Bitcoin basics: the white paper and key facts

Bitcoin was first described in a nine-page paper by Satoshi Nakamoto, published on 31 October 2008. Here is what each section says in plain English, followed by the key facts a company should know, each with a source.

The white paper, section by section

The paper has twelve numbered sections. Section 1 sets out the problem, sections 2 to 6 describe how the system works, and sections 7 to 12 cover storage, light clients, privacy and security.

1. Introduction. Online payments rely on banks and payment firms acting as trusted middlemen. Because their payments can be reversed, someone has to settle disputes, which adds cost, makes very small payments impractical and pushes merchants to ask customers for more information. The paper proposes payments based on cryptographic proof instead of trust, so two parties can transact directly.
2. Transactions. A coin is described as a chain of digital signatures. Each owner passes it on by signing a record that points to the previous transaction and to the next owner's public key. Signatures alone cannot stop the same coin being spent twice, so every transaction has to be announced publicly and everyone has to agree on one history of the order in which they happened.
3. Timestamp server. Transactions are grouped into blocks. Each block is hashed together with the hash of the block before it, so the blocks form a chain. Every new block reinforces the ones before it, which proves the earlier data existed at that time.
4. Proof of work. To add a block, a participant must find a number that makes the block's hash meet a target, which takes a great deal of computing work but is quick for anyone to check. Changing an old block would mean redoing its work and the work of every block after it. The chain with the most accumulated work counts as the agreed history, and the difficulty adjusts so blocks keep arriving at a steady average rate.
5. Network. The paper lists the steps: transactions are broadcast to all nodes, nodes gather them into a block and work on its proof, a node that finds one broadcasts the block, and other nodes accept it only if every transaction in it is valid and not already spent. Nodes show acceptance by building the next block on top of it.
6. Incentive. The first transaction in each block creates new coins for whoever produced the block. This is how new coins are issued without a central issuer. Transaction fees are a second incentive, and once the planned number of coins has been issued, fees can replace new coins entirely. The paper argues that an attacker with a lot of computing power would earn more by following the rules than by undermining them.
7. Reclaiming disk space. Old transactions can be pruned once they are buried under enough blocks, because each block stores a single summary hash (a Merkle root) of its transactions. A block header without its transactions is about 80 bytes, so keeping every header needs only a few megabytes a year.
8. Simplified payment verification. A user can check that a payment is included in the chain without running a full node, by keeping only the block headers and asking for proof that the transaction sits in a block. This is reliable while honest nodes control the network. The paper notes that "businesses that receive frequent payments will probably still want to run their own nodes for more independent security and quicker verification".
9. Combining and splitting value. A transaction can have several inputs and outputs, so value can be combined and split. Usually there is one output for the payment and one returning change to the sender.
10. Privacy. Banks keep transactions private by limiting who can see them. Bitcoin instead makes every transaction public and keeps privacy by not tying public keys to identities. The paper suggests a new key pair for each transaction, and warns that some linking is unavoidable when several inputs are spent together.
11. Calculations. The paper works out the chance that an attacker could build a longer alternative chain and rewrite recent history. That chance falls very quickly with each extra block the attacker is behind, which is why recipients wait for several confirmations before treating a large payment as settled.
12. Conclusion. The paper sums up a system for electronic payments that does not rely on trust. Nodes need little coordination, can leave and rejoin at will, and agree on history by accepting the chain with the most proof of work. Any rules and incentives needed can be enforced through this same mechanism.

Key facts

Each fact links to its source: the Bitcoin Core software, Bitcoin's developer documentation or the public block chain. Live figures come from mempool.space.

Loading live block data.

Where to go next

• Market and network context: live price, block height, hash rate and fees, data only.
• Custody options: multisig, a regulated custodian or an exchange-traded product.
• Sizing an allocation and treasury policy.

Sources

Primary sources only. Each link was checked on 29 October 2026. Rules change, so confirm the current version with your adviser.

1. Satoshi NakamotoBitcoin: A Peer-to-Peer Electronic Cash System (white paper, 31 October 2008, PDF)
2. Bitcoin Coresrc/consensus/amount.h: COIN (100,000,000 satoshis) and MAX_MONEY (21 million BTC)
3. Bitcoin Coresrc/kernel/chainparams.cpp: halving interval of 210,000 blocks, 10 minute block target, two week retarget, genesis block
4. Bitcoin Coresrc/validation.cpp: GetBlockSubsidy, 50 BTC halved every 210,000 blocks
5. Bitcoin developer documentationBlock chain guide: proof of work, difficulty every 2,016 blocks, block subsidy
6. Bitcoin developer documentationTransactions guide: public keys, private keys and signatures
7. Bitcoin developer documentationGlossary: one bitcoin equals 100,000,000 satoshis
8. mempool.spaceBlock 0, the genesis block (3 January 2009)
9. mempool.spaceBlock 840,000, the fourth halving (20 April 2024)
10. Bitcoin BIPsBIP 11: M of N standard transactions (multisig)
11. SECInvestor Bulletin: exchange-traded products providing exposure to bitcoin and ether (September 2024)
12. FCAFCA opens retail access to crypto ETNs (in force 8 October 2025)