In 2007, before smartphones and mobile payments, when people used to pay with cash and credit cards, the Q-coin was probably one of the most familiar virtual currencies. A year later, in 2008, the financial crisis began to sweep the world, and the entire capital market was in a slump. It was at this time that a person named Satoshi Nakamoto published a paper “Bitcoin: P2P Electronic Money System” on the Internet, describing the mode of bitcoin and setting up the bitcoin system. In 2009, bitcoin, a decentralized PEER-to-peer digital currency, was born.
After Nakamoto built the bitcoin system, it disappeared completely and was maintained by two former Google engineers. After that, bitcoin didn’t attract much attention. In 2010, an engineer bought a pizza with 10,000 bitcoins (worth nearly 600 million yuan in 2018), and then some institutions or organizations began accepting bitcoin transactions. From 2012 to 2016, the price of Bitcoin fluctuated constantly, from a few dollars at the beginning to several thousand dollars. It was not until 2017 when Bitcoin exceeded 10,000 dollars that blockchain technology began to appear frequently in people’s eyes.
Many people actually know more about various virtual currencies than blockchain, because coin speculation can be more direct to obtain incredible returns (and may be run away), while blockchain is just a seemingly advanced technology and concept. Currently, the most mainstream bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) are all based on blockchain technology, so it requires self-judgment and knowledge to identify which virtual currencies have real application scenarios and value, and which are just packaged Ponzi schemes.
We know that blockchain has the main feature of decentralization. What does that mean? Colloquically speaking, such as in financial activities, it means that there is no third party supervision, the two parties can directly conduct transactions. At this point, you might ask, how do you ensure that transactions are fair without third-party supervision? In the transaction process, a unique data will be generated to record the transaction information, and then this data will be updated to every user with distributed ledger, so that everyone recognizes the validity of the transaction, and no one can modify it alone. This ensures the reliability of the transaction and greatly reduces the cost of the transaction.
Most people don’t know what it is, but they know that if they forget or lose it, they will be in big trouble. This string of code is a hash value, which is one of the core technologies of blockchain. Since there is only one hash value for a piece of data, the hash algorithm can be used to verify the integrity of the data. In each transaction, a block of data is generated to store information about network transactions, a technology called asymmetric encryption. Different from symmetric encryption technology and encryption and decryption key are the same, there are two keys with asymmetric encryption technology, public key and a private secret key, only the public key is unable to crack to transmit data, need the private secret key to decrypt the data, thus ensure the security and privacy in the process of transmission. Since there is no need to verify the user’s identity, blockchain technology can provide anonymity, which is one of the reasons why many countries are cracking down on bitcoin and virtual currencies. Imagine that if A and B agreed in advance to conduct offline transactions through anonymous bitcoin transfers, then no transaction records would be found at all, so that many illegal activities could go undetected.
In addition to the distributed and asymmetric encryption technologies mentioned above, blockchain also has consensus mechanisms and smart contracts. The consensus mechanism is used to verify the validity of each record and prevent data tampering in any node. Smart contracts we often see in some ethereum-based virtual coins, usually written in a white paper, something like “local currency has a very promising application scenario, the use of smart contracts is very good, everyone to buy, the ipo is only 1000,000,000, will never be issued.” In fact, smart contract can be understood as a promise in the form of numbers. Due to the birth of smart contract, the application scope of blockchain has been greatly increased.
A lot of people are wondering why they didn’t buy Bitcoin a few years ago, put it away for a year and a half, and now they’re financially free. In fact, buying Tencent shares a decade ago would be financially free today, with much less risk. If you bought enough bitcoins in 2014, you would have gone through a thousand ups and downs, resisted selling at the high, resisted pressure at the low, endured sleepless nights and finally greeted the dawn… Carefully open the long-saved hard drive, sacred moment… Only to find that the hard drive has long been formatted by you…
Blockchain technology is good, but many people are using it to do some illegal things. To quote a sentence frequently seen on the Internet recently, from Marx’s Das Kapital: “When the profit reaches 10%, they will be ready to move; When profits reach 50 per cent, they will take desperate risks; When the profit reaches 100%, they dare to trample all the laws of the world; When the profit is 300 percent, they dare to risk hanging.”
From the recent establishment of blockchain-related departments by major companies, it is foreseeable that blockchain is the breakthrough of the next technology, and there are application scenarios in many fields, including finance, education, Internet of Things and so on. Purely from the major companies to recruit blockchain related talents, open the salary is relatively high. So in addition to the Internet of Things, big data, VR, artificial intelligence, there is another technology to learn and further. There is a long way to go.