The Bitcoin Field Guide

01

The birthday

Day the coin was born

January 3, 2009 (genesis header)

Bitcoin does not have one birthday. The date below is the event this chapter is dating. Other layers are in the table.

This book treats 3 January 2009 as the birthday of the running ledger because that is the date in block 0. The paper was announced earlier, on the mailing list, not inside the PDF.

The genesis coinbase includes the Times headline dated 3 January 2009: “Chancellor on brink of second bailout for banks.” That string is in the block data. It is a newspaper-date stamp, not a separate paper date and not a price forecast.

A later note on the same list says moderation delayed subscriber delivery of the October post until 1 November 2008. The archived message still carries the 31 October stamp. This book uses the archive header, not a guessed delivery clock.

02

People and projects

Who is behind it

The design was published under the name Satoshi Nakamoto. That name is a pseudonym. Emails came from satoshi at vistomail.com. A legal identity beyond the handle is unverified. This book does not invent one.

The venue was the Cryptography Mailing List at metzdowd.com: the 31 October 2008 paper post and the 8 January 2009 v0.1 release.

No company owns Bitcoin. v0.1 said it was “completely decentralized with no server or central authority.” Bitcoin Core is open-source software most nodes run today. Miners, node operators, wallet makers, and exchanges are separate roles. Later companies are not Bitcoin.

03

Place and lineage

Where it came from

Bitcoin came from a design posted to a public cryptography mailing list, not from a company launch party.

The paper’s claim is “a purely peer-to-peer version of electronic cash” so payments can be sent “without going through a financial institution,” using “a peer-to-peer distributed timestamp server” and proof-of-work.

There is no primary that a court or the protocol named a successor CEO. Exchanges, wallet vendors, and ETP sponsors are not the network.

04

Keep these separate

What it is and is not

05

The machine

How it works

Agreement method

Proof of work. Miners compete to publish the next valid block. Independent nodes reject blocks that break the rules.

Units

1 bitcoin = 100,000,000 satoshis. People also say BTC.

Issuance

The subsidy function issues 20,999,999.9769 BTC (derived from GetBlockSubsidy: integer right-shift of 50 BTC every 210,000 blocks). That is 0.0231 BTC short of a round 21,000,000. MAX_MONEY in amount.h is a 21 million sanity check, not the total supply. Core’s comment says the total “currently happens to be less than 21,000,000 BTC.” At least 150 BTC of issued coin is permanently unspendable (genesis coinbase 50 BTC plus two BIP30-overwritten coinbases of 100 BTC). Do not guess a total for burns, OP_RETURN, or lost keys.

A bitcoin payment spends previous outputs. That is the UTXO model: unspent transaction outputs. You do not have a bank “account balance” inside Bitcoin. You have spendable pieces.

Miners do not vote with a CEO. They expend work. Nodes still check every rule. A miner cannot invent coins or reverse a buried payment cheaply. Changing the rules requires the economy of nodes, miners, and users to run new software. Incompatible rule sets produce a fork.

Confirmations are later blocks built on top of yours. More confirmations make a reversal more expensive. “One block” is not a customer-service guarantee.

MAX_MONEY exists because the 21 million cap already failed once. On 15 August 2010, block 74638 created about 184.467 billion BTC. The patch that introduced MAX_MONEY is the emergency fix for that incident. See the extra pages.

A payment, in order

1. A wallet signs a transaction with the private key that controls the coins being spent.
2. The transaction is broadcast to the network.
3. Nodes check the signature, the amounts, and that the coins were not already spent.
4. A miner includes it in a candidate block and searches for a proof-of-work hash below the target.
5. Other nodes accept the block only if every rule still holds.
6. Later blocks add confirmation depth.

06

Keys, not cookbooks

How you send and hold it

The coins are recorded on the network. The wallet holds the secret that can move them. If someone else has that secret, they can usually move the coins.

A recovery phrase is a list of ordinary words that can rebuild the keys. Nobody who is helping you should need it. A support chat, a giveaway, or a “wallet check” that asks for it is trying to take the coins.

Custodial accounts (an exchange or app that holds the keys for you) can freeze, limit, or lose access. Self-custody gives you control and the full job of backup. Neither choice is magic.

This chapter is not a crime cookbook. It does not teach mixing, tumbling, fake identities, or how to hide funds from a lawful process. It teaches you not to donate your keys to a stranger.

Bitcoin addresses and invoice formats vary (legacy, SegWit, Taproot). The receiving wallet or service must support the format you send. A Lightning invoice is not a base-layer address.

Safer habits

• Download wallet software only from a site or store listing you found yourself, not from a message.
• Write the recovery phrase on paper or another offline backup. Do not photograph it, email it, or type it into a website.
• Send a tiny test first. Confirm the network, the asset, and the destination.
• For a company account, turn on a second factor that is not only a text message if you can.
• Stop if anyone asks for the phrase, a remote-control app, or a “verification deposit.”

This book does not tell you how to hide funds, evade a law, or defeat an investigation. A wallet lesson is about not losing your own keys—not about becoming invisible.

07

Read this twice

What can go wrong

08

United States readers only

Law and tax notes

These notes are for United States readers only. Other countries have different rules.

The Internal Revenue Service treats convertible virtual currency as property for federal tax purposes. That is the starting point in IRS Notice 2014-21. Later IRS pages, including the virtual-currency frequently asked questions, expand on reporting. They do not turn this book into tax advice.

Selling crypto, trading one crypto for another, or using crypto to pay for goods or services can be a taxable event. Receiving crypto as wages, as a trade or business payment, or in some airdrop or hard-fork situations can also create income. See Notice 2014-21 and Revenue Ruling 2019-24 for the IRS’s own words on forks and airdrops.

Keep records: date, amount in U.S. dollars, what you received or spent, and which service or wallet you used. A lost key is not automatically a deductible story you can invent later.

A listing, an exchange product, or a court remark about someone else is not your tax result.

On June 14, 2018, William Hinman, then Director of the SEC’s Division of Corporation Finance, gave a speech titled “Digital Asset Transactions: When Howey Met Gary (Plastic).” Footnote [1] says the Commission disclaims responsibility and that the speech expresses the author’s views. Those were staff remarks. They are not a Commission rule and not a court holding that bitcoin is outside the securities laws. Hinman also said that if a promoter placed Bitcoin in a fund or trust and sold interests, “it would create a new security.” That is why ETP shares and BTC must stay split.

On 10 January 2024 the Commission issued Release 34-99306, an Exchange Act order approving proposed rule changes to list and trade bitcoin-based Commodity-Based Trust Shares. Chair Gensler the same day: the action “is cabined to ETPs holding one non-security commodity, bitcoin,” and “we did not approve or endorse bitcoin.” An ETP listing is not a Howey analysis that “bitcoin is not a security.”

This is not legal or tax advice. Rules change. Read the linked primary pages and talk to a licensed professional about your own facts.

Words used in this book

GLOSSARY

Read these before the check-the-terms pages. A word is only useful if you can say it back in your own words.

Address

A destination others can pay. Sharing an address is not the same as sharing a key.

Block

A batch of transactions plus proof-of-work data that nodes can check.

Confirmation

A later block built on top of the block that included your payment.

Fee

What you pay miners to include your transaction. It is not a bank wire fee schedule.

Node

Software that stores and checks Bitcoin’s rules and data. Running a node is not the same as mining.

Private key

The secret that can sign a spend. Anyone who has it can move the coins.

Proof of work

The costly puzzle miners solve so that rewriting history is expensive.

Recovery phrase

Words that can rebuild wallet keys. Treat them as the money.

Satoshi

The smallest bitcoin unit in common use: one hundred millionth of a bitcoin. COIN = 100,000,000.

UTXO

An unspent transaction output—the spendable piece a later payment consumes.

MAX_MONEY

A 21 million BTC sanity check on a single amount. Core says this is not the total money supply, which is less than 21,000,000 BTC. Introduced by the 15 August 2010 overflow patch.

Value overflow incident

15 August 2010, block 74638. About 184.467 billion BTC created. Fixed in v0.3.10.

ETP share

A security listed on a national exchange that holds or references bitcoin. Not BTC itself.

Check yourself

CHECK THE TERMS

Circle one answer. The answer key is on the next pages. Do not peek until you have tried.

1. What date is on Bitcoin’s genesis block?

   1. October 31, 2008, printed inside bitcoin.pdf
   2. January 3, 2009, the genesis header
   3. January 9, 2008

2. Is Bitcoin anonymous?

   1. Yes, automatically
   2. No. The ledger is public and identities can be linked
   3. Only if you use a bank

3. How many BTC does the subsidy schedule issue?

   1. Exactly 21,000,000.00000000 forever
   2. 20,999,999.9769 under GetBlockSubsidy, and the cap already failed once
   3. Exactly 21 million sitting in living wallets

4. Why does MAX_MONEY exist?

   1. Satoshi wrote it on day one as a law of nature
   2. The 15 August 2010 overflow patch introduced it after block 74638
   3. The 2024 ETP order required it

5. Where is the white-paper date?

   1. Printed inside bitcoin.pdf
   2. On the metzdowd mailing-list post, 31 October 2008
   3. Inside the genesis coinbase

6. Hinman’s 2018 speech is…

   1. A Supreme Court holding
   2. Staff remarks, not a Commission or court holding
   3. The Bitcoin white paper

7. A 2024 spot bitcoin ETP listing means…

   1. A Howey holding that BTC is not a security
   2. That trust shares were allowed to list; Gensler said they did not approve or endorse bitcoin
   3. That bitcoin is insured by the FDIC

8. Who should receive your recovery phrase?

   1. Exchange support
   2. Nobody
   3. A miner

Check our work

Sources

Primary pages first. In-repo research packs under docs/field-guides/ were used as source wells. Payhip product blurbs were not used as facts. If a pack left a gap UNVERIFIED, this book leaves it open.

1. Satoshi Nakamoto, “Bitcoin P2P e-cash paper,” Cryptography Mailing List — Fri Oct 31 14:10:00 EDT 2008. This is the paper date. Not printed inside bitcoin.pdf.
2. bitcoin.pdf (no date on the PDF)
3. Satoshi, “Bitcoin v0.1 released” — Thu Jan 8 14:27:40 EST 2009.
4. Genesis block — Timestamp 1231006505.
5. Bitcoin Core amount.h (MAX_MONEY comment)
6. GetBlockSubsidy
7. Jeff Garzik, “Strange block 74638”
8. Commit that introduced MAX_MONEY
9. bitcoin.org protect your privacy
10. Hinman speech, June 14, 2018 (staff remarks; footnote [1])
11. SEC Release No. 34-99306 (Jan. 10, 2024) spot bitcoin ETP listings
12. Chair Gensler statement on spot bitcoin ETPs
13. SDNY Silk Road seizure press (2013)
14. IRS Notice 2014-21
15. IRS Revenue Ruling 2019-24