Introduction to Cryptocurrency (Bitcoin)
1. Basic Concepts
- Cryptocurrency is a digital currency that uses encryption technology for transactions and control of new unit creation. The most famous one is Bitcoin.
- Bitcoin is a decentralized digital currency that uses a peer-to-peer network for transactions, recorded on a public distributed ledger called the blockchain.
2. Blockchain Technology
- Blockchain is a distributed database that records all Bitcoin transactions. It ensures the security and immutability of transactions through encryption technology.
- Blockchain consensus includes machine consensus (algorithm rules), governance consensus (rules made or modified by humans), and market consensus (equilibrium prices formed by market transactions).
3. Trustlessness
- Trustlessness refers to the fact that in a blockchain, transaction parties do not need to trust each other or third-party institutions. Transaction confirmations and state changes occur synchronously.
4. Applications and Regulation
- Cryptocurrencies have various applications globally, but they have also raised regulatory issues. For example, China has completely banned virtual currency trading, citing potential financial risks and illegal activities.
