What is Bitcoin (virtual currency)?
The concept of Bitcoin was originally proposed by Satoshi Nakamoto on November 1, 2008, and was officially born on January 3, 2009. Design and release open source software and construct P2P network based on Satoshi Nakamoto's ideas. Bitcoin is a virtual encrypted digital currency in the form of P2P. Peer-to-peer transmission means a decentralized payment system.
Unlike all currencies, Bitcoin does not rely on specific currency institutions to issue it.
It is generated through a large number of calculations based on specific algorithms.
The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. And use the design of cryptography to ensure the security of all aspects of currency circulation.
The decentralized nature of P2P and the algorithm itself can ensure that it is impossible to artificially manipulate the value of coins by making a large number of Bitcoins.
Cryptography-based design allows Bitcoin to be transferred or paid only by its true owner. This also ensures the anonymity of currency ownership and circulation transactions.
The biggest difference between Bitcoin and other virtual currencies is that its total number is very limited and it is extremely scarce.
Product: Cryptocurrency
Circulation platform: The internet
So called Founder: Satoshi Nakamoto
Abbreviation: BTC
Formation Date: January 3, 2009
Table of Content
1. Development History
2. Founders
3. Production principle
4. Currency characteristics
5. Currency trading
▪ How to buy
▪ Trading methods
▪ Consumption
▪ Payment case
6. Legal status
7. External evaluation
What is the Development Path of Bitcoin?
The global financial crisis broke out in 2008. On November 1, 2008, a person claiming to be Satoshi Nakamoto published a Bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P foundation website. Stating his new vision of electronic money-Bitcoin is here.
On January 3, 2009, the Bitcoin Genesis Block was born.
Compared with fiat currency, Bitcoin does not have a centralized issuer, but is calculated by network nodes.
Anyone may participate in the production of Bitcoin, and it can be circulated around the world. It can be on any computer connected to the Internet.
Buy and sell, no matter where you are, anyone can mine, buy, sell or receive Bitcoin, and outsiders cannot identify the user's identity during the transaction.
On January 5, 2009, Bitcoin was born out of the control of the central bank and any financial institutions.
Bitcoin is a digital currency that consists of a series of complex codes generated by a computer. New Bitcoins are manufactured through a preset program.
Whenever Bitcoin enters the mainstream media's perspective, the mainstream media will always ask some mainstream economists to analyze Bitcoin.
Earlier, these analyses always focused on whether Bitcoin is a scam.
Today's analysis is always focused on whether Bitcoin can become the mainstream currency of the future.
The focus of the debate is often on the deflationary nature of Bitcoin.
Many Bitcoin players are attracted by the inability to issue additional Bitcoins. Contrary to the attitude of Bitcoin players, economists are polarized towards a fixed total of 21 million Bitcoin.
Keynesian economists believe that the government should actively regulate the total amount of money and use the tightness of monetary policy to refuel or brake the economy in a timely manner.
Therefore, they believe that Bitcoin's fixed total currency sacrifices controllability, and worse, it will inevitably lead to deflation, which will hurt the overall economy.
The Austrian school of economists have the opposite view. They believe that the less government intervention in currency, the better. The deflation caused by the fixed amount of money is not a big deal, even a sign of social progress.
The Bitcoin network uses "mining" to generate new Bitcoins. The so-called "mining" essentially uses a computer to solve a complex mathematical problem to ensure the consistency of the distributed accounting system of the Bitcoin network.
The Bitcoin network automatically adjusts the difficulty of mathematical problems so that the entire network can get a qualified answer about every 10 minutes.
Subsequently, the Bitcoin network will generate a new amount of Bitcoin as a block reward to reward those who get the answer.
When Bitcoin was born in 2009, the block reward was 50 Bitcoins. Ten minutes after its birth, the first 50 bitcoins were generated, and the total amount of money at this time was 50.
Bitcoin has since grown at a rate of about 50 every 10 minutes.
When the total amount reaches 10.5 million (50% of 21 million), the block reward is halved to 25.
When the total amount reaches 15.75 million (new output 5.25 million, which is 50% of 1050), the block reward is halved to 12.5.
The currency system used to be no more than 10.5 million in 4 years, and the total number will be permanently limited to about 21 million.
Bitcoin is a virtual currency with a limited amount, but it can be used to cash out. It can be exchanged for the currency of most countries. You can use Bitcoin to buy some virtual items, such as clothes, hats, and equipment in online games.
As long as someone accepts, you can also use Bitcoin to buy real-life items.
On February 25, 2014, the bitcoin opening price of "Bitcoin China" was 3,562.41 yuan. As of 4.40 pm, the price had fallen to 3,185 yuan, a decrease of more than 10%.
According to the historical market data of the platform, on January 27, 2014, 1 bitcoin could be exchanged for 5032 yuan. This means that in less than a month on the platform, the price of Bitcoin has fallen by 36.7%.
On September 9, 2014, US e-commerce giant eBay announced that Braintree, the company's payment processing subsidiary, will begin accepting Bitcoin payments.
The company has partnered with Bitcoin trading platform Coinbase to begin accepting this relatively new payment method.
Although eBay market trading platforms and PayPal businesses are not yet accepting Bitcoin payments.
Braintree customers such as Airbnb, a travel home rental community, and Uber, a car rental service, will start accepting this virtual currency.
Braintree's main business is providing payment processing software to businesses, which was acquired by eBay in 2013 for about $ 800 million.
On the evening of January 22, 2017, Huobi.com, Bitcoin China, and OKCoin Coin Bank issued announcements on their official websites.
In order to further suppress speculation and prevent sharp price fluctuations, each platform was opened on January 24, 2017 at 12 noon.
Starting from 00, the transaction service fee will be charged. The service fee was to be charged at a fixed rate of 0.2% of the transaction amount, and the active transaction rate and the passive transaction rate will be the same.
On May 5th, the latest data from OKCoin Coin Network shows that the price of Bitcoin has just refreshed its history again, and reached a high of 9,222 yuan before the press release.
Starting from 12:00 noon on January 24th, China's three major Bitcoin platforms have officially started charging transaction fees. On September 4, the central bank and other seven ministries issued a statement saying that China banned virtual currency transactions.
When did Bitcoin Price Reach its all time high?
Earlier on December 17, 2017, Bitcoin reached an all-time high of $ 1,950.
On November 25, 2018, Bitcoin fell below the $ 4,000 mark and stabilized at more than $ 3,000.
Latest, its all time price high was almost $20,000 in late 2020.
On November 19, the cryptocurrency resumed its downward trend, and Bitcoin dropped to the $ 5,000 mark for the first time since October 2017, due to the previous hard fork of BCH and the regulatory agency's initial coin offering (ICO) Strengthened review.
At 4:30 am on November 21, the bitcoin quote on the coinbase platform fell below $ 4,100, a new low in 13 months.
In April 2019, Bitcoin broke the $ 5,000 mark again, setting a new high for the year.
On May 12, Bitcoin exceeded $ 7,000 for the first time in nearly eight months.
On May 14, 2019, according to a quote from coinmarketcap, Bitcoin stood at $ 8,000, up 14.68% in 24 hours.
On June 22, 2019, the price of Bitcoin exceeded the $ 10,000 mark. The price of bitcoin fluctuated around 10,200, with an increase of nearly 7% in 24 hours.
On June 26, the price of bitcoin exceeded $ 12,000 in one fell swoop, hitting a 17-month high since January last year.
On the morning of June 27, the price of Bitcoin was close to $ 14,000 at one time, setting a new high for the year.
Who is the Founder of Bitcoin?
Mochizuki Shinichi, Professor of Mathematics, Kyoto University
On November 1, 2008, a person claiming to be Satoshi Nakamoto published a bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P foundation website, stating his interest in electronic money.
This is the new idea of Bitcoin-Bitcoin is here. On January 3, 2009, the Bitcoin Genesis Block was born.
Bitcoin uses a distributed ledger to get rid of the restrictions of third-party institutions, which Satoshi Nakamoto calls "blockchain." Users are happy to dedicate CPU computing power and run a special software to be a "miner", which will form a network to maintain the "regional chain".
In the process, they will also generate new currencies. Buying and selling also extends on this network.
Computers running this software are scrambling to solve irreversible password problems, which contain several buying and selling data. The first "miner" who handles the problem will receive a 50 bitcoin reward, and the relevant trading area will join the chain.
With the increase in the number of "miners", the difficulty of each puzzle has also improved, which keeps the bitcoin productivity of each trading area at about one minute.
In 2009, Satoshi Nakamoto designed a digital currency, namely bitcoin.
The ups and downs of the bitcoin market have risen and fallen, and the identity of its founder "Satoshi Nakamoto" has always been a mystery.
The rumors involved everything from the US National Security Agency to financial experts, which also gave Bitcoin a mysterious aura.
According to foreign media reports, computer scientist TedNelson posted a video on the Internet on Sunday saying that he had determined that the founder of Bitcoin was Shinichi Mochizuki, a professor of mathematics at Kyoto University.
The founder of Bitcoin has always used the pseudonym of Satoshi Nakamoto, and the Internet has also speculated a lot about its true identity. Nelson released a video saying that he has determined that Mochizuki Shinichi is the true founder of Bitcoin.
Mochizuki Shinichi became famous in 2013 for proving the ABC conjecture. He attended Philip Exeter College in high school, one of the most prestigious high schools in the United States, and graduated just two years later.
Mochizuki entered the University of Princeton at the age of 16 and left school as a Ph.D. at the age of 22. He became a full professor at the age of 33.
It is extremely rare in academia to obtain a full professor title at such a young age. This math superstar may have broken one of the most important problems in the field.
Satoshi Nakamoto himself has few personal data left on the Internet, especially in recent years, which has almost completely disappeared, so his life has also become a mystery.
On March 7, 2014, when someone said that the founder of Bitcoin was Dorian Nakamoto, it quickly became the most attractive news on the Internet.
Unlike the speculation that it might be a fictional name, "Satoshi Nakamoto" is a real name.
He is a 64-year-old Japanese-American. He likes to collect train models. He has worked for large companies and the US military. jobs.
For the past 40 years, Satoshi Nakamoto has never used his real name in life. According to the 1973 file of the Los Angeles District Court, when he graduated from California State Polytechnic University at the age of 23, he changed his name to Dorian Prentice Satoshi Nakamoto.
Since then, he no longer uses the name "Satoshi", and has signed Dorian S. Nakamoto.
Also in 2014, the true inventor Satoshi Nakamoto spoke online and denied: "I'm not Dorian Nakamoto."
What is the Production Principle of Bitcoin?
The nature of special currency is actually a special solution generated by a bunch of complex algorithms. A special solution is one of a finite number of solutions that can be obtained by a system of equations.
Each special solution can solve the equation and is unique. In the metaphor of a banknote, Bitcoin is the prefix number of the banknote.
If you know the prefix number on a banknote, you have the banknote. And the mining process is constantly seeking special solutions to this system of equations through huge calculations. This system of equations is designed to have only 21 million special solutions, so the upper limit of Bitcoin is 21 million.
To mine bitcoin, you can download a dedicated bitcoin calculation tool, then register various cooperation sites, fill in the registered user name and password in the calculation program, and then click to start the calculation. After completing the installation of the Bitcoin client, you can directly obtain a Bitcoin address. When others pay, you only need to paste the address to others, and you can make payments through the same client. After installing the Bitcoin client, it will assign a private key and a public key.
You need to back up your wallet data containing the private key to ensure that the property is not lost. If you unfortunately format the hard drive completely, your personal Bitcoin will be completely lost.
What are the Currency Characteristics of Bitcoin?
Decentralization: Bitcoin is the first distributed virtual currency. The entire network is composed of users and there is no central bank. Decentralization is the guarantee of Bitcoin's security and freedom.
Circulation worldwide: Bitcoin can be managed on any computer connected to the Internet. No matter where you are, anyone can mine, buy, sell or receive Bitcoin.
Exclusive ownership: private keys are required to manipulate Bitcoin, and it can be stored in isolation on any storage medium. No one except the users themselves.
Low transaction fees: Bitcoin can be remitted for free, but a transaction fee of about 1 bit cent will be charged for each transaction in the end to ensure faster transaction execution.
No hidden costs: As a payment method from A to B, Bitcoin has no cumbersome limits and procedures. Knowing the counterparty's bitcoin address allows payment.
Cross-platform mining: Users can explore the computing capabilities of different hardware on many platforms.
What are the Advantages of Bitcoin?
Completely decentralized, without the issuer, it is impossible to manipulate the number of releases. Its distribution and circulation are achieved through the open source p2p algorithm with features of anonymous, tax-exempt and regulatory-free.
2017 Prominent virtual currencies information
Currency Abbr. | Issue Time | Founder | Active | Market Cap- Bitcoin BTC 2009 Satoshi Nakamoto $ 200 billion is SHA-256
- Ethereum ETH 2014 Vitalik Butrin Yes $ 32 billion No Ethash
- Ripple XRP 2013 Chris Larson Yes $ 17 billion Yes SHA-256
- Yuzucoin EOS 2017 Daniel Larimer Yes $ 5.5 billion No DPOS
- Litecoin LTC 2011 Li Qiwei Yes $ 7.5 billion Yes Scrypt
Bitcoin Cash
- BCH 2017
- Founder:Wu Jihan
- Active: Yes
- Market Cap: $ 7.5 billion
- Algorithm: SHA-256
When and where was the first Bitcoin ATM opened?
The "world's first" Bitcoin ATM was opened in Vancouver, Canada on October 29, 2013. It processed the exchange of Canadian dollars and bitcoin, and quickly greeted people who queued for business.
The ATM is made by American Machine Currency Corporation and is located in a coffee shop called "Trends" in Vancouver.
One of the cash machine owners is Mitchell Demeter, who has been engaged in bitcoin trading for several years, and two other high school classmates have formed a bitcoin trading company. Demeter says this is the world's first Bitcoin cash machine.
Demet and his associates both consider bitcoin cash machines to be business opportunities, because previously "there is no Bitcoin cash machine, everyone is trading on the website."
During the operation, a Bitcoin user enters a password similar to a bank PIN and logs in to a network Bitcoin account.
Through the cash machine, users can withdraw the Canadian dollar cash corresponding to the ratio from the Bitcoin account, or deposit the cash into the Bitcoin account.
Bitcoin users only need a smartphone to use Bitcoin, which is similar to online shopping.
Is there any Lack of supervision on Bitcvoin?
But some worry that bitcoin is a hotbed for drug trading, money laundering and other illegal activities. A website called "Silk Road" set up a platform for criminals to trade in bitcoin, which was shut down by US authorities earlier this month. U.S. police said on October 25, 2013 that they found $ 2.8 million worth of bitcoin in the computer of the site's owner, William Wilhelm Ublich.
Reuters reported that the website, which has been in operation since 2011, is a trading platform for criminals. The site sells heroin and other drugs and even offers killers. More than 900,000 registered users of the site use bitcoin for drug transactions.
Court documents show that the site reached $ 1.2 billion worth of bitcoin transactions in two years of operation, with a transaction fee of 8% to 15%.
Agence France-Presse reported that Bitcoin has not been effectively regulated in any country or region. Germany is the first country in the world to recognize Bitcoin as a "private currency"
What is the Legal status of Bitcoin?
Germany: At the end of June 2013, after the German parliament decided to hold bitcoin for more than one year and would be exempt from tax, bitcoin was recognized by the German Ministry of Finance as a "accounting unit", which means that bitcoin has been considered a legal currency in Germany, Can be used to pay taxes and engage in trade activities.
United States: In August 2013, a Texas District Court Judge Amos Mazant ruled in a Bitcoin virtual hedge fund case that Bitcoin is a currency and should be included in the regulation of financial regulations Within range.
Japan: In 2017, the Japanese government described Bitcoin as a legal payment method.
China: In China, the Regulations on the Administration of the RMB stipulate that the production and sale of token tickets is prohibited. As there is no clear judicial interpretation of the definition of token tickets, if Bitcoin is included in "token tickets", the legal prospects of Bitcoin in China face uncertainty.
Notice of the Ministry of Culture and the Ministry of Commerce on strengthening the management of virtual currency for online games (Wenshifa [2009] No. 20) On June 4, 2009, the "Notice" stated that the scope of application of virtual currency for online games was clarified for the first time.
The current online game virtual currency is distinguished from the virtual items in the game; at the same time, the notice states that the "Notice" requires companies engaged in related services to obtain approval before they can operate.
In China, some Taobao stores have also started to accept the use of Bitcoin, and merchants will gradually increase.
In October 2013, the first issue of the first Bitcoin quarterly magazine, OneBit, was released.
On October 15, 2013, Baidu Accelerator Services, a subsidiary of Baidu, announced support for Bitcoin.
On October 26, 2013, BTCMini reported that GBL was hacked.
On October 31, 2013, Lei Teng, a well-known internet lawyer, issued a document suggesting that the case of investigating the closure of the GBL Bitcoin trading platform be investigated as soon as possible, analyzing the "value function" and "use function" of Bitcoin. Bitcoin should be subject to relevant laws.
December 5, 2013, "Notice of China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission on Preventing Bitcoin Risk, Ministry of Industry and Information Technology of the People's Bank of China indicates that Bitcoin is a specific virtual commodity.
As a kind of commodity buying and selling behavior on the Internet, ordinary people have the freedom to participate in the premise of bearing their own risks.
September 4, 2017, "Public Announcement of the People's Bank of China Central Cyberspace Office of the Ministry of Industry and Information Technology, Industrial and Commercial Bureau of China Banking Regulatory Commission, China Securities Regulatory Commission, Insurance Regulatory Commission on Preventing Token Issuance and Financing Risk Announcement": Prohibition of ICO Issuance and Financing (ICO).
Trading Platform Do not engage in the exchange of fiat currencies with tokens and "virtual currencies", do not buy or sell tokens or "virtual currencies" as a central counterparty, do not provide pricing, information intermediation, etc. for tokens or "virtual currencies" service.
On November 2, 2018, the People's Bank of China released "Crypto Assets" in Topic 12 of the "China Financial Stability Report 2018".
What does External evaluation says about Bitcoin?
In August 2014, a reporter from The Coinsman website in the United States came to the Northeast to inspect "Bitcoin Mining", and everything stunned him. The scene was like the sound of angry bumblebees flapping their wings.
Despite the air conditioning, the indoor temperature reached 40 degrees, and the strong wind formed by the wind turbines made it impossible to move forward. Behind these wind turbines, it was uncountable. Mining machine. The monthly electricity bill is 400,000 yuan.
The workers work in three shifts 24 hours a day, 2,500 machines, and 230 billion hash calculations per second.
What is the General Public Review of Bitcoin?
Bitcoin development has entered a "fuzzy period" i.e. the regulators in most countries are both alert and indifferent. For example, the Bank of England recently released a report that when digital currencies are fully accepted by the market, it will threaten the stability of the British financial system.
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