No technical background is required to understand this article.
In a word, Bitcoin BTC (BitCoin) is a blockchain-based, inflation-resistant, electronic currency. There are three key words here: electronic currency, resistance to inflation, blockchain-based.
1. Does Bitcoin have value?
Long ago, there was no currency, items for items.
I have a cow in my hand, I need salt, but the person who buys the salt doesn't need cows, he needs cloth, so I try to use cows to exchange cloth first, and then exchange for the salt I want. The whole process is very inefficient.
People are very smart, so they invented an equivalent, and everyone recognized its value, and used it to improve the efficiency of transactions. This equivalent is money . Currency needs to have the characteristics of convenience, scarcity, easy division, and easy measurement. Equivalents that have historically been used as currency are: shells, copper coins, gold and silver, banknotes .
First of all, the essence of Bitcoin is money.
2. Why is Bitcoin valuable?
Currency, diamonds, walnuts...they are valuable not because of practicality, but because "everyone recognizes their value", the more people who recognize them, the more valuable they are.
The country issues currency , and it is guaranteed by the country's credit, so that everyone recognizes the value of the currency; the dollar, people all over the world recognize it, and everyone believes in the value of the dollar; the ruble, except for Russia, few people believe in its purchasing power, and many people do not. The value of the ruble dollar.
Diamonds , very rare, can resist inflation, many people believe in its value, so it is expensive; of course, for those who do not believe, diamonds are worthless.
Voiceover: Many people say that Bitcoin, like diamonds, is useless and a big scam.
Walnuts are expensive for those who like it and believe in its value; of course, for those who don't like it, walnuts are worthless.
Ruan Yifeng has an interesting example. Jack Ma's father wrote "This piece of paper is worth 10,000 yuan" on a piece of paper and signed it. Then, it is very likely that this piece of paper is worth 10,000 yuan, and everyone recognizes him. Even due to the scarcity of signatures, it is likely that this piece of paper will be fired for tens of thousands of yuan in the future. Strange goods are available, these are determined by the relationship between supply and demand, and are automatically adjusted by the market.
Voice-over: Uh, Daddy Ma is still awesome.
Speaking of Bitcoin, more and more people recognize the value of Bitcoin. It is guaranteed by blockchain technology (more powerful than national credit guarantees) and has a fixed total amount of issuance (rare, like diamonds) Inflation resistance), more and more people believe in its value, so it is getting more and more expensive , and now it is more than 10,000 dollars a piece.
Voice-over: You read that right, more than ten thousand dollars a piece.
3. What does blockchain technology guarantee?
In the previous article, I briefly explained the relationship between bitcoin and blockchain: blockchain is distributed storage, and bitcoin is an application based on this storage; just like mysql is the underlying storage, and wechat is the upper-layer application.
Voice-over: Regarding blockchain, see " Understanding the Nature of Blockchain in 1 Minute ".
Any technology selection that is out of business is a hooligan. The characteristics of blockchain technology are abnormally matched with the electronic currency business scenario:
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Distributed high availability : the system will never hang
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Decentralization : No one controls the operation of the system
Voice-over: For the relevant departments, is this an advantage or a disadvantage?
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Tamper-proof : Once the transaction is written into the blockchain, it is permanent, cannot be tampered with, and there is no possibility of counterfeit currency
Voice-over: Hackers hacked into the bank and changed the money in the account, and they could withdraw cash.
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Consistency : Everyone will eventually agree on the transaction data, and there will be no disputes
Voice-over: How does the blockchain ensure consistency, see " Understanding the Nature of "Blockchain Fork" in 1 Minute?
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Transparency : Rules and transaction records are transparent to everyone, and no one can issue them at will
Voice-over: Um, who knows the circulation of RMB and the rules of issuance?
Voiceover: Blockchain technology is very suitable for electronic currency applications. In addition to electronic currency applications such as Bitcoin, Litecoin, and Ethereum, there seem to be very few other applications on the market. Bitcoin, Bitcoin is the blockchain" misunderstanding.
4. How to get Bitcoin?
Having said so much, how do users get bitcoins to obtain corresponding benefits?
Not to mention the ways of "buying bitcoin with cash and transferring bitcoin", the only way to get bitcoin with empty gloves is "mining".
What is "mining" has been described in " Understanding Blockchain Mining in 1 Minute ", so we won't go into details. We just need to know that mining is difficult.
Whenever a miner digs a ore, that is, a new block is generated, the corresponding block reward can be obtained , which contains two parts of income:
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Block subsidy: Whenever a new block is mined, a number of bitcoin subsidies will be rewarded at one time, such as 50 bitcoins, which are extra out of thin air
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Transaction fees: If a Bitcoin holder wants to conduct a Bitcoin transaction, the transfer record must be written to a certain ledger. This ledger is the block dug out, and I want the block I dug to be written to Your transfer record, sorry, please pay me a transaction fee, such as 0.5 bitcoins, these bitcoins are given to miners by the people who traded bitcoins
Voiceover: Yes, in the system design, Bitcoin supports decimals. The easter egg here is that the conversion unit designed by Satoshi Nakamoto is:
1BTC = 1000 Medium
1 medium = 1000
1 = 100 聪 (Satoshi)
which is
1BTC = 100,000,000 Satoshi
Generally speaking, Bitcoin transactions take 0.01BTC as the minimum transaction precision.
5. Why is Bitcoin resistant to inflation?
It can be seen that "block subsidy" is the only way to generate bitcoins out of thin air. With more and more blocks, will bitcoins become more and more like currency issuance?
It will not increase indefinitely. The "block subsidy" has such a rule: every time N=210000 blocks are generated, the subsidy is reduced by half, namely:
First N blocks, subsidize 50 BTC
N-2N blocks, subsidize 25 BTC
2N-3N blocks, subsidize 12.5 BTC
…
It is easy to know that the total number of BTC is:
sum = 50 + 25 + 12.5 + … = formula for summation of proportional series =2100W
That is, a maximum of 2100W bitcoins are issued, and it will not inflate like normal paper money, and all of this is program-controlled.
As mentioned in " How to Ensure Uniform Mining in the Blockchain", the block generation is uniform, and the block subsidy will change about every 4 years. Now, the block subsidy for mining a block is 12.5BTC. Around 2140, when a new block is mined, the block subsidy will drop to 0.
Voiceover: Some people will ask, if the block subsidy is reduced to 0, will anyone continue to mine? The answer is yes, as long as everyone believes in Bitcoin and continues to trade Bitcoin, someone will mine blocks and charge transaction fees. At present, the main income of mining is block subsidies. Maybe the main income of mining in the future will become transaction fees.
6. Summary
This article does not explain Bitcoin from a technical point of view, but briefly summarizes the minute:
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Bitcoin is blockchain based, inflation resistant, electronic money
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At present, 1 bitcoin is worth about 1W US dollars, and its value is based on people's recognition of it
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Through mining, new blocks are generated, and "block subsidies" and "transaction fees" can be obtained to obtain bitcoins
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The total amount of bitcoin issued is limited and can resist inflation
Later notice:
The generation of bitcoin is not the core of the bitcoin system. How to trade, how to keep accounts, and how to ensure security is the most interesting part of this system. Wait for the next minute.
Reprinted from: Architect's Road Public Account