What is Bitcoin?.

Bitcoin was introduced in a 2008 whitepaper, shortly after the financial crisis, as an alternative to the banking system. The goal was a digital payment method allowing users to pay each other directly, without a bank in between.

Since launching in January 2009, the Bitcoin network has run continuously, maintained by thousands of independent computers (nodes) around the world.

A defining feature of Bitcoin is its fixed cap of 21 million coins. New bitcoin is released as a reward to miners who process transactions, but that pace halves roughly every four years in an event called the 'halving'.

This built-in scarcity leads supporters to compare Bitcoin to digital gold. That doesn't mean the price is stable, though: Bitcoin has a history of sharp price swings in both directions.

Owning bitcoin really means controlling a private key that authorises spending those coins. Transactions are grouped into blocks and added to the blockchain by miners through the proof-of-work mechanism.

Once confirmed a few times, a transaction is effectively irreversible. This differs from a bank transfer, which can sometimes still be reversed: with Bitcoin, that is not possible in practice.

European consumers typically buy bitcoin through a crypto exchange, which since 2024 must be licensed under the MiCA regulation as a crypto-asset service provider (CASP). This offers more protection than platforms based outside the EU.

After buying, you can leave bitcoin on the exchange or move it to your own wallet. With a self-custody wallet, you control the private keys yourself, which brings more responsibility but also more control.

Bitcoin's price can rise or fall by tens of percent within days. Never invest money you need in the short term, and treat crypto as a high-risk asset class.

If you lose access to your private keys or wallet backup, your bitcoin becomes permanently inaccessible. There is no customer support that can restore it. Also stay alert to phishing and fake platforms impersonating known exchanges.

Bitcoin has a relatively narrow purpose: being a decentralised means of payment and store of value. Other networks, such as Ethereum, offer broader programmable functionality like smart contracts.

For many investors, Bitcoin is considered the most established and liquid cryptocurrency, which is not the same as risk-free: it remains a volatile and relatively young financial instrument.