{"id":10301,"date":"2026-09-03T13:40:59","date_gmt":"2026-09-03T13:40:59","guid":{"rendered":"https:\/\/crypto12.com\/?p=10301"},"modified":"2026-09-15T13:39:48","modified_gmt":"2026-09-15T13:39:48","slug":"what-is-bitcoin-and-how-does-it-work","status":"publish","type":"post","link":"https:\/\/crypto12.com\/en\/what-is-bitcoin-and-how-does-it-work\/","title":{"rendered":"What Is Bitcoin and How Does It Work?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Bitcoin is the first and best-known cryptocurrency, or <strong>virtual currency<\/strong> according to the terminology used in Serbia\u2019s Law on Digital Assets. It was created as a digital form of value that enables transfers between users without requiring every transaction to be processed by a bank or another centralized institution.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Today, Bitcoin is most commonly used as a digital asset for investment and trading, but its underlying technology enables much more than simply buying and selling.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who Created Bitcoin?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bitcoin was introduced in 2008 through a paper published under the pseudonym <strong>Satoshi Nakamoto<\/strong>, and the Bitcoin network was launched in early 2009.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike traditional currencies, Bitcoin does not have a central bank that issues it. The network operates through computers around the world that collectively verify and record transactions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Does Bitcoin Work?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">To understand Bitcoin, there are three basic things to remember:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Bitcoin is a digital asset.<\/strong> It does not exist in a physical form like banknotes or coins.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Transactions are recorded on the blockchain.<\/strong> A blockchain is a public, distributed ledger in which transactions are recorded.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The network does not depend on a single central institution.<\/strong> Transactions are validated by network participants according to the rules of the Bitcoin protocol.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Learn more about the underlying technology in our guide: <strong>[What Is Blockchain and How Does It Work?]<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does BTC Mean?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">BTC is the ticker symbol for Bitcoin.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When someone says they own 0.1 BTC, it means they own a fraction of a Bitcoin. You do not need to buy an entire Bitcoin \u2014 you can purchase only a fraction of one.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Does Bitcoin Have Value?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bitcoin does not have value because it is guaranteed by a central bank or government. Its market value is determined by supply and demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One reason Bitcoin is often viewed as an investment asset is its limited maximum supply: <strong>21 million BTC<\/strong> can exist under the Bitcoin protocol.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This does not mean that the price of Bitcoin must increase. As with other forms of digital assets, its price can fluctuate significantly.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is Bitcoin Money?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not in the legal sense in Serbia.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to the <a href=\"https:\/\/mfin.gov.rs\/sr\/propisi-1\/zakon-o-digitalnoj-imovini-1\" target=\"_blank\" rel=\"noopener\">Law on Digital Assets<\/a>, a virtual currency does not have the legal status of money or currency and is not legal tender. Under Serbia\u2019s regulatory framework, virtual currencies may be used as a means of exchange and for investment purposes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is therefore more precise to describe Bitcoin as a <strong>virtual currency and a type of digital asset<\/strong>, rather than as official money.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Do You Buy Bitcoin?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bitcoin can be purchased through a provider of services related to virtual currencies that holds the appropriate license, such as <a href=\"https:\/\/trade.crypto12.com\/register\/landing\">Crypto12<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before buying Bitcoin, it is important to check:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>who provides the service;<\/li>\n\n\n\n<li>whether the provider is regulated;<\/li>\n\n\n\n<li>what fees are charged;<\/li>\n\n\n\n<li>how digital assets are stored;<\/li>\n\n\n\n<li>how funds can be deposited and withdrawn.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In Serbia, the provision of services related to virtual currencies is regulated by the Law on Digital Assets, and licenses for these services are issued by the National Bank of Serbia.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Where Is Bitcoin Stored?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bitcoin is not stored \u201con a phone\u201d or computer in the same way a file is stored.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ownership and the ability to control Bitcoin are linked to cryptographic keys. It is therefore important for users to understand what a <strong>crypto wallet<\/strong> is, what a private key is, and what a seed phrase is.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Read more: <strong>[What Is a Crypto Wallet and How Does It Work?]<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is Bitcoin Safe?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Bitcoin network and individual user accounts are not the same thing. The Bitcoin network itself relies on cryptography and decentralized infrastructure, but users can lose funds if they lose access to their keys, send assets to the wrong address, or fall victim to fraud.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is why security is one of the most important aspects of using crypto.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Should You Remember?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Bitcoin is the first and best-known cryptocurrency. It operates on a decentralized network, while transactions are recorded on the blockchain.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Serbia, Bitcoin is legally treated as a <strong>virtual currency<\/strong>, which is a type of digital asset, rather than as legal tender.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you are just getting started, the next step is to understand <strong>blockchain<\/strong>, the technology on which Bitcoin operates.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin is the first and best-known cryptocurrency, or virtual currency according to the terminology used in Serbia\u2019s Law on Digital Assets. It was created as a digital form of value that enables transfers between users without requiring every transaction to be processed by a bank or another centralized institution. Today, Bitcoin is most commonly used [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":10306,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-10301","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/posts\/10301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/comments?post=10301"}],"version-history":[{"count":1,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/posts\/10301\/revisions"}],"predecessor-version":[{"id":10310,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/posts\/10301\/revisions\/10310"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/media\/10306"}],"wp:attachment":[{"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/media?parent=10301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/categories?post=10301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto12.com\/en\/wp-json\/wp\/v2\/tags?post=10301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}