Web3 Popular Science: How to understand $BTC ? What is Bitcoin? (Help you understand BTC in a simple and easy way)

Bitcoin, Bitcoin, we can break it down to understand: a relatively special currency. Perhaps many brothers who are rolling in the market have not read the Bitcoin white paper, but even without reading the white paper, we still need to know that 👇🏻

📍BTC is currently the most successful electronic cash payment system in the world, so the Chinese translation of its white paper is also translated as: "Bitcoin: A peer-to-peer electronic cash system"

Therefore, Bitcoin is another version iteration in the current history of currency development, that is, both: physical currency (shells), metal currency (gold and silver) and electronic currency after paper money

It is different from the WeChat and Alipay we currently use. It is a real value transfer in a system. Each transaction has a clear account that can be queried and the assets are self-sustaining

The WeChat payment we use is based on a pool composed of a basket of banks. Only when funds actually flow out and in, the account will be recorded by the bank system behind it (simply put, when we use WeChat, the money is not actually in our hands, but is held by WeChat as a proxy Bank custody)

It is also worth mentioning that Bitcoin is not the earliest electronic payment system, because there were many similar electronic systems before Bitcoin, just like in the past e-commerce war in our country, Taobao was not the only e-commerce mall

But from a God's perspective, Taobao was the most successful e-commerce mall 17 years ago, and Bitcoin is still a peer-to-peer electronic cash payment system with group consensus (although most people know that its premise is based on investment attributes, this does not affect its basic foundation based on payment)

In the e-commerce era, there is a saying: There is no era of Jack Ma, only Jack Ma of the era

As for Bitcoin, as a currently ownerless peer-to-peer payment system without a clear conscious leader, we can say: There is no era of Bitcoin, only Bitcoin of the era

The rise of Bitcoin has a strong historical background, namely the financial crisis in 2008. This background is the most important step in promoting the Long March. Therefore, this is one of the reasons why I say that Bitcoin is not the earliest peer-to-peer payment system: without the times, it is difficult to create a "hero" out of thin air

At the bottom of this payment system, there is a consensus mechanism called proof of work as support, that is, a group of miners need to compete for [bookkeeping rights] on this electronic ledger system to obtain the [basic salary (block reward)] and [commission (transaction fee)] paid by this system

>And this proof of work is also designed to be halved every 4 years, that is: this system will give you a salary cut every 4 years<

At present, the main image of Bitcoin in everyone's vision is an investment product. With the passage of Bitcoin ETF this year, Bitcoin has officially entered the traditional financial framework

Therefore, we need to talk about the topic of where BTC's investment attributes come from

First, popularize a little-known knowledge, where does money come from❓

Regarding the origin of currency, the famous economist Adam Smith once gave an example, that is, the origin of currency was born from people's demand for goods, and before the emergence of currency, people's [barter] was obviously inconvenient. With the development of productivity, the types of goods began to increase, and this inconvenience was aggravated

Therefore, currency was born, serving as a pricing medium for goods transactions, so that demand can be met and goods can be circulated. The requirement for this medium is to ensure that everyone recognizes it, that is, [consensus]

In fact, there is another theory about the origin of currency, that is, currency is based on debt, that is, credit, which is substituted into the modern system, that is, personal credit, corporate credit and national credit, but I think the underlying basis is still based on - [consensus]

That is, everyone recognizes it, and the same is true for Bitcoin. In our current monetary system, there is a country as a credit endorsement to divide the face value of a single currency and [the invisible hand in the market] to regulate purchasing power

📍The source of Bitcoin's value also includes these two factors: [consensus], [the invisible hand in the market]

That is, only a small number of people recognized it at the beginning, and gradually more and more people recognized it. At this time, with the continuous influx of funds, the invisible hand in the market will regulate the purchasing power that a Bitcoin can generate

To understand it more simply: Bitcoin is an ownerless virtual bank. Everyone thinks that this bank is safe or for various reasons such as risk aversion, so they choose to deposit their money in it.This bank will give you some bitcoins as vouchers for withdrawals, that is, bitcoins. Next time you want to withdraw money, give the bitcoins back and take out the money.

But it should be noted that because the number of vouchers in this bank is fixed and limited (21 million), when more people go to deposit money, the number of vouchers we will get will also be reduced accordingly. On the contrary, if more people go to withdraw money, because the vouchers are limited, one voucher may be split for three people, so we may be able to withdraw money with fewer vouchers.

When there are fewer people depositing money or more people withdrawing money, the total size of the vault will be reduced, and the amount of money that can be withdrawn will also be reduced.

So we should usually deposit money when there are fewer people or even when everyone is withdrawing money, so that we don’t have to queue up and can get more vouchers $BTC , and then wait until everyone is queuing up to deposit money, and then withdraw the money, so that we can use fewer voucher shares to exchange for the same amount of money.

The above is the story of our investment in $BTC , buying when no one cares, and selling in the midst of the crowds~