Digital data can be copied
Without a central account keeper, two payments might try to reuse the same earlier value.
Follow one payment from Alice's wallet to Bob. The ten-minute guided tour gives you the whole picture. Optional mastery practice then checks whether you can use and explain it.
Bitcoin is a public payment system with no company keeping the master account. Wallets prepare and authorize payments. Independent computers called full nodes check the rules, while miners use costly proof of work to propose the order of valid payments.
Bitcoin with a capital B means the network and protocol. bitcoin with a lowercase b means the asset or units sent through it.
WalletCreates and authorizes
Full nodesCheck and relay
MinerProposes a block
Full nodesValidate again
ConfirmationsReduce reversal risk
This separation is the mental model to keep. A wallet authorizes. Nodes enforce. Miners propose order. Proof of work makes history costly to replace. Confirmations reduce risk.
Without a central account keeper, two payments might try to reuse the same earlier value.
Nodes can detect a conflict because both payments refer to the same uniquely identified output.
Nodes accept the first valid spend in the selected valid chain and reject later reuse of that output.
Manages keys, chooses existing outputs, creates new outputs, and signs a transaction.
Does not decide validity for everyone.Checks transactions and blocks against every applicable rule, then updates its own state.
Does not trust a miner's verdict.Selects valid transactions, builds a candidate block, and searches for proof of work.
Cannot make invalid data valid.Orders a batch of transactions and links it to earlier accepted history.
Is only accepted after node validation.Counts the block containing a payment and valid blocks built after it.
Reduces risk rather than promising magic finality.A sat is the smallest bitcoin unit. Bob first gives Alice a payment address, which is a shareable instruction for creating his new output, not a private key or protocol account. Alice begins with one spendable output worth 100,000 sats. Watch the same payment state change at every stage.
The wallet chooses Alice's existing output, creates 40,000 sats for Bob, 59,000 sats of change for Alice, and leaves 1,000 sats as the transaction fee. It creates a signature authorizing this input for this transaction. Later lessons explain the alternative parts a signature can commit to. Bitcoin has no protocol account balance to edit.
A good mental model includes the limits. The protocol enforces precise rules, but it cannot remove every kind of risk.
Every valid block must begin with exactly one special coinbase transaction. It may create only the subsidy allowed at that block height and collect transaction fees. The subsidy halves on a fixed schedule, so fewer than 21 million bitcoin can ever be created under the current consensus rules.
You now have the whole payment story. Continue to foundations now, or choose the optional mastery practice, which takes about 20 minutes.
Visit all eight explained stages above to open this activity.
Predict where the flow stops. A wrong answer is saved as a weak spot so the idea returns in later review.
What happens first?
Can a second valid signature spend it again?
Does proof of work make the block acceptable?
What can honest nodes do?
Choose an answer, check it, and read the reason. The final explanation only opens after these shorter checks.
Answer all four recognition questions correctly to open the explanation.
Open any technical term in this list for a compact definition. The guided tour also explains these ideas in context before optional practice.
Software or hardware that manages keys and constructs transactions. It does not store bitcoin as files.
A secret number used to create an authorization signature. Never share it.
A shareable payment instruction that helps a wallet construct an output. It is not a protocol account.
A uniquely identified amount with a spending condition. UTXO means unspent transaction output.
A candidate state change that consumes existing outputs and creates new outputs.
A computer that independently verifies transactions, blocks, and chain state.
One node's temporary set of valid unconfirmed transactions.
A participant that chooses transactions for a candidate block and searches for proof of work.
An ordered batch of transactions linked to a prior block, with a header that satisfies proof of work.
The ordered chain of validated blocks. Each block commits to the one before it, so changing older history requires replacing its work and the work built after it.
A costly search that makes proposing and replacing block history expensive.
A block containing the payment, plus any valid blocks built after it.
A node's local rules for accepting and forwarding unconfirmed transactions. Policy can differ between nodes without changing Bitcoin's shared block-validity rules.
The numeric boundary a block-header hash must fall below. A lower threshold makes a qualifying result harder to find.
How many proof-of-work hash attempts a miner or the network makes per second.
The shared validity rules that full nodes apply to transactions, blocks, and chain state.
The first transaction in a block. It collects the block's transaction fees and may create the allowed new bitcoin subsidy.
The maximum new bitcoin a valid block may create at its height. It halves on a fixed schedule.
A block's position counted from Bitcoin's first block, which has height zero.
A change in recent accepted history when nodes switch to a different valid branch with more accumulated proof of work.
The specific attacks, failures, and adversary capabilities someone chooses to protect against.
Another computer on the Bitcoin network that a node exchanges transactions and blocks with.
The compact block summary miners repeatedly hash. It commits to the previous block and the block's transaction set.
The rule-controlled creation of new bitcoin through a valid block's coinbase transaction.
Completion requires the full flow, sequence, four failure cases, four recognition checks, and a no-hint explanation that passes semantic tutor review. Your exact progress is saved in the Guild database.