Why was Bitcoin created?

Bitcoin emerged in the aftermath of the 2008 global financial crisis, when trust in traditional financial systems was shaken. 

It introduced the idea of a peer-to-peer (P2P) digital currency that could operate without banks or central intermediaries. Today, platforms like Crypto.com help users learn about Bitcoin and access it responsibly.

Who created Bitcoin?

Bitcoin was created by an individual or group using the pseudonym Satoshi Nakamoto. In October 2008, Satoshi published the Bitcoin Whitepaper which details a system for electronic cash, one that could be transferred directly between users without relying on third parties.

Beyond the whitepaper, Satoshi also wrote Bitcoin’s original code and participated in early discussions with developers and users through online forums and emails. These contributions formed Bitcoin’s initial design and set its foundational rules.

Satoshi’s real-world identity has never been verified. This anonymity is often seen as consistent with Bitcoin’s decentralized ethos, as the system does not depend on a known founder or central authority. In 2010, Satoshi gradually withdrew from public involvement, leaving development to the open-source community.

Since then, Bitcoin has been maintained and improved by a global network of developers. No single individual controls its direction — Bitcoin exists independently of its creator.

Why was Bitcoin created?

Bitcoin was created to address limitations in existing financial systems, particularly the need to rely on central institutions to process and verify transactions. During the 2008 financial crisis, failures among banks and financial intermediaries highlighted vulnerabilities in systems built on trust and central control.

At its core, Bitcoin was designed as P2P electronic cash, a phrase drawn directly from the title of its whitepaper. The goal was to allow people to send value directly to one another over the internet, without banks acting as gatekeepers.

A technical challenge Bitcoin sought to solve was the double-spending problem, the risk that digital money could be copied and spent more than once. Bitcoin addressed this by using a public, shared ledger that records transactions in a transparent and verifiable way.

By distributing this ledger across a network rather than placing it under a single authority, Bitcoin circumvents single points of failure. However, there are trade-offs, including price volatility and a learning curve for users unfamiliar with digital assets.

Today, platforms like Crypto.com have made it easier for users to learn about Bitcoin, understand its risks and track its price.

Brief history of Bitcoin

How Bitcoin works

Bitcoin operates on a blockchain, which is a public ledger that records all transactions. This ledger is shared across a global network of computers, allowing anyone to verify transaction history without relying on a central database.

When someone transacts Bitcoin, the transaction is broadcast to the network and grouped with others into a block. These blocks are added sequentially to the blockchain, creating a chronological record that is difficult to alter retroactively.

New blocks are added through mining, a process that helps the network agree on transaction order and maintain consistency. As part of this process, new Bitcoin is introduced according to a fixed issuance schedule, capped at a maximum supply of 21 million.

Although Bitcoin is celebrated for its decentralized nature, one of the drawbacks include slower transaction throughput compared to traditional payment systems or other blockchain networks.

How is Bitcoin used?

Bitcoin’s use has expanded beyond its original P2P experiment. Today, it functions in several practical and conceptual ways, depending on user needs and infrastructure.

1. Medium of exchange

Bitcoin can be used to pay for goods and services at merchants that accept it directly or through payment providers. For example, PayPal announced a ‘Pay with Crypto’ push in July 2025 to expand merchant acceptance across a wider set of cryptocurrencies and wallets, with instant conversion at checkout.

2. Digital asset for holding value

Some users treat Bitcoin as a long-term holding due to its fixed supply. It’s commonly compared to commodities like gold, though outcomes are not guaranteed and price volatility remains a significant consideration.

3. Cross-border value transfer

Bitcoin can be used to move value across borders without relying on traditional banking rails. This can be relevant in situations where access to international payment systems is limited or costly, though transaction fees and confirmation times vary.

4. Portfolio diversification within digital assets

Within the broader crypto ecosystem, Bitcoin is often viewed as a foundational asset and ‘market leader’. Its long operating history and large network make it a common reference point for people learning about cryptocurrencies, though it carries risks like any other digital asset.

5. Gifting and social transfers

Bitcoin is sometimes used as a digital gift, particularly during festive periods. Recent years saw a trend of sending ‘crypto red packets’ around Lunar New Year, where small amounts of BTC or other cryptocurrencies are shared among friends or family as a modern take on traditional cash gifts. 

Platforms like Crypto.com enable users to hold BTC, transfer it and use supported spending features, alongside educational content that breaks down all you need to know about crypto.

What’s the value of Bitcoin?

Bitcoin doesn’t have a fixed or intrinsic value assigned by its protocol. Its value is determined by the market and can change rapidly based on a range of factors.

The main influences on Bitcoin’s value include its fixed supply, levels of demand, network usage, public sentiment and broader economic conditions. Because only 21 million Bitcoins can ever exist, changes in demand can have pronounced effects on price.

As mentioned earlier in its history, Bitcoin is sometimes described as ‘digital gold’, an analogy that points to its scarcity and durability rather than a promise of stability. Unlike physical commodities, Bitcoin exists entirely as software and its market price has historically been subject to significant volatility, with some examples being the period around Federal Reserve (Fed) minutes or the ‘sell the news’ tendencies.

For this reason, Bitcoin’s value should be understood as market-driven and risk-bearing. Tools such as Crypto.com’s price pages can help users observe real-time prices, historical trends and other trading metrics.

Bitcoin’s role in the broader crypto ecosystem

Bitcoin occupies a foundational role in the crypto ecosystem, not just because it was first, but because it established a working model that others adapted or deliberately diverged from.

As the earliest decentralised digital asset, Bitcoin demonstrated that value could be transferred and recorded on a public blockchain without a central authority. This breakthrough laid the groundwork for later cryptocurrencies, even those that took different technical or philosophical paths.

Dogecoin, for example, was created as a lighter, faster variant of Bitcoin’s model, using similar mechanics but aiming for lower transaction friction and broader everyday use. Other developments emerged through direct protocol divergence; Bitcoin Cash originated from a network split in 2017, driven by disagreements over how Bitcoin should scale for payments.

For many learning about digital assets for the first time, Bitcoin is usually an entry point. It remains a widely referenced asset for market data, liquidity and benchmarking.

While newer blockchain technologies continue to explore different approaches to scaling and functionality, Bitcoin’s development has included solutions such as the Lightning Network, which was introduced to enable faster, lower-cost payments.

Bitcoin challenges and limitations

How to learn more about Bitcoin

For beginners, starting with clear explanations of core concepts, such as how blockchain works, what wallets do and how transactions are recorded, can build a strong foundation.

Educational resources, including Crypto.com’s Learn articles, are written to explain these topics in the easiest manner possible. They cover Bitcoin’s mechanics, history and risks, along with guides on other crypto.

Tools within platforms like the Crypto.com App can also support learning. Features such as price charts, alerts, and educational content allow users to observe how Bitcoin behaves over time while staying informed about market movements.

Most importantly, learning about Bitcoin should be approached thoughtfully. Taking time to research, understand risks and explore reputable sources can help users make informed decisions without relying on assumptions or hype.

FAQs about why Bitcoin was created

What is the purpose of Bitcoin?

Bitcoin was created to enable digital value transfers without relying on banks or central intermediaries. Its design allows transactions to be verified on a public network, giving users an alternative way to send and receive money electronically.

Is Bitcoin valuable?

Bitcoin’s value is determined by the market. It reflects supply, demand, network usage and broader economic factors. There is no guaranteed or intrinsic value and prices can change significantly over time.

What problem does Bitcoin solve?

Bitcoin addresses the problem of transferring digital money without a trusted third party. It allows transactions to be recorded and verified publicly, reducing reliance on central institutions to prevent double spending.

How does Bitcoin differ from traditional money?

Unlike traditional currencies issued by governments, Bitcoin has a fixed supply and operates on a decentralized network. Transactions are recorded on a public ledger rather than managed by a central authority or bank.

Why is Bitcoin considered decentralized?

No single entity controls the network. Its ledger is maintained by a distributed network of participants and changes to the system require broad agreement rather than unilateral decisions.

How many Bitcoins will ever exist?

Bitcoin’s maximum supply is capped at 21 million tokens. This limit is enforced by the protocol and cannot be exceeded without widespread agreement across the network.

How do people buy Bitcoin safely?

People typically buy Bitcoin through established exchanges or wallets that provide clear information, custody options and user support. Learning how wallets work and understanding risks are important parts of using Bitcoin responsibly.

Why does Bitcoin fluctuate in price?

Bitcoin’s price fluctuates due to changes in supply and demand, market sentiment, regulatory developments and broader economic conditions. Because the market is in a constant flux, price movements can be significant.

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