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Apr 7, 2023#区块链 #BTC289

AI Translation

This post is translated from Chinese into English through AI.View Original

AI-generated summary

Digital currency refers to electronic forms of currency that exist using digital technology. Unlike traditional cash currency, digital currencies are not issued and managed by central banks, but rather through cryptography and distributed ledger technology. Bitcoin, introduced in 2009, is an example of a digital currency based on blockchain technology. Other digital currencies include Ethereum and Litecoin. Blockchain is a technology that allows for decentralized issuance and management of digital currencies. It is often compared to a train where each block represents a container for transactions, and the train head represents the genesis block. Mining, or solving complex mathematical problems, is used to validate and add blocks to the blockchain, with rewards in the form of digital currencies. Bitcoin, for example, can be generated through mining rewards and transaction fees. However, as time goes on, the mining rewards will decrease, and transaction fees will become the main source of generating digital currencies. There are also various challenges and attacks associated with digital currencies, such as the 51% attack and hard forks.

Cryptocurrency#

Cryptocurrency refers to digital currencies that exist in electronic form using digital technology. They are different from traditional cash currencies in that they are not issued and managed by central banks, but rather through cryptography and distributed ledger technology.

Cryptocurrency is not a very novel term either. In 2009, the whitepaper for Bitcoin emerged, based on blockchain technology, and it is issued and managed in a decentralized manner.
In addition to Bitcoin, there are other cryptocurrencies such as Ethereum, Litecoin...

Blockchain#

We often hear about "on-chain," so what is a chain?

Let's tell a story#

A long time ago, there was a person named Satoshi Nakamoto who invented a locomotive. This locomotive could be of infinite length, and each section of the locomotive could hold a container.
He established a rule:

Anyone can pack containers onto the train.
Packing containers onto the train will be rewarded with a tip.
When collecting goods, a reasonable tip can be requested.
Only those who answer the question correctly can have the opportunity to pack.
The goods inside the container must be strictly accounted for, and anyone has the right to inspect the train car and its cargo.

Locomotive: Genesis block
Goods: Transactions
Container: Block
Packing containers onto the train: Packing blocks
Answering questions: Also known as mining, calculating a Hash key
Tip: BTC, ETH, and other cryptocurrencies

BTC#

From a technical perspective, the underlying data structure of the blockchain is actually a Merkle Tree structure, which is pointed to the previous node through a Hash pointer. The leaf nodes are the transaction information of each transaction, and the non-leaf nodes are calculated from the Hash of the child nodes. Using Hash pointers ensures that node information cannot be tampered with. The top-level node of each tree structure is what is commonly referred to as a block. When a block is successfully packed into the chain and recognized by broadcasting, a certain amount of BTC is generated out of thin air as an incentive reward (PoW).

BTC is generated in two ways:

Incentive rewards
Transaction fees packed during transactions (the fees charged to users during transactions)

Tip: The average block packing time is about 10 minutes, and the incentive reward is halved approximately every 4 years. In the near future, the incentive reward will become less and less, and the main means of generation will shift to transaction fees during packing.

Of course, there are still many things: the 51% attack, hard fork, soft fork...