It's a long pose! The bits and cents that you must know

In a moment, Bitcoin became the focus of global attention, 10 months ago, a bitcoin price of 13 U.S. dollars, and now even to 1000 U.S. dollars-Bitcoin seems to be hard to return to such a low price. The man who paid for the bitcoin, and the teenager who sold his house to buy Bitcoin, is now reckoned to have a smile on his face ...

Related reading: What is Bitcoin? How to use it? Bitcoin wallet client software download

For many people, Bitcoin is a mysterious new word. What the hell is it? Why so crazy?

Bitcoin is a digital asset that is controlled and stored by the computer and can flow through the network. But it's not just an asset, it's a way of paying, like Alipay or the credit card, it allows you to hold it, but it also allows you to spend it elsewhere, or in exchange, using a method as simple as sending an email.

One feature that bitcoin often mentions is "anonymity". The most notable example is the "Silk Road" website, which was closed last month, and is known for its illegal drug trade. But unlike the movie's Mystery of gangster trading, its trading system can be viewed openly, and all Bitcoin exchanges are open, and this transparency gives a new sense of trust in economic activity.

Also, it is the international character of Bitcoin that is easily overlooked. It can not only provide currency settlement support for illegal transactions, but also ignore country differences and facilitate cross-border payments. Bitcoin is controlled by Open-source Software, which operates on a complex set of mathematical rules and is supervised by people. As software runs on thousands of computers around the world, the changes to the software will have to be agreed upon.

For now, Bitcoin seems to be a monetary form of the Internet.

The above is the characteristics of Bitcoin, but its operating form, as well as the source of it?

Five years ago, the alias for Satoshi Nakamoto individuals/groups on the network issued a bitcoin software system. The software is designed to run on a network built by many machines and run on a personal computer. People who run Bitcoin software systems are also known as "Bitcoin miners".

This distributed software can generate some new, small-batch bitcoin. These bits are stored in a long string of digital addresses, which store the Blockchain's General Ledger (Ledger), which is known online. Bitcoin's design has allowed Bitcoin to grow slowly to encourage people to become "Bitcoin miners", allowing the system to develop steadily.

When the system "digs" the new Bitcoin, the bitcoin will be allocated to the miners. The miners then recorded the record and added it to the blockchain, and as a compensation, the miners were able to get a little bit more bitcoin occasionally. Now, every one hours the system rewards the miners 6 times, 25 Bitcoin each time, but the frequency of the reward changes over time.

Why is Bitcoin valuable? It's because people need it, like dollars or yen, or just like in Africa 3,000 of years ago people traded shells for things. It is worth mentioning that the Bitcoin is limited to the supply, although the system has been generating Bitcoin, but the number of Bitcoin will be up to 21 million pieces of time to stop. The system has been designed in advance to stop "digging" in 2140.

The design was designed so that monetary value would not be affected by centralised institutions such as the Fed, leading to a sharp decline. And when the system does not generate a new currency, the value of each Bitcoin increases as demand increases, a similar approach to deflation. However, since bitcoin can be designed to be divided into 100 million smaller units (known as satoshis), it is still very easy to distribute.

Each Bitcoin owner has an encrypted "secret key", which is used only after the secret key is associated with a public account on the Internet. Bitcoin's account is a string of complex and difficult names, such as "1dtaxpks1sz7a5hl2skp8bykwgael5jyrz". You can think of it as an e-mail address. If someone wants to send you a bitcoin, he needs this address.

From the previous paragraph also can be learned that the amount of Bitcoin is not important, and the secret key is very important, if the secret key lost, so how many "dug" how many bits are not in vain. In the Internet Bitcoin exchange, the secret key is also an essential role, the system must check the secret key before licensing the two sides to exchange.

The "Bitcoin miners" are used to generate Bitcoin machines that form the Bitcoin trading network itself, which examines each transaction. Because the bitcoin system is built on complex mathematical calculations, both the secret keys and the number of accounts do not increase, the transaction is rejected.

A shield has a spear, it seems that the encryption system can be overcome, and the software system behind the Bitcoin may also have flaws, let others sneak in. However, from birth to the present, Bitcoin has been very rigorous testing, and it looks quite safe.

For Bitcoin holders, how to manage their Bitcoin account addresses and secret keys is a bit cumbersome. However, there are many programs on the line called "wallets" that can help people track the record of Bitcoin. You can use the "wallet" on your computer, your phone, or even on your program's development website.

With a "wallet", the process of sending bitcoin to others and receiving bitcoin becomes much simpler. On the website, you can sell a pizza and set up a bitcoin to pay for it. You can also donate the bitcoin to others. But, more importantly, Bitcoin can trade with the real world--as long as you have a mobile version of the "wallet" application, after eating, wipe your mouth, pick up the phone scan the desktop two-dimensional code, you can pay.

Speaking so much, how to get more Bitcoin is you more concerned about the problem?

First, you have to have a "wallet", which can be obtained from Blockchain.info, and includes the phone version. When you have a "wallet", where can you get bitcoin? This can be obtained from a number of Bitcoin trading sites, in the United States can go to Coinbase, in China can BTC Chinese and so on. Of course, if you want to do a large bitcoin transaction, you can also Mt.Gox or Bitstamp, but you must first pay a large amount of cash in order to carry out expensive and time-consuming international online transactions.

You can be anonymous when trading. However, if you use services such as Coinbase or Mt.Gox, you should provide bank account numbers and audit information. Other Bitcoin trading sites, such as Localbitcoins, allow people to trade without submitting personal data.

However, it is best to meet two people online and make a private deal. Because both credit cards and bank transactions are reversible, but Bitcoin is not. So you have to be very careful when dealing with other people, which is part of the reason why so many people like to swap bitcoin for cash. So, it's best to choose a place to meet and make a private deal, and you can start a date on Bitcoin meetup.

To get Bitcoin, "digging" is the traditional way. This means that your computer will become one of the nodes of the Bitcoin Peer-to-peer Trading network, and your machine will run with Bitcoin Open-source software. In the past, you can use your own computer to "dig", but now because of the rise in the price of Bitcoin, "digging" has become an arms race-professional player owners targeted hardware and software, and can be flexible expansion of computing resources.

Now, 25 bits is the equivalent of 1 seconds for the machine to do 5,000,003 square times. More figuratively, this is equivalent to 150 times times the world's most powerful supercomputer. Because of the increasing number of people/companies joining the "digging" game, the hardware used is becoming more and more powerful, which means that Bitcoin is increasingly difficult to dig. Therefore, in the spirit of saving energy and money from the starting point, or do not use the "mining" way to save Bitcoin.

Although the bitcoin system is highly secure, it is important to be careful that your "wallet" and "secret key" files are stolen by someone else--because the bitcoin transaction is irreversible and the secret key file is related to the Bitcoin account verification.

Before a hacker hacked into a website called bitcoin "wallet", Input.io got a $1.2 million worth of Bitcoin. And the bitcoin disappears and cannot be found. Therefore, many of the more professional Bitcoin holders, the "wallet" and "secret key" in the external hard drive, once completed the transaction, the hard drive from the computer unplugged, out of the network world.

Some people even transfer their bitcoin assets to the real world, such as recording a secret key on a piece of paper.

The good news is that in theory the bitcoin ledger can find out who voted for your bitcoin. You can stare and see who is trading with your Bitcoin address, and if you find the person you're connected to, you know who the thief is. But this is just the way to start exploring, don't count on it.