Bitcoin Academy

Academy

Twelve lessons, each one idea and one thing to try, from the first block to your tax bill. Your progress stays in this browser.

Stage 1 · BeginnerThe basicsWhat Bitcoin is, why there are only 21 million and how to get started safely.
Stage 2 · IntermediateUnderstand and secureThe long-term trend with the Power Law, and how to hold and protect your bitcoin yourself.
Stage 3 · AdvancedPlanning and living with BitcoinInheritance and multisig, financial planning, living off Bitcoin and taxes in Germany, Austria and Switzerland.

1 Stage 1 · Beginner

The basics

What Bitcoin is, why there are only 21 million and how to get started safely.

What is Bitcoin?
Why exactly 21 million?
Your first bitcoin
Volatility and time horizon

Lesson 1 of 12

What is Bitcoin?

Bitcoin is money that works without a bank and without a state. Since 3 January 2009, thousands of computers around the world have kept a public ledger together, the blockchain. About every ten minutes a new block of payments is added.

No one can print more bitcoin, freeze accounts or change the rules alone. Owning bitcoin really means owning a secret key that lets you spend your share of the ledger.

Remember:Bitcoin is an open network with fixed rules – and your key is your property.

Lesson 2 of 12

Why exactly 21 million?

The amount is fixed in the code: there will never be more than 21 million bitcoin. New bitcoin are created as the miners' reward; every 210’000 blocks, about every four years, that reward halves (the halving). Since 2024 it has been 3.125 bitcoin per block.

One bitcoin divides into 100 million satoshis (sats). So you don't have to buy a whole bitcoin – even a few euros are thousands of sats. The last bitcoin will be created around the year 2140.

Remember:The supply is limited and anyone can verify it – that is what makes Bitcoin scarce.

Lesson 3 of 12

Your first bitcoin

The easiest way to buy is a regulated exchange or a savings-plan app. Many start with a savings plan: a fixed amount every month, whatever the price. That way you don't have to catch the right moment.

Watch the fees and make sure you can withdraw your bitcoin to a wallet of your own. Stay away from promises of fixed returns, other kinds of cryptocurrency and tips from strangers – Bitcoin needs no middleman who promises you more.

Remember:Start small, save regularly, only Bitcoin – and buy where you can withdraw.

Lesson 4 of 12

Volatility and time horizon

The Bitcoin price swings hard: drops of 50 to 80 percent have happened several times, and each time it later rose to new highs. Anyone who has to sell in the short term may sell at the worst moment.

So only put money into Bitcoin that you won't need for at least four years – one full halving cycle – and keep an emergency reserve in euros or francs first.

Remember:Time beats timing: a long horizon makes the swings bearable.

2 Stage 2 · Intermediate

Understand and secure

The long-term trend with the Power Law, and how to hold and protect your bitcoin yourself.

The Power Law: the long-term trend
Custody: not your keys, not your coins
Security: protecting your seed words
Hardware wallets and backups

Lesson 5 of 12

The Power Law: the long-term trend

Plot the Bitcoin price against the days since the genesis block (3 January 2009) on two logarithmic axes, and it lies remarkably close to a straight line – a power law: 10^a × days^b. Our floor is 0.42 × that line, with the published values for a and b, the ones other Power Law pages use too; we check them against every daily close since 2010, and the Power Law page shows both.

The price has rarely closed below the floor, and the Power Law page shows how often. The trend (fair value) lies above the floor and comes a little closer to it every year, because every boom rose less far than the one before. A third line, the top band, runs through the earlier cycle tops and stays above the trend. Between these lines lie the zones: floor zone, accumulation, fair, hot and euphoria. Where the price stands right now is shown in the bar at the very top of every page.

Remember:The Power Law describes the past and gives orientation – it is no guarantee for the future.

Lesson 6 of 12

Custody: not your keys, not your coins

As long as your bitcoin sit on an exchange, the exchange holds the key – you only hold a promise. If the exchange goes bust or freezes your account, you cannot reach your money (as happened at Mt. Gox and FTX).

With a wallet of your own you hold them yourself: it creates a recovery phrase of 12 or 24 words (the seed). Whoever has these words has your bitcoin – on any device, anywhere in the world.

Remember:Withdraw larger amounts from the exchange; your seed words are your bitcoin.

Lesson 7 of 12

Security: protecting your seed words

Write the words on paper or stamp them into metal – never as a photo, file, email or in a cloud. Keep them in a safe place, protected from fire, water and prying eyes.

No one legitimate ever asks for your words: no support desk, no exchange, no wallet maker. Check addresses before every payment, install apps only from official sources and test the recovery once with a small amount.

Remember:Whoever asks for your seed wants to rob you – without exception.

Lesson 8 of 12

Hardware wallets and backups

A hardware wallet is a small device that keeps your key offline and has you confirm every payment on its own display. Even an infected computer cannot steal bitcoin that way. Buy it only directly from the maker.

If the device is lost, you restore everything on a new one with your seed words. An additional passphrase protects you if someone finds the words – but it has to be kept just as safely.

Remember:Once losing the amount would hurt, your bitcoin belong on a hardware wallet.

3 Stage 3 · Advanced

Planning and living with Bitcoin

Inheritance and multisig, financial planning, living off Bitcoin and taxes in Germany, Austria and Switzerland.

Multisig and inheritance
Financial planning with Bitcoin
Living off Bitcoin
Taxes in Germany, Austria and Switzerland

Lesson 9 of 12

Multisig and inheritance

With a multisig wallet a payment needs several keys, for example 2 of 3. The keys are kept in different places; if one is lost or stolen, your bitcoin stay safe.

Think of your heirs too: without keys and instructions your bitcoin are lost to them. Write down what you own, where the keys are and how to use them – and store it so that no one can get to it beforehand.

Remember:Custody is only safe once it also works without you.

Lesson 10 of 12

Financial planning with Bitcoin

Decide what share of your wealth Bitcoin should be, how much you save each month and which goal you want to reach. The Power Law helps to work out realistic ranges – with the floor as the cautious case.

Set your selling rules before the price makes you euphoric: for example, from which zone on you sell a part. In My Goal you record your goal and rules – as a poster for your wall.

Remember:A plan written down in advance protects you from greed and fear.

Lesson 11 of 12

Living off Bitcoin

To live off Bitcoin, you sell a small part regularly – calculated cautiously with the floor, not the peak. A reserve in euros or francs for one to two years bridges bear markets without having to sell cheaply.

Instead of selling, you can also borrow with bitcoin as collateral. But if the price falls sharply, the collateral is sold off (liquidation). So whoever borrows borrows only a small part of the value and knows the price at which it becomes critical.

Remember:Withdraw so little that even a long bear market does not break your plan.

Lesson 12 of 12

Taxes in Germany, Austria and Switzerland

Germany: gains on privately held bitcoin are tax-free after a holding period of more than one year; before that your personal tax rate applies (up to €1’000 of gains a year stay free). Austria: bitcoin bought since 1 March 2021 are taxed at 27.5 % when sold; older holdings are tax-free after one year.

Switzerland: price gains are tax-free for private investors, but your bitcoin count as wealth and are subject to wealth tax. Whoever trades a lot may count as a professional trader. Keep complete records of purchases, sales and receipts.

Remember:Taxes belong in the plan – when in doubt, ask a professional.

You have completed the Academy

Next come your own numbers: target prices and selling rules in My Goal, or a savings plan, a withdrawal or a loan in the calculators.

My Goal Power Law Calculators Start again

Not financial, legal or tax advice. Tax rules change; check yours before you sell.