How to explain to parents what is the blockchain?

"What is the blockchain", "What is Bitcoin", "How to own Bitcoin" and many other issues that we have already known are still ignorant for many people outside the circle.

This is not. I have specially compiled some questions that the broad masses of the people (such as my dad) seem to understand and understand. I would like to answer them here and hope to help everyone.

Q: What is a blockchain?

A blockchain can be thought of as a distributed ledger, unlike traditional centralized accounting. Blockchain has the characteristics of decentralization, non-tamperability, traceability, collective maintenance, openness and transparency. Once the information is on the chain, everyone can view it, and it cannot be tampered with. It can solve the problems of fairness, trust and value transmission in the traditional Internet. .

For example, we need to transfer funds through third-party financial institutions such as banks. If there is a problem with the central organization, the user will have no complaints. If the user wants to make cross-border remittances, it will not only cost a lot of fees, but also take a long time. However, the use of blockchains does not require central agency accounting. All nodes compete for accounting rights, and then pass cryptography to ensure that the books cannot be falsified and unforgeable, thus ensuring the openness and transparency of the blockchain. This is to create trust. basis.

Note: You can understand the nodes as “volunteers” who participate in bookkeeping. They can get certain rewards through bookkeeping.

Q: What is the use of blockchain? What is the relationship with the people?

Blockchain has begun testing water in areas such as finance, public welfare, electronic invoicing, and product traceability. For example, the Agricultural Bank has applied blockchain technology to the e-commerce supply chain finance sector; CCB launched a blockchain bank insurance platform and successfully handled it. The industry's first blockchain international factoring business; Shenzhen Tax Bureau and Tencent Company launched blockchain electronic invoices, which can trace the source, authenticity and accounting of invoices, effectively avoid false invoices, optimize invoice reimbursement process, and improve invoices Regulatory process.

Blockchain technology can also be used in many fields such as medical, logistics, copyright certification, food safety, social assistance, etc. In the shipping industry, blockchain can be used to track the location of goods and money; in health care systems, it can be used for secure storage. Patient data.

Q: When was the blockchain created?

A blockchain is a combination of many prior art technologies such as asymmetric cryptography, point-to-point transmission techniques, hash cash algorithm mechanisms, and the like. The first successful digital implementation was in Bitcoin, a cryptographic geek proposed by Satoshi Nakamoto in 2008.

Q: What is bitcoin?

Bitcoin was proposed by Nakamoto in 2008 and is a peer-to-peer electronic cash system. Bitcoin is designed to solve online payment problems and is a cheaper, faster and more convenient way to trade across borders. Bitcoin is portable, severable and irrevocable; the total amount is limited, only 21 million are issued, never oversold.

Users can directly point-to-point transactions, without the need for an intermediary to manage the fund transactions, no one can force the payment of fees or control transactions; without the centralized accounting of banks or financial companies, each transaction will be recorded simultaneously by all users, open and transparent, Any cheating in the community will be noticed and rejected.

Q: What is the relationship between blockchain and bitcoin?

Bitcoin is the first application of the blockchain. The blockchain is the underlying technology of Bitcoin, and the decentralized distributed ledger of Bitcoin is called the blockchain.

Q: Is Bitcoin completely virtual?

Yes. But Bitcoin doesn't disappear because of its virtuality, and you can use Bitcoin for money or physical.

Q: Bitcoin can't be seen or touched. How do you know the true and false? How can I own Bitcoin?

It can be purchased from regular exchanges (such as Firecoin, Coin, OKEx, etc.), and your own Bitcoin will be stored in a Bitcoin address, which can be transparently and transparently searched on a block browser (such as The balance and transaction history to this address.

Q: Since the blockchain is open and transparent, how many bitcoins do I know?

First, a person can generate and own a lot of bitcoin addresses; second, the address on the blockchain and every transaction inside it is transparent, but the address is anonymous (the address does not write your name), So as long as you don't disclose all the addresses in your name, no one knows how many assets you have.

Q: Can I make money with Bitcoin?

Market risk, the investment need to be cautious. In this fluctuating market, some people are profitable, and some people lose their money. They must be considered before investing.

Q: Why is Bitcoin valuable?

More and more people now regard Bitcoin as a kind of "digital gold". Bitcoin is supported by mathematics and code. It has persistence, portability, interchangeability, scarcity, severability, etc. .

Bitcoin has a growing user base, and the consensus is getting stronger and stronger, as Kabir Sehgal, the author of A Brief History of Money, said, “The focus of religious belief is that you believe that the focus of money belief is that others believe.” .

Q: What is the price of Bitcoin?

According to the principles of economics, prices are determined by supply and demand. When demand increases, the price rises; when demand decreases, the price falls. The circulation of Bitcoin is constant, with a total of 21 million pieces, never exceeding the limit. Moreover, the rate of SGD output continues to decline. About every four years, the production of Bitcoin will be halved. Each time it is halved, it will usher in a sharp rise in the price of the currency. This is also called “half the halving. effect".

Q: Does anyone pay with bitcoin?

There are already many hotels, supermarkets, etc. in foreign countries that support bitcoin cash payments. As shown below, in a digital port in Hong Kong, the options for bitcoin payment are listed.

Of course, if you are willing to use Bitcoin to reward our articles, we will be happy to accept it.

Q: How to classify bitcoin wallets?

There are many types of Bitcoin wallets, so you only need to choose the one that suits you. Today, I want to introduce you to two more common wallets on the market – HD wallet and cloud (hosted) wallet. HD wallets and cloud wallets are classified according to the way they keep the mnemonic/private key (which can be understood as a password).

The HD wallet is kept by the user's own mnemonic/private key. Having a mnemonic/private key means ownership of the digital currency asset. Once the mnemonic/private key is lost, all assets may be lost. Therefore, HD wallet is more complicated for small white users.

Here to remind everyone, if you use HD wallet, do not take the mnemonic/private key on the mobile phone, or send it via email, QQ, etc., and don't put it on a cloud server such as a cloud disk. You can keep it on paper or keep it in a metal mnemonic board (such as Cobo King Kong).

The cloud (hosted) wallet user does not need to import the mnemonic/private key by himself, because it will help the user to keep it. You can understand that the cloud wallet is a bank in the field of digital assets, helping users to keep assets. From a global perspective, large wallet companies are dominated by hosting.

Therefore, using a cloud wallet is just like using other Internet products. You only need to keep your mobile phone, username and password. Even if you lose your phone or uninstall the app, you can retrieve it by username and password. For Xiaobai, the experience is more friendly.

Have you learnt that?

We will continue to update Blocking; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Galaxy Digital Founder: Bitcoin ETF Will Become SEC's "Stamp of Approval"

The founder of Galaxy Digital believes that the approval of a bitcoin ETF for spot trading is essentially a recogniti...


October Mining News by Wu Shenma releases new mining machine, El Salvador's first mining pool, Bitmain launches Aleo mining machine, and more.

Author | Wu talks about Block chain 1. Bitfarms announced the mining of 411 Bitcoins in September 2023, with a 7.3% i...


Conversation with Galaxy Digital Potential Impact of Spot Bitcoin ETF on the Market

The launch of a spot Bitcoin ETF will enable wealth management advisors who are restricted to offer clients Bitcoin i...


Wu's Weekly Selection Tornado Cash Co-founder Arrested, HashKey to Open Retail Investors Next Week, and Top 10 News (0819-0825)

Author | Wu Shuo Blockchain Weekly News Top 101. The US government arrests the co-founder of Tornado Cash and include...