Bitcoin Guide: What It Is and How to Buy It in Australia

As cryptocurrency continues to surge in popularity worldwide, Bitcoin remains at the forefront of this digital revolution. Often hailed as "digital gold," Bitcoin has gone from a niche experiment to a globally recognised asset—capturing the attention of both retail investors and the biggest financial institutions in the world.

In this guide, we'll explore what makes Bitcoin so unique and walk you through how to buy Bitcoin in Australia. Whether you're intrigued by its potential for growth, looking for a hedge against inflation, want to escape the centralised financial system we are controlled by or are simply curious about the technology that underpins it, our step-by-step approach will help you navigate this exciting new frontier of finance. Let's start by diving into the basics of Bitcoin and why it matters.

Understanding Bitcoin 

You've likely heard of Bitcoin in the news or on social media. In this section, we'll explore what Bitcoin is and why it matters.

What Is Bitcoin?

Bitcoin (BTC) is a decentralised digital currency. It is digital because it only exists in an online form and decentralised because it operates without the need for an intermediary, like a bank or government. This means it can act as a form of money without needing someone or some group to control it. 

This allows Bitcoin to operate on a peer-to-peer network, where people who use it can send funds to one another without having to go through a third party or intermediary. 

Bitcoin is also the newest technology that offers a potential replacement for fiat currency (regular money). It has all the qualities of money combined with those of finite commodities like gold. It offers:

1. Scarcity: There is a limited amount of it, unlike printed money.

2. Portability: It's much easier to transport than a lump of gold.

3. Uniformity: Every bitcoin is identical and interchangeable.

4. Durability: BTC is a digital asset. It won't physically degrade and can be stored indefinitely.

5. Acceptability: This is increasing with time as people come to realise its potential.

Bitcoin Benefits:

• Decentralised: Operates independently of banks and governments, giving you direct control over your money

• Borderless: You can take it anywhere in the world with you without any hassles. Send and receive anywhere in the world.

• Permissionless: Anyone can use Bitcoin without the need for permission from a bank or authority.

• Fixed Supply: Bitcoin's fixed supply of 21 million coins means that, unlike traditional fiat currencies, BTC is a scarce asset, allowing it to maintain and even grow purchasing power over time, unlike fiat currencies, which are printed out of thin air.

A Brief History

Bitcoin holds the title of the first-ever cryptocurrency. It emerged in 2008 amid the global financial crisis, introduced by a still-unidentified individual or group under the pseudonym Satoshi Nakamoto. Against a backdrop of bank failures and rampant money printing, Nakamoto proposed a revolutionary idea: an electronic cash system that was fully peer-to-peer and didn't require any trusted intermediaries, such as banks or governments.

The Bitcoin Whitepaper & Early Adoption

• Whitepaper Release (2008): Nakamoto published a nine-page document (commonly called the Bitcoin whitepaper) detailing how Bitcoin would function without centralised oversight.

• First Transaction (2009): Soon after, the Bitcoin network went live, and the inaugural transaction officially marked Bitcoin's birth.

Why Is the Fixed Supply Significant?

One of Bitcoin's defining features is its capped supply of 21 million coins. Much like gold's natural scarcity, there can never be more than 21 million BTC in circulation—unlike fiat currencies, which governments can print endlessly. This built-in limitation has led many to view Bitcoin as a hedge against inflation and a store of value.

Notable Milestones

• 2010 – The Pizza Purchase: In what's now a legendary moment, a user paid 10,000 BTC for two pizzas—an amount worth an astronomical sum in today's market.

• 2017 – USD $19,000 Breakthrough: Bitcoin smashed through the $19,000 milestone for the first time, capturing mainstream media attention.

• 2021 – USD $69,000 Peak: The price of BTC soared to around $69,000, setting a then all-time high.

• 2024 – USD $100,000 Landmark: In early December 2024, Bitcoin made headlines yet again by surpassing the $100,000 mark.

A Global Phenomenon

Although Bitcoin's price has been famously volatile, it has repeatedly outperformed many traditional asset classes over the past decade. Its unique combination of decentralisation, scarcity, and technological innovation has turned a once-obscure concept into a worldwide phenomenon—paving the way for thousands of other cryptocurrencies and transforming people's thoughts about money.

Current Market Status (03/01/2025)

On January 3rd, 2025, Bitcoin's performance continues to reflect its growing adoption and global trading volumes. Here's a snapshot of the essential metrics on this date:

• Price: $96,500 USD (approximately $154,000 AUD)

• Market Capitalization (Market Cap): $1.92 Trillion USD (about $3.05 Trillion AUD)

• 24-Hour Trading Volume: $44 Billion USD (around $71 Billion AUD)

• Circulating Supply: 19.8 Million BTC

• Maximum Supply: 21 Million BTC

Why These Metrics Matter

• Market Cap: Calculated by multiplying Bitcoin's current price by the total circulating supply, this figure helps gauge the overall value of BTC in circulation.

• 24-Hour Trading Volume: This represents how much Bitcoin was traded across all platforms within the past day, indicating market liquidity and interest.

Note: Cryptocurrency prices are famously volatile. Values can shift dramatically even within a single day. Always verify current market conditions before making any investment decisions.

Why Buy Bitcoin?

Bitcoin's rise from an obscure digital experiment to a global financial asset has caught the attention of investors, tech enthusiasts, and everyday users alike. Below are some of the key reasons why many people choose to include Bitcoin in their financial plans.

1. Investment Potential

• High Returns Over Time: Historically, Bitcoin has often outperformed other asset classes. In fact, it was the top-performing asset in 8 of the last 11 years, drawing in both individual investors and major institutions.

• BTC ETF Accessibility: The introduction of Bitcoin Exchange-Traded Funds (ETFs) makes it easier for those who prefer traditional brokerage accounts to gain exposure without having to sign up for a crypto exchange or manage a separate crypto wallet.

• Portfolio Diversification: Adding Bitcoin to your investment mix can help broaden your portfolio, potentially balancing risk across various asset classes.

Important: As with any investment, Bitcoin carries risks—including price volatility. Always invest responsibly and never more than you can afford to lose.

2. Versatile Use Cases

• Global Transactions: Send funds across borders in minutes, often with lower fees than traditional remittance services.

• Payment Method: An increasing number of retailers now accept BTC for goods and services.

• Financial Inclusion: Bitcoin's peer-to-peer nature offers services like decentralised finance (DeFi), enabling lending, borrowing, and staking without a central authority.

  
  

3. Hedge Against Inflation

• Limited Supply: Bitcoin's maximum supply of 21 million coins creates built-in scarcity—no central bank can simply "print" more.

• Decentralisation: No single entity or government can manipulate the Bitcoin network or inflate its supply.

• "Digital Gold" Narrative: Much like gold, Bitcoin is viewed by many as a store of value, particularly during periods when fiat currencies lose purchasing power.

  
  

4. Institutional Adoption

• Growing Corporate Interest: Financial giants like BlackRock and Fidelity are increasingly offering clients Bitcoin-related products and services, signalling growing confidence in BTC's longevity.

• Pro-Crypto Initiatives: High-profile figures and governments have announced ambitions to bolster national Bitcoin reserves or establish themselves as crypto hubs, reflecting a larger trend of mainstream acceptance.

In short, Bitcoin provides a unique mix of potential returns, practical uses, and a hedge against traditional financial vulnerabilities. Whether you're intrigued by its technological underpinnings or its promise as a long-term investment, understanding these key factors can help you decide to add Bitcoin to your portfolio.

How to Buy Bitcoin

Buying Bitcoin might feel intimidating at first, but it's often simpler than you expect—especially with the right platform. Here are the basic steps to get started:

1. Choose a Reliable Platform

   • Opt for a reputable, regulated Australian platform like BlackSheep that allows you to buy Bitcoin directly with Australian dollars (AUD).

   • Make sure the platform has robust security measures, transparent fees, and positive user reviews.

2. Create an Account & Verify Your ID

   • Sign up by providing your email and creating a strong password.

   • Complete KYC (Know Your Customer) checks. In Australia, this typically involves uploading a valid ID to comply with regulations.

3. Fund Your Account with AUD

   • Deposit Australian dollars into your exchange wallet.

   • Most platforms support bank transfers, debit/credit cards, or other payment methods—pick the one you're most comfortable with.

4. Place Your Order

   • Navigate to the "Buy Bitcoin" section on the platform.

   • Enter the amount of BTC (or AUD value) you wish to purchase.

   • Review any applicable fees, then confirm the transaction.

5. Store Your Bitcoin Securely

   • You can keep your BTC on the exchange if you plan to trade frequently.

   • Alternatively, consider transferring your Bitcoin to a secure wallet—either a hot wallet for easy access or a cold wallet for long-term storage.

Pro Tip: Always double-check the latest BTC price before buying, and stay informed about market volatility. Buying and holding Bitcoin is a personal decision—never invest more than you're comfortable losing.

Storing Your Bitcoin

Once you've purchased Bitcoin—or any cryptocurrency—it's important to decide how and where you'll store it. Unlike a traditional bank account, Bitcoin storage relies on digital wallets that safeguard the private keys you need to access your funds.

Hot Wallets (Online)

• Pros: Convenient for frequent transactions, easy to set up, ideal for everyday use.

• Cons: Connected to the internet, making them more vulnerable to hacks.

• Use Case: Treat a hot wallet like your "checking account"—handy for quick buys, sells, or transfers.

Cold Wallets (Offline)

• Pros: Significantly more secure, as they aren't connected to the internet; ideal for large amounts or long-term holdings.

• Cons: Slightly less convenient for frequent trading; hardware wallets can be lost if not stored securely.

• Use Case: Think of a cold wallet as your "savings account," where you keep most of your BTC for the long haul.

Pro Tip: You don't have to stick to just one method. Many people use a hot wallet for daily transactions and a cold wallet for safely storing larger balances over time.

Best Security Practices

Bitcoin's rapidly evolving landscape means that staying vigilant and employing multiple layers of protection can help safeguard your assets.

1. Password Management

   • Use unique, complex passwords for each account.

   • Update them regularly to reduce risk.

2. Two-factor authentication (2FA)

   • Enable 2FA on your exchange accounts, wallets, and email.

   • Prefer authenticator apps over SMS when possible.

3. Crypto Storage Diversity

   • Split your holdings between different wallets to spread risk.

   • Decide which wallets to use for hot vs. cold storage based on how often you plan to transact.

4. Avoiding Scams

   • Only trade on trusted, reputable platforms.

   • Be wary of phishing attempts, fake exchanges, and suspicious investment offers.

5. Stay Informed

   • Keep up with the latest security updates for your wallet or exchange.

   • Follow crypto news to stay aware of new scams or vulnerabilities.

Long-Term Considerations

1. Stay Informed

   • Monitor market trends and regulatory changes that may impact your investment.

   • Join crypto communities or follow reliable news sources to expand your knowledge.

2. Investment Approach

   • Consider dollar-cost averaging (DCA) if you prefer gradual, consistent investment.

   • Periodically review whether your strategy aligns with your financial goals and risk tolerance.

3. Review Your Strategy

   • Market conditions change—sometimes quickly—so reassessing your allocations can be wise.

   • Don't hesitate to adjust if your goals or risk appetite evolve.

4. Do Your Research

   • Vet new tokens, platforms, or opportunities thoroughly.

   • Understand how your Bitcoin holdings fit into your broader financial plan.

By thoughtfully storing your Bitcoin, following rigorous security practices, and planning for the long term, you can maximise the benefits of this innovative digital asset. Whether you treat Bitcoin as an everyday currency, a speculative investment, or a hedge against inflation, remember to stay informed, stay secure, and only invest what you can afford to lose.

Final Thoughts

Bitcoin has evolved from a niche experiment into a globally recognised asset, attracting everyone from tech enthusiasts to institutional investors. Its potential as "digital gold," borderless currency, and a hedge against inflation has positioned BTC at the forefront of modern finance—especially in Australia, where adoption continues to rise.

However, crypto remains a high-risk market. Prices can swing dramatically, and innovations unfold at lightning speed. The key to success in Bitcoin is staying informed, prioritising secure storage, and investing what you can afford to lose. With the right research, careful strategy, and reliable platforms like BlackSheep, your journey into Bitcoin can be both exciting and rewarding.

Disclaimer: This information is provided by Blacksheep Operations Pty Ltd ABN 16 674 111 392 for general informational purposes only and may refer to products not available in your location. It does not constitute (i) investment advice or a recommendation to invest; (ii) an invitation or solicitation to buy, sell, or hold digital assets; or (iii) financial, legal, accounting, or tax advice. Digital assets, including stablecoins and NFTs, are highly volatile and carry significant risks. You should carefully assess your financial situation before deciding whether to trade or hold such assets. For advice specific to your circumstances, please consult your legal, tax, or investment adviser. All data and statistics are provided solely for general information. Blacksheep Operations accepts no responsibility or liability for any errors or omissions in this information, nor for any use of or reliance upon it by others.

Frequently Asked Questions (FAQs)

What exactly is Bitcoin, and how does it work?

Bitcoin is a digital currency powered by blockchain technology, a decentralised ledger maintained by a network of computers. Instead of being controlled by banks or governments, transactions are validated collectively, making manipulation and counterfeiting extremely difficult. Each user holds unique cryptographic keys to manage their funds and execute peer-to-peer transfers. Because Bitcoin is finite—with a maximum supply of 21 million coins—it's often regarded as "digital gold." The result is a secure, transparent system where transactions can be made globally and without intermediaries.

How much will I get if I put $1 dollar in Bitcoin?

The exact amount you'll get depends on Bitcoin's current market price; if one BTC is $20,000, your $1 would buy 1/20,000 of a Bitcoin. After purchase, your holding's value fluctuates as the market price changes, so you could see gains if the price climbs or losses if it drops. Cryptocurrency is highly volatile, so even a small investment carries risks. Always check real-time prices before buying. Never invest more than you can afford to lose.

How do I explain Bitcoin to a friend?

Think of Bitcoin as digital money that doesn't rely on banks or governments, allowing anyone to send funds worldwide at any time. It runs on a public ledger called the blockchain, which secures and records every transaction. Only 21 million Bitcoins will ever exist, giving it a scarcity like precious metals. Rather than trusting a single authority, transactions are verified by a global network of computers. This creates a borderless, permissionless system where money can move as easily as sending an email.