Bitcoin (BTC)

System: Bitcoin — Money and Payments

Bitcoin provides a permissionless peer-to-peer payment and final settlement network, enabling users and merchants to settle payments and transfers using on-chain BTC transactions. Founded in 2009, it uses Proof-of-Work (SHA-256) consensus with Nakamoto consensus, a UTXO-based ledger, and a peer-to-peer networking model, probabilistic finality, and a fixed-supply BTC issuance schedule with quadrennial halvings. The system boundary includes Bitcoin mainnet consensus rules, nodes, miners, and Bitcoin Core client software, and excludes Lightning Network, and other L2, extensions and third-party wrapped BTC tokens.

Market Data

Price$78421.00
Market Cap$1570.16B
Fully Diluted Valuation$1570.16B
30d Change17.10%
365d Change-19.30%

Token Functionalities

Collateral

  • Financial Collateral (Strong) [Exogenous]

    Right to use BTC in DeFi applications in external systems as financial collateral. There is an extensive usage of wrapped BTC in other L1 or L2 systems.

  • Performance-Bond [Exogenous]

    Right to stake BTC in certain restaking protocols built as L2 systems on Bitcoin. For example right to lock BTC in a Babylon-recognised staking script and delegate it to a Babylon Finality Provider, with the stake subject to protocol-defined slashing (burn) if the delegated Finality Provider double-signs.

Service Provision

  • State Transition Execution and Transaction Sequencing [Exogenous]

    Stacks’ consensus design lets participants use BTC as the work input to perform an external network role (block-production competition). In practice, a participant commits/spends BTC per Stacks’ rules in order to compete for block selection and earn Stacks-native rewards.

Payments

  • General Medium of Exchange [Exogenous]

    Right to discharge a payment obligation to a willing counterparty for goods or services outside the system. This right exists only with a willing counterparty and is not system-enforced or regulatory-enforced. Right to trade on centralised exchanges with BTC where BTC is the quote asset in the trading pair.

  • Native Resource Fee (Strong)

    Right to pay BTC-denominated transaction fees to consume Bitcoin blockspace.

System Attributes

Operating Model

<p>Bitcoin&nbsp;is&nbsp;a&nbsp;system&nbsp;where&nbsp;core&nbsp;rules&nbsp;are&nbsp;executed&nbsp;and&nbsp;enforced&nbsp;on-chain&nbsp;by&nbsp;consensus,&nbsp;where&nbsp;users&nbsp;submit&nbsp;transactions&nbsp;directly&nbsp;to&nbsp;a&nbsp;public&nbsp;mempool&nbsp;and&nbsp;the&nbsp;protocol’s&nbsp;hardware&nbsp;operators&nbsp;(miners&nbsp;and&nbsp;full&nbsp;nodes)&nbsp;validate,&nbsp;order,&nbsp;and&nbsp;finalize&nbsp;state&nbsp;transitions.&nbsp;Access&nbsp;is&nbsp;permissionless;&nbsp;the&nbsp;scarce&nbsp;resource&nbsp;is&nbsp;blockspace,&nbsp;paid&nbsp;for&nbsp;with&nbsp;the&nbsp;native&nbsp;token&nbsp;(BTC)&nbsp;via&nbsp;protocol-defined&nbsp;fees.&nbsp;State&nbsp;is&nbsp;replicated&nbsp;across&nbsp;nodes&nbsp;and&nbsp;settlement&nbsp;is&nbsp;achieved&nbsp;through&nbsp;the&nbsp;chain’s&nbsp;consensus&nbsp;(probabilistic&nbsp;finality&nbsp;under&nbsp;PoW).&nbsp;Upgrades&nbsp;occur&nbsp;via&nbsp;client&nbsp;software&nbsp;releases&nbsp;adopted&nbsp;by&nbsp;independent&nbsp;node&nbsp;operators;&nbsp;there&nbsp;is&nbsp;no&nbsp;centralized&nbsp;operator&nbsp;providing&nbsp;the&nbsp;core&nbsp;service.</p>

Value Creation

<p>The&nbsp;Bitcoin&nbsp;blockchain&nbsp;exclusively&nbsp;creates&nbsp;value&nbsp;on-chain&nbsp;by&nbsp;providing&nbsp;censorship-resistant&nbsp;settlement&nbsp;and&nbsp;a&nbsp;native&nbsp;bearer&nbsp;asset&nbsp;(BTC)&nbsp;transferable&nbsp;via&nbsp;transactions&nbsp;recorded&nbsp;on&nbsp;the&nbsp;Bitcoin&nbsp;blockchain.</p>

Value Capture

Value is captured through block rewards (issuance) and transaction fees, and routed primarily to miners/mining pools who successfully mine blocks and include transactions.

Governance

Governance is primarily participant-based: changes to consensus rules are effectuated through software adoption by network participants (not by BTC-holder voting).