People use Bitcoin for four main reasons. Some hold it as an asset that will never exceed 21 million coins. Some want to keep money without a bank, using only their own keys. Some send value across borders directly to another person. A growing number get price exposure through regulated funds without holding coins themselves. Each reason comes with trade-offs. Payments cannot be reversed, the price is volatile, transactions are public, and tax rules still apply. The sections below explain each reason and its trade-off, using Bitcoin's own documentation, regulators and official records.
Where Bitcoin came from
In 2008 Satoshi Nakamoto published "Bitcoin: A Peer-to-Peer Electronic Cash System". It describes a system in which "online payments [can] be sent directly from one party to another" without going through a financial institution. The paper sets out the core idea: "What is needed is an electronic payment system based on cryptographic proof instead of trust."
The network started on 3 January 2009, when the first block, the genesis block, was mined. Its generation transaction contains the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". Many readers take that headline as a comment on the banking system of the time. Bitcoin.org says the first specification appeared on a cryptography mailing list and that Satoshi left the project in late 2010.
Reason 1: A fixed supply
Bitcoin.org states that "only 21 million bitcoins will ever be created." New coins enter circulation through the generation transaction, the first transaction in each block. It pays the miner who produced that block.
The issuance schedule is part of the software. In Bitcoin Core's mainnet parameters, the block subsidy halves every 210,000 blocks (nSubsidyHalvingInterval = 210000). The target time between blocks is ten minutes (nPowTargetSpacing = 10 * 60). Together these produce a halving about every four years. The most recent halving came at block 840,000 in April 2024 and cut the subsidy from 6.25 to 3.125 BTC per block.
This known, fixed supply is why many holders treat Bitcoin as long-term savings rather than spending money. A fixed supply does not set the price, though. The price moves with demand and can fall sharply (see the risks below).
Reason 2: Self-custody, with no bank in the middle
A Bitcoin wallet holds keys, not coins. Whoever controls the private key controls the funds. Bitcoin.org puts the trade-off plainly: "you control your bitcoin—but you are also responsible for keeping it secure." If you leave coins with a custodian, you take on counterparty risk instead.
For people who distrust banks or have limited access to them, this is the main attraction. The cost is responsibility. Bitcoin.org warns that if you lose your recovery phrase, "your funds are gone permanently". No one can restore them.
How to hold Bitcoin yourself
- Write down the recovery phrase offline and store it somewhere safe. Anyone who has it can take the funds.
- Bitcoin.org recommends using each receiving address only once, for privacy.
- Treat a hardware or software wallet as a tool for signing transactions. The coins are recorded on the blockchain, not stored on the device.
Reason 3: Sending value across borders
Bitcoin transfers go directly between two parties and do not depend on banking hours or a correspondent bank. Bitcoin.org explains that the fee "is not related to the amount of bitcoins being sent". It depends on network demand and the size of the transaction, which can make large transfers relatively cheap.
Traditional remittances are expensive. The World Bank's Remittance Prices Worldwide report for Q1 2025 gives the global average cost of sending $200 as 6.49%, against a UN Sustainable Development Goal target of 3% by 2030. That cost is one reason people look at alternatives. It does not mean Bitcoin is always cheaper. Bitcoin's fees change with network congestion, and converting to and from local currency can add more costs.
How confirmation works
A transfer is final only after it has been included in blocks. Bitcoin.org says new blocks arrive "approximately every 10 minutes on average", but the timing varies. Its guidance on confirmations:
| Confirmations | Bitcoin.org guidance |
|---|---|
| 0 | Safe only if you trust the payer |
| 1 | Somewhat reliable |
| 3 | Mostly reliable |
| 6 | Minimum recommended for high-value transfers |
| 30 | Recommended in emergencies, to allow human intervention |
A low fee can delay the first confirmation.
How many confirmations should you wait for?
Answer a few questions about an incoming Bitcoin payment to see what Bitcoin.org's confirmation guidance says.
Do you trust the person who is paying you?
- Yes, I trust the payer → 0 confirmations
- No, or I am not sure → next question
Is this a high-value transfer?
- Yes, it is high-value → next question
- No, it is a smaller amount → next question
Is this an emergency where you need time for human intervention?
- Yes, it is an emergency → 30 confirmations
- No, it is a normal high-value transfer → 6 confirmations
Is 'somewhat reliable' enough for this payment, or do you want 'mostly reliable'?
- Somewhat reliable is enough → 1 confirmation
- I want mostly reliable → 3 confirmations
Bitcoin.org calls an unconfirmed payment safe only if you trust the payer. A Bitcoin transaction cannot be reversed; only the receiver can refund it.
Bitcoin.org rates one confirmation as somewhat reliable. New blocks arrive approximately every 10 minutes on average, but the timing varies, and a low fee can delay the first confirmation.
Bitcoin.org rates three confirmations as mostly reliable. Blocks average about 10 minutes apart, so expect to wait longer than for one confirmation.
Bitcoin.org gives six confirmations as the minimum recommended for high-value transfers.
Bitcoin.org recommends 30 confirmations in emergencies, to allow time for human intervention.
This only restates Bitcoin.org's general confirmation guidance: it cannot predict how long your payment will take or what fee it needs, and it does not cover conversion costs, tax or whether to accept Bitcoin at all.
Reason 4: Paying for things, and where that stands now
The whitepaper presented Bitcoin as electronic cash, and some merchants accept it. The best-known national experiment has since been scaled back.
El Salvador made Bitcoin legal tender in 2021. In February 2025 the IMF approved a 40-month, US$1.4 billion Extended Fund Facility for the country. The IMF says the actions required before approval included "legal reforms making acceptance of Bitcoin by the private sector voluntary" and ensuring that "tax payments are made only in U.S. dollars." The programme also limits government involvement in Bitcoin-related activity. Businesses there can still accept Bitcoin, but they are no longer required to.
Reason 5: Price exposure through regulated funds
Many people now hold Bitcoin indirectly. On 10 January 2024 the US Securities and Exchange Commission approved the listing and trading of spot bitcoin exchange-traded products (ETPs). Investors can buy these through an ordinary brokerage account without managing keys.
The SEC Chair at the time, Gary Gensler, said in his statement on the approval that "we did not approve or endorse bitcoin." He called Bitcoin "primarily a speculative, volatile asset" and noted its use in illicit activity, including ransomware and money laundering.
On 6 March 2025 the US government signed Executive Order 14233, "Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile". It directs the Treasury to hold bitcoin that the government has acquired through final forfeiture. The order states that it is to be carried out consistent with applicable law and subject to the availability of appropriations.
What the sources warn about
- Irreversible payments. "A Bitcoin transaction cannot be reversed, it can only be refunded by the person receiving the funds" (Bitcoin.org).
- Not anonymous. "All Bitcoin transactions are stored publicly and permanently on the network." The FAQ adds that Bitcoin "is not anonymous and cannot offer the same level of privacy as cash." The whitepaper's privacy model depends on "keeping public keys anonymous". Linking an address to a person breaks that privacy.
- Volatility. Bitcoin.org advises treating Bitcoin as a high-risk asset and not storing money you cannot afford to lose.
- Still experimental. Bitcoin.org says ongoing development can bring higher fees, slower confirmations or more serious problems.
- Taxes. For US tax purposes, the IRS says "digital assets are considered property, not currency," and "Income from digital assets is taxable." That includes digital assets received as payment for goods or services. Other countries have their own rules.
Bottom line
Most people who use Bitcoin today use it as a scarce asset or as money they hold themselves. Fewer use it for everyday spending. Cross-border transfers and regulated funds are the other two common routes. Bitcoin's own documentation describes the same features that attract users as risks: no intermediary, no reversals and a fully public ledger.
Limitations: the remittance figure is from Q1 2025, the most recent World Bank release we could verify. Fees and prices change constantly, and nothing here is investment advice.
