▲Bitcoin is a relatively new type of currency, just like the euro or the dollar. The main difference is that it's a completely digital currency, also known as a cryptocurrency. It's a piece of computer code that is used as a medium of exchange.

▲Just like any other currency, you can store it in an online wallet like a bank account, exchange it for goods and services, and make payments with it. Unlike other currencies, you can use bitcoins without involving a bank or any other third party.

▲You keep your bitcoins in a digital wallet, which can be accessed through your phone or computer. There is no central bank or organization behind Bitcoin. The currency is used on a peer-to-peer basis without control by any government, company, or financial institution.

▲Mining is the process by which new bitcoins are created and entered into circulation, similar to the process of minting new banknotes. Mining is a painstaking and costly process.

▲The value of Bitcoin is determined by supply and demand, therefore it varies, just like stocks. Current affairs and political changes can also cause the value of Bitcoin to increase or decrease quite abruptly.

▲

The value of a single Bitcoin has experienced dramatic swings, rising from less than US$1 in 2011 to over $68,000 at its peak in 2021. As of 2025, a single Bitcoin is worth approximately $97,092, and many of its users remain hopeful that it will eventually stabilize and develop a more consistent value, like gold, as it matures in the global financial landscape.

▲

Bitcoin was associated with all sorts of dodgy dealings like black market purchases and ransom scams when it first came into circulation. But these days, it's commonly used in more mainstream commercial transactions.

▲For this reason, Bitcoin is popular on the 'dark web,' where drugs and weapons are traded. The anonymity is naturally appreciated by those involved in illegal activities online.

▲Some online retailers already accept Bitcoin as a payment method. For example, Microsoft, AT&T, Expedia, and Shopify all allow Bitcoin payments.

▲What's more, an increasing number of physical stores and restaurants are equipping themselves for Bitcoin payment. Examples include Starbucks, Home Depot, and Burger King.

▲Anyone who has tried to send money to another country with a different currency knows that it's complicated, slow, and expensive. International Bitcoin transfers are comparatively cheap and work much faster.

▲Many users prefer Bitcoin because it exists outside of traditional financial institutions. This means you don't have to pay fees to a bank for storing or transferring your money.

▲For the average person wanting to procure a bitcoin, mining is not an option. Instead, they can purchase them at a Bitcoin exchange office. There are several websites that buy and sell bitcoin.

▲The price of a single bitcoin is astronomical these days, so luckily you don't have to buy a full one. It's possible to purchase a fraction of a bitcoin.

▲Bitcoin is also the preferred payment method of online scammers looking for ransom. A common scheme is for the perpetrator to email someone saying they have hacked them and accessed compromising information or photos that they will share if a ransom isn't paid.

▲

To create a Bitcoin wallet, you don't need to provide the usual personal details like your name and billing address. No personal data is required to store and use this currency, meaning it provides a high level of privacy to its users.

▲Bitcoin was invented in 2009 and was the first cryptocurrency. It was created by an unknown cryptographer or group of cryptographers who use the pseudonym Satoshi Nakamoto. Their true identity remains unknown to this day.

▲Each country has its own policy about how Bitcoin payments are taxed. Those using Bitcoin need to do some research and find out how it works in their locale. In some countries, it's totally tax-exempt!

▲

Once data about a Bitcoin transaction is created, it can never be deleted. This is why it's all traceable, and also why most types of fraud are impossible.

▲

It can only be done using powerful, highly sophisticated hardware, and an extremely complex computational math problem. It requires a large number of powerful computers, which is why bitcoin mining is said to have a high carbon footprint.

▲Vancouver, in Canada, was the first city to have a Bitcoin ATM, but they can be found all over the world now. You can enter your Bitcoin address at an ATM, put cash in, and you will receive bitcoins in your digital wallet in return.

▲There is a limit to the number of bitcoins that can exist in the world. According to Bitcoin, there will never be more than 21 million. This limitation helps to secure the value of the existing bitcoins.

▲Bitcoin was the first cryptocurrency to be invented, but it was far from the last. Many other companies are trying, and succeeding, in following the Bitcoin model and creating their own cryptocurrencies.

▲

The value of Bitcoin reached an all-time high in November 2021 and continued to rise. Despite periods of growth, Bitcoin’s value has also faced declines due to shifts in global economic conditions. This ongoing volatility highlights the unpredictable nature of the cryptocurrency market. Additionally, the tariffs imposed on China by US President Donald Trump have created further uncertainty for the crypto market.

Sources: (Bitcoin) (Investopedia) (Good Returns)

▲

Bitcoin has become the favored transfer method for many migrants working abroad when it comes to sending money back home to their families. It's quickly overtaking traditional bank transfers and operators like MoneyGram.

▲Although Bitcoin wallets and users are anonymous, the currency’s system of transparency means that all transactions are public and traceable. All criminal transactions can be tracked, even if the user’s identity is unknown. What’s more, anonymity is lost once the user tries to convert their bitcoin into a non-digital currency like the euro or dollar.

▲

Although they're much rarer, some Bitcoin ATMs actually allow you to convert your bitcoins into cash.

▲

There are currently around 19.9 million bitcoins in existence. Due to the way the mining system works, the process becomes slower and slower the more bitcoins there are in circulation. It's expected that the limit of 21 million bitcoins won't be reached until the year 2140.

▲

Some of the other cryptocurrencies on the rise include Ripple, Ethernum, Dash, Monero, and Litecoin.

▲

There is even a cryptocurrency called Dogecoin, which features the popular doge meme and was created as a joke. Dogecoin experienced a temporary surge in value when Elon Musk tweeted about it in 2021 (also as a joke).

▲

When we think of something valuable, we tend to think of a precious metal like gold. As a society, we have mutually agreed that gold is a highly valuable substance. It's rare because there is a limited supply, it's durable, and it's possible to authenticate whether or not it's the real thing. As such, gold has been used as an effective form of currency for centuries. Its value is agreed upon by all so it can easily be exchanged for goods and services.

Bitcoin aims to be the digital version of gold. It was created as an innovative currency that operates outside of banks and government institutions, the value of which is determined by the mutual agreement of its users.

So, how exactly does Bitcoin work and why is everyone so interested in this form of currency? Click on to find the answers.