FAQ
Bitcoin & Cryptocurrency — Common Questions
What is Bitcoin?+
Bitcoin is a decentralized digital currency created in 2009 by Satoshi Nakamoto. It allows peer-to-peer transactions without banks or intermediaries, recorded on a public blockchain.
How do I buy Bitcoin?+
The easiest way is through a regulated exchange like Binance. Create an account, verify your identity, deposit funds, and buy BTC. Always transfer your Bitcoin to a personal wallet after purchase.
Is Bitcoin safe?+
The Bitcoin network itself is extremely secure. The risks come from exchanges being hacked, losing your private keys, or falling for scams. Use a hardware wallet for large amounts and enable 2FA on all accounts.
What is a Bitcoin wallet?+
A Bitcoin wallet stores your private keys — the passwords that prove you own Bitcoin. Hardware wallets (like Ledger) store keys offline for maximum security. Software wallets are convenient but less secure.
What is the difference between Ledger and Trezor?+
Both are hardware wallets. Ledger uses a secure element chip and has a larger app ecosystem. Trezor is open-source and has a longer track record. Both are excellent choices for securing your crypto.
What is a blockchain?+
A blockchain is a distributed database that records transactions in blocks linked together chronologically. It is immutable — once data is written, it cannot be altered — and transparent, viewable by anyone.
What is Bitcoin mining?+
Mining is the process of validating transactions and adding them to the blockchain. Miners use specialized computers to solve mathematical puzzles, and are rewarded with newly created Bitcoin.
What is the Bitcoin halving?+
Every ~4 years, the reward miners receive for each block is cut in half. This reduces the rate of new Bitcoin creation and has historically preceded significant price increases.
How do I recognize a crypto scam?+
Red flags include: guaranteed returns, unsolicited contact, pressure to act quickly, requests to send crypto first, celebrity endorsements, and platforms with no verifiable company information.
What is a seed phrase?+
A seed phrase (or recovery phrase) is 12-24 words that can restore your wallet if your device is lost. Never share it with anyone, never store it digitally — write it on paper and keep it safe offline.
Is Bitcoin legal?+
Bitcoin is legal in most countries. Some countries restrict or ban it. Always check the regulations in your jurisdiction. In most Western countries, Bitcoin is legal to own and trade but may be subject to capital gains tax.
What taxes do I pay on Bitcoin?+
In most countries, Bitcoin is treated as a capital asset. You pay taxes on gains when you sell, trade, or use Bitcoin. Keep records of all transactions. Consult a tax professional familiar with crypto in your country.