WTF is Bitcoin?

Cash remains the criminal's tool of choice, because it is genuinely anonymous and leaves no record. Bitcoin's ledger is public and permanent, so every transaction is traceable forever, which makes it a poor place to hide. Criminals have worked this out: Chainalysis found Bitcoin's share of illicit transaction volume fell from around 70% in 2020 to roughly 7% in 2025, as they moved to other assets. Illicit activity accounts for under 1% of all digital-asset transaction volume. Some people do use it badly, as they do with cash and email. That is an argument about people rather than technology.

Bitcoin does use a lot of electricity, and there is no point pretending otherwise. Cambridge researchers put the network at roughly 0.5% of global electricity use. Where that power comes from has shifted a great deal, though. The same Cambridge study found sustainable sources at 52.4% of Bitcoin mining in 2025, up from 37.6% in 2022, with coal falling from 36.6% to 8.9%. Natural gas is now the single biggest source at 38.2%, so this is genuinely better rather than solved. Miners chase the cheapest power, which tends to be power nobody else wants. This Machine Greens, further down this page, covers the argument in both directions.

People have been saying exactly that at every price since it cost a few pence. Nobody honest can tell you where it goes from here, and anyone who claims they can should be ignored on principle. What we can say is that it remains small next to gold, property or the bond market, and that you can buy a few pounds' worth rather than a whole one. Whether that is interesting to you is your call, not ours.

It has crashed hard, repeatedly, and recovered each time over a period of years. That is unusual for a bubble, which tends to pop once and stay popped. It has also run continuously since 2009, and the network itself has never been broken. None of which guarantees anything about the future. The value can fall a very long way, and you should never put in money you need.

Several have tried, with limited success, because there is no company to shut down and no office to raid. The network runs on thousands of independent computers worldwide. The realistic risk is not prohibition but regulation, which is already happening in the UK and elsewhere, and which mostly affects the exchanges you buy through rather than Bitcoin itself.

Two separate risks, worth keeping apart. The price can fall a long way, which is why nobody sensible puts in money they need soon. And you can lose access to your own Bitcoin by losing your keys and your backup, which is a solvable problem and the reason we wrote a whole page about holding it safely. The second risk is entirely within your control.

Yes. It's legal to buy, hold and sell Bitcoin in the UK. It's treated as an asset rather than legal tender, and any exchange serving UK customers has to register with the FCA.

No. A single Bitcoin divides into 100 million tiny units called satoshis, so you can buy a few pounds' worth and own a fraction.

As little as a few pounds. Plenty of people start small with a regular amount rather than a lump sum. What you do is your call, and this page is education, not advice.

Bitcoin came first, and it's the only one with a genuinely fixed supply and no company or founder steering it. The thousands of other digital assets are separate projects with their own teams, aims and risks. We write about Bitcoin and not the rest, and the distinction matters a great deal more than the industry usually admits.

Generally yes. HMRC treats Bitcoin as an asset rather than money, so selling it, spending it or swapping it counts as a disposal and can create a capital gains tax bill. The annual exempt amount is £3,000, and the rate depends on your income band. Simply buying and holding is not itself a taxable event, and neither is moving it between your own wallets. Worth knowing: since January 2026, UK platforms have had to collect and report customer data to HMRC. Thresholds change, so check HMRC's current guidance or speak to an accountant about your own position.

Not on the exchange, once the amount matters to you. Moving it to a wallet you control means nobody else can lose it, freeze it, or go bust while holding it. Our guide to holding Bitcoin walks through the options, from a first hardware wallet upwards.

Yes, in two ways. Its value can fall sharply, and you can lose access by losing your keys and your backup. The first is a risk you choose to take. The second is avoidable with a written-down backup kept somewhere safe.

The Bitcoin network itself has never been hacked in its entire history. The real risks are its price, which can fall sharply, and losing access to your own coins, which is why backups and self-custody matter.

The software is open-source, so anyone can copy the code, and plenty have. What can't be copied is the network itself: the years of accumulated computing power, the thousands of independent nodes, and the simple fact that people value it. A photocopy of a twenty pound note has much the same problem.

The last new Bitcoin is expected around the year 2140, so it isn't a near-term concern. After that, the people securing the network are paid through transaction fees rather than newly created coins.

Through a registered exchange. You deposit pounds, buy Bitcoin, and ideally move it to a wallet you control afterwards. Our UK buying guide compares the main options honestly, including the fees that are easy to miss.