How to explain in an easy-to-understand way what is blockchain and what is Bitcoin?

In fact, the entire white paper does not say that Bitcoin is a currency, only that it is a payment system. Therefore, Bitcoin needs to be understood from two levels: what is the Bitcoin payment system; what is Bitcoin.

1. Bitcoin payment system

When you go shopping in the mall and you say you have 1,000 yuan with you, what it actually means is that you have a total amount in your pocket 1,000 yuan in cash. This cash is tangible and physically transferred when you spend it.

So, when you say you have 1 million in your bank account, what is this 1 million? This 1 million is actually a number. What you understand as the money in the account becoming more or less is the change in this number. At this time, your money is actually abstract.

When you make a purchase and transfer money to others. To implement it with a program is essentially to subtract a number from your account and add a number to someone else's account. This is done by the bank. If your two accounts happen to be opened at the same bank, then the transaction only occurs within this bank. For a bank, its total assets do not change.

If your two accounts are opened in different banks, an inter-bank fund transfer will occur at this time. This is ultimately done by the central bank's payment and clearing system. The central bank will debit Bank A's account. A number was added to Bank B’s account.

In principle, all transactions are realized through such additions and subtractions. All current economic behaviors in human society are based on such a system.

The data of each bank is summarized and processed by the central bank, so we call it a centralized payment system. Each bank's own clearing system can be regarded as a subsystem of this system.

So what is the essence of this payment system? In fact, it is an account book of the additions and subtractions just mentioned.

Bitcoin’s payment system is actually similar and is essentially a ledger.

For example, if you want to show off your wealth now, you can post a screenshot of your bank account. If you can't show it off and you say you have money, people will say you are bragging. People trust banks, but they don’t trust you.

Your friend gave you a payment, and the number in your account increased. What is the nature of this number? It means the bank recognizes that you have the money. If the bank doesn't recognize it, the money doesn't actually exist.

So in the final analysis, how much money you have must be recognized by the bank payment system. The bank is a centralized third party.

The Bitcoin payment system is similar. How many Bitcoins you have needs to be recognized by the blockchain network.

What is blockchain?

A cartoon will help you understand instantly

Blockchain technology refers to a way for all people to participate in accounting. There is a database behind all systems. You can think of the database as a big ledger. Currently, each is keeping its own account.

Since there is no centralized intermediary agency, letting everything run automatically through preset programs can not only greatly reduce costs, but also improve efficiency. And since everyone has the same ledger, it can ensure that the ledger recording process is open and transparent.

Blockchain technology is the underlying technology of Bitcoin. Without the operation and management of any centralized organization, Bitcoin has been operating very stably for many years without any problems, so some people have noticed its The underlying technology abstracts the Bitcoin technology and calls it blockchain technology, or distributed ledger technology.

According to a report released by Santander, Spain’s largest bank, if all banks around the world use blockchain technology internally around 2020, they will save approximately US$20 billion in costs per year. Such data is enough to illustrate the tremendous changes and breakthroughs that "blockchain" has brought to the traditional financial field.

Cloud computing is usually defined as providing dynamic, easily scalable and often virtualized resources through the Internet, but it is often a centralized organization that provides a cloud computing platform. The network composed of blockchain generally does not have a specific organization, so blockchain is closer to the definition of a distributed computing system and is a type of distributed computing.

Q Coin is a centralized electronic currency, including the total amount and issuance method, which are controlled by Tencent. The total amount and issuance method of Bitcoin are pre-set by programs and encryption algorithms, and run on multiple nodes around the world. No one or institution can modify them, and they are not controlled by any single person or institution. Q coins are generally called electronic currencies or corporate tokens. Bitcoin is called digital currency or encrypted digital currency.