Bitcoin

Bitcoin (BTC) is the first cryptocurrency. It is also the world's most valuable cryptocurrency in terms of market capitalization.

Bitcoin was invented by an unknown person or group of people under the pseudonym Satoshi Nakamoto and released as open-source software in 2009.

What is Bitcoin?

Bitcoin is an open, public payment network which has existed since 2009.

Anyone with a Bitcoin wallet can send or receive value directly. No bank, government, or corporation can stand in the way.

Nodes are computers that run the Bitcoin software and enforce its rules. Anyone can run a node, helping to keep the Bitcoin ledger auditable and synchronized worldwide.

Special nodes called miners compete over processing transactions on the network. Roughly every 10 minutes, a miner bundles recent transactions into a new block and broadcasts the block to all nodes.

Each successful miner receives a block reward (newly mined bitcoin plus any transaction fees) bringing fresh coins into circulation.

Who controls Bitcoin?

Bitcoin is an open protocol. Anyone who uses Bitcoin participates in its shared governance.

It is not controlled by any single entity. There is no organization that operates Bitcoin.

Bitcoin's evolution relies on open-source developers, miners, nodes, and the broader economic majority.

No group can force changes on the others; upgrades take hold only when participants reach transparent, globally distributed consensus.

Because global consensus for changes is intentionally difficult to achieve, Bitcoin evolves slowly and conservatively.

What is Bitcoin used for?

Bitcoin has come a long way since someone famously bought two pizzas for 10,000 bitcoin in 2010 .

Now, its uses range from micro-payments to multi-billion-dollar trades and transfers. In recent years, Bitcoin was adopted by the financial services industry for a variety of purposes, and it has also been adopted as a treasury asset by some governments and corporations.

It is also used in everyday life to pay for goods in communities which have adopted Bitcoin.

How to use Bitcoin with Trezor

We created the Trezor Model One, the world's first hardware wallet, to help people store their bitcoin back in 2014.

Since then, we've added support for other cryptocurrencies, but we offer Bitcoin only firmware on Trezor devices for those those that want to keep their devices only (or purely) compatible with Bitcoin.

The easiest way to use Bitcoin with your Trezor is via our Trezor Suite desktop application; you can also track your balances on the go with our mobile application Trezor Suite Lite. It is also possible to use your Trezor with third-party wallets such as Electrum.

Trezor Suite

Bitcoin is integrated with Trezor Suite, therefore it is possible to use it in the standard interface.

• Plug in your Trezor device.
• Download and install Trezor Suite; alternatively, you can use Trezor Suite for web.
• Navigate to the Accounts page, and select Bitcoin in the "My accounts" side menu.
• In each of your Bitcoin accounts, you can send, receive, view, sign & verify transactions.

History

Before Bitcoin

In the 1980s, a small group of technologists had already begun experimenting with ways to protect messages and digital value from surveillance. Their early experiments with digital cash and private communications laid the groundwork for what would become the cypherpunk movement.

In the late 1990s and early 2000s, they began exploring ways to create a digital form of money that didn’t rely on governments or banks. Among them was Wei Dai, who proposed b-money in 1998: a concept for “an anonymous, distributed electronic cash system.” Though never implemented, b-money introduced key ideas that would later influence Bitcoin.

Around the same time, Hashcash, developed by Adam Back in 1997, used a Proof-of-Work mechanism to combat email spam. This same mechanism became central to Bitcoin mining.

Then came Bit gold, designed by Nick Szabo. Like Bitcoin, it used cryptographic puzzles and timestamped records to secure a decentralized digital currency. Although Bit gold was never launched, it’s often called a direct precursor to Bitcoin.

Satoshi Nakamoto & the birth of Bitcoin

In 2008, an unknown figure or group using the name Satoshi Nakamoto joined the cypherpunks mailing list and shared a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. By combining the innovations of b-money, Hashcash, and Bit gold, with a few critical improvements, Satoshi launched Bitcoin on January 3rd, 2009.

Other breakthroughs also contributed to Bitcoin’s architecture, including secure timestamping, Merkle trees for cryptographic proof, and public key cryptosystems. But Bitcoin was the first to bring them all together into a functioning, decentralized network.

Satoshi Nakamoto's last public interaction was in 2011. He then left development of the protocol to the community.

Technology

Block

A block is a group of transactions assembled by a miner. Each transaction is grouped into a block and secured using cryptography. Once added, data in a block can’t be changed or removed. A new block is created approximately every 10 minutes.

This prevents people from trying to use the same coins more than once - a problem known as double-spending.

Blockchain

Each block contains a SHA-256 cryptographic hash of the previous block, creating a secure, unbroken chain of records called a blockchain.

Blocks are numbered sequentially. This number is known as the block height and reflects their position in the chain.

Together, they form a shared and tamper-resistant history of all bitcoin transactions since the network began.

Copies of the blockchain are stored on thousands of computers around the world, making it easy to verify that everything matches and making censorship practically impossible.

By distributing trust across a global network, the blockchain keeps Bitcoin secure without relying on any central authority.

Mining

Mining is the process of using computer power to secure the Bitcoin network by validating and recording transactions, and earning bitcoin as a reward.

Miners keep the blockchain trusted and unalterable by repeatedly grouping newly broadcast transactions into blocks, which are then sent to the network and verified by nodes.

As an incentive, miners compete to solve a complex Proof of Work calculation, and approximately every 10 minutes, the first to succeed is rewarded with newly created bitcoin and the transaction fees from all the transactions in that block.

As more miners join the network to compete, the network automatically adjusts the difficulty, making it increasingly harder to earn new bitcoin over time and keeping the approximate 10 minute block time consistent even if computational power increases significantly.

Proof of Work

Proof of Work is the process that secures the Bitcoin network and issues new bitcoin into circulation.

It is a computationally intensive process involving repeated trial-and-error calculations to find a solution that meets specific criteria. While the solution is difficult to produce, each result can be verified almost instantly by anyone.

Supply

New bitcoin enters circulation once a block has been mined. The successful miner who finds a new block is rewarded with newly created bitcoin (called a block reward) and transaction fees.

The block reward decreases over time in a previously determined process called Bitcoin halving.

When Bitcoin was first created, the block reward was 50 bitcoin. It is currently 3.125 bitcoin.

Eventually, the reward will decrease to zero, and all 21 million bitcoins will be mined once the block height reaches 6,930,000 - estimated to be sometime in the year 2140.

At this point, miners will only be paid the transaction fees from blocks they mine.

UTXOs

UTXOs (Unspent Transaction Outputs) are a core component of Bitcoin. They are pieces of bitcoin controlled by a wallet until they are spent (sent to another address). Every Bitcoin transaction creates a one or more new UTXOs and can combine existing UTXOs from different addresses controlled by the same wallet.

Hierarchical Deterministic (HD) wallets

Hierarchical Deterministic (HD) wallets use a single wallet backup to generate a nearly unlimited number of unique addresses. Instead of creating a separate wallet for each address, HD wallets use a tree-like structure to organize and recover all keys. This improves privacy, simplifies wallet recovery, and supports secure scaling of your accounts.