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Since it’s existence Bitcoin has went up on average 143% each year. If you read the rest of this you will understand finally what is Bitcoin and why it rockets year on year!
Bitcoin is the first ever digital only currency created in 2009 by an anonymous person (or group) called Satoshi Nakamoto.
A digital currency is a form of money that exists only in electronic form, used for online transactions, without the need for physical cash. The £pound can be used as a digital currency if issued and managed electronically by a Bank or authorised institution for use in digital transactions without physical cash.
Bitcoin is first digital only currency where there is no physical equivalent.
Bitcoin is the first Decentralised currency as it can be used without the need for a central entity like bank or government. In Bitcoin, there are no banks acting as middle men; transactions take place directly between users. If I send money to you it goes straight to you, not via Bank of Scotland or whatever Bank you use.
This is able to happen as every transaction is stored on a secure, network called the blockchain, which publicly records every transaction so they cannot be altered. The blockchain is a quite a difficult thing to understand, and I explain it as simple as I can at the bottom of this page.
Why Is Bitcoin Different From Regular Digital Money?
You might be wondering, “But I already use digital money—bank apps, PayPal, credit cards… what makes Bitcoin different?”
The key difference is who controls it.
- When you use your bank account or PayPal, your money isn’t truly yours—a bank or company controls it. They can freeze your account, reverse transactions, or even limit withdrawals.
- Governments and banks can print more money, which reduces its value over time (inflation).
Inflation makes your money worth less, but Bitcoin’s limited supply helps it hold or grow in value. This is important because it means your savings in Bitcoin won’t slowly lose value like they can with regular money.
Bitcoin isn’t controlled by anyone—it’s decentralised.
- No bank, government, or company can stop you from sending or receiving Bitcoin.
- There’s a fixed supply of 21 million Bitcoin, meaning it can’t be inflated like the dollar or pound.
- It works peer-to-peer, meaning you send Bitcoin directly to someone else without needing a middleman like a bank.
Bitcoin is like digital gold—you own it, no one can take it from you, and its value grows over time due to its scarcity.
Bitcoin was created after the 2008 recession as a response to the failure and mistrust of traditional banks and financial institutions. It was designed to give people control over their own money without relying on banks, which had been accused of mismanagement and dishonesty during the financial crisis.
Bitcoin’s Price Growth Over the Last 10 Years
While Bitcoin’s price can go up and down in the short term, over the long term, it has historically increased in value. Here’s what 1 Bitcoin (BTC) cost in February of each year over the past decade:
| Year | Bitcoin Price ($) |
|---|---|
| 2015 | $250 |
| 2016 | $400 |
| 2017 | $1,000 |
| 2018 | $10,000 |
| 2019 | $3,500 |
| 2020 | $9,000 |
| 2021 | $40,000 |
| 2022 | $45,000 |
| 2023 | $23,000 |
| 2024 | $55,000 |
🚨 Important: Bitcoin is highly volatile, meaning the price can drop suddenly before rising again. For example, in 2018, it fell from $10,000 to $3,500 before recovering years later. This is why many see it as a long-term investment, similar to gold. Although Bitcoin was created to be a currency, it is now used more as a store of value which is why it gets commonly referred to as digital gold as like gold the value goes up over time.
Bitcoin has a maximum supply 21 million. Only 21 million Bitcoin will ever be created.
Unlike the pound or dollar where there is not a finite amount, more pounds or dollars can be printed by governments and banks at any point.
How Bitcoin is released into the world ?
New Bitcoin doesn’t just appear — it’s earned.
Bitcoin is created as a reward for people called miners. Think of miners like digital security guards. They check and approve all Bitcoin transactions to make sure everything is legit and no one cheats the system.
When they do this, they’re rewarded with new Bitcoin. Right now, they earn 3.125 Bitcoin per block of transactions they verify, which is worth about £200,000 to £225,000.
But here’s the twist — every 4 years, the reward is cut in half. This is called the Bitcoin Halving.
So over time, less and less new Bitcoin is created, which makes it more scarce — and the more scarce something is, the more valuable it tends to become.
The Bitcoin halving event is so important as it reduces supply, unlike traditional money which can be printed endlessly — making Bitcoin scarcer and more valuable over time, where traditional money will lose its value.
This will keep happening until all 21 million Bitcoin have been released (around the year 2140). After that, no more new Bitcoin will ever be made.
This means there are less Bitcoins being created over time, so if the demand for Bitcoin stays the same or grows the value of BTC will go up! Do you understand? Pretty clever!
💵 How Is This Benefit over Regular Money?
Governments can and print money whenever they want as there is not a set supply on how pounds or dollars can exist unlike Bitcoin.
The more money that’s printed, the less valuable it becomes over time—this is called inflation. Bitcoin can’t be printed endlessly, it’s designed with this in mind to hold its value and grow over time.
Inflation = Prices go up, money loses value. If a coffee costs £3 today and inflation is high, in 10 years, it could cost £10. Bitcoin doesn’t inflate because no one can print more.
During the Covid pandemic the US Government printed over $13 Trillion Dollars. Reasons like this are why we experiencing so much inflation as they are diluting the currency making it less valuble.
Bitcoin Blockchain Explained
🏰 Bitcoin Blockchain Explanation – Castle Wall Analogy
Think of a castle wall made of bricks. Every time a new brick is added, it’s locked into place, making the wall stronger and stronger. If someone tries to remove a brick, the wall would not be as strong. The castle guards would notice missing bricks and fix the wall.
💡 In Bitcoin
Relating this to the Bitcoin blockchain, the blockchain is the castle wall and each brick is a block of Bitcoin transactions. Every block joins together and makes up the blockchain, and with every transaction the blockchain becomes bigger and stronger, like a brick would make a wall bigger and stronger.
The miners are the castle guards, making it safe, fair, and transparent – everything is what it says it is and their is no stealing/fraudulent activity.
This makes cheating virtually impossible, transactions are cemented by complex equations completed by thousands of miners around the world.
Miners are incentivised to verify transactions on the blockchain and are paid in Bitcoin for their efforts. If there a was a block missing or tampered with the thousands of miners would pick up on this instantly and not verify the transaction. This keeps the loop of everything being safe and fair.
Disclaimer: Cryptocurrency prices can be extremely volatile, with big price drops happening unexpectedly. Bitcoin should be seen as a long-term investment rather than a way to make quick money. This post is for informational purposes only and not financial advice—always do your own research (DYOR) before investing.
How to Buy and Sell Bitcoin
Buying and selling Bitcoin is easier than ever. Here’s how you can do it in three simple steps:
1️⃣ Choose an online Crypto Exchange – Platforms like Coinbase, Swissborg are the only two regulated Crypto exchanges in the UK making them extremely safe to use. They allow you to buy, sell, and store Bitcoin. Sign up, verify your identity, and link your bank account or card. You can download these is apps on whatever device you use or visit their websites on a PC
2️⃣ Buy Bitcoin – Decide how much Bitcoin you want to buy. You can buy a fraction of a Bitcoin (e.g., £10 worth) instead of a whole one, you can buy however much you want. Once purchased, it will appear in your exchange wallet (i.e Coinbase/Swissborg wallet) this will look similar to an online banking app.
3️⃣ Sell Bitcoin – When you want to sell, go to the exchange, enter the amount to sell, and choose if you want cash deposited into your bank or to trade it for another cryptocurrency.
Bitcoin is stored in a digital wallet, which can be an app on your phone, a computer program, or a special USB-like device. To send Bitcoin, you just enter the recipient’s wallet address (like an email for Bitcoin) and confirm the transaction. The Bitcoin network then processes the transfer, and the recipient gets their Bitcoin, usually within minutes.
Summary
- Bitcoin was created in 2009 by an anonymous entity known as Satoshi Nakamoto.
- Only 21 million Bitcoin will ever be created, making it a scarce asset. Unlike traditional currencies, Bitcoin cannot be printed at will, protecting it from inflation.
- Every 4 years, the number of new Bitcoins being made halves. Which makes Bitcoin scarce, as it is rare, so its value can go up as demand grows.
- Decentralised: Bitcoin operates without the need for banks or governments; you can send BTC peer-to-peer without a middleman.
- Long-Term Investment: Bitcoin has historically increased in value over time, though it can be volatile in the short term.
- Bitcoin miners verify transactions and are rewarded with new Bitcoin, this is the only way Bitcoin is released into the world.
- Bitcoin transactions are secured by a transparent blockchain, making fraud nearly impossible.
- Bitcoin’s blockchain is like a castle wall made of bricks, where each transaction is a brick that strengthens the structure, and miners act as guards ensuring security and fairness; any attempt to tamper with a transaction is instantly detected and rejected by the network.
