What is Bitcoin?

Bitcoin has received unprecedented attention since the release of the white paper in 2008, especially since Bitcoin had its first transaction and increased tens of millions of times within ten years. Every surge and plunge has become the focus of attention and caused huge controversy.

So, what exactly is Bitcoin?

The Internet’s “last piece of the puzzle”?

As we all know, before the emergence of Bitcoin, the Internet was undoubtedly the brightest star in the past twenty years. It has indeed brought about earth-shaking changes in people's lives.

On the Internet, if I want to send you a photo, it is easy to do it using WeChat, QQ or email.

But after you received the photos, the photos in my hand did not disappear out of thin air. In other words, what you receive is a copy of this photo.

Send photos, videos or files, we can send copies to each other, but what about the money? This will definitely not work. It is impossible to have a situation like this: I transferred 100 yuan to you and you received it, but I still still have the 100 yuan in my hand. This is the so-called "double spending".

There is no way to solve the "double spending" problem with Internet technology alone. So, we can usually pay directly with WeChat, Alipay, UnionPay, etc., so what’s going on?

This is because the "double spending" problem that cannot be solved by Internet technology alone has been solved by relying on giant intermediaries such as WeChat, Alipay, and UnionPay.

In other words, after I transfer 100 yuan to you, these intermediaries deduct 100 yuan from my account and increase your account by 100 yuan, thus solving the problem of "double spending" of 100 yuan.

But Bitcoin solves this problem perfectly. I transfer 1 Bitcoin to you. After you receive this Bitcoin, my account will lose 1 Bitcoin. This The process does not require the participation of giant intermediaries. Bitcoin's unique internal mechanism perfectly solves the "double spending" problem.

It can be said that the emergence of Bitcoin has completed the last piece of the puzzle of Internet technology, that is, the transfer of value without relying on intermediaries (for example, 1 Bitcoin is transferred from my account to your account) . Therefore, the emergence of Bitcoin immediately became the focus of attention, and its underlying technology blockchain is also known as the "Internet of Value".

How does Bitcoin work?

We said earlier that Bitcoin complements the “last piece of the puzzle” of the Internet, on the basis of not relying on intermediaries. Solve the "double spending" problem and realize the free flow of value.

So, how does Bitcoin work?

We can think of the operation process of Bitcoin as a large-scale game. The rules of this game are as follows:

1. Anyone can join in and play together, or they can quit at any time, provided that a computer is prepared as a game tool.
2. The more computer chips and the higher the configuration, the greater the probability of receiving rewards from the Bitcoin system.
3. Bitcoins can be transferred to other people at will, but the Bitcoin transfer records will be sent to everyone and everyone will keep them individually.
4. Unless the majority of people agree, no one can modify the game rules and transfer records without authorization.

It is precisely because there are Bitcoins as rewards, so when I transfer 1 Bitcoin to you, these people participating in the game will rush to keep accounts. Decrease 1 Bitcoin from my account, add 1 Bitcoin to your account, and then back up the transfer records to everyone participating in the game, and the underlying technology of Bitcoin ensures that these records cannot be tampered with.

We mentioned above that when using Alipay to transfer money, we need to rely on Alipay, a giant institution, to record the transfer for us and solve the "double spending" problem.

So, when using Bitcoin to transfer money, we don’t need to rely on other intermediaries. Using Bitcoin’s inherent technology and incentive mechanism, we can ensure that all people participating in the game keep accounts together, thus solving the problem of “double spending.” "Problem to realize the transfer of value.

This is also the reason why Bitcoin can be decentralized and disintermediated.

So, what kind of magic does Bitcoin have that can mobilize tens of thousands of people around the world to continue to participate in accounting? What is the difference between Bitcoin and Q Coin?

We will talk about these in the next issue.

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