Bitcoin is a digital decentralized currency that allows peer-to-peer transactions without the need for intermediaries like banks, often used for online purchases and investment. Its value is subject to market fluctuations.
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Last Updated: February 6, 2026
Bitcoin is a form of digital currency that is offered independently from any government or financial institution. More specifically, Bitcoin is a digital currency that’s capable of being transferred anywhere in the world without a central bank or other intermediary needed to transfer it from person to person. Bitcoin’s definition also requires that it has a known monetary value that can’t be altered.
This article explains the basics of Bitcoin: what it is, how to get it, and some confusing Bitcoin-related vocabulary.
In its simplest terms, Bitcoin is a decentralized, digital currency. No government, institution, or authority controls Bitcoin; many Bitcoin enthusiasts believe this is one of the currency’s biggest advantages. Bitcoin owners are completely anonymous and use encryption keys instead of personally identifiable information (PII) to identify themselves and their accounts. Another advantage is that Bitcoin isn’t “issued,” like a traditional currency. Instead, it’s “mined” by a computer, which is covered later in the article.
Bitcoin was launched anonymously in 2009 by a person who called themselves Satoshi Nakamoto. Nakamoto’s goal in launching Bitcoin was to create a completely decentralized electronic cash system. Nakamoto allegedly turned over Bitcoin’s source code to others in the Bitcoin community and vanished in 2011. They haven’t been heard from since.
Despite Bitcoin’s somewhat murky origin story, it’s now a globally traded asset. Its daily traded volume is in the tens of billions of dollars. While its regulatory status varies by region, Bitcoin is most commonly regulated as either a currency or a commodity. Some countries, like the U.S., continue to grapple with how to regulate certain aspects of Bitcoin, particularly those that resemble securities.
Bitcoin can be purchased or “mined.” Each method has its advantages and disadvantages.
It’s possible to purchase Bitcoin on a coin exchange. Common ones include Coinbase, Binance, and others. Users typically need to create an account and a cryptocurrency wallet before they can begin buying Bitcoin.
Many people won’t be able to purchase an entire bitcoin because of the high price. For example, at the beginning of 2026, one bitcoin cost over $66,000. However, many coin exchanges, like those listed above, will allow users to buy fractions of coins using an account funded in fiat currency (like U.S. dollars, Euros, or similar currencies). One of bitcoin’s benefits is that it can be purchased in fractional shares and is easily bought with other currencies.
Mining Bitcoin requires a little more (human) brainpower and (computer) energy than just buying it. The business definition of Bitcoin mining has a lot to do with complex math and record-keeping. When someone sends a bitcoin to someone else, the network records that transaction. It also records all the other transactions made over a certain period of time, in a “block.” Using special software, computers known as “miners” inscribe these transactions in a digital ledger. These blocks are known, collectively, as the “blockchain.” They create a record of bitcoin transactions that is transparent and that can’t be altered.
Miners then use increasingly specialized software and energy-intensive hardware to convert these blocks into a sequence of code, known as a “hash.” When a new hash is generated, it’s placed at the end of the blockchain, which is then publicly updated and propagated. As payment for their work, the miner gets 12.5 bitcoins. The value of 12.5 bitcoins fluctuates, but as of early 2026, that’s worth more than $829,000 in U.S. currency.
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. The team’s writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
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