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What is Bitcoin?

Bitcoin was the world’s first-ever digital currency and blockchain. Follow our easy-to-understand guide on what Bitcoin is, how it works and where to buy it.

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What is Bitcoin?

The word Bitcoin can be used interchangeably to describe both the digital cryptocurrency (BTC) and the Bitcoin blockchain.

Bitcoin, or BTC, is a digital currency that is exchanged across the network. There will only ever be a total of 21 million Bitcoin in existence.

Bitcoin, the blockchain, is the decentralised network that transfers and records all BTC transactions. The blockchain is what provides users with the ability to transfer wealth and, therefore, gives the digital asset value.

Bitcoin (BTC), the digital asset

Bitcoin, the digital asset, is a form of digital coin. It is often abbreviated to BTC. The coins facilitate the transfer of wealth between individuals without the requirement of a centralised organisation. Coins can be collected, traded and spent like money.

Bitcoin coins are gradually created through the process of Bitcoin mining. The system was designed so that the number of new coins created decreases with time. It will eventually take decades to produce just a few coins and there will only ever be a maximum of 21 million.

When someone talks about buying, selling or trading Bitcoin, they’re talking about these coins.
Everything else that makes Bitcoin special is down to the Bitcoin blockchain.

Bitcoin, the blockchain

The Bitcoin blockchain has two main jobs:

  1. It processes BTC transactions. When you spend BTC, it’s transferred to the recipient through the Bitcoin blockchain.
  2. It keeps a record of every BTC transaction ever made. This is often referred to as a digital ledger.

The Bitcoin blockchain was designed so that no single entity will ever have control over the network. That is what makes it special. No one can stop it from carrying transactions and no one can stop it from meticulously recording everything in the digital ledger.

How does Bitcoin work?

Bitcoin was the first-ever example of a blockchain as we know it today.

As the name suggests, a blockchain is a series of blocks chained together. Each new block contains the latest set of transactional data. The blockchain is then stored on thousands of participant computers worldwide, otherwise known as “miners”.

When a user transfers a Bitcoin from their address to a recipient’s address, that transaction is sent to the Bitcoin blockchain to be processed. The transactions are grouped into blocks and are sent to miners for verification. Once verified, the transaction is processed and the blockchain is updated. A new block of transactions is created every 10 minutes.

As all transactions are verified by thousands of miners on the blockchain, there is no chance of fraudulent payments occurring, there is no need to trust a “middleman” service such as a bank and the records can never be tampered with.

Where can I buy Bitcoin in New Zealand?

As the Bitcoin blockchain grew, an entire industry grew alongside it, including plenty of Bitcoin brokers and marketplaces.

You can find and compare some of them here.

Name Product Deposit methods Fiat Currencies Cryptocurrencies
Crypto.com App
Credit card, Cryptocurrency, PayPal, TransferWise, SEPA
USD, AUD, CAD, CHF, EUR, GBP, NZD, SGD, JPY, ZAR & 9+ more

153
cryptocurrencies

Buy 100+ cryptocurrencies, earn up to 14.5% p.a. on holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform.
Independent Reserve Exchange
Cryptocurrency, SWIFT, Osko, PayID, EFT
AUD, NZD, USD

27
cryptocurrencies

Deposit NZD and buy or sell BTC, ETH and 20+ other cryptos with trading fees of up to 0.5%.
Easy Crypto Cryptocurrency Exchange
Bank transfer, POLi
NZD

104
cryptocurrencies

Based in New Zealand, Easy Crypto enables users to simply pay in NZD through POLi or bank transfer to access a range of cryptocurrencies.
Gemini Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, CAD, EUR, GBP, SGD, HKD

48
cryptocurrencies

Trade bitcoin, Ethereum and more at a US-based exchange where payments can be made in USD.
Binance Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, GBP, EUR, RUB, TRY, NGN, UAH, PHP, CZK & 20+ more

315
cryptocurrencies

Promo: New users earn up to USD 100 in bonus rewards on qualified deposits and trades. Valid till 31 December 2021. T&Cs apply.
Finder Exclusive: Get 10% discount on your fees when signing up through Finder.
Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
FTX Cryptocurrency Exchange
FTX Cryptocurrency Exchange
Credit card, Wire transfer, Silvergate Exchange Network (SEN), Signature SIGNET
USD,EUR,GBP,AUD,HKD,SGD,TRY,ZAR,CAD,CHF,BRL

69
cryptocurrencies

FTX is an exchange built by traders for traders, with a range of derivatives markets such as options and futures with deep leverage, in addition to standard spot markets. Note: Not available for US customers.
AAX Cryptocurrency Exchange
AAX Cryptocurrency Exchange
Alipay, Bank transfer, Cash, Neteller, PayPal, Qiwi, SWIFT, WeChat, Western Union, UPI, IMPS, Paytm, Faster Payments (FPS), PayNow, Swish, Payme
AUD, CAD, CNH, CHF, EUR, GBP, HKD, NZD, SGD, USD

110
cryptocurrencies

Make fast transactions including spot, futures and P2P trading with this cryptocurrency exchange.
Coinmama Cryptocurrency Marketplace
Bank transfer, Credit card, Cryptocurrency, Debit card
USD, EUR, AUD, CAD, GBP, JPY

10
cryptocurrencies

Founded in 2013, CoinMama lets you buy and sell popular cryptos with a range of payment options and quick delivery.
Bittrex Global
Bank transfer, Credit card, Cryptocurrency, Debit card
USD

280
cryptocurrencies

Buy from one of the largest cryptocurrency exchanges with a selection of over 190+ cryptocurrencies and 3 USD pairings.
Gate.io Cryptocurrency Exchange
Cryptocurrency
USD, EUR, GBP, HKD, SGD, AUD, CHF, MXN

820
cryptocurrencies

Finder exclusive: New users get $90 worth of Gate.IO points and an airdrop of $5 in GateTokens if trade volume exceeds $100 in their first week. T&Cs apply.
A feature-rich exchange with over 700 tokens including derivatives, yield farming and lending products.
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