How to use Bitcoin (BTC)? A beginner’s guide.

Bitcoin is a digital currency that behaves like money in some contexts and like a financial rail in others. It can be used to pay merchants that accept it, send funds across borders or keep for capital appreciation without relying on a single bank for approvals.

For beginners, the challenge isn’t so much the concept. It’s the first few decisions: where to start, what a wallet does and how to avoid mistakes that can’t be reversed.

How to get started with Bitcoin

Getting started with Bitcoin usually begins by choosing a reputable crypto platform. Platforms like Crypto.com offer users an all-in-one experience, combining buying, storage and educational resources in one place.

The first step is creating an account and completing identity verification. This process, called Know Your Customer (KYC), helps platforms meet financial regulatory requirements, reduce fraud and money laundering risks, and ensure only legitimate users can access services. You’ll have to submit basic personal information, including a valid ID and other documents as part of the process.

Once verified, users add funds using methods such as bank transfers or debit cards. From there, Bitcoin can be purchased and held in a digital wallet linked to the account.

Bitcoin wallets come in two main types: Custodial and non-custodial. Custodial wallets are managed by a platform and you get convenience and recovery support along with it. Non-custodial wallets give full control but require careful handling of private keys.

Before sending or receiving anything, learn the basics of addresses and fees. Bitcoin transactions are typically irreversible and small entry errors – like a wrong address or wrong network – can lead to permanent loss. A careful review habit matters more than speed.

What’s the purpose of Bitcoin?

Bitcoin was designed to let people move monetary value online without requiring a bank or payment company to approve every transfer. In that sense, it can function as peer-to-peer digital money, with transactions validated by a network rather than a single intermediary.

That validation happens on Bitcoin’s blockchain, a public ledger that records transactions in chronological order. Instead of trusting one central database, participants can verify the same history. The network uses Proof-of-Work (PoW), a mining process that helps the system agree on which transactions are final and in what order.

Bitcoin’s purpose shows up in a few common use cases:

• Payments, where merchants or payment providers accept BTC.
• Global transfers, especially when traditional rails are slow or expensive.
• Access to decentralized digital money, where rules are transparent and not tied to a single issuer.
• A store-of-value concept, based on limited supply, though future value is uncertain and prices can be volatile.
• A way some people think about hedging or diversification within a broader portfolio.

How Bitcoin works

As mentioned, Bitcoin runs on a shared database known as a blockchain. Instead of being stored on a central server, this ledger is maintained by a global network of computers that follow the same rules and keep identical copies of transaction history.

When someone sends Bitcoin, they authorise the transaction using a private key, while the recipient is identified by a public address. The transaction is broadcast to the network, where it is checked for validity before being added to a block.

Blocks are added to the blockchain at regular intervals, typically about every 10 minutes. This process is coordinated by miners, who compete to confirm transactions and keep the ledger consistent. In return, they get rewarded newly issued Bitcoin and transaction fees.

Because the ledger is public and shared, transactions can be verified by anyone. At the same time, transfers are generally irreversible. 

It’s worth reminding once more that once a transaction is confirmed, it cannot be undone.

How to use Bitcoin

Earlier, it was covered that Bitcoin is generally used for payments, global transfers, a store of value and more. The objective depends on what someone wants to achieve. 

Some people focus on holding it, others trading and select groups on optimizing its value through features offered by crypto platforms.

Here are some common ways people use Bitcoin today.

1. Buy and hold as an asset

Many beginners start by learning the concept of HODL-ing (acronym for ‘Hold on for Dear Life’) it over time. This approach is often chosen for its simplicity: Buy BTC, store it in a wallet and monitor it only occasionally.

That said, holding Bitcoin comes with risks. Prices can fluctuate significantly and there is no guarantee of future value. Tools such as price alerts and recurring purchase features, available on platforms like the Crypto.com App, can help users stay informed without requiring constant attention.

2. Trading

As opposed to HODL, the more experienced users might try to profit by timing BTC’s price movements.

Traders might buy BTC when they think the price is about to go up and then sell once they’ve realized an appreciation in price. On the flip side, they may have to sell to ‘cut losses’ if their expectations aren’t met.

Traders use a variety of research strategies, such as fundamental analysis, technical analysis (or ‘charting’) and news catalysts.

This approach requires closer attention. Bitcoin prices can move quickly and trading carries the risk of losses. 

To help users manage execution rather than predict markets, some platforms offer structured trading tools. For example, the Crypto.com App includes ‘Target Price’ orders, which allow users to set a price at which a buy or sell is automatically triggered if the market reaches that level.

It also supports ‘Time-Weighted Average Price (TWAP)’ orders, which break a large trade into smaller transactions executed over a set period. 

3. Payment

Bitcoin may be used to pay for goods and services at merchants that accept it directly or through payment processors. Payments are typically made by scanning a QR code or sending BTC to a specified address.

Some platforms allow users to spend funds that originated as Bitcoin by converting them into spendable balances. 

4. Sending and receiving monetary value

There are occasions that call for such transactions, such as paying friends and family, gifting and engaging in certain cultural traditions.

Sending BTC follows a standard protocol, which largely looks like this:

1. Get the recipient’s public address. Every crypto wallet (whether custodial or non-custodial) has a public address for receiving cryptocurrency and a separate, private address for sending it. The public address is safe and users can give it to anyone who wishes to send them money.
2. Most wallets provide an easy way for individuals to share their public address, such as a link or QR code. This is most likely the way someone will provide their public address information.
3. Visit the link or scan the QR code from the wallet app.
4. In the wallet app, select the option to send Bitcoin to the recipient’s public address.
5. Select the amount to send.
6. Review the transaction, then tap or click ‘Send’.
7. Look for a transaction confirmation. This will take place in the platform, but users may also get additional confirmations via email or text message, depending on their wallet and configuration settings.

To receive BTC, the steps are reversed. All a user needs to do is provide the receiving address to the sender. 

5. Global transfers

Bitcoin can be used to move value across borders without relying on traditional banking rails. This can be useful in situations where international transfers are slow, expensive or restricted.

However, network fees can fluctuate and price volatility means the value received may differ from the value sent.

6. Mining

Bitcoin mining is the process by which transactions are confirmed and new BTC is introduced into circulation. It requires specialized hardware and significant electricity consumption.

Because of the cost and complexity involved, mining is generally not practical for beginners. Today, most people who use Bitcoin do so through buying, holding or transferring it rather than participating directly in mining.

7. Receive salaries or payments

In some cases, Bitcoin is used as a form of payment for employment. A small number of companies and independent contractors choose to pay or receive part of their income in BTC.

This arrangement typically involves converting local currency into Bitcoin at the time of payment and comes with considerations around price volatility, taxes and local regulations. It remains a niche but notable use of BTC.

8. Maximizing crypto tools

Beyond payments and transfers, Bitcoin is sometimes used as a gateway to tools offered within crypto platforms, especially for users who want to observe markets or automate basic actions.

Common examples include:

• Price tracking and market monitoring: Many platforms allow users to track BTC’s price in real time, set alerts and review historical charts.
• Automated recurring purchases: Some users set up recurring buys that automatically purchase small amounts of BTC at regular intervals. This approach is commonly referred to as dollar-cost averaging (DCA).
• Swaps: BTC is commonly used as a base currency for swaps into other crypto, owing to its historical standing as a primary liquidity and trading pair.

How to store Bitcoin safely

Most beginners leave their crypto on exchanges out of convenience. When it comes to safety, the main decision is whether to move assets to a non-custodial wallet.

Non-custodial wallets place control directly in the user’s hands. Access is secured by private keys or recovery phrases, which must be stored carefully. Losing them usually means losing access permanently. Non-custodial wallets get around security lapses that their custodial counterparts tend to face, such as hacks, phishing and ease of access by perpetrators.

Non-custodial wallets can be further broken down into two types. The digital kind, such as Crypto.com Onchain, prioritizes convenience and accessibility, making them suitable for smaller balances or frequent use. Hardware wallets store private keys offline, reducing exposure to online threats and are often used for longer-term storage.

Regardless of wallet type, backups are of utmost importance. Recovery phrases should be written down and stored securely offline. Screenshots, cloud storage, or messaging apps introduce unnecessary risk.

Most losses happen not through hacking, but through forgotten passwords, misplaced recovery phrases or accidental deletion. 

Common mistakes when using Bitcoin (and how to avoid them)

How to get started on Crypto.com

1. Download the Crypto.com App, available on the Apple App Store and Google Play. 
2. Complete the sign-up process and identity verification. On-screen prompts are at hand to guide. 
3. Funds deposited using bank transfers will usually clear within one to three business days. For faster access, you can also fund their account using Apple Pay or a prepaid/credit card. Please note that processing times and availability may vary depending on card issuer and other factors. 
4. Once the funds are cleared, users can start buying BTC and other supported crypto and manage them conveniently from one place.

FAQs about using Bitcoin

How do you use Bitcoin?

Bitcoin can be used to hold value, make payments, send funds to others or transfer money across borders. How it’s used depends on the user and the tools they choose, such as wallets or crypto platforms.

Can you buy things with Bitcoin?

Yes. Some merchants accept Bitcoin directly, while others support it through payment providers that convert BTC into local currency at checkout. Acceptance varies by region and retailer.

Is Bitcoin easy for beginners to understand?

Bitcoin and digital assets in general have a learning curve, especially around wallets and the intricacies of transactions. Many beginners start with platforms that simplify buying and sending BTC, then learn more about self-custody over time.

Do you need a wallet to use Bitcoin?

Yes. A wallet is required to store, send or receive Bitcoin. Wallets can be custodial, where a platform manages access, or non-custodial, where the user controls the private keys and takes full responsibility of the assets’ security.

How long do Bitcoin transactions take?

Bitcoin transactions typically take about 10 minutes for the first confirmation, but full confirmation can take longer depending on network congestion and fees paid.

Is Bitcoin anonymous?

Bitcoin is not anonymous. Transactions are recorded on a public blockchain. While wallet addresses are not tied to names by default, activity can often be traced.

What can you do with Bitcoin besides buying and holding it?

Beyond holding, Bitcoin can be used for payments, remittance, donations or receiving income in some cases. Uses depend on local rules and available services.

How do you send Bitcoin to someone?

To send Bitcoin, you need the recipient’s wallet address. After entering the amount and confirming the transaction, it’s broadcast to the network and confirmed on the blockchain.

Is Bitcoin safe to use?

Bitcoin’s network is designed to be secure, but risks remain. Price volatility, phishing attempts and user errors can lead to losses. Learning how wallets work and practicing good security habits is essential.

IMPORTANT INFORMATION: This is informational content sponsored by Crypto.com and should not be considered as investment advice. Trading cryptocurrencies carries risks, including price volatility. Past performance may not indicate future results. There is no assurance of future profitability. Consider your risk appetite before trading cryptocurrencies.

Crypto.com services, features, and benefits referenced may be subject to eligibility requirements and may change at Crypto.com’s discretion.

If you use a non-custodial wallet, you are responsible for securely storing your seed phrase. Losing it may result in loss of access to your assets.