Simple definition
Bitcoin is the first and best-known cryptocurrency, a digital money system that runs without a bank or a central company.
How it works
- People send bitcoin to each other using wallet apps.
- Computers around the world check and record each transaction on the Bitcoin blockchain.
- Only 21 million bitcoin can ever exist, a limit set in its code.
Everyday example
In real life
Someone abroad sends bitcoin to a family member. The family member receives it in a wallet app and can keep it or exchange it for local money, with fees along the way.
Benefits and why this matters
Why this matters
Bitcoin is where crypto started, and its name is often used in scams. Knowing what it really is makes you harder to fool.
- Open to anyone with internet access
- Rules are public and fixed in code
- Can be sent across borders
Risks and limitations
Things to watch out for
- Watch out: Its price can rise and fall sharply
- Watch out: If you lose access, no bank can recover it for you
- Watch out: Scams often borrow its name
Your beginner action
Try this
Read how Bitcoin works from a trusted explainer, and note one benefit and one risk. You do not need to buy anything to learn.