Content
This article is an in-depth article about Bitcoin and blockchain knowledge. I strive to follow the principle of "top-down, and refinement" to make Bitcoin and blockchain knowledge like an onion, layer by layer. Go deeper, so that readers will have a complete knowledge harvest every time they peel off.
Decentralization
Blockchain was originally an Internet-based information encoding, transmission, encryption, decryption, and verification technology, but in my opinion, it has now risen to a "decentralized" concept, which is essentially an ideological concept. innovation. Bitcoin is a specific application of this concept.
For example, blockchain is equivalent to e-commerce. If you think about it twenty years ago, a few people understood what e-commerce is. It is also a concept in essence, but this concept must be used to a certain extent. Technical means to achieve. Bitcoin is equivalent to Taobao, a specific application of e-commerce.
Therefore, if we want to understand what a blockchain is, we must first understand what decentralization is. Let me give you two examples to help you understand:
The first example is downloading movies from the Internet. In the earliest days, we downloaded movies to some well-known movie download websites. These websites would store the movie files on a server or a group of servers, and everyone would visit this (group) server to download the movies. This is called centralization.
In this game rule, the server of the movie website is the center, and every person who downloads a movie is just a line drawn from the center. In centralized games, the status of players is unequal, and the website owner occupies an absolute strong position. He wants to download it when he wants you to download, and he wants to limit the speed to you.
Later, a decentralized download mode appeared, this is BT download, also called P2P (peer to peer) download. Now when we talk about P2P, it generally refers to the kind of personal lending website, but the original concept is downloaded from BT. P2P means individual to individual, point-to-point. The principle of BT download is completely different from that of movie websites. The movie is not stored on a certain server, but everyone downloads a small part of the movie from everyone on the network, and finally puts it together into a complete file.
In this game, the status of all players is completely equal. Any player can leave and join at any time. As long as there are people playing, the whole game can run normally, and no one has special power. This is called decentralization.
The second example is the bank card or Alipay, WeChat and other renminbi payment methods we use every day. Let’s put aside cash first. We use a cashless way to pay for things in RMB. It is a centralized game. Its center has many levels. For example, Alipay's server is the first-level center, and Alipay funds custodian banks such as Industrial and Commercial Bank of China and China CITIC Bank. It is the second-level center, and the next-level center of these banks is the server of the central bank—the People's Bank of China.
In this game, the power and status of players at different levels are unequal. Of course, the biggest Boss is the central bank. It can even issue currency. Its power can be so big that it can grab all our money in minutes. It’s very simple. All it needs to do is to issue additional currency suddenly. If prices suddenly rise a hundred times, our money will be robbed. Can currency games be decentralized like downloading movies? It is also possible. The Bitcoin system is such a decentralized currency game system. You can think of it as a large-scale currency experiment.
The Bitcoin game is played like this, with two core rules. First, its currency issuance is not determined by an institution, but a set of algorithms are published. Every time a number that meets the requirements is calculated, it is equivalent to digging a number of bitcoins. Anyone can count, it's absolutely fair, and no one can cheat, because the algorithm is essentially just to make up numbers one by one, and make up one by one. Second, the transaction information of Bitcoin is not recorded on a certain server, but a copy of each of the players' computers participating in the game, which is recorded synchronously. This type of transaction record is almost impossible to tamper with in theory.
This is the "decentralized ledger".
In this way, the status and power of all game players are completely equal, and almost no player is special. Why add the word "almost"? Because, after all, those who are able to mine Bitcoin are still a bit special, but this particularity is not too big, and there are no barriers to the miners. As long as you can afford a good computer, anyone can be a miner. .
It has to be said that this "decentralized" design of Bitcoin is very wonderful. Its inventor, the mysterious Satoshi Nakamoto (Satoshi Nakamoto) is indeed a "green onion".
Understanding decentralization is equivalent to understanding blockchain. A real blockchain project is a project that implements the concept of decentralization through reasonable game rules design, supplemented by information technology. The Bitcoin system is an excellent demonstration project of the concept of decentralization and blockchain technology.
It is not an exaggeration to say that I think this is a revolution in the concept of the Internet, and another revolution in equality for mankind. The last revolution broke the inequality in status between people, this time it broke the inequality in the rules of the game itself. Because of this, the blockchain can inspire so much enthusiasm for people. This is a new thing that sounds like it can subvert all the old rules.
However, in my opinion, the Bitcoin system is not a successful blockchain application, or even inherently lacking. Why do you say that? Because, by looking at the two Bitcoin core game rules introduced above, you know that it has the following inherent flaws:
First, the Bitcoin client software requires huge storage space, because every node must record all transaction records from the first day of the birth of the Bitcoin system, as of the time of writing (February 13, 2018) ), this transaction log file is already as big as 147GB, and it will only increase but not decrease.
Second, in order to prevent someone from cheating, the Bitcoin system has a very complicated set of game rules to ensure that the transaction records are authentic, which results in the confirmation time of each transaction generally taking an hour or even a few days. Think about it, if you use Bitcoin to buy a cup of milk tea on the street, what will happen.
Third, there are only 21 million bitcoins at most, and no matter how many people are mining, the system rules determine that a few bitcoins can be produced every ten minutes on average (12.5 bitcoins every ten minutes in 2018). The contradiction is just like that sentence: the contradiction between the increasing demand for Bitcoin and the insufficient amount of Bitcoin.
Bitcoin cannot represent the blockchain, and the blockchain is not Bitcoin. What applications can the blockchain have in the future?
In fact, the core problem solved by blockchain is trust. All financial institutions, banks, insurance companies, brokerage firms, etc., rely on credit for their survival. The reason why we buy stocks, futures, and paper gold with confidence is because we trust institutions that act as trading intermediaries. And these transaction intermediaries are the center of financial activities. We would rather pay a certain amount of handling fees and transaction fees for this, and financial institutions also make a lot of money.
However, when the blockchain is mature in people's concepts and technologies, this centralized financial institution may be subverted, because we can use the concept and technology of the blockchain to rewrite the rules of the game and let All financial product transactions no longer need a center, but are all done in a peer-to-peer manner, and theoretically can guarantee credit problems.