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Intermediate · Lesson 1 of 6

Blockchains and Bitcoin

7 minute read · By Krishna Avadhani, Vestora Academy · Updated 18 October 2026

A blockchain is a shared ledger copied across thousands of computers. New transactions are grouped into blocks, and each block links to the previous one with a cryptographic hash, so changing old records would require redoing all later work.

Bitcoin, launched in 2009 by the pseudonymous Satoshi Nakamoto, uses proof of work: miners compete to solve a puzzle, and the winner adds the next block and earns new bitcoin. Supply is capped at 21 million coins, and the new-coin reward halves roughly every four years ("the halving").

Supporters see bitcoin as digital gold, a scarce asset outside government control. Critics point to its volatility, energy use, and lack of cash flows to value. Both views matter when deciding how much, if any, to hold.

Key takeaways

  • A blockchain is a tamper-resistant shared ledger.
  • Bitcoin: proof of work, 21 million cap, halvings.
  • No cash flows: value rests on adoption and belief in scarcity.

Check your understanding

1. What is the maximum supply of bitcoin?

  • 1 million
  • 21 million
  • 100 million
  • Unlimited
Show the answer

21 million. The protocol caps supply at 21 million.

2. What does a bitcoin "halving" cut?

  • The price
  • The block reward to miners
  • Transaction fees
  • The number of users
Show the answer

The block reward to miners. New issuance per block halves about every four years.

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General education only, not financial advice. Examples are illustrations. Rules, tax settings and products change; check official sources.