Complex Bitcoin concepts made simple through interactive visualizations. Explore the rabbit hole one diagram at a time.
Concept 1 of 11
⛓️
Blockchain Structure
Blocks linked by cryptographic hashes create an immutable chain. Change one block? You break every block that comes after.
🟩
Block 1
Hash: abc123
🔗
🟦
Block 2
Prev: abc123
🔗
🟨
Block 3
Prev: def456
Hash Function:
One-way cryptographic fingerprint. Even changing a single character completely changes the hash.
🏗️ Immutability:
To change block 2, you'd need to remine block 2, 3, 4, 5... all the way to the current block. Computationally impossible.
Time Chain:
The blockchain is actually a "time chain"—each block proves what happened before it and when it happened.
⛏️
Mining & Proof-of-Work
Miners race to solve a mathematical puzzle. First to solve it wins the right to write the next block and earn the reward.
📦
Transactions
Pending in mempool
→
🎲
Try Nonce
Billions of guesses
↓
#️⃣
SHA-256 Hash
Must start with zeros
→
✅
Found!
0000abc... valid!
Difficulty Adjustment:
Every 2 weeks, Bitcoin adjusts difficulty to maintain ~10 minute blocks regardless of total hash power.
💎 Block Reward:
Winner gets newly minted bitcoins + all transaction fees in the block.
🔋 Energy = Security:
The energy spent mining makes attacking Bitcoin prohibitively expensive. It's a feature, not a bug.
📉
The Halving
Every 210,000 blocks (~4 years), the block reward cuts in half. This creates Bitcoin's predictable, deflationary supply schedule.
🎂
2009-2012
50 BTC/block
→
🍰
2012-2016
25 BTC/block
↓
🧁
2016-2020
12.5 BTC/block
→
🍪
2020-2024
6.25 BTC/block
↓
2024-2028: 3.125 BTC/block
→ Until year ~2140: 0.00000001 BTC/block → Final cap: 21,000,000 BTC
Scarcity by Design:
Unlike fiat currencies that governments can print endlessly, Bitcoin's supply is mathematically capped at 21 million—forever.
Stock-to-Flow:
After each halving, Bitcoin becomes scarcer than gold. Less new supply = higher stock-to-flow ratio = potential price appreciation.
⚖️ Miner Economics:
As block rewards decrease, transaction fees become increasingly important to incentivize miners to secure the network.
Keys & Addresses
The cryptographic magic that lets you own and control Bitcoin without any bank, company, or government involved.
🔑
Private Key
Keep secret!
→
🔓
Public Key
Math derived
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📧
Address
Share freely
One-Way Function:
Easy to calculate private → public key. Mathematically impossible to reverse public → private. This is elliptic curve cryptography.
✍️ Digital Signature:
Your private key signs transactions, proving you own the coins without ever revealing the key itself.
🏦 Self-Custody:
"Not your keys, not your coins." Only the person with the private key can spend the Bitcoin. No exceptions, no chargebacks, no middlemen.
🎲
Wallet Generation Magic
Your wallet is born from pure randomness. Rolling 256 dice creates your financial sovereignty—no bank, no permission needed.
🎲
256 Bits
Random entropy
→
🔑
Private Key
Your secret
↓
📝
Seed Phrase
12-24 words
→
📬
Address
Share publicly
The Numbers:
2^256 possible private keys = more combinations than atoms in the observable universe. The odds of someone guessing yours are effectively zero.
Human-Readable:
Seed phrases (BIP39) convert the random number into words you can write down and remember. Those words = your wallet.
Universal Recovery:
Take your 12 words anywhere in the world, any wallet software, and recover your Bitcoin. No company, no servers, no permission.
📤
Transaction Journey
From your wallet to permanent settlement on the blockchain: How your transaction travels through the Bitcoin network.
👛
Create & Sign
Your wallet
→
📡
Broadcast
To nodes
↓
⏳
Mempool
Waiting room
→
⛏️
Mined
In a block
↓
✅
Confirmed
~10 min first confirm
Fee Market:
Higher fees = faster confirmation. Miners prioritize transactions that pay more, creating a natural market for block space.
Mempool:
Unconfirmed transactions waiting to be mined. When the mempool is full, fees rise. When it's empty, fees drop.
Confirmations:
Each new block adds security. 1 confirm = probably safe. 6 confirms = mathematically secure. More confirms = more secure.
🧩
UTXO Model
Bitcoin doesn't track "account balances" like banks. Instead, it tracks Unspent Transaction Outputs—like digital cash bills.
0.5 BTC
UTXO #1
0.3 BTC
UTXO #2
0.2 BTC
UTXO #3
↓
Total Balance = 1.0 BTC
🛒
Spend 0.7 BTC
Use UTXO #1 + #2
→
Change
Get 0.1 BTC back
The Cash Analogy:
If you have three $10 bills and want to pay $25, you give two bills and get $5 back as change. UTXOs work the same way!
🔑 Why It Matters:
UTXOs make Bitcoin transactions atomic, verifiable, and impossible to fake. Each output can only be spent once.
Double-Spend Problem
The core problem Bitcoin solved: Without a trusted third party, how do you prevent someone from spending the same digital coin twice?
👤
Alice
Has 1 BTC
⚠️ Attempts to spend same coin twice!
↓
↓
👨
Bob's Coffee
1 BTC payment
👩
Charlie's Car
Same 1 BTC
❌ Traditional Solution:
Banks and payment processors prevent double-spending by maintaining a central ledger (but you must trust them)
✅ Bitcoin's Solution:
Public blockchain verified by thousands of independent nodes. Consensus rules make double-spending mathematically impossible.
How it Works:
Only the first transaction that gets mined into a block is valid. The second attempt is rejected by the network.
Lightning Network
Bitcoin's Layer 2 solution: Instant, near-free transactions by keeping most payments off the main blockchain.
👤
Alice
Opens channel
⛓️
🔓
Channel
1 BTC locked
⛓️
👥
Bob
Opens channel
Thousands of instant transactions ⚡
All happening off-chain at near-zero fees
Close Channel
Settle on blockchain
→
✅
Final Balance
1 on-chain tx
The Bar Tab Analogy:
Instead of paying the blockchain for every beer (expensive!), open a tab, buy 100 beers, and settle once at the end (cheap!).
Network Effect:
You don't need a direct channel with everyone. Payments route through the network automatically.
⚔️
51% Attack
What if someone controls more than half the network's mining power? They can rewrite recent history—but at a massive cost.
⚖️
Normal Network
Miners: 49% vs 51%
↓
👥
Honest Chain
49% hash power
VS
👹
Attacker Chain
51% hash power
↓
⚠️ Attacker's chain becomes longer
Network accepts longest chain = attacker wins
Economic Reality:
To attack Bitcoin today, you'd need $10+ billion in hardware and massive electricity costs. Then Bitcoin's price would crash, making your investment worthless.
Limited Powers:
Attackers CAN'T steal others' coins, change block rewards, or create coins from nothing. They can only double-spend their own recent transactions.
Defense in Depth:
The more confirmations a transaction has (deeper in the chain), the more expensive it becomes to reverse. 6 confirmations ≈ extremely secure.
🏰
Byzantine Generals Problem
How do you achieve consensus when some participants might be dishonest? Bitcoin solved this computer science puzzle that stumped academics for decades.