Bitcoin is a cryptocurrency based on a decentrally organized booking system. Payments are cryptographically legitimized (digital signature) and processed via a network of computers with equal rights (peer-to-peer). Unlike the traditional banking system, no central clearing of money movements is necessary. Proofs of ownership of Bitcoin are stored in personal digital wallets. The exchange rate of a Bitcoin to other means of payment is determined by pricing on the free market.

The Bitcoin payment system was invented by Satoshi Nakamoto, appearing under a pseudonym, according to Nakamoto in 2007, who described it in a November 2008 publication and released open-source reference software for it in January 2009. The Bitcoin network is based on a decentralized database shared by participants, the blockchain, in which all transactions are recorded. Cryptographic techniques are used to ensure that valid transactions with Bitcoins can only be made by the respective owner and that monetary units cannot be issued more than once.

Unlike the issuance of new banknotes by a central bank, new Bitcoin units are created through the computer-based solution of cryptographic tasks, known as mining (prospecting). Bitcoin has come under increasing criticism due to the high energy consumption of mining and the associated CO2 emissions.


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