Cryptocurrency

What Is Bitcoin?

Bitcoin is a blockchain-based digital currency that operates independently of banks or centralized authorities, with its ledger maintained collectively by a global network of nodes. Transactions and block creation are validated via the Proof of Work (PoW) consensus mechanism. The supply of Bitcoin is hard-coded to a maximum of 21 million coins, making it suitable for use cases such as value storage and cross-border transfers.

To understand Bitcoin further, consider it an "internet-native scarce asset." Anyone can transparently verify transactions on-chain. Miners bundle transactions into blocks and earn new coins and fees by solving cryptographic hashes. With a capped supply and a halving event every four years that reduces issuance, Bitcoin’s scarcity increases over time.

Current Price, Market Cap, and Circulation of Bitcoin (BTC)

As of December 29, 2025, data from CoinMarketCap and CoinGecko show Bitcoin consistently holds the top spot by market capitalization among crypto assets. Its price fluctuates in cycles tied to macro liquidity and “halving cycles.” The circulating supply is near the 21 million coin limit, with new issuance dropping significantly after the 2024 halving. For live prices, candlestick charts, and trading volumes, refer to Gate’s official page (sources: CoinMarketCap, CoinGecko, data as of December 29, 2025).

From a supply perspective, Bitcoin is released via block rewards, with new coin issuance halving roughly every four years—a process that has occurred multiple times and lowers inflation rates. On the demand side, factors like institutional allocation, ETF channels, macro interest rates, and risk appetite drive significant price volatility.

Who Created Bitcoin (BTC) and When?

Bitcoin was introduced by the pseudonymous Satoshi Nakamoto, who published its whitepaper in 2008 and launched the genesis block in 2009. Initially maintained and propagated by developers and enthusiasts, Bitcoin’s potential as a payment tool was famously demonstrated in 2010’s “pizza transaction.” As network effects grew, Bitcoin evolved from a niche technology into a global asset allocation choice.

On the compliance front, in 2024 the United States approved spot Bitcoin ETFs, providing regulated channels for institutional and compliant capital to participate and driving broader market involvement (source: US SEC public filings, January 2024).

How Does Bitcoin (BTC) Work?

Bitcoin records transactions on its blockchain using Proof of Work (PoW) consensus. Miners compete to compute hashes and package new blocks; those who first meet the difficulty target receive block rewards and transaction fees. The network recognizes the longest chain as valid.

Bitcoin uses the UTXO model (Unspent Transaction Output), where each transaction consists of inputs and outputs to ensure only legitimate spending of assets. The difficulty adjustment mechanism recalibrates every 2,016 blocks to keep average block times around 10 minutes. For security, each transaction is signed by a private key, with anyone able to verify its authenticity using the corresponding public key.

What Can You Do With Bitcoin (BTC)?

Bitcoin can be used for value storage, cross-border payments, and portfolio diversification. For small international transfers, users can make direct on-chain payments—typically confirmed after several blocks—without traditional intermediaries. Long-term holders benefit from scarcity enforced by fixed supply and the halving mechanism.

For payment scalability, the community has explored Layer2 solutions such as instant micro-payment networks that reduce settlement wait times and fees for small transactions; on-chain transfers remain better suited for larger payments or settlements.

What Is the Long-Term Value Proposition of Bitcoin (BTC)?

Bitcoin’s long-term value stems from its scarcity, censorship resistance, network effects, and global accessibility. The hard cap of 21 million coins and predictable issuance pathways provide code-enforced scarcity. Global nodes and miners collectively validate transactions, enhancing censorship resistance and resilience against single points of failure.

Potential demand drivers include macro hedging strategies, institutional allocation, compliant product development, and cross-border settlement usage. The four-year halving cycle and evolving fee markets impact miner revenue and network security budgets; sustainable long-term value relies on growing user demand for on-chain settlement and asset preservation.

Key Risks and Regulatory Considerations for Bitcoin (BTC)

Major risks include price volatility, regulatory uncertainty, custody and private key management challenges, network congestion with fluctuating fees, and liquidity impacts from policy changes. Prices can swing sharply due to macro events or market sentiment; tax and compliance rules for crypto assets vary widely across jurisdictions.

For self-custody, loss or exposure of private keys results in irreversible asset loss; mnemonic phrases must be securely stored with offline backups. When using trading platforms, ensure account safety by enabling two-factor authentication (2FA) and withdrawal whitelists to guard against phishing and social engineering risks.

How to Buy and Securely Store Bitcoin (BTC) on Gate

Step 1: Register and complete KYC verification. KYC is an identity process required for compliance and account security; completing it increases deposit and trading limits.

Step 2: Prepare funds. You can purchase via fiat currency for quick access or deposit stablecoins before swapping to BTC. Fiat refers to government-issued legal tender; pay attention to deposit methods and fee disclosures.

Step 3: Search for “BTC” and enter spot trading. Spot trading means buying or selling the actual token directly; you may choose a “market order” for immediate execution at the current price or a “limit order” to set your desired price and wait for fulfillment.

Step 4: Configure risk controls and security settings. Enable Google Authenticator or similar two-factor authentication methods, activate withdrawal whitelists and confirmation alerts to reduce account theft risk. For large holdings, consider splitting purchases across multiple accounts to mitigate price fluctuation risks.

Step 5: Withdrawals & custody (optional). For self-custody, transfer BTC to your own wallet. Before withdrawing, verify network details, addresses, and tags; securely store your private key and mnemonic phrase offline across multiple locations. For long-term storage, consider cold storage solutions or multi-signature wallets for enhanced security.

How Does Bitcoin (BTC) Differ From Ethereum?

Purpose: Bitcoin is designed primarily as a store of value and peer-to-peer electronic cash. Ethereum serves as a general-purpose smart contract platform powering decentralized applications (dApps) and token issuance.

Supply Mechanism: Bitcoin has a fixed maximum supply of 21 million coins with issuance declining through halving events; Ethereum has no fixed cap but uses fee burning combined with dynamic issuance.

Consensus Mechanism: Bitcoin relies on PoW for security via mining hash power; Ethereum utilizes Proof of Stake (PoS), where validators stake tokens to participate in block validation.

Ecosystem & Functionality: Bitcoin’s scripting language is limited for security reasons; its main chain is conservative. Ethereum features a vibrant DeFi and NFT ecosystem with flexible smart contract execution. In global asset allocation, Bitcoin often plays the role of "digital gold," while Ethereum acts as a "decentralized computation platform."

Summary of Bitcoin (BTC)

Bitcoin is a decentralized asset whose supply is regulated by code rules and security ensured through PoW consensus. Its scarcity and global reach have earned it the reputation of “digital gold.” It consistently leads in price, market cap, and circulation within the industry—driven by macro trends and halving cycles—and serves both as a store of value and a solution for cross-border settlements. Beginners can complete registration, funding, spot trading, and secure storage on Gate—always enable two-factor authentication, set withdrawal whitelists, and safeguard private keys. Considering regulatory changes, volatility, custody risks, and fees, users are advised to diversify holdings prudently and monitor compliance information when evaluating long-term use cases.

FAQ

How Are Cryptocurrencies Different From Traditional Currencies?

Cryptocurrencies are digital assets built on blockchain technology—not issued by central banks but generated and managed via cryptographic algorithms. Their main difference lies in decentralization: anyone can transfer funds peer-to-peer without third-party approval. All transaction records are permanently stored on the blockchain—transparent and tamper-proof.

Why Do Cryptocurrencies Have Value?

Cryptocurrency value is derived from several factors: first, supply is usually fixed or limited—creating scarcity similar to gold; second, they have practical functions such as transfers, payments, or smart contracts; third, market consensus drives demand. Like any asset class, broader acceptance and usage stabilize value over time.

How Should Beginners Safely Start Buying Cryptocurrency?

Start by choosing a licensed exchange such as Gate—create an account and complete identity verification. Begin with small amounts—never invest more than you can afford to lose. Safeguard your private key or mnemonic phrase using official wallets or hardware wallets. Always educate yourself before investing to avoid losses due to lack of knowledge.

What Are Common Risks in Crypto Investing That Should Be Avoided?

Crypto markets carry major risks including severe price swings, regulatory uncertainty, platform vulnerabilities, and scams. Pitfalls for beginners include chasing market hype, over-leveraging positions, falling for phishing sites, or believing get-rich-quick promises. Stick to reputable platforms, back up your assets regularly, be cautious with links, and practice risk management.

When Is It Suitable For Beginners To Enter the Crypto Market?

There is no universally optimal timing for crypto investing; learning consistently outweighs market timing. New users should start with small investments to experience market cycles while studying price patterns during stable periods. Diversify risk using dollar-cost averaging—investing fixed amounts monthly rather than lump sums. Most importantly—only invest what you can afford to lose.

Cryptocurrency Glossary

• Blockchain: Distributed ledger technology that links data blocks using cryptography to ensure transaction records cannot be altered.
• Smart Contract: Self-executing code running on blockchains without intermediaries.
• Wallet: A tool for storing private keys and public keys used to manage and transfer crypto assets.
• Mining: The process by which miners validate transactions with computing power to generate new blocks—earning rewards.
• Consensus Mechanism: Rules enabling network nodes to agree on ledger data integrity—such as PoW or PoS.
• Decentralization: A system trait where no single entity controls operations; instead maintained collectively by distributed network participants.

Cryptocurrency References & Further Reading

• Official Sites / Whitepapers:

  • https://bitcoin.org/
  • https://ethereum.org/
  • https://whitepaper.io/

• Developer Docs:

  • https://developer.bitcoin.org/
  • https://docs.ethereum.org/
  • https://github.com/bitcoin/bitcoin

• Trusted Media / Research:

  • https://www.coindesk.com/
  • https://research.bloomberg.com/
  • https://www.theblockcrypto.com/