Day 1: What Bitcoin is, and is not
Start with the basics: what Bitcoin actually is, who runs it (nobody) and why its supply is fixed. About 5 minutes.
1. Bitcoin
Bitcoin is a decentralised digital currency and the network that runs it. It was described in a white paper published on 31 October 2008 under the name Satoshi Nakamoto, and the network went live on 3 January 2009 with the "genesis block". Instead of a bank keeping the ledger, thousands of independent computers (nodes) each hold a copy of a shared record of transactions called the blockchain. New blocks are added roughly every ten minutes by miners using proof of work, and the rules of the software cap total supply at just under 21 million coins. Bitcoin can be split into 100 million smaller units called satoshis, so you can buy a tiny fraction of one coin. Ownership is controlled by private keys: whoever holds the key can move the coins, which is why self-custody and security matter. The price is set by trading on open markets and is highly volatile.
In India: In India, bitcoin is legal to buy, hold and sell but is not legal tender. It is classed as a virtual digital asset (VDA) for tax: gains are taxed at 30% plus cess and 1% TDS applies on sales.
More on Bitcoin →2. Blockchain
A blockchain is a record of transactions grouped into blocks, where each block contains a cryptographic hash (a kind of fingerprint) of the block before it. Because every block points to its predecessor, changing an old transaction would change its hash and break every block that follows, which makes tampering easy to detect. Public blockchains such as Bitcoin and Ethereum are maintained by many independent computers rather than one company. These computers follow shared rules, called a consensus mechanism, to agree which new block is valid. Proof of work and proof of stake are the two most common. A blockchain is not automatically secure or useful: its security depends on how many independent participants maintain it and how costly it is to attack. "Private" or "permissioned" blockchains run by a single firm or consortium give up much of that independence in exchange for speed and control.
More on Blockchain →3. Satoshi (sat)
A satoshi, often shortened to "sat", is the smallest unit of bitcoin recorded on the blockchain. One bitcoin equals 100,000,000 satoshis, so one sat is 0.00000001 BTC. The unit is named after Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Thinking in sats is useful because a whole bitcoin is expensive. Many wallets let you display balances and fees in sats, and network fees are quoted in satoshis per virtual byte (sat/vB) of transaction data. On the Lightning Network, payments can even be denominated in thousandths of a satoshi (millisatoshis) internally, though they settle on-chain in whole sats. Buying sats rather than whole coins is how most retail investors acquire bitcoin. Exchanges let you spend a fixed rupee or dollar amount and credit you the corresponding fraction.
In India: Indian exchanges let you buy bitcoin for small rupee amounts; the coins you receive are simply a number of satoshis.
More on Satoshi (sat) →4. Bitcoin halving
The halving is a built-in rule that cuts the number of new bitcoins paid to miners per block by 50% every 210,000 blocks, which works out to roughly every four years. The block subsidy started at 50 BTC in 2009, fell to 25 in 2012, 12.5 in 2016, 6.25 in 2020 and 3.125 in April 2024. The next halving is expected around 2028. Because new supply keeps halving, the total number of bitcoins approaches but never quite exceeds 21 million; the last fractions are expected to be issued around the year 2140. After that, miners will be paid only through transaction fees. Halvings are often discussed as price catalysts because they reduce the flow of new coins onto the market. Past halvings were followed by bull markets, but past performance does not guarantee future results, and the date of each halving is publicly known well in advance.
More on Bitcoin halving →5. Decentralisation
Decentralisation describes how widely control over a network is spread. A highly decentralised blockchain has many independent node operators, miners or validators in different countries, open-source software that anyone can inspect, and no single company able to change the rules, freeze funds or censor transactions. Decentralisation is the main reason public blockchains are interesting at all: it is what makes the ledger hard to tamper with and the money hard to confiscate. But it is a spectrum, not a yes-or-no label. Useful questions include: how many entities produce most blocks, who holds most of the tokens, who can upgrade the smart contracts, and whether the project depends on one company's servers or front-end. Many projects call themselves decentralised while key functions remain controlled by a small team, a multisig of insiders or a foundation. Greater decentralisation usually costs speed or convenience, a trade-off often described as the blockchain trilemma.
More on Decentralisation →
Do this today
Check today's price in rupees →See what 1 BTC costs in INR right now, and how that compares with Indian exchanges.
← Course overviewDay 2: Wallets, keys and seed phrases →
General information, not financial advice.