What block chain? Super detail, read self-taught!

Block chain, is probably the most promising moment full of differences and economic trends and technology. It brings to the digital world "express value" and "value transfer" two new basic features. Its potential is emerging, but the moment it is in a stage of growth obscurity and barbarism.

Comparative history of the Internet, and now the block chain may be equivalent to the Internet in 1994, that time the Internet has just entered the public view, that is the period of the first wave of Internet revolution budding. Google, Amazon, Facebook, Tencent, Alibaba, Uber, drops, even now worth more than a trillion apples have benefited from that moment.

Now block chain technology could bring the second revolution of the Internet, the Internet from "Internet information" with the "value of the Internet." Under the control block chain, it was found that the Internet was originally aptly called "information superhighway" in dealing with "information", and block chain can handle is "value."

Impending changes, the future has come. Once again, we are in the starting point of the revolution - the value of the Internet revolution, and to understand the future value of the Internet, we want to understand what we first block chain technology Yes.

Let's go back 10 years ago, from that moment Satoshi (Satoshi Nakamoto) Bitcoin invention talking about.

Born Bitcoin

January 3, 2009, on a server located in Helsinki, Finland, has a mysterious anonymous technology geeks Nakamoto Bitcoin generated the first block, the so-called Bitcoin block creation (genesis block).

Creation of the notes in the block, Nakamoto written the same day the British "The Times' front page headline:

"At The Times 03 / Jan / 2009 Chancellor ON SECOND, Brink of bailout for Banks"
"" The Times ", January 3, 2009, Finance Minister standing on the edge of the second bank bailout."

In doing so, he recorded the moment Bitcoin system start-up and creation of tile generation, but also by these words express the innuendo that time the global financial system. In early 2009, the global financial system has just experienced the impact of the 2008 financial crisis, it looks shaky.

When generating block creation, according to the rules you set, Nakamoto Bitcoin won 50 awards, this is the first 50-bit currency. Starting founding blocks, books on Bitcoin there is a new data block is added up every 10 minutes, Bitcoin is a new issue out of thin air. Bitcoin decentralized network began operation, it expanded to a global network of tens of thousands of nodes now.

Bit at the time of creation of the currency, the three components which have emerged, i.e., encrypted digital currency (cryptocurrency), distributed books (distributed ledger), to a central network (decentralized network), as shown below.

October 31, 2008, all members of the Nakamoto to a cryptography mailing list send an e-mail, titled "Bitcoin: point to point electronic cash paper."

Nakamoto see the message: https://www.mail-archive.com/[email protected]/msg09959.html .

Bitcoin see White Paper: www.bitcoin.org/bitcoin.pdf .

He wrote: "I have been researching a new electronic cash system, which is entirely the point, without any credible third party." Bitcoin origin should be much earlier than this date, Nakamoto said that he from in May 2007 it began for the Bitcoin project programming. In August 2008, he registered bitcoin.org domain name, which is now the official website Bitcoin project.

In the message, he attached a link Bitcoin White Paper, the paper entitled "Bitcoin: a point to point electronic cash system" (Bitcoin: A Peer-to -Peer Electronic Cash System). Nakamoto in this paper published in 2008 may be one of the most important papers in the history of the development of the Internet, there are other important papers Licklider wrote on "Computer as a Communication Device" Internet predecessor Arpanet (1968 ), Tim Berners - Lee wrote the protocol the World Wide Web (WWW) proposal "information management: a proposal" (1989), Google co-founder Sergey Brin and Larry Page wrote search engine paper (1998) and so on.

It is reasonable to speculate that research scholar Satoshi not an academic, he could be a real engineer software engineering, because he not only designed the Bitcoin system, also developed it, let it run on the Internet stand up. He may be the first to develop the software, just write a heavyweight paper mentioned above to explain their design.

2008 November 16, Nakamoto published the source code for Bitcoin system. After publishing the White Paper, the open-source software code, in this moment of creation block chain of January 3, 2009, he was finally on the internet on line the Bitcoin network. After that, Nakamoto and several developers together to discuss ideas on the Internet, continue to develop iteration. With the maturity of Bitcoin network, it began to reduce his activities, the Bitcoin system gradually into the state of autonomous operation. Finally, after the invention of the Bitcoin system for three years, since November 2011 after Nakamoto never appear. He became a legend forever anonymous, no one knows who he is, he only left his creation.

Why create Nakamoto Bitcoin

In the process of creating a bit of currency, in the present invention Cong block chain technology, the underlying technology is derived from the block chains bit token. So, why did he create Bitcoin? What he wanted to solve the problem?

Now, Bitcoin is often called a 'encrypted digital currency ", in which people are often very concerned about the" money "word. In fact, Bitcoin does not have the legal tender of the characteristics of each country now, it is only a form of digital special commodity. Bitcoin current market prices and rises and falls also affect people's perception of it, people see it as an analogy a variety of investment gold, such as tulips, the subject of speculation.

But if the back Nakamoto create its moment, we will see the emergence Bitcoin is due to a technical problem technology geeks trying to solve: "In the digital world, how to create something kind of cash property? "" Bitcoin: a point to point electronic cash system, "the title reflects the problem Satoshi want to solve: he wanted to create electronic cash available in the digital world, it can point to point is no need for individual personal trading, trading any intermediary involved.

To compare and see. In the physical world, a person can cash notes to another person, does not require such as banks, payment institutions, witnesses and other intermediaries.

But because digital files are copied, copied out of the electronic document is exactly the same, so that in the digital world, we can not simply use a digital file as a representative of the value of things. At the same time, how much money we pay in institutions, and not as banknotes as a digital file can represent, money is only recorded centralized database.

In the digital world, when a person put cash to another person, it must be involved intermediaries. For example, we process through Alipay transfer is: Alipay lose a certain amount in the account of a person's record, the increase in a certain amount of another person's account records.

In the digital world, how to create an intermediary or without centralized to digital cash has been a problem. Because digital files can be copied perfectly, without a centralized database to take notes, how to avoid that a sum of money to a man twice?

This is called double or double flowers payment problems (double spending). Before Bitcoin appeared, we are familiar with major electronic cash system (such as PayPal, Alipay etc.) rely on a centralized database to avoid double flowers problems, these trusted third party intermediary indispensable, shown in Figure 2.

Figure 2: Bitcoin is a cash point to point without any intermediary

But the electronic cash in another road that is intermediary or go to the center of this path, there are many technology geeks have been doing various attempts, but has been unable to get the ultimate success.

By 2008, Nakamoto and learn from the results of a comprehensive predecessors, especially now that the results are often referred to as punk group password (cypherpunk), the improvement of various types of electronic cash before the central and decentralized go, add their own unique and innovative, creating a Bitcoin this point electronic cash system to solve the problem in the case of double flowers do not need an intermediary.

In particular, the electronic cash system Bitcoin is at the same time disintermediation and decentralized:

Electronic cash between the individual and the individual without the intervention of a trusted third party intermediary, which is disintermediation.
The electronic cash currency does not need a centralized organization, but the code is done by consensus with the community, which is decentralized.

It should be noted that this "electronic cash" in the cash means is not money, it is just to represent the value of the digital world to say to borrow in the process of solving problems in. Say this is for ease of understanding, in reality, the most common thing is representative of the value of cash.

Initially, the Bitcoin e-cash to indicate the value is not the price. Bitcoin system is only logically possible systems is a difficult problem to solve technical toys. May 22, 2010, on an online forum, a programmer with 10,000 bitcoins for a voucher two rods Yuehanbisa of Bitcoin first time with a fair price: 10000 Bitcoin price $ 25. To commemorate this day, the annual May 22 became a festival block chain world - Bitcoin pizza section.

Since then, though never a Bitcoin currency, but gradually with the value and price. Bitcoin prices are determined in a free market trading, and continued, repeated fluctuations. However, no matter fallen from the early half of 1132 dollars, or quickly rose to nearly $ 20,000 by the end of 2017, but fell to only one-third within a few months, Bitcoin system and its underlying block chain technology remained stable.

Bitcoin electronic cash system Nakamoto design and coding implementation has been running for nearly a decade. Bitcoin system has become a functioning, almost perfect system from a technical toy, and it seems that will continue long-term stable operation.

Found from the bit block chain system credits

In the physical world, cash is a picture of the bill, but it has a set behind currency-related financial system: the central bank, Bank counterpart, credit card organizations, as well as third-party online payment institutions and other subsequent emergence.

In the digital world, we want to create a disintermediation, decentralized "electronic cash", the same to design a complete system. The system must be able to address the following series of questions:

This "cash" How fair and equitable issue out not to be the center of any of the institutions or individuals under their control?
How to achieve as in the physical world, a person can be directly handed cash to another person, without the assistance of any intermediary?
This electronic cash how "security"? In the digital world, this problem can be converted to, how not to be a sum of electronic cash spent twice?

Nakamoto design and development of the Bitcoin system, the perfect solution to these problems. Speaking of Bitcoin, people often refer to the Bitcoin do this electronic cash value represented. In fact, the surface as Bitcoin Bitcoin only electronic cash system Bitcoin system consists of three layers, shown in Figure 3:

The top layer is the bit that e-cash currency. This is the application layer of the system.
An intermediate layer between the transfer function of the bit currency issuing currency and processing user bits. This layer is also called bit credits Protocol (bitcoin protocol), it is an application protocol layer of the entire system.
Bottom and books distributed to the central network bit token. This layer is also referred to as bit credits block chain (Bitcoin blockchain) , it is a generic protocol layers of the system.

Three Bitcoin system of naming (application layer, application layer protocol, general protocol layer) block chain from well-known researcher Melanie Swan, she also proposed a widely quoted stage is divided: Block Chaining 1.0 is the currency, the block chain 2.0 is a contract, the block chain 3.0 application.

Melanie Swan (Melanie Swan) with a "block chain: a new economic blueprint and Guidance" (Blockchain: Blueprint for a new economy). The application layer, application protocol layer, protocol layer of the general classification see her speech.

Figure 3: see FIG bit credits and a block chain

Decentralized peer electronic cash system Bitcoin achieved, the issue of the transfer by the middle of the Bitcoin protocol layer. Analogy real money system, this level is equivalent to the role of the central bank (issuing currency) and bank (transfer processing) and other financial institutions.

To in-depth look at this one entitled "Bitcoin agreement". System Architecture FIG bit credits and often further subdivided into five (see FIG. 4), which corresponds to the currency bit protocol and bit block chain credits two portions. In this five-story architecture, Bitcoin protocol layer is subdivided into: the application layer, layer of incentives and consensus layer.

Figure 4: System Architecture FIG bits credits

In designing bit token system, Nakamoto creatively computer operator forces competitive and economic incentives combined to form the workload proof (proof-of-work, POW ) consensus mechanism for mining computer node completes the calculation of the competition the currency and accounting functions, and also completed a block chain books and go to the center of the network operation and maintenance. This creates a complete cycle: mining machine mining (count force competition), complete decentralized accounting (operating system), get a bit of money in the form of economic incentives (economic incentives).

Workload Bitcoin prove consensus mechanism is the connecting link layer, connecting the upper and lower application technology: the level on which to issue electronic cash transfers, security; agree node under the hierarchy of the network to the center update distributed books.

After discussing the block chain present and future, we will continue to back up the Bitcoin system design, it is a simple yet ingenious system, the integration of technical and economic factors, block chain is the source of all innovation.

Defined block chain

At this point, I believe that readers already would be able to understand what is the block chain, finally, let us give a definition of the next block chain from a different angle now.

The first definition block chain (more popular)

Bitcoin: encryption digital currency; block chains: a basic technique.

Block chain derived from a "bit money" underlying technology. In other words, the first bit is a big credits block chain technique successfully.

The second block is defined chain

Block chain is carried out in the digital world "express value" and "value transfer" technology. Side of the coin is a block chain value through encryption or digital currency card, the other side is a distributed network of value transfer and books to the center.

Distributed books and go to the center of the network is also often referred to as "chain", it can be seen as a software platform; and represents the value of the pass card is often called "money."

Certificate stored in the chain pass through the code (on the main chain in the form of a smart contract ) to manage, which is programmable.

[Discuss] block chain when we say, what we say

Bit token system comprises three layers: a bit coins, currency protocol bit, bit chain block coins, i.e. the books distributed to the center of the network bit token. So, take a look at the control from the Bitcoin system, said block chain, we are talking about what is possible?

Figure 6: credits from the system to see what bits of block chains is

This statement block chain comprises four possibilities, the area covered by gradually increases, see above:

One possibility, refers to a bit block chain currency data structure , i.e., the connecting link is formed (chain) by the data block (Block), which is also known as "distributed books." In Bitcoin White Paper, Nakamoto and chain blocks were mentioned, but then they are often not combined into block chain (blockchain) this new word.
Bis block chain refers to the possibility of a combination of the books distributed to the network central bit and currency. Corresponding to a bit token system, it refers to the entire third layer bit credits block chain.
Three possibilities, the block chain refers to a second layer (bit credits Protocol) bit token system and combination of the third layer (bit credits block chain). It includes a distributed books, coins to the center and the bit network protocol.
Four possibilities, the block chain refers to the entire Bitcoin system, including all three layers, including both Bitcoin value represented, including the entire support system behind. From this perspective, it is to block chain as both a technical section, and includes a full part of the economic system.

Mass in reference block chain, usually refers to the fourth maximum range, i.e., "books + + + protocol network currency." In the industry, people in the chain of blocks referred to, generally refers to a third range, i.e., "+ + network protocol books." Many software developers when talking about the block chain often referred to as a second range "books + network", that distributed books added to the network center.

Now, including me, many people have a perception that things are called through the express card and put Bitcoin and other tokens (coin) regarded as a particular kind of pass certificates based on the value chain of the block. In general, it mentioned encrypted digital currency, pass cards, tokens when we refer to are based on the block chain, the value of things that were represented in the digital world. If "pass card" statement, including the maximum range of the block chain is "books + + + protocol through the network card."