What Is Bitcoin? A Beginner's Guide
Bitcoin is a digital currency that runs on a worldwide network of computers instead of a bank or a government. Anyone can send it to anyone else, at any time, without asking permission from a middleman.
How does it work?
Every Bitcoin transaction is recorded on a public ledger called the blockchain. Thousands of computers (called nodes) keep a copy of that ledger and check each new transaction against the rules. Because everyone holds the same record, nobody can spend the same coin twice.
New transactions are grouped into blocks. A block is added to the chain roughly every ten minutes by miners, who use computing power to secure the network and are rewarded with newly created bitcoin.
Why is it limited?
The Bitcoin software only allows 21 million coins to exist. That fixed supply is one of the main reasons people compare it to digital gold, because nobody can print more of it when they like.
What do people use it for?
- Holding it as a long-term store of value.
- Sending money across borders quickly.
- Paying with merchants who accept it.
- Learning how blockchains work.
The risks to understand first
- Price swings. Bitcoin can rise or fall by double digits in days. Only invest what you can afford to lose.
- You are your own bank. If you lose your private keys or recovery phrase, nobody can recover your coins for you.
- Scams. Be careful of anyone promising guaranteed returns or asking for your recovery phrase.
Where to start
Open the Markets page to see the live Bitcoin price, then read our guide on how to store crypto safely before you buy anything.
This article is for information only and is not financial advice.
