Understanding Bitcoin

Summary: Bitcoin is a decentralized digital asset created in 2009. It functions as a censorship-resistant money system, global payment network, and increasingly recognized store of value similar to gold. This report explains how Bitcoin works, its history, practical uses, why owning your private keys matters, and how to safely store and obtain Bitcoin.

History of Bitcoin

Bitcoin was introduced in 2008 through a whitepaper by an anonymous figure using the name Satoshi Nakamoto. The motivation: create a peer-to-peer money system not controlled by banks or governments. In 2009 the network launched — with transactions verified by miners solving cryptographic puzzles. Unlike national currencies, Bitcoin has:

• A fixed supply of 21 million coins
• No central authority
• Transparent public ledger (blockchain)
• Mathematically enforced issuance schedule

Satoshi disappeared in 2011, leaving control to the community and open-source developers.

Key Uses of Bitcoin

Digital money: Send value anywhere globally without permission.
Store of value: Similar to gold, Bitcoin is scarce and resistant to inflation and seizure.
Economic freedom: Used by individuals in unstable economies (e.g., Argentina, Lebanon) as a hedge against collapsing local currencies.
Settlement network: Institutions use Bitcoin as a base layer for final-settlement financial transfers.

Bitcoin as a Store of Value

Bitcoin’s value thesis centers on scarcity and decentralization. Only 21 million BTC will ever exist — enforced by the protocol. This predictable supply contrasts with fiat currencies that can be printed at will, eroding purchasing power over time.
Early adopters viewed Bitcoin as “digital gold.” Today large institutions, public companies, and nation-states treat it as a reserve asset.

Bitcoin Price History

Bitcoin’s price history shows volatility but long-term exponential growth driven by adoption cycles:

Where and How to Buy Bitcoin

Popular regulated exchanges:

• Coinbase
• Kraken
• Cash App
• Strike

Peer-to-peer / decentralized options:

• Bitcoin ATMs (higher fees)
• Bisq
• HodlHodl

Why Private Keys Matter

Private keys are cryptographic keys that prove Bitcoin ownership. If you don’t control the keys, you don’t control the coins — meaning exchanges can freeze accounts or get hacked.
Private key: Acts like the password that unlocks your Bitcoin.
Public key / address: Where people send Bitcoin — safe to share.
Owning your keys = true control and sovereignty. Losing your keys = loss of access forever.

Recommended Secure Storage: Trezor Hardware Wallet

Cold storage (offline hardware wallets) keeps Bitcoin safe from online threats. The Trezor wallet allows self-custody, meaning you truly own your coins.

Store Bitcoin safely. Own your future.

Sources

• U.S. Senate Library — Digital Asset Policy Studies
  
• Nakamoto, S. (2008). Bitcoin Whitepaper
• Cambridge Centre for Alternative Finance
• Fidelity Digital Assets Research
• Coin Metrics Network Data

Ledger Nano S Plus Review

Secure your crypto with confidence

Product Overview

The Ledger Nano S Plus is a hardware wallet designed for safely storing and managing your cryptocurrency assets. With enhanced storage compared to the original Nano S, it allows users to install more apps simultaneously, supporting a wide range of coins and tokens.

It offers state-of-the-art security by keeping your private keys offline and safe from online threats, while maintaining a user-friendly interface through the Ledger Live app.

Pros

• ✅ Affordable price point compared to other hardware wallets
• ✅ Supports over 5,500 cryptocurrencies
• ✅ Larger memory than original Nano S (install more apps at once)
• ✅ Top-tier security with offline private keys
• ✅ Easy integration with Ledger Live for managing assets

Cons

• ❌ No Bluetooth support (USB-C only)
• ❌ Smaller screen compared to Ledger Nano X
• ❌ Not as portable if you need wireless connectivity

Final Verdict

The Ledger Nano S Plus is an excellent choice for both beginners and experienced crypto users who want a secure, reliable, and cost-effective hardware wallet.
It’s perfect if you want strong security without paying a premium for extra features like Bluetooth.


👉 Get Your Ledger Nano S Plus Today

Affiliate Disclosure: This review may contain affiliate links, meaning we may earn a commission at no extra cost to you.

How does a hardware wallet work, and how does it keep my crypto safe?

Hardware wallets, including Ledger devices, are primarily secure signing devices designed to protect your private keys, which are the keys to your crypto. Here’s a breakdown of how they work:

1. Private Key Generation and Protection:
   • When you set up your hardware wallet, a secure chip (in Ledger’s case, the Secure Element) generates a random 256-bit number called the entropy.
   • This number is converted into your 24-word Secret Recovery Phrase (SRP) using the BIP-39 standard.
   • Your SRP should be kept secret and never shared with anyone.
   • From this SRP, your private keys are generated using the BIP-32 standard, and then the public keys and public addresses are generated.
2. Transaction Signing:
   • When you want to send crypto or interact with a smart contract, your hardware wallet uses your private keys to create a digital signature.
   • This signature proves you own the crypto without revealing your private keys.
   • The secure chip performs this signing process securely offline, protecting your keys from malware on your computer.
3. Firmware’s Crucial Role:
   • The firmware is the operating system of your hardware wallet. It acts as the intermediary between the hardware and the software applications.
   • Cryptographic Functions: The firmware implements the necessary cryptographic algorithms (like Elliptic Curve Digital Signature) for generating keys and signing transactions.
   • Security Policies: It enforces security policies, such as isolating apps and requiring user consent for sensitive operations.
   • Feature Updates: Firmware updates are essential for adding support for new cryptocurrencies, features, and security enhancements.
   • Security Patches: Firmware updates also patch security vulnerabilities, ensuring your wallet stays protected against evolving threats.
   • Device Attestation: The firmware embeds a Ledger attestation that allows any device to prove it’s a genuine one.
4. Security Features:
   • Secure Element Chip: This chip provides hardware-level security, protecting your keys from physical and digital attacks.
   • App Isolation: The operating system isolates apps to prevent unauthorized access to your private keys.
   • User Consent: You must explicitly consent to any action involving your private keys.
   • Ledger Recover: Ledger Recover splits your seed into 3 encrypted shards and stores them with 3 independent providers.
5. Trust and Transparency:
   • It’s important to understand that using any wallet requires a minimal amount of trust. If you assume your wallet provider is actively trying to attack you, no security measure can fully protect you.
   • While open source is valuable, it doesn’t eliminate all trust requirements. A malicious actor could still introduce backdoors in various ways, including random number generation, cryptographic libraries, or even the hardware itself. Verifying the integrity of the entire supply chain is incredibly complex.
   • To be absolutely trustless, you would need to build your own computer from scratch, write your own compiler, create your own wallet software, run your own node, and implement your own cryptography. This is a highly complex and time-consuming undertaking.
   • Ledger prioritizes transparency where possible. A large portion of our software is open source, allowing for community review.
   • Ledger works with a third party to audit the code.
6. Why Secure Chip?
   • Only a smart card (secure chip) can match the requirements to protect the private keys from physical attacks.
   • Smart cards come with restrictive NDAs, which is why we can’t be 100% open source.

Think of your hardware wallet as a secure bank vault, and the firmware as the vault’s sophisticated control system. It manages the locks, the security cameras, and the authorization protocols, ensuring only you have access to your valuables. The Secure Element is the vault’s reinforced core, protecting your most precious assets. Hardware wallets provide a secure environment for managing your crypto, but a baseline level of trust in the device’s integrity is necessary.

Does the firmware have access to the private keys?

• Direct Access – No:
  • The firmware does not have direct, unrestricted access to the private keys in a way that would allow it to extract or freely use them.
  • The private keys are securely stored within the Secure Element, a dedicated hardware chip designed to resist tampering.
• Indirect Access – Necessary for Operations:
  • The firmware does have a controlled form of indirect access, which is essential for the hardware wallet to function.
  • To perform a transaction, the firmware instructs the Secure Element to use the appropriate private key to generate a digital signature.
  • In this process, the firmware sends the transaction data to the Secure Element and tells it which key to use.
  • However, the Secure Element performs the actual cryptographic operation; the firmware never receives the private key itself.
• Analogy:
  • Think of the Secure Element as a vault, and the firmware as the bank teller.
  • The teller can tell the vault which item to retrieve and present (the private key for signing), but the teller cannot enter the vault and take the item.
• Key Point:
  • The Secure Element’s design prevents the firmware from extracting or permanently accessing the private keys.
  • The firmware’s access is limited to instructing the Secure Element to perform specific cryptographic operations.

In summary, while the firmware plays a crucial role in directing the Secure Element to use the private keys, it does not have the kind of access that would allow it to compromise the security of those keys.

What is a Secure Element?

• A Secure Element is a specialized, tamper-resistant microchip. Think of it as a tiny, fortified vault inside your Ledger device. Its primary job is to store your private keys—the cryptographic codes that control your cryptocurrency—in complete isolation from the rest of the device’s operating system. This isolation prevents malware or unauthorized access from ever reaching your keys, even if your computer or phone is compromised. It’s like having a bank vault within your device, designed to keep your most sensitive information safe.

How does Ledger prevent malware attacks?

• Ledger devices are designed with a multi-layered security architecture. First, the Secure Element isolates your private keys. Second, the device runs a custom operating system, LedgerOS, which is designed with security as its core principle. This operating system restricts the apps that can run on the device and enforces strict security policies. Finally, Ledger Live™  and device firmware are constantly updated to patch vulnerabilities and improve security. These measures, combined, create a robust defense against malware and other threats.

What is the purpose of the BOLOS operating system?

• LedgerOS is Ledger’s custom-built operating system. It’s designed specifically for hardware wallets and prioritizes security. LedgerOS allows for the secure execution of applications while ensuring that private keys remain protected within the Secure Element. This system limits the attack surface and helps prevent unauthorized access or manipulation of your crypto assets. It also allows for the secure addition of new cryptocurrencies.

How are firmware updates secured?

• Ledger firmware updates are digitally signed by Ledger. This means that every update is verified to ensure it comes directly from Ledger and hasn’t been tampered with. When you update your Ledger, the device checks this digital signature. If the signature is invalid, the update is rejected. This process ensures that only legitimate, secure firmware can be installed on your device, preventing malicious software from being installed.

What is the open-source aspect of Ledger?

• While the Secure Element and LedgerOS are not fully open-source due to security considerations, Ledger actively contributes to and supports open-source initiatives. Some of our software components, like parts of Ledger Live and certain libraries, are open-source, allowing for community review and contribution. This approach balances transparency with the critical need for robust security. We are also increasing the amount of open-source code we produce, where it does not impact the security of the secure element.

How does Ledger handle security vulnerabilities?

• Ledger has a responsible disclosure program, encouraging security researchers to report any vulnerabilities they find. We take these reports very seriously and work quickly to address any issues. We publish security advisories and release firmware updates to patch vulnerabilities. Our commitment to transparency and rapid response helps maintain the security of our products.
• Our in-house security team, The Ledger Donjon, is constantly assessing Ledger’s security infrastructure and products to safeguard against any potential threats or vulnerabilities.

Why is physical security important for hardware wallets?

• Hardware wallets, like any physical device, are susceptible to physical attacks. If someone gains physical access to your Ledger, they might attempt to tamper with it or extract your private keys. Ledger devices have physical security measures, like tamper-evident seals and secure chip designs, to deter and detect such attacks. However, it’s crucial to store your device in a secure location and avoid sharing it with untrusted individuals.

Is Ledger’s hardware open source?

• The Secure Element itself is not open source due to the sensitive nature of its function and the need to protect against potential vulnerabilities. However, the communication protocol between the Secure Element and the host device is documented, and some parts of Ledger’s software ecosystem are open source. This approach balances transparency with the critical need for security.

How does Ledger protect against supply chain attacks?

• Ledger takes several measures to protect against supply chain attacks. We work with trusted manufacturers and implement strict quality control procedures. Our devices are shipped in sealed packaging to detect tampering. We also provide instructions on how to verify the authenticity of your Ledger device. These measures help ensure that you receive a genuine and secure product.