What is Bitcoin and how does it work?

Bitcoin is a decentralized digital currency that allows users to make peer-to-peer transactions without the need for intermediaries like banks. Powered by blockchain technology, Bitcoin operates on a network of computers called nodes, which collectively maintain a transparent and immutable ledger of all transactions. When users initiate a transaction, it gets broadcasted to the network and grouped with other pending transactions into a block. Miners then compete to solve a complex mathematical puzzle, validating the transactions within the block. The first miner to solve the puzzle adds the block to the blockchain, ensuring the transaction's permanence. To incentivize miners and control the issuance of new Bitcoins, a reward is given to the winning miner. Bitcoin's limited supply, along with its cryptographic security measures, aims to create a digital currency that is scarce, secure, and free from government control.