1. What is Bitcoin?
Bitcoin (BTC) is a user-autonomous, globally versatile encrypted electronic currency.
The concept was proposed by Nakamoto Satoshi (a pseudonym) in 2008. Subsequently, he combined the concept of open peer-to-peer and consensus initiative to combine the principles of cryptography, peer-to-peer networking technology and open source software to develop a self-improving, free Bitcoin application system; January 3, 2009 On the day, Bitcoin came out. Through the unremitting efforts of the members of the Bitcoin community, their application systems have been continuously improved, so that the number of individuals, organizations and enterprises that recognize, use and participate has increased rapidly around the world. At the same time, more and more countries and their authorities have attached importance to it. Make it a new financial ecosystem that adapts to the Internet era and is independent of the traditional financial system.
Unlike traditional currencies, the Bitcoin operating mechanism does not rely on central bank, government, enterprise support or credit guarantees, but relies on network protocols reached in seed files in peer-to-peer networks, decentralized, self-improving monetary system, theoretically ensuring It is impossible for anyone, institution, or government to manipulate the total amount of money in Bitcoin, or to make counterfeit coins. Its monetary aggregate gradually increased at a predetermined rate, and the rate of increase gradually slowed down, eventually reaching a limit of 21 million in 2140. The anti-counterfeiting, anti-inflation and security of the Bitcoin application system are not maintained by the state, but rely on peer-to-peer network technology and the consensus of the participants to actively cooperate.
2. The principle of bitcoin production
Starting from the nature of Bitcoin, the essence of Bitcoin is actually a special solution generated by a bunch of complex algorithms. The special solution refers to a group of equations that can get an infinite number of (in fact, bitcoin is a finite number) solution. And each special solution can solve the equation and is unique.
In the analogy of the renminbi, bitcoin is the serial number of the renminbi. You know the serial number on a banknote, and you own the banknote.
The process of mining is to seek a special solution of this equation by a huge amount of calculation. This equation is designed to have only 21 million special solutions, so the upper limit of Bitcoin is 21 million.
3. What are the common bitcoin wallets?
Bitcoin wallets allow you to trade with the entire world. You can receive bitcoin from someone else using the bitcoin address generated in the Bitcoin wallet. You can also transfer the bitcoin on your account to someone else's bitcoin address. A bitcoin address is like a bank card number. You only need to know someone else's bitcoin address to make a bitcoin transfer. Bitcoin wallet holds all your own bitcoin address and private key information.
4. Common wallet
Bitcoin-Qt – official client, based on C++/Qt, full platform, full data.
MultiBit – full platform, light wallet, official recommendation
Electrum – famous light wallet
Armory – Python-based light wallet with many features
Info– very famous online wallet
5. Bitcoin transaction confirmation
After Bitcoin's transaction data is packaged into a "data block" or "block", the transaction is initially confirmed. The trade will be further confirmed when the block is linked to the previous block. After a continuous confirmation of 6 blocks, the transaction was basically irreversibly confirmed. The Bitcoin peer-to-peer network stores all transaction history in the "blockchain". The blockchain continues to grow, and once the new block is added to the blockchain, it will not be removed. The blockchain is actually a group of scattered client nodes, and a distributed database of all participants is a record of all bitcoin transaction history. Nakamoto believes that when the amount of data increases, the client hopes that the data is not all stored in its own node. To achieve this goal, he introduced the introduction of a hash function mechanism. This way the client will be able to automatically strip out parts that they will never use, such as the very early bitcoin transactions.
The process of confirming a transaction is achieved by a workload proof mechanism that solves a series of computational problems. The workload proof mechanism requires that the computing power of the computer be a certain finite value, which requires a certain amount of time to resolve, which makes it impossible for the attacker to rewrite the transaction history unless he can have more than his Bitcoin peer-to-peer network system. Powerful computing power to generate blockchains faster. The Bitcoin Foundation and its participants discovered the bitcoin blockchain in time. After reaching a consensus, they discouraged developers from stopping the development and use of cottage products, avoiding a bitcoin share being used twice in two blockchains. may. The difficulty of the workload proof mechanism is automatically adjusted by the system, so the generation of new blocks takes an average of 10 minutes. Nodes throughout the Bitcoin P2P peer-to-peer network automatically detect the validity of transactions and blocks, and ignore any transactions and blocks that violate the rules, such as those that generate the wrong number of blocks, or multiple times to send the same share of Bitcoin. behavior.
The client participating in the processing block can get a certain amount of newly issued bitcoin and related transaction fees. In order to get these newly generated bitcoins, the user involved in processing the block needs a lot of time and computational power. This process is very similar to mining, so Nakamoto called the data processor "miner" and processed the data. The activity is called "mining." These newly generated bitcoins can compensate the data processors in the system, and their computational work guarantees the normal operation of the Bitcoin peer-to-peer network. By mining, the Bitcoin system has also injected a revolutionary currency into the global economy.
6. What is a miner and a mining pond, what is the difficulty?
Miners: These are computers that try to create blocks and add them to the blockchain. (also referred to as some mining software). The miner's work will be rewarded by the bitcoin agreement. Once a valid block is found, the system automatically rewards 50 newly generated bitcoins (the reward is halved every four years and will be halved for the first time in December 2012). This is also the source of Bitcoin.
Mine Pool: Due to the low probability of producing an effective block (reward 50 BTC), the pool provides a platform for miners to create blocks and evenly split the profit, thus ensuring a reliable income for the miners.
Difficulty: refers to the difficulty of producing a new block. It automatically adjusts to ensure that the entire network can find a valid block on average for 10 minutes.
7. What are the relevant knowledge of the Bitcoin trading market?
Ask : refers to the price that is currently willing to sell on an exchange, bid is the highest price that is currently willing to buy in the market, and the ask-bid difference is the difference between ask and bid.
Trading volume: refers to the trading volume of Bitcoin within a certain period of time.
Market Depth: The amount of Bitcoin that people have sold in the trading market and have not sold in a certain period of time (because no one is willing to accept these prices).
Speculators: These are those who try to buy low and sell high to make money. Hedging refers to activities that take advantage of the difference between different trading platforms. A band is an activity that relies on a transaction that predicts high-frequency trading of short-term price fluctuations.
Bubble: When people are optimistic about Bitcoin's future price and buy Bitcoin, Bitcoin's price has risen rapidly and continues to cycle until the bubble bursts and the market collapses (market correction). The biggest bubble currently occurs between April and June 2011, causing prices to rise rapidly from $0.75 to $30 and drop sharply to $2. Not long ago, the bubble reappeared in August 2012, from a sharp $1 to $15.5, and fell to $9.
Margin Trading: A highly risky speculative trading (using leverage). You can use the borrowed money to trade Bitcoin and take a bigger risk to get a higher profit. For example, using 5 times leverage, 20% mandatory settlement, you predict that bitcoin prices will fall, you can sell a certain amount of bitcoin (even if you don't have bitcoin, as long as you have enough margin), if the bitcoin price falls, you You can buy the corresponding amount of bitcoin (profit). If the bitcoin rises (losing money), you can buy the corresponding amount of bitcoin, and the lost money is deducted from the margin, and when the price rises more than 20 of your purchase price % (that is, the mandatory settlement price) will be forcibly cleared and the loss will be deducted from the deposit.
Satoshi: A Bitcoin unit named after Bitcoin founder Satoshi Nakamoto. 1 satoshi is equal to one millionth of a bit of bitcoin and is the smallest bitcoin unit currently circulated.
Intermediary services: The certified trader, the buyer transfers the bitcoin to a trusted third party intermediary, and these bitcoins are transferred to the seller after the transaction is completed. (similar to Alipay).
Signature Encryption: An advanced feature of Bitcoin that allows Bitcoin transactions with people who are trusted by 0. In the future, Bitcoin will be encrypted with two or more signatures. Technically, all bitcoin transactions use signature encryption, but the term is usually only used in discussions of unconventional transactions.