Three Minutes to Truly Understand Bitcoin 3.0
Bitcoin, as a virtual cryptocurrency with a fixed total supply of 21 million coins, is characterized by features such as "decentralization," "anonymity," and "limited supply," making it both innovative and controversial.
The innovation of Bitcoin lies in its use of blockchain technology and asymmetric encryption technology.
Blockchain Technology: The blockchain is the underlying technology of Bitcoin, a distributed ledger maintained by numerous nodes spread across the globe.
Asymmetric Encryption Technology: Bitcoin uses asymmetric encryption technology to ensure transaction security. Users have a public key and a private key; the public key is like a bank card number that can be disclosed, while the private key is like a bank card password that must be kept secure. The sender encrypts the transaction information using the recipient's public key, and the recipient decrypts it with their private key. The private key is also used for the electronic signature of the transaction, proving its authenticity and ownership.
In a transaction, when villager A wants to transfer Bitcoin to villager B, to ensure that only B can receive and use this Bitcoin, A will encrypt the transaction data, which includes the transfer amount and the addresses of both parties, using B's public key. The encrypted transaction information is broadcasted to the Bitcoin network, and the recipient will record it in their own ledger, but only the villager B, who possesses the corresponding private key, can decrypt this information, access the transaction details, and confirm the transfer, thus completing the Bitcoin transfer.
The controversy surrounding Bitcoin arises from issues such as difficulty in market regulation, high energy consumption, and significant technological limitations.
Difficulty in Market Regulation: Due to Bitcoin's decentralization and anonymity, regulatory agencies find it challenging to track and control transactions, making it susceptible to money laundering and illegal trading activities.
High Energy Consumption: The process of "mining" requires a large amount of computational resources and energy, putting pressure on energy supplies and the environment.
Significant Technological Limitations: The speed of transaction confirmation is relatively slow, and the capacity to process large-scale transactions is limited, which may not meet the demands of future large-scale commercial applications.
