How does Bitcoin work?
Bitcoin is money that only exists as entries in a huge shared list of who owns what. There are no coins or notes, and no bank in charge. Instead, thousands of computers around the world keep identical copies of the list and check every payment, so nobody can cheat or spend the same money twice.
Money that only exists in a list
There are no bitcoin coins or notes. A bitcoin is just an entry in a public list that shows who owns how much. An app on your phone, called a wallet, holds the secret code that lets you move your part of the list to someone else.
Share this stepPayments are locked in a chain
About every ten minutes, new payments are bundled into a block and attached to the ones before, forming a chain: the blockchain. Once added, they can’t be changed. The computers that do this work, called miners, are paid in newly created bitcoins, which is the only way new ones appear.
Share this stepDigital money that everyone keeps track of together.
Shared listthousands of copiesBitcoin
There will never be more than 21 million bitcoins. The price is simply what people are willing to pay, which is why it can swing sharply. Payments aren’t anonymous either: they’re public in the list, just linked to codes instead of names.
Common follow-up questions
Why is Bitcoin worth anything?
For the same reason as other money: people agree to accept it. The fixed supply of 21 million and the fact that no government can print more make some people value it, but the price depends entirely on demand.
How do people get bitcoins?
Most buy them through an app or exchange with ordinary money. You can also be paid in bitcoin, and miners get new bitcoins for their work. You don’t have to buy a whole one, small fractions work too.
What happens if I lose my secret code?
Your bitcoins are lost for good. There’s no bank or password reset. Millions of bitcoins are believed to be lost this way.
Is Bitcoin a safe investment?
Its value can swing wildly in a short time, and you can lose everything you put in. Financial regulators warn that crypto is high-risk. This page explains how it works, not whether to buy it.
