Remember the shared notebook? You, Ali, Ben and Cara each keep a copy. Now it needs a new page. But nobody is the boss.
There is no teacher to decide. Who should write the next page?
How should the class pick?
Race the other kids. Keep guessing until you hit the lucky number. The winner writes the next page.
That's mining!
Special computers race to find the lucky number. It can't be faked, only paid for with electricity. It works only for that exact page.
The winner adds the next page, about every ten minutes. As a prize, the winner earns some new bitcoin.
Pages are chained. Each page carries a fingerprint of the page before it. Change an old page and every page after it stops matching.
Ben sneaks to an old page. He wants to erase the line saying he paid you 5 marbles, so he can spend them again.
What happens when he changes it?
Ben would have to redo that page and every page after it. He would need more machines and electricity than everyone else together. So cheating costs far too much.
Many other computers, called nodes, keep a copy too. They check each page against the rules. They refuse pages that break them, even from a miner.
In August 2010, a bug let one page create about 184 billion bitcoin. That is far more than 21 million!
A fixed version came out within five hours. People running Bitcoin had to choose to install the fix. Soon the network switched to it and dropped the bad page.
Source: Value overflow incident (Bitcoin Wiki) · Bitcoin FAQ: only 21 million will ever be created
Only the person with the secret key can spend their coins. They sign each payment, and anyone can check it. A list of recovery words can rebuild the key.
Where should recovery words live? Tap a way to keep them, then tap Safe or Risky.
Whoever has the words can spend the coins.
So keep them private. Keep a copy offline and hidden, and a spare in another safe place.
Now you know how Bitcoin guards itself. But a safe network is not a safe bet.
So what can you actually do? Find out in chapter 12.
🧠 What you learned
- Miners race to add each new page
- Chained pages and many checking computers make cheating too costly
- Your recovery words are your coins. Keep them private
🎯 Question 1 of 12 · Easy
In the race, what are the miners trying to find?
What does the winner of each race get to do?
About how often is a new page added?
Ben erases a line on an old page. What happens to the pages after it?
Why is it too costly for Ben to fake an old page?
Why can't Ben spend Ali's coins?
A miner wins a race, but the page breaks a rule. What do the nodes do?
Why keep a spare paper copy of your recovery words in another place?
Why do many nodes make Bitcoin harder to cheat than one boss checking pages?
In 2010 a bug made one page create about 184 billion bitcoin. What happened next?
What does the 2010 story honestly show?
A message says: "Send us your recovery words and we will keep them safe." What is the best reply?
Well done!
You earned a badge: How Bitcoin stays safe
Education, not financial advice. Never put in money you can't afford to lose.
👩🏫 Grown-up corner · 1 of 6
The proper names
In grown-up words, the notebook is a blockchain and a page is a block. The fingerprint is a hash: a short code worked out from everything on the page, so any change gives a different code. Miners change one number in the page's header, the nonce, until its hash is low enough. That is proof of work, and bitcoin.org compares mining to a competitive lottery. The winner's prize is the block reward: new bitcoin plus payment fees. Every 2,016 pages the network retunes the difficulty, about two weeks, so pages keep arriving about every ten minutes.
👩🏫 Grown-up corner · 2 of 6
Why the energy counts
Michael Saylor argues that the energy is the safety. To rewrite history, a cheat must beat the honest miners with real machines and real power, and Saylor describes the miners' work as a wall of encrypted energy that an attacker has to get through. He also argues that someone who owned half of the machines and energy would earn more by playing fair than by cheating. Critics see the electricity as a waste, which chapter 10 looks at.
👩🏫 Grown-up corner · 3 of 6
Costly is not the same as impossible
The safety lasts only while cheating costs more than it could win. The developer guide says the cost to change a page grows with every page added after it, so a payment is safer once more pages sit on top. It also says a miner with even less than half of the machines still has a good chance of some attacks. And the prize halves every four years, so later the guards must be paid more by fees. Whether that is enough is an open question.
👩🏫 Grown-up corner · 4 of 6
Many checkers, no single boss
Each node keeps its own copy and checks every page against the same rules, which developers call consensus rules. Those rules include no spending coins twice. A cheat would have to fool all of them, not one. The 2010 bug shows the human side. The fix came as a new version of the program, so people had to choose to run it, and the bad page was then dropped. Rules only protect you while people keep running them.
👩🏫 Grown-up corner · 5 of 6
Keys, recovery words and who holds them
Whoever holds the secret key can spend the coins. Wallets let you back it up as a list of recovery words, and bitcoin.org says one backup of that phrase can restore a wallet. Michael Saylor argues that keys give the strongest property rights ever, and that someone who loses theirs cannot win the money back by appealing to an authority. The flip side is real: you hold all the risk, a bitcoin payment cannot be reversed, and a company that holds your coins for you becomes a risk of its own. bitcoin.org says to be wary of services that hold your money online.
👩🏫 Grown-up corner · 6 of 6
A safe network is not a safe price
This chapter is about the pages, not the price. The price has crashed before, as chapter 10 explains, and bitcoin.org says to treat Bitcoin as a high-risk asset. It also advises keeping only small amounts on a phone or computer for everyday use, and notes that some effort is needed to protect your privacy. This is learning, not financial advice.