What is Bitcoin and how does it work?

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network, allowing users to send and receive payments over the internet without the need for intermediaries like banks. It was introduced in 2009 by an anonymous person or group of people under the pseudonym Satoshi Nakamoto. Bitcoin transactions are verified through a consensus process called mining, where miners use computational power to solve complex cryptographic puzzles and validate transactions. The total supply of Bitcoin is capped at 21 million coins, making it a deflationary asset. Bitcoin’s value fluctuates based on demand, market sentiment, and broader economic factors.