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Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator.The network is peer-to-peer and transactions take place between users directly, without an intermediary.

Bitcoin was originally created as an alternative, decentralized payment method. Unlike international bank transfers at the time, it was low-cost and almost instantaneous. An added benefit for merchants (less so for users) was that it was irreversible, removing the threat of expensive charge-backs. However, the improvement in domestic payment methods and the rapid development of alternative (non-cryptocurrency) forms of international transfers has reduced bitcoin's advantage in this area, especially given its increasing fees and frequent network bottlenecks.

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Money has changed forms over the years, from gold coins, to paper bills, to proof of credit. While these forms of money are physically very different, they are all still backed by governments and as such constitute the fiat currencies of the official monetary system. In 2009, bitcoin introduced the world to a completely different kind of currency—one not backed by any government or bank but created through computer code. This cryptocurrency or virtual currency has gained in value and users.

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