Topic outline
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This course will take you through the basics of Bitcoin for beginners: Bitcoin economics, investment, philosophy, and history, as well as its technical and practical components. Once you have completed this course, you will have a basic level of Bitcoin knowledge and be able to start interacting with Bitcoin by buying, receiving, storing, and spending it.
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Time: 12 hours
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Free Certificate
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What went wrong with money in the past? Why were some goods chosen to become money over others? In this unit, we explore how money serves as a coordination tool for society and how it arises in a bottom-up, spontaneous order. We also explore government intervention in the market for money. We will also discuss monetary history, what makes a good money, and why Bitcoin is well-placed to supersede prior forms of money. We will also talk about deflation and "hoarding", and Bitcoin's environmental impact.
Completing this unit should take you approximately 3 hours.
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Students mustMark as done
Explore Bitcoin in this seminal article by Vijay Boyapati. Many of the key value propositions and ideas of Bitcoin are discussed in this article. Why does Bitcoin not need "backing"? What are the origins of money? What are the attributes of a good store of value? What are the stages of evolution in a money?
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Students mustMark as done
Read this article by Dan Held. Proof of work might seem "inefficient" on its face, but in reality, it is what enables Bitcoin to be what it is and do what it does: enable a decentralized network of Bitcoin nodes to agree on the state of the ledger. Ultimately, it comes down to subjective valuation of what you believe the energy is "worth". Since energy is available and priced on the market, the fact that miners are able to use it cost-effectively is an indicator that it is not wasteful. What makes proof of work efficient?
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Students mustMark as done
Listen to this podcast episode (or read the transcript) with Dr. Philip Bagus, which explains the problems with the typical misconceptions about deflation. Listen out for the explanations around why deflation must be separated and understood in separate components. Growth deflation is beneficial to humanity, while "credit deflation" is typically feared and covered in mainstream news articles. Why is growth deflation good, but credit deflation feared?
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Students mustMark as done
Though some might critique the energy expenditure required for Bitcoin mining, the real comparison is against other monetary standards. Read this article to understand more about what is enabled by easy money standards. Also, note the parallels the article makes with gold mining and living under a gold standard.
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Students mustMark as done
Read this section on the West's monetary breakdown by Murray Rothbard. Are the monetary standards we live under today the result of free voluntary choice? If not, what were the government monetary interventions along the way?
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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Why buy and hold Bitcoin? If you simply save in your local fiat currency (USD, GBP, EUR, and so on), you will be losing value over time. In this unit, we will explore this concept and why many people are now turning to Bitcoin as a way to protect themselves from the "melting ice cube" of fiat money. We will also explore Bitcoin's volatility, and whether it must be used as a medium of exchange in the short term to be viable. Bitcoin is moving through phases of evolution, and broadly remains uncorrelated with other assets. Bitcoin detractors also call it a Ponzi scheme or a bubble, or assert that the government will ban it. We will also address these topics.
Completing this unit should take you approximately 2 hours.
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Students mustMark as done
Listen to Michael Saylor, the CEO of MicroStrategy, explain his thought process around protecting his company assets from fiat inflation with Bitcoin in this podcast episode. Listen from ~4:55 to 20:04 or read the transcript from "And I didn't pay much attention to macroeconomics until 2020..." until "...where I was conditioned to believe that you could you could get a decent return without becoming an investment analyst, or a speculator". What are some of the traditional investments that Michael mentions in this segment? Are they still suitable? What kind of returns did they offer in the past, and what kind of returns do they offer now?
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Students mustMark as done
A common line of reasoning will be that money must be "backed by" something, whether that is another asset, government force, or something else. This article by Parker Lewis is an excellent answer to this challenge. Building on some of the ideas from Unit 1, read this article and see that ultimately it comes down to the credibility of monetary properties. What properties of a money are most important? How does Bitcoin compare against other potential monies? Why is it that government force alone is not enough for some governments, such as those of Venezuela, Argentina, or Turkey?
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Students mustMark as done
Read this article. Why do economic systems converge towards a single monetary medium? Why are there large gains to the economy under such a system?
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As you read this article, consider the utility and innovation of Bitcoin. Also, consider the definition of a pyramid scheme relative to Bitcoin's supply. What are the crucial distinguishing factors outlined in the article?
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Students mustMark as done
Read this article. What are the stages of grief in relation to Bitcoin as money? As Bitcoin grows in popularity and use, how feasible will it be for governments to ban or stop Bitcoin? Would it be feasible to shut it down globally?
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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Bitcoin wasn't formed in a vacuum. There's a rich history of cypherpunks, privacy activists, and free-market libertarians who contributed to the preceding culture and technologies. In this unit, we will contrast Bitcoin with predecessor technologies and businesses, such as BitGold, b-money, HashCash, and e-gold. Bitcoin has also faced various tests in terms of social attacks that have forced a response from the Bitcoin community to defend or strengthen Bitcoin. One interesting case is SegWit2X, where large Bitcoin businesses and miners attempted a hostile takeover of Bitcoin that was repelled by Bitcoin users.
Completing this unit should take you approximately 3 hours.
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Students mustMark as done
Watch this series on the cypherpunks. Who are the cypherpunks? What motivated them? Who were some of their influences? What technologies did they invent, promote, and defend?
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Students mustMark as done
Bitcoin was not formed in a vacuum. It has a deep history of predecessor technologies, ideas, and research that combined to make Bitcoin possible. Take a look at this diagram and see which elements were referred to in the video series you just watched on the cypherpunks.
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Students mustMark as done
Read this series, which documents some prior technologies that culminated in the creation of Bitcoin in 2009. What were the key features of each? What did they contribute to Bitcoin?
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Students mustMark as done
Read the Bitcoin white paper for context on how this all started. Pay attention to the initial design of peer to peer cash. Why was Bitcoin built to minimize trust, and how did it go about doing so?
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Students mustMark as done
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Students mustMark as done
SegWit2x was a pivotal and instructional moment in Bitcoin's history. There was an upgrade to Bitcoin's protocol that would fix bugs (like transaction malleability) and more easily enable higher layer function on top of Bitcoin, such as the lightning network. However, while implementing this upgrade, there was a kind of "deadlock" among the parties in the Bitcoin world. In this time, Bitcoin's different stakeholders learned new things about how Bitcoin's network truly operates. The question was: do miners control Bitcoin? Or, do users and nodes control Bitcoin? What is the role of developers? Read this article and watch the accompanying video to learn more.
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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Bitcoin has various technical ingredients that combine to provide extraordinary properties not seen in any other form of money available today. First, Bitcoin's immutable ledger enables transactions that are extremely hard to reverse or tamper with. Bitcoin mining also provides a link between real-world energy expenditure and the security of Bitcoin's ledger. Holding your own Bitcoin private keys enables the user to have custody of their own Bitcoins and control them exclusively. Finally, running a Bitcoin node allows users to fully self-validate their Bitcoins and ensure that the rules of Bitcoin are upheld. In this unit, we will also explore some of the trade-offs of Bitcoin against altcoins, and explore how Bitcoin has no leaders but still continues to advance and develop.
Completing this unit should take you approximately 2 hours.
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Students mustMark as done
Watch this video to learn a bit more about how the technology behind Bitcoin works. How does Bitcoin act like a ledger? How do Bitcoin transactions take place? How does Bitcoin, as a system, reduce the need for trust?
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Students mustMark as done
Listen to this podcast interview with Yan Pritzker for an introduction to Bitcoin mining. As you listen, consider the following questions. What does mining do, and how does it secure the Bitcoin network? Should you mine Bitcoin as a retail individual? How are Bitcoin miners compensated? What is the block reward, and what is the block subsidy?
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Students mustMark as done
Think of a Bitcoin node as a fake Bitcoin detector. Just as people transacting with gold want to use special equipment to verify that the gold is legitimate, Bitcoin nodes check the rules of Bitcoin and enable the user to interact with the Bitcoin network. Note, though, that some wallets connect to a central node and are run by a third party. You can run your own Bitcoin node for a more "trust-minimized" Bitcoin experience. When you run your own Bitcoin node and use it in conjunction with your own Bitcoin wallet (and private keys), you are said to be self-validating. This may be particularly useful in the case of verifying that you have truly received Bitcoins (rather than trusting another party or service to tell you and not lie to you). As you read this article, consider how Bitcoin can act as an impenetrable fortress of validation.
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Students mustMark as done
As you read this article by Pierre Rochard, consider the process for Bitcoin upgrades to take place. Note the different parties involved, such as Bitcoin developers and Bitcoin users. Using Bitcoin is a voluntary, opt-in choice, and while Bitcoin developers may write code, Bitcoin users do not necessarily have to run that code. In this way, the different parties within the Bitcoin ecosystem "check" each other. Recall the earlier material on Segwit2X and merging SegWit into the Bitcoin protocol, and the interplay between different actors in the Bitcoin space, such as exchanges, merchants, miners, developers, and users.
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Students mustMark as done
In this article, Jameson Lopp delves into further detail in how Bitcoin Core (the reference implementation of Bitcoin) is developed and how changes are made. As you read, consider the following questions. Which parties may propose upgrades? Which parties may block upgrades or changes to code? What other controls exist to stop unwanted or malicious code from entering the Bitcoin Core codebase?
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Students mustMark as done
In this interview with Jon Atack, you will learn about the process behind open source contribution to Bitcoin Core. As you listen, think about the discussions around the following topics. What is being worked on in Bitcoin right now? How do contributors to Bitcoin discuss and make decisions? What is the process of peer review for Bitcoin like?
For more technical information about contributing to Bitcoin Core, review this document from the Bitcoin Core code repository: https://github.com/Bitcoin/Bitcoin/blob/master/CONTRIBUTING.md#peer-review
As an optional extra, you may want to listen to this interview with Gloria Zhao for an enjoyable discussion on learning to become a Bitcoin Core contributor: https://stephanlivera.com/episode/216/
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Students mustMark as done
Read this article by Thib Maréchal on why battles in the monetary market are not about incremental technological features, but rather monetary properties.
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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Now that you have some base awareness of Bitcoin, we will cover basic instruction on putting Bitcoin into practice in this unit. This includes acquiring Bitcoin, using a Bitcoin wallet and the Lightning Network, privacy and security practices, and avoiding common pitfalls, scams, and mistakes.
Completing this unit should take you approximately 2 hours.
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Students mustMark as done
A typical strategy for people new to Bitcoin is first acquiring a small amount of Bitcoin (sats) while learning more about what Bitcoin is, and later purchasing more once they have learned. This short article explores and compares the main methods to acquire Bitcoin. What are the main methods of acquiring Bitcoin? Which methods are most suitable for you?
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Students mustMark as done
A Bitcoin wallet is how you interact with the Bitcoin network. It will manage your Bitcoin private keys for you, though there are different types of wallets. Bitcoin users typically go through a progression in terms of wallet types, and ways of interacting with the network.
As you read this text, consider how you would select a bitcoin wallet, what kinds of Bitcoin wallets there are, how to send and receive, and what other progression steps you can take when using Bitcoin. Think about how you can move through the different levels, how backups work, and how you would secure your Bitcoins against loss.
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Students mustMark as done
Using Bitcoin privately and securely is not "on by default". There are active steps that a user must undertake to improve their privacy and security. In this article, you will learn some of the basic pointers with privacy, such as network privacy and transaction graph privacy.
Security in Bitcoin is dependent on getting sufficient randomness in the generation of your seed and private keys, protecting those keys from the outside world, while still making suitable trade-offs for you to still be able to use Bitcoin. What kinds of tools should you use to secure your Bitcoin? What single points of failure exist in your setup, and how could they be removed? What other ways can you mitigate these risks?
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Students mustMark as done
The lightning network is a special layer adding faster payments and additional functionality to Bitcoin. Lightning enables participants to dramatically speed up Bitcoin transactions while still retaining many interesting qualities of Bitcoin, such as non-custodial transaction and settlement, at much lower fees for small payment values.
What is the lightning network? What are some popular lightning wallets, and when should they be used? How does a user set up and run a lightning node?
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Students mustMark as done
Bitcoin has unfortunately had a lot of scammers operating in the space as well as having its fair share of common pitfalls. Read this article and understand some of the common points to be wary of. This may include being wary of people who ask for your seed phrase or ask for Bitcoins promising high returns back.
Which techniques would you use to ensure that you remain safe in the Bitcoin space?
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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Please take a few minutes to give us feedback about this course. We appreciate your feedback, whether you completed the whole course or even just a few resources. Your feedback will help us make our courses better, and we use your feedback each time we make updates to our courses.
If you come across any urgent problems, email contact@saylor.org.
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Take this exam if you want to earn a free Course Completion Certificate.
To receive a free Course Completion Certificate, you will need to earn a grade of 70% or higher on this final exam. Your grade for the exam will be calculated as soon as you complete it. If you do not pass the exam on your first try, you can take it again as many times as you want, with a 7-day waiting period between each attempt.
Once you pass this final exam, you will be awarded a free Course Completion Certificate.
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Students mustReceive a gradeReceive a passing grade
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