This article was first published in the deep and simple blockchain community
What is Bitcoin? This article has been updated
Maybe a thousand people have a thousand interpretations of Bitcoin. In this introductory article (written for those who are completely new to the concept of Bitcoin, the old ones should be ignored), I have tried to introduce bitcoin in simple, easy-to-understand terms. What exactly is bitcoin and how does it work?
What is bitcoin
Bitcoin is a digital currency based on a distributed network. The Bitcoin system (broadly defined as Bitcoin) is a distributed peer-to-peer network that is used to build the digital currency.
This article focuses on the narrow definition of bitcoin.
What is digital currency
Keynes said in his Theory of Money that money can carry debts, the general equivalent of prices. The essence of money is an equivalent. It can be anything, such as a piece of paper or a number, as long as people recognize its value. As national credit currency, RMB, US dollar and so on, its value is endorsed by national sovereignty. Digital money is a new kind of money that does not rely on credit and physical objects, and its value is determined by consensus. Bitcoin is a digital currency. (The amount we have in online banking, wechat, alipay, to be precise, it is the digitalization of credit currency, not digital currency, but the central bank is also studying bitcoin and preparing to issue digital currency.)
Operation principle
As we all know, the assets corresponding to our identity ID are recorded in the database of the banking system. Such records are called account books below. For example, the card zhang SAN transferred 1W and the balance 10W on October 1st. The bitcoin system also has such a ledger, which is kept by a single organization of different banks. The ledger of Bitcoin is kept by all the people running the system (the node, which can be simply understood as a computer), and each node keeps (synchronizes) a complete ledger. Also use simple majority rule, to ensure the consistency of the books. For example, if someone changes his or her balance from $10,000 to $1 million on his or her computer, and that account is inconsistent with most people’s, the Bitcoin system will consider it invalid.
Bitcoin uses blockchain technology to support the operation of the entire system. If you are interested, you can read these blog posts in detail:
- Blockchain accounting principle
- Bitcoin ownership issues
- How to mine Bitcoin
Also read: Analyzing the Bitcoin Network: A decentralized, peer-to-peer network architecture that provides a detailed understanding of the Bitcoin network. Bitcoin block structure Merkle tree and simple payment verification analysis, can understand in detail how the block structure to verify transactions.
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