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Glossary · Money and currencies

Bitcoin

In short: Bitcoin is the first major cryptocurrency — a digital unit on a public blockchain, described in Satoshi Nakamoto's white paper (31.10.2008) and running since 3 January 2009.

Simply put: The idea is "money without a bank": all participants keep a shared "notebook" of transfers, and every block carries a fingerprint of the previous one, so old records are hard to falsify. There is no company, profit or property behind bitcoin — its price is market expectation, which is why it swings so much. Addresses are visible, so it is pseudonymous, not anonymous.

Example: You buy bitcoin for a fictional €500. If the price falls by 30%, you have €350. If you lose your key, you lose that too — no one can restore it.

Watch out: In 2014 the Mt. Gox exchange stopped and about 850,000 bitcoins disappeared: people lost because they had handed their keys to an intermediary. "Not your keys, not your coins." This is knowledge, not advice to buy.

Source: Satoshi Nakamoto, "Bitcoin: A Peer-to-Peer Electronic Cash System" (2008) — https://bitcoin.org/bitcoin.pdf · BIS, Annual Economic Report 2018, ch. V — https://www.bis.org/publications/aer-2018/cryptocurrencies-looking-beyond-hype

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