Understanding Bitcoin is actually this simple

There is a remote island where 100 villagers live. Some grow corn, some fish, and some pick coconuts. They usually rely on barter for their daily needs. You trade 2 fish for 3 corns; I trade 1 coconut for a sickle. But carrying things around for barter is too cumbersome. Everyone thought of keeping accounts; we keep a small ledger privately. For example, I owe you 5 fish, and you owe me 2 coconuts. But when the two of us compare our records, they don't match, and that's where the trouble starts.

Later, someone discovered that there were unique patterned stones at the island's volcano that no one could replicate. It was agreed that 1 stone equals 1 fish. Using stones as currency made trading easier. But as transactions increased, it became hard to keep track. So everyone pooled money together to build a trading station, hiring two people to manage the accounts and ensure they couldn't be changed. This was the earliest form of a bank.

But the good times didn't last. One time, the person managing the accounts acted out of self-interest and secretly recorded 10 extra stones under their name, using fake numbers to trade for others' corn. This caused panic among everyone; if money could be altered at will, then everything in hand would have been in vain. This is what is commonly referred to as inflation.

The key turning point came when a clever person proposed that instead of letting a few individuals manage the accounts, we should give each of the 100 people a blank ledger. From then on, anyone trading would have to call out their transaction for everyone to hear, and then everyone would record clearly in their ledgers that Zhang San traded 2 stones for Li Si's 5 fish.

In this way, everyone’s ledger would be identical. Even if someone lost their ledger, they could reconcile with the majority. To change a ledger, you would need to convince 51 people to agree to the change; only then would the ledger be valid. This is the distributed ledger of Bitcoin. Attempting to cheat with a 51% attack is nearly impossible.

But a new problem arose; it was too tedious to call out every transaction. Why should anyone help others keep their accounts? Later, the internet came along, and calling out became unnecessary. Everyone installed the same accounting software, and whenever someone made a transaction, the software automatically sent the message to everyone.

Mobile ledgers sync updates. As for the incentive to keep accounts, every time a transaction occurs, the payer receives a little extra reward. Whoever records the transaction accurately first must also match everyone else's ledger for the reward to be theirs.

This reward is Bitcoin, and the process of assisting in ledger-keeping is mining @阿二说币 #加密市场观察 #美联储重启降息步伐 #ETH走势分析