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What is Bitcoin, and how does it work? Understanding the crypto basics is essential whether you’re sending payments or just investing in the future of finance.
That’s what we’ll cover today.
We’ll walk you through everything, from what Bitcoin is to what makes the popular digital currency so exciting for investors and holders alike.
Ready to get started?
Let’s start with the crypto basics.
Bitcoin is what some people call “digital gold.” It’s a digital currency that exists only on the internet but holds real value.
It’s decentralized, meaning no bank or government controls it.
Instead of being printed, like paper money, Bitcoin is created through a process called mining. Think of it the same way you think of gold. Gold has to be mined as well — that, alongside scarcity, is what gives it value.
It takes time, energy, and resources to pull gold out of the ground.
In a similar way, Bitcoin miners use powerful computers and electricity to “mine” Bitcoin. It doesn’t just magically appear. Miners have to work to ensure every transaction is valid. This, in part, helps secure the network.
Every transaction is recorded on a public ledger called the blockchain.
Because of this, Bitcoin is hyper-transparent. Anyone with internet access can download a copy of the blockchain or use a blockchain explorer to see every transaction that has ever been made since Bitcoin’s inception.
That’s the 101 crash course on Bitcoin. But there’s a little bit more to understand.
To understand why Bitcoin is so different from paper money, also known as fiat, we need to dive into Bitcoin’s finite supply. Unlike U.S. dollars, you can’t just print more Bitcoin.
There will only ever be 21 million coins* (as mentioned on bitbo.io).
Once the last coin is mined, the existing supply will be locked forever. Now you can see why it’s constantly compared to gold. There is only so much gold on earth, supporting its value as a precious commodity.
Here are a few more ways Bitcoin stands apart from paper money:
Compared to other blockchain networks like Ethereum, Bitcoin still stands apart.
These “altcoins,” which are alternatives to Bitcoin, try to solve different problems. However, Bitcoin remains the most trusted and widely adopted. As of February 2025, Bitcoin represents around 60%* (data from coinmarketcap.com) of the total crypto market.
Ethereum, the second closest competitor, only holds about 10% of the market (also from coinmarketcap.com)
Okay, now you’ve got the crypto basics. What’s next? Well, you need to get your hands on some Bitcoin.
Lucky for you, it’s easier than ever before.
Back when Bitcoin was brand new, it was almost impossible for non-tech-savvy people to obtain it. These days, though, you’ve got plenty of options:
If you remember what makes Bitcoin so special, a huge part of that story is the decentralized nature of the network. You own your coins, and no one else has control. In other words, you have direct ownership.
This is an important point to remember.
When you buy from a centralized exchange, broker, or through an ETF, you’re giving up that direct ownership.
That’s why so many people love Bitcoin ATMs.
They offer you a way to easily buy Bitcoin while still retaining complete control and ownership of your coins.
By this point, you should know both what Bitcoin is and how to buy your first few coins. But we haven’t really answered the big question: why Bitcoin?
Remember that finite supply from earlier? It makes Bitcoin a potential inflation hedge.
Just as prices at the grocery store go up over time, the value of traditional money decreases. Unlike traditional currencies, which central banks can print at will, Bitcoin’s scarcity helps preserve its purchasing power.
As a result, many view Bitcoin as an inflation hedge, much like gold.
This reputation as a store of value is part of what’s been driving Bitcoin’s price performance over the years. It represents an alternative to the traditional banking system, giving users complete control over their finances.
It’s not just something that sits in your wallet, either.
Bitcoin is a great tool for all kinds of things:
Putting all the pieces together, you can see why so many people, whether they are investors or just everyday users, are excited about Bitcoin and its potential for the future.
What’s next for the world’s most popular cryptocurrency? Well, quite a bit.
Mainstream adoption is here. Companies like Microstrategy are buying up Bitcoin as if it’s their only mission and countries like the U.S., are considering adding Bitcoin to their balance sheets. — and that’s just the start!
There’s never been a more exciting time in crypto.
Additionally, Bitcoin is super accessible, thanks in part to technology like Bitcoin ATMs. No matter who you are or where you live, you can now buy Bitcoin and become a part of the crypto revolution.
Bitcoin is becoming a major part of the world’s financial system, and it’s doing it without being controlled by any government or bank.
When you think of it this way, it really is truly amazing.
There you have the crypto basics.
From understanding what Bitcoin is to what makes it so popular, you’ve now got the information you need to make a better-informed buying decision.
No matter how you want to make your first purchase, Bitcoin Depot is here to help. Want to make a purchase online? Our online buying service is your go-to choice. What about buying Bitcoin with cash? We’ve got you covered there, too.
Just check out one of our over 8,400 (as of April 2025) Bitcoin ATM locations across the U.S., Canada, and Australia.
Find your nearest Bitcoin ATM today and get started.
*The information provided above is for informational purposes only. The inclusion of any particular 3rd party site does not imply an endorsement, sponsorship, or partnership between Bitcoin Depot and the 3rd parties listed above. While Bitcoin Depot endeavors to ensure the accuracy and relevance of the information provided, we do not guarantee the reliability of any 3rd party’s information.