What is Bitcoin (BTC) & how does it work?

What is Bitcoin (BTC)? Bitcoin is the world’s first and most widely used cryptocurrency; a decentralised digital currency that enables peer-to-peer transactions without the need for a central authority. Our guide explains how Bitcoin works and how you can securely buy, sell and store it.

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What is Bitcoin (BTC)?

Bitcoin is a decentralised digital currency that allows people to send and receive money over the internet, but without the need for a bank or central authority like the Federal Reserve. Created in 2009 by an anonymous individual or group under the pseudonym Satoshi Nakamoto, Bitcoin pioneered the concept of a peer-to-peer financial system powered by blockchain technology.

Unlike traditional fiat currencies, Bitcoin is entirely digital, existing only as computer code. Instead of relying on intermediaries to validate its transactions, Bitcoin uses a decentralised network of computers (nodes) that work together to verify and record every transaction on a public ledger, known as the blockchain.

As Bitcoin is decentralised, no single entity controls the network, making it resistant to censorship, interference or manipulation. With a hard cap of 21 million coins ever to be created, Bitcoin operates as a deflationary asset designed to give individuals ultimate control over their wealth. For anyone looking to buy, sell or store Bitcoin safely, Crypto.com is a popular, user-friendly platform.

How does Bitcoin work?

Bitcoin operates on a decentralised digital ledger called a blockchain, which records all transactions across a global network of computers. When you send or receive Bitcoin, the transaction is broadcast to the network and grouped with others into a block before being validated through a process called Proof of Work (PoW).

Miners play a critical role by using advanced ASIC hardware to solve complex cryptographic puzzles. Once validated and added to the blockchain, transactions become permanent and irreversible. To store and manage your digital assets securely, users rely on digital wallets—divided into hot wallets (connected to the internet for trading) and cold wallets (offline storage for maximum security).

What is the price of Bitcoin (BTC)?

Bitcoin’s price is constantly changing, driven by global supply and demand, market sentiment, and macroeconomic trends. Reaching milestones such as its all-time high near $122,000 in mid-2025, Bitcoin continues to be regarded by many institutional and retail investors as ‘digital gold’ and a reliable long-term store of value.

Bitcoin blockchain explained

The blockchain is a public, distributed ledger that records every transaction ever made. Each block is cryptographically linked to the previous block via a unique hash code, creating an unbreakable, tamper-proof chain. This transparency eliminates the need for trusted intermediaries like traditional banking institutions.

Bitcoin characteristics: What's the purpose of Bitcoin?

• Store of value: Scarcity driven by a hard cap of 21 million coins mimics precious metals like gold.
• Medium of exchange: Fast, borderless peer-to-peer digital transactions without high cross-border fees.
• Inflation hedge: Fixed issuance protects purchasing power against traditional fiat currency devaluation.

History of Bitcoin

Introduced in 2008 via a whitepaper by Satoshi Nakamoto, Bitcoin launched with the Genesis Block in January 2009. Milestone moments include Bitcoin Pizza Day in 2010, mainstream corporate adoption in the 2020s, and increasing global integration across financial ecosystems.

Who created Bitcoin?

Bitcoin was created under the pseudonym Satoshi Nakamoto, who mysteriously stepped away from the project in 2010. The true identity remains unknown, reinforcing Bitcoin's decentralised and leaderless ethos.

Strengths of Bitcoin

• Financial Inclusion: Provides banking access to unbanked populations globally.
• Decentralisation: Operates entirely peer-to-peer without single points of failure.
• Transparency: Public ledger verification ensures absolute accountability and security.

Bitcoin supply: How many Bitcoins are there?

With a hard maximum supply of 21 million coins, roughly 95% of all Bitcoins are already in circulation. Regular halving events every four years reduce block rewards, slowing down issuance and cementing its status as scarce digital gold.

How to buy Bitcoin (BTC)

1. Download the App: Get the official Crypto.com App on your mobile device.
2. Sign up and complete KYC: Verify your identity securely within minutes.
3. Deposit funds: Fund your account via bank transfer, card, or crypto.
4. Buy Bitcoin: Search BTC, enter your desired amount, and execute your purchase instantly.

How to sell Bitcoin (BTC)

1. Access your wallet: Open your Crypto.com App and select your Bitcoin wallet.
2. Select 'Sell': Choose how much BTC you want to liquidate into cash or other tokens.
3. Confirm transaction: Review current exchange rates and finalise your order.
4. Withdraw or Spend: Transfer fiat to your bank account or spend via your Crypto.com Prepaid Visa Card.

Bitcoin halving and mining explained

Halving events cut miner block rewards in half every four years to control inflation. Bitcoin mining validates transactions through Proof-of-Work, securing the network while rewarding participants with newly minted BTC and transaction fees.

Frequently Asked Questions (FAQ)