The main function of creatine is to act as a buffer for ATP. ATP is the main form of energy consumed by your muscles, where the food you eat such (e.g. glucose) is broken down and used in a series of metabolic reactions to produce ATP. ATP is used in the cross-bridge actinmyosin cycle in muscle cells, and is consumed with each muscle contraction. However, ATP pools in the body are relatively small and are therefore consumed in a short period of time (a matter of seconds) during intense, anaerobic and alactic exercise. Creatine comes into play here where CrP (creatine Phosphate) re-establishes ATP as it is consumed by muscle as it supplies it with additional high energy phosphates.
In short, creatine acts as a buffer to reduce the rate of ATP depletion during anaerobic and alactic erercise. Creatine occurs naturally in the body in relatively small amounts and the 'body building' supplements just provide an additional supply of creatine, this enables you to work harder at the gym. It does not directly contribute to muscle weight gain, however enables you to work your muscles harder.
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Creatine is normally marketed as a weight gain product. It professes to promote muscle gain while burning fat. Muscle weighs roughly twice as much as fat, so if it does what it says it will do (which I am not saying either way) then you will actually gain weight.