Bitcoin has captured global attention like never before. In December 2024, its price soared past $107,000, setting a new all-time high and sparking widespread curiosity. With growing interest from governments, investors, and everyday users, understanding Bitcoin—what it is, why its value is rising, and how to buy it—has become essential. This comprehensive guide breaks down everything you need to know about Bitcoin in clear, accessible language.
What Is Bitcoin?
Bitcoin (BTC) is a decentralized digital currency created in 2008 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It was introduced through a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which outlined a revolutionary way to transfer money online without relying on banks or central authorities.
Launched in 2009, Bitcoin operates on a technology called blockchain, a distributed ledger that records every transaction across a global network of computers. Unlike traditional currencies issued by governments, Bitcoin has no central issuer. Instead, it relies on cryptography and consensus mechanisms to verify transactions and control the creation of new units.
Today, Bitcoin stands as the world’s most recognized and widely adopted cryptocurrency, serving both as a medium of exchange and a store of value—often referred to as “digital gold.”
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Why Is the Bitcoin Price Surging?
The surge in Bitcoin’s price in late 2024 can be attributed to a combination of macroeconomic trends, institutional adoption, and geopolitical signals.
One major catalyst was the U.S. presidential election outcome. The incoming administration signaled strong support for cryptocurrency innovation, pledging to make America a global hub for digital assets. During a major Bitcoin conference in July 2024, the president-elect declared ambitions to turn the U.S. into a "Bitcoin superpower." This shift marked a dramatic reversal from previous skepticism toward crypto.
Further boosting market confidence was the announcement of a proposed "strategic Bitcoin reserve"—a concept modeled after the Strategic Petroleum Reserve. The idea of government-backed accumulation of Bitcoin sent bullish signals across financial markets, reinforcing the narrative that Bitcoin could become part of national financial infrastructure.
Additionally, ongoing inflation concerns, increased institutional investment via ETFs, and limited supply due to Bitcoin’s fixed cap of 21 million coins have all contributed to upward price pressure.
How Does Bitcoin Work?
At its core, Bitcoin functions on a peer-to-peer (P2P) network. Every participant (or node) in the network maintains a copy of the blockchain—the complete history of all Bitcoin transactions. When someone sends Bitcoin, the transaction is broadcast to the network and verified by nodes using cryptographic rules.
Once validated, transactions are grouped into blocks and added to the chain through a process called mining. This decentralized structure eliminates the need for intermediaries like banks, enabling direct, trustless transfers between parties anywhere in the world.
Because there's no single point of failure, the system is highly resilient. However, this also means users bear full responsibility for securing their own funds.
What Does “Bitcoin Mining” Mean?
Bitcoin mining is the engine that powers the network. Miners use powerful computers to solve complex mathematical puzzles—a process known as proof-of-work (PoW). The first miner to solve the puzzle gets to add a new block of transactions to the blockchain and is rewarded with newly minted bitcoins.
This mechanism serves two purposes: it secures the network against fraud and controls the release of new bitcoins into circulation. Over time, the reward halves approximately every four years in an event called the halving. Experts estimate that the final bitcoin will be mined around the year 2140, after which no more will be created.
Mining requires significant computational power and energy, leading to debates about sustainability—especially in countries like Iran, where excessive electricity consumption has prompted regulatory crackdowns.
El Salvador Adopts Bitcoin as Legal Tender – What Happened?
In June 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender. The move aimed to promote financial inclusion, reduce remittance costs, and attract foreign investment.
However, the rollout faced immediate challenges. On the first day of implementation, Bitcoin’s price dropped sharply by 16%, and technical issues caused transaction delays on local exchanges. Critics, including emerging markets expert Mark Mobius, argued that only economically fragile nations might resort to such measures.
Despite early setbacks, recent performance tells a different story. As Bitcoin surpassed $100,000 in 2025, El Salvador’s holdings—purchased at lower prices—generated substantial unrealized gains. President Nayib Bukele revealed that the country’s Bitcoin portfolio had reached a market value of $630 million on an initial investment of $270 million, yielding an impressive return of over 133%.
Still, adoption remains limited: fewer than 40% of citizens actively use it, and only about 20% of businesses accept it as payment.
Is Cryptocurrency Used for Money Laundering and Crime?
While early associations with illicit activities—such as Silk Road or ransomware payments—have tarnished crypto’s reputation, the reality today is more nuanced.
Yes, cryptocurrencies can be used for illegal purposes due to pseudonymity and cross-border transfer ease. However, blockchain transparency makes many transactions traceable. Law enforcement agencies now routinely track and seize illicit funds using forensic tools.
Moreover, legitimate use cases are expanding rapidly: cross-border remittances, decentralized finance (DeFi), non-fungible tokens (NFTs), and even central bank digital currency (CBDC) research are reshaping finance.
Regulators worldwide remain cautious. Taiwan’s Financial Supervisory Commission warns that virtual currencies are not legal tender and carry high volatility and speculative risk. Similarly, Taiwan’s Central Bank emphasizes that while crypto innovation is inevitable, consumer protection must come first.
Can Bitcoin Replace Traditional Money?
Bitcoin is unlikely to replace fiat currencies anytime soon—but it may complement them.
Unlike government-issued money, Bitcoin is not backed by physical assets or state authority. Its value stems from scarcity, utility, and market demand. While some compare it to gold as a hedge against inflation, others see it as a speculative asset.
That said, forward-thinking economists like former Premier Chen Chong have questioned whether central banks should ignore Bitcoin entirely. In a recent article, he suggested that dismissing digital assets could leave national reserves vulnerable in an era of global inflation.
Could central banks eventually hold Bitcoin like gold? It’s still speculative—but not impossible.
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Frequently Asked Questions (FAQ)
What gives Bitcoin its value?
Bitcoin’s value comes from its scarcity (capped at 21 million), decentralization, security, and growing acceptance as a store of value. Unlike fiat money, it cannot be inflated at will by governments.
Is Bitcoin legal in Taiwan?
Yes, owning and trading Bitcoin is legal in Taiwan. However, it is not recognized as legal tender and lacks protection under traditional banking laws.
How do I keep my Bitcoin safe?
Store your Bitcoin in secure wallets—preferably hardware or cold wallets offline. Avoid keeping large amounts on exchanges due to hacking risks.
Can I buy less than one Bitcoin?
Absolutely. Bitcoin is divisible up to eight decimal places (1 satoshi = 0.00000001 BTC), so you can invest even small amounts.
What affects Bitcoin’s price?
Key factors include macroeconomic conditions (inflation, interest rates), regulatory news, institutional adoption, technological upgrades (like halvings), and market sentiment.
Will Bitcoin hit $1 million?
Some analysts project this could happen long-term due to scarcity and increasing demand. However, prices remain highly volatile and subject to unforeseen events.
Bitcoin represents more than just a digital coin—it’s a paradigm shift in how we think about money, ownership, and trust. Whether you're an investor, technologist, or simply curious, understanding its mechanics and implications is crucial in today’s evolving financial landscape.
As adoption grows and regulations mature, staying informed is your best defense—and your greatest opportunity.
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