Bitcoin (BTC) Explained: Everything You Need to Know Before You Buy
Bitcoin is the asset everyone names first and understands last. In this Wednesday session from the Crypto School, Brian walks through what Bitcoin actually is, why it was built the way it was, and what to check before you form an opinion on it. This companion article expands on the main points from the video.
A Layer 1 Built to Solve One Problem
Bitcoin is a layer 1 blockchain launched in 2009, secured by proof of work, and capped at 21 million coins. It exists to answer a single question: how do you send digital money person to person without a bank in the middle?
Digital files can be copied, so the usual fix is a trusted third party who keeps score. That works until the third party fails. Bitcoin's answer is a public ledger that everyone holds a copy of, with update rules enforced by math and cost instead of trust in an institution.
The timing was not an accident. The white paper appeared in October 2008 after Lehman Brothers collapsed, signed by the still-unknown Satoshi Nakamoto. The first block, mined January 3, 2009, contained a newspaper headline referencing a second bailout for the banks. That line did two jobs at once: it proved the block could not have been created earlier, and it stated the project's purpose without a word of explanation. If you want a condensed refresher, this breakdown of the key points behind how Bitcoin works covers the same ground in writing.
Deliberately Limited, Deliberately Secure
Bitcoin can run simple programs, but its scripting language is intentionally restricted. It cannot do what Ethereum or Solana do, and that was a design choice. More capability means more surface area to break. By limiting what the chain can do, the goal is to maximize what it does best: making settlement permanent and irreversible on the authoritative ledger.
Execution gets pushed elsewhere. Lightning opens payment channels between users so Bitcoin can move instantly for a fraction of a cent before recording back to the main chain. Capacity sits around 5,600 BTC with monthly volume over a billion dollars, though node counts have been falling.
Supply, Halvings, and Coins That Are Gone Forever
There will only ever be 21 million BTC. Roughly 20 million are already mined, and new supply arrives at about 450 coins a day. Miners currently earn 3.125 BTC per block, down from 6.25 after the 2024 halving, with the next cut due in 2028. Understanding how the Bitcoin four-year halving cycle plays out is one of the more useful lenses for reading market position.
Scarcity may be even tighter than the cap suggests. An estimated 17% to 20% of supply is believed permanently lost — discarded early wallets, thrown-away hard drives, holders who died without passing on keys. Satoshi's roughly 1 million coins have never moved.
Who Holds It, and What to Watch
Spot ETFs were approved in 2024 and now hold around $102 billion worth. BlackRock's fund alone holds close to 800,000 BTC, Strategy holds about 847,000 as a corporate treasury, and the US government holds over 300,000 mainly from seizures. ETF demand peaked around 15,000 to 20,000 coins coming off the market, but shares flow both directions.
ETF holders also give something up. Someone else holds the coins on their behalf, so they cannot use that Bitcoin as collateral or move it themselves. Mt. Gox in 2014 is the reason the phrase "not your keys, not your coins" exists.
Before forming a view, Brian suggests watching five things: dominance, ETF flows, hash rate and difficulty, halving schedule, and cycle position. Bitcoin dominance has held around 55% to 60% through 2026, and historically drops have meant money rotating into altcoins. It is worth learning to track Bitcoin dominance against altcoins as a routine habit.
If your interest in Bitcoin is long-horizon rather than short-term trading, custody structure matters as much as entry price. Some investors choose to hold Bitcoin inside a tax-advantaged retirement account through a provider like iTrustCapital, which changes how gains are taxed over a multi-cycle holding period. Whether that fits depends on your timeline and tax situation.
Bitcoin sessions like this one run live every Wednesday at noon Eastern inside the Crypto School, alongside 120+ course videos broken into beginner, intermediate, and advanced tracks. If you want to ask questions in real time and work through each coin in this level of detail, you can join the Crypto School community at skool.com/crypto-profit and start with the coin breakdown archive.
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