Bitcoin is a decentralized digital currency that runs on a public ledger called a blockchain, without a central bank or single administrator controlling it. Transactions are verified by a distributed network of computers rather than a bank.
Unlike traditional currency, Bitcoin has a fixed maximum supply of 21 million coins, which is part of why some investors view it as a hedge against inflation, though its price has historically been very volatile.
To buy Bitcoin, most people use a cryptocurrency exchange, where you can purchase a fraction of a coin – you don’t need to buy a whole one. Coins are then stored in a digital wallet, either on the exchange or in a separate wallet you control.
Because crypto markets are unregulated compared to traditional finance and prices can swing sharply in short periods, it’s generally recommended to only invest money you can afford to lose, and to research any platform thoroughly before using it.
Bitcoin remains the most well-known cryptocurrency, but it’s one of thousands – understanding the basics of how it works is a useful foundation before exploring the wider crypto market.