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Bitcoin is a virtual encrypted digital currency proposed by Satoshi Nakamoto in 2008 and officially born in 2009. The following is a detailed explanation of Bitcoin:
Core Features
- Decentralization: Bitcoin runs on a distributed network, without a single institution or individual in control, and is free from dependence on traditional financial institutions. Transaction records are permanently stored on countless nodes, forming an unchangeable time chain, ensuring the security and credibility of the data.
- Constant total amount: Its maximum supply is set at 21 million, and the mining reward will automatically halve for every approximately 210,000 new blocks generated. This scarcity gives it a "hard currency" attribute similar to gold.
- Anonymity: Bitcoin transactions are conducted through addresses, which have no direct connection with the user's real identity. There is no need to disclose sensitive information during the transaction process, but this also poses a challenge to supervision.
How it works
- Mining: Miners verify transactions on the Bitcoin network by solving complex mathematical problems, thereby obtaining Bitcoin rewards. This process consumes a lot of computing resources and electricity. As time goes by, the difficulty of mining continues to increase and the rewards gradually decrease. - Transactions: Users can use digital wallets to send and receive Bitcoins. The Bitcoin address in the wallet corresponds to a unique private key, which is used to control the address and the use rights of Bitcoin.
Development History
- On January 3, 2009, Satoshi Nakamoto mined the "Genesis Block" of Bitcoin.
- On May 22, 2010, the first Bitcoin transaction occurred, and two pizzas were purchased with 10,000 Bitcoins.
- In 2013, the German Parliament decided to exempt investors who held Bitcoin for more than one year from tax. In the same year, the People's Bank of China and other regulatory agencies issued a notice prohibiting financial institutions from conducting Bitcoin-related business.
- In February 2021, the market value of Bitcoin reached 1 trillion US dollars for the first time.
- On January 10, 2024, the US Securities and Exchange Commission approved the first 11 spot Bitcoin exchange funds.