What Is Bitcoin? How the Network, the 21 Million Supply and Its Markets Work

Bitcoin is a digital currency run by a public network of computers with no bank in charge, and a supply schedule in its code that stops just under 21 million.

Bitcoin is two things with one name: a network that keeps a shared record of who owns what, and the coin that record tracks. This page covers how the network adds new blocks, how new bitcoin is issued and why the total stops near 21 million, the ways people hold and trade it today, from exchanges to US spot funds and perpetual futures, and which of those markets Kresmion shows with live data. It is descriptive throughout.

Where Bitcoin came from

Bitcoin was described in a white paper by an author using the name Satoshi Nakamoto, titled "Bitcoin: A Peer-to-Peer Electronic Cash System." The paper set out a way for two parties to pay each other online without a bank or payment company in the middle, with a public record that anyone can check and that no single party can rewrite.

The network itself started with its first block, called the genesis block, which carries a timestamp of 3 January 2009 at 18:15 UTC. Every block since links back to it.

How the network works: blocks, mining and the 10-minute target

Transactions are collected into blocks. Each block contains a reference to the block before it, so the blocks form a chain, which is where the word blockchain comes from. Independent computers, called nodes, keep a full copy and check every block against the same rules.

New blocks are added by miners. To add a block, a miner has to find a number that makes the block's fingerprint (its hash) fall below a target, and the only known way to do that is to try enormous numbers of guesses. This is called proof of work. The first miner to find a valid answer broadcasts the block and other nodes check it. If two valid blocks appear at once, nodes follow whichever chain ends up with the most total proof of work, and the other block is dropped.

The rules aim for one block every 10 minutes. Bitcoin's rules, as written in the code of Bitcoin Core, the main node software, set that spacing and recalculate how hard the puzzle is every 2,016 blocks, which is two weeks at the target pace. If blocks have been arriving faster than every 10 minutes, the puzzle gets harder, and if slower, it gets easier. The pace still drifts: across the 210,000 blocks before April 2024, blocks arrived on average every 9.87 minutes, according to the block timestamps.

Supply: why it stops near 21 million

New bitcoin enters circulation only as a reward to the miner of each block, called the block subsidy. The subsidy started at 50 bitcoin and is cut in half every 210,000 blocks, an event known as the Bitcoin halving. Since 20 April 2024 it has been 3.125 bitcoin per block.

Adding up every subsidy the schedule will ever pay gives 20,999,999.9769 bitcoin, which is why Bitcoin's supply is described as capped at 21 million. Each bitcoin divides into 100 million units called satoshis, so the smallest amount the system can record is 0.00000001 bitcoin.

By block 969,440, mined at 10:28 UTC on 1 October 2026, the schedule had released about 20.09 million bitcoin, roughly 95.7 percent of the total. The number that can actually be spent is lower for several reasons: the 50 bitcoin in the genesis block can never be spent under the software's rules, and coins whose private keys have been lost still count in the total. At the 10-minute target, the subsidy reaches zero around the year 2140, after which miners would be paid only through transaction fees.

How people hold and trade Bitcoin

Owning bitcoin means controlling the private key that can sign a transaction moving it. There are three common ways to hold or get exposure to it.

• Self-custody. A person holds their own keys in a wallet. Nobody else can move the coins, and nobody can recover them if the keys are lost.
• An exchange or broker account. The platform holds the keys and the customer holds a claim on the platform, which adds the platform's own risk.
• A spot Bitcoin fund. On 10 January 2024 the US Securities and Exchange Commission approved the listing and trading of a number of spot Bitcoin exchange-traded products, funds whose shares are backed by bitcoin the fund holds. The SEC chair's statement that day added that the agency "did not approve or endorse bitcoin." How to read spot Bitcoin ETF flows explains the daily flow figures for these funds, and what an ETF is covers the structure.

Kresmion's free research page for IBIT, BlackRock's iShares Bitcoin Trust ETF, lists the fund's SEC filings, including its quarterly 10-Q reports, and the Form 13F positions reported in it by the institutional managers Kresmion tracks. Kresmion's crypto ETF desk, which opens with a free account, marks a session pending and withholds the figure when it cannot source that day's flows for the Bitcoin funds, rather than estimating it; recent sessions were withheld on 1 October 2026.

Bitcoin also trades through derivatives, including perpetual futures: contracts with no expiry date that track the price through a periodic funding payment between holders of long and short positions (see what a perpetual futures contract is).

What Kresmion's live data showed on 1 October 2026

Kresmion's derivatives feed records Bitcoin perpetual futures across four major exchanges, and shows them on its crypto derivatives pages, which open with a free account. At 10:56 UTC on 1 October 2026:

Open interest is the value of contracts still open (see what open interest is). The funding figure is the eight-hour equivalent of each venue's rate, weighted by its open interest, and multiplying by the 1,095 eight-hour periods in a year gives the annual figure. The liquidation figures appear on Kresmion's crypto overview desk, also behind a free account, and come from one exchange, so they are a sample of forced closures, not a market total (what a crypto liquidation is explains the mechanics). None of these readings says where the price goes next.

Bitcoin also moves on its own blockchain, and coins moving onto or off exchanges are tracked as exchange flows (see what exchange netflow is). Kresmion's full exchange flow tracker, after sign-in, counts Bitcoin flows only for Binance, OKX and Bybit, the exchanges whose Bitcoin wallets meet its evidence bar (its whale transfer feed reads a wider wallet list, which is why older figures on the netflow page also mention Kraken). Coinbase and Kraken publish no list of their Bitcoin wallets, and Crypto.com's known ones fall short of the tracker's evidence bar, so all three are left out of Bitcoin flows rather than shown as zero, and withdrawals are only partly attributed even at the three tracked exchanges. Without an account, the public exchange flow page shows the Solana leg only.

Honest limitations

The supply figures are computed from the subsidy schedule, not from a count of spendable coins, so they overstate what can actually move by the lost coins nobody can measure precisely. Block timestamps are set by miners and can differ from the real time by minutes or more, so the 9.87-minute average is approximate. Kresmion's derivatives figures cover four venues and its liquidation figures one, so neither is a market-wide total, and both describe a single moment that has already changed. Exchange flow tracking depends on knowing which wallets belong to which exchange, and that list is incomplete. Daily flows for the US spot Bitcoin funds are not always available on Kresmion, as described above.

Key takeaways

Frequently asked questions

Is Bitcoin the same thing as blockchain?

No. A blockchain is a way of storing records in linked blocks, and Bitcoin was the first widely used one. Bitcoin is a specific network and coin built on that design, and many other blockchains, such as Ethereum, use the same broad idea with different rules.

Who controls Bitcoin?

No company or government runs the network. Miners add blocks, but every node checks those blocks against the rules and rejects any that break them. Changing a rule requires new software that the people running nodes and miners choose to adopt.

Can the 21 million limit change?

The limit comes from the subsidy schedule in the software, and the 210,000-block halving interval has applied at all four halvings so far. Changing it would need the network's participants to adopt different software, which is the same route any rule change takes.

What is a satoshi?

A satoshi is one hundred-millionth of a bitcoin, the smallest unit the system records. Prices and fees are often quoted in satoshis because a single bitcoin is a large unit.

Do ETF flows or the funding rate predict Bitcoin's price?

No. Fund flows record money that has already moved into or out of the funds, and the funding rate measures what holding a perpetual position cost at one moment. Both describe positioning that has already happened, not where the price goes next.

This page is information, not investment advice.

---

Source: Satoshi Nakamoto, "Bitcoin: A Peer-to-Peer Electronic Cash System," https://bitcoin.org/bitcoin.pdf ; Bitcoin Core source code, block subsidy function (src/validation.cpp, which also notes that the genesis block's coinbase is unspendable), https://github.com/bitcoin/bitcoin/blob/master/src/validation.cpp ; Bitcoin Core consensus parameters, 10-minute spacing and two-week retarget (src/kernel/chainparams.cpp), https://github.com/bitcoin/bitcoin/blob/master/src/kernel/chainparams.cpp ; block timestamps for the genesis block, block 630,000, block 840,000 and block 969,440, as recorded in each block's header on the Bitcoin blockchain ; supply totals and average block time computed by Kresmion from the subsidy schedule and those timestamps ; US Securities and Exchange Commission, Statement on the Approval of Spot Bitcoin Exchange-Traded Products, 10 January 2024, https://www.sec.gov/newsroom/speeches-statements/gensler-statement-spot-bitcoin-011023 ; Kresmion derivatives feed (perpetual open interest and open-interest-weighted funding across four major exchanges), 1 October 2026 at 10:56 UTC ; Kresmion liquidation feed (one exchange), 24 hours to 10:00 UTC on 1 October 2026 ; Kresmion IBIT research page, https://kresmion.com/research/IBIT.

Kresmion Research.