FAQ

Bitcoin 101 Checklist

Billy Boone

• 4 min read

If you are new to Bitcoin, you may be overwhelmed by the vast amount of sub-categories and rabbit holes.

This Bitcoin 101 checklist exists to help you prioritize information to provide some structure to your Bitcoin educational journey.

It starts with the fundamentals. These are the topics and concepts everything else is built upon.

The next part is the Bitcoin Whitepaper. These are all the components that make Bitcoin a unique revolutionary technology.

The final part is self-sovereignty. Bitcoin could be studied for centuries. Self-sovereignty involves continuing to learn about the ever-evolving facets of Bitcoin and becoming a self-sovereign individual.

Part I - What is Money?

To grasp Bitcoin, it is best to start by understanding money.

This includes:

    • Functions of money (medium of exchange, store of value, unit of account).
    • History of money: from barter to gold to fiat.
    • The evolution of money and why society chooses certain forms of it.

The Saylor Series is a comprehensive analysis answering the question, "What is money?" from first principles:

The goal is to gain perspective on how the global monetary system works.

Lyn Alden made a fantastic video on this:

Fiat Currency and Inflation

The nature of government-issued money (fiat) and why it can be devalued.

Book: “What Has Government Done to Our Money?” by Murray Rothbard
Rothbard’s classic essay explains how government manipulation of money leads to devaluation. Link to free PDF

Sound Money vs. Fiat

    • What makes a currency "sound"? (Scarcity, durability, portability, divisibility, verifiability).
    • Why gold was considered sound money and how fiat replaced it.
    • Bitcoin as a modern, digital form of sound money.

Video: “How the Economic Machine Works” – Ray Dalio’s Economic Principles
A great video that breaks down how inflation happens and why it impacts individuals:

Video: "Bitcoin 101" - Robert Breedlove discusses how Bitcoin is the digital solution. Watch here

Austrian Economics

    • Basics of Austrian economics and how it contrasts with Keynesian economics.
    • The role of time preference, property rights, and individual liberty.
    • Why Bitcoin aligns with the principles of Austrian economics (hard money, free markets).

Saifedean Ammous, author of The Bitcoin Standard, is a notable Austrian economist who teaches about Bitcoin.

Video: Saifedean sits down with Lex Fridman to cover the entire Bitcoin and Austrian economics thesis:

The Problem Bitcoin Solves

    • Trust issues in traditional finance (centralized intermediaries, censorship, manipulation).
    • Government overreach and monetary policy abuses.
    • The need for decentralized, censorship-resistant, sound money that individuals can control.

Video: "The Changing World Order" – Ray Dalio analyzes principles and trends for how the world works. This provides context for the system Bitcoin aims to disrupt.

Video: "The Ultimate Bitcoin Use Cases" – Alex Gladstien and Peter McCormack outline how Bitcoin is used for commerce, freedom, and energy systems.

Part II - What is Bitcoin?

High level Bitcoin explanation:

The Bitcoin Whitepaper outlines how Bitcoin works from a technical standpoint.

Video: "But how does bitcoin actually work?" This video is a nice complement to act as a visual aid for the topics in the Whitepaper.


The Whitepaper includes several core concepts:

Decentralization

  • How Bitcoin operates without a central authority.
  • Peer-to-peer (P2P) network: Bitcoin nodes communicating to verify transactions.
  • Why decentralization is key to Bitcoin’s trustlessness and censorship resistance.

Scarcity (21 Million Supply Cap)

  • Bitcoin's fixed supply of 21 million coins.
  • The deflationary nature of Bitcoin compared to the inflationary nature of fiat.
  • Why this scarcity is fundamental to Bitcoin's value proposition.

Proof of Work (PoW)

  • How Bitcoin’s consensus mechanism (Proof of Work) secures the network.
  • The role of miners in verifying transactions and securing the blockchain.
  • Why energy use is essential for ensuring Bitcoin’s immutability and preventing fraud.

Video: Intro to Bitcoin – Jack Mallers analyzes Bitcoin from a proof-of-work perspective:

Mining and Block Creation

  • The process of miners competing to find a valid nonce and create new blocks.
  • Block rewards and transaction fees.
  • The importance of the Bitcoin halving cycle and how it reduces new supply every four years.

Transaction Verification and Blockchain

  • How transactions are broadcast and added to the blockchain.
  • Understanding how Bitcoin uses the UTXO (Unspent Transaction Output) model.
  • Transaction confirmations and what it means for a transaction to be finalized.

Security and Cryptography

  • Public and private key cryptography: How Bitcoin ensures that only the owner of a private key can spend their Bitcoin.
  • Digital signatures and how they verify ownership without revealing personal information.
  • The immutability of Bitcoin transactions and why it is impossible to reverse confirmed transactions.

The Solution to Double-Spending

  • What the double-spend problem is and why previous digital currencies failed to solve it.
  • How Bitcoin’s blockchain prevents double-spending through its distributed ledger.

Part III - Becoming a Sovereign Individual

Setting Up and Securing Your Wallet

  • Choose between custodial and non-custodial wallets (always aim for non-custodial).
  • How to set up a Bitcoin wallet (like the ColdCard).
  • Securing your seed phrase: Write it down, store it safely, and never share it online (SeedStamp).
  • Backup strategies: Multisig wallets for added security (e.g., using tools like Unchained).

Sending and Receiving Bitcoin

  • How to send Bitcoin: Understanding transaction fees, confirmations, and how to use a block explorer.
  • How to receive Bitcoin: Generating receiving addresses and ensuring privacy.

Understanding the Lightning Network

  • What the Lightning Network is and how it scales Bitcoin for fast, low-cost payments.
  • Setting up a Lightning wallet and opening channels.
  • The difference between on-chain transactions and off-chain Lightning transactions.

Running a Full Node

  • Why running your own full node helps decentralize the network and verify your own transactions.
  • How to set up a Bitcoin full node (using Bitcoin Core, Umbrel, or MyNode).
  • Full node hardware options (Raspberry Pi, dedicated servers).

Privacy Best Practices

  • Basic privacy strategies: Avoiding address reuse, using CoinJoin, and coin control.
  • Tools like Wasabi or Samourai Wallet to help you maintain privacy.
  • Avoiding KYC (Know Your Customer) exchanges when possible to keep your financial history private.

Avoiding Common Pitfalls and Scams

  • Recognizing phishing attacks, Ponzi schemes, and fraudulent altcoin projects.
  • "Not your keys, not your coins": Why self-custody is critical.
  • Avoiding the temptation to speculate on altcoins—focus on Bitcoin.

Achieving Financial Sovereignty

  • Converting your savings into Bitcoin as a long-term store of value.
  • The importance of dollar-cost averaging (DCA) and avoiding day trading.
  • Living on Bitcoin: Finding merchants that accept Bitcoin (Bitcoin merchant directories, local Bitcoin economies).

Contributing to the Bitcoin Ecosystem

  • How to contribute to Bitcoin development, support open-source projects, or participate in the community.
  • Staying updated: Follow Bitcoin-only news, podcasts, and Twitter accounts (avoid crypto noise).
  • Resources for further education.