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Bitcoin is a brand new thing. Bitcoin, like the Internet, has a whole new level of underlying technology, operational principles, and top-level applications that have never seen anything similar in history. To make it clear to the general public what bitcoin is, it is as hard as making it clear to the general public in the 1980s what the Internet is.

This also led most ordinary people are hard to figure out what bitcoin is, and produce a variety of misunderstandings, and the problems encountered earlier on the Internet. How would they react if they told the people in the 1980s to buy clothes online?

Even the test did not try, how can this be bought clothes? This is absolutely nonsense!

A picture is not ah, do not have to go to the streets to try on clothing to try?

I do not know wearing a fit, good or bad to buy? You are crazy!

You want to introduce them to Google, how will they react?

A company to help you search for information worth 500 billion US dollars? Check the information can receive so much money?

what? Check the information is free? All the services you use are free?

That company how to make money? Also the market value of 500 billion US dollars? You are crazy!

You have to tell ordinary people, a digital programmer made money, a coin worth 1200 US dollars, more than one ounce of gold, the total market value of more than 10 billion US dollars, how they react?

Bitcoin is a scam, any programmer can create more than stupid coins, than silly coins, than stupid coins,

How can such a virtual coin with no real body be made out of thin air?

Without government endorsement, how can credit be used as currency? You are crazy!

Sounds not all makes sense, logically impeccable?

Bitcoin is quite obscure for those who want to learn bitcoin. The earliest bitcoin users are mostly geeks and hackers, which led to most of the "bitcoin science tutorial" is actually filled with a large number of technical terms and introduction of the underlying principle, not suitable for people without technical background to read.

Often, it takes a month or two for a self-taught person without a technical background to get a rough picture of Bitcoin's technology fundamentals, principles of operation, past histories and ecosystems (think of a person who spent the 1980s) How long to get a general picture of the Internet). The purpose of this article is to shorten these two months to a week or two and strive to develop a basic understanding of bitcoin within an hour or two of reading this article.

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• 0, what is bitcoin?

• 1, bitcoin legal?

1.1, bitcoin in the legal definition

Is Bitcoin a Ponzi scheme or pyramid scheme?

1.3, the difference between some MLM virtual currency and bitcoin

• 2, Bitcoin is how to run?

2.1, centralized accounting (bank)

2.2, to centralize the books

2.3, to centralize the book (bitcoin)

2.4, can not be copied bitcoin

2.5, Bitcoin to centralize the meaning

3, what is the use of bitcoin? What is the value?

3.1, payment remittance

3.1.1, Bitcoin payment

3.1.2, bitcoin micro-payment

3.1.3, bitcoin transnational remittance (need to hedge currency price fluctuations)

3.1.4, Bitcoin Capital Remittance Under Capital Control

3.2, smart contract

3.2.1, Mapping Real-World Assets

3.2.2, anchor the real world currency

3.2.3, non-fraudulent contracts and economy

3.3, information disclosure

3.3.1, charity fund-raising

3.3.2, authentication

3.3.3, to the center of service

3.3.4, openly funded

3.3.4, the combination of information disclosure and intelligent contract

3.4, hype superscript

3.5, illegal use

3.5.1, online betting

3.5.2, dark network black market

3.5.3, extortion

3.5.5, pyramid schemes attract funds

3.5.6, non-conscious intention

3.6, the value of storage

3.6.1, the value of gold storage function

3.6.2, bitcoin value storage function

3.6.3, Bitcoin's hedging function

3.6.4, bitcoin asylum function

3.7, currency issue and social equity

3.7.1, Social Weakening Trend of Government Power

3.7.2, the government masters the drawbacks of currency distribution rights

3.7.3, U.S. Attempts to Limit Government Currency Issue

3.7.4, Hayek's currency is not nationalized

3.7.5, Friedman's Yap Island stone coins

3.7.6, thirty years of digital currency technology accumulation

3.7.7, The Highest Mission of Bitcoin - Restricting Government's Spamming of Legal Money by Technical Means to Promote Society's Fairness and Efficiency

4, bitcoin venture

5, bitcoin is how the issue, what is bitcoin mining?

5.1, What is bitcoin mining?

5.2, mining equipment evolution

5.3, mine

5.4, Bitcoin mining significance - the initial distribution of bitcoin

• 6, the significance of the blockchain - a major innovation in the structure of human organization

7, bitcoin defects

• 8, concluded

8.1, investment risk

8.2, the use of risk

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• 0, what is bitcoin?

Bitcoin (BTC) is a digital currency with a constant total amount of 21 million. It is decentralized, globalized and anonymized like the Internet. Transferring bitcoins to the other end of the globe is as simple and cost-effective as sending an e-mail without any restrictions. Bitcoin is therefore used in areas such as cross-border trade, payments, remittances.

Because of its vast prospects and vast reverie of space, Bitcoin has seen its price continue to rise since its birth in 2009, with the dollar reaching US $ 1 in 2011 and up to US $ 1,200 in 2013, exceeding the price of one ounce of gold, with the reputation of "digital gold" The current price of about 450 US dollars). Bitcoin began with the 2008 themit mystery character Satoshi Nakamoto's essay Bitcoin: A Peer-to-Peer Electronic Cash System (Chinese Version). In the six years after its birth, Bitcoin, as an unprecedented new currency, has experienced countless market tests and technical attacks and has always stood still. Bitcoin has now grown into a monetary system that has millions of users worldwide, tens of thousands of merchants accepting payments, and a market capitalization of up to 10 billion U.S. dollars.

Bitcoin-related companies also attracted venture capital from hundreds of well-known venture capital funds, companies and individuals with nearly 1 billion U.S. dollars in equity investment. Many of them are traditional financial giants such as:

Visa, Nasdaq, Citigroup: "30 billion U.S. dollars in chain investment chain, including Visa and the Nasdaq";

MasterCard: "MasterCard, New York Life Insurance Joins Digital Finance's New Round of Financing

";

Goldman Sachs, IDG Capital: "Bitcoin Won $ 50 Million Circle"

PayPal co-founder, co-founder of eBay, Qualcomm: "Start-up bitcoin 21 21 billion acquisition of huge financing";

New York Stock Exchange (NYSE): "Coinbase formally completes $ 75 million round C financing";

Yahoo founder Jerry Yang, Li Ka-shing's venture capital: "Bitcoin commercial trading platform BitPay financing 30 million US dollars, valued at 160 million US dollars," and so on.

Some venture capital funds also bought bitcoin directly. For example, at the auction conducted by the FBI in the United States to seize bitcoin on the dark market, Tim Draper (Baidu, Hotmail, Skype, Tesla's lead investor People) bought 32,000 bitcoins for 20 million U.S. dollars and 48,000 bitcoins for the Bitcoin Investment Trust in the United States. (NetEase news "three anonymous bidder took the" Silk Road "fifty thousand bitcoin")

The Internet has broken the geographical boundaries and national boundaries of information dissemination. The freedom of information has greatly promoted the economic, political and cultural development of humanity. Bitcoin will further break down barriers to financial and value transmission based on the national boundaries and exert a profound influence on the world. Bhagwan Chowdhry, a professor of finance at the University of California, nominates Nakamoto as a candidate for the Nobel Prize in Economics to rate the following:

I strongly recommend that this award be awarded to Nakamoto. Bitcoin's invention is simply revolutionary.

Nakamoto's contribution will not only revolutionize the way we think about money but will likely overturn the central bank's role in monetary policy and will undermine services such as high-cost remittances such as Western Union and eliminate altogether Visa, MasterCard And Paypal They charge 2-4% middleman transaction tax, eliminate cumbersome and expensive notary and brokerage services, in fact it will completely change the way legal contracts are made.

• 1, bitcoin legal?

1.1, bitcoin in the legal definition

At present, although some countries recognize Bitcoin as a currency, most governments do not recognize Bitcoin as a currency. Instead, they define Bitcoin as a commodity. The main opinions of governments on Bitcoin include:

① The U.S. Commodity Futures Trading Commission (CFTC) defines Bitcoin as a commodity, the same as gold crude oil wheat. (Phoenix Financial "Bitcoin was formally classified as commodities under CFTC regulation")

② The People's Bank of China and other five ministries and commissions jointly issued the "Notice on the Prevention of Bitcoins Risk" prohibiting financial institutions from engaging in bitcoin. At the same time,

"Bitcoin is a specific virtual goods, does not have the legal status equivalent to the currency can not and should not be used as currency in the market circulation.But Bitcoin transactions as a commodity trading on the Internet, the general public in Have the freedom to participate at your own risk. "

The United States New York Monetary Authority (NYDFS) promulgated the BitLicense (bitcoin license), the implementation of bitcoin financial transactions in the regulation of enterprises. (NetEase news "New York bitLicense Bitcoin license final version")

④ People's Daily also expressed a similar regulatory opinion in its "E-money Regulation Schedule" (22 October 2015, version 22):

"Although many fictitious currencies are not located closer to the true monetary attributes, exploring the true power of electronic money through a relatively robust development path through the discovery of monetary functions centered on payment and settlement can help to explore true electronic currency innovation." However, innovation Followed by the pace of regulation to follow.

Although the Chinese government has not yet started to regulate Bitcoin, its attitude has changed from "disregard" and "hostility" to "concern."

⑤ British Customs and Excise Administration (HMRC) that bitcoin is a currency, the Bitcoin transaction exempt from VAT. However, governments such as Sweden and Germany have always believed that bitcoin should be treated as a commodity.

The European Court of Justice finally ruled that Bitcoin should be treated as a currency rather than as a commodity, and that Bitcoin transactions do not have to pay VAT like traded goods. (Tencent News "European Court of Justice Discretes Bitcoin as a Currency Instead of a Commodity")

Therefore, Bitcoin is not an illegal product prohibited by the government, but a legitimate commodity and investment approved by the government, or even a currency.

Is Bitcoin a Ponzi scheme or pyramid scheme?

The capital flows of bitcoin trading markets are similar to the stock market, where new investors buy investments (bitcoin or stocks) from unspecified old investors and neither new or old investors make any profit.

"Ponzi scheme" is defined as: the use of the subsequent "investor" money back to the front of the "investor" in return for the capital attraction,

"MLM" is defined as the act of pulling people in and out of a particular affiliate relationship to absorb and distribute funds.

Elsewhere in the bitcoin / stock market, the elderly have no advantage over newcomers, and rely on their ability to judge the ups and downs for profitability. The middle-aged and elderly people in Ponzi schemes have more advantages than the newcomers, and the elderly are forced to obtain funds from the newcomers. So while bitcoin / stock markets, like Ponzi schemes / MLM, rely on latecomer funding, the Bitcoin and the stock markets are in the same category, not Ponzi schemes or MLM. Many people actually confuse the three completely different concepts of "bubble", "pyramid scheme" and "Ponzi scheme."

To put it bluntly, MLM on-line everybody said is to ensure that you make money, how much a month earnings, you pay, he will be able to draw some of the money you pay (for example, 30% to 50%); bit Bitcoin players and you are talking about the risk of investing in bitcoin is very large, there have been three major post-bubble crash in history, fell 80% to 95%, you must be ready to buy zero, you bought him without any benefit Strictly speaking, if he holds one ten thousandth of the total amount of bitcoin, then he has a millionth advantage).

1.3, the difference between some MLM virtual currency and bitcoin

However, it should be noted that there have been a large number of virtual coins issued under the control of a liar company on the Internet, which is known as an imitator of bitcoin but is actually a pyramid scheme or Ponzi scheme (for example, treasures, vikas, Etc.) or, although not purely a scam, highly manipulated by the dealer (eg sharks, chaff, etc.).

The biggest difference between these liar coins and bitcoin is that bitcoin does not belong to anyone or an organization and is an unmanned and decentralized currency. These liar coin has a clear issuer, and is fully controlled by the issuer. Although liar money, also known as "coins", but it is completely different from bitcoin. Unlike open-bitcoin, most of the swindlers do not have open code, or simply do not have the code, just a number on the site, and how much the publisher wants to change.

Liar coins are often hard-working posting promotion, generally use the means to pull people off the assembly line to absorb funds. One of the simplest judgments is that if the XX currency is issued by the XX company known as "strong", it has broad prospects and guarantees high investment / mining income, promises to make money and make you pay for it. 100% Is a liar coin.

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