BTC-USD $83,493.90 -0.89% ETH-USD $2,686.01 +0.24% SOL-USD $118.52 -2.59% XRP-USD $1.49 -1.26% ADA-USD $0.25 -3.23%

Module 1 of 8 · 10:41

Getting started: Bitcoin, blockchains, coins versus tokens

Why can’t you simply copy a bitcoin and spend it twice? Learn what Bitcoin is, how a blockchain records payments, and how coins differ from tokens.

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Chapters in this module
  1. Intro
  2. The question behind crypto
  3. What is Bitcoin?
  4. What does a blockchain do?
  5. Follow one Bitcoin payment
  6. Ethereum and smart contracts
  7. Coins versus tokens
  8. Check your understanding

In this module

  • Separate the Bitcoin network from its native asset, BTC.
  • Follow the basic steps of a Bitcoin payment.
  • Understand Ethereum, smart contracts and tokens.

Start with the network, then the asset

Bitcoin is both a payment network and the name commonly used for its native asset, bitcoin (BTC). The network lets participants check transfers against shared rules. Owning bitcoin does not mean owning shares in a company called Bitcoin.

A blockchain groups transactions into linked blocks. Participants independently check that proposed transactions and blocks satisfy the rules. The record is designed to make accepted history difficult to change; it is not a promise that every application or every claim recorded on it is trustworthy.

Follow a payment

A wallet prepares a transaction and uses a private key to authorise it. The transaction is broadcast, checked and, if accepted into a block, gains a confirmation. Additional blocks provide further confirmations. The recipient’s address tells the network where the payment is going; the private key authorises spending.

Fees pay for using the network. Sending a transaction is different from having it confirmed, and services can require different numbers of confirmations before crediting a payment.

Coins, tokens and smart contracts

A coin is usually the native asset of its blockchain: BTC on Bitcoin and ETH on Ethereum are examples. A token is usually issued using an existing blockchain. Multiple tokens can share the same network, while similarly named tokens can exist on different networks.

A smart contract is software that runs according to a blockchain’s rules. It can define token transfers or other interactions. The label does not establish that the code is safe, that its operator is trustworthy, or that it creates a legal contract.

Takeaway: always identify the asset, the network it uses and the permissions involved before treating two crypto products as equivalent.

Further reading

Provider documentation explains particular designs. It is not a product endorsement.

Check your understanding

Does holding a token mean you own part of the company that created it?

Reveal the answer

No. A token has the rights and functions defined by its design and terms. It does not automatically represent shares or ownership of a business.

Ready to move on?

Mark this module complete when you have finished the video and reviewed the key ideas.

General education, not personal investment advice. Examples illustrate concepts; they are not recommendations or forecasts.