On October 31, 2008, an anonymous individual or group under the pseudonym Satoshi Nakamoto released the groundbreaking whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” This document, shared with a cryptography mailing list, outlined a revolutionary decentralized financial system free from reliance on traditional banks and centralized authorities.
Satoshi proposed a peer-to-peer (P2P) digital currency that eliminates the need for intermediaries, allowing transactions to be verified and recorded on a public, immutable ledger known as the blockchain. This innovation solved the long-standing double-spending problem in digital transactions, ensuring that Bitcoin could function as scarce, verifiable, and censorship-resistant money.
Since then, Bitcoin has grown from a niche experiment into the most secure and decentralized monetary network in history. Its principles of financial sovereignty, fixed supply (21 million BTC), and resistance to inflation and government control continue to attract individuals, institutions, and nations seeking a truly independent financial system.
Read the full whitepaper here: bitcoin.org/bitcoin.pdf
Bitcoin is the first decentralized digital currency, enabling peer-to-peer transactions without the need for a central governing authority. It is secured by cryptographic technology and recorded on a transparent, immutable ledger known as the blockchain. Created in 2009 by an anonymous entity known as Satoshi Nakamoto, Bitcoin was designed to function independently of traditional financial systems.
Traditionally, ledgers have always required a central authority to verify transactions, ensuring accuracy and trustworthiness. This centralized system meant people had to rely on an intermediary to honestly record balances and prevent fraud.
Bitcoin eliminates the need for a central authority. Instead, it operates on a decentralized network of thousands of nodes, each holding a complete copy of the Bitcoin ledger. When a transaction occurs, these nodes independently verify its legitimacy. If someone attempts to spend bitcoin they don’t own, the network rejects the transaction.
This makes Bitcoin a trustless system—one where trust is placed in mathematics and code rather than institutions or individuals. Because of this, the Bitcoin ledger is arguably the most powerful financial innovation in human history.
For thousands of years, central authorities have controlled and manipulated money, using it as a tool for power and control. They have repeatedly debased currencies, stealing people’s hard-earned wealth through inflation. This silent theft erodes purchasing power over time, making it harder for individuals to save and build a secure financial future.
Inflation occurs when central authorities create more money, diluting the value of existing currency. While they claim this is necessary for economic growth, the reality is that it benefits governments, banks, and the wealthy, while everyday people see their savings lose value. The more money printed, the less each unit is worth, forcing people to work harder just to maintain the same standard of living.
Bitcoin solves this problem by removing money from the hands of central authorities. It is a decentralized system with a fixed supply of 21 million bitcoin, meaning no government or institution can inflate it away. This scarcity makes Bitcoin a hedge against inflation and a way to preserve wealth over time. Unlike fiat currency, which can be manipulated and debased, Bitcoin remains trustless, transparent, and resistant to control.
By giving people the ability to store and transfer value without reliance on banks or governments, Bitcoin restores financial sovereignty. It empowers individuals to take control of their money, free from the corruption and manipulation that have plagued traditional financial systems for centuries. In a world where economic uncertainty is rising, Bitcoin is not just an alternative—it is a necessity.
Buying Bitcoin is easier than ever. You can purchase it on an exchange like Swan Bitcoin, which is a Bitcoin-only platform focused on long-term accumulation. Exchanges allow you to buy Bitcoin using traditional payment methods like bank transfers or debit cards, making the process accessible to beginners. However, buying Bitcoin is just the first step—what truly matters is taking control of it.
Once you buy Bitcoin, it is crucial to learn how to self-custody it. When you leave your Bitcoin on an exchange, you don’t actually own it—the exchange does. Your funds are held on their platform, and you are essentially trusting a third party with your wealth. “Not your keys, not your coins” is a well-known saying in the Bitcoin space, meaning that unless you hold your own private keys, you do not truly own your Bitcoin.
If an exchange were to experience a hack, go bankrupt, or face government intervention, you could lose access to your Bitcoin permanently. History has shown that trusting centralized platforms can be risky, with many exchanges failing and customers left empty-handed.
To secure your Bitcoin, withdraw it to a self-custodied wallet as soon as possible. Hardware wallets or multisig setups provide the best security, allowing you to hold your Bitcoin safely without relying on a third party. By taking full control, you ensure that your wealth remains yours—protected, sovereign, and beyond the reach of intermediaries.
When you’re ready to take your Bitcoin off an exchange and truly own it, self-custody is the next critical step. To do this, you’ll need a cold wallet, a specialized device that securely stores your Bitcoin without being connected to the internet. This eliminates the risk of online hacks and exchange failures, ensuring that your Bitcoin remains in your control.
There are two main types of Bitcoin wallets: hot wallets and cold wallets. A hot wallet is connected to the internet, making it convenient for frequent transactions but more vulnerable to cyber threats. A cold wallet, on the other hand, remains offline, offering maximum security against online attacks. However, it’s important to understand that Bitcoin itself is not stored on your cold wallet. Instead, the wallet generates and secures your public and private keys. Your public key functions like an email address, allowing others to send Bitcoin to you, while your private keys—a unique set of 12 to 24 words—grant you exclusive ownership and control over your Bitcoin.
Self-custodying your Bitcoin with a cold wallet is like hiding your gold in a secure, private vault rather than leaving it in a bank where it could be seized or restricted. Exchanges are like banks—they hold your Bitcoin on your behalf, meaning you are trusting a third party with your wealth. By storing your Bitcoin in a cold wallet, you eliminate counterparty risk, ensuring that no one but you has access to your financial sovereignty.
Bitcoin quiz helps us to increase our knowledge
Once a fringe concept, bitcoin has evolved into a new asset, drawing global investor interest. To fully grasp bitcoin, it’s beneficial first to understand the fundamental concept of money. This guide begins by exploring the basics of money and then provides a simple overview of bitcoin and critical considerations for investors evaluating bitcoin ETFs.
Money might make you think of cash and coins, but actually, most of what we use as money today doesn’t have a physical form—it’s just numbers on a computer. Money is merely a concept, a way for humans to store value and exchange for real goods and services. Different items have stood in for money throughout history, including shiny shells, paper currency, precious metals, grains, and even salt. The key is the shared belief in its value; as long as everyone agrees on its worth, anything can serve the role of money. There are three major functions of money: medium of exchange, unit of account, and store of value.
It is scarce (there will only ever be 21 million) and this can be verified by anyone with a $30 single board computer. It has an immense amount of computational power dedicated to securing its distributed ledger. The network literally pays people to protect its integrity and act in good faith. Bitcoins ‘price’ in $ or £ terms is determined by simple market supply and demand.
Put simply, everyone and no-one. Everyone is in control of their own participation in the network and the network is structured so that bad actors cannot succeed. No single developer can incite any changes to the code. No one miner can censor specific transactions. No single user can cheat the system and spend Bitcoin they don’t have or that does not belong to them.
At a network level, bitcoins are not ‘tagged’ to any public identity. The protocol only knows of strings of letters and numbers known as an address. However, businesses built on top of Bitcoin such as KYC exchanges where it’s possible to buy bitcoin can link your real world identity to bitcoin purchased through them. The bitcoin ledger is completely public so it can be possible to track known public entities across a network.
The blockchain is a public ledger that contains a copy of every single bitcoin transaction ever completed. Miners compete to produce blocks for transaction fees and a block subsidy. Each successful block is cryptographically linked or ‘chained’ to its predecessor.
Governments could absolutely make Bitcoin illegal in their jurisdiction. In fact China has already done so, multiple times yet the ecosystem continues to flourish. Bitcoin’s distributed nature means that in reality it would require a monumental co-ordinated attack from many world powers to stem its growth.
Bitcoin is money and any money can be used by criminals. In 2017 the entire drug trafficking market alone was estimated to be worth $500,000,000,000 (500 billion). At current prices that could buy the entire Bitcoin network 11 times over! It’s probably fair to say that the overwhelming majority of illicit activities are funded by fiat currencies.
At a network level yes, and lots of people have. There are literally hundreds of copies of Bitcoin, each usually with a minor tweak to its code to ‘improve’ it. Almost always these ‘improvements’ come with huge tradeoffs that prevent them from gaining any traction on Bitcoin’s massive network effects.
It’s true that the Bitcoin network consumes a lot of power, but spending energy to secure and operate a global payments network that provides huge amounts of value to millions of people should not be seen as ‘wasteful’. Bitcoin mining has already started to push innovation in the use of alternative (often wasted) energy sources such as flared gas or renewables.
At the time of writing there are a little over 19 million bitcoins that have been mined. There will only ever be 21 million and the final one will be mined around the year 2140. Each bitcoin can be subdivided into 100 million Satoshis or ‘sats’ so there are plenty to go around.
New bitcoins are created as a result of the globally distributed and highly competitive mining process. Each newly mined block rewards the successful miner with a subsidy. At the time of writing, this subsidy has just been halved to 6.25 bitcoins. It will halve again to 3.125 bitcoins after another 210,000 blocks or roughly 4 years.
The process of participants contributing large amounts of computing power to process transactions into blocks. Once they have grouped these transactions a miner performs a repetitive computational task on them to try and find an answer that is below a certain target. If they are successful, the block is mined and the miner receives the transaction fees and block subsidy. The process then starts again and the next batch of transactions.
There are lots of online exchanges that you can buy bitcoin from although you should do your own due diligence when finding somewhere to buy from. The best way to get your first piece of bitcoin is to buy some from a trusted friend or family member. Remember – You can buy a fraction of a bitcoin (there are 100 million sats in each one)! See here for some recommendations.
A Bitcoin address is similar to a physical address or an email. It is the only information you need to provide for someone to pay you with Bitcoin. An important difference, however, is that each address should only be used for a single transaction.
Bit is a common unit used to designate a sub-unit of a bitcoin – 1,000,000 bits is equal to 1 bitcoin (BTC). This unit is usually more convenient for pricing tips, goods and services.
Bitcoin – with capitalization, is used when describing the concept of Bitcoin, or the entire network itself. e.g. “I was learning about the Bitcoin protocol today.”
bitcoin – without capitalization, is used to describe bitcoins as a unit of account. e.g. “I sent ten bitcoins today.”; it is also often abbreviated BTC or XBT.
The block chain is a public record of Bitcoin transactions in chronological order. The block chain is shared between all Bitcoin users. It is used to verify the permanence of Bitcoin transactions and to prevent double spending.
A block is a record in the block chain that contains and confirms many waiting transactions. Roughly every 10 minutes, on average, a new block including transactions is appended to the block chain through mining.
BTC is a common unit used to designate one bitcoin.
Confirmation means that a transaction has been processed by the network and is highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like $1000 USD, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.
Cryptography is the branch of mathematics that lets us create mathematical proofs that provide high levels of security. Online commerce and banking already uses cryptography. In the case of Bitcoin, cryptography is used to make it impossible for anybody to spend funds from another user’s wallet or to corrupt the block chain. It can also be used to encrypt a wallet, so that it cannot be used without a password.
If a malicious user tries to spend their bitcoins to two different recipients at the same time, this is double spending. Bitcoin mining and the block chain are there to create a consensus on the network about which of the two transactions will confirm and be considered valid.
The hash rate is the measuring unit of the processing power of the Bitcoin network. The Bitcoin network must make intensive mathematical operations for security purposes. When the network reached a hash rate of 10 Th/s, it meant it could make 10 trillion calculations per second.
Bitcoin mining is the process of making computer hardware do mathematical calculations for the Bitcoin network to confirm transactions and increase security. As a reward for their services, Bitcoin miners can collect transaction fees for the transactions they confirm, along with newly created bitcoins. Mining is a specialized and competitive market where the rewards are divided up according to how much calculation is done. Not all Bitcoin users do Bitcoin mining, and it is not an easy way to make money.
Peer-to-peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
A private key is a secret piece of data that proves your right to spend bitcoins from a specific wallet through a cryptographic signature. Your private key(s) are stored in your computer if you use a software wallet; they are stored on some remote servers if you use a web wallet. Private keys must never be revealed as they allow you to spend bitcoins for their respective Bitcoin wallet.
A cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of Bitcoin, a Bitcoin wallet and its private key(s) are linked by some mathematical magic. When your Bitcoin software signs a transaction with the appropriate private key, the whole network can see that the signature matches the bitcoins being spent. However, there is no way for the world to guess your private key to steal your hard-earned bitcoins.
A Bitcoin wallet is loosely the equivalent of a physical wallet on the Bitcoin network. The wallet actually contains your private key(s) which allow you to spend the bitcoins allocated to it in the block chain. Each Bitcoin wallet can show you the total balance of all bitcoins it controls and lets you pay a specific amount to a specific person, just like a real wallet. This is different to credit cards where you are charged by the merchant.
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