Module 2 of 4
Open the video.
Watch the video.
The source notes that the host is not a Maxi; be aware of this if participants ask.
Prepare the tables below. Explain the rules before the role-play: each transfer changes the record only if it is permitted by the stated starting balances and rules. In the final scenario, participants should compare their records after each step; agreement is not a vote on what they prefer, but a check of whether the same stated rules and earlier entries produce the same result.
Ask participants to track these transfers. They may work from memory first and then use paper.
| TEACHER | RED | BLUE | |
|---|---|---|---|
| Starting balance | 21 | 0 | 0 |
| After step 2 | 19 | 2 | 0 |
| After step 3 | 14 | 2 | 5 |
| After step 4 | 14 | 3 | 4 |
| After step 5 | 9 | 9 | 4 |
Ask learners how they checked their result and what information they needed.
Tell the class that a BANKER begins with 2,100 play-money units and pays 200 units to each of six participants: RED, BLUE, PURPLE, BLACK, ORANGE, and GREEN. Designate one learner as the official record keeper.
Ask the class: under the initial rules, is Step 4 a valid payment, a newly authorized issuance, an error, or something else? Who has the authority to answer in this scenario? Make clear that the answer depends on the rules you gave the record keeper; the activity has not shown that all single-record systems work the same way.
Repeat the scenario with every participant maintaining a record. After each entry, participants compare balances and state whether the entry follows the initial rules.
At the proposed addition of 600 units, ask participants to distinguish two questions:
If the group rejects the entry under its initial rules, ask what would have to change for it to be accepted: the record, the rule, the authority to change the rule, or the group’s interpretation. This helps learners see that distributed copies do not themselves create a rule; participants must also apply and enforce common rules.
Explain that Bitcoin users may choose to run software that independently validates transactions and blocks against Bitcoin’s rules. Many users instead rely partly on wallets or other services, so it is inaccurate to say that every user keeps a full copy of the ledger.
At beginner level, describe the process as follows: transactions are broadcast; miners propose blocks using proof of work; and nodes independently accept or reject blocks according to their validation rules. Nodes converge on a history with the most accumulated proof of work. This is a useful comparison with the classroom exercise, but the exercise omits important technical and social details.
Optional money-properties comparison
If learners compare money properties, ask them to state the criterion and evidence for each entry rather than directing them toward a preferred answer. A supply rule is one input to scarcity; credibility, enforcement, verification, history, and demand are separate questions.
This is a simplified classroom model
The activity represents a shared record and rule checking. It does not reproduce Bitcoin's digital signatures, peer-to-peer message propagation, mining competition, proof-of-work difficulty, forks, incentives, or security assumptions. It does not show that one form of coordination is always better than another.
Allow time for calculations and for disagreement about the scenario's rules. Keep the discussion focused on the difference between an observation from the role-play, a technical fact that can be checked, and a value judgment that requires criteria.
Bitcoin Diploma assessment link: This activity may provide formative practice for T2 / C2. Use the approved protocol and record individual evidence for copying, verification, rules, and roles if it is used for assessment.
Educator background and source notes
These sources support the technical background only. They do not establish a universal historical claim about leaders, a causal claim about monetary systems, or a conclusion about Bitcoin’s value.
Select 3 or 4 participants as malicious nodes before class and assign them a cryptographic puzzle as homework in the previous class.
Select an originator and form participants into a circle, separating malicious nodes.
Give the originator a note reading “ATTACK” and the number sequence “4-16-14-21-1-21-1-3-11-”. The originator passes it to the right.
After all participants read the message, the originator says “Now.” Participants react simultaneously; “ATTACK” means taking a step forward.
Observe that participants who interpreted the encrypted message correctly remain still while others act, revealing a lack of consensus.
Why was consensus not achieved? How does this relate to the Byzantine Generals’ Problem and Bitcoin’s solution?
Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2. Use the approved protocol and record an individual explanation of shared verification; otherwise, this activity is formative.
Assign roles. Explain that a recipient can provide a destination and check for a payment, but does not approve a transaction for the network. Nodes validate transactions and blocks against the stated rules. A miner can build a candidate block from valid transactions and tries proof of work. The educator decides which valid model transactions are available to the miner.
The sender writes a simulated amount and recipient on a transaction note, then authorizes it. The recipient checks the intended amount and destination. Nodes check the model's signature, balance, and double-spend rules.
When nodes accept the transaction in the model, the miner adds it to a candidate classroom block. The miner rolls the die until the educator's stated result is reached. Explain that the die represents repeated proof-of-work attempts, not a vote or transaction-validation step.
The nodes check that the candidate classroom block follows the model's rules, including the valid transaction and the stated die result. Update the classroom ledger only after this check.
Bitcoin uses digital signatures, transaction rules, peer-to-peer communication, proof of work, and independent node validation. The classroom model shows only selected roles and checks.
Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2. Use the approved protocol and record an individual explanation of validation and double spending; otherwise, this activity is formative.
Explain that hashing turns a digital message into a fixed-length code that acts as a unique identifier.
Open the SHA-256 Hash Generator and generate a hash for a string or input value.
Generate the hash again using the same message and compare the result.
Change the message slightly and observe that the code is completely different. Compare the lengths of hashes from differently sized inputs.
The same message produces the same hash; small changes produce a very different hash; output length is fixed.
Use fictional, non-sensitive text only
Never paste a seed phrase, private key, password, recovery code, personal information, or a real financial record into an online hash tool.
Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2, specifically proof-of-work preparation. Use the approved protocol and required rule-and-role explanation; otherwise, this activity is formative.
Hash functions are described as one-way methods.
Open the video.
Watch most or all of the video as time permits.
Note how the video shows blocks being chained.
The full video is 17 minutes long and may be difficult to play in its entirety.
Choose a model target, such as at least three dice showing one. Explain that in Bitcoin a miner repeatedly changes a candidate block header to seek a hash at or below the current target threshold. Nodes can check the resulting proof of work and the block's rules. The difficulty adjustment periodically changes the target; it is not the value a block must be below.
Participants or a designated miner roll six dice repeatedly. Each roll represents one unsuccessful or successful attempt in the model. The goal is to meet the stated dice target.
If the model target is too easy or too difficult for the time available, change it before the next round. Explain that a lower Bitcoin target makes a successful hash less likely, but the dice rule is only a teaching comparison.
When the dice target is met, the class checks the number of ones and confirms that the stated result follows the model rule. Explain that Bitcoin nodes also check transaction and block rules, not only proof of work.
Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2. Use the approved protocol, including the required role and rules explanation; otherwise, this activity is formative.
Open the video.
Watch the video.
Open the video.
Watch only the first five minutes, then stop when the speaker begins explaining setup.
Emphasize that nodes are not miners or wallets: they run the Bitcoin protocol and maintain an updated copy of the blockchain.
Nodes help ensure the network is decentralized and secure.
Open “How To Setup Bitcoin Core.”
Watch the video.
Explain that Bitcoin Core is one option for running a node and that it downloads the blockchain before checking newly arriving blocks.
View and discuss; do not require installation
This activity teaches the role of a node. Do not require learners to install software, run infrastructure, use personal devices, or expose personal network information.
Return to the money comparison table from Chapter 2.
Review the characteristics: durable, portable, uniform, acceptable, scarce, and divisible.
Compare cows, cigarettes, diamonds, euros, and Bitcoin against each characteristic.
Complete the totals in the comparison table.
How does Bitcoin compare with other forms of money?
Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2. Use the approved protocol, including an explanation of how a Bitcoin property could help or limit its use as money and the required explanation of participant roles; otherwise, this activity is formative.
