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Bitcoin

Last Updated: April 17, 2024

Bitcoin is the first decentralized network to support a cryptographically-secure digital asset, using public-key cryptography to record, sign and send transactions. The native token BTC operates on the Bitcoin network, a layer-1 blockchain.

Bitcoin is currently the largest cryptocurrency by market valuation.

Trading Bitcoin on Bullish

How do I buy, trade, or sell Bitcoin on Bullish?

Step by step

1. Onboard with us by creating an account, passing KYC, and providing your TIN number. Click here for more information on how to onboard.
2.Once onboarded, log in to the exchange. Click here for more information on how to log in.
3.After logging in, deposit funds. Click here for more information on how to deposit funds.
4.Once you have deposited funds, select a BTC pair from the list of assets.
5.Open a spot position and place an order. Click here for more information on how to spot trade with Bullish. 

Background

Pseudonymous founder Satoshi Nakamoto devised Bitcoin as a decentralized, peer-to-peer network, able to facilitate financial transactions without a central authority like a government or bank. In doing so, Satoshi solved a key issue, the double-spending problem, by creating a proof-of-work consensus mechanism within a blockchain structure. 

Bitcoin’s network was activated in January 2009 when Satoshi mined the first block, or the “genesis block” and 50 BTC entered circulation at a price of $0.00. Fifty bitcoin continued to enter circulation every block (created once every 10 minutes) until the first halving event took place in November 2012. Halvings which are programmed into Bitcoin’s code by Satoshi involve automatically halving the number of new BTC entering circulation every 210,000 blocks.

Bitcoin has a fixed supply of 21 million and no more bitcoin can be created and units of bitcoin cannot be destroyed. Each bitcoin is made up of 100 million satoshis (the smallest units of bitcoin), making individual bitcoin divisible up to eight decimal places. That means anyone can purchase a fraction of a bitcoin with as little as one U.S. dollar.

Launch

In 2006 development began by an anonymous computer programmer or group of programmers under the pseudonym “Satoshi Nakamoto.” Satoshi subsequently published a whitepaper outlining the network’s framework and operation in 2008 titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” In January 2009, the Bitcoin network launched its 0.1 release.

How does it work?

Scalability

The Bitcoin network is a peer-to-peer electronic payment system that uses a bitcoin cryptocurrency to transfer value over the internet or act as a store of value like gold and silver. Everything is done publicly through a transparent, immutable, distributed ledger technology also known as a blockchain without any intermediaries. Holders who store their own bitcoin have complete control over it. It cannot be accessed without the holder’s cryptographic key. 

Governance

The Bitcoin blockchain utilizes a proof-of-work (PoW) based consensus mechanism. Every single bitcoin transaction that takes place has to be permanently committed to the Bitcoin blockchain ledger through a process called “mining.” Miners compete using specialized computer equipment known as application-specific integrated circuit (ASIC) chips. Hash power is the computational power used to validate network processes such as the difficult math problems which need to be solved to unlock the next block in the chain. In order to incentivize the miners to do so, a fee is attached to each transaction and that fee is awarded to whichever miner adds the transaction to a new block. 

Miners can form pools in order to win the right to mine the next transaction block. When a group of miners wins, each participant receives a share of the block rewards equivalent to the hash power their miner provided to the mining pool. Fees work on a first-price auction system, where the higher the fee attached to the transaction, the more likely a miner will process that transaction first

Community

The Bitcoin blockchain and the bitcoin.org website are supported by open-source developers from around the world contributing at will. The Bitcoin Foundation facilitates community activations and events engaging software engineers and Bitcoin enthusiasts to develop and innovate on the Bitcoin platform.

General FAQ

How are Bitcoin and Ethereum different?
Bitcoin was conceived as an alternative to traditional money, aiming to be a decentralized and digital cash system. Ethereum is an open-source platform for creating and implementing smart contracts and decentralized applications (DApps) which utilizes its native token ether (ETH).

How are altcoins different from Bitcoin?
Alternative coins or “altcoins” are all cryptocurrencies other than Bitcoin. They entered the market with the aim to address Bitcoin’s perceived limitations and introduce additional or new capabilities. For example, some altcoins use different consensus mechanisms to validate transactions or open new blocks. While Bitcoin is primarily a digital currency, many altcoins serve various functions, such as Ethereum’s Ether, which is used to pay transaction fees within its network.

Who owns Bitcoin?
Bitcoin is a decentralized digital currency so it is not owned by any individual, company, or government. Bitcoin aims to be maintained by a community of volunteer coders and run by an open network of dedicated computers spread around the world to ensure the integrity and smooth operation of the Bitcoin network remain.

Who is Satoshi Nakamoto?
Satoshi is believed to be a pseudonym for the individual or group responsible for Bitcoin who is a polymath possessing extensive knowledge in computer programming, economics, cryptography, and peer-to-peer networking. At launch, Satoshi claimed to be a 37 year-old man living in Tokyo, Japan. His name is often translated as “thinking clearly inside the foundation.” There is no record of a computer scientist by this name prior to the launch of Bitcoin in 2009.  Satoshi updated the Bitcoin source code until 2010 and wrote hundreds of blog posts in English at first using American spellings and then switching to British spellings and colloquialisms. On April 23, 2011, Satoshi disappeared from the Internet, telling a developer in an email that he has “moved onto other things.”

What is Bitcoin v bitcoin?
When “Bitcoin” is capitalized, it refers to the concept of bitcoin, including its technology, protocol, software. When bitcoin is not capitalized, it denotes the unit of currency (BTC).

What are the units of bitcoin?
The smallest subunit of BTC is the “satoshi.” One satoshi is equal to 10-8 BTC or one hundred-millionth of a BTC (0.00000001 bitcoin).

What is Bitcoin mining?
New bitcoins are created by “mining” which is the process by which thousands of computers worldwide compete to record and verify transactions on the network. These specialized computers, known as “mining rigs,” perform the equations required to verify and record a new transaction. The rigs are typically massive, specialized, and often owned by businesses or large numbers of individuals pooling their resources. 

What is the bitcoin supply?
Unlike other cryptocurrencies with unlimited supply like Ethereum (ETH), the supply of bitcoin is deterministic and fixed at 21 million BTC. The supply schedule is embedded in the Bitcoin protocol and the process of adding new bitcoins to the supply occurs approximately every 10 minutes, which is the average time it takes to create a new block on the Bitcoin blockchain. However, given the systematic reduction inherent in bitcoin halving, the total number of bitcoins issued will likely never reach the full 21 million due to the use of rounding operators in the Bitcoin codebase. It is projected that the final satoshi (smallest unit of bitcoin) may not be generated until around 2140.

What is Bitcoin halving?
Bitcoin halving is when Bitcoin’s mining reward is split in half. It takes the blockchain network about four years to open 210,000 more blocks (a standard set by the blockchain’s creators) to continuously reduce the rate at which the cryptocurrency is introduced. The first halving occurred on November 28, 2012 where the first reward of 50 bitcoin was split in half to 25.

How is the value of Bitcoin determined?
The value of Bitcoin is determined primarily by supply and demand. The rate at which new bitcoins are created is designed to slow down over time, which may influence demand. Demand for Bitcoin can be influenced by various factors, including its utility as a medium of exchange and its acceptance by businesses and consumers. Its potential utility in the digital economy is another factor. Multiple factors including the cost of producing bitcoin through the mining process, the number of competing digital currencies, regulations governing its sale and use, and media coverage can all impact its price. 

What is the advantage of Bitcoin over other digital currencies?
As Bitcoin has a capped supply at 21 million bitcoins which are generated at a predictable rate, this makes Bitcoin a deflationary currency. Bitcoin is often referred to as “digital gold” due to its potential for long-term utility. Bitcoin may be utilized for transactions with merchants that accept Bitcoin and other cryptocurrencies both online and offline. Bitcoin may also be utilized via Bitcoin debit cards, remittance services, Bitcoin ATMs, and peer-to-peer (P2P) marketplaces. 

Are Bitcoin transactions anonymous?
While Bitcoin transactions are harder to trace than traditional electronic transactions, they are not completely anonymous as the crypto wallet’s address is stored in the public blockchain. Each transaction is linked to a public key, an alpha-numerical string that serves as a pseudonym for the user. This public key, while not directly linked to the user’s real-world identity, can be traced using tools known as Bitcoin explorers. This enables fraud prevention as transactions can be publicly traced.  Another point is that pseudo-anonymity can be compromised when users exchange their cryptocurrency for other digital assets, or when they register with centralized digital asset platforms or blockchain-based applications, as these platforms may implement a Know Your Customer (KYC) process.

What is the “genesis block”?
When the cryptocurrency was launched at the beginning of 2009, Satoshi Nakamoto mined the genesis block (the first-ever block on the Bitcoin blockchain) with 50 BTC entering into circulation at a price of $0.00.

What is Bitcoin Pizza Day?
The Bitcoin Pizza Day refers to the first time bitcoin was used to purchase a real good. On May 22, 2010, a programmer in Florida named Laslo Hanyecz (now referred to as the “Bitcoin Pizza Guy”) purchased two Papa John’s pizzas for 10,000 bitcoin. Every year on May 22, the Bitcoin community commemorates Bitcoin Pizza Day. This historical day highlights the deflationary nature of bitcoin and its store of value properties.

Bullish Trading FAQ

What methods of payment can I use to buy Bitcoin?
You may deposit digital assets or fiat currency (USD) to transact on Bullish. Click here to learn more about depositing funds.

Can I buy and sell Bitcoin instantly?
If you have created a Bullish account, passed the KYC process, and made a deposit, you can buy or sell BTC instantly by placing a market order.

What is the minimum amount of Bitcoin I can buy?
Visit our Help Center to check minimum and maximum order sizes for BTC.

What are the fees for buying Bitcoin?
See the fee schedule in our Help Center to check all fees for all Bullish trading fees.

Why buy Bitcoin with Bullish?
Bullish leverages innovations of decentralized finance (DeFi) within a regulated framework so you can execute fast, reliable crypto trades with near-zero spreads, even in volatile markets. Learn more about trading on Bullish here.

How does Bullish keep my Bitcoin safe?
Bullish’s best-in-class crypto custody architecture maximizes the security of your assets by mitigating risks, without sacrificing the speed of your deposits or withdrawals. Learn more about how Bullish keeps user assets safe here.

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