New to Bitcoin? Start here
You are not behind. Start here.
You do not need to buy anything, download anything, or be good at math. Give this page ten minutes. It covers what I teach on the first day of class.
Step 1 · The sixty-second answer
What is Bitcoin?
This is what I say when someone asks me. Say it out loud once. Notice where you slow down.
“Bitcoin is money that no one controls.
The network is a shared ledger of who owns how much, kept in identical copies on thousands of computers worldwide. Because each copy continuously checks the others, the network is decentralized: it has no company, no headquarters, and no boss. No single entity can shut it down or alter it on its own.
There will only ever be 21 million bitcoin, a fixed limit enforced by mathematics and cryptography. This absolute scarcity is the exact opposite of traditional currencies, which lose purchasing power because governments can always print more.
By combining scarcity with decentralization, Bitcoin is secured by the world's most powerful computer network. It is a global financial system that belongs to everyone who uses it, and to no one in particular.”
Read the six-minute answer in Chapter 1Free, no sign-up
Step 2 · The sixteen questions my students ask first
Find your question.
Short answers, from the front of the book. Each one names the chapter that goes deeper. If an answer does not make sense yet, keep reading. It will.
What is it?5 questions
2What is the difference between Bitcoin and crypto?“Crypto” is a term for millions of digital tokens, most of which are issued by a company or founder who can change the rules. Bitcoin has no company, no founder in charge, and a supply no one can change; it is the only digital asset (aka cryptocurrency) this book is about. Discussed in Chapter 1.Chapter 1
3What is the blockchain?A shared record of who sent how much to whom, kept in identical copies on thousands of computers that check each other, with new entries added in batches called blocks about every 10 minutes. Chapter 4 shows how strangers agree on approving transactions without a boss.Chapter 4
5Who created Bitcoin?Someone using the name Satoshi Nakamoto published a 9-page paper on October 31, 2008, started the network on January 3, 2009, stopped posting in 2011, and has never been identified. No one is in charge, including the founder. Chapter 1 outlines Satoshi and how Bitcoin came into existence.Chapter 1
6How many bitcoin are there, and is that enough?There will only ever be 21 million, and about 20.1 million exist so far. Each one divides into 100 million satoshis, so running out is not the problem. Chapter 1 explains why.Chapter 1
7What is mining?Computers worldwide compete to add the next batch of transactions to the record. The competition costs real electricity, and that cost is what makes the record expensive to fake. The miner who wins a new block is paid in new bitcoin. Chapter 4 outlines who the miners are and the mining process.Chapter 4
Is it safe? Is it legal?5 questions
1Is Bitcoin money for criminals?Some criminals use bitcoin. Far more use dollars, and every bitcoin transaction sits on a public ledger forever, which is how investigators catch people who thought they were hidden. Chapter 7 has the numbers.Chapter 7
8Is bitcoin safe to own? Can it be hacked?The network has run since 2009 without being hacked, with one early exception in 2010 that was fixed within hours. Companies and apps around it have been hacked many times, and people have been tricked, so keeping bitcoin safe mostly means keeping it away from other people’s mistakes and your own. Chapters 4, 10, and 11.Chapters 4, 10, 11
9Is it legal?In the United States, yes. You can buy, hold, spend, and sell it, and the IRS taxes it as property. Some countries restrict it. Chapters 7 and 13.Chapters 7, 13
12Isn’t Bitcoin a Ponzi scheme?No. A Ponzi scheme has an operator who promises returns and pays early investors with newer investors’ money until it runs out. Bitcoin has no operator, promises no return, and pays no one; buyers buy from sellers at a market price. The price can still fall hard. Chapter 8 answers this in full.Chapter 8
16Isn’t it bad for the environment?The Bitcoin network uses real energy, roughly half of 1% of the world’s electricity by the most-cited estimate. Whether that is “bad” depends on what powers it and what you think the network is worth. Chapter 4 gives both sides.Chapter 4
The price2 questions
10Is it too late to invest in bitcoin?People have said “too late” at every price for 17 years, and roughly 4% of the world holds any bitcoin at all. You are late, but it’s not where you think. Chapter 6 explains the difference between late and too late.Chapter 6
11Why does the price fall so hard? Can it go to zero?The supply is fixed, so every change in demand hits the price, and no central bank smooths it. Bitcoin has fallen more than 75% four times, and nothing in the code prevents it from going to zero. Chapter 6.Chapter 6
Buying and keeping it4 questions
4How do I buy it?Small, slowly, and not yet. A phone app takes less time than opening a bank account, but keeping bitcoin safe matters more than buying it, so read Chapters 6, 10, and 11 before you spend a dollar. You can start with ten dollars’ worth; nobody has to buy a whole one. Chapter 9 walks you through the purchase.Chapters 6, 10, 11, 9
13Where do I keep it?In a wallet that serves as your signing device that holds your keys rather than your bitcoin. In the book, your options are listed as a ladder that runs from “a fund or an app holds it for me” to “I hold it myself on a device the size of a thumb drive.” Higher is not safer for everyone. Chapter 10 lays out your options.Chapter 10
14Can I spend it? Can I turn it back into cash?Yes, to both, and both count as selling for tax purposes. Chapters 12 and 13 explain.Chapters 12, 13
15Is it taxed?Holding it is not taxed. Selling, spending, or trading it is taxed on the difference between what you paid and what it was worth, so keep records from the first purchase. See Chapter 13.Chapter 13
Your decision. Whether to buy, how much, and where to keep it are yours to decide, with a professional who knows your whole picture. The book will not decide for you, and neither will this site.
Step 3 · Eight words
Know these and Chapter 1 reads easily.
bitcoin (lowercase b)The money itself, the bitcoin that moves on the Bitcoin network.“Small-b bitcoin is the money. You can own a piece of one.”
LedgerA list of who owns how much.“Bitcoin is a ledger everyone can read, and nobody can edit.”
BlockchainThe ledger’s pages, each one stapled to the page before it.“The blockchain is just the ledger in order, with each batch locked to the last.”
Private keyThe secret that lets you move your entry.“The bitcoin is on the ledger. The key is what makes it mine.”
WalletThe app or device you use to hold and send bitcoin.“The wallet holds the keys, not the coins.”
Satoshi (sat, sats)The penny of Bitcoin, only smaller.“You don’t buy a bitcoin. You buy sats.”
ExchangeA store that sells bitcoin to the public, like a currency booth.“The exchange is the shop. Bitcoin is what the shop sells.”
Seed phraseThe 12 or 24 words that rebuild every key in your wallet.“Lose the phone, keep the words, keep the bitcoin.”
One warning, before anything else. Your seed phrase is the 12 or 24 words that can rebuild your keys. Anyone who has them has your bitcoin. No real company, helper, or support agent will ever ask for them. Chapter 10 and Chapter 11 explain why.