• Unit 6: Bitcoin

    This unit introduces Bitcoin, describes the basic mechanisms of the Bitcoin software, and outlines a hypothetical Bitcoin-anchored monetary hierarchy. It introduces proof-of-work mining, Bitcoin's difficulty adjustment, halvings, private keys, addresses, and wallets. It also discusses the Lightning Network as a second layer. It also discusses alternative cryptocurrencies, stablecoins, and service providers. Finally, it covers financial products such as futures and ETFs.

    Completing this unit should take you approximately 2 hours.

    • Upon successful completion of this unit, you will be able to:

      • summarize the goals of the Bitcoin software;
      • summarize proof-of-work, Bitcoin mining, and Bitcoin's difficulty adjustment;
      • summarize Bitcoin's legal precedent and standing in the US; and
      • describe the evolution of Bitcoin as an asset class, including the introduction of Lightning Network.

    • 6.1: Bitcoin

      This subunit introduces Bitcoin. It begins with Satoshi Nakamoto's Bitcoin "whitepaper" and some of its basics. It explains some cryptography needed to understand Bitcoin and some of the essential components of Bitcoin's design, such as Secure Hash Algorithm 2, private keys and addresses, peers and nodes, blocks, proof-of-work, mining, Bitcoin's difficulty adjustment, halvings, wallets, and cold storage.

      • Bitcoin Page

        This passage introduces the components of Bitcoin's design.

    • 6.2: Bitcoin's Denomination

      This subunit covers the early history of Bitcoin. It examines the idea of "neutral money" and claims that Bitcoin resembles gold in a digital form. It explores the early days of Bitcoin and how the IRS began to treat Bitcoin is property.

    • 6.3: Bitcoin Evolution

      This subunit examines the state of Bitcoin in the digital money hierarchy. We discuss cryptocurrency exchanges and their role in a layered bitcoin system. It also examines the Lightning Network.

      • Bitcoin Evolution Page

        Read this section about the evolution of Bitcoin and the introduction of Lightning Network.

    • Unit 6 Review and Assessment

      • Unit 6 Review Page

        In this video, Nik Bhatia walks through the major topics we covered in Unit 6.  As you watch, consider Bitcoin as a monetary innovation.

      • Unit 6 Assessment Quiz
        Receive 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.