Think of Bitcoin as the funds in an online bank account or the credit balance visible in your bank's app. When you purchase Bitcoin, you don’t physically “hold” anything, just like you don’t hold physical dollars every time you make a digital bank transfer. Instead, Bitcoin exists as entries in a decentralized ledger called the blockchain, similar to how your bank keeps digital records of all account balances.

In this case, the blockchain serves as a kind of community bank ledger that everyone can view. Your balance, however, is only accessible to you through a "wallet" that links to the blockchain. This wallet has two main pieces: a public address, similar to an email address used to send and receive messages, and a private key, which functions like the password to access your funds. Your wallet finds all the pieces of Bitcoin (satoshis) that you've transacted with and securely displays the total for you.

When you have Bitcoin in your wallet, you hold control of it through a digital “key.” The blockchain keeps track of how much Bitcoin belongs to each address, just like your bank tracks how much money you have—but with Bitcoin, there is no central bank managing these accounts; instead, it’s managed by everyone on the network.

Unlike traditional systems controlled by a single organization or bank, Bitcoin’s decentralized structure means it has no single point of failure. This is an important strength that helps make Bitcoin one of the most secure networks in the world. Because it isn’t run by a central entity, there’s no single target for hackers or technical failures that could compromise the entire system.

For example, in recent years, a Microsoft and CrowdStrike update unexpectedly impacted banks, airports, and train stations all at once, causing widespread disruptions because these systems relied on a centralized update process. With Bitcoin, such a shutdown is impossible because its decentralized network operates through thousands of independent computers, or “nodes,” spread across the globe. Each node verifies and stores the complete history of Bitcoin transactions, so if one or even hundreds of nodes went offline, the network would continue to run smoothly with the remaining nodes.

This decentralized approach gives Bitcoin resilience and security, as no central control means no single point of weakness. Every 10 minutes, these nodes work together to confirm and add new transactions, creating a secure, time-stamped record on the blockchain that is publicly accessible and transparent. As a result, any attempt to change the record would require altering data across more than half of the entire network—something virtually impossible to achieve.

So, for new users worried about security, Bitcoin’s system provides unique safeguards that make it distinct from traditional centralized systems. It’s designed to operate independently, securely, and reliably, providing reassurance that your holdings are safe, even as network technology and user demand grow globally.