Bitcoin FAQs
Got questions? We’ve got answers. From “What is Bitcoin?” to “How do I secure my wallet?”, this easy-to-navigate FAQ breaks down the basics in clear, concise terms—perfect for beginners and seasoned HODLers alike.
What is Bitcoin?

Graph source: bitbo.io
Bitcoin is a decentralized digital currency that allows peer-to-peer transactions without intermediaries like banks. It operates on a blockchain, a public ledger that records all transactions securely using cryptography. Introduced in 2008 by Satoshi Nakamoto, Bitcoin is designed for secure, transparent, and censorship-resistant value transfer.
How does Bitcoin work?
Bitcoin transactions are verified by a network of computers (nodes) through a process called mining, where miners solve complex mathematical problems to add transactions to the blockchain. Users send and receive Bitcoin using digital wallets, which store private keys for signing transactions. The network’s consensus ensures security and prevents double-spending.
Is Bitcoin anonymous?
Bitcoin is pseudonymous, not anonymous. Transactions are recorded on the public blockchain, linked to wallet addresses but not directly to personal identities. Advanced analysis can sometimes trace transactions, so users seeking privacy should use techniques like generating new addresses per transaction.
Need help achieving anonymity? We cannot completely shelter your Bitcoin from the prying eyes of the intelligence services. Nor will we help you evade taxes. But if structured properly, your Bitcoin transactions will leave only infinitesimal footprints. If you have a desire for privacy or want to paint a smaller target for would be thieves, this can be invaluable. Explore your options by scheduling a free 15 minute consultation to discuss your concerns.
Is Bitcoin secure?
Bitcoin’s blockchain is highly secure due to its decentralized nature and proof-of-work consensus, making it resistant to hacks. However, user errors like losing private keys or using insecure wallets can lead to losses. Employ strong security practices, such as two-factor authentication and offline storage, to protect your funds.
The weak link in Bitcoin is you the user and bad habits you may acquire.As your Bitcoin savings grow, make sure these are up to snuff. Schedule a free 15 minute consultation to review that your practices are safe.
What are the risks of investing in Bitcoin?
Bitcoin carries risks like price volatility, which can lead to significant losses. Security risks include hacks on exchanges or wallets if not properly secured. Regulatory changes may also affect its value or legality. Only invest what you can afford to lose and research thoroughly.
Need help mitigating those risks? Find out how we can help by scheduling a free 15 minute consultation sign up to discuss your concerns.
Bitcoin is so expensive.
How can I afford it?
You don’t need to buy a whole Bitcoin! Just like dollars can be divided into cents, Bitcoin can be divided into 100 million parts called satoshis. You can buy as little as $1 or $5 worth—whatever fits your budget.
Many people start small, buying bits of Bitcoin over time. This strategy is called dollar-cost averaging and is popular with everyday users who want to build savings gradually without trying to time the market.
In short: Yes, you can afford it. Bitcoin is for everyone, not just the wealthy.
How can I buy Bitcoin?
You can buy Bitcoin through cryptocurrency exchanges like Coinbase, Binance, or Kraken using fiat currency (e.g., USD, EUR) via bank transfers, credit cards, or other payment methods. Peer-to-peer platforms like TransferXO also allow direct purchases from other users. Always research reputable platforms and consider fees before buying.
Need help acquiring Bitcoin securely? Privately? In the right size of UTXO’s? Find out how we can help by scheduling a free 15 minute consultation to discuss your concerns.
What is a Bitcoin wallet, and which one should I use?
A Bitcoin wallet is a software or hardware tool that stores your private and public keys to send, receive, and manage Bitcoin. Beginners might use software wallets like Coinbase Wallet or Electrum for ease of use. Intermediate users may prefer hardware wallets like Ledger Nano S Plus for enhanced security by storing keys offline.
Need help choosing what’s right for you? Find out how we can help by scheduling a free 15 minute consultation to discuss your concerns.
What is the Lightning Network?
How does it work?
The Lightning Network is a second-layer protocol built on top of Bitcoin. It enables fast, low-cost transactions by moving small payments off the main blockchain.
It works by creating payment channels between users. Once a channel is open, you can send Bitcoin instantly back and forth without waiting for blockchain confirmations. Only the opening and closing of the channel are recorded on-chain.
For example, if Alice and Bob open a channel, they can send hundreds of micro-payments privately and instantly. Even if Alice wants to pay Charlie (and has no direct channel), the network routes the payment through connected channels automatically—like handing off money through trusted intermediaries.
Because it reduces congestion on the main chain, the Lightning Network helps Bitcoin scale for everyday use—whether it’s buying coffee, tipping online, or sending money globally in seconds.
In short: It makes Bitcoin faster and cheaper for small payments, without sacrificing security.