Bitcoin explained simply, in figures you can look up

Bitcoin is a computer program that has run without interruption since 3 January 2009 and does one job: it keeps a record of who owns which units, without a bank or a public authority keeping that record. The rules sit in the code, and the best known of them is a cap on the quantity.

What was published on 31 October 2008

On 31 October 2008 a nine page paper appeared under the name Satoshi Nakamoto, titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. The claim stands in the abstract: payments should run directly from one party to another “without going through a financial institution”. To do that, the paper describes a solution for the double spending problem, because a file can be copied and a payment must not be.

A good two months later, on 3 January 2009 at 18:15:05 UTC, the first block came into being. Its reward of 50 BTC cannot be spent to this day because of a quirk in the code. The data of that block carries the headline of a British daily newspaper from the same day about a second bank bailout. Six days passed before the next block, a figure far above the later average. How single blocks become a chain that resists tampering is set out in the piece on how a blockchain works.

How new bitcoin come into being and where the quantity ends

New units arise in one way only: whoever finds a valid block may credit a fixed reward to themselves. The network adjusts the difficulty of that search every 2,016 blocks so that on average a block appears about every 10 minutes, that is roughly 144 blocks a day. The reward halves every 210,000 blocks, which works out at about four years.

The cap follows from that rule. The first 210,000 blocks paid 50 BTC each, the next 210,000 paid 25 BTC, then 12.5 BTC, then 6.25 BTC. Added up, by block 840,000 on 20 April 2024 the schedule had created 19,687,500 BTC, and since then 3.125 BTC arrive per block, so 450 BTC a day; that is the sum from the reward schedule, not a count in the chain, in which single blocks have claimed less than the full reward. The sum of all future halvings runs towards just under 21 million; because of the rounding in the code, the figure that can be reached by calculation is 20,999,999.9769 BTC. At an unchanged rate of computation, the last fraction would fall around the year 2140. How those halvings played out one by one is set out in the piece on the bitcoin halving.

A unit is divisible: 1 BTC consists of 100,000,000 smallest units, called satoshi. Anyone who wants to know how many satoshi a given euro amount buys can work it out in the satoshi to euro converter.

Who decides about bitcoin

There is no central office, but there are three groups with different levers. Nodes are computers that hold a full copy of the chain and check every rule themselves. They reject blocks that break the rules, and that is exactly where their power lies: a change that node operators do not adopt does not take hold. Miners supply the computing power and decide which transactions go into the next block. They cannot rewrite the supply rule, though, because nodes turn down a block with too high a reward.

Developers maintain the software and put changes forward as numbered proposals, the Bitcoin Improvement Proposals. Proposal BIP 141, for example, introduced the separate storage of signatures in 2017 and replaced the old cap of 1,000,000 bytes per block with a weight limit of 4,000,000 weight units. Whether something like that takes effect is decided in the end by adoption: software nobody installs changes nothing. The whitepaper calls this principle “one-CPU-one-vote” and ties security to the majority of computing power sitting with participants who do not attack together.

Because nobody hands out a customer number, there is no registration either. An address comes from a key pair that a program creates on your own device. Whoever knows the secret part can dispose of the units; whoever loses it loses access. The network knows neither names nor addresses of residence, but it does know every movement: all transfers since 2009 lie open and can be read by anyone. That is not anonymous, pseudonymous fits better.

What running the network costs in electricity

The computing work is the price of the security, and it can be estimated. A survey by the University of Cambridge from April 2025 asked 49 mining companies which together supplied 268 EH/s on the reference date of 30 June 2024, so just under 48 per cent of the estimated computing power of the network. The result for that date: electricity use projected over a year was estimated at around 138 TWh, up 17 per cent on the year before and about 0.54 per cent of global electricity use. The study puts the greenhouse gases attributed to it at around 39.8 million tonnes of CO2 equivalent, about 0.08 per cent of global emissions; for a finer reading it names the lower range of 32.9 to 37.6 million tonnes itself.

The study reports the electricity mix of the companies surveyed as 52.4 per cent sustainable, made up of 42.6 per cent renewable sources and 9.8 per cent nuclear power. The same study arrives at only 37.6 per cent when it uses a location based calculation instead of self reporting, so the range runs from 37.6 to 52.4 per cent. The largest single source was natural gas at 38.2 per cent, coal came to 8.9 per cent and oil to 0.5 per cent. The companies named a median electricity price of 45 US dollars per MWh; electricity accounted for more than 80 per cent of their running costs. All of these figures come from self reporting by a subset of the market as of 30 June 2024 and are not a measurement of the whole network; the study itself points out that operations in the United States are likely over represented in it, and those in Russia, Africa and parts of Asia under represented.

Bitcoin, cash and a current account side by side

Comparing bitcoin with the two forms of money everyone in Germany knows makes the differences clear faster than any definition. In its monthly report of July 2019 the Deutsche Bundesbank, the German central bank, speaks not of a currency but of crypto tokens: they “do not fulfil the functions of money owing to a lack of price stability” and are a niche product “used mainly by speculatively minded investors”.

Three properties separate the columns of the table below. First, the question of who stands behind the value: with a balance in a current account it is a bank, and in an insolvency the deposit guarantee steps in up to 100,000 euro per customer and institution; behind bitcoin stands nobody. Second, the quantity: a central bank steers the money supply according to its mandate, the quantity of bitcoin follows a fixed formula. Third, reversibility: a direct debit can be pulled back, a confirmed transfer in the chain cannot.

How to check the figures yourself

Everything set out here can be recalculated or looked up without prior knowledge. The supply formula: 210,000 blocks times 50 BTC gives 10,500,000 BTC in the first stage, every further stage delivers half of the one before, and the sum approaches 21,000,000. Daily production: 6 blocks per hour times 24 hours times 3.125 BTC gives 450 BTC. The next halving sits at block 1,050,000; when it is reached depends on the actual block time and can only be estimated, for instance with the halving countdown.

Three points are worth settling before you put money in. First: the price swings widely, and there is no issuer who props it up. Second: whoever loses their keys loses the units for good, because there is no blocking and no chargeback as there is with an account. Third: buying, custody and tax follow their own rules in Germany, and those are set out in the piece on the first steps when buying. Look up unfamiliar terms in the glossary.

Frequently asked questions

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