22 Sociologist Nigel Dodd argues that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control. These philosophical ideas initially attracted libertarians and anarchists. According to The Economist in 2014, bitcoin functions best as a medium of exchange. The Economist describes bitcoin as “a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks”. Money serves three purposes: a store of value, a medium of exchange, and a unit of account. Economist Paul Krugman argues that cryptocurrencies like bitcoin are only used by bank skeptics and criminals.

Segwit was intended to support the Lightning Network as well as improve scalability. In February 2018, the price crashed after China imposed a complete ban on bitcoin trading. In November 2020, PayPal added support for bitcoin in the US. During the same year, bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges. In December 2017, the first futures on bitcoin was introduced by the Chicago Mercantile Exchange (CME). SegWit opponents, who supported larger blocks as a scalability solution, forked to create Bitcoin Cash, one of many forks of bitcoin.

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The blockchain is implemented as an ordered list of blocks. 215-219 Individual blocks, public addresses, and transactions within blocks are public information, and can be examined using a blockchain explorer. The blockchain is maintained by a peer-to-peer network. A new block is created every 10 minutes on average, updating the blockchain across all nodes without central oversight. Nodes validate and broadcast transactions, each maintaining a copy of the blockchain for ownership verification. This process tracks bitcoin spending, ensuring each bitcoin is spent only once. Unlike a traditional ledger that tracks physical currency, bitcoins exist digitally as unspent outputs of transactions.

Bitcoin Core is among the best known clients. Third-party internet services, called online wallets or hot wallets, store users’ credentials on their servers, making them susceptible of hacks. The Lightning Network, second-layer routing network, is a potential scaling solution. Cold storage protects bitcoins from such hacks by keeping private keys offline, either through specialized hardware wallets or paper printouts. Nakamoto limited the block size to one megabyte. Forks of Bitcoin Core exist such as Bitcoin Unlimited. 1 or lightweight clients, just to send and receive transactions without a local copy of the entire blockchain. The limited block size and frequency can lead to delayed processing of transactions, increased fees and a bitcoin scalability problem.