Frequently Asked Questions

Bitcoin is a form of digital currency introduced in 2008 by a mysterious person, or group of people, known only as Satoshi Nakamoto. Unlike traditional currencies, Bitcoin operates as a decentralized system, free from the control of central banks or governments. Instead, it relies on a network of users who collectively maintain its operations via a digital ledger called a blockchain.

In essence, a blockchain is just a database that is small enough that thousands of people around the world can store it on their local devices and that it can constantly be updated via an established set of rules. It is essentially just a very inefficient database in which the benefits of decentralisation outweigh the cost of running the blockchain.

The 'blockchain trilemma' refers to the challenge of maintaining decentralisation, security and scalability - efforts to maximise one of these properties results in trade-offs in another. Bitcoin prioritises decentralisation and security, which comes at the expensive of scalability. Other cryptos  market themselves as superior to bitcoin in some attribute but they are really just making a different set of trade-offs and typically sacrificing decentralisation in the process.

These two attributes - decentralisation and security - are at the heart of what makes bitcoin valuable. This means that the key rules running the bitcoin network cannot be changed by any individual or group of individuals, which enforces the maximum supply of bitcoin of 21 million. Bitcoin's credible fixed supply means that it can be truly thought of as digital money, whereas other cryptocurrencies are best thought of as semi-decentralised equities, the value of which is unclear (to us at least).

Most other cryptocurrencies operate more like venture backed tech companies than open monetary networks. They’re controlled by foundations or developer teams that can change the rules, issue more tokens, or steer the project’s direction, all things that simply can’t happen with Bitcoin.

For further reading on this topic, we suggest the following articles:

• Bitcoin's Network Effect by Lyn Alden - https://www.lynalden.com/bitcoins-network-effect/
• Bitcoin not Blockchain by Parker Lewis - https://www.unchained.com/blog/bitcoin-not-blockchain
• The Crypto Catch-22: Why Bitcoin Only by Jesse Myers - https://www.onceinaspecies.com/p/the-crypto-catch-22-why-bitcoin-only

We have a Bitcoin Basics guide covering Bitcoin 101, thoughts about buying/storing bitcoin and an introduction to the Lightning network.

General advice is to try and learn as much as you can about this new and evolving ecosystem by doing your own research. A great starting point is Inside Africa's Secret Off Grid Bitcoin Mines by Joe Nakamoto, Broken Money by Lyn Alden and The Big Print by Larry Lepard.

1. You might now want to dip your toe in the water and see how you could swap money from the old fiat (£’s, $’s) network we are familiar with to the new Bitcoin network. Exchanges like CoinCorner or Coinbase might be your first port of call, or the digital services like Revolut or PayPal.
2. Try using Bitcoin. Spend using the Lightning Network - fast and low-cost layer of the network. Many exchanges allow you to send bitcoin via the Lightning Network to buy goods and services or to send to your own wallet. Maybe try installing an app like ‘Wallet of Satoshi’ on your phone? Try Bitrefill to buy gift cards, or explore BTCMap.org to find places that accept Bitcoin in the UK.
3. As you become more knowledgeable about Bitcoin you will naturally want to store larger amounts of wealth. Some pension funds, companies and charities are adding Bitcoin to their portfolios so you can make enquiries. We recommend learning about ‘self-custody’ i.e. hardware wallets like a Trezor or Coldcard Bitcoin storage.

Some trusted names in Bitcoin are listed below. Many of these people have produced YouTube videos, Spotify podcasts or books.

• General Bitcoin information - Andreas Antonopoulos, Jeff Booth, Jason Maier and the 'What Bitcoin Did' podcast
• Using the Lightning network - BTC Sessions
• Storing Bitcoin safely (hardware wallets etc) - BTC Sessions
• Human rights and Bitcoin - Alex Gladstein, Anita Posch
• Environmental Bitcoin - Daniel Batten, Margo Paez, Troy Cross

The most common way to buy Bitcoin is on an traditional exchange, which allows you to exchange your pounds/dollars into bitcoin. It can also be bought on Peer-to-peer (P2P) exchanges allow users to trade directly with each other, eliminating the need for a central authority. More information on how to buy bitcoin can be found on our Bitcoin basics page.

Bitcoin can be stored using a custodial service, such as an exchange, ideally offering an insurance policy and segregating funds. It is also possible to store bitcoin yourself - so called 'self-custody' -  one can take full control of your assets by moving your bitcoin off exchanges and into a private wallet where you alone hold the keys. More information about custody options and trade-offs can be found on our Bitcoin basics page.

At the moment, Bitcoin Policy UK is a completely volunteer-led organisation, which sadly means we are not in a position to offer any paid employment. For opportunities to volunteer, any opportunities will be advertised on the Contact page.

As a volunteer-led policy organisation we are unable to assist with individual cases.

If you think there is fraud and the platform is based in the UK you could try reporting the issue to Action Fraud, the UK’s national fraud reporting centre: https://www.actionfraud.police.uk/.  Otherwise it may be a case of seeking legal advice.