Some call it digital gold. Others predict it will replace money within a few years. But what exactly is Bitcoin, and how does it work?
Note: This is not financial advice. This text is intended solely for informational and educational purposes and should not be considered as investment guidance or carry any liability.
The Origin and Emergence of Bitcoin
Bitcoin is a digital currency that enables decentralized transactions through a technology known as blockchain. The idea behind Bitcoin originated from an individual or group of people operating under the pseudonym Satoshi Nakamoto. Nakamoto published Bitcoin: A Peer to Peer Electronic Cash System in October 2008 on an online forum. This document outlined the basic principles of Bitcoin and how it functions.
The fundamental idea of Bitcoin was to solve the problems of centralized financial systems. And the need for intermediaries such as banks in financial transactions. Bitcoin uses blockchain technology, which is a public and distributed ledger of transactions maintained by a network of computers known as miners.
Bitcoin was officially launched with the release of Nakamoto’s Bitcoin whitepaper in January 2009. When the first transaction, also known as the genesis block, was added to the blockchain. Nakamoto also developed the first version of the Bitcoin software and mining algorithm.
Bitcoins are created through a process called mining. Miners are individuals who use computer systems to solve complex mathematical problems in order to verify transactions and add them to the blockchain. The entire system is automated. For their work, miners are rewarded with new Bitcoins. This process is known as the mining reward.
The First Transaction and “Pizza Day”
From 2009 until today, Bitcoin has undergone significant development and has experienced numerous changes, both in its technology and in its acceptance and market value.
The first exchange of Bitcoin for traditional currency occurred in 2010 on a platform known as BitcoinMarket.com. At that time, the value of Bitcoin was extremely low by today’s standards, literally just a few cents.
One of the most famous and, unfortunately, most tragic Bitcoin transactions happened when a programmer named Laszlo Hanyecz paid ten thousand Bitcoins for the delivery of two pizzas. For those unfamiliar, as of 2024, one Bitcoin is worth approximately forty thousand dollars. If those ten thousand Bitcoins were sold today at that price, it would amount to a staggering four hundred million US dollars. Yes, that is how “wealthy” this guy would be today. This moment is famously known as Pizza Day.
Price Growth and Changes from 2008 to Today
The price of Bitcoin remained relatively stagnant for years. Hovering between 10 and 100$ dollars, until 2013 when it experienced its first major jump to nearly 1.000$ per Bitcoin. That price remained, with minor corrections and drops, until 2017 when Bitcoin saw its first real explosion, both in the crypto market and in global media.
In just a few months, from the beginning of 2017 to the end of that year, the price surged to a then record of 19.106$ per Bitcoin on 18.12.2017.
That was the beginning of Bitcoin’s true expansion as we know it today, which continues to grow each year. Media outlets across the world were reporting on this strange digital currency worth nineteen thousand dollars.
Over the following year, the price fluctuated beteein 19.000$ – 5.000$, eventually dropping below 5.000$ by the end of 2018.
That price point remained more or less stable until the end of 2020, when Bitcoin experienced its most dramatic surge yet.
From December 2020 to April 2021, the price climbed rapidly, reaching a then all-time high of 63.258$ on 16. April 2021. It then halved in July to around 30.000$, only to rise again on November fourteenth two thousand and twenty-one to a still-standing record of 64.455$.
In early 2023, the price once again dropped below 20.000$, but by the end of the year it returned to a range fluctuating between 70k – 110k $ in 2025.
From all of this, it is clear that the price of Bitcoin is highly volatile and subject to change. However, if we look at the price trend from its inception until today, one can conclude that over the long term, Bitcoin has managed to preserve and grow its value, despite notable corrections and drops.
How to Buy Bitcoin and Cryptocurrencies
To buy Bitcoin, start by choosing a reliable cryptocurrency exchange such as Coinbase, Binance, Kraken, or eToro. Create an account and complete the required identity verification process to comply with regulations. Next, deposit funds into your account using methods like bank transfer, credit card, or PayPal, depending on what the platform supports. Once your account is funded, you can place an order to buy Bitcoin at the current market price or set a limit order to buy at a specific price. After purchasing, it’s important to transfer your Bitcoin to a secure wallet. Either a hardware wallet or a reputable software wallet, to keep your assets safe from hacks. Always research the platform’s fees and security features before making a purchase.
Crypto Taxes in the World and Europe
The regulation and taxes of Bitcoin or another Cryptocurrency varies across the globe. In most cases, countries implement their own laws and guidelines for trading and using cryptocurrencies. So far, Ecuador is the only country that has officially adopted cryptocurrency as a means of payment.
Cryptocurrency taxation varies widely. Globally, countries like Japan and the USA have some of the highest crypto tax rates, reaching up to 55% and 37% respectively. In contrast, Portugal, Switzerland, and the UAE are known for zero or minimal crypto taxes.
In Europe, France and Italy impose flat taxes around 30%, while Germany offers full tax exemption if you hold your crypto for over one year. Portugal remains the most tax-friendly, with no personal crypto tax at all.
Laws continue to evolve, but the trend shows growing regulation and clearer rules across the EU. For now, crypto investors benefit most in countries with either no tax or long-term holding incentives.
Bitcoin is as digital asset
Bitcoin is classified as digital asset in most countries. But what is digital property?
The Law on Digital Assets defines digital property as a digital record of value that can be digitally bought, sold, exchanged, transferred, or used as a medium of exchange or for investment purposes. The term digital property does not include digital records of currencies that are legal tender or other financial assets regulated by different laws.
Predictions and the Future of Bitcoin
Many analysts and crypto enthusiasts predict further growth in the value of Bitcoin. One argument in favor of this is the limited total supply of Bitcoin; only twenty-one million will ever exist ! which makes it similar to precious metals like gold. Increased interest from institutional investors also supports optimism regarding future value increases.
The issue of regulation plays a key role in Bitcoin’s future. While some countries are embracing cryptocurrencies, others remain skeptical. More regulation could bring added stability to the markets but also raises questions about privacy and decentralization, which are the fundamental values of Bitcoin.
Given the large number of alternative cryptocurrencies, or altcoins, Bitcoin is facing competition. Some people remain optimistic about Bitcoin as digital gold, while others believe that technically more advanced altcoins could attract more investor attention.
The future of Bitcoin remains dependent on numerous factors including market volatility, regulatory changes, and technological innovations. While many see Bitcoin as a transformative innovation in the financial world, there are also skeptics who warn of its risks. To make informed decisions, it is essential for investors to stay up to date with the latest information, analyses, and legal guidelines.
Despite all the challenges, Bitcoin remains a central player in the crypto industry. And its fate continues to capture attention across the globe.
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