Sep 29, 2024 16 min read FAQ

Bitcoin 101 Checklist

The ultimate Bitcoin 101 checklist. Start with the Bitcoin fundamentals. These are the topics and concepts everything else is built upon.

Why learn about Bitcoin?

Bitcoin is the best money, and money is highly relevant in modern society.

If you understand money, you can protect your purchasing power and plan for your future.

If you are new to Bitcoin, you may be overwhelmed by the many sub-categories, rabbit holes, and technical jargon.

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

This is a Bitcoin roadmap.

Glossary:

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

Part II: The next part is the Bitcoin basics. These are all the components that make Bitcoin a unique, revolutionary technology and the best money.

Part III: 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 to protect your wealth for generations.

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 (much shorter, only 1 hour):

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:

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?

Video: "What is Bitcoin?" – Simple Mining explains Bitcoin in 120 seconds:

Video: "Introduction to Bitcoin: what is Bitcoin and why does it matter?" – Andreas Antonopoulos explains Bitcoin at a high level:

The Bitcoin Whitepaper was written by Satoshi Nakamoto, Bitcoin's anonymous creator. It outlines how Bitcoin works from a technical standpoint.

Video: "But how does Bitcoin actually work?" This video is a nice complement to the topics in the Whitepaper:

The Whitepaper can be dense material for beginners. Don't worry if most of the information doesn't stick the first time around. There are plenty of educational resources that simplify these complex concepts.

The Whitepaper includes several core ideas:

Decentralization

Bitcoin solves the double-spending problem without requiring trust in a centralized entity.
Electronic payment system based on cryptographic proof instead of trust.
Why decentralization is key to Bitcoin’s value proposition and censorship resistance.

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 (referred to as a "timestamp server")
Why energy use is essential for ensuring Bitcoin’s success and fraud prevention.

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

Nodes

Nodes are why Bitcoin's hard-capped supply cannot be changed.

Nodes enforce the monetary policy
The majority of nodes must agree to finalize transactions.
Transactions are broadcast to all nodes.

Important note: When Bitcoin first started, a full node, a wallet, and miner were all the same client. Bitcoin has since separated these into individual clients.

How do transactions work?

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.

Buying Bitcoin

What is a UTXO?

What is Bitcoin mining?

The process of miners competing to find a valid hash 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.
What is the Difficulty Adjustment?

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.
Backup strategies: Multisig wallets for added security (e.g., using tools like Unchained).

Understanding the Lightning Network

What the Lightning Network is and how it scales Bitcoin for fast, low-cost payments.
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).

Avoiding Common Pitfalls and Scams

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

Bitcoin Strategy

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

Contributing to Bitcoin