Bitcoin is a type of digital money that can be transferred over the internet without a bank controlling the Bitcoin network.
Bitcoin exists electronically rather than as notes or coins. People can send it to one another through the Bitcoin network, and ownership is recorded on a shared public record called a blockchain.
Unlike pounds in your bank account, Bitcoin is not issued by the Bank of England or controlled by one bank or company. The system follows computer rules shared across a worldwide network.
Bitcoin was introduced in 2009. Its design allows people to transfer Bitcoin using a network of computers rather than requiring one bank to maintain the central record of who owns what.
That does not mean using Bitcoin removes all middlemen in practice. Many people buy, sell and store Bitcoin through exchanges and other companies. Those services introduce their own fees and risks.
Bitcoin has a market price because people are willing to buy and sell it. Different buyers may value it for different reasons.
Bitcoin's rules limit the eventual supply to about 21 million bitcoin. Scarcity alone does not guarantee something will increase in value, but the limit is an important part of Bitcoin's design.
Bitcoin can be transferred digitally between compatible Bitcoin addresses without physically moving an asset.
Bitcoin has developed a worldwide network of users, miners, developers, exchanges and businesses.
Ultimately, its market price comes from what buyers are prepared to pay and sellers are prepared to accept.
Someone instructs the Bitcoin network to transfer Bitcoin from an address they control.
Bitcoin's network applies its rules to determine whether the transaction is valid.
Confirmed transactions become part of Bitcoin's blockchain — its shared transaction history.
Copies of the blockchain are maintained across many computers rather than existing only in one company's database.
If demand to buy increases faster than the amount people want to sell, the price can rise. If selling pressure is stronger, the price can fall.
News, regulation, economic conditions, investor sentiment, large transactions and speculation can all influence demand. This is one reason Bitcoin can be much more volatile than many traditional assets.
Understanding Bitcoin does not mean you need to buy it. Its price can fall sharply and you could lose all the money you put into a cryptoasset.
The commonly used ticker symbol for Bitcoin — similar to GBP for British pounds.
The shared record containing Bitcoin transactions.
Software or hardware used to manage the keys that allow someone to control cryptoassets.
A commonly used estimate of the total market value: current price multiplied by circulating supply.
The process used in Bitcoin to help confirm transactions and secure the network, with miners competing to add new blocks.
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LiveCryptoPrices UK provides market information and educational content. We do not tell you whether to buy, sell or hold Bitcoin or any other cryptoasset.