Learn bitcoin
From the very basics to keeping your coins safe for decades. Plain language, links to official docs.
Bitcoin from zero
Eight short steps, about 10 minutes of reading.
1. What bitcoin is
Bitcoin is digital money that no company or government runs. It was described in a 9-page paper by Satoshi Nakamoto in 2008, and the network started on 3 January 2009. Anyone can use it, and no one can print more than the 21 million coins written into the rules.
2. How the network works
Transactions are grouped into blocks about every 10 minutes. Miners compete to add the next block by doing a lot of computing work (proof of work) and earn new coins plus fees. Thousands of independent nodes check every block against the same rules, so cheating doesn't pay. Every ~4 years (210,000 blocks) the reward for new blocks halves; that's the halving.
3. Keys, addresses and the seed phrase
You don't hold coins in a file. You hold a private key that lets you spend coins recorded on the blockchain. Wallets generate keys from a seed phrase, usually 12 or 24 words (BIP39). Whoever has those words controls the coins, so write them down offline and never type them into a website or a chat. An address is what you share to receive money; it is safe to share.
4. Buying your first sats
You don't need a whole bitcoin: 1 BTC = 100,000,000 satoshis (sats). Most people start on a regulated exchange or a bitcoin-only app, buy a small amount, then practise withdrawing to their own wallet. Buying a fixed amount on a schedule (DCA) avoids trying to time the market.
5. Choosing a wallet
A hot wallet is an app on your phone or computer: convenient for small amounts. A hardware wallet (signing device) keeps keys offline and signs transactions on the device: the standard choice for savings. Keep spending money hot and savings cold, like a wallet and a safe.
6. Sending and fees
A fee is paid per unit of transaction size (sat/vB), not per amount sent. When many people transact, fees rise; if you're not in a hurry, choose a lower rate and wait. One confirmation takes ~10 minutes on average; for large amounts many people wait for 3–6. Always double-check the address on your hardware wallet screen.
7. Self-custody vs. exchanges
Coins on an exchange are an IOU: if the exchange is hacked, freezes withdrawals or goes bankrupt (Mt. Gox 2014, FTX 2022), you may lose them. Self-custody means you hold the keys and you alone are responsible for backups. "Not your keys, not your coins."
8. Scams to avoid
No real support agent will ever ask for your seed phrase. "Send 1, get 2 back" giveaways, guaranteed-return investment schemes, fake wallet apps and romance/"pig-butchering" schemes are the most common traps. If someone pushes you to act fast, stop. Download wallets only from the official site and verify them.
Security guides
Backups, multisig, inheritance, verifying software and running your own node.
Backups: protecting the seed phrase
- Write the words by hand on paper or stamp them on steel. No photos, no cloud, no password managers for large sums.
- Keep at least two copies in different places (fire, flood, theft).
- Test recovery: wipe or use a second device, restore from the words and check you see the same first address.
- An optional passphrase ("25th word") creates a different wallet; if you use one, back it up separately — losing it means losing the coins.
Multisig: no single point of failure
- A 2-of-3 multisig wallet needs any 2 of 3 keys to spend. Losing one key or having one stolen doesn't lose the coins.
- Use hardware wallets from different vendors for each key, coordinated by software such as Sparrow, Nunchuk or Bitcoin Keeper.
- Back up every seed AND the wallet configuration (all extended public keys / the descriptor). Without the config you cannot rebuild the wallet even with 2 seeds.
- Collaborative custody services (e.g. Unchained, Casa) hold one key for you as a backup; you keep the others.
Inheritance: making sure family can recover
- Write a plain-language letter: what you own, where the backups are, which wallet software to use, whom to trust for help. Don't put the seed itself in the letter or will.
- Split knowledge so no single person or place can take the coins alone (multisig makes this much easier).
- Timelocked wallets such as Liana add a recovery key that only becomes usable after a period of inactivity you choose.
- Review the plan yearly and do a dry run with the person who would inherit.
Verifying wallets and firmware
- Buy hardware wallets directly from the maker or an authorised reseller; check the tamper seals and that the device has no pre-set seed.
- Download wallet software only from the official site, then verify the release: check the SHA-256 hash and the developer's PGP signature (Sparrow and Bitcoin Core publish step-by-step instructions).
- Update firmware only through the vendor's official tool or signed files; the device itself checks the signature, and you should confirm the version on its screen.
- Before sending a large amount, receive a small test amount and verify the address on the device screen.
Running your own node
- A full node downloads and checks every block itself. Connecting your wallet to it means you don't reveal your addresses to someone else's server and you verify payments yourself.
- Bitcoin Core is the reference software: free, runs on Windows, macOS and Linux. A pruned node needs only a few GB of disk; a full archive needs roughly 700+ GB and growing.
- Umbrel and Start9 are home-server systems that install Bitcoin Core, an Electrum server and apps with a few clicks on a mini-PC.
- Point Sparrow (or another wallet) at your node or Electrum server instead of a public one.
Physical safety and privacy
- Don't advertise how much bitcoin you have, online or offline.
- Prefer delivery of hardware to an address that doesn't reveal your home if you can; vendor data leaks have happened.
- Multisig with keys in different places also protects against coercion, since no single key can move the funds.
Glossary (38)
- Bitcoin / bitcoin
- Capital B: the network and protocol. Lowercase b: the currency unit (BTC).
- Satoshi (sat)
- The smallest unit: 1 BTC = 100,000,000 sats.
- Block
- A batch of transactions added to the chain about every 10 minutes.
- Blockchain
- The public ledger: all blocks linked in order since 2009.
- Mining
- Using computing power to find valid blocks; secures the network and issues new coins.
- Hashrate
- Total computing power of all miners, measured in hashes per second (EH/s).
- Difficulty
- How hard it is to find a block; adjusts every 2,016 blocks to keep ~10-minute blocks.
- Halving
- Every 210,000 blocks the new-coin reward per block halves. Next: block 1,050,000 (3.125 → 1.5625 BTC).
- 21 million
- The maximum number of bitcoin that will ever exist, enforced by every node.
- Mempool
- The waiting room of unconfirmed transactions.
- Fee rate (sat/vB)
- Fee per virtual byte of transaction size; higher rates confirm sooner.
- Confirmation
- A transaction is confirmed once it is in a block; each new block on top adds one more.
- UTXO
- Unspent transaction output: a "coin" your wallet can spend. Your balance is the sum of your UTXOs.
- Address
- What you share to receive bitcoin. Modern ones start with bc1. Use a new one each time for privacy.
- Private key
- The secret number that authorises spending. Whoever has it controls the coins.
- Public key / xpub
- Derived from the private key; an xpub lets software see all your addresses but not spend.
- Seed phrase
- 12 or 24 words (BIP39) that back up all keys of a wallet.
- Passphrase
- Optional extra word(s) added to the seed that create a separate hidden wallet.
- Descriptor
- A text that fully describes how a wallet derives its addresses; essential backup for multisig.
- Hardware wallet
- A dedicated device that keeps keys offline and signs transactions.
- Hot / cold wallet
- Hot: keys on an internet-connected device. Cold: keys kept offline.
- Air-gapped
- A device that never connects to a computer by cable or network; data moves by QR code or SD card.
- Multisig
- A wallet that needs several keys to spend, e.g. 2-of-3.
- PSBT
- Partially Signed Bitcoin Transaction: a standard file format to pass a transaction between wallets for signing.
- Timelock
- A rule that coins (or a key) can only be used after a certain time or block height.
- Full node
- Software that downloads and checks every block and enforces the rules for you.
- Pruned node
- A full node that deletes old blocks after checking them, to save disk space.
- Electrum server
- An indexer on top of a node that wallets like Sparrow connect to.
- SegWit / Taproot
- Protocol upgrades (2017 / 2021) that made transactions cheaper and more flexible.
- Lightning Network
- A second layer for fast, cheap payments that settles to the bitcoin blockchain.
- Coin control
- Choosing which UTXOs to spend, for privacy and fee management.
- KYC
- "Know your customer": identity checks required by regulated exchanges.
- Proof of reserves
- An exchange's attempt to show it holds the customer coins it owes.
- Spot ETF
- An exchange-traded fund that holds real bitcoin; you own fund shares, not coins.
- DCA
- Dollar-cost averaging: buying a fixed amount on a fixed schedule.
- HODL
- Holding long-term instead of trading; from a 2013 forum typo.
- Realized price
- Average price at which all coins last moved on-chain; a cost-basis estimate.
- MVRV
- Market value ÷ realized value; high values have marked past tops.
FAQ
Do I need to buy a whole bitcoin?+
No. You can buy any amount down to 1 sat (0.00000001 BTC); exchanges usually have a small minimum like $1–10.
Can bitcoin be hacked?+
The network itself has run since 2009 with no successful attack on its core rules. What gets hacked are exchanges, phones and people who reveal their seed phrase.
What happens when all 21 million are mined?+
The last fraction of a coin is expected around 2140. After that, miners are paid only by transaction fees.
Where should I keep my bitcoin?+
Small spending amounts: a reputable mobile wallet. Savings: a hardware wallet with a tested seed backup. Larger sums: consider multisig.
What if I lose my hardware wallet?+
Buy a new one (any compatible brand) and restore from your seed phrase; the coins are on the blockchain, not in the device. If someone finds it, the PIN protects it — but move funds if you're worried.
What if the exchange goes bust?+
Coins left on it may be lost or frozen for years. Withdraw to your own wallet what you don't actively trade.
Is bitcoin anonymous?+
No, it is pseudonymous: every transaction is public. Exchanges with KYC link your identity to addresses. Use new addresses and good wallet habits for privacy.
How long does a transaction take?+
Usually 10–60 minutes for the first confirmation depending on the fee you choose; Lightning payments take seconds.
Why does the price swing so much?+
Supply is fixed, so changes in demand move the price directly; the market is still young and trades 24/7 worldwide. Falls of 70–80% have happened in every past cycle.
Is bitcoin legal and taxed?+
It depends on your country. In most it is legal to own; sales and swaps are often taxable. Check local rules or ask a tax adviser.
Is it too late to buy?+
Nobody knows the future price. Only invest what you can hold through big drops, and learn self-custody first.
Why bitcoin and not other coins?+
This site focuses on bitcoin only: the oldest, most decentralised network with a fixed supply and no company behind it.
Educational only, not financial advice. Links go to official project sites and well-known community guides; we are not affiliated with them. Always double-check you are on the real site.