Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
What is Bitcoin? Everything You Need to Know in 2025
Jasmine Birtles
31st Mar 2025
Bitcoin supporters have long argued that when the world feels shaky, investors rush to safe havens. Traditionally, gold has been the go-to, but in recent years, Bitcoin has been making its case as ‘digital gold.’
As we head into 2025, Bitcoin is still dominating headlines, with increasing numbers of people looking to invest. Whether you’re completely new to crypto or just want to get up to speed with the latest developments, let’s break it all down in plain English.
- What is Bitcoin?
- How does Bitcoin work?
- What other cryptocurrencies are there?
- Can I buy things with cryptocurrencies?
- Should I get into Bitcoin mining?
- Should I invest in Bitcoin or other cryptocurrencies?
What is Bitcoin?
Bitcoin is the original cryptocurrency, a type of digital money that isn’t controlled by any government or central bank.
Unlike the pounds in your bank account, which are managed by the Bank of England, Bitcoin operates on a decentralised network of computers around the world.
But here’s the twist: Bitcoin isn’t something you can hold in your hand. It’s not even a ‘coin’ in the traditional sense. It’s a digital asset that exists on a technology called blockchain – a public ledger that records every Bitcoin transaction ever made.
How Does Bitcoin Work?
Bitcoin is powered by blockchain technology, which is essentially a decentralised and transparent ledger. Every time someone buys, sells, or transfers Bitcoin, the transaction is recorded across thousands (if not millions) of computers worldwide. This makes it virtually impossible to fake a transaction or tamper with the system.
The ‘crypto’ in cryptocurrency comes from cryptography – the complex mathematical algorithms that secure the network and keep transactions private. Instead of a central authority issuing new money, Bitcoin is ‘mined’ through a process that involves solving cryptographic puzzles.
Crypto runs on the ‘blockchain’
Blockchain is the decentralised technology on which cryptocurrencies like bitcoin run, but it is also the platform for all sorts of transactions. Blockchain can be used in various areas of life such as voting, art ownership, health, education, property transactions and much more.
The blockchain is a decentralised online ledger, storing information across millions of personal computers across the world, recording transactions in real-time. With the blockchain you can’t erase or reverse any transactions, you can only add new ones.
So if you want to reverse a transaction you have to do it again but in reverse. It’s all totally transparent (which is what makes it so good for voting systems, for example). Everyone can see what is being done so it’s impossible to commit fraud on it (at least that’s the theory).
What is Bitcoin Mining?
Bitcoin mining is the process of validating transactions and adding them to the blockchain. Miners use powerful computers to solve complex equations, and in return, they’re rewarded with new bitcoins.
However, Bitcoin mining isn’t as easy (or as profitable) as it used to be. The process requires a huge amount of computing power, and with energy prices soaring, mining in the UK can be costly. Many miners have now moved operations to countries with cheaper electricity.
What is Bitcoin Halving?
Bitcoin halving is an event that happens roughly every four years, cutting the number of new bitcoins that miners receive in half.
Why does this matter? Because it slows down the supply of new bitcoins, making them scarcer over time.
The next Bitcoin halving is expected in April 2028, which historically has led to price increases due to reduced supply. Many investors keep a close eye on halving events, as they often mark significant shifts in Bitcoin’s price trends.
What Other Cryptocurrencies Are there?
Currently there are well over 2,000 cryptocurrencies (!). As you can imagine, most of them are tiny and very obscure. Some are actively fraudulent and just created by people wanting to steal from the unsuspecting so be very careful before you buy into any of the smaller cryptocurrencies. Best to stick with the most popular ones and only buy them through a reputable cryptocurrency exchange.
Signing up for a cryptocurrency exchange will allow you to buy, sell, and hold cryptocurrency. Trading Bitcoins is getting easier, as is the security of exchanges and wallets. It is also possible to buy Bitcoin through PayPal payment. You can either use your PayPal account or use your PayPal account balance to buy cryptocurrencies from a third-party provider.
The currencies modelled after bitcoin are collectively called altcoins and have often tried to present themselves as modified or improved versions of bitcoin. While some of these currencies are easier to mine than bitcoin, none are currently as valuable as bitcoin and most have their detractors as well as their supporters.
Here’s a list of the most popular ones at the moment:
Ethereum
Ethereum is the next biggest cryptocurrency platform after Bitcoin. The coin that works on this platform is known as Ether. Although Ether is the second biggest decentralised currency it’s a long way behind Bitcoin at roughly one tenth of the value. However it is used a lot within the ‘alt-coin’ sphere so it’s useful to have some of these to hand.
Ripple (XRP)
Ripple is often poo-pooed by crypto enthusiasts. They say it’s not a proper cryptocurrency as it isn’t fully decentralised. However, it is popular and has real-world application, primarily because it acts like SWIFT, helping money to be transferred across the world.
Litecoin
Litecoin is the one that is closest to Bitcoin in the way it works and is often known as ‘silver’ to Bitcoin’s ‘gold’.
Tether
Tether is known as a ‘stable coin’ in that it has ‘tethered’ itself to the dollar. The reason for doing this is to make it less volatile than the other cryptocurrencies and therefore make it more attractive to possible investors and users.
Bitcoin cash
Bitcoin Cash is the product of what is called a ‘hard fork’ in development circles. Essentially a group of developers didn’t like the direction of Bitcoin and came up with a different plan for it. That meant they sort of broke away from the other developers and created something a little different from the original.
Should I Invest in Bitcoin or Other Cryptocurrencies?
Maybe. But not without doing your homework first.
Bitcoin has had a wild ride over the past decade, and while many believe it has a bright future, it’s still a highly volatile asset. Before you invest, make sure you:
- Have a diversified investment portfolio (don’t put all your eggs in the crypto basket).
- Use a reputable exchange (like Coinbase, Kraken, or Binance).
- Only invest money you can afford to lose.
- Consider storing your Bitcoin in a secure wallet rather than leaving it on an exchange.
Cryptocurrency isn’t for the faint-hearted, but if you’re willing to take the risk, it could be an exciting addition to your investment strategy.
Can I buy things with Bitcoin?
Yes, but should you? That’s another question.
Technically, you can use Bitcoin to buy everything from coffee to cars. Big names like Starbucks and Microsoft accept Bitcoin, and even some luxury retailers have jumped on board. But most investors prefer to hold onto their Bitcoin rather than spend it, as its value can fluctuate wildly.
Remember the guy who bought two pizzas for 10,000 Bitcoin back in 2010? That’s now worth hundreds of millions of pounds. Ouch.
Also read: How to Buy Bitcoin in the UK
Cryptocurrency Exchanges
You can buy and sell cryptocurrencies through specialist crypto exchanges. Like cryptocurrency itself, the exchanges have had a checkered history already. Some have folded without warning, taking people’s money with them.
However there are some that have survived and improved their security levels.
The most well-known, and to our minds the most secure, one is Coinbase. It isn’t the cheapest one. However, it is pretty secure and has been around long enough to trust it.
Also read: The best FCA registered crypto exchanges
Cryptocurrencies are very new and very volatile. One day they’re up and the next day they’re down, so you must make sure you have solid investments elsewhere to fall back on.
If you would like to invest in them I suggest you put only a very small percentage of your spare cash there. Make sure it’s money you’re prepared to lose…because there’s a decent possibility that you will lose it!
Jasmine Birtles owns a small amount of Bitcoin, Litecoin, XRP and Ethereum.
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*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
Disclaimer: Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.
“Cryptocurrency is not regulated by the UK Financial Conduct Authority and is not subject to protection under the UK Financial Services Compensation Scheme or within the scope of jurisdiction of the UK Financial Ombudsman Service. Investing in cryptocurrency comes with risk and cryptocurrency may gain in value, or lose some or all value. Capital gains tax may be applicable to profits from cryptocurrency sales.
“Content is for informational purposes and is not investment advice. Past performance is not indicative of future results. Investing in cryptocurrency comes with risk.”
Very informative article.