What is Bitcoin? How It Works & Where to Use It

How it works

Digital money, secured by energy.

Bitcoin keeps one shared record of who owns what, with no bank in the middle. Anyone can verify it, no one can quietly change it, and new coins are released on a fixed, slowing schedule. Four ideas make that work.

The shared ledger

Every transaction since 2009 lives in one public chain of blocks, copied across tens of thousands of nodes. Anyone can audit the whole money supply.

Mining & Proof of Work

Miners race to solve a hard math puzzle, spending real electricity. The winner adds the next block, rewriting history would cost more than it's worth.

The halving

Every four years the reward for mining a block is cut in half. Issuance slows predictably toward zero, scarcity is written into the code.

21 million cap

There will only ever be 21 million BTC, no central bank can print more. The first truly fixed-supply money, often called digital gold.

How Proof of Work secures the chain

1

Broadcast

You send BTC. The transaction is signed with your private key and broadcast to the network, where it waits in the “mempool” to be included in a block.

2

Mine

Miners worldwide bundle transactions and race to find a hash below the target, trillions of guesses a second. The first to succeed wins the block reward + fees.

3

Confirm

The new block is added to the chain roughly every 10 minutes. After ~6 blocks (≈1 hour) the payment is treated as final, reversing it is practically impossible.

The layers under the hood

Base layer

The UTXO ledger + Script

Balances are tracked as unspent outputs (“digital banknotes”). A small, deliberately limited language called Script enforces the rules of each spend.

Consensus

Proof of Work, SHA-256 mining

Difficulty auto-adjusts every 2,016 blocks so a block is found about every 10 minutes, no matter how much mining power joins or leaves.

Layer 2

The Lightning Network

Payment channels settle on Bitcoin but move funds off-chain, enabling instant, sub-cent payments at massive scale.

More than payments

Multisig, funds needing several keys to spend
Timelocks, payments that unlock at a future date
Taproot, smaller, more private complex spends
Ordinals & Runes, data & tokens inscribed on-chain

Bitcoin keeps its base layer simple on purpose, security and predictability first, with richer features added carefully over years.

Adoption & usage

Security you can measure.

Live, on-chain numbers that show Bitcoin's scale and security, the hashrate, usage and reliability behind it, not the price.

View on mempool.space

Network activity

Total transactions1.14BAll-time

Daily transactions486KLast 24h

Block height882,640~10 min per block

Avg fee$1.84~3 sat/vB

Network hashrate · last 12 months+38%

Ever-rising security. Total mining power keeps climbing to record highs, every added exahash makes the chain more expensive to attack.

Daily active addresses912K

Unique addresses transacting each day, 7-day average, a proxy for real economic use.

Security · Proof of Work

Hashrate721 EH/s7-day average

Coins mined19.84M

94.5% of 21M

Block reward3.125 BTCSince 2024 halving

Cost to attack$20B+51% of hashrate

Reliability

99.98% uptime since the genesis block (Jan 2009)

Bitcoin has produced blocks almost without interruption for over 16 years. Its rules are enforced by tens of thousands of independent nodes, so no single party can change the supply or reverse confirmed payments.

Mar 2013A temporary fork between two software versions split the chain for ~6 hours. Node operators coordinated a downgrade, the chain reconverged, and the bug was permanently fixed, no coins were lost.

Ecosystem

What Bitcoin is used for.

Bitcoin's role is narrower than most chains by design, but deep. Here's where it's actually used, and how it reaches into the wider crypto economy.

DefiLlama

Store of value

A scarce, portable, censorship-resistant asset, “digital gold” held by individuals, companies and now spot ETFs.

Lightning payments

Instant, near-free transfers on a Layer 2 used for tipping, remittances and point-of-sale around the world.

Ordinals & Runes

A newer wave of inscriptions and tokens recorded directly on Bitcoin, digital artefacts secured by the base chain.

Wrapped BTC

Tokenised BTC (WBTC, tBTC, cbBTC) brings Bitcoin's value into DeFi on Ethereum and other chains, $16B+ worth.

Bitcoin across the wider economy

1ESpot Bitcoin ETFsRegulated funds$118B

2WWrapped BTC (WBTC)BTC in DeFi$10.9B

3LLightning NetworkPayments · capacity$480M

4ccbBTCBTC in DeFi$3.8B

5ttBTCDecentralized wrap$1.1B

The Lightning Network

Bitcoin's main Layer 2 for everyday spending, instant and near-free. Zypto supports Lightning for fast, low-fee BTC payments. Learn more in our Lightning guide.

Adoption at a glance

ETF assets$118BSpot BTC funds

Legal tender2Countries

In the Zypto App

Hold, send and spend Bitcoin.

Bitcoin is fully integrated. Self-custody BTC, send on-chain or over Lightning, swap to any supported asset, and spend BTC through Zypto Pay.

Available in the Zypto App · on-chain & Lightning

BitcoinBTC$104,214+2.3%

BTC LightningInstant payments

Wrapped BTCWBTC · on ETH$104,190+2.3%

Bitcoin's only native asset is BTC. Tokenised versions like WBTC live on other chains and are held there in self-custody, your keys, your coins.

Get BTC in Zypto App

Be the reason Bitcoin ships next.

Bitcoin isn't in the Zypto App yet. Post the request to your followers and ask them to add their voice, we prioritize the chains with the most demand. Everything above stays fully live either way.

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Accepted as Payment

BitcoinAccepted as Payment

BTC LightningAccepted as Payment

Pay bills, top-ups and 24,000+ products with BTC through Zypto Pay, on-chain for larger amounts, Lightning for instant everyday spends.

Swap & convert

CChangeNow LLetsExchange SSwapKit ZIn-app DEX

Wrapped BTC is CCIP-ready Native BTC settles on the Bitcoin chain. Wrapped BTC (WBTC) can move cross-chain to any Chainlink CCIP network in a single transaction.

Swap BTC to any supported asset in seconds. Zypto routes the best path automatically across these providers and the in-app DEX.

History & FAQ

Sixteen years, plainly told.

Key milestones

2008

The whitepaper

An anonymous Satoshi Nakamoto publishes “Bitcoin: A Peer-to-Peer Electronic Cash System.”

2009

Genesis block

The first block is mined on 3 January 2009, starting the Bitcoin blockchain.

2010

First real purchase

10,000 BTC buys two pizzas, the first known commercial Bitcoin transaction.

2021

Taproot + legal tender

The Taproot upgrade improves privacy and efficiency; El Salvador adopts BTC as legal tender.

2024

Fourth halving + US ETFs

Block reward drops to 3.125 BTC; spot Bitcoin ETFs launch in the US, drawing institutional flows.

Key facts

Launched3 Jan 2009

CreatorSatoshi Nakamoto

ConsensusProof of Work

Hash functionSHA-256

Block time~10 minutes

Max supply21,000,000 BTC

Smallest unit1 satoshi (1e-8)

Layer 2Lightning Network

Store of valueProof of WorkLayer 1MiningLightning

What is Bitcoin in one sentence?

Bitcoin is a decentralized digital money, a public ledger secured by worldwide mining, with a fixed supply of 21 million coins and no central authority that can change the rules.

How is Bitcoin different from Ethereum?

Bitcoin is purpose-built as sound money: simple, scarce and secured by Proof of Work mining. Ethereum is a programmable platform secured by Proof of Stake, designed to run smart contracts, DeFi and thousands of tokens.

What is the halving?

Roughly every four years, the reward miners receive for each block is cut in half. This steadily slows the creation of new BTC until the 21-million cap is reached around the year 2140, making Bitcoin increasingly scarce over time.

Is Bitcoin secure and decentralized?

Yes. Tens of thousands of independent nodes enforce the rules, and an enormous amount of mining power protects the chain. Rewriting history or attacking the network would cost tens of billions of dollars in hardware and electricity.

Is Bitcoin available in the Zypto App?

Yes. You can hold and self-custody BTC, send it on-chain or instantly over Lightning, swap it, and spend it through Zypto Pay. For live prices and charts, see the BTC price page.

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