Bitcoin Fundamentals: Structure, Scarcity and Use

Introduced in 2009, Bitcoin was the first application of blockchain technology and remains the most widely recognized cryptocurrency.¹ Bitcoin exists on its own blockchain, a shared network that records and verifies transactions.¹

How the Bitcoin Network Works
The Bitcoin blockchain functions as a decentralized ledger that records every transaction in chronological order. Transactions are grouped into “blocks,” validated by the network and added to the blockchain at regular intervals.

Key Features of the Bitcoin Network

• TRANSPARENCY The transaction history is publicly viewable.
• DECENTRALIZATION No single entity controls the network.
• SECURITY Transactions are validated using cryptographic methods.
• IMMUTABILITY Once recorded, transactions generally cannot be altered without broad network consensus.

Bitcoin and Digital Scarcity
A defining characteristic of Bitcoin is its fixed supply. The Bitcoin protocol limits total issuance to 21 million coins, a feature embedded in the network’s code. New Bitcoin is introduced at a predetermined pace that slows over time through a process known as block reward halving.²

Approximately 20 million Bitcoin—roughly 95% of the total eventual supply—have already been created as of early 2026.³ The remaining supply is scheduled to be issued gradually over the coming decades. This programmed scarcity has contributed to frequent comparisons between Bitcoin and scarce physical assets such as gold.

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^{RISK CONSIDERATIONS
Digital assets are highly volatile and unpredictable. Their value is influenced by, but not limited to, supply and demand, investor confidence and their willingness to purchase it using traditional currencies, inflation, interest rates, currency exchange rates, changing regulations in the U.S. and abroad, and economic trends. Investors also face risks such as price swings, flash crashes, fraud, and cybersecurity threats. Digital assets may be more vulnerable to market manipulation than securities.}

^{Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.}

^{Cryptocurrency (notably, Bitcoin) operates as a decentralized, peer-to-peer financial exchange and value storage that is used like money. It is not backed by any government. Federal, state or foreign governments may restrict the use and exchange of cryptocurrency. Cryptocurrency may experience very high volatility.}