What Is Bitcoin? A Complete Guide for Crypto Beginners

In this article, learn what Bitcoin is, how the system behind it works, and the basics of navigating the original cryptocurrency.

What Is Bitcoin?

On a technical level, Bitcoin can be thought of as numbers stored on the Internet. It was conceived in 2008 when someone under the name ‘Satoshi Nakamoto’ (whose real identity is still a mystery) published a white paper called ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. The title of the paper captures the two key features of Bitcoin:

• Peer-to-Peer (P2P): Bitcoin allows direct P2P payments without third-party intermediaries, such as banks or payment processors. This is a major reason why Bitcoin is commonly regarded as a decentralised currency.
• Electronic Cash: There have been many past attempts to develop electronic cash, but Bitcoin stands out for its clever use of existing technologies like cryptography and distributed systems, making it highly secure and efficient.

How Does Bitcoin Work?

Bitcoin uses blockchain technology. Regular users can access the system to make transactions, while miners work behind the scenes to power and maintain the network. Anyone can partake in mining.

Users send and receive money via the Bitcoin system, with the difficult behind-the-scenes work handled by miners.

Miners need to run computers with a lot of processing power in order to store data, handle and broadcast transactions, and solve a complex mathematical puzzle to reach what is known as ‘consensus‘. This mechanism is called Proof of Work (PoW). When someone sends a new transaction to the Bitcoin network, miners pick up the transaction and complete the steps above behind the scenes.

Miners do not volunteer to maintain this decentralised network for free. They are incentivised to do so by receiving mining rewards and transaction fees upon completing the equation and validating transactions. They are, of course, paid in BTC.

How Is Bitcoin Different From Traditional Finance?

One of Bitcoin’s most significant contributions is its foundational role in decentralised finance (DeFi). By eliminating intermediaries, Bitcoin enables financial transactions to occur directly between users. The system is then made open, permissionless, and resistant to censorship.

While most DeFi protocols today are built on smart contract platforms like Ethereum, Bitcoin remains the ideological and technical bedrock for the broader movement. Innovations like the Lightning Network and tools like Stacks and Taproot are gradually expanding Bitcoin’s potential in decentralised payments, programmable money, and trustless settlement.

Below are the key points characterising the cryptocurrency market in which Bitcoin operates:

1. The only asset class that is traded 24 hours a day, seven days a week.
2. A global market without geographical barriers.
3. The first payment network that is fully autonomous, self-sustaining, and decentralised.
4. A liquid and highly efficient market (for major cryptocurrencies). 
5. A new and high growth market that attracts a profusion of talent and capital.
6. A highly volatile market, bringing a unique set of both advantages and disadvantages to market participants.

Crypto.com’s converter feature is used to check the price of Bitcoin in real time.

In the Crypto.com App, users can conveniently buy Bitcoin and over 400 other tokens using a credit/debit card, Apple Pay, Google Pay, or any one of the 20-plus supported fiat currencies transferred from their bank account. To do so, users can tap ‘Buy’ from the home screen and select the token to purchase, as well as the payment method. 

Visit the Help Centre for more information, and download the Crypto.com App here.

Why Is Bitcoin Revolutionary?

Bitcoin paved the way for the most significant technological revolution since the internet — a global digital currency without intermediary fees. It is the first fully autonomous and self-sustaining payment network, where no single party or incident can intervene or terminate the system. Users can access it anytime, anywhere in the world, as long as they have internet access.

Other interesting features of Bitcoin (and cryptocurrencies in general) include:

• Limited Supply: Bitcoin has a hard cap of 21 million coins. As of 2025, over 19.7 million have already been mined. This limited supply is why Bitcoin is often referred to as ‘digital gold‘.
• Fast Settlement: Bitcoin settlement typically takes about 10 minutes per block, but confirmations for large transactions may take longer.

Smart Contracts: While limited compared to Ethereum, Bitcoin supports basic smart contract functionalities through its scripting language. Additional capabilities are being explored via tools like Taproot and Layer-2 protocols.

Bitcoin Payment Protocols

Beyond the base Bitcoin blockchain, several payment protocols and second-layer solutions have emerged to improve Bitcoin’s scalability, transaction speed, and utility.

Lightning Network

The Lightning Network is a Layer-2 payment protocol built on top of Bitcoin. Compared to Bitcoin’s on-chain settlement time, the Lightning Network brings near-instant, low-cost transactions by allowing users to open payment channels off-chain. 

Once the transaction is complete, only the final settlement is recorded on the Bitcoin blockchain. The Lightning Network drastically reduces network congestion and is increasingly adopted for everyday microtransactions, merchant payments, and cross-border remittances.

Taproot

Activated in 2021, Taproot enhances privacy and efficiency by aggregating multiple transaction signatures into one. This upgrade paves the way for more complex, scalable, and private applications on Bitcoin.

Ordinals and Runes

Ordinals and Runes are protocols that let users inscribe data and mint digital assets directly on the Bitcoin blockchain. Ordinals support non-fungible tokens (NFTs), while Runes are designed for fungible tokens. Both have opened new use cases, though they remain controversial due to their impact on network space and fees.

Bitcoin ETFs and Mainstream Adoption

Bitcoin’s mainstream financial acceptance saw the approval of spot Bitcoin exchange-traded funds (ETFs) in January 2024 by the US Securities and Exchange Commission (SEC). This marked a watershed moment for the crypto industry after more than a decade of rejections.

Bitcoin ETFs allow investors to gain exposure to Bitcoin’s price without holding the asset directly. These regulated vehicles offer convenience, custody solutions, and integration into retirement accounts, making them attractive to institutions and traditional investors.

The initial approvals included 11 ETFs from major financial institutions; as of 2025, US spot Bitcoin ETFs collectively hold over 1.26 million BTC at the time of writing — about 6% of the total supply — across major issuers like BlackRock (IBIT), Fidelity (FBTC), and Grayscale (GBTC). ETF inflows have also been credited with triggering major price rallies, particularly after the 2024 Bitcoin halving. Check out a full guide to Bitcoin and Ethereum ETFs.

Is Bitcoin Safe?

While there is no simple answer, the Bitcoin network is reasonably safe and has endured real-life usage for over a decade. It is equally important for users to be cautious of how they store crypto and protect their keys.

To keep their cryptocurrency holdings safe, users can store them in crypto wallets using an institutional-grade storage solution that offers customer service support. Additional security and data privacy best practices can be found here.

Bitcoin: Timeline of Key Events

Bitcoin Price Trends and Halving Cycles

Bitcoin’s price history is marked by sharp cycles of growth and correction, often in response to macroeconomic factors and halving events, which occur approximately every four years. These halvings reduce the rate of new BTC issued by half, creating programmed scarcity, which historically has preceded major price rallies.

The most recent halving took place in April 2024, reducing the block reward from 6.25 to 3.125 BTC. In the months that followed, Bitcoin crossed $100,000 for the first time and reached a peak of $110,000 in May 2025.

The long-term trend remains bullish, with increasing institutional adoption and ETF inflows supporting the market.

Check out a deep-dive into Bitcoin’s price trends.

How to Buy Bitcoin 

There are many different ways to purchase Bitcoin, and the right choice for the buyer will depend on their individual preferences. 

• Brokerages are a type of financial service that allow individuals to buy and sell cryptocurrency. They typically provide access to a variety of currencies and features like interest-bearing accounts. The Crypto.com App is trusted by over 80 million users and beginners starting their crypto journey. 
• Exchanges facilitate cryptocurrency trading for individuals and institutions. They also provide an array of features, such as charting and analysis tools, to help users make informed decisions. The Crypto.com Exchange is known for its industry-leading matching engine and security infrastructure. 
• Peer-to-peer marketplaces provide an anonymous way for people to connect and trade cryptocurrency with each other without the need for a third-party intermediary. Crypto.com Onchain is a non-custodial app that gives users full control of their private keys. 
• Cryptocurrency ATMs are similar to traditional ATMs but dispense cryptocurrency instead of cash.

Buying Bitcoin on Crypto.com

Buying BTC and other large-cap digital assets is straightforward with the Crypto.com App. Users can then do so using over 20 supported fiat currencies like USD, EUR, and GBP.

Below is a step-by-step guide to getting started:

1. Download the Crypto.com App, available on the Apple App Store and Google Play.
2. Complete the sign-up process. On-screen prompts are at hand to guide users.
3. Fund the account. Funds deposited using bank transfers will usually clear in one to three days. For those who don’t want to wait, they can fund their account instantly by choosing Apple Pay or a debit/credit card.
4. Once the funds are cleared, users can start buying BTC, plus an extensive collection of altcoins and meme coins.

Conclusion

Bitcoin continues to stand at the centre of the cryptocurrency movement, as both a technological breakthrough and a resilient asset class. Its foundational innovations in decentralised finance (DeFi), limited supply, and peer-to-peer architecture have sparked widespread change across industries and borders.

As the ecosystem matures, Bitcoin’s role has grown from experimental currency to global store of value, investment hedge, and programmable money layer. From institutional adoption and ETF integration to new Layer-2 solutions and emerging payment channels, the Bitcoin network continues to evolve while staying true to its core principles: transparency, security, and decentralisation.

For those exploring Bitcoin for the first time or deepening an understanding of it, this guide lays the foundation for grasping why Bitcoin matters — and why it’s likely here to stay.

Due Diligence and Do Your Own Research

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Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.