Why does Bitcoin exist (Why can Bitcoin survive)?
Why does Bitcoin exist? Why does Bitcoin exist? Author: Marti Staley, Xiaochuan
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Why does Bitcoin exist? Why does Bitcoin exist?
Author: Marti Staley, Xiaochuan Wang, authorized by Planet Daily to reprint.
1. Why is Bitcoin valuable? Because people can use it to pay for daily transaction fees and living expenses, etc. without using cash or the banking system for settlement. If it is not for the demand of liquidity, it will not be able to be purchased again, which would be unsustainable. 2. What is blockchain? Bitcoin is a distributed database that records all data through a specific data structure and proves all information in each block (such as the amount of Bitcoins held by someone). In this case, all currency is generated by computers, anyone can participate, and each number has the characteristics of uniqueness and traceability. (Image source: Internet) 3. What is the purpose of blockchain? Currently, most cryptocurrencies do not have practical applications and are still in the experimental stage. However, due to the high technical complexity and high degree of decentralization, many blockchain projects cannot meet the needs of users. Moreover, most of the project’s code has not been audited or reviewed by security companies, so these developers do not understand blockchain technology and have no capability to solve this problem. 4. What is the consensus mechanism? Bitcoin, as a new protocol layer, has been widely accepted and its emergence brings more trust globally. Although the views of many cryptocurrency enthusiasts differ, the consensus mechanism of Bitcoin does provide a set of solutions to achieve a more efficient network environment. The underlying asset of Bitcoin, Ethereum, is one of the main applications on the Bitcoin network. Theoretically, it is the first smart contract platform based on the Ethereum network, aiming to support seamless communication and cross-chain transfers between multiple chains. 5. What is the principle of Bitcoin mining? In simple terms, it allows miners to automatically allocate their resources to obtain Bitcoin rewards according to their desired rewards; that is, as long as miners have sufficient computing power, they can mine more Bitcoins, and they can also use their idle power to help others mine more Bitcoins. When the price of Bitcoin exceeds the historical high, the difficulty coefficient will automatically adjust to improve efficiency. 6. What is the cost of Bitcoin mining? Bitcoin’s mining output occurs once every ten minutes. This is the first time this has been discovered since 2009. 7. How low is the cost of Bitcoin mining? Bitcoin consumes only about half of 21 million kilowatt-hours of energy per year. With governments around the world continuing to expand their money-printing machines and promote economic development, we see more and more people entering the market and investing in production every day. Therefore, as a new financial ecosystem, Bitcoin can support the development of human civilization and is expected to become the cornerstone of future social development.
Why can Bitcoin survive
According to CCN news, Bitcoin is able to survive mainly for several reasons. Firstly, it is a decentralized currency protocol, which is not considered secure in the eyes of most people. Secondly, blockchain technology provides a new way to record the entire process of transactions and ownership proof, and provides a trusted way for people to verify whether assets are stolen or tampered with. The last important reason is its anonymity, transparency, and immutability, which makes it a global consensus mechanism that can be used to determine who holds a certain type of digital commodity or value storage tool in the financial system, and how to convert these things into other types of items without intermediaries. The third factor is its distributed ledger technology (DLT).
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