052101/https://www.cnbc.com/id/101711220 |archive-date=3 April 2015}}</ref> As a result, the user must have complete trust in the online wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. An example of such a security breach occurred with Mt. Gox in 2011.<ref name="mtgoxdetails">{{cite web |date=4 March 2014 |title=MtGox gives bankruptcy details |url=https://www.bbc.com/news/technology-26420932 |url-status=live |archive-url=https://web.archive.org/web/20140312001338/http://www.bbc.com/news/technology-26420932 |archive-date=12 March 2014 |access-date=13 March 2014 |website=bbc.com |publisher=BBC}}</ref>

===Cold storage===
{{multiple image
| total_width       = 416
| perrow            = 2
| image1            = Bitcoin paper wallet generated at bitaddress.jpg
| caption1          = A paper wallet with a [[Engineering:Banknote|banknote]]-like design. Both the private key and the address are visible in [[Human-readable medium|text form]] and as 2D barcodes.
| image2            = Sample Bitcoin paper wallet.png
| caption2          = A paper wallet with the address visible for adding or checking stored funds. The part of the page containing the private key is folded over and sealed.
| image3            = Casascius_coin.jpg
| caption3          = A brass [[Finance:Token coin|token]] with a private key hidden beneath a tamper-evident [[Security hologram|security hologram]]. A part of the address is visible through a transparent part of the hologram.
| image4            = 10elqpi.jpg
| caption4          = A hardware wallet [[Engineering:Peripheral|peripheral]] which processes bitcoin payments without exposing any credentials to the computer
}}

Wallet software is targeted by [[Security hacker|hackers]] because of the lucrative potential for [[Finance:Cryptocurrency and crime|stealing bitcoins]].<ref name="Jeffries"/> A technique called "cold storage" keeps private keys out of reach of hackers; this is accomplished by keeping private keys offline at all times<ref name="Roberts">{{Cite news |last=Roberts |first=Daniel |date=15 December 2017 |title=How to send bitcoin to a hardware wallet |work=Yahoo Finance |url=https://finance.yahoo.com/news/send-bitcoin-hardware-wallet-140141385.html |url-status=live |access-date=17 February 2018 |archive-url=https://web.archive.org/web/20180217142235/https://finance.yahoo.com/news/send-bitcoin-hardware-wallet-140141385.html |archive-date=17 February 2018}}</ref><ref name="Antonopoulos2014" />{{rp|ch. 4}} by generating them on a device that is [[Air gap (networking)|not connected to the internet]].<ref name="befuddled">{{Cite book |last1=Barski |first1=Conrad |title=Bitcoin for the Befuddled |last2=Wilmer |first2=Chris |publisher=No Starch Press |year=2015 |isbn=978-1-59327-573-0}}</ref>{{rp|39}} The credentials necessary to spend bitcoins can be stored offline in a number of different ways, from specialized hardware wallets to simple paper printouts of the private key.{{r|Antonopoulos2014|page=ch. 10}}

===Hardware wallets===
A hardware wallet is a computer [[Engineering:Peripheral|peripheral]] that signs transactions as requested by the user. These devices store private keys and carry out signing and encryption internally,<ref name="Roberts"/> and do not share any sensitive information with the host computer except already signed (and thus unalterable) transactions.<ref name="iohk">{{cite techreport |first=Myrto |last=Arapinis |first2=Adriana |last2=Gkaniatsou |first3=Dimitris |last3=Karakostas |first4=Aggelos |last4=Kiayias |title=A Formal Treatment of Hardware Wallets |institution=[[Organization:University of Edinburgh|University of Edinburgh]], IOHK |year=2019 |url=https://eprint.iacr.org/2019/034.pdf}}</ref> Because hardware wallets never expose their private keys, even computers that may be compromised by malware do not have a vector to access or steal them.{{r|befuddled|page=42–45}}

The user sets a passcode when setting up a hardware wallet.<ref name="Roberts"/> As hardware wallets are tamper-resistant,<ref name="iohk"/><ref name="Antonopoulos2014" />{{rp|ch. 10}} the passcode will be needed to extract any money.<ref name="iohk"/>

===Paper wallets===
A paper wallet is created with a keypair generated on a [[Air gap (networking)|computer with no internet connection]]; the private key is written or printed onto the paper{{efn|The private key can be printed as a [[Human-readable medium|series of letters and numbers]], a [[Passphrase|seed phrase]], or a 2D barcode. Usually, the public key or bitcoin address is also printed, so that a holder of a paper wallet can check or add funds without exposing the private key to a device.}} and then erased from the computer.<ref name="Antonopoulos2014" />{{rp|ch. 4}} The paper wallet can then be stored in a safe physical location for later retrieval.{{r|befuddled|page=39}}

Physical wallets can also take the form of metal [[Finance:Token coin|token coin]]s<ref name="theverge">{{cite web |last=Staff |first=Verge |date=13 December 2013 |title=Casascius, maker of shiny physical bitcoins, shut down by Treasury Department |url=https://www.theverge.com/2013/12/13/5207256/casascius-maker-of-shiny-physical-bitcoins-shut-down-by-treasury |url-status=live |archive-url=https://web.archive.org/web/20140110010445/http://www.theverge.com/2013/12/13/5207256/casascius-maker-of-shiny-physical-bitcoins-shut-down-by-treasury |archive-date=10 January 2014 |access-date=10 January 2014 |website=The Verge}}</ref> with a private key accessible under a [[Security hologram|security hologram]] in a recess struck on the reverse side.<ref name="Ahonen2016">{{Cite book |last1=Ahonen |first1=Elias |title=Encyclopedia of Physical Bitcoins and Crypto-Currencies |last2=Rippon |first2=Matthew J. |last3=Kesselman |first3=Howard |year=2016 |isbn=978-0-9950-8990-7}}</ref>{{rp|38}} The security hologram self-destructs when removed from the token, showing that the private key has been accessed.<ref>{{cite web |last=Mack |first=Eric |date=25 October 2011 |title=Are physical Bitcoins legal? |url=https://www.cnet.com/news/are-physical-bitcoins-legal/ |url-status=live |archive-url=https://web.archive.org/web/20190626215256/https://www.cnet.com/news/are-physical-bitcoins-legal/ |archive-date=26 June 2019 |access-date=19 May 2019 |website=CNET}}</ref> Originally, these tokens were struck in brass and other [[Chemistry:Base metal|base metal]]s, but later used [[Chemistry:Precious metal|precious metal]]s as bitcoin grew in value and popularity.{{r|Ahonen2016|page=80}} Coins with stored face value as high as ₿1,000 have been struck in gold.{{r|Ahonen2016|page=102–104}} The British Museum's coin collection includes four specimens from the earliest series{{r|Ahonen2016|page=83}} of funded bitcoin tokens; one is currently on display in the museum's money gallery.<ref>{{cite web |last=British Museum |year=2012 |title=Bitcoin token with digital code for bitcoin currency |url=https://www.britishmuseum.org/research/collection_online/collection_object_details.aspx?objectId=3451294&partId=1&people=185966&peoA=185966-3-9&page=1 |access-date=17 May 2019}}</ref> In 2013, a Utah manufacturer of these tokens was ordered by the Financial Crimes Enforcement Network (FinCEN) to register as a [[Finance:Money services business|money services business]] before producing any more funded bitcoin tokens.<ref name="theverge" />{{r|Ahonen2016|page=80}}

==History==
{{Main|Finance:History of bitcoin}}

===Creation===
{{external media
| float = right
| width = 258px
| image1 = [https://www.thetimes03jan2009.com/wp-content/uploads/2015/03/genesis-block-newspaper-bitcoin.jpg Cover page of ''The Times'' 3 January 2009 showing the headline used in the genesis block]
| image2 = [https://web.archive.org/web/20220331081217/http://heliacal.net/~solar/bitcoin/pizza/IMG_0984.jpg Infamous photo of the two pizzas purchased by Laszlo Hanyecz for ₿10,000]
}}{{multiple image
| width             = 90
| image1            = Bitcoin old.png
| image2            = Bitcoin.png
| footer            = Bitcoin logos made by Satoshi Nakamoto in 2009 (left) and 2010 (right) [[Skeuomorph#Virtual examples|depict bitcoins]] as gold tokens.
}}

The domain name ''bitcoin.org'' was registered on 18 August 2008.<ref>{{Cite news |last=Bernard |first=Zoë |date=2 December 2017 |title=Everything you need to know about Bitcoin, its mysterious origins, and the many alleged identities of its creator |work=Business Insider |url=http://www.businessinsider.com/bitcoin-history-cryptocurrency-satoshi-nakamoto-2017-12 |url-status=live |access-date=15 June 2018 |archive-url=https://web.archive.org/web/20180615010015/http://www.businessinsider.com/bitcoin-history-cryptocurrency-satoshi-nakamoto-2017-12 |archive-date=15 June 2018}}</ref> On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled ''Bitcoin: A Peer-to-Peer Electronic Cash System''<ref name="paper">{{cite web |last=Nakamoto |first=Satoshi |date=31 October 2008 |title=Bitcoin: A Peer-to-Peer Electronic Cash System |url=https://bitcoin.org/bitcoin.pdf |url-status=live |archive-url=https://web.archive.org/web/20140320135003/https://bitcoin.org/bitcoin.pdf |archive-date=20 March 2014 |access-date=28 April 2014 |publisher=bitcoin.org}}</ref> was posted to a cryptography mailing list.<ref>{{Cite news |last=Finley |first=Klint |date=31 October 2018 |title=After 10 Years, Bitcoin Has Changed Everything—And Nothing |magazine=Wired |url=https://www.wired.com/story/after-10-years-bitcoin-changed-everything-nothing/ |url-status=live |access-date=9 November 2018 |archive-url=https://web.archive.org/web/20181105070656/https://www.wired.com/story/after-10-years-bitcoin-changed-everything-nothing/ |archive-date=5 November 2018}}</ref> Nakamoto implemented the bitcoin software as [[Open-source software|open-source code]] and released it in January 2009.<ref>{{cite web |last=Nakamoto, Satoshi |date=3 January 2009 |title=Bitcoin |url=https://sourceforge.net/p/bitcoin/code/HEAD/tree/ |url-status=live |archive-url=https://web.archive.org/web/20170721190347/https://sourceforge.net/p/bitcoin/code/HEAD/tree/ |archive-date=21 July 2017}}</ref><ref>{{cite web |last=Nakamoto, Satoshi |date=9 January 2009 |title=Bitcoin v0.1 released |url=http://www.mail-archive.com/cryptography@metzdowd.com/msg10142.html |url-status=live |archive-url=https://web.archive.org/web/20140326174921/http://www.mail-archive.com/cryptography%40metzdowd.com/msg10142.html |archive-date=26 March 2014}}</ref><ref name="NY2011" /> Nakamoto's identity remains unknown.{{r|whoissn}} 

No uniform convention for ''bitcoin'' capitalization exists; some sources use ''Bitcoin'', capitalized, to refer to the technology and [[Computer network|network]] and ''bitcoin'', lowercase, for the unit of account.<ref name="capitalization">{{Cite magazine |last=Bustillos, Maria |date=2 April 2013 |title=The Bitcoin Boom |url=https://www.newyorker.com/tech/elements/the-bitcoin-boom |url-status=live |magazine=The New Yorker |publisher=Condé Nast |archive-url=https://web.archive.org/web/20140727185121/http://www.newyorker.com/tech/elements/the-bitcoin-boom |archive-date=27 July 2014 |access-date=22 December 2013 |quote=Standards vary, but there seems to be a consensus forming around Bitcoin, capitalized, for the system, the software, and the network it runs on, and bitcoin, lowercase, for the currency itself.}}</ref> ''{{wipe|The Wall Street Journal}}'',<ref>{{Cite news |last=Vigna |first=Paul |date=3 March 2014 |title=BitBeat: Is It Bitcoin, or bitcoin? The Orthography of the Cryptography |work=WSJ |url=https://blogs.wsj.com/moneybeat/2014/03/14/bitbeat-is-it-bitcoin-or-bitcoin-the-orthography-of-the-cryptography |url-status=live |access-date=21 April 2014 |archive-url=https://web.archive.org/web/20140419024119/http://blogs.wsj.com/moneybeat/2014/03/14/bitbeat-is-it-bitcoin-or-bitcoin-the-orthography-of-the-cryptography/ |archive-date=19 April 2014}}</ref> ''The Chronicle of Higher Education'',<ref>{{cite web |last=Metcalf |first=Allan |date=14 April 2014 |title=The latest style |url=http://chronicle.com/blogs/linguafranca/2014/04/11/the-latest-style/ |url-status=live |archive-url=https://web.archive.org/web/20140416083920/http://chronicle.com/blogs/linguafranca/2014/04/11/the-latest-style/ |archive-date=16 April 2014 |access-date=19 April 2014 |series=Lingua Franca blog |publisher=The Chronicle of Higher Education (chronicle.com)}}</ref> and the ''Oxford English Dictionary''{{r|btox}} advocate the use of lowercase ''bitcoin'' in all cases.

On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the ''genesis block''.<ref name="Wired:RFB">{{Cite magazine |last=Wallace, Benjamin |date=23 November 2011 |title=The Rise and Fall of Bitcoin |url=https://www.wired.com/2011/11/mf-bitcoin/ |url-status=live |magazine=Wired |archive-url=https://web.archive.org/web/20131031043919/http://www.wired.com/magazine/2011/11/mf_bitcoin |archive-date=31 October 2013 |access-date=13 October 2012}}</ref><ref>{{cite web |title=Block 0&nbsp;– Bitcoin Block Explorer |url=http://blockexplorer.com/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f |url-status=live |archive-url=https://web.archive.org/web/20131015154613/http://blockexplorer.com/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f |archive-date=15 October 2013}}</ref> Embedded in the coinbase of this block was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks".<ref name="NY2011" /> This note references a headline published by ''The Times'' and has been interpreted as both a timestamp and a comment on the instability caused by [[Finance:Fractional-reserve banking|fractional-reserve banking]].<ref>{{Cite book |last=Pagliery |first=Jose |url=https://books.google.com/books?id=_-wuBAAAQBAJ |title=Bitcoin: And the Future of Money |date=2014 |publisher=Triumph Books |isbn=978-1629370361 |access-date=20 January 2018 |archive-url=https://web.archive.org/web/20180121071329/https://books.google.com.au/books?id=_-wuBAAAQBAJ |archive-date=21 January 2018 |url-status=live}}</ref>{{rp|18}}

The receiver of the first bitcoin transaction was Hal Finney, who had created the first reusable [[Finance:Proof-of-work system|Proof-of-work system]] system (RPoW) in 2004.<ref>{{cite web |date=19 May 2013 |title=Here's The Problem with the New Theory That A Japanese Math Professor Is The Inventor of Bitcoin |url=https://www.businessinsider.com/did-shinichi-mochizuki-invent-bitcoin-2013-5 |url-status=live |archive-url=https://web.archive.org/web/20150104063653/http://www.sfgate.com/technology/businessinsider/article/Here-s-The-Problem-With-The-New-Theory-That-A-4529573.php |archive-date=4 January 2015 |access-date=24 February 2015 |website=San Francisco Chronicle}}</ref> Finney downloaded the bitcoin software on its release date, and on 12 January 2009 received ten bitcoins from Nakamoto.<ref>{{Cite news |last=Peterson |first=Andrea |date=3 January 2014 |title=Hal Finney received the first Bitcoin transaction. Here's how he describes it. |newspaper=The Washington Post |url=https://www.washingtonpost.com/blogs/the-switch/wp/2014/01/03/hal-finney-received-the-first-bitcoin-transaction-heres-how-he-describes-it/ |url-status=live |archive-url=https://web.archive.org/web/20150227213647/http://www.washingtonpost.com/blogs/the-switch/wp/2014/01/03/hal-finney-received-the-first-bitcoin-transaction-heres-how-he-describes-it/ |archive-date=27 February 2015}}</ref><ref>{{Cite news |last=Popper |first=Nathaniel |date=30 August 2014 |title=Hal Finney, Cryptographer and Bitcoin Pioneer, Dies at 58 |work={{wipe|The New York Times}} |url=https://www.nytimes.com/2014/08/31/business/hal-finney-cryptographer-and-bitcoin-pioneer-dies-at-58.html |url-status=live |access-date=2 September 2014 |archive-url=https://web.archive.org/web/20140903162835/http://www.nytimes.com/2014/08/31/business/hal-finney-cryptographer-and-bitcoin-pioneer-dies-at-58.html |archive-date=3 September 2014}}</ref> Other early cypherpunk supporters were creators of bitcoin predecessors: [[Biography:Wei Dai|Wei Dai]], creator of b-money, and Nick Szabo, creator of bit gold.<ref name="Wired:RFB" /> In 2010, the first known [[Finance:Financial transaction|commercial transaction]] using bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John's pizzas for ₿10,000 from Jeremy Sturdivant.<ref name="Meet the man who spent millions worth of bitcoin on pizza – CBS News – Anderson Cooper interview">{{cite web |last1=Cooper |first1=Anderson |title=Meet the man who spent millions worth of bitcoin on pizza |url=https://www.cbsnews.com/news/meet-the-man-who-spent-millions-worth-of-bitcoin-on-pizza-60-minutes-2019-05-16/ |website=www.cbsnews.com/ |date=16 May 2019 |publisher=CBS News |access-date=8 December 2021}}</ref><ref name="The First-Ever Bitcoin Purchase Was Remarkably Inglorious – Slate – Alison Griswold author">{{cite web |last1=Griswold |first1=Alison |title=The First-Ever Bitcoin Purchase Was Remarkably Inglorious |url=https://slate.com/business/2014/05/first-bitcoin-purchase-two-pepperoni-pizzas-from-papa-john-s.html |website=slate.com/ |date=23 May 2014 |publisher=Slate |access-date=8 December 2021}}</ref><ref name="Bitcoin Pizza Day: Celebrating the $80 Million Pizza Order – Investopedia – Aaron Hankin article">{{cite web |last1=Hankin |first1=Aaron |title=Bitcoin Pizza Day: Celebrating the $80 Million Pizza Order |url=https://www.investopedia.com/news/bitcoin-pizza-day-celebrating-20-million-pizza-order/ |website=www.investopedia.com/ |publisher=Investopedia |access-date=8 December 2021}}</ref><ref>{{Cite news |last=Kharpal |first=Arjun |date=18 June 2018 |title=Everything you need to know about the blockchain |work=CNBC |url=https://www.cnbc.com/2018/06/18/blockchain-what-is-it-and-how-does-it-work.html |url-status=live |access-date=13 September 2018 |archive-url=https://web.archive.org/web/20180913112144/https://www.cnbc.com/2018/06/18/blockchain-what-is-it-and-how-does-it-work.html |archive-date=13 September 2018}}</ref>

[[Finance:Blockchain#Blockchain analysis|Blockchain analysts]] estimate that Nakamoto had mined about one million bitcoins<ref>{{Cite news |last=McMillan |first=Robert |title=Who Owns the World's Biggest Bitcoin Wallet? The FBI |magazine=Wired |publisher=Condé Nast |url=https://www.wired.com/2013/12/fbi-wallet/ |url-status=live |access-date=7 October 2016 |archive-url=https://web.archive.org/web/20161021221609/https://www.wired.com/2013/12/fbi-wallet/ |archive-date=21 October 2016}}</ref> before disappearing in 2010 when he handed the network alert key and control of the code repository over to Gavin Andresen. Andresen later became lead developer at the [[Organization:Bitcoin Foundation|Bitcoin Foundation]].<ref>{{cite web |last=Simonite |first=Tom |title=Meet Gavin Andresen, the most powerful person in the world of Bitcoin |url=https://www.technologyreview.com/s/527051/the-man-who-really-built-bitcoin/ |access-date=6 December 2017 |website=MIT Technology Review}}</ref><ref name="governance">{{Cite news |last=Odell |first=Matt |date=21 September 2015 |title=A Solution To Bitcoin's Governance Problem |work=TechCrunch |url=https://techcrunch.com/2015/09/21/a-solution-to-bitcoins-governance-problem/ |url-status=live |access-date=24 January 2016 |archive-url=https://web.archive.org/web/20160126051521/http://techcrunch.com/2015/09/21/a-solution-to-bitcoins-governance-problem/ |archive-date=26 January 2016}}</ref> Andresen then sought to decentralize control. This left opportunity for controversy to develop over the future development path of bitcoin, in contrast to the perceived authority of Nakamoto's contributions.<ref name="breakingup" /><ref name="governance" />

===2011–2012===
After early "proof-of-concept" transactions, the first major users of bitcoin were [[Finance:Black market|black market]]s, such as Silk Road. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting ₿9.9&nbsp;million, worth about $214&nbsp;million.<ref name="JEP" />{{rp|222}}

In 2011, the price started at $0.30 per bitcoin, growing to $5.27 for the year. The price rose to $31.50 on 8 June. Within a month, the price fell to $11.00. The next month it fell to $7.80, and in another month to $4.77.<ref name="Odata">{{cite web |title=Bitcoin Historical Prices |url=https://www.officialdata.org/bitcoin-price |url-status=live |archive-url=https://web.archive.org/web/20180704010212/https://www.officialdata.org/bitcoin-price |archive-date=4 July 2018 |access-date=3 July 2018 |website=OfficialData.org}}</ref>

In 2012, bitcoin prices started at $5.27, growing to $13.30 for the year.<ref name="Odata" /> By 9 January the price had risen to $7.38, but then crashed by 49% to $3.80 over the next 16 days. The price then rose to $16.41 on 17 August, but fell by 57% to $7.10 over the next three days.<ref name="MktWatch09022018">{{Cite news |last=French |first=Sally |date=9 February 2017 |title=Here's proof that this bitcoin crash is far from the worst the cryptocurrency has seen |publisher=Market Watch |url=https://www.marketwatch.com/story/heres-proof-that-this-bitcoin-crash-is-far-from-the-worst-the-cryptocurrency-has-seen-2018-02-09 |url-status=live |access-date=3 July 2018 |archive-url=https://web.archive.org/web/20180703220246/https://www.marketwatch.com/story/heres-proof-that-this-bitcoin-crash-is-far-from-the-worst-the-cryptocurrency-has-seen-2018-02-09 |archive-date=3 July 2018}}</ref>

The Bitcoin Foundation was founded in September 2012 to promote bitcoin's development and uptake.<ref>{{Cite news |last=Bustillos |first=Maria |date=1 April 2013 |title=The Bitcoin Boom |magazine=The New Yorker |url=https://www.newyorker.com/tech/elements/the-bitcoin-boom |url-status=live |access-date=30 July 2018 |archive-url=https://web.archive.org/web/20180702064450/https://www.newyorker.com/tech/elements/the-bitcoin-boom |archive-date=2 July 2018}}</ref>

On 1 November 2011, the [[Reference implementation|reference implementation]] Bitcoin-Qt version 0.5.0 was released. It introduced a [[Front and back ends|front end]] that used the [[Software:Qt|Qt user interface toolkit]].<ref name="bqt">{{cite web |date=1 November 2011 |title=Bitcoin-Qt version 0.5.0 released |url=https://bitcoin.org/en/release/v0.5.0 |access-date=13 November 2016 |publisher=Bitcoin Project}}</ref> The software previously used [[Software:Berkeley DB|Berkeley DB]] for database management. Developers switched to [[Software:LevelDB|LevelDB]] in release 0.8 in order to reduce blockchain [[Synchronization (computer science)|synchronization]] time.{{citation needed|date=May 2019}} The update to this release resulted in a minor blockchain fork on 11 March 2013. The fork was resolved shortly afterwards.{{citation needed|date=May 2019}} Seeding nodes through [[Internet Relay Chat|IRC]] was discontinued in version 0.8.2. From version 0.9.0 the software was renamed to Bitcoin Core. Transaction fees were reduced again by a factor of ten as a means to encourage [[Finance:Micropayment|microtransactions]].{{citation needed|date=May 2019}} Although Bitcoin Core does not use [[Software:OpenSSL|OpenSSL]] for the operation of the network, the software did use OpenSSL for remote procedure calls. Version 0.9.1 was released to remove the network's vulnerability to the Heartbleed bug.{{citation needed|date=May 2019}}

===2013–2016===
In 2013, prices started at $13.30 rising to $770 by 1 January 2014.<ref name="Odata" />

In March 2013 the [[Finance:Blockchain|blockchain]] temporarily split into two independent chains with different rules due to a bug in version 0.8 of the bitcoin software. The two blockchains operated simultaneously for six hours, each with its own version of the transaction history from the moment of the split. Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software, selecting the backwards-compatible version of the blockchain. As a result, this blockchain became the longest chain and could be accepted by all participants, regardless of their bitcoin software version.<ref name="bug events">{{cite web |last=Lee |first=Timothy |date=11 March 2013 |title=Major glitch in Bitcoin network sparks sell-off; price temporarily falls 23% |url=https://arstechnica.com/business/2013/03/major-glitch-in-bitcoin-network-sparks-sell-off-price-temporarily-falls-23/ |url-status=live |archive-url=https://web.archive.org/web/20130420050926/http://arstechnica.com/business/2013/03/major-glitch-in-bitcoin-network-sparks-sell-off-price-temporarily-falls-23/ |archive-date=20 April 2013 |access-date=15 February 2015 |publisher=arstechnica.com}}</ref> During the split, the [[Company:Mt. Gox|Mt. Gox]] exchange briefly halted bitcoin deposits and the price dropped by 23% to $37<ref name="bug events" /><ref name="VergeFork">{{cite web |last=Blagdon |first=Jeff |date=12 March 2013 |title=Technical problems cause Bitcoin to plummet from record high, Mt. Gox suspends deposits |url=https://www.theverge.com/2013/3/12/4092898/technical-problems-cause-bitcoin-to-plummet-from-record-high |url-status=live |archive-url=https://web.archive.org/web/20130420073538/http://www.theverge.com/2013/3/12/4092898/technical-problems-cause-bitcoin-to-plummet-from-record-high |archive-date=20 April 2013 |access-date=12 March 2013 |website=The Verge}}</ref> before recovering to the previous level of approximately $48 in the following hours.<ref>{{cite web |title=Bitcoin Charts |url=http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2013-03-12zeg2013-03-15ztgSzm1g10zm2g25zv |url-status=live |archive-url=https://web.archive.org/web/20140509133404/http://bitcoincharts.com/charts/mtgoxUSD |archive-date=9 May 2014}}</ref>

The US Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as Money Service Businesses (MSBs), that are subject to registration or other legal obligations.<ref name="ArsFinCEN">{{cite web |last=Lee |first=Timothy |date=20 March 2013 |title=US regulator Bitcoin Exchanges Must Comply With Money Laundering Laws |url=https://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/ |url-status=live |archive-url=https://web.archive.org/web/20131021203745/http://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/ |archive-date=21 October 2013 |access-date=28 July 2017 |publisher=Arstechnica |quote=Bitcoin miners must also register if they trade in their earnings for dollars.}}</ref><ref name="Finextra1">{{cite web |date=19 March 2013 |title=US govt clarifies virtual currency regulatory position |url=http://www.finextra.com/News/FullStory.aspx?newsitemid=24645 |url-status=live |archive-url=https://web.archive.org/web/20140326183202/http://www.finextra.com/News/FullStory.aspx?newsitemid=24645 |archive-date=26 March 2014 |publisher=Finextra}}</ref><ref name="FinCEN1">{{cite web |title=Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies |url=http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf |url-status=dead |archive-url=https://web.archive.org/web/20130328190308/http://fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf |archive-date=28 March 2013 |access-date=19 March 2013 |publisher=Department of the Treasury Financial Crimes Enforcement Network}}</ref>

In April, exchanges [[Company:BitInstant|BitInstant]] and Mt. Gox experienced processing delays due to insufficient capacity<ref>{{cite web |last=Roose |first=Kevin |title=Inside the Bitcoin Bubble: A Q&A With BitInstant's Stressed-Out CEO |url=https://nymag.com/intelligencer/2013/04/inside-the-bitcoin-bubble-bitinstants-ceo.html |access-date=26 January 2022 |website=Intelligencer|date=8 April 2013 }}</ref> resulting in the bitcoin price dropping from $266 to $76 before returning to $160 within six hours.<ref>{{cite web |title=Bitcoin Exchange Rate |url=http://bitcoincharts.com/charts/mtgoxUSD |url-status=live |archive-url=https://web.archive.org/web/20120625010940/http://bitcoincharts.com/charts/mtgoxUSD |archive-date=25 June 2012 |access-date=15 August 2013 |publisher=Bitcoinscharts.com}}</ref> The bitcoin price rose to $259 on 10 April, but then crashed by 83% to $45 over the next three days.<ref name="MktWatch09022018" />

On 15 May 2013, US authorities seized accounts associated with Mt. Gox after discovering it had not registered as a [[Finance:Money transmitter|money transmitter]] with FinCEN in the US.<ref>{{cite web |last=Dillet |first=Romain |title=Feds Seize Assets From Mt. Gox's Dwolla Account, Accuse It Of Violating Money Transfer Regulations |url=https://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/ |url-status=live |archive-url=https://web.archive.org/web/20131009161856/http://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/ |archive-date=9 October 2013 |access-date=15 May 2013}}</ref><ref name="ABA FINCEN">{{cite web |last=Berson |first=Susan A. |year=2013 |title=Some basic rules for using 'bitcoin' as virtual money |url=http://www.abajournal.com/magazine/article/some_basic_rules_for_using_bitcoin_as_virtual_money/ |url-status=live |archive-url=https://web.archive.org/web/20131029185546/http://www.abajournal.com/magazine/article/some_basic_rules_for_using_bitcoin_as_virtual_money/ |archive-date=29 October 2013 |access-date=26 June 2013 |work=ABA Journal |publisher=American Bar Association}}</ref> On 23 June 2013, the US [[Organization:Drug Enforcement Administration|Drug Enforcement Administration]] listed ₿11.02 as a seized asset in a United States Department of Justice seizure notice pursuant to 21 U.S.C. § 881. This marked the first time a government agency had seized bitcoin, likely by either seizing a computer with an unencrypted wallet, or through a sting operation.<ref>{{Cite news |last=Sampson |first=Tim |year=2013 |title=U.S. government makes its first-ever Bitcoin seizure |work=The Daily Dot |url=http://www.dailydot.com/business/11-bitcoins-seized-government-dea/ |url-status=live |access-date=15 October 2013 |archive-url=https://web.archive.org/web/20130712010826/http://www.dailydot.com/business/11-bitcoins-seized-government-dea/ |archive-date=12 July 2013}}</ref><ref>{{cite news |last1=Null |first1=Christopher |title=Trouble with Bitcoin as the government muscles in |url=https://www.pcworld.com/article/452572/trouble-with-bitcoin-as-the-government-muscles-in.html |access-date=1 June 2023 |work=PCWorld |date=23 June 2013 |language=en}}</ref> The FBI seized about ₿30,000<ref name="draper">{{cite web |last=Ember, Sydney |date=2 July 2014 |title=Winner of Bitcoin Auction, Tim Draper, Plans to Expand Currency's Use |url=https://dealbook.nytimes.com/2014/07/02/venture-capitalist-tim-draper-wins-bitcoin-auction/ |url-status=live |archive-url=https://web.archive.org/web/20190828223151/https://dealbook.nytimes.com/2014/07/02/venture-capitalist-tim-draper-wins-bitcoin-auction/ |archive-date=28 August 2019 |access-date=13 June 2019 |website=The New York Times |department=DealBook}}</ref> in October 2013 from the [[Dark web|dark web]] website Silk Road, following the arrest of Ross William Ulbricht.<ref>{{cite web |title=After Silk Road seizure, FBI Bitcoin wallet identified and pranked |website=[[ZDNet]] |url=http://www.zdnet.com/after-silk-road-seizure-fbi-bitcoin-wallet-identified-and-pranked-7000021603/ |url-status=live |archive-url=https://web.archive.org/web/20140405173339/http://www.zdnet.com/after-silk-road-seizure-fbi-bitcoin-wallet-identified-and-pranked-7000021603/ |archive-date=5 April 2014}}</ref><ref>{{cite web |title=Silkroad Seized Coins |url=http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX |url-status=live |archive-url=https://web.archive.org/web/20140109022946/http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX |archive-date=9 January 2014 |access-date=2 November 2013}}</ref><ref>{{Cite news |last=Hill |first=Kashmir |title=The FBI's Plan For The Millions Worth Of Bitcoins Seized From Silk Road |work=Forbes |url=https://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/ |url-status=live |archive-url=https://web.archive.org/web/20140502154935/http://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/ |archive-date=2 May 2014}}</ref> These bitcoins were sold at [[Finance:First-price sealed-bid auction|blind auction]] by the United States Marshals Service to venture capital investor Tim Draper.<ref name="draper" /> Bitcoin's price rose to $755 on 19 November and crashed by 50% to $378 the same day. On 30 November 2013, the price reached $1,163 before starting a long-term crash, declining by 87% to $152 in January 2015.<ref name="MktWatch09022018" />

On 5 December 2013, the [[Company:People's Bank of China|People's Bank of China]] prohibited Chinese financial institutions from using bitcoin.<ref name="ccontrols">{{Cite news |last=Kelion, Leo |date=18 December 2013 |title=Bitcoin sinks after China restricts yuan exchanges |work=bbc.com |publisher=BBC |url=https://www.bbc.co.uk/news/technology-25428866 |url-status=live |access-date=20 December 2013 |archive-url=https://web.archive.org/web/20131219214615/http://www.bbc.co.uk/news/technology-25428866 |archive-date=19 December 2013}}</ref> After the announcement, the value of bitcoin dropped,<ref>{{Cite news |date=6 December 2013 |title=China bans banks from bitcoin transactions |work=The Sydney Morning Herald |publisher=Reuters |url=https://www.smh.com.au/business/markets/currencies/china-bans-banks-from-bitcoin-transactions-20131206-2yugy.html |url-status=live |access-date=31 October 2014 |archive-url=https://web.archive.org/web/20140323102824/http://www.smh.com.au/business/markets/currencies/china-bans-banks-from-bitcoin-transactions-20131206-2yugy.html |archive-date=23 March 2014}}</ref> and [[Company:Baidu|Baidu]] no longer accepted bitcoins for certain services.<ref name="bloomberg">{{Cite news |date=7 December 2013 |title=Baidu Stops Accepting Bitcoins After China Ban |work=Bloomberg |location=New York |url=https://www.bloomberg.com/news/2013-12-07/baidu-stops-accepting-bitcoins-after-china-ban.html |url-status=live |access-date=11 December 2013 |archive-url=https://web.archive.org/web/20131210214547/http://www.bloomberg.com/news/2013-12-07/baidu-stops-accepting-bitcoins-after-china-ban.html |archive-date=10 December 2013}}</ref> Buying real-world goods with any virtual currency had been illegal in China since at least 2009.<ref>{{cite web |date=29 June 2009 |title=China bars use of virtual money for trading in real goods |url=http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html |url-status=live |archive-url=https://web.archive.org/web/20131129184312/http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html |archive-date=29 November 2013 |access-date=10 January 2014 |publisher=English.mofcom.gov.cn}}</ref>

In 2014, prices started at $770 and fell to $314 for the year.<ref name="Odata" />  On 30 July 2014, the [[Organization:Wikimedia Foundation|Wikimedia Foundation]] started accepting donations of bitcoin.<ref>{{cite magazine |last=Rayman |first=Noah |date=30 July 2014 |title=You Can Now Donate to Wikipedia in Bitcoin |url=http://time.com/3059325/wikimedia-wikipedia-bitcoin-donations/ |archive-url=https://web.archive.org/web/20140730182422/http://time.com/3059325/wikimedia-wikipedia-bitcoin-donations/ |archive-date=30 July 2014 |access-date=27 April 2019 |magazine={{wipe|Time (magazine)}}}}</ref>

In 2015, prices started at $314 and rose to $434 for the year. In 2016, prices rose and climbed up to $998 by 1 January 2017.<ref name="Odata" />

Release 0.10 of the software was made public on 16 February 2015. It introduced a consensus library which gave programmers easy access to the rules governing [[Consensus decision-making|consensus]] on the network. In version 0.11.2 developers added a new feature which allowed transactions to be made unspendable until a specific time in the future.<ref name="v0.11.2">{{cite web |date=13 November 2015 |title=Bitcoin Core version 0.11.2 released |url=https://bitcoin.org/en/release/v0.11.2 |access-date=14 November 2016 |publisher=Bitcoin Project}}</ref>

In July 2016, the CheckSequenceVerify soft fork activated.<ref>{{Cite book |last=Antonopoulos |first=Andreas |title=Mastering Bitcoin: Programming the Open Blockchain |publisher=O'Reilly Media |year=2017 |isbn=978-1491954386 |edition=2nd |quote=BIP-68 and BIP-112 were activated in May 2016 as a soft fork upgrade to the consensus rules.}}</ref> In August 2016, the Bitfinex cryptocurrency exchange platform was [[Finance:2016 Bitfinex hack|hacked]] in the second-largest breach of a Bitcoin exchange platform up to that time, and ₿119,756,<ref name=nyt20160803>{{cite news |last=Tsang |first=Amie |date=3 August 2016 |title=Bitcoin Plunges After Hacking of Exchange in Hong Kong |newspaper=The New York Times |url=https://www.nytimes.com/2016/08/04/business/dealbook/bitcoin-bitfinex-hacked.html |url-status=live |archive-url=https://web.archive.org/web/20170518201610/https://www.nytimes.com/2016/08/04/business/dealbook/bitcoin-bitfinex-hacked.html |archive-date=18 May 2017}}</ref> worth about $72&nbsp;million at the time, were stolen.<ref name=fortune20160803>{{cite web |title=Bitcoin Worth $72M Was Stolen in Bitfinex Exchange Hack in Hong Kong |url=http://fortune.com/2016/08/03/bitcoin-stolen-bitfinex-hack-hong-kong/ |url-status=live |archive-url=https://web.archive.org/web/20161120085013/http://fortune.com/2016/08/03/bitcoin-stolen-bitfinex-hack-hong-kong/ |archive-date=20 November 2016 |access-date=26 October 2016 |website=Fortune}}</ref>

In October 2016, Bitcoin Core's 0.13.1 release featured the "Segwit" soft fork that included a scaling improvement aiming to optimize the bitcoin blocksize.{{citation needed|date=May 2019}} The patch was originally finalized in April, and 35 developers were engaged to deploy it.{{citation needed|date=May 2019}} This release featured Segregated Witness ([[Finance:SegWit|SegWit]]) which aimed to place downward pressure on transaction fees as well as increase the maximum transaction capacity of the network.<ref name="rel13.1">{{cite web |title=Bitcoin Core 0.13.1 |url=https://bitcoincore.org/en/releases/0.13.1/ |access-date=25 October 2016 |publisher=Bitcoin Core}}</ref>{{primary source inline|date=May 2019}} The 0.13.1 release endured extensive testing and research leading to some delays in its release date.{{citation needed|date=May 2019}} SegWit prevents various forms of transaction [[Malleability (cryptography)|malleability]].<ref name="swb">{{cite web |date=26 January 2016 |title=Segregated Witness Benefits |url=https://bitcoincore.org/en/2016/01/26/segwit-benefits/ |access-date=20 October 2018 |website=Bitcoin Core}}</ref>{{primary source inline|date=May 2019}}

===2017–2019===
Research produced by the [[Organization:University of Cambridge|University of Cambridge]] estimated that in 2017, there were 2.9 to 5.8 million unique users using a [[Finance:Cryptocurrency wallet|cryptocurrency wallet]], most of them using bitcoin.<ref name="CU2017">{{cite web |last1=Hileman |first1=Garrick |last2=Rauchs |first2=Michel |title=Global Cryptocurrency Benchmarking Study |url=https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf |url-status=live |archive-url=https://web.archive.org/web/20170410130007/https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf |archive-date=10 April 2017 |access-date=14 April 2017 |publisher=Cambridge University}}</ref> On 15 July 2017, the controversial Segregated Witness [SegWit] software upgrade was approved ("locked-in"). Segwit was intended to support the [[Finance:Lightning Network|Lightning Network]] as well as improve scalability.<ref name="wsjsegwit" /> SegWit was subsequently activated on the network on 24 August 2017. The bitcoin price rose almost 50% in the week following SegWit's approval.<ref name="wsjsegwit">{{Cite news |last=Vigna |first=Paul |date=21 July 2017 |title=Bitcoin Rallies Sharply After Vote Resolves Bitter Scaling Debate |work=The Wall Street Journal |url=https://blogs.wsj.com/moneybeat/2017/07/21/bitcoin-rallies-sharply-after-vote-resolves-bitter-scaling-debate/ |url-status=live |access-date=26 January 2020 |archive-url=https://web.archive.org/web/20200126104343/https://blogs.wsj.com/moneybeat/2017/07/21/bitcoin-rallies-sharply-after-vote-resolves-bitter-scaling-debate/ |archive-date=26 January 2020}}</ref> On 21 July 2017, bitcoin was trading at $2,748, up 52% from 14 July 2017's $1,835.<ref name="wsjsegwit" /> Supporters of large blocks who were dissatisfied with the activation of SegWit forked the software on 1 August 2017 to create [[Finance:Bitcoin Cash|Bitcoin Cash]], becoming one of many [[Finance:List of bitcoin forks|forks of bitcoin]] such as [[Finance:Bitcoin Gold|Bitcoin Gold]].<ref name="bsit">{{Cite news |last=Selena Larson |date=1 August 2017 |title=Bitcoin split in two, here's what that means |work=CNN Tech |publisher=Cable News Network |url=https://money.cnn.com/2017/08/01/technology/business/bitcoin-cash-new-currency/index.html |url-status=live |access-date=2 April 2018 |archive-url=https://web.archive.org/web/20180227214042/https://money.cnn.com/2017/08/01/technology/business/bitcoin-cash-new-currency/index.html |archive-date=27 February 2018}}</ref>

Prices started at $998 in 2017 and rose to $13,412.44 on 1 January 2018,<ref name="Odata" /> after reaching its all-time high of $19,783.06 on 17 December 2017.<ref>{{cite web |title=Bitcoin Hits a New Record High, But Stops Short of $20,000 |url=http://fortune.com/2017/12/17/bitcoin-record-high-short-of-20000/ |url-status=live |archive-url=https://web.archive.org/web/20181114132600/http://fortune.com/2017/12/17/bitcoin-record-high-short-of-20000/ |archive-date=14 November 2018 |access-date=16 April 2019 |website=Fortune}}</ref>

China banned trading in bitcoin, with first steps taken in September 2017, and a complete ban that started on 1 February 2018. Bitcoin prices then fell from $9,052 to $6,914 on 5 February 2018.<ref name="MktWatch09022018" /> The percentage of bitcoin trading in the Chinese [[Finance:Renminbi|renminbi]] fell from over 90% in September 2017 to less than 1% in June 2018.<ref name="rmbXinhua">{{Cite news |date=7 July 2018 |title=RMB Bitcoin trading falls below 1 pct of world total |publisher=Xinhuanet |agency=Xinhua |url=http://www.xinhuanet.com/english/2018-07/07/c_137308879.htm |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180710225218/http://www.xinhuanet.com/english/2018-07/07/c_137308879.htm |archive-date=10 July 2018}}</ref>

Throughout the rest of the first half of 2018, bitcoin's price fluctuated between $11,480 and $5,848. On 1 July 2018, bitcoin's price was $6,343.<ref name="YahooFin" /><ref name="Xpress10072018">{{Cite news |last=Dawkins |first=David |date=10 July 2018 |title=Has CHINA burst the bitcoin BUBBLE? Trading in RMB drops from 90% to 1% |publisher=Express |url=https://www.express.co.uk/finance/city/986552/Bitcoin-price-ripple-cryptocurrency-ethereum-BTC-to-USD-XRP-news-china |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180710225323/https://www.express.co.uk/finance/city/986552/Bitcoin-price-ripple-cryptocurrency-ethereum-BTC-to-USD-XRP-news-china |archive-date=10 July 2018}}</ref> The price on 1 January 2019 was $3,747, down 72% for 2018 and down 81% since the all-time high.<ref name="YahooFin">{{Cite news |title=Bitcoin USD |publisher=Yahoo Finance! |url=https://finance.yahoo.com/quote/BTC-USD/history/ |url-status=live |access-date=27 January 2019 |archive-url=https://web.archive.org/web/20190128082721/https://finance.yahoo.com/quote/BTC-USD/history/ |archive-date=28 January 2019}}</ref><ref>{{cite web |date=4 January 2019 |title=Bitcoin turns 10: The obscure technology that became a household name |url=https://www.cnbc.com/2019/01/04/bitcoin-turns-10-the-obscure-technology-that-became-a-household-name.html |url-status=live |archive-url=https://web.archive.org/web/20190119121616/https://www.cnbc.com/2019/01/04/bitcoin-turns-10-the-obscure-technology-that-became-a-household-name.html |archive-date=19 January 2019 |access-date=18 January 2019 |website=CNBC}}</ref>

In September 2018, an anonymous party discovered and reported an invalid-block denial-of-server vulnerability to developers of Bitcoin Core, Bitcoin ABC and Bitcoin Unlimited. Further analysis by bitcoin developers showed the issue could also allow the creation of blocks violating the 21 million coin limit and {{CVE|2018-17144}} was assigned and the issue resolved.<ref>{{cite news |title=CVE-2018-17144 Full Disclosure |work=Bitcoin Core |url=https://bitcoincore.org/en/2018/09/20/notice/ |access-date=23 September 2018}}</ref>{{primary source inline|date=May 2019}}

Bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges, including thefts from [[Company:Coincheck|Coincheck]] in January 2018, [[Company:Bithumb|Bithumb]] in June, and Bancor in July. For the first six months of 2018, $761 million worth of cryptocurrencies was reported stolen from exchanges.<ref name="Roy3072018">{{Cite news |last=Chavez-Dreyfuss |first=Gertrude |date=3 July 2018 |title=Cryptocurrency exchange theft surges in first half of 2018: report |work=Reuters |url=https://www.reuters.com/article/us-crypto-currencies-ciphertrace/cryptocurrency-exchange-theft-surges-in-first-half-of-2018-report-idUSKBN1JT1Q5 |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180704120854/https://www.reuters.com/article/us-crypto-currencies-ciphertrace/cryptocurrency-exchange-theft-surges-in-first-half-of-2018-report-idUSKBN1JT1Q5 |archive-date=4 July 2018}}</ref> Bitcoin's price was affected even though other cryptocurrencies were stolen at Coinrail and Bancor as investors worried about the security of cryptocurrency exchanges.<ref name="BloomFort">{{Cite magazine |date=20 July 2018 |title=Cryptocurrencies Tumble After $32 Million South Korea Exchange Hack |url=http://fortune.com/2018/06/20/south-korea-cryptocurrency-hack/ |url-status=live |magazine=Fortune |archive-url=https://web.archive.org/web/20180711032352/http://fortune.com/2018/06/20/south-korea-cryptocurrency-hack/ |archive-date=11 July 2018 |access-date=10 July 2018 |agency=Bloomberg}}</ref><ref name="CNNhack">{{Cite news |last=Shane |first=Daniel |date=11 June 2018 |title=Billions in cryptocurrency wealth wiped out after hack |publisher=CNN |url=https://money.cnn.com/2018/06/11/investing/coinrail-hack-bitcoin-exchange/index.html |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180711032051/https://money.cnn.com/2018/06/11/investing/coinrail-hack-bitcoin-exchange/index.html |archive-date=11 July 2018}}</ref><ref name="TCBancor">{{Cite news |last=Russell |first=Jon |date=10 July 2018 |title=The crypto world's latest hack sees Israel's Bancor lose $23.5M |work=TechCrunch |url=https://techcrunch.com/2018/07/10/bancor-loses-23-5m/ |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180710084932/https://techcrunch.com/2018/07/10/bancor-loses-23-5m/ |archive-date=10 July 2018}}</ref> In September 2019, the [[Company:Intercontinental Exchange|Intercontinental Exchange]] (the owner of the NYSE) began trading of bitcoin futures on its exchange called [[Company:Bakkt|Bakkt]].<ref name="WSJBakkt">{{Cite news |last=Osipovich |first=Alexander |date=22 September 2019 |title=NYSE Owner Launches Long-Awaited Bitcoin Futures |work=The Wall Street Journal |url=https://www.wsj.com/articles/nyse-owner-to-launch-long-awaited-bitcoin-futures-11569153649 |url-status=live |access-date=24 September 2019 |archive-url=https://web.archive.org/web/20190924021537/https://www.wsj.com/articles/nyse-owner-to-launch-long-awaited-bitcoin-futures-11569153649 |archive-date=24 September 2019}}</ref> Bakkt also announced that it would launch options on bitcoin in December 2019.<ref name="bakkt20191024">{{Cite news |last=Olga Kharif |date=24 October 2019 |title=Bakkt Plans First Regulated Options Contracts on Bitcoin Futures |work=bloomberg.com |publisher=Bloomberg |url=https://www.bloomberg.com/news/articles/2019-10-24/bakkt-plans-first-regulated-options-contracts-on-bitcoin-futures |url-status=live |access-date=5 November 2019 |archive-url=https://web.archive.org/web/20191024192915/https://www.bloomberg.com/news/articles/2019-10-24/bakkt-plans-first-regulated-options-contracts-on-bitcoin-futures |archive-date=24 October 2019}}</ref> In December 2019, [[Company:YouTube|YouTube]] removed bitcoin and cryptocurrency videos, but later restored the content after judging they had "made the wrong call".<ref name="YoutubeBBC-Block">{{Cite news |date=28 December 2019 |title=YouTube admits error over Bitcoin video purge |work=bbc.com |publisher=BBC |url=https://www.bbc.com/news/technology-50924494 |url-status=live |access-date=28 December 2019 |archive-url=https://web.archive.org/web/20191228003142/https://www.bbc.com/news/technology-50924494 |archive-date=28 December 2019}}</ref>

In February 2019, Canadian cryptocurrency exchange [[Company:Quadriga Fintech Solutions|Quadriga Fintech Solutions]] failed with approximately $200 million missing.<ref name="Quadriga-Bloomberg">{{Cite news |last=Alexander |first=Doug |date=4 February 2019 |title=Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins |work=bloomberg.com |publisher=Bloomberg |url=https://www.bloomberg.com/news/articles/2019-02-04/crypto-exchange-founder-dies-leaves-behind-200-million-problem |url-status=live |access-date=27 January 2020 |archive-url=https://web.archive.org/web/20191216163149/https://www.bloomberg.com/news/articles/2019-02-04/crypto-exchange-founder-dies-leaves-behind-200-million-problem |archive-date=16 December 2019}}</ref> By June 2019 the price had recovered to $13,000.<ref name="ForbesCorona">{{Cite news |last=del Castillo |first=Michael |date=19 March 2020 |title=Bitcoin's Magic Is Fading, And That's A Good Thing |work=Forbes.com |url=https://www.forbes.com/sites/michaeldelcastillo/2020/03/19/bitcoins-magic-is-fading-and-thats-a-good-thing/ |url-status=live |access-date=21 March 2020 |archive-url=https://web.archive.org/web/20200320174739/https://www.forbes.com/sites/michaeldelcastillo/2020/03/19/bitcoins-magic-is-fading-and-thats-a-good-thing/amp/ |archive-date=20 March 2020}}</ref>

===2020–present===
[[File:Bitcoin usd price.svg|thumb|Bitcoin price in US dollars]]
On 13 March 2020, bitcoin fell below $4,000 during a broad market selloff, after trading above $10,000 in February 2020.<ref>{{cite web |date=13 March 2020 |title=Bitcoin loses half of its value in two-day plunge |url=https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-its-value-in-two-day-plunge.html |access-date=9 December 2020 |website=CNBC}}</ref> On 11 March 2020, 281,000 bitcoins were sold, held by owners for only thirty days.<ref name="ForbesCorona" /> This compared to ₿4,131 that had laid dormant for a year or more, indicating that the vast majority of the bitcoin volatility on that day was from recent buyers. During the week of 11 March 2020, cryptocurrency exchange [[Company:Kraken|Kraken]] experienced an 83% increase in the number of account signups over the week of bitcoin's price collapse, a result of buyers looking to capitalize on the low price.<ref name="ForbesCorona" /> These events were attributed to the onset of the COVID-19 pandemic.

In August 2020, [[Software:MicroStrategy|MicroStrategy]] invested $250 million in bitcoin as a treasury reserve asset.<ref>{{cite web |date=11 August 2020 |title=MicroStrategy buys $250M in Bitcoin as CEO says it's superior to cash |url=https://www.bizjournals.com/washington/news/2020/08/11/microstratregy-buys-250m-in-bitcoin.html |access-date=11 August 2020 |website=Washington Business Journal}}</ref> In October 2020, [[Company:Square, Inc.|Square, Inc.]] placed approximately 1% of total assets ($50 million) in bitcoin.<ref>{{cite news |author=Oliver Effron |title=Square just bought $50 million in bitcoin |url=https://www.cnn.com/2020/10/08/business/square-bitcoin-crypto-investment/index.html |access-date=22 October 2020 |website=CNN}}</ref> In November 2020, [[Company:PayPal|PayPal]] announced that US users could buy, hold, or sell bitcoin.<ref>{{cite web |date=13 November 2020 |title=PayPal says all users in US can now buy, hold and sell cryptocurrencies |url=https://techcrunch.com/2020/11/12/paypal-says-all-users-in-u-s-can-now-buy-hold-and-sell-cryptocurrencies/ |access-date=26 November 2020 |website=Techcrunch}}</ref> On 30 November 2020, the bitcoin value reached a new all-time high of $19,860, topping the previous high of December 2017.<ref>{{cite web |date=30 November 2020 |title=Bitcoin hits an all-time high of just under $20,000 |url=https://edition.cnn.com/2020/11/30/investing/bitcoin-prices-record-high/index.html |access-date=1 December 2020 |website=CNN}}</ref> Alexander Vinnik, founder of [[Company:BTC-e|BTC-e]], was convicted and sentenced to five years in prison for money laundering in France while refusing to testify during his trial.<ref name="zdnetfrance">{{Cite news |url=https://www.zdnet.com/article/btc-e-founder-sentenced-to-five-years-in-prison-for-laundering-ransomware-funds/ |title=BTC-e founder sentenced to five years in prison for laundering ransomware funds |date=7 December 2020 |work=ZDNet |access-date=9 December 2020 |author=Catalin Cimpanu}}</ref> In December 2020, Massachusetts Mutual Life Insurance Company announced a bitcoin purchase of US$100 million, or roughly 0.04% of its general investment account.<ref name="MM2020">{{cite news |url=https://www.bloomberg.com/news/articles/2020-12-10/169-year-old-insurer-massmutual-invests-100-million-in-bitcoin |title=169-Year-Old MassMutual Invests $100 Million in Bitcoin |date=11 December 2020 |work=Bloomberg |access-date=26 December 2020 |author=Olga Kharif}}</ref>

On 19 January 2021, [[Biography:Elon Musk|Elon Musk]] placed the handle ''#Bitcoin'' in his [[Company:Twitter|Twitter]] profile, tweeting "In retrospect, it was inevitable", which caused the price to briefly rise about $5,000 in an hour to $37,299.<ref name="CNBCMusk">{{Cite news |url=https://www.cnbc.com/2021/01/29/bitcoin-spikes-20percent-after-elon-musk-adds-bitcoin-to-his-twitter-bio.html |title=Bitcoin spikes 20% after Elon Musk adds #bitcoin to his Twitter bio |date=29 January 2021 |work=CNBC |access-date=2 February 2021 |author=Ryan Browne}}</ref> On 25 January 2021, Microstrategy announced that it continued to buy bitcoin and as of the same date it had holdings of ₿70,784 worth $2.38 billion.<ref name="BIMS">{{Cite news |url=https://www.businessinsider.com/buy-bitcoin-dip-marathon-patent-group-pours-millions-btc-2021-1 |title=Crypto miner Marathon Patent Group pours $150 million into bitcoin as the token pulls back from record highs |date=26 January 2021 |work=Business Insider |access-date=1 February 2021 |author=Will Daniel}}</ref> On 8 February 2021 [[Company:Tesla, Inc.|Tesla's]] announcement of a bitcoin purchase of US$1.5 billion and the plan to start accepting bitcoin as payment for vehicles, pushed the bitcoin price to $44,141.<ref name="TeslaCNBCbitcoinATH">{{Cite news |url=https://www.cnbc.com/2021/02/08/bitcoin-surges-above-43000-to-a-record-after-elon-musks-tesla-buys-1point5-billion.html |title=Bitcoin surges above $44,000 to record after Elon Musk's Tesla buys $1.5 billion worth |date=8 February 2021 |work=CNBC |access-date=9 February 2021 |author=Yun Li}}</ref> On 18 February 2021, Elon Musk stated that "owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold".<ref>{{Cite news |title=Elon Musk says bitcoin is slightly better than holding cash |work=The Economic Times |url=https://economictimes.indiatimes.com/markets/stocks/news/elon-musk-says-bitcoin-is-slightly-better-than-holding-cash/articleshow/81104000.cms |access-date=19 February 2021}}</ref> After 49 days of accepting the digital currency, Tesla reversed course on 12 May 2021, saying they would no longer take bitcoin due to concerns that "mining" the cryptocurrency was contributing to the consumption of fossil fuels and climate change.<ref>{{Cite news |date=13 May 2021 |title=Tesla will no longer accept Bitcoin over climate concerns, says Musk |work=BBC News |url=https://www.bbc.com/news/business-57096305 |access-date=13 May 2021}}</ref> The decision resulted in the price of bitcoin dropping around 12% on 13 May.<ref>{{cite news |last=Iyengar |first=Rish |date=13 May 2021 |title=Bitcoin drops around 12% after Elon Musk tweets that Tesla will not accept it as payment |url=https://www.cnn.com/2021/05/12/tech/elon-musk-tesla-bitcoin/index.html |access-date=13 May 2021 |website=CNN}}</ref> During a July bitcoin conference, Musk suggested Tesla could possibly help bitcoin miners switch to renewable energy in the future and also stated at the same conference that if bitcoin mining reaches, and trends above 50 percent renewable energy usage, that "Tesla would resume accepting bitcoin." The price for bitcoin rose after this announcement.<ref>{{cite web |title=Elon Musk Says Tesla Likely to Accept Bitcoin Again |url=https://gizmodo.com/elon-musk-says-tesla-likely-to-accept-bitcoin-again-1847340934 |access-date=22 July 2021 |website=Gizmodo |date=22 July 2021}}</ref>

In June 2021, the [[Finance:Taproot (fork)|Taproot]] network software upgrade was approved, adding support for [[Schnorr signature]]s, improved functionality of [[Finance:Smart contract|Smart contract]]s and [[Finance:Lightning Network|Lightning Network]].<ref>{{Cite news |last=Sigalos |first=MacKenzie |date=9 June 2021 |title=Bitcoin just got its first makeover in four years |work=CNBC |url=https://www.cnbc.com/2021/06/12/bitcoin-taproot-upgrade-what-it-means.html |access-date=15 June 2021 |issn=}}</ref> The upgrade was activated in November.<ref>{{cite web |last=Sigalos |first=MacKenzie |date=14 November 2021 |title=Bitcoin's biggest upgrade in four years just happened – here's what changes |url=https://www.cnbc.com/2021/11/14/bitcoin-taproot-upgrade-what-it-means-for-investors.html |access-date=15 November 2021 |website=CNBC}}</ref>

In September 2021, [[Finance:Bitcoin in El Salvador|Bitcoin in El Salvador]] became [[Finance:Legal tender|legal tender]], alongside the US dollar.<ref name="Renteria"/><ref name="BTCSVSept7FT"/>

On 16 October 2021, the SEC approved the ProShares Bitcoin Strategy ETF, a cash-settled [[Finance:Futures contract|futures]] exchange-traded fund (ETF). The first bitcoin ETF in the United States gained 5% on its first trading day on 19 October 2021.<ref name="Monica Business 2021">{{cite news |last1=La Monica |first1=Paul |title=The first bitcoin ETF finally begins trading |website=CNN |date=19 October 2021 |url=https://www.cnn.com/2021/10/19/investing/bitcoin-etf-proshares-bito/index.html |access-date=22 October 2021}}</ref><ref name="ReutersATH">{{cite web |last=Mccrank |first=John |date=22 October 2021 |title=Bitcoin falls from peak, U.S. ETF support questioned |url=https://www.reuters.com/business/finance/bitcoin-edges-off-all-time-high-momentum-more-gains-this-year-seen-intact-2021-10-21/ |access-date=27 October 2021 |website=Reuters}}</ref>

On 25 March 2022, Pavel Zavalny stated that Russia might accept bitcoin for payment for oil and gas exports, in response to sanctions stemming from the 2022 Russian invasion of Ukraine.<ref name="RussiaBTC">{{cite web |last=Liang |first=Annabelle |date=25 March 2022 |title=Russia considers accepting Bitcoin for oil and gas|url=https://www.bbc.com/news/business-60870100|access-date=26 March 2022 |website=BBC}}</ref>

On 27 April 2022 Central African Republic adopted bitcoin as legal tender alongside the [[Finance:CFA franc|CFA franc]].<ref name="BBCLT">{{cite web |last=|first=|date=25 April 2022 |title=Bitcoin becomes official currency in Central African Republic|url=https://www.bbc.com/news/world-africa-61248809|access-date=27 April 2022 |website=BBC}}</ref><ref name="CAF Bloom">{{Cite news |date=28 April 2022 |title=Bitcoin Declared Legal Currency in Central African Republic |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2022-04-28/bitcoin-is-declared-a-legal-currency-in-central-african-republic-l2isppnb |access-date=28 April 2022}}</ref>

On May 10, 2022, the bitcoin price fell to $31,324, as a result of a collapse of a UST [[Finance:Stablecoin|stablecoin]] experiment named Terra, with bitcoin down more than 50% since the November 2021 high.<ref name="CNBCLuna">{{cite web |last=Browne|first=Ryan|date=10 May 2022 |title=Bitcoin investors are panicking as a controversial crypto experiment unravels|url=https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html |website=CNBC}}</ref> By June 13, 2022, the [[Company:Celsius Network|Celsius Network]] (a [[Finance:Decentralized finance|decentralized finance]] loan company) halted withdrawals and resulted in the bitcoin price falling below $20,000.<ref>{{cite news|last1=Milmo|first1=Dan|title=Bitcoin value slumps below $20,000 in cryptocurrencies turmoil|url=https://www.theguardian.com/technology/2022/jun/18/bitcoin-value-falls-cryptocurrency-markets-turmoil|access-date=19 June 2022|work=The Guardian|date=18 June 2022|language=en}}</ref><ref name="NYTCel">{{cite web |last=Yaffe-Bellany|first=David |date=13 June 2022 |title=Celsius Network Leads Crypto Markets Into Another Free Fall|url=https://www.nytimes.com/2022/06/13/technology/bitcoin-ether-price.html|website=The New York Times}}</ref>

In May 2022, following a vote by [[Wikipedia]] editors the previous month, the Wikimedia Foundation announced it would stop accepting donations in bitcoin or other cryptocurrencies—eight years after it had first started taking contributions in bitcoin.<ref>{{cite news |last1=Binder |first1=Matt |title=Wikipedia will no longer accept cryptocurrency donations. Here's why. |url=https://mashable.com/article/wikipedia-wikimedia-cryptocurrency-donations |access-date=September 20, 2022 |work=Mashable |date=May 1, 2022 |language=en}}</ref><ref>{{cite news |last1=Dent |first1=S. |title=The Wikimedia Foundation won't accept crypto donations anymore |url=https://www.engadget.com/wikimedia-foundation-confirms-that-it-will-no-longer-accept-crypto-donations-080029446.html |access-date=September 20, 2022 |work=Engadget |date=May 2, 2022}}</ref>

==Associated ideologies==
Satoshi Nakamoto stated in an essay accompanying bitcoin's code that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."<ref name="BitIdeo">{{cite news |last=Feuer |first=Alan |date=14 December 2013 |title=The Bitcoin Ideology |work=The New York Times |url=https://www.nytimes.com/2013/12/15/sunday-review/the-bitcoin-ideology.html |url-status=live |access-date=1 July 2018 |archive-url=https://web.archive.org/web/20180701222302/https://www.nytimes.com/2013/12/15/sunday-review/the-bitcoin-ideology.html |archive-date=1 July 2018}}</ref>

===Austrian economics roots===
According to the European Central Bank, the decentralization of money offered by bitcoin has its theoretical roots in the [[Social:Austrian school of economics|Austrian school of economics]], especially with Friedrich von Hayek in his book ''Denationalisation of Money: The Argument Refined'',<ref>{{cite book |first=Friedrich |last=von Hayek|url=https://archive.org/details/denationalisatio0000haye |title=Denationalisation of Money: The Argument Refined |year=1976 |publisher=The institute of economic affairs |isbn=978-0-255-36239-9 |location=2 Lord North Street, Westminster, London SWIP 3LB |access-date=10 September 2015 |archive-url=https://web.archive.org/web/20200111013930/https://archive.org/details/denationalisatio0000haye |archive-date=11 January 2020 |url-status=live}}</ref> in which Hayek advocates a complete [[Social:Free market|free market]] in the production, distribution and management of money to end the monopoly of central banks.<ref name="ECB">{{cite book |author=European Central Bank |url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |title=Virtual Currency Schemes |year=2012 |publisher=European Central Bank |isbn=978-92-899-0862-7 |location=Frankfurt am Main |archive-url=https://web.archive.org/web/20121106053452/http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |archive-date=6 November 2012 |url-status=live}}</ref>{{rp|22}}

===Anarchism and libertarianism===
{{More|Crypto-anarchism}}
According to ''{{wipe|The New York Times}}'', libertarians and anarchists were attracted to the philosophical idea behind bitcoin. Early bitcoin supporter Roger Ver said: "At first, almost everyone who got involved did so for philosophical reasons. We saw bitcoin as a great idea, as a way to separate money from the state."<ref name="BitIdeo" /> ''[[Finance:The Economist|The Economist]]'' describes bitcoin as "a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks".<ref name="30082018Economist" /> Economist [[Biography:Paul Krugman|Paul Krugman]] argues that cryptocurrencies like bitcoin are "something of a cult" based in "paranoid fantasies" of government power.{{r|Krugman}}

{{external media | width = 210px | float = right | video1 = [https://www.youtube.com/watch?v=XQqZ9b0S0BY The Declaration Of Bitcoin's Independence], BraveTheWorld, 4:38<ref name="DecInd" />| accessdate =1 July 2018}} Nigel Dodd argues in ''The Social Life of Bitcoin'' that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control.<ref name="DoddLSE">{{cite web |last=Dodd |first=Nigel |date=2017 |title=The social life of Bitcoin |url=http://eprints.lse.ac.uk/69229/1/Dodd_The%20social%20life%20of%20Bitcoin_author_2017%20LSERO.pdf |url-status=live |archive-url=https://web.archive.org/web/20180701222330/http://eprints.lse.ac.uk/69229/1/Dodd_The%20social%20life%20of%20Bitcoin_author_2017%20LSERO.pdf |archive-date=1 July 2018 |access-date=1 July 2018 |website=LSE Research Online}}</ref> Dodd quotes a [[Company:YouTube|YouTube]] video, with Roger Ver, Jeff Berwick, Charlie Shrem, Andreas Antonopoulos, Gavin Wood, Trace Meyer and other proponents of bitcoin reading ''The Declaration of Bitcoin's Independence''. The declaration includes a message of crypto-anarchism with the words: "Bitcoin is inherently anti-establishment, anti-system, and anti-state. Bitcoin undermines governments and disrupts institutions because bitcoin is fundamentally humanitarian."<ref name="DoddLSE" /><ref name="DecInd">{{cite web |last=Tourianski |first=Julia |title=The Declaration Of Bitcoin's Independence |url=https://archive.org/details/DECLARATION_201508 |url-status=live |archive-url=https://web.archive.org/web/20190323085106/https://archive.org/details/DECLARATION_201508 |archive-date=23 March 2019 |access-date=1 July 2018 |website=Archive.org |date=13 August 2014}}</ref>

David Golumbia says that the ideas influencing bitcoin advocates emerge from right-wing extremist movements such as the Liberty Lobby and the John Birch Society and their anti-Central Bank rhetoric, or, more recently, Ron Paul and [[Social:Tea Party movement|Tea Party]]-style libertarianism.<ref name="Golumbia1">{{Cite book |last=Golumbia |first=David |title=Bitcoin as Politics: Distributed Right-Wing Extremism |date=2015 |publisher=Institute of Network Cultures, Amsterdam |isbn=978-90-822345-5-8 |editor-last=Lovink |editor-first=Geert |pages=117–131 |ssrn=2589890}}</ref> [[Biography:Steve Bannon|Steve Bannon]], who owns a "good stake" in bitcoin, considers it to be "disruptive populism. It takes control back from central authorities. It's revolutionary."<ref name="NYTBannon">{{Cite news |last1=Peters |first1=Jeremy W. |last2=Popper |first2=Nathaniel |date=14 June 2018 |title=Stephen Bannon Buys Into Bitcoin |work=The New York Times |url=https://www.nytimes.com/2018/06/14/technology/steve-bannon-bitcoin.html |url-status=live |access-date=1 July 2018 |archive-url=https://web.archive.org/web/20180701015803/https://www.nytimes.com/2018/06/14/technology/steve-bannon-bitcoin.html |archive-date=1 July 2018}}</ref>

A 2014 study of Google Trends data found correlations between bitcoin-related searches and ones related to computer programming and illegal activity, but not libertarianism or investment topics.<ref name="uok">{{cite journal |author1=Matthew Graham Wilson |author2=Aaron Yelowitz |date=November 2014 |title=Characteristics of Bitcoin Users: An Analysis of Google Search Data |journal=Social Science Research Network |volume=Working Papers Series |ssrn=2518603 |name-list-style=amp}}</ref>

==Economics==
{{Main|Finance:Economics of bitcoin}}

Bitcoin is a digital asset designed to work in peer-to-peer transactions as a [[Finance:Currency|currency]].{{r|paper|Monetarists}} Bitcoins have three qualities useful in a currency, according to ''The Economist'' in January 2015: they are "hard to earn, limited in supply and easy to verify".<ref name="ec1305">{{Cite news |date=13 January 2015 |title=The magic of mining |newspaper=[[Finance:The Economist|The Economist]] |url=https://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic |url-status=live |access-date=13 January 2015 |archive-url=https://web.archive.org/web/20150112165531/http://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic |archive-date=12 January 2015}}</ref> Per some researchers, {{asof|2015|lc=yes}}, bitcoin functions more as a [[Finance:Payment system|payment system]] than as a currency.<ref name="JEP" />

Economists define [[Finance:Money|money]] as serving the following three purposes: a [[Finance:Store of value|store of value]], a [[Finance:Medium of exchange|medium of exchange]], and a [[Finance:Unit of account|unit of account]].<ref name="econ315">{{Cite news |date=15 March 2014 |title=Free Exchange. Money from nothing. Chronic deflation may keep Bitcoin from displacing its rivals. |newspaper=The Economist |url=https://www.economist.com/news/finance-and-economics/21599053-chronic-deflation-may-keep-bitcoin-displacing-its-fiat-rivals-money |url-status=live |access-date=25 March 2014 |archive-url=https://web.archive.org/web/20140325085119/http://www.economist.com/news/finance-and-economics/21599053-chronic-deflation-may-keep-bitcoin-displacing-its-fiat-rivals-money |archive-date=25 March 2014}}</ref> According to ''The Economist'' in 2014, bitcoin functions best as a medium of exchange.<ref name=econ315 /> However, this is debated, and a 2018 assessment by ''The Economist'' stated that cryptocurrencies met none of these three criteria.<ref name="30082018Economist">{{Cite news |date=30 August 2018 |title=Bitcoin and other cryptocurrencies are useless |newspaper=The Economist |url=https://www.economist.com/leaders/2018/08/30/bitcoin-and-other-cryptocurrencies-are-useless |url-status=live |access-date=4 September 2018 |archive-url=https://web.archive.org/web/20180904040905/https://www.economist.com/leaders/2018/08/30/bitcoin-and-other-cryptocurrencies-are-useless |archive-date=4 September 2018 |quote=Lack of adoption and loads of volatility mean that cryptocurrencies satisfy none of those criteria.}}</ref>
Yale economist [[Biography:Robert J. Shiller|Robert J. Shiller]] writes that bitcoin has potential as a unit of account for measuring the relative value of goods, as with Chile's [[Finance:Unidad de Fomento|Unidad de Fomento]], but that "Bitcoin in its present form&nbsp;... doesn't really solve any sensible economic problem".{{r|Shiller}}

According to research by the [[Organization:University of Cambridge|University of Cambridge]], between 2.9 million and 5.8 million unique users used a [[Finance:Cryptocurrency wallet|cryptocurrency wallet]] in 2017, most of them for bitcoin. The number of users has grown significantly since 2013, when there were 300,000–1.3 million users.<ref name="CU2017" />

===Acceptance by merchants===

[[Company:Dish Network|Dish Network]], a ''Fortune'' 500 subscription TV provider, has been described as the first large company to accept bitcoin, in 2014.<ref>{{Cite web|url=https://www.zdnet.com/article/dish-partners-with-freedomfi-to-deliver-5g-hotspots/|title=Dish partners with FreedomFi to deliver 5G hotspots|website=www.zdnet.com}}</ref>

Bloomberg reported that the largest 17 crypto merchant-processing services handled $69 million in June 2018, down from $411 million in September 2017. Bitcoin is "not actually usable" for retail transactions because of high costs and the inability to process chargebacks, according to Nicholas Weaver, a researcher quoted by ''Bloomberg''. High price volatility and transaction fees make paying for small retail purchases with bitcoin impractical, according to economist Kim Grauer. However, bitcoin continues to be used for large-item purchases on sites such as Overstock.com, and for cross-border payments to freelancers and other vendors.<ref name="impractical">{{Cite news |last=Kharif |first=Olga |date=1 August 2018 |title=Bitcoin's Use in Commerce Keeps Falling Even as Volatility Eases |publisher=Bloomberg |url=https://www.bloomberg.com/news/articles/2018-08-01/bitcoin-s-use-in-commerce-keeps-falling-even-as-volatility-eases |url-status=live |access-date=2 August 2018 |archive-url=https://web.archive.org/web/20180802073219/https://www.bloomberg.com/news/articles/2018-08-01/bitcoin-s-use-in-commerce-keeps-falling-even-as-volatility-eases |archive-date=2 August 2018}}</ref>

In 2017 and 2018, bitcoin's acceptance among major online retailers included only three of the top 500 U.S. online merchants, down from five in 2016.<ref name="FT08062018">{{Cite news |last=Murphy |first=Hannah |date=8 June 2018 |title=Who really owns bitcoin now? |work=Financial Times |url=https://www.ft.com/content/29259448-69b3-11e8-b6eb-4acfcfb08c11 |url-status=live |access-date=10 June 2018 |archive-url=https://web.archive.org/web/20180610051316/https://www.ft.com/content/29259448-69b3-11e8-b6eb-4acfcfb08c11 |archive-date=10 June 2018}}</ref> Reasons for this decline include high transaction fees due to bitcoin's scalability issues and long transaction times.<ref>{{cite web |last=Katz |first=Lily |date=12 July 2017 |title=Bitcoin Acceptance Among Retailers Is Low and Getting Lower |url=https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-acceptance-among-retailers-is-low-and-getting-lower |url-status=live |archive-url=https://web.archive.org/web/20180125204553/https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-acceptance-among-retailers-is-low-and-getting-lower |archive-date=25 January 2018 |access-date=25 January 2018 |publisher=Bloomberg}}</ref>

As of 2018, the overwhelming majority of bitcoin transactions took place on [[Finance:Cryptocurrency exchange|cryptocurrency exchange]]s, rather than being used in transactions with merchants.<ref name="FT08062018" /> Delays processing payments through the blockchain of about ten minutes make bitcoin use very difficult in a retail setting. Prices are not usually quoted in units of bitcoin and many trades involve one, or sometimes two, conversions into conventional currencies.<ref name="JEP" /> Merchants that do accept bitcoin payments may use payment service providers to perform the conversions.<ref>{{cite web |last=Karkaria |first=Urvaksh |date=23 September 2014 |title=Atlanta-based BitPay hooks up with PayPal to expand bitcoin adoption |url=http://www.bizjournals.com/atlanta/blog/atlantech/2014/09/atlanta-based-bitpay-hooks-up-with-paypal-to.html |url-status=live |archive-url=https://web.archive.org/web/20141026224207/http://www.bizjournals.com/atlanta/blog/atlantech/2014/09/atlanta-based-bitpay-hooks-up-with-paypal-to.html |archive-date=26 October 2014 |website=Atlanta Business Chronicle}}</ref>

===Financial institutions===
Bitcoins can be bought on digital currency exchanges.

Per researchers, "there is little sign of bitcoin use" in international remittances despite high fees charged by banks and [[Company:Western Union|Western Union]] who compete in this market.<ref name="JEP" /> The ''South China Morning Post'', however, mentions the use of bitcoin by Hong Kong workers to transfer money home.<ref>{{Cite news |last=Chan |first=Bernice |date=16 January 2015 |title=Bitcoin transactions cut the cost of international money transfers |work=South China Morning Post |url=https://www.scmp.com/lifestyle/technology/article/1679904/bitcoin-transactions-cut-cost-international-money-transfers |url-status=live |access-date=31 May 2019 |archive-url=https://web.archive.org/web/20190531060301/https://www.scmp.com/lifestyle/technology/article/1679904/bitcoin-transactions-cut-cost-international-money-transfers |archive-date=31 May 2019}}</ref>

In 2014, the National Australia Bank closed accounts of businesses with ties to bitcoin,<ref>{{cite news |date=10 April 2014 |title=Bitcoin firms dumped by National Australia Bank as 'too risky' |url=https://www.theguardian.com/world/2014/apr/10/bitcoin-dumped-by-national-australia-bank-as-too-risky |url-status=live |archive-url=https://web.archive.org/web/20150223011000/http://www.theguardian.com/world/2014/apr/10/bitcoin-dumped-by-national-australia-bank-as-too-risky |archive-date=23 February 2015 |access-date=23 February 2015 |website=The Guardian |agency=Australian Associated Press}}</ref> and [[Company:HSBC|HSBC]] refused to serve a hedge fund with links to bitcoin.<ref>{{cite web |last=Weir, Mike |date=1 December 2014 |title=HSBC severs links with firm behind Bitcoin fund |url=https://www.bbc.com/news/world-europe-jersey-30261976 |url-status=live |archive-url=https://web.archive.org/web/20150203210318/http://www.bbc.com/news/world-europe-jersey-30261976 |archive-date=3 February 2015 |access-date=9 January 2015 |website=bbc.com |publisher=BBC}}</ref> Australian banks in general have been reported as closing down bank accounts of operators of businesses involving the currency.<ref name="afr.com">{{cite web |title=ACCC investigating why banks are closing bitcoin companies' accounts |url=http://www.afr.com/technology/accc-investigating-why-banks-are-closing-bitcoin-companies-accounts-20151018-gkc5iv |url-status=live |archive-url=https://web.archive.org/web/20160211070834/http://www.afr.com/technology/accc-investigating-why-banks-are-closing-bitcoin-companies-accounts-20151018-gkc5iv |archive-date=11 February 2016 |access-date=28 January 2016 |website=Financial Review |date=19 October 2015}}</ref>

On 10 December 2017, the [[Company:Chicago Board Options Exchange|Chicago Board Options Exchange]] started trading bitcoin futures,<ref>{{Cite news |date=11 December 2017 |title=Bitcoin futures surge in first day of trading |work=CBS News |url=https://www.cbsnews.com/news/bitcoin-futures-price-surge-in-first-day-of-trading/ |url-status=live |access-date=31 May 2019 |archive-url=https://web.archive.org/web/20190531054558/https://www.cbsnews.com/news/bitcoin-futures-price-surge-in-first-day-of-trading/ |archive-date=31 May 2019}}</ref> followed by the [[Company:Chicago Mercantile Exchange|Chicago Mercantile Exchange]], which started trading bitcoin futures on 17 December 2017.<ref>{{Cite news |date=18 December 2017 |title=Chicago Mercantile Exchange jumps into bitcoin futures |work=CBS News |url=https://www.cbsnews.com/news/chicago-mercantile-exchange-jumps-into-bitcoin-futures/ |url-status=live |access-date=31 May 2019 |archive-url=https://web.archive.org/web/20190531054602/https://www.cbsnews.com/news/chicago-mercantile-exchange-jumps-into-bitcoin-futures/ |archive-date=31 May 2019}}</ref>

In September 2019 the Central Bank of Venezuela, at the request of PDVSA, ran tests to determine if bitcoin and [[Finance:Ethereum|ether]] could be held in central bank's reserves. The request was motivated by oil company's goal to pay its suppliers.<ref>{{Cite news |date=26 September 2019 |title=Venezuela Has Bitcoin Stash and Doesn't Know What to Do With It |work=Bloomberg |url=https://www.bloomberg.com/news/articles/2019-09-26/venezuela-has-bitcoin-stash-and-doesn-t-know-what-to-do-with-it |url-status=live |access-date=26 September 2019 |archive-url=https://web.archive.org/web/20190926180923/https://www.bloomberg.com/news/articles/2019-09-26/venezuela-has-bitcoin-stash-and-doesn-t-know-what-to-do-with-it |archive-date=26 September 2019}}</ref>

François R. Velde, Senior Economist at the Chicago Fed, described bitcoin as "an elegant solution to the problem of creating a digital currency".<ref>{{cite web |last=Velde |first=François |date=December 2013 |title=Bitcoin: A primer |url=https://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2013/cfldecember2013_317.pdf |url-status=live |archive-url=https://web.archive.org/web/20141026065254/http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2013/cfldecember2013_317.pdf |archive-date=26 October 2014 |access-date=3 September 2016 |website=Chicago Fed letter |publisher=Federal Reserve Bank of Chicago |page=4 |issue=317}}</ref> David Andolfatto, Vice President at the Federal Reserve Bank of St. Louis, stated that bitcoin is a threat to the establishment, which he argues is a good thing for the [[Finance:Federal Reserve System|Federal Reserve System]] and other [[Finance:Central bank|central bank]]s, because it prompts these institutions to operate sound policies.<ref name="Andolfatto2014-03" />{{rp|33}}<ref>{{cite web |last=Wile, Rob |date=6 April 2014 |title=St. Louis Fed Economist: Bitcoin Could Be A Good Threat To Central Banks |url=http://www.businessinsider.com/interview-with-david-andolfatto-2014-4 |url-status=live |archive-url=https://web.archive.org/web/20150924095030/http://www.businessinsider.com/interview-with-david-andolfatto-2014-4 |archive-date=24 September 2015 |access-date=16 April 2014 |website=businessinsider.com |publisher=Business Insider}}</ref><ref>{{cite web |last=Andolfatto, David |date=24 December 2013 |title=In gold we trust? |url=http://andolfatto.blogspot.com/2013/12/in-gold-we-trust.html |url-status=live |archive-url=https://web.archive.org/web/20170412053554/http://andolfatto.blogspot.com/2013/12/in-gold-we-trust.html |archive-date=12 April 2017 |access-date=17 April 2014 |website=MacroMania |publisher=David Andolfatto |quote=Also, note that I am not against gold or bitcoin (or whatever) as a currency. In fact, I think that the threat that they pose as alternate currency can serve as a useful check on a central bank.}}</ref>

===As an investment===
The Winklevoss twins have purchased bitcoin. In 2013, ''The Washington Post'' reported a claim that they owned 1% of all the bitcoins in existence at the time.<ref>{{Cite news |last=Lee |first=Timothy B. |title=The $11 million in bitcoins the Winklevoss brothers bought is now worth $32 million |work=The Switch |publisher=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2013/11/09/the-11-million-in-bitcoins-the-winklevoss-brothers-bought-is-now-worth-32-million/ |url-status=live |access-date=11 August 2017 |archive-url=https://web.archive.org/web/20170706111658/https://www.washingtonpost.com/news/the-switch/wp/2013/11/09/the-11-million-in-bitcoins-the-winklevoss-brothers-bought-is-now-worth-32-million/ |archive-date=6 July 2017}}</ref>

Other methods of investment are bitcoin funds. The first regulated bitcoin fund was established in Jersey in July 2014 and approved by the Jersey Financial Services Commission.<ref name="BitcoinJersey">{{Cite news |date=10 July 2014 |title=Jersey approve Bitcoin fund launch on island |work=BBC News |url=https://www.bbc.com/news/world-europe-jersey-28247796 |url-status=live |access-date=10 July 2014 |archive-url=https://web.archive.org/web/20140710211917/http://www.bbc.com/news/world-europe-jersey-28247796 |archive-date=10 July 2014}}</ref>

''Forbes'' named bitcoin the best investment of 2013.<ref>{{Cite news |last=Hill |first=Kashmir |title=How You Should Have Spent $100 In 2013 (Hint: Bitcoin) |work=Forbes |url=https://www.forbes.com/sites/kashmirhill/2013/12/26/how-you-should-have-spent-100-in-2013-hint-bitcoin/ |url-status=live |access-date=16 February 2015 |archive-url=https://web.archive.org/web/20150219043444/http://www.forbes.com/sites/kashmirhill/2013/12/26/how-you-should-have-spent-100-in-2013-hint-bitcoin/ |archive-date=19 February 2015}}</ref> In 2014, Bloomberg named bitcoin one of its worst investments of the year.<ref name="worst">{{Cite news |last=Steverman, Ben |date=23 December 2014 |title=The Best and Worst Investments of 2014 |work=bloomberg.com |publisher=Bloomberg LP |url=https://www.bloomberg.com/news/2014-12-22/the-best-and-worst-investments-of-2014.html |url-status=live |access-date=9 January 2015 |archive-url=https://web.archive.org/web/20150109122649/http://www.bloomberg.com/news/2014-12-22/the-best-and-worst-investments-of-2014.html |archive-date=9 January 2015}}</ref> In 2015, bitcoin topped Bloomberg's currency tables.<ref>{{Cite news |last=Gilbert |first=Mark |date=29 December 2015 |title=Bitcoin Won 2015. Apple&nbsp;... Did Not |publisher=Bloomberg |url=http://www.bloombergview.com/articles/2015-12-29/bitcoin-won-in-2015-but-apple-lost-big |url-status=live |access-date=29 December 2015 |archive-url=https://web.archive.org/web/20151229200002/http://www.bloombergview.com/articles/2015-12-29/bitcoin-won-in-2015-but-apple-lost-big |archive-date=29 December 2015}}</ref>

According to bitinfocharts.com, in 2017, there were 9,272 bitcoin wallets with more than $1 million worth of bitcoins.<ref>{{cite web |title=Top 100 Richest Bitcoin Addresses and Bitcoin distribution |url=https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html |url-status=live |archive-url=https://web.archive.org/web/20171015082601/https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html |archive-date=15 October 2017 |access-date=14 October 2017 |website=bitinfocharts.com}}</ref> The exact number of bitcoin millionaires is uncertain as a single person can have more than one bitcoin wallet.

===Venture capital===
Peter Thiel's Founders Fund invested {{currency|3|USD}} million in [[Company:BitPay|BitPay]].<ref name="mtr20130612">{{cite news |last=Simonite, Tom |date=12 June 2013 |title=Bitcoin Millionaires Become Investing Angels |work=Computing News |publisher=MIT Technology Review |url=https://www.technologyreview.com/2013/06/12/15919/bitcoin-millionaires-become-investing-angels/ |access-date=13 June 2013}}</ref> In 2012, an incubator for bitcoin-focused start-ups was founded by Adam Draper, with financing help from his father, venture capitalist Tim Draper, one of the largest bitcoin holders after winning an auction of ₿30,000,<ref name="wsj1214">{{cite news |last=Robin Sidel |date=1 December 2014 |title=Ten-hut! Bitcoin Recruits Snap To |work=The Wall Street Journal |publisher=Dow Jones & Company |url=https://www.wsj.com/news/articles/SB21659981523255993497704580305120918936264 |access-date=9 December 2014}} {{dead link|date=May 2020|bot=medic}}{{cbignore|bot=medic}}</ref> at the time called "mystery buyer".<ref name="guard714">{{cite news |last=Alex Hern |date=1 July 2014 |title=Silk Road's legacy 30,000 bitcoin sold at auction to mystery buyers |work=The Guardian |url=https://www.theguardian.com/technology/2014/jul/01/silk-road-bitcoin-auction |url-status=live |access-date=31 October 2014 |archive-url=https://web.archive.org/web/20141023190952/http://www.theguardian.com/technology/2014/jul/01/silk-road-bitcoin-auction |archive-date=23 October 2014}}</ref> The company's goal is to fund 100 bitcoin businesses within 2–3 years with $10,000 to $20,000 for a 6% stake.<ref name="wsj1214" /> Investors also invest in bitcoin mining.<ref>{{cite news |date=24 January 2014 |title=CoinSeed raises $7.5m, invests $5m in Bitcoin mining hardware – Investment Round Up |work=Red Herring |url=http://www.redherring.com/finance/coinseed-raises-7-5m-invests-5m-in-bitcoin-mining-hardware-investment-round-up/ |url-status=live |access-date=9 March 2014 |archive-url=https://web.archive.org/web/20140309042510/http://www.redherring.com/finance/coinseed-raises-7-5m-invests-5m-in-bitcoin-mining-hardware-investment-round-up/ |archive-date=9 March 2014}}</ref> According to a 2015 study by Paolo Tasca, bitcoin startups raised almost $1 billion in three years (Q1 2012 – Q1 2015).<ref name="Tasca">{{cite ssrn |last=Tasca |first=Paolo |date=7 September 2015 |title=Digital Currencies: Principles, Trends, Opportunities, and Risks |ssrn=2657598}}</ref>

===Price and volatility===

The price of bitcoins has gone through cycles of appreciation and depreciation referred to by some as [[Finance:Economic bubble|bubbles]] and busts.<ref>{{cite web |last=Moore, Heidi |date=3 April 2013 |title=Confused about Bitcoin? It's 'the Harlem Shake of currency' |url=https://www.theguardian.com/commentisfree/2013/apr/03/bitcoin-currency-bubble-crash-not-rocking-financial-markets |url-status=live |archive-url=https://web.archive.org/web/20140301083816/http://www.theguardian.com/commentisfree/2013/apr/03/bitcoin-currency-bubble-crash-not-rocking-financial-markets |archive-date=1 March 2014 |access-date=2 May 2014 |website=The Guardian}}</ref> In 2011, the value of one bitcoin rapidly rose from about US$0.30 to US$32 before returning to US$2.<ref name="Leebubble">{{Cite news |last=Lee, Timothy |date=5 November 2013 |title=When will the people who called Bitcoin a bubble admit they were wrong |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2013/11/05/when-will-the-people-who-called-bitcoin-a-bubble-admit-they-were-wrong/?variant=116ae929826d1fd3 |url-status=live |access-date=10 January 2014 |archive-url=https://web.archive.org/web/20140111011839/http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/05/when-will-the-people-who-called-bitcoin-a-bubble-admit-they-were-wrong/ |archive-date=11 January 2014}}</ref> In the latter half of 2012 and during the [[Finance:2012–13 Cypriot financial crisis|2012–13 Cypriot financial crisis]], the bitcoin price began to rise,<ref>{{cite web |last=Liu |first=Alec |date=19 March 2013 |title=When Governments Take Your Money, Bitcoin Looks Really Good |url=https://www.vice.com/en/article/ypp9v5/cyprus-spain-when-governments-take-your-money-bitcoin-looks-really-good |url-status=live |archive-url=https://web.archive.org/web/20140207194506/http://motherboard.vice.com/blog/cyprus-spain-when-governments-take-your-money-bitcoin-looks-really-good |archive-date=7 February 2014 |access-date=7 January 2014 |publisher=Motherboard}}</ref> reaching a high of US$266 on 10 April 2013, before crashing to around US$50. On 29 November 2013, the cost of one bitcoin rose to a peak of US$1,242.<ref>{{Cite news |last=Ben Rooney |date=29 November 2013 |title=Bitcoin worth almost as much as gold |publisher=CNN |url=https://money.cnn.com/2013/11/29/investing/bitcoin-gold/index.html |url-status=live |access-date=31 October 2014 |archive-url=https://web.archive.org/web/20141026213248/https://money.cnn.com/2013/11/29/investing/bitcoin-gold/index.html |archive-date=26 October 2014}}</ref> In 2014, the price fell sharply, and as of April remained depressed at little more than half 2013 prices. {{As of|2014|August}} it was under US$600.<ref>{{cite web |date=August 2014 |title=Bitcoin prices remain below $600 amid bearish chart signals |url=http://www.nasdaq.com/article/bitcoin-prices-remain-below-600-amid-bearish-chart-signals-cm376685 |url-status=live |archive-url=https://web.archive.org/web/20141014012642/http://www.nasdaq.com/article/bitcoin-prices-remain-below-600-amid-bearish-chart-signals-cm376685 |archive-date=14 October 2014 |access-date=31 October 2014 |publisher=nasdaq.com}}</ref>

According to Mark T. Williams, {{as of|2014|9|30|lc=y}}, bitcoin has [[Finance:Volatility|volatility]] seven times greater than gold, eight times greater than the S&P 500, and 18 times greater than the US dollar.<ref>{{cite web |last=Williams, Mark T. |date=21 October 2014 |title=Virtual Currencies – Bitcoin Risk |url=http://management.bu.edu/files/2014/10/Wlliams-World-Bank-10-21-2014.pdf |url-status=live |archive-url=https://web.archive.org/web/20141111095526/http://management.bu.edu/files/2014/10/Wlliams-World-Bank-10-21-2014.pdf |archive-date=11 November 2014 |access-date=11 November 2014 |website=World Bank Conference Washington DC |publisher=[[Organization:Boston University|Boston University]]}}</ref> Hodl is a meme created in reference to holding (as opposed to selling) during periods of volatility. Unusual for an asset, bitcoin weekend trading during December 2020 was higher than for weekdays.<ref>{{cite web |last1=Irrera |first1=Tom Wilson, Anna |title=Analysis: Cancel your weekends! Bitcoin doesn't rest, and neither can you |url=https://www.reuters.com/article/us-crypto-currencies-analysis-idUSKBN29G0DV |website=Reuters |archive-url=https://web.archive.org/web/20210206170123/https://www.reuters.com/article/us-crypto-currencies-analysis-idUSKBN29G0DV |archive-date=6 February 2021 |date=11 January 2021 |quote=Trading volumes across six major cryptocurrency exchanges have been 10% higher at weekends than weekdays in that period |url-status=live}}</ref> Hedge funds (using high [[Finance:Leverage|leverage]] and [[Finance:Derivative|derivates]])<ref>{{cite web |last1=Zaki |first1=Myret |title=Bitcoin: The Derivative Bomb |url=https://themarket.ch/meinung/bitcoin-the-derivative-bomb-ld.3398 |website=The Market |archive-url=https://web.archive.org/web/20210115081742/https://themarket.ch/meinung/bitcoin-the-derivative-bomb-ld.3398 |archive-date=15 January 2021 |language=de |date=14 January 2021 |quote=the lion's share of institutional trading in bitcoin is being done without owning any single bitcoin. The bitcoin derivative boom was encouraged by the fact that you can get 2 to 3 times leverage on the CME, and more than 100 x leverage on native crypto derivative exchanges. In 2020, the ratio between bitcoin futures and spot volumes has increased from 2,3 to 4,6 in 2019 |url-status=live}}</ref> have attempted to use the volatility to [[Finance:Short|profit from downward price movements]]. At the end of January 2021, such positions were over $1{{nbsp}}billion, their highest of all time.<ref>{{cite web |title=CFTC Commitments of Traders Short Report – Financial Traders in Markets (Futures Only) |url=https://cftc.gov/dea/futures/financial_lf.htm |website=cftc.gov |publisher=Commodity Futures Trading Commission (CFTC) |archive-url=https://web.archive.org/web/20210208113707/https://cftc.gov/dea/futures/financial_lf.htm |archive-date=8 February 2021 |date=2-5 February 2021 |url-status=live |quote=Bitcoin – Chicago Mercantile Exchange, CFTC Code #133741}}</ref>
{{As of|2021|2|08}}, the closing price of bitcoin equaled US$44,797.<ref>{{cite web |title=WSJ Markets Bitcoin USD |url=https://www.wsj.com/market-data/quotes/fx/BTCUSD/historical-prices |access-date=8 February 2021}}</ref>

==Legal status, tax and regulation==
{{Further|Finance:Legality of bitcoin by country or territory}}

The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.<ref name="Tasca" /> Because of its decentralized nature and its trading on online exchanges located in many countries, regulation of bitcoin has been difficult. However, the use of bitcoin can be criminalized, and shutting down exchanges and the peer-to-peer economy in a given country would constitute a de facto ban.<ref>{{cite web |title=China May Be Gearing Up to Ban Bitcoin |url=https://www.pastemagazine.com/articles/2017/09/china-may-be-gearing-up-to-ban-bitcoin.html |url-status=live |archive-url=https://web.archive.org/web/20171003224721/https://www.pastemagazine.com/articles/2017/09/china-may-be-gearing-up-to-ban-bitcoin.html |archive-date=3 October 2017 |access-date=6 October 2017 |website=Paste |date=18 September 2017 |quote=The decentralized nature of bitcoin is such that it is impossible to "ban" the cryptocurrency, but if you shut down exchanges and the peer-to-peer economy running on bitcoin, it's a de facto ban.}}</ref> 

According to the Library of Congress, an "absolute ban" on trading or using cryptocurrencies applies in nine countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, Vietnam, and the United Arab Emirates. An "implicit ban" applies in another 42 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan.<ref name="RCAWJune2018LOC">{{cite web |date=June 2018 |title=Regulation of Cryptocurrency Around the World |url=https://www.loc.gov/law/help/cryptocurrency/cryptocurrency-world-survey.pdf |url-status=live |archive-url=https://web.archive.org/web/20180814071440/https://www.loc.gov/law/help/cryptocurrency/cryptocurrency-world-survey.pdf |archive-date=14 August 2018 |access-date=15 August 2018 |website=Library of Congress |publisher=The Law Library of Congress, Global Legal Research Center |pages=4–5}}</ref> On 22 October 2015, the European Court of Justice ruled that bitcoin transactions would be exempt from Value Added Tax.<ref>{{cite news |title=Bitcoin now tax-free in Europe after court ruling |first=Matt |last=Clinch |url=https://www.cnbc.com/2015/10/22/bitcoin-now-tax-free-in-europe-after-court-ruling.html |publisher=CNBC |date=22 October 2015 |accessdate=16 August 2022 }}.</ref>
===Regulatory warnings===
The U.S. Commodity Futures Trading Commission has issued four "Customer Advisories" for bitcoin and related investments.<ref name="CFTC bitcoin">{{cite web |title=Bitcoin |url=https://cftc.gov/Bitcoin/index.htm |url-status=live |archive-url=https://web.archive.org/web/20180701150718/https://www.cftc.gov/Bitcoin/index.htm |archive-date=1 July 2018 |access-date=17 July 2018 |website=U.S. Commodity Futures Trading Commission}}</ref> A July 2018 warning emphasized that trading in any cryptocurrency is often [[Finance:Speculation|speculative]], and there is a risk of theft from hacking, and fraud.<ref name="JulyCFTC">{{cite web |title=Customer Advisory: Use Caution When Buying Digital Coins or Tokens |url=https://www.cftc.gov/sites/default/files/2018-07/customeradvisory_tokens0718.pdf |url-status=live |archive-url=https://web.archive.org/web/20180717071031/https://www.cftc.gov/sites/default/files/2018-07/customeradvisory_tokens0718.pdf |archive-date=17 July 2018 |access-date=17 July 2018 |website=U.S.Commodity Futures Trading Commission}}</ref> In May 2014 the U.S. Securities and Exchange Commission warned that investments involving bitcoin might have high rates of fraud, and that investors might be solicited on social media sites.<ref name="SECMay2014">{{cite web |date=7 May 2014 |title=Investor Alert: Bitcoin and Other Virtual Currency-related Investments |url=https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-bitcoin-other-virtual-currency |url-status=live |archive-url=https://web.archive.org/web/20180630224256/https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-bitcoin-other-virtual-currency |archive-date=30 June 2018 |access-date=17 July 2018 |website=Investor.gov |publisher=U.S. Securities and Exchange Commission}}</ref> An earlier "Investor Alert" warned about the use of bitcoin in Ponzi schemes.<ref name="SEC2">{{cite web |title=Ponzi schemes Using virtual Currencies |url=https://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf |url-status=live |archive-url=https://web.archive.org/web/20180616111648/https://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf |archive-date=16 June 2018 |access-date=17 July 2018 |website=sec.gov |publisher=U.S. Securities and Exchange Commission}}</ref>

The European Banking Authority issued a warning in 2013 focusing on the lack of regulation of bitcoin, the chance that exchanges would be hacked, the volatility of bitcoin's price, and general fraud.<ref name="ebawarn">{{cite web |date=12 December 2013 |title=Warning to consumers on virtual currencies |url=http://www.eba.europa.eu/documents/10180/16136/EBA+Warning+on+Virtual+Currencies.pdf |url-status=dead |archive-url=https://web.archive.org/web/20131228224508/http://www.eba.europa.eu/documents/10180/16136/EBA+Warning+on+Virtual+Currencies.pdf |archive-date=28 December 2013 |access-date=23 December 2013 |publisher=European Banking Authority}}</ref> FINRA and the [[Organization:North American Securities Administrators Association|North American Securities Administrators Association]] have both issued investor alerts about bitcoin.<ref>{{cite web |date=21 December 2017 |title=Investor Alerts Don't Fall for Cryptocurrency-Related Stock Scams |url=http://www.finra.org/investors/alerts/dont-fall-cryptocurrency-related-stock-scams |url-status=live |archive-url=https://web.archive.org/web/20180701195236/http://www.finra.org/investors/alerts/dont-fall-cryptocurrency-related-stock-scams |archive-date=1 July 2018 |access-date=23 July 2018 |website=FINRA.org |publisher=Financial Industry Regulatory Authority}}</ref><ref>{{cite web |date=April 2018 |title=Informed Investor Advisory: Cryptocurrencies |url=http://www.nasaa.org/44848/informed-investor-advisory-cryptocurrencies/ |url-status=live |archive-url=https://web.archive.org/web/20180723182210/http://www.nasaa.org/44848/informed-investor-advisory-cryptocurrencies/ |archive-date=23 July 2018 |access-date=23 July 2018 |publisher=North American Securities Administrators Association}}</ref>

===Price manipulation investigation===
An official investigation into bitcoin traders was reported in May 2018.<ref name="Times05252018">{{Cite news |last=Dean |first=James |date=25 May 2018 |title=Bitcoin investigation to focus on British traders, US officials examine manipulation of cryptocurrency prices |work=The Times |url=https://www.thetimes.co.uk/article/bitcoin-investigation-to-focus-on-british-traders-c58brwn60 |url-status=live |access-date=25 May 2018 |archive-url=https://web.archive.org/web/20180525101341/https://www.thetimes.co.uk/article/bitcoin-investigation-to-focus-on-british-traders-c58brwn60 |archive-date=25 May 2018}}</ref> The U.S. Justice Department launched an investigation into possible price manipulation, including the techniques of [[Finance:Spoofing|spoofing]] and [[Finance:Wash trade|wash trade]]s.<ref name="chloeFT">{{Cite news |last=Cornish |first=Chloe |date=24 May 2018 |title=Bitcoin slips again on reports of US DoJ investigation |work=Financial Times |url=https://www.ft.com/content/5d8f06f2-5f3a-11e8-9334-2218e7146b04 |url-status=live |access-date=24 May 2018 |archive-url=https://web.archive.org/web/20180524222527/https://www.ft.com/content/5d8f06f2-5f3a-11e8-9334-2218e7146b04 |archive-date=24 May 2018}}</ref><ref name="Bloom052418">{{Cite news |last1=Robinson |first1=Matt |last2=Schoenberg |first2=Tom |date=24 May 2018 |title=U.S. Launches Criminal Probe into Bitcoin Price Manipulation |publisher=Bloomberg |url=https://www.bloomberg.com/news/articles/2018-05-24/bitcoin-manipulation-is-said-to-be-focus-of-u-s-criminal-probe |url-status=live |access-date=24 May 2018 |archive-url=https://web.archive.org/web/20180524082123/https://www.bloomberg.com/news/articles/2018-05-24/bitcoin-manipulation-is-said-to-be-focus-of-u-s-criminal-probe |archive-date=24 May 2018}}</ref><ref name="USAT05242018">{{Cite news |last=McCoy |first=Kevin |date=24 May 2018 |title=Bitcoin value gyrates amid report of Department of Justice manipulation investigation |work=[[Software:USA Today|USA Today]] |url=https://www.usatoday.com/story/money/2018/05/24/bitcoin-value-gyrates-after-report-department-justice-probe/640289002/ |url-status=live |access-date=25 May 2018 |archive-url=https://web.archive.org/web/20180524205443/https://www.usatoday.com/story/money/2018/05/24/bitcoin-value-gyrates-after-report-department-justice-probe/640289002/ |archive-date=24 May 2018}}</ref>

The U.S. federal investigation was prompted by concerns of possible manipulation during futures settlement dates. The final settlement price of CME bitcoin futures is determined by prices on four exchanges, [[Finance:Bitstamp|Bitstamp]], [[Company:Coinbase|Coinbase]], itBit and [[Finance:Kraken (bitcoin exchange)|Kraken]]. Following the first delivery date in January 2018, the CME requested extensive detailed trading information but several of the exchanges refused to provide it and later provided only limited data. The Commodity Futures Trading Commission then subpoenaed the data from the exchanges.<ref name="MWmanipulation">{{cite web |last1=Rubin |first1=Gabriel T. |last2=Michaels |first2=Dave |last3=Osipovich |first3=Alexander |date=8 June 2018 |title=U.S. regulators demand trading data from bitcoin exchanges in manipulation probe |url=https://www.marketwatch.com/story/us-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-2018-06-08 |url-status=live |archive-url=https://web.archive.org/web/20180608214458/https://www.marketwatch.com/story/us-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-2018-06-08 |archive-date=8 June 2018 |access-date=9 June 2018 |website=MarketWatch}} Note: this is a short open access version of a ''Wall Street Journal'' article.</ref><ref name="WSJmanipulation">{{Cite news |last1=Rubin |first1=Gabriel T. |last2=Michaels |first2=Dave |last3=Osipovich |first3=Alexander |date=8 June 2018 |title=U.S. regulators demand trading data from bitcoin exchanges in manipulation probe |work=The Wall Street Journal |url=https://www.wsj.com/articles/u-s-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-1528492835 |url-status=live |access-date=9 June 2018 |archive-url=https://web.archive.org/web/20180608233342/https://www.wsj.com/articles/u-s-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-1528492835 |archive-date=8 June 2018}} {{paywalled}}</ref>

State and provincial securities regulators, coordinated through the [[Organization:North American Securities Administrators Association|North American Securities Administrators Association]], are investigating "bitcoin scams" and [[Finance:Initial coin offering|ICOs]] in 40 jurisdictions.<ref name="WaPo52118">{{Cite news |last=Fung |first=Brian |date=21 May 2018 |title=State regulators unveil nationwide crackdown on suspicious cryptocurrency investment schemes |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2018/05/21/state-regulators-unveil-nationwide-crackdown-on-suspicious-cryptocurrency-investment-schemes/ |url-status=live |access-date=27 May 2018 |archive-url=https://web.archive.org/web/20180527081727/https://www.washingtonpost.com/news/the-switch/wp/2018/05/21/state-regulators-unveil-nationwide-crackdown-on-suspicious-cryptocurrency-investment-schemes/ |archive-date=27 May 2018}}</ref>

Academic research published in the ''[[Finance:Journal of Monetary Economics|Journal of Monetary Economics]]'' concluded that price manipulation occurred during the Mt Gox bitcoin theft and that the market remains vulnerable to manipulation.<ref name="JME">{{cite journal |last1=Gandal |first1=Neil |last2=Hamrick |first2=J.T. |last3=Moore |first3=Tyler |last4=Oberman |first4=Tali |date=May 2018 |title=Price manipulation in the Bitcoin ecosystem |journal=[[Finance:Journal of Monetary Economics|Journal of Monetary Economics]] |volume=95 |pages=86–96 |doi=10.1016/j.jmoneco.2017.12.004 |s2cid=26358036}}</ref> The history of hacks, fraud and theft involving bitcoin dates back to at least 2011.<ref>{{cite web |last=Lee |first=Tim |date=12 December 2017 |title=A brief history of Bitcoin hacks and frauds |url=https://arstechnica.com/tech-policy/2017/12/a-brief-history-of-bitcoin-hacks-and-frauds/ |url-status=live |archive-url=https://web.archive.org/web/20180528051930/https://arstechnica.com/tech-policy/2017/12/a-brief-history-of-bitcoin-hacks-and-frauds/ |archive-date=28 May 2018 |access-date=27 May 2018 |website=Ars Technica}}</ref>

Research by John M. Griffin and Amin Shams in 2018 suggests that trading associated with increases in the amount of the [[Finance:Tether (cryptocurrency)|Tether cryptocurrency]] and associated trading at the [[Finance:Bitfinex|Bitfinex]] exchange account for about half of the price increase in bitcoin in late 2017.<ref name="untethered">{{Cite journal |last1=Griffin |first1=John M. |last2=Shams |first2=Amin |date=13 June 2018 |title=Is Bitcoin Really Un-Tethered? |journal=Social Science Research Network |ssrn=3195066}}</ref><ref name="Artynyt">{{Cite news |last=Popper |first=Nathaniel |date=13 June 2018 |title=Bitcoin's Price Was Artificially Inflated Last Year, Researchers Say |work=The New York Times |url=https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html |url-status=live |access-date=13 June 2018 |archive-url=https://web.archive.org/web/20180613100732/https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html |archive-date=13 June 2018}}</ref>

J.L. van der Velde, CEO of both Bitfinex and Tether, denied the claims of price manipulation: "Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex."<ref name="WaPoVdV">{{Cite news |last=Shaban |first=Hamza |date=14 June 2018 |title=Bitcoin's astronomical rise last year was buoyed by market manipulation, researchers say |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2018/06/14/bitcoins-astronomical-rise-last-year-was-buoyed-by-market-manipulation-researchers-say/ |url-status=live |access-date=14 June 2018 |archive-url=https://web.archive.org/web/20180615111336/https://www.washingtonpost.com/news/the-switch/wp/2018/06/14/bitcoins-astronomical-rise-last-year-was-buoyed-by-market-manipulation-researchers-say/ |archive-date=15 June 2018}}</ref>

===Use by governments===
In June 2021, the Legislative Assembly of El Salvador voted [[Finance:Bitcoin Law|legislation]] to make bitcoin [[Finance:Legal tender|legal tender]] in El Salvador, alongside the US dollar.{{efn|According to some reports, the law was approved on 8 June.<ref>{{cite news |last1=Aleman |first1=Marcos |title=El Salvador makes Bitcoin legal tender |url=https://apnews.com/article/caribbean-el-salvador-bitcoin-technology-business-ed51894baf9d47ec1093005602883fd9 |access-date=16 June 2021 |work=Associated Press |date=9 June 2021}}</ref><ref>{{cite news |title=El Salvador aprueba el uso de Bitcoin como moneda de intercambio |url=https://www.efe.com/efe/america/economia/el-salvador-aprueba-uso-de-bitcoin-como-moneda-intercambio/20000011-4557574 |access-date=16 June 2021 |work=Agencia EFE |date=9 June 2021 |language=es}}</ref><ref>{{cite news |title=El Salvador first country to approve bitcoin as legal tender |url=https://news.yahoo.com/el-salvador-first-country-approve-091655155.html |access-date=16 June 2021 |work=Agence France Presse |date=9 June 2021}}</ref> According to others, it was approved on 9 June.<ref name="WSJ Salvador" /><ref name="Renteria">{{cite news |last1=Renteria |first1=Nelson |last2=Wilson |first2=Tom |last3=Strohecker |first3=Karin |title=In a world first, El Salvador makes bitcoin legal tender |url=https://www.reuters.com/world/americas/el-salvador-approves-first-law-bitcoin-legal-tender-2021-06-09/ |access-date=16 June 2021 |work=Reuters |date=9 June 2021}}</ref><ref>{{cite news |last1=Webber |first1=Jude |last2=Szalay |first2=Eva |title=El Salvador becomes first country to adopt bitcoin as legal tender |url=https://www.ft.com/content/7b5b1cc4-50bb-437f-aa16-f106d2dbc1c7 |access-date=16 June 2021 |work=[[Social:Financial Times|Financial Times]] |date=9 June 2021}}</ref> The law was voted during the 8 June parliamentary session, and published in the official journal on 9 June.<ref>{{cite news |last1=Portillo |first1=Denni |title=Gobierno publica Ley Bitcóin en el Diario Oficial |url=https://www.laprensagrafica.com/elsalvador/GOES-publica-Ley-Bitcoin-en-el-Diario-Oficial-20210611-0055.html |access-date=6 July 2021 |work=La Prensa Gráfica |date=11 June 2021}}</ref><ref>{{cite news |last1=Magaña |first1=Yolanda |title=¿Cuándo estará vigente la Ley Bitcoin en El Salvador? |url=https://diario.elmundo.sv/cuando-estara-vigente-la-ley-bitcoin-en-el-salvador/ |access-date=6 July 2021 |work=El Mundo (El Salvador) |date=11 June 2021}}</ref>}}<ref name="btcsalvador">{{cite web |last=Jagtiani |first=Sunil |date=9 June 2021 |title=El Salvador President Says Nation Adopts Bitcoin as Legal Tender |url=https://www.bloomberg.com/news/articles/2021-06-09/el-salvador-president-says-nation-adopts-bitcoin-as-legal-tender |access-date=9 June 2021 |website=Bloomberg}}</ref><ref name="WSJ Salvador">{{Cite news |last=Ostroff |first=Caitlin |date=9 June 2021 |title=El Salvador Becomes First Country to Approve Bitcoin as Legal Tender |work={{wipe|The Wall Street Journal}} |url=https://www.wsj.com/articles/el-salvador-becomes-first-country-to-approve-bitcoin-as-legal-tender-11623234476 |access-date=9 June 2021 |issn=}}</ref><ref>{{cite web |title=El Salvador, primer país del mundo en reconocer al Bitcoin como moneda de curso legal &#124; Asamblea Legislativa de El Salvador |url=https://www.asamblea.gob.sv/node/11282 |access-date=26 January 2022 |website=www.asamblea.gob.sv}}</ref> The law took effect on 7 September, making El Salvador the first country to do so.<ref>{{Cite news |last1=Lopez |first1=Oscar |last2=Livni |first2=Ephrat |date=7 September 2021 |title=In Global First, El Salvador Adopts Bitcoin as Currency |work=The New York Times |url=https://www.nytimes.com/2021/09/07/world/americas/el-salvador-bitcoin.html |archive-url=https://ghostarchive.org/archive/20211228/https://www.nytimes.com/2021/09/07/world/americas/el-salvador-bitcoin.html |archive-date=28 December 2021 |url-access=limited |access-date=30 September 2021}}{{cbignore}}</ref><ref>{{cite news |last1=Renteria |first1=Nelson |title=Bitcoin to become legal tender in El Salvador on Sept 7 |url=https://www.reuters.com/technology/bitcoin-become-legal-tender-el-salvador-sept-7-2021-06-25/ |access-date=25 June 2021 |work=Reuters |date=25 June 2021}}</ref><ref name="BTCSVSept7FT">{{cite web |title=El Salvador's dangerous gamble on bitcoin |url=https://www.ft.com/content/c257a925-c864-4495-9149-d8956d786310 |date=7 September 2021 |access-date=7 September 2021 |quote=On Tuesday, the small Central American nation became the first in the world to adopt bitcoin as an official currency. |work=Financial Times |department=The editorial board}}</ref> The implementation of the law has been met with protests<ref>{{cite web |url=https://www.bbc.co.uk/news/business-58459098 |title=Bitcoin crashes on first day as El Salvador's legal tender |last=Silver |first=Katie |website=BBC |date=8 September 2021}}</ref> and calls to make the currency optional, not compulsory.<ref name="Noticias de El Salvador – La Prensa Gráfica &#124; Informate con la verdad 2021">{{cite web |title=Uso de bitcóin cumple 2 meses en El Salvador entre polémicas y "ganancias" |website=Noticias de El Salvador – La Prensa Gráfica &#124; Informate con la verdad |date=5 November 2021 |url=https://www.laprensagrafica.com/elsalvador/Uso-de-bitcoin-cumple-2-meses-en-El-Salvador-entre-polemicas-y-ganancias-20211105-0038.html |language=es |access-date=11 December 2021}}</ref> According to a survey by the [[Organization:Central American University (San Salvador)|Central American University]], the majority of Salvadorans disagreed with using cryptocurrency as a legal tender,<ref>{{cite web |url=https://www.bbc.co.uk/news/technology-58473260 |quote=More than 68% of those questioned said they disagreed with using cryptocurrency as a legal tender. |website=BBC |first=Joe |last=Tidy |date=7 September 2021 |title=Fear and excitement in El Salvador as Bitcoin becomes legal tender}}</ref><ref name="Reuters 2021">{{cite web |title=Majority of Salvadorans do not want bitcoin, poll shows |website=Reuters |date=2 September 2021 |url=https://www.reuters.com/technology/majority-salvadorans-do-not-want-bitcoin-poll-shows-2021-09-02/ |access-date=30 November 2021}}</ref> and a survey by the Center for Citizen Studies (CEC) showed that 91% of the country prefers the dollar over bitcoin.<ref name="Urquilla 2021">{{cite web |last=Urquilla |first=EFE- K. |title=Más del 91 % de los salvadoreños prefieren el dólar sobre el Bitcoin, según nueva encuesta |website=Noticias de El Salvador — elsalvador.com |date=22 November 2021 |url=https://www.elsalvador.com/noticias/negocios/el-salvador-bitcoin-dolar-bukele-ciudad/902708/2021/ |language=es |access-date=11 December 2021}}</ref> As of October 2021, the country's government was exploring mining bitcoin with [[Earth:Geothermal power|geothermal]] power and issuing bonds tied to bitcoin.<ref name="nytstrongman">{{cite news |last=Kurmanaev |first=Anatoly |date=7 October 2021 |title=Bitcoin Preaches Financial Liberty. A Strongman Is Testing That Promise. |work=The New York Times |url=https://www.nytimes.com/2021/10/07/world/americas/bitcoin-el-salvador-bukele.html |archive-url=https://web.archive.org/web/20211007151206/https://www.nytimes.com/2021/10/07/world/americas/bitcoin-el-salvador-bukele.html |archive-date=7 October 2021 |url-access=limited |access-date=8 October 2021}}</ref> According to a survey done by the Central American University 100 days after the Bitcoin Law came into force: 34.8% of the population has no confidence in bitcoin, 35.3% has little confidence, 13.2% has some confidence, and 14.1% has a lot of confidence. 56.6% of respondents have downloaded the government bitcoin wallet; among them 62.9% has never used it or only once whereas 36.3% uses bitcoin at least once a month.<ref>{{cite web |title=El Salvador: 70% de la población desconfía del bitcóin, según sondeo |url=https://www.dw.com/es/el-salvador-70-de-la-poblaci%C3%B3n-desconf%C3%ADa-del-bitc%C3%B3in-seg%C3%BAn-sondeo/a-60432915 |access-date=15 January 2022 |publisher=Deutsche Welle |date=15 January 2022 |language=es-ES}}</ref><ref>{{cite web |title=Evaluación de año 2021 {{!}} Iudop |url=https://uca.edu.sv/iudop/wp-content/uploads/PPT-Eva.-de-ano-2021.pdf |access-date=15 January 2022 |website=uca.edu.sv|pages=34–37}}</ref> In 2022, the [[Organization:International Monetary Fund|International Monetary Fund]] (IMF) urged El Salvador to reverse its decision after bitcoin lost half its value in two months. The IMF also warned that it would be difficult to get a loan from the institution.<ref>{{cite news|website=BBC News |title= IMF urges El Salvador to remove Bitcoin as legal tender|date= 26 January 2022|url= https://www.bbc.co.uk/news/world-latin-america-60135552}}</ref> According to one report in 2022, 80% of businesses refused to accept bitcoin despite being legally required to.<ref name="Alvarez Argente Van Patten 2022 p.">{{cite report | last1=Alvarez | first1=Fernando | last2=Argente | first2=David | last3=Van Patten | first3=Diana | title=Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador | publisher=National Bureau of Economic Research | publication-place=Cambridge, MA | year=2022 | doi=10.3386/w29968 | page=}}</ref>

In April 2022, the Central African Republic (CAR) adopted Bitcoin as legal tender alongside the [[Finance:CFA franc|CFA franc]]. After El Salvador, CAR is the second country to do so.<ref name="BBCLT" /><ref name="CAF Bloom" />

{{wipe|Ukraine}} is accepting donations in cryptocurrency, including bitcoin, to fund the resistance against the Russian invasion.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2022-02-26/ukraine-soliciting-crypto-donations-after-russian-invasion |title=Ukraine Crypto Donations Pour In After Russian |first1=Stacy-Marie |last1=Ishmael |first2=Hannah |last2=Miller |date=26 February 2022 |publisher=Bloomberg |accessdate=5 April 2022}}</ref><ref>{{cite web|url=https://www.unian.net/economics/finance/za-dva-dnya-ukraincy-sobrali-dlya-armii-pochti-13-millionov-dollarov-v-kriptovalyute-novosti-ukraina-11722474.html|title = За два дня украинцы собрали для армии почти 13 миллионов долларов в криптовалюте|website=www.unian.net}}</ref><ref>{{cite web|url=https://www.cnbc.com/2022/02/27/ukraine-government-raises-over-10-million-in-cryptocurrency-donations.html|title = Ukraine government raises over $10 million in cryptocurrency donations|website = {{wipe|CNBC}}|date = 27 February 2022}}</ref><ref>{{cite web|url=https://news.yahoo.com/ukraine-crypto-donations-top-36m-070838492.html|title = Ukraine crypto donations top $36M amid Russian invasion| date=28 February 2022 }}</ref><ref>{{cite web|url=https://cleantechnica.com/2022/02/27/elon-musk-responds-to-ukraine-plea-for-support-and-how-you-can-help-ukraine/|title = Elon Musk Responds to Ukraine Plea for Support, and How You Can Help|date = 27 February 2022}}</ref> According to the officials, 40% of the Ukraine's military suppliers are willing to accept cryptocurrencies without converting them into euros or dollars.<ref>{{cite magazine |last=Kharif |first=Olga |agency=Bloomberg |date=5 March 2022 |url=https://time.com/6155209/ukraine-crypto/|title = Ukraine Buys Military Gear with Donated Cryptocurrencies |magazine=Time}}</ref> In March 2022, Ukraine has passed a law that creates a legal framework for the cryptocurrency industry in the country,<ref>{{cite web|url=https://www.cnbc.com/2022/03/17/ukraine-legalizes-cryptocurrency-sector-as-donations-pour-in.html|title = Ukraine legalizes crypto sector as digital currency donations continue to pour in|website = {{wipe|CNBC}}|date = 17 March 2022}}</ref> including judicial protection of the right to own virtual assets.<ref>{{Cite web|url=https://www.unian.net/economics/finance/zelenskiy-legalizoval-rynok-virtualnyh-aktivov-v-ukraine-novosti-ukraina-11746633.html|title=Зеленский легализовал рынок виртуальных активов в Украине|website=www.unian.net}}</ref> In the same month, a cryptocurrency exchange was integrated into the Ukrainian e-governance service [[Software:Diia|Diia]].<ref>{{cite web|url=https://www.unian.net/techno/kriptobirzha-whitebit-obyavila-ob-integracii-s-diya-chtoby-pomogat-zhertvam-voyny-v-ukraine-11751013.html|title = Криптобиржа WhiteBIT объявила об интеграции с "Дия", чтобы помогать пострадавшим от войны в Украине}}</ref>

[[Religion:Iran|Iran]] announced pending regulations that would require bitcoin miners in Iran to sell bitcoin to the Central Bank of Iran, and the central bank would use it for imports.<ref name="aawsat202011">{{cite web |date=31 October 2020 |title=Iran: New Crypto Law Requires Selling Bitcoin Directly to Central Bank to Fund Imports |url=https://english.aawsat.com/home/article/2596686/iran-new-crypto-law-requires-selling-bitcoin-directly-central-bank-fund-imports |access-date=1 November 2020 |website=aawsat.com}}</ref> Iran, as of October 2020, had issued over 1,000 bitcoin mining licenses.<ref name="aawsat202011" /> The Iranian government initially took a stance against cryptocurrency, but later changed it after seeing that digital currency could be used to circumvent sanctions.<ref name="ViceIran">{{cite web |date=3 November 2020 |title=Iran Is Pivoting to Bitcoin |url=https://www.vice.com/en/article/qjppx3/iran-bitcoin-us-sanctions |access-date=10 November 2020 |website=vice.com}}</ref> The US Office of Foreign Assets Control listed two Iranians and their bitcoin addresses as part of its Specially Designated Nationals and Blocked Persons List for their role in the [[2018 Atlanta cyberattack|2018 Atlanta cyberattack]] whose ransom was paid in bitcoin.<ref name="FPIran">{{cite web |date=24 January 2020 |title=Iran Has a Bitcoin Strategy to Beat Trump |url=https://foreignpolicy.com/2020/01/24/iran-bitcoin-strategy-cryptocurrency-blockchain-sanctions/ |access-date=10 November 2020 |website=foreignpolicy.com}}</ref>

Some [[Place:Administrative division|constituent states]] accept tax payments in bitcoin, including Colorado (US)<ref>{{Cite web |date=2022-09-21 |title=Colorado accepts cryptocurrency to pay taxes, moving the state "tech forward" |url=https://www.denverpost.com/2022/09/21/colorado-accepts-cryptocurrency-taxes/ |access-date=2023-01-19 |website=The Denver Post |language=en-US}}</ref> and Zug ({{wipe|Switzerland}}).<ref>{{cite web |url=https://www.zg.ch/behoerden/finanzdirektion/direktionssekretariat/aktuell/kanton-zug-akzeptiert-ab-2021-kryptowaehrungen-fuer-steuerzahlungen/medienmitteilungen/press-release-of-september-3rd-2020-english-version/download |title=Canton Zug to accept cryptocurrencies for tax payment beginning in 2021 |date=3 September 2020 |access-date=24 January 2021 |publisher=Canton of Zug}}</ref><ref>{{cite web |url=https://www.srf.ch/news/regional/zentralschweiz/steuern-zahlen-mit-bitcoin-kanton-zug-akzeptiert-kryptowaehrungen-bei-steuern |language=de |title=Kanton Zug akzeptiert Kryptowährungen bei Steuern |publisher=Schweizerischen Radio- und Fernsehgesellschaft |date=3 September 2020 |access-date=24 January 2021}}</ref>

==Economic and legal concerns==
{{Further|Finance:Cryptocurrency bubble|Finance:Economics of bitcoin}}
Bitcoin, along with other cryptocurrencies, has been described as an [[Finance:Economic bubble|economic bubble]] by at least eight Nobel Memorial Prize in Economic Sciences laureates, including Robert Shiller,<ref name="Shiller">{{Cite news |last=Shiller |first=Robert |date=1 March 2014 |title=In Search of a Stable Electronic Currency |work=The New York Times |url=https://www.nytimes.com/2014/03/02/business/in-search-of-a-stable-electronic-currency.html |url-status=live |archive-url=https://web.archive.org/web/20141024120222/http://www.nytimes.com/2014/03/02/business/in-search-of-a-stable-electronic-currency.html |archive-date=24 October 2014}}</ref> [[Biography:Joseph Stiglitz|Joseph Stiglitz]],<ref name="Stiglitz">{{Cite news |last=Costelloe |first=Kevin |date=29 November 2017 |title=Bitcoin 'Ought to Be Outlawed,' Nobel Prize Winner Stiglitz Says |publisher=Bloomberg |url=https://www.bloomberg.com/news/articles/2017-11-29/bitcoin-ought-to-be-outlawed-nobel-prize-winner-stiglitz-says-jal10hxd |url-status=live |access-date=5 June 2018 |archive-url=https://web.archive.org/web/20180612224313/https://www.bloomberg.com/news/articles/2017-11-29/bitcoin-ought-to-be-outlawed-nobel-prize-winner-stiglitz-says-jal10hxd |archive-date=12 June 2018 |quote=It doesn't serve any socially useful function.}}</ref> and [[Biography:Richard Thaler|Richard Thaler]].<ref name="Thaler">{{Cite news |date=22 January 2018 |title=Economics Nobel prize winner, Richard Thaler: "The market that looks most like a bubble to me is Bitcoin and its brethren" |publisher=ECO Portuguese Economy |url=https://econews.pt/2018/01/22/economics-nobel-prize-winner-richard-thaler-the-market-that-looks-most-like-a-bubble-to-me-is-bitcoin-and-its-brethren/ |url-status=live |access-date=7 June 2018 |archive-url=https://web.archive.org/web/20180612140603/https://econews.pt/2018/01/22/economics-nobel-prize-winner-richard-thaler-the-market-that-looks-most-like-a-bubble-to-me-is-bitcoin-and-its-brethren/ |archive-date=12 June 2018}}</ref><ref name="4Nobels"/> Economist and columnist [[Biography:Paul Krugman|Paul Krugman]] has described bitcoin as "a bubble wrapped in techno-mysticism inside a cocoon of libertarian ideology",<ref name="Krugman">{{Cite news |last=Krugman |first=Paul |date=29 January 2018 |title=Bubble, Bubble, Fraud and Trouble |work=The New York Times |url=https://www.nytimes.com/2018/01/29/opinion/bitcoin-bubble-fraud.html |url-status=live |archive-url=https://web.archive.org/web/20180604124251/https://www.nytimes.com/2018/01/29/opinion/bitcoin-bubble-fraud.html |archive-date=4 June 2018}}</ref> economist [[Biography:Nouriel Roubini|Nouriel Roubini]] of New York University has called bitcoin the "mother of all bubbles",<ref>{{cite web |title=Bitcoin biggest bubble in history, says economist who predicted 2008 crash |website=TheGuardian.com |date=2 February 2018 |url=https://www.theguardian.com/technology/2018/feb/02/bitcoin-biggest-bubble-in-history-says-economist-who-predicted-2008-crash |url-status=live |archive-url=https://web.archive.org/web/20180612141424/https://www.theguardian.com/technology/2018/feb/02/bitcoin-biggest-bubble-in-history-says-economist-who-predicted-2008-crash |archive-date=12 June 2018}}</ref> and University of Chicago economist [[Biography:James Heckman|James Heckman]] has compared it to the 17th-century [[Biology:Tulip mania|tulip mania]].<ref name="4Nobels" />

Journalists, economists, investors, and the central bank of Estonia have voiced concerns that bitcoin is a Ponzi scheme.<ref>{{cite news |last=Braue |first=David |date=11 March 2014 |title=Bitcoin confidence game is a Ponzi scheme for the 21st century |work=ZDNet |url=http://www.zdnet.com/article/bitcoin-confidence-game-is-a-ponzi-scheme-for-the-21st-century/ |url-status=live |access-date=5 October 2016 |archive-url=https://web.archive.org/web/20161006050933/http://www.zdnet.com/article/bitcoin-confidence-game-is-a-ponzi-scheme-for-the-21st-century/ |archive-date=6 October 2016}}</ref><ref name="auto">{{cite web |last=Clinch, Matt |date=10 March 2014 |title=Roubini launches stinging attack on bitcoin |url=https://www.cnbc.com/id/101479123 |url-status=live |archive-url=https://web.archive.org/web/20141006074352/https://www.cnbc.com/id/101479123 |archive-date=6 October 2014 |access-date=2 July 2014 |publisher={{wipe|CNBC}}}}</ref><ref name="auto1">{{cite web |title=This Billionaire Just Called Bitcoin a 'Pyramid Scheme' |work=Fortune|url=http://fortune.com/2017/07/27/howard-marks-bitcoin-pyramid-scheme/ |url-status=live |archive-url=https://web.archive.org/web/20170924045918/http://fortune.com/2017/07/27/howard-marks-bitcoin-pyramid-scheme/ |archive-date=24 September 2017 |access-date=23 September 2017}}</ref><ref name="Ott Ummelas and Milda Seputyte">{{cite news |last1=Ott Ummelas |last2=Milda Seputyte |name-list-style=amp |date=31 January 2014 |title=Bitcoin 'Ponzi' Concern Sparks Warning From Estonia Bank |work=bloomberg.com |publisher=Bloomberg |url=https://www.bloomberg.com/news/2014-01-30/bitcoin-ponzi-scheme-worry-sparks-estonia-central-bank-caution.html |url-status=live |access-date=1 April 2014 |archive-url=https://web.archive.org/web/20140329214501/http://www.bloomberg.com/news/2014-01-30/bitcoin-ponzi-scheme-worry-sparks-estonia-central-bank-caution.html |archive-date=29 March 2014}}</ref> Eric Posner, a law professor at the [[Organization:University of Chicago|University of Chicago]], states that "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion."<ref name="Posner, Eric">{{cite web |last=Posner, Eric |date=11 April 2013 |title=Fool's Gold: Bitcoin is a Ponzi scheme—the Internet's favorite currency will collapse. |url=https://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/bitcoin_is_a_ponzi_scheme_the_internet_currency_will_collapse.html |url-status=live |archive-url=https://web.archive.org/web/20140326185128/https://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/bitcoin_is_a_ponzi_scheme_the_internet_currency_will_collapse.html |archive-date=26 March 2014 |access-date=1 April 2014 |website=Slate}}</ref> A 2014 report by the [[Organization:World Bank|World Bank]] concluded that bitcoin was not a deliberate Ponzi scheme.<ref>{{cite web |last=Kaushik Basu |date=July 2014 |title=Ponzis: The Science and Mystique of a Class of Financial Frauds |url=http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/07/16/000112742_20140716115536/Rendered/PDF/WPS6967.pdf |url-status=live |archive-url=https://web.archive.org/web/20141031043236/http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/07/16/000112742_20140716115536/Rendered/PDF/WPS6967.pdf |archive-date=31 October 2014 |access-date=30 October 2014 |publisher=World Bank Group}}</ref>{{rp|7}} Also in 2014, the Swiss Federal Council examined concerns that bitcoin might be a pyramid scheme, and concluded that "since in the case of bitcoin the typical promises of profits are lacking, it cannot be assumed that bitcoin is a pyramid scheme."<ref name="FC20140625">{{cite web |date=25 June 2014 |title=Federal Council report on virtual currencies in response to the Schwaab (13.3687) and Weibel (13.4070) postulates |url=http://www.news.admin.ch/NSBSubscriber/message/attachments/35355.pdf |url-status=live |archive-url=https://web.archive.org/web/20141205182453/http://www.news.admin.ch/NSBSubscriber/message/attachments/35355.pdf |archive-date=5 December 2014 |access-date=28 November 2014 |website=Federal Council (Switzerland) |publisher=Swiss Confederation}}</ref>{{rp|21}}

Bitcoin wealth is highly concentrated, with 0.01% holding 27% of in-circulation currency, as of 2021.<ref>{{Cite news |last1=Vigna |first1=Paul |title=Bitcoin's 'One Percent' Controls Lion's Share of the Cryptocurrency's Wealth |work=Wall Street Journal |date=20 December 2021 |url=https://www.wsj.com/articles/bitcoins-one-percent-controls-lions-share-of-the-cryptocurrencys-wealth-11639996204 |issn=0099-9660}}</ref>

===Use in illegal transactions===
The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies, law enforcement, and the media.<ref name="Lavin, Tim">{{Cite news |last=Lavin, Tim |date=8 August 2013 |title=The SEC Shows Why Bitcoin Is Doomed |work=bloomberg.com |publisher=Bloomberg LP |url=http://www.bloombergview.com/articles/2013-08-08/did-the-sec-just-validate-bitcoin-no- |url-status=live |access-date=20 October 2013 |archive-url=https://web.archive.org/web/20140325214514/http://www.bloombergview.com/articles/2013-08-08/did-the-sec-just-validate-bitcoin-no- |archive-date=25 March 2014}}</ref>

Several news outlets have asserted that the popularity of bitcoins hinges on the ability to use them to purchase illegal goods.<ref name="Monetarists">{{Cite news |date=29 September 2012 |title=Monetarists Anonymous |newspaper=The Economist |publisher=The Economist Newspaper Limited |url=http://www.economist.com/node/21563752 |url-status=live |access-date=21 October 2013 |archive-url=https://web.archive.org/web/20131020192331/http://www.economist.com/node/21563752 |archive-date=20 October 2013}}</ref><ref>{{cite web |last=Ball, James |date=22 March 2013 |title=Silk Road: the online drug marketplace that officials seem powerless to stop |url=https://www.theguardian.com/world/2013/mar/22/silk-road-online-drug-marketplace |url-status=live |archive-url=https://web.archive.org/web/20131012012106/http://www.theguardian.com/world/2013/mar/22/silk-road-online-drug-marketplace |archive-date=12 October 2013 |access-date=20 October 2013 |website=theguardian.com |publisher=Guardian News and Media Limited}}</ref> Nobel-prize winning economist [[Biography:Joseph Stiglitz|Joseph Stiglitz]] says that bitcoin's anonymity encourages money laundering and other crimes.<ref name="Hammer">{{Cite news |last=Montag |first=Ali |date=9 July 2018 |title=Nobel-winning economist: Authorities will bring down 'hammer' on bitcoin |publisher=CNBC |url=https://www.cnbc.com/2018/07/09/nobel-prize-winning-economist-joseph-stiglitz-criticizes-bitcoin.html |url-status=live |access-date=11 July 2018 |archive-url=https://web.archive.org/web/20180711200915/https://www.cnbc.com/2018/07/09/nobel-prize-winning-economist-joseph-stiglitz-criticizes-bitcoin.html |archive-date=11 July 2018}}</ref><ref name="FN">{{Cite news |last=Newlands |first=Chris |date=9 July 2018 |title=Stiglitz, Roubini and Rogoff lead joint attack on bitcoin |publisher=Financial News |url=https://www.fnlondon.com/articles/stiglitz-roubini-and-rogoff-lead-joint-attack-on-bitcoin-20180709 |url-status=live |access-date=11 July 2018 |archive-url=https://web.archive.org/web/20180711200500/https://www.fnlondon.com/articles/stiglitz-roubini-and-rogoff-lead-joint-attack-on-bitcoin-20180709 |archive-date=11 July 2018}}</ref>

==Environmental effects==
{{excerpt|Environmental effects of Bitcoin}}

==Software implementation==
{{Infobox software
| name = Bitcoin Core
| logo =
| screenshot = Bitcoin-core-v0.10.0.png
| caption = The start screen under [[Software:Fedora Linux|Fedora Linux]]
| author = Satoshi Nakamoto
| released = 2009
| programming_language = [[C++]]
| operating_system = [[Software:Linux|Linux]], [[Software:Windows|Windows]], [[Software:MacOS|macOS]]
| genre = [[Finance:Cryptocurrency|Cryptocurrency]]
| license = [[Software:MIT License|MIT License]]
| repo = {{url|https://github.com/bitcoin/bitcoin}}
| website = {{URL|https://bitcoincore.org}}
}}

''Bitcoin Core'' is [[Free and open-source software|free and open-source software]] that serves as a bitcoin [[Node (networking)|node]] (the set of which form the [[Finance:Bitcoin network|bitcoin network]]) and provides a bitcoin wallet which fully verifies payments. It is considered to be bitcoin's [[Reference implementation|reference implementation]].<ref name="Antonopoulos">{{Cite book |last=Antonopoulos |first=Andreas |title=Mastering Bitcoin: Programming the Open Blockchain |publisher=O'Reilly Media |year=2017 |isbn=978-1491954386 |edition=2nd |chapter=3 |quote=Bitcoin Core is the reference implementation of the bitcoin system, meaning that it is the authoritative reference on how each part of the technology should be implemented. Bitcoin Core implements all aspects of bitcoin, including wallets, a transaction and block validation engine, and a full network node in the peer-to-peer bitcoin network.}}</ref> Initially, the software was published by Satoshi Nakamoto under the name "Bitcoin", and later renamed to "Bitcoin Core" to distinguish it from the [[Finance:Bitcoin network|network]].<ref>{{cite web |date=19 March 2014 |title=Bitcoin Core version 0.9.0 released |url=https://bitcoin.org/en/release/v0.9.0#rebranding-to-bitcoin-core |access-date=21 October 2018 |website=Bitcoin Core}}</ref> It is also known as the ''Satoshi client''.<ref name="mastbit">{{Cite book |last=Antonopoulos |first=Andreas M. |url=https://books.google.com/books?id=IXmrBQAAQBAJ |title=Mastering Bitcoin: Unlocking Digital Cryptocurrencies |publisher=O'Reilly Media, Inc. |year=2014 |isbn=978-1491902646 |pages=31–32 |access-date=6 November 2016}}</ref>

The [[Organization:Massachusetts Institute of Technology|MIT]] Digital Currency Initiative funds some of the development of Bitcoin Core.<ref name="blad">{{cite web |date=29 March 2016 |title=MIT Announces $900,000 Bitcoin Developer Fund |url=https://www.inc.com/ilan-mochari/mit-media-lab-bitcoin-developer-fund.html |access-date=21 October 2018 |website=Inc}}</ref> The project also maintains the cryptography library libsecp256k1.<ref name="about" />

Bitcoin Core includes a transaction verification engine and connects to the bitcoin network as a full [[Node (networking)|node]].<ref name="mastbit" /> Moreover, a [[Finance:Cryptocurrency wallet|cryptocurrency wallet]], which can be used to transfer funds, is included by default.<ref name="about">{{cite web |title=About |url=https://bitcoincore.org/en/about/ |access-date=21 October 2018 |website=Bitcoin Core}}</ref>  The wallet allows for the sending and receiving of bitcoins. It does not facilitate the buying or selling of bitcoin. It allows users to generate QR codes to receive payment.

The software validates the entire blockchain, which includes all bitcoin transactions ever. This [[Distributed ledger|distributed ledger]] which has reached more than 235 gigabytes in size as of Jan 2019, must be downloaded or synchronized before full participation of the client may occur.<ref name="mastbit" /> Although the complete blockchain is not needed all at once since it is possible to run in pruning mode. A [[Command-line interface|command line]]-based [[Daemon (computing)|daemon]] with a [[JSON-RPC]] interface, bitcoind, is bundled with Bitcoin Core. It also provides access to testnet, a global testing environment that imitates the bitcoin main network using an alternative blockchain where valueless "test bitcoins" are used. Regtest or Regression Test Mode creates a private blockchain which is used as a local testing environment.<ref name="bde">{{cite web |title=Bitcoin Developer Examples |url=https://bitcoin.org/en/developer-examples#testing-applications |access-date=21 October 2018 |publisher=Bitcoin}}</ref> Finally, bitcoin-cli, a simple program which allows users to send [[Remote procedure call|RPC]] commands to bitcoind, is also included.

Checkpoints which have been hard coded into the client are used only to prevent Denial of Service attacks against nodes which are initially syncing the chain. For this reason the checkpoints included are only as of several years ago.<ref name="check">{{cite web |title=checkpoints.cpp |url=https://github.com/bitcoin/bitcoin/blob/master/src/checkpoints.cpp |access-date=13 November 2016 |website=Repository source code |publisher=GitHub, Inc.}}</ref><ref>{{cite web |title=bitcoin/chainparams.cpp |url=https://github.com/bitcoin/bitcoin/blob/master/src/chainparams.cpp |access-date=21 October 2018 |website=GitHub}}</ref>{{failed verification|date=December 2019}} A one megabyte block size limit was added in 2010 by Satoshi Nakamoto. This limited the maximum network capacity to about three transactions per second.<ref name="leadbit">{{Cite news |last=Mike Orcutt |date=19 May 2015 |title=Leaderless Bitcoin Struggles to Make Its Most Crucial Decision |work=MIT Technology Review |url=https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |access-date=15 November 2016}}</ref> Since then, network capacity has been improved incrementally both through block size increases and improved wallet behavior. A network alert system was included by Satoshi Nakamoto as a way of informing users of important news regarding bitcoin.<ref name="asr">{{cite web |date=1 November 2016 |title=Alert System Retirement |url=https://bitcoin.org/en/alert/2016-11-01-alert-retirement |access-date=16 November 2016 |publisher=Bitcoin Project}}</ref> In November 2016 it was retired. It had become obsolete as news on bitcoin is now widely disseminated.

Bitcoin Core includes a scripting language inspired by [[Forth (programming language)|Forth]] that can define transactions and specify parameters.<ref name="mpapi">{{cite web |last=Antonopoulos |first=Andreas |date=29 May 2013 |title=Bitcoin is a money platform with many APIs |url=http://radar.oreilly.com/2013/05/bitcoin-is-a-money-platform-with-many-apis.html#more-57340 |access-date=19 November 2016 |website=Radar |publisher=O'Reilly}}</ref> ScriptPubKey is used to "lock" transactions based on a set of future conditions. scriptSig is used to meet these conditions or "unlock" a transaction. Operations on the data are performed by various OP_Codes. Two [[Stack (abstract data type)|stacks]] are used – main and alt. Looping is forbidden.

Bitcoin Core uses [[Software:OpenTimestamps|OpenTimestamps]] to timestamp merge commits.<ref>{{cite web |title=Bitcoin Core devtools README – Create and verify timestamps of merge commits |url=https://github.com/bitcoin/bitcoin/blob/ebd786b72a2a15143d7ef4ea2229fef121bd8f12/contrib/devtools/README.md#create-and-verify-timestamps-of-merge-commits |access-date=5 May 2018 |website=GitHub}}</ref>

The original creator of the bitcoin client has described their approach to the software's authorship as it being written first to prove to themselves that the concept of purely peer-to-peer electronic cash was valid and that a paper with solutions could be written. The lead developer is Wladimir J. van der Laan, who took over the role on 8 April 2014.<ref name="hunt" /> Gavin Andresen was the former lead maintainer for the software client. Andresen left the role of lead developer for bitcoin to work on the strategic development of its technology.<ref name="hunt">{{cite book |last1=Preukschat |first1=Alex |url=https://play.google.com/store/books/details?id=438FCwAAQBAJ |title=Bitcoin: The Hunt of Satoshi Nakamoto |last2=Josep Busquet |publisher=Europe Comics |year=2015 |isbn=9791032800201 |page=87 |access-date=16 November 2016}}</ref> Bitcoin Core in 2015 was central to a dispute with [[Software:Bitcoin XT|Bitcoin XT]], a competing client that sought to increase the blocksize.<ref name="NewYorker">{{cite news |last=Maria Bustillos |date=25 August 2015 |title=Inside the Fight Over Bitcoin's Future |work=New Yorker |url=https://www.newyorker.com/business/currency/inside-the-fight-over-bitcoins-future |access-date=29 June 2020}}</ref> Over a dozen different companies and industry groups fund the development of Bitcoin Core.

==In popular culture==

===Term "HODL"===
Hodl ({{IPAc-en|ˈ|h|ɒ|d|əl}} {{respell|HOD|əl}}; often written '''HODL''') is slang in the [[Finance:Cryptocurrency|cryptocurrency]] community for [[Finance:Buy and hold|holding]] a cryptocurrency rather than selling it. A person who does this is known as a Hodler. It originated in a December 2013 post on the Bitcoin Forum message board by an apparently inebriated user who posted with a typo in the subject, "I AM HODLING."<ref>{{cite web |url=https://ftalphaville.ft.com/2017/12/22/2197074/the-hodl/ |title=The HODL |last=Kaminska |first=Izabella |date=22 December 2017 |website=Financial Times |access-date=21 November 2018}}</ref> It is often humorously suggested to be a [[Social:Backronym|backronym]] to "hold on for dear life".<ref>{{cite web |last1=Montag |first1=Ali |title='HODL,' 'whale' and 5 other cryptocurrency slang terms explained |url=https://www.cnbc.com/2018/01/23/what-hodl-whale-and-other-cryptocurrency-slang-terms-mean.html |website=CNBC |access-date=12 November 2020 |date=26 August 2018}}</ref> In 2017, ''Quartz'' listed it as one of the essential slang terms in bitcoin culture, and described it as a stance, "to stay invested in bitcoin and not to capitulate in the face of plunging prices."<ref>{{Cite news |url=https://qz.com/878728/buy-and-hodl-just-dont-get-rekt-the-slang-that-gets-you-taken-seriously-as-a-bitcoin-trader/ |title=Buy and hodl, just don't get #rekt: The slang that gets you taken seriously as a bitcoin trader |last=Wong |first=Joon Ian |work=Quartz |access-date=22 December 2017 |url-status=live |archive-url=https://web.archive.org/web/20171222220057/https://qz.com/878728/buy-and-hodl-just-dont-get-rekt-the-slang-that-gets-you-taken-seriously-as-a-bitcoin-trader/ |archive-date=22 December 2017}}</ref> ''TheStreet.com'' referred to it as the "favorite [[Philosophy:Mantra|mantra]]" of bitcoin holders.<ref>{{Cite news |url=https://www.thestreet.com/story/14429339/1/bitcoin-fans-chant-hodl-as-price-plunges.html |title=As Bitcoin plunges, cryptocurrency fans chant 'HODL' for comfort |last=Akhtar |first=Tanzeel |date=22 December 2017 |work=TheStreet |access-date=22 December 2017 |url-status=live |archive-url=https://web.archive.org/web/20171223102117/https://www.thestreet.com/story/14429339/1/bitcoin-fans-chant-hodl-as-price-plunges.html |archive-date=23 December 2017}}</ref> {{wipe|Bloomberg News}} referred to it as a mantra for holders during market routs.<ref>{{Cite news |url=https://www.bloomberg.com/news/articles/2020-11-19/what-the-heck-is-hodl-bitcoin-lingo-for-crypto-noobs-quicktake |title=All the Bitcoin Lingo You Need to Know as Crypto Heats Up |last=Hajric |first=Vildana |date=19 November 2020 |work=Bloomberg |access-date=1 December 2020}}</ref>

===Literature===
In Charles Stross's 2013 science fiction novel ''Neptune's Brood'', the universal [[Engineering:Interstellar travel|interstellar]] payment system is known as "bitcoin" and operates using cryptography.<ref>{{cite book |last=Stross |first=Charles |url=https://archive.org/details/neptunesbrood0000stro |title=Neptune's Brood |date=2013 |publisher=Penguin Group USA |isbn=978-0-425-25677-0 |edition=First |location=New York |quote=It's theft-proof too – for each bitcoin is cryptographically signed by the mind of its owner.}}</ref> Stross later blogged that the reference was intentional, saying "I wrote ''Neptune's Brood'' in 2011. Bitcoin was obscure back then, and I figured had just enough name recognition to be a useful term for an interstellar currency: it'd clue people in that it was a networked digital currency."<ref>{{cite web |title=Crib Sheet: Neptune's Brood – Charlie's Diary |url=http://www.antipope.org/charlie/blog-static/2014/09/crib-sheet-neptunes-brood.html |url-status=live |archive-url=https://web.archive.org/web/20170614175136/http://www.antipope.org/charlie/blog-static/2014/09/crib-sheet-neptunes-brood.html |archive-date=14 June 2017 |access-date=5 December 2017 |website=www.antipope.org |quote=I wrote Neptune's Brood in 2011. Bitcoin was obscure back then, and I figured had just enough name recognition to be a useful term for an interstellar currency: it'd clue people in that it was a networked digital currency.}}</ref>

===Film===
The 2014 documentary ''[[Finance:The Rise and Rise of Bitcoin|The Rise and Rise of Bitcoin]]'' portrays the diversity of motives behind the use of bitcoin by interviewing people who use it. These include a computer programmer and a drug dealer.<ref>{{Cite news |last=Kenigsberg, Ben |date=2 October 2014 |title=Financial Wild West |work=The New York Times |url=https://www.nytimes.com/2014/10/03/movies/the-rise-and-rise-of-bitcoin-from-nicholas-mross.html |url-status=live |access-date=8 May 2015 |archive-url=https://web.archive.org/web/20150518232516/http://www.nytimes.com/2014/10/03/movies/the-rise-and-rise-of-bitcoin-from-nicholas-mross.html |archive-date=18 May 2015}}</ref> The 2016 documentary ''Banking on Bitcoin'' is an introduction to the beginnings of bitcoin and the ideas behind cryptocurrency today.<ref>{{cite web |last=Michel |first=Lincoln |date=16 December 2017 |title=What the Hell Is Bitcoin? Let This Documentary on Netflix Explain |url=https://www.gq.com/story/what-the-hell-is-bitcoin-let-this-documentary-on-netflix-explain |url-status=live |archive-url=https://web.archive.org/web/20181118220511/https://www.gq.com/story/what-the-hell-is-bitcoin-let-this-documentary-on-netflix-explain |archive-date=18 November 2018 |access-date=10 October 2018 |website=GQ}}</ref>

===Academia===
In September 2015, the establishment of the peer-reviewed [[Academic journal|academic journal]] ''Ledger'' ({{ISSN|2379-5980}}) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.<ref>{{cite web |title=Introducing Ledger, the First Bitcoin-Only Academic Journal |url=http://motherboard.vice.com/read/introducing-ledger-the-first-bitcoin-only-academic-journal |url-status=live |archive-url=https://web.archive.org/web/20170110172807/http://motherboard.vice.com/read/introducing-ledger-the-first-bitcoin-only-academic-journal |archive-date=10 January 2017 |website=Motherboard|date=15 September 2015 }}</ref> The journal encourages authors to digitally sign a [[Hash function|file hash]] of submitted papers, which will then be [[Trusted timestamping|timestamped]] into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.<ref>{{cite web |title=Editorial Policies |url=https://www.ledgerjournal.org/ojs/ledger/about |url-status=live |archive-url=https://web.archive.org/web/20161223135741/http://www.ledgerjournal.org/ojs/index.php/ledger/about/editorialPolicies#custom-0 |archive-date=23 December 2016 |access-date=10 January 2017 |website=ledgerjournal.org}}</ref><ref>{{Cite journal |date=2015 |title=How to Write and Format an Article for Ledger |url=http://ledger.pitt.edu/ojs/public/journals/1/AuthorGuide.pdf |url-status=live |journal=Ledger |doi=10.5195/LEDGER.2015.1 |doi-broken-date=31 December 2022 |archive-url=https://web.archive.org/web/20150922190603/http://ledger.pitt.edu/ojs/public/journals/1/AuthorGuide.pdf |archive-date=22 September 2015}}</ref>

==See also==

{{Div col}}
* Alternative currency
* [[Base58]]
* [[Crypto-anarchism]]
* [[Company:List of bitcoin companies|List of bitcoin companies]]
* [[Organization:List of bitcoin organizations|List of bitcoin organizations]]
* SHA-256 crypto currencies
* Virtual currency law in the United States
{{Div col end}}


==Notes==
{{Notelist}}

==References==
{{Reflist|refs=
<ref name="low usage"> Sources for bitcoin's low usage in El Salvador as of 2022:
*{{Cite web |last=García |first=Marcela |title=Nayib Bukele's failed Bitcoin experiment in El Salvador - The Boston Globe |url=https://www.bostonglobe.com/2022/07/08/opinion/nayib-bukeles-failed-bitcoin-experiment-el-salvador/ |access-date=2022-07-09 |website=BostonGlobe.com |language=en-US}}
*{{Cite news |last1=Kurmanaev |first1=Anatoly |last2=Avelar |first2=Bryan |date=2022-07-05 |title=A Poor Country Made Bitcoin a National Currency. The Bet Isn't Paying Off. |language=en-US |work=The New York Times |url=https://www.nytimes.com/2022/07/05/world/americas/el-salvador-bitcoin-national-currency.html |access-date=2022-07-09 |issn=0362-4331}}
*{{Cite web |title=Cryptocurrency makes up just 1.9 pct. of remittances in El Salvador |work= La Prensa Latina Media |date= 25 May 2022 |url=https://www.laprensalatina.com/cryptocurrency-makes-up-just-1-9-pct-of-remittances-in-el-salvador/ |access-date=2022-07-09 |language=en-US}}
*{{Cite news |title=Central America hoped bitcoin would attract tourists. It hasn't worked. |language=en-US |newspaper=Washington Post |url=https://www.washingtonpost.com/travel/2022/07/06/el-salvador-bitcoin-beach/ |access-date=2022-07-09 |issn=0190-8286}}</ref>
}}

==External links==
* {{Official|https://bitcoin.org/en/}}
* {{Curlie|Science/Social_Sciences/Economics/Financial_Economics/Currency_and_Money/Alternative_Monetary_Systems/Cryptocurrencies/Bitcoin}}

{{Bitcoin}}
{{Cryptocurrencies}}

[[Category:Bitcoin| ]]
[[Category:Application layer protocols]]
[[Category:Currency symbols]]
[[Category:Elliptic curve cryptography]]

{{Sourceattribution|Bitcoin|1}}