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Plain Text Translation: Plain Text Translation: Simplified Blockchain

#区块链#BTC289
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Digital currency is a form of currency that exists in electronic form and is issued and managed through cryptography and distributed ledger technology, rather than by a central bank. Bitcoin was the first digital currency, using blockchain technology and a decentralized approach to issuance and management. Other digital currencies include Ethereum and Litecoin. The blockchain is a data structure that uses hash pointers to ensure node information cannot be tampered with. Bitcoin is produced through incentive rewards and transaction fees, and its production will become increasingly reliant on transaction fees in the future. There are also potential risks associated with digital currencies, such as witch attacks, 51% power attacks, hard forks, and soft forks.

Cryptocurrency#

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

Cryptocurrency is not a very new 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 being "on-chain," so what is a chain?

Let's tell a little story#

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

  1. Anyone can pack a shipping container onto the train.
  2. Packing a shipping container onto the train rewards a small tip.
  3. When collecting goods, a small tip can be requested.
  4. Only those who answer a question correctly can grab the opportunity to pack.
  5. The goods inside the shipping container must be strictly accounted for, and anyone has the right to inspect the train car and its goods.
  • Locomotive: Genesis block
  • Goods: Transactions
  • Shipping container: Block
  • Packing a shipping container onto the train: Packing a block
  • Answering a question: Also known as mining, calculating a Hash key
  • Tip: It refers to digital currencies like BTC, ETH, etc.

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 for each time, and the non-leaf nodes are calculated from the child nodes' Hash. 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 through broadcasting, a certain amount of BTC is generated out of thin air as an incentive reward (PoW).

BTC is generated in two ways:

  1. Incentive reward
  2. Transaction fees packed during transactions (the fees charged to users during transactions)

Tip: The block packing time is approximately 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 many more: the 51% attack, hard forks, soft forks...

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