11 years later, read the bitcoin white paper
In October 2008, the concept of bitcoin was discussed in a white paper released by Nakamoto. Even today, 11 years later, this white paper still fully explains the operation of bitcoin, which is a must read work for everyone who chooses to invest in cryptocurrency.DJMINER
Almost all trade on the Internet needs to rely on financial institutions as a trusted third party to process electronic payment information... We need such an electronic payment system very much. It is based on the principle of cryptography rather than credit, so that any agreed parties can pay directly without the participation of a third-party intermediary.
Bitcoin does not need to rely on centralized authorities such as banks, which is the most important point for cryptocurrency supporters, especially the trust crisis of such centralized institutions. For example, in certain circumstances, a credit card company allows a buyer to withdraw or reverse a transaction, so the transaction received by the seller will not be permanent. Bitcoin can remove third parties and make payments more reliable and irreversible.
If most CPUs are honest node control, the honest chain will be extended at the fastest speed and surpass other competitive chains. If an attacker wants to modify an existing block, he must redo the workload of the block plus the workload of all blocks after the block, and finally catch up with and surpass the workload of honest nodes.
The premise of bitcoin's normal operation is that it is difficult to crack, so that those who try to create a deceptive transaction chain cannot create a real blockchain, which requires computing power. Therefore, the computing power needed for bitcoin mining is not a waste of resources, but the premise of maintaining network security, ensuring normal transactions and producing bitcoin, which follows the principle of energy conservation._DJMINER
We need a way for the payee to make sure that the previous owner has not signed the earlier transactions... This solution first proposes a "timestamp server".
As a payment system, bitcoin faces the most critical problem of double spending. In the physical currency system, double flowers do not exist, because you have to hand over the money to the seller. The trust foundation of bitcoin is that everyone knows and understands the occurrence of the previous transaction, they have confidence in the previous transaction, so there will be no problem of repeated spending.
As long as the workload consumed by the CPU can meet the workload proving mechanism, the information of the block cannot be changed unless the equivalent workload is completed again. Since the subsequent blocks are linked after the block, if you want to change the information in the block, you need to complete the whole workload of all blocks.
One of the reasons bitcoin network is so flexible is that it will become more and more powerful over time, and the proof of work (POW) is an important source of its energy. As the blockchain becomes longer and longer, the success rate of attacks will decrease, and bitcoin's defense mechanism will become more and more powerful.
The node always regards the longest chain as the correct chain, and continues to work and extend it.
One of the problems that may be faced in the process of increasing bitcoin network blocks is that not all nodes will hold the latest version of the blockchain. Nakamoto also found this problem. He proposed that nodes always regard the longest chain as the only chain, and nodes that missed some blocks can request to download these data again._DJMINER
Bitcoin removes the middleman mechanism
Almost all trade on the Internet needs to rely on financial institutions as a trusted third party to process electronic payment information... We need such an electronic payment system very much. It is based on the principle of cryptography rather than credit, so that any agreed parties can pay directly without the participation of a third-party intermediary.
Bitcoin does not need to rely on centralized authorities such as banks, which is the most important point for cryptocurrency supporters, especially the trust crisis of such centralized institutions. For example, in certain circumstances, a credit card company allows a buyer to withdraw or reverse a transaction, so the transaction received by the seller will not be permanent. Bitcoin can remove third parties and make payments more reliable and irreversible.
Transaction security of bitcoin
If most CPUs are honest node control, the honest chain will be extended at the fastest speed and surpass other competitive chains. If an attacker wants to modify an existing block, he must redo the workload of the block plus the workload of all blocks after the block, and finally catch up with and surpass the workload of honest nodes.
The premise of bitcoin's normal operation is that it is difficult to crack, so that those who try to create a deceptive transaction chain cannot create a real blockchain, which requires computing power. Therefore, the computing power needed for bitcoin mining is not a waste of resources, but the premise of maintaining network security, ensuring normal transactions and producing bitcoin, which follows the principle of energy conservation._DJMINER
Trust foundation of bitcoin
We need a way for the payee to make sure that the previous owner has not signed the earlier transactions... This solution first proposes a "timestamp server".
As a payment system, bitcoin faces the most critical problem of double spending. In the physical currency system, double flowers do not exist, because you have to hand over the money to the seller. The trust foundation of bitcoin is that everyone knows and understands the occurrence of the previous transaction, they have confidence in the previous transaction, so there will be no problem of repeated spending.
Why is POW so important?
As long as the workload consumed by the CPU can meet the workload proving mechanism, the information of the block cannot be changed unless the equivalent workload is completed again. Since the subsequent blocks are linked after the block, if you want to change the information in the block, you need to complete the whole workload of all blocks.
One of the reasons bitcoin network is so flexible is that it will become more and more powerful over time, and the proof of work (POW) is an important source of its energy. As the blockchain becomes longer and longer, the success rate of attacks will decrease, and bitcoin's defense mechanism will become more and more powerful.
Consistency of bitcoin network
The node always regards the longest chain as the correct chain, and continues to work and extend it.
One of the problems that may be faced in the process of increasing bitcoin network blocks is that not all nodes will hold the latest version of the blockchain. Nakamoto also found this problem. He proposed that nodes always regard the longest chain as the only chain, and nodes that missed some blocks can request to download these data again._DJMINER
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