Hello, everyone. I’m Xiaozuoshou and I’m very happy to meet you in the Web3 world. I will mainly use token economics to help you deepen your understanding of virtual currency and help you understand its meaning. I wish you all a successful investment!
Bitcoin is the world's first decentralized digital currency or cryptocurrency. It is released as open source software and is not controlled by any entity.
Bitcoin uses a peer-to-peer network that allows senders to transact directly with receivers without any intermediaries. This eliminates unnecessary fees and makes each transaction much cheaper compared to international remittance services.
A total of 21,000,000 BTC will be produced in the world. No one can change this number, not even the founder Satoshi Nakamoto.
Bitcoin not only has its largest unit, Bitcoin (BTC), but also smaller units called Satoshis (or sts), named after the creator of Bitcoin.
The exchange rate is 1 BTC = 100,000,000 Satoshis, with 1 Satoshi equal to 0.00000001 BTC.
How does Bitcoin work?
Bitcoin operates on blockchain technology, which is a decentralized public ledger system. Each Bitcoin transaction is attached to a block, and these blocks are interconnected to form a blockchain. The Bitcoin network consists of thousands of nodes (computers) around the world responsible for verifying and recording transactions.
When a Bitcoin transaction is created, it is broadcast to the network and waits for confirmation from the nodes within the system. These nodes check the validity of the transaction, including verifying the source of Bitcoin funds and validating the electronic signature. Once the transaction is confirmed, it is packaged into a new block and added to the blockchain.
Why was Bitcoin created?
Why did Satoshi Nakamoto create it? The value of Bitcoin depends on the time each individual and user holds, owns, or uses Bitcoin. Here are some applications:
Bitcoin as a means of payment: Bitcoin was created to be a peer-to-peer payment system. Although Bitcoin initially had no intrinsic value, after more than a decade of development, more and more organizations accept Bitcoin as a payment method.
Value storage: Due to its scarcity and mining difficulty, Bitcoin is often viewed as digital gold. Therefore, many large financial institutions and individual investors buy and hold Bitcoin as a long-term value store.
Borrowing and mortgaging with Bitcoin: In addition to being used for payments, Bitcoin is also accepted by many institutions as collateral for investors to borrow and optimize capital. Bitcoin is accepted as collateral because it has the highest market capitalization and is the most widely used cryptocurrency.
Conclusion
The birth of Bitcoin has opened the blockchain industry, which is currently worth billions of dollars. Bitcoin is one of the most attention-grabbing assets today. The high volatility of BTC makes it an attractive investment channel in the eyes of many, but it also brings significant risks, especially for novice investors. Properly understanding Bitcoin and the cryptocurrency market is the best way to effectively reduce risks.
