Corrowen | A Plain-Language Bitcoin Field Guide

Part 1

The shared ledger

Bitcoin is a network of computers that agrees on one shared record of who owns what. That record is called the ledger. It is kept as a chain of blocks, where each block gathers recent transactions and points back to the block before it.

Because each block depends on the one before it, rewriting an old entry means redoing the work of every block built after it. That dependency is what makes the record hard to edit.

Arrows point back to the earlier block. Each block carries a fingerprint of the one before it, so an edit to any block breaks the links that follow.

No single company owns the ledger. Anyone can run software that checks the rules, and the network accepts a new block only when it follows them.

Part 2

Keys and ownership

Bitcoin does not keep balances in an account the way a bank does. Ownership is shown by a private key, a very large secret number, and the public address derived from it. To spend coins, the owner signs a transaction with the private key, and the network accepts the signature only if it matches.

That design has one important consequence. Whoever controls the private key controls the coins, and no help desk can reset a signature. If a key is lost and no backup exists, the coins it controls cannot be moved by anyone.

A wallet app is a tool that holds and signs with your keys. Apps can be reinstalled or replaced. The keys behind them are what you must protect.

Part 3

Seed phrases and backups

Most modern wallets create a recovery phrase, usually 12 or 24 common words, from which all of its keys can be rebuilt. The phrase is the master backup. Anyone who learns it can recreate the keys, so it deserves more care than a password.

Do

Write the phrase by hand on paper or metal, and protect it from fire, water, and theft.
Keep it offline, with more than one copy in separate places.
Confirm that your wallet restores from the phrase before you rely on it.

Do not

Photograph the phrase, paste it into a note, or send it in a message.
Type it into a website, a support chat, a form, or any step that asks for it.

Part 4

Blocks and confirmations

The network aims for a new block about every ten minutes. A transaction is included in a block, and each block added on top of it counts as one confirmation. More confirmations make a payment harder to reverse.

A confirmation count measures accumulated work, not a guarantee. Read it as a guide to how settled a payment is, and remember that the right number depends on how much is at stake.

Part 5

A fixed supply

The protocol allows at most 21,000,000 bitcoin to ever exist. Each bitcoin divides into 100,000,000 smaller units called satoshis, so the smallest unit is one hundred-millionth of a bitcoin.

Every node that checks the rules enforces this limit. Changing it would require the network to adopt a new version of the software, which is a deliberate and visible process rather than a quiet adjustment.

Part 6

Halvings

New bitcoin enters circulation as a block reward paid to the miner or pool that adds a block. That reward is cut in half every 210,000 blocks. At the target pace of about ten minutes per block, a halving happens roughly every four years.

The schedule is written into the protocol, so the rate of new supply falls over time in a way anyone can calculate in advance.

Reference numbers

These are fixed definitions from the protocol. They do not change with the market.

21,000,000: The maximum amount of bitcoin the protocol allows to exist.
100,000,000: Satoshis in one bitcoin, the smallest unit.
About 10 minutes: The target time between blocks.
210,000 blocks: The number of blocks between each halving of the reward.

Before you act

This guide explains how Bitcoin works. It is not financial, legal, or medical advice, and it does not recommend buying, selling, or holding any asset. For decisions about your own money or your own security, speak with a qualified professional who knows your situation.