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What is Bitcoin?
Bitcoin is a decentralized digital currency with no central bank or single administrator. Transactions are verified by a peer-to-peer network and recorded on a public ledger called the blockchain. Created by the pseudonymous Satoshi Nakamoto in 2009, it was the first cryptocurrency.
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The UTXO Model
Bitcoin doesn't use account balances. Instead it uses Unspent Transaction Outputs (UTXOs) — chunks of bitcoin tied to addresses. When you spend bitcoin, you consume UTXOs and create new ones as change. Your "balance" is just the sum of all UTXOs you control.
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Proof of Work
Miners compete to solve a cryptographic puzzle by hashing block data with a random nonce. The first to find a valid hash wins the block reward. This process secures the network — rewriting history would require more computing power than all honest miners combined.
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The Halving
Every 210,000 blocks (~4 years), the block reward paid to miners is cut in half. Bitcoin launched with a 50 BTC reward. It's now 3.125 BTC after four halvings. This programmatic supply reduction continues until ~2140, when all 21 million BTC will have been issued.
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SegWit & Taproot
SegWit (2017) separated signature data from transaction data, fixing transaction malleability and increasing block capacity. Taproot (2021) added Schnorr signatures enabling more efficient multisig, better privacy, and smarter scripting — Bitcoin's biggest upgrade in years.
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Lightning Network
A Layer 2 payment protocol built on top of Bitcoin. Two parties open a payment channel by locking funds on-chain, then transact instantly and cheaply off-chain. Only the final balance is settled on the blockchain. Enables microtransactions and instant global payments.
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Keys & Wallets
A Bitcoin wallet stores private keys, not coins. Your private key proves ownership and signs transactions. The public key (and derived address) is what others send to. "Not your keys, not your coins" — if an exchange holds your keys, they control your bitcoin.
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Nodes & Consensus
Full nodes download and verify every block and transaction, enforcing Bitcoin's rules independently. No authority controls the rules — consensus emerges from thousands of nodes worldwide agreeing. Running a node is the most sovereign way to use Bitcoin.
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Reading the Mempool
The mempool is a waiting room for unconfirmed transactions. Miners prioritize higher fee-rate transactions. When the mempool is congested, fees rise. When it clears, 1 sat/vB can get you confirmed. Watching mempool size helps you time transactions and save on fees.