Bitcoin, introduced in 2009 by an anonymous entity known as Satoshi Nakamoto, is a decentralized digital currency that operates on a peer-to-peer network without a central authority. It is based on blockchain technology, a public ledger that records all transactions transparently and immutably. Bitcoin's key innovation is its use of cryptographic principles to secure transactions and control the creation of new units, making it resistant to fraud and counterfeiting.

Transactions in Bitcoin are verified by network nodes through cryptography and recorded in the blockchain. Miners, individuals who validate and add new transactions to the blockchain, are rewarded with newly created bitcoins, a process known as mining. This ensures the network's security and the steady release of new bitcoins, with a total supply capped at 21 million.

Bitcoin's decentralized nature offers advantages such as lower transaction fees compared to traditional financial systems and the ability to operate across borders without intermediaries. It has gained significant attention as a store of value and a hedge against inflation, often likened to "digital gold."

However, Bitcoin also faces challenges, including regulatory scrutiny, price volatility, and concerns over its environmental impact due to the energy-intensive mining process. Despite these issues, Bitcoin remains a pioneering force in the world of cryptocurrencies, influencing the development of thousands of other digital assets and fostering the growth of blockchain technology.$BTC