Historical background and birth of BTC

In 2008, the world suffered a financial crisis caused by the US subprime mortgage crisis, which led to the collapse of many banks, market collapse, economic recession, and tens of millions of people losing their jobs. Against this background, on October 31, 2008, a person named Satoshi Nakamoto anonymously released the white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" in a cryptography discussion group. On January 3, 2009, Satoshi Nakamoto created the first block in the Bitcoin network - the Genesis Block, which marked the official birth of Bitcoin.

The nature of currency and the definition of Bitcoin

Before we delve into Bitcoin, we first need to understand the concept of currency. Currency is issued by the state and serves as a medium of exchange for commodities, a measure of value, a means of storage, and a means of payment. The formulation of monetary policy is an important means of national macroeconomic regulation. However, the core of currency lies in trust and consensus. Bitcoin is a digital currency created, traded, and stored based on "blockchain" technology. Blockchain is a decentralized, distributed, collectively maintained database technology. In short, Bitcoin is like gold in the online world, but it is actually a string of complex codes.

Characteristics and operation mechanism of Bitcoin

Bitcoin has several significant characteristics. First, decentralization is its core feature. Bitcoin does not rely on any central institution, such as banks or governments, and its transactions and records are realized through blockchain technology. This means that the issuance, transaction and storage of Bitcoin are based on a decentralized network without the participation of intermediaries. Secondly, Bitcoin is anonymous, and no personal information needs to be provided when trading, thus protecting the privacy of users. In addition, Bitcoin has global circulation, is not restricted by geographical location, and can be traded worldwide without handling fees or exchange fees. Furthermore, the supply of Bitcoin is limited, and the total amount is set at 21 million. This is determined by its algorithm and consensus mechanism and cannot be changed. This is also one of the main reasons why the price of Bitcoin has been rising. Finally, Bitcoin uses advanced encryption technology to protect transaction security and ensure that only legitimate owners can transfer Bitcoin.