Bitcoin 101

Bitcoin is the world's largest and most valuable cryptocurrency. This beginner-friendly guide covers what Bitcoin is and how you can use and invest in it.
0/5 Rating
15 Lessons
Beginner
1 hour 50 mins
Written by: Harry Atkins
December 19, 2019
Updated: February 24, 2021

What you'll learn

  • What a blockchain is and how it relates to Bitcoin
  • A brief history of where Bitcoin came from
  • The different types of Bitcoin wallets available and the differences between them

Key course lessons

  • What Bitcoin is
  • How Bitcoin works
  • What 'Bitcoin mining' means

What is Bitcoin?

Before getting involved in bitcoin it is important to understand it. This guide lays out the basics: what Bitcoin is and the different ways it can be used. Ultimately, we’re all here to learn, so don’t be afraid – get stuck in and we’ll help you. With this in mind, we have made a jargon-free summary and compiled a list of how to understand the technology, buy, trade and use bitcoin wisely.

Most of our readers want to know if they should acquire bitcoin using normal bank transfers, PayPal or credit card. It doesn’t really matter, it’s much more important that you use a reputable service.

Make better choices with Bitcoin.

Course overview

1. Bitcoin & the blockchain

What is blockchain technology?

1a – What is a blockchain? The blockchain is the technology that makes cryptocurrency possible. This is the first thing anyone needs to know in order to understand what Bitcoin is. In layman’s terms, a blockchain is a publicly accessible accounting book (ledger) that records all transactions…
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What is Bitcoin?

2a – What is Bitcoin? Bitcoin is the first ever cryptocurrency, supported by the first ever blockchain. It was created in 2008 by person(s) unknown named Satoshi Nakamoto, shortly after they published an academic journal article entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. This article not only put forward the…
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How does Bitcoin work?

3a – How are bitcoins transferred? Imagine sending someone (e.g. your friend Sarah) an email that reads ‘1 bitcoin’. You would: Log into your email accountEnter Sarah’s email addressType ‘1 bitcoin’ into the body of the emailHit sendSarah would receive a message reading ‘1 bitcoin’ A bitcoin transfer works in…
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How to acquire and store Bitcoin

4a – How do I actually purchase some bitcoin? If you are looking to buy bitcoin with the money in your bank account, the best and easiest option is to use a brokerage. A bitcoin brokerage is essentially an online bureau de change for bitcoin. Brokerage platforms sell…
Beginner 4 min read Cryptocurrency Courses

2. How bitcoin mining works

What is bitcoin mining?

Put simply, bitcoin mining is the process of verifying bitcoin transactions. It basically involves adding transaction records to the Bitcoin public ledger (the blockchain) to record the movement of bitcoins between wallets. The miners that do this job are rewarded for using their computer power to create new blocks on the blockchain with bitcoin. Why…
Beginner 7 min read Cryptocurrency Courses

What is bitcoin hardware mining?

Just as the name suggests: it’s hardware that is used to mine bitcoin. There are numerous different types of hardware you can use, such as GPUs, ASICs or FPGAs, and each has its own advantages and drawbacks. This page explains everything you need to know. Where can I find the best…
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What is bitcoin cloud mining?

Mining Bitcoin without having to own and manage the hardware. Also known as cloud hashing, cloud mining is a service that allows users to lease mining capacity (hashing power) of hardware in remote data centers and earn bitcoins as the miners generate them. How does it work? In order get started…
Beginner 8 min read Cryptocurrency Courses

3. How bitcoin wallets work

What is a bitcoin wallet?

Also referred to as a digital wallet, a bitcoin wallet is a program or software where bitcoins are stored, like a bank account. The wallets come in many forms, each providing unique features. There are web-based wallets, mobile wallets, and offline based wallets such as hardware and paper wallets. Why are they called…
Beginner 8 min read Cryptocurrency Courses

What is a bitcoin hardware wallet?

A bitcoin hardware wallet, also known as a ‘hard wallet’, is a physical electronic device that stores your bitcoins. Hardware wallets are the most secure type of Bitcoin wallets and act like cryptocurrency safes, important for after having paid for your bitcoin. How do bitcoin hardware wallets work? Exactly how your…
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What is a bitcoin desktop wallet?

A bitcoin desktop wallet is a programme that you download and store on your computer. Once you have installed a desktop wallet, you’ll be able to access and transfer your coins using the app’s user-friendly interface. A wallet is usually necessary if you have already bought bitcoin. How do…
Beginner 10 min read Cryptocurrency Courses

What is a bitcoin mobile wallet?

A mobile wallet is an app on your phone that stores and moves your bitcoin. Mobile wallets can be downloaded through Google Play or the App Store and are completely free. It’s important to note that all your wallet details are stored locally using your phone’s memory rather than online,…
Beginner 10 min read Cryptocurrency Courses

What is an online Bitcoin wallet?

Also known as a web wallet, an online wallet is a way of storing your bitcoin on the internet. In other words, it’s a wallet that runs on your browser, just like a website. Online wallets are regarded as more vulnerable to hacks than other types of wallet, but they are very…
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What is a bitcoin paper wallet?

A paper wallet is an offline wallet you can make yourself and keep on a piece of paper. This may sound a little confusing, but they’re actually one of the most secure ways to store bitcoins if you know how to make one. How do bitcoin paper wallets work? Paper wallets typically…
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4. Spending bitcoins

What is a bitcoin debit card?

A bitcoin debit card is a card that is linked to a cryptocurrency account or wallet, allowing you to spend your bitcoins both online and in real shops and ATMs. When you make a purchase, the bitcoins in your account are converted to fiat currency based on the current market rates, and…
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How to use and spend Bitcoin

5a – What is bitcoin used for? It’s now a decade since bitcoin was created, and you can now use it for almost anything for which you’d usually use ‘regular’ currency. To give examples, many Australians today pay their household bills using bitcoin, you can gamble with bitcoin in many…
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