First, there is a person from Nakamoto village who designed an algorithm, built a system, and an open source project. The payment process between network nodes (computers) will notify all nodes (computers) in the network. Why is there a payment between network nodes? For example, if you want to transfer 1,000 yuan to your friend through the network, you had to make a transfer transaction through the bank before, and then came out an electronic wallet. Note that this wallet is not in the bank, and It’s recorded a sum in a virtual network. It doesn’t matter where the money is. As long as you swipe through the network, the other party can use this information to withdraw cash (currently Withdraw after bank deposit).

   If we build such a network, if someone wants to pay another person in the network a sum of money, just record a sum in the network, without the actual currency transaction, then when the recipient receives the money It is just a bill, but it can be used to pay to another person, as long as the other person is willing to accept it, just like an endorsement of a letter of credit. In this way, this virtual money can be circulated in this network, which is the circulation of money.


   So who owns the first currency? This is the problem that Bitcoin must solve first, and how does Bitcoin come from. At the beginning of the network establishment, no one has currency, but as the initiator, he can initiate a payment to another network node. The system started, and the algorithm started to work.

   Bitcoin's mechanism is just a protocol, how reasonable it is, waiting for future verification. Bitcoin only circulates in this network system, so the generation of Bitcoin also comes from this system. You cannot generate Bitcoin independently of the network.

   When a transaction occurs in the system, the initiator will broadcast (P2P) technology to all nodes, telling everyone that I paid a certain amount of money (N Bitcoin) to XX, then everyone starts to register in their own ledger Make a note of it.

   There is a problem here, that is, how does the node know the existence of all other nodes, this still needs a "central server", this server is responsible for recording all the clients logged into the network system. Once the client logs in, it will download this list to the local.

   The so-called "broadcast" is to use P2P technology to directly send transaction information packets to all nodes. This packet is the size of a UDP. Because it does not need to be forwarded by the central server, the load of the central server is not large. In fact, the broadcast may not be directly sent to all nodes in a P2P manner. It may only send a part of it. For the node, the received information packet will be forwarded. It is the routing function of the node, and the data packet will quickly traverse all the nodes like a pipeline.