Learn Bitcoin
From your first satoshi to running a full node. Everything you need to understand the most important monetary innovation in history.
What is Bitcoin?
Bitcoin is a decentralized digital currency created in 2009 by the pseudonymous Satoshi Nakamoto. It enables peer-to-peer transactions without the need for intermediaries like banks. Bitcoin operates on a distributed ledger called a blockchain, where every transaction is transparently recorded and verified by a network of computers worldwide. There will only ever be 21 million bitcoins, making it inherently scarce - like digital gold.
How Does Bitcoin Work?
When you send Bitcoin, your transaction is broadcast to the network. Miners compete to validate transactions by solving complex mathematical puzzles (proof-of-work). Once solved, the transaction is added to a block and appended to the blockchain. This process takes roughly 10 minutes per block. The blockchain is immutable - once confirmed, transactions cannot be reversed or altered.
Wallets & Security
A Bitcoin wallet stores your private keys - the cryptographic passwords that let you spend your bitcoin. Wallets come in many forms: hardware wallets (physical devices), software wallets (apps), and paper wallets. Your private key must be kept secret. Many people use a 'seed phrase' (12 or 24 words) to back up their wallet. Remember: not your keys, not your coins.
Getting Your First Bitcoin
You can acquire Bitcoin through exchanges (like River, Coinbase, or Kraken), peer-to-peer platforms (like Bisq), or by accepting it as payment. You don't need to buy a whole bitcoin - the smallest unit is a 'satoshi' (0.00000001 BTC). Many people dollar-cost average (DCA) by buying small amounts regularly.
Mining
Mining is the process of using computational power to validate transactions and secure the network. Miners race to find a hash below a target value, adjusting a nonce in the block header. The first to find it earns the block reward (currently 3.125 BTC) plus transaction fees. Mining difficulty adjusts every 2,016 blocks (~2 weeks) to maintain the ~10 minute block interval.
Transactions & UTXOs
Bitcoin uses an Unspent Transaction Output (UTXO) model. Each bitcoin you own is actually a collection of UTXOs - outputs from previous transactions that haven't been spent yet. When you send bitcoin, you consume UTXOs as inputs and create new UTXOs as outputs. Any difference between inputs and outputs becomes the miner's fee.
Lightning Network
The Lightning Network is a Layer 2 payment protocol built on top of Bitcoin. It enables near-instant, low-fee transactions by creating payment channels between participants. Channels are opened and closed with on-chain transactions, but thousands of payments can flow through them off-chain. This dramatically increases Bitcoin's throughput for everyday payments.
Network & Nodes
Bitcoin's network consists of thousands of nodes worldwide. Full nodes download and verify the entire blockchain, enforcing all consensus rules. Running a full node is the most sovereign way to use Bitcoin - you verify everything yourself without trusting anyone. Anyone can run a node on modest hardware.
Bitcoin Script
Bitcoin has a simple stack-based scripting language called Script. It's intentionally not Turing-complete for security. Common scripts include P2PKH (pay-to-public-key-hash), P2SH (pay-to-script-hash), and P2WSH (pay-to-witness-script-hash). Script enables features like multisig, timelocks, and hash-locked contracts.
Taproot & Schnorr Signatures
Activated in November 2021, Taproot (BIP 340-342) brought Schnorr signatures to Bitcoin. Schnorr allows key and signature aggregation, making multisig transactions indistinguishable from single-sig on-chain. MAST (Merkelized Alternative Script Trees) enables complex spending conditions while only revealing the executed branch.
Cryptography in Bitcoin
Bitcoin uses elliptic curve cryptography (secp256k1) for key pairs, SHA-256 for proof-of-work and transaction hashing, RIPEMD-160 for address generation, and HMAC-SHA512 for HD wallet key derivation (BIP32). The security of Bitcoin fundamentally rests on the computational difficulty of reversing these cryptographic functions.
Running a Full Node
Running Bitcoin Core verifies every transaction and block yourself. Requirements: ~600GB disk space (pruned: ~10GB), 2GB+ RAM, broadband connection. Download Bitcoin Core from bitcoincore.org, let it sync (can take days on first run), and you'll be fully validating the chain. Use it with a wallet like Sparrow for maximum sovereignty.