What is Bitcoin, in plain English?

Bitcoin is digital money that runs on a public network called a blockchain. Instead of a bank keeping score, thousands of independent computers (“nodes”) agree on who owns what by sharing the same ledger and following the same rules. Because nobody controls the ledger, you can send value directly to someone else—no bank account or payment processor required.

The original white paper (2008) described Bitcoin as “peer-to-peer electronic cash.” Today, people treat it as internet money, as a store of value, or simply as an asset whose price moves around. Crucially, Bitcoin’s supply schedule is predictable and capped at 21 million coins; new coins enter circulation as rewards for miners who secure the network.

Learn more at the community website Bitcoin.org and the beginner portal Ethereum.org’s crypto overview.

How a blockchain actually works

A blockchain is a shared database that grows in blocks. Each block contains recent transactions plus a pointer (a cryptographic hash) to the previous block, which chains the history together. Because changing one block would break every link after it, altering history is extremely difficult without enormous computing power.

Bitcoin uses proof-of-work (PoW). Miners compete to find a valid hash; the winner proposes the next block and earns a block reward plus transaction fees. This cost (electricity + hardware) deters attackers and, in practice, is why Bitcoin has remained resilient. Other networks, like Ethereum, now use proof-of-stake (PoS), where validators lock up (“stake”) their coins to secure the chain and earn fees.

Keys, wallets, and addresses

A crypto wallet stores your keys, not your coins. Your coins live on the blockchain; your wallet simply proves you can spend them. You get a public address (shareable) and a private key or seed phrase (never share).
If you lose the private key, you lose access—there is no password reset.

• Custodial wallets (exchanges): convenient, but the provider holds your keys. If it’s hacked or freezes withdrawals, you’re exposed.
• Self-custody (software/hardware wallets): you hold the keys. It’s safer if managed well, but you must protect backups and avoid phishing.
• Seed phrase: 12–24 words that recreate your keys. Write them down offline; never type them into random websites or share with “support agents.”

Fees, confirmations, and transactions

Every Bitcoin transaction pays a network fee to incentivize miners to include it in a block.
When the network is busy, fees can spike; when it’s quiet, fees drop. After your transaction is included, nodes consider it “confirmed.” More confirmations mean it’s harder to reverse. For smaller payments, one confirmation is often enough; for larger transfers, people wait for more.

On Ethereum and similar chains, you’ll pay gas to compensate validators for computation and storage.
Because Ethereum supports smart contracts, activity from DeFi, NFTs, or gaming can affect network congestion and gas prices.

Bitcoin versus “other crypto” (the big buckets)

Common risks you should actually plan for

• Volatility: prices can move sharply in hours. Only use money you can afford to have fluctuate.
• Custody risk: exchanges can be hacked or go offline. Consider splitting holdings and learning self-custody.
• Phishing/social scams: fake support, fake airdrops, fake wallets. Never share your seed phrase; bookmark official sites.
• Smart-contract bugs: DeFi protocols can be exploited. Stick to audited, widely used apps; start small.
• Regulatory uncertainty: tax, reporting, and compliance rules vary by country and evolve over time.

How people typically get started (responsibly)

1. Pick your approach: learn first; then decide between a reputable exchange (for convenience) or self-custody (for control).
2. Verify identity: exchanges require KYC. Ensure you’re on the genuine website (padlock icon, correct URL).
3. Set up a wallet: if self-custody, create a hardware or software wallet and back up the seed phrase offline.
4. Practice small: send a tiny test transaction to yourself. Confirm you can receive and send out before scaling up.
5. Enable security: two-factor authentication (TOTP, not SMS), unique passwords, password manager, device hygiene.

Taxes and regulation (quick global notes)

All about Bitcoin and other cryptocurrencies. Most countries tax crypto in some form—often as property or capital assets. Disposals (selling, swapping, spending) can trigger taxable events, while simply holding usually does not. However, every jurisdiction has nuances: reporting thresholds, treatment of staking rewards, or rules for airdrops. Keep records from day one and consult a qualified tax professional for your location.

For consumer protection resources, see national regulator sites or educational hubs like the FCA’s crypto pages (UK) and authoritative introductions such as Ethereum.org’s “What is crypto?”.

Environmental discussion in context

Bitcoin’s proof-of-work consumes energy by design. Supporters argue that PoW anchors bitcoin’s neutrality and security, encourages use of stranded energy, and acts as a buyer of last resort for intermittent renewables. Critics stress total consumption and local externalities. Meanwhile, many newer networks use proof-of-stake, which dramatically reduces operational energy usage. The bottom line: security models differ; so do their trade-offs.

All about Bitcoin and other cryptocurrencies Security checklist you can copy-paste

• Use a password manager; give each exchange/wallet a unique, strong password.
• Turn on app-based 2FA (e.g., Authenticator). Avoid SMS 2FA when possible.
• Record your seed phrase on paper/steel; store in separate, safe locations.
• Bookmark official domains; avoid clicking wallet links from social media.
• Keep some funds in a hardware wallet; keep only “hot” spending amounts in mobile/web wallets.
• Start with small test sends; verify the first and last characters of addresses before confirming.

Use cases you’ll actually encounter

• Global transfers: move value without bank hours, often faster than SWIFT—fees depend on congestion.
• Savings: some treat bitcoin as long-term, programmatically scarce money.
• On-chain apps: lending/borrowing, decentralized exchanges, collectibles, gaming, identity.
• Micropayments: Lightning and other L2s enable instant, tiny payments with low fees.

All about Bitcoin and other cryptocurrencies Jargon buster (mini-glossary)

Where to learn more

For All about Bitcoin and other cryptocurrencies neutral intros and developer-level explainers, start with: Bitcoin.org (Bitcoin basics) and Ethereum.org Docs (smart contracts & tooling).
These hubs keep beginner pages up to date and link to reputable references, tutorials, and glossaries.