1. What is Bitcoin?

Introduction to Bitcoin

Bitcoin is a type of tokens based on a decentralized peer-to-peer network, consensus mechanisms, and open-source technology, using blockchain as its underlying technology. It was proposed by an anonymous person known as Satoshi Nakamoto on October 31, 2008, followed by the creation of the Bitcoin genesis block on January 3, 2009.

Basic Concepts

1. Decentralization: Bitcoin does not rely on a central authority to issue new money or maintain transactions, but rather completes this using the blockchain, which employs cryptographic algorithms and resists 51% hash power attacks to ensure the security of assets and transactions.
2. Blockchain: A blockchain is a series of data blocks (called "blocks") that are linked together using cryptographic methods. Each new block can be connected to the previous one, forming a chain. The blockchain records the history of all Bitcoin transactions.
3. Asymmetric Encryption: Bitcoin uses asymmetric encryption techniques, involving public and private keys. The public key is open and accessible to anyone, while the private key is confidential and can only be used by the owner. This encryption technology guarantees the reliability of payments.

Operational Mechanism

1. Transaction Process: When a payment occurs, the node where it takes place informs another node until the message spreads throughout the entire network. Miners collect various newly occurring transactions from the network, packaging them into the blockchain. Once this is successfully recorded, the blockchain at the miner's node becomes the latest version, and other nodes replicate the new block to ensure the blockchain across the network remains consistent.
2. Farming; Mining: Users participating in processing blocks can receive a certain amount of newly issued Bitcoin, along with associated transaction fees. These newly generated Bitcoins serve as rewards for data processors within the system, providing assurance for the normal operation of the Bitcoin peer-to-peer network.

Features

1. Decentralization and Security: Bitcoin does not require management by a central authority, ensuring transaction security through blockchain technology and cryptographic algorithms.
2. Global Circulation: Bitcoin can circulate worldwide, except in a few countries/regions where it is prohibited.
3. Privacy: Bitcoin transactions have a unique level of privacy, requiring no third-party financial institutions.

In summary, Bitcoin is a decentralized token based on blockchain technology, achieving secure and reliable transactions through asymmetric encryption and a peer-to-peer network.

2. Who created Bitcoin?

Bitcoin was created by an individual or group using the pseudonym "Satoshi Nakamoto". Despite significant efforts to uncover Nakamoto's true identity, Bitcoin remains one of the biggest mysteries in the tech world.

3. Which venture capitals invested in Bitcoin?

According to the provided information, here are some venture capital firms that have invested in tokens and related projects:

1. a16z (Andreessen Horowitz): Invested in well-known blockchain projects such as Coinbase, Uniswap, MakerDAO, Compound, Dapper Labs, Arweave, Optimism, and Solana.

2. Paradigm: Co-founded by Matt Huang and Fred Ehrsam (one of the co-founders of Coinbase), it received donations from Harvard, Stanford, and Yale as well as investments from Sequoia.

3. Multicoin Capital: Established in 2017, raised $175 million and invested in several blockchain projects.

4. Three Arrows Capital: Founded in 2012, active in the DEFI and NFT sectors.

5. Coinbase Ventures: The investment arm of Coinbase, investing in various blockchain projects.

6. Binance Labs: The investment arm of Binance, investing in numerous blockchain projects.

7. Alameda Research: Invested in various blockchain projects.

8. IDG Capital and Qiming Venture Partners: Invested in KuCoin, providing $20 million in Series A financing.

9. Hong Kong Zhonghong Venture Capital and Chain Forest Capital: Strategically invested in the BT exchange.

These firms have significant investment and influence in the tokens and blockchain space.

4. How does Bitcoin operate?

The operational principles of Bitcoin tokens:

1. Decentralized Network: Bitcoin is based on a peer-to-peer (P2P) network, with no central server or issuing authority. All transactions are recorded on a distributed public ledger (blockchain).

2. Blockchain Technology: A blockchain is a digital ledger that records all transactions. Each block contains multiple transactions and is linked to the previous block via encryption, creating an immutable chain.

3. Cryptographic Technology: Bitcoin uses advanced cryptographic techniques to protect transactions. Each transaction requires two-factor authentication and is verified and recorded through encryption algorithms.

4. Consensus Mechanism: Bitcoin employs a proof-of-work (POW) consensus mechanism to validate transactions and prevent double spending. Miners verify transactions and create new blocks by solving complex mathematical problems.

5. Transaction Process: Users can carry out transactions through exchanges or directly on the P2P network. Each transaction requires the public and private keys of both the sender and receiver for encryption and verification.

6. Mining and Block Creation: Miners create new blocks by solving mathematical problems and adding them to the blockchain. Each new block contains multiple transactions and is linked to the previous block through encryption.

7. Security: Bitcoin's security relies on its decentralized P2P network, cryptographic technology, and consensus mechanism. These characteristics make Bitcoin's transaction records difficult to tamper with.

In summary, Bitcoin's operation relies on its decentralized P2P network, blockchain technology, cryptographic methods, and consensus mechanisms. These features make Bitcoin a secure, transparent, and reliable digital currency.