The +d+ flag assigns the user's home directory. In this case, we put it on the external drive. The +s+ flag assigns the user's interactive shell. In this case we set it to +/dev/null+ to disable interactive shell use. The last argument is the new user's username +bitcoin+.
The +m+ and +d+ flags create the user's home directory as specified by /external_drive/bitcoin in this case. The +s+ flag assigns the user's interactive shell. In this case we set it to +/dev/null+ to disable interactive shell use. The last argument is the new user's username +bitcoin+.