Why is Bitcoin decentralized (Why is Bitcoin called decentralized)?

Why is Bitcoin decentralized? Why is Bitcoin decentralized?According to data fr

Why is Bitcoin decentralized (Why is Bitcoin called decentralized)?

Why is Bitcoin decentralized? Why is Bitcoin decentralized?

According to data from CoinMarketCap, among the top ten cryptocurrencies ranked by market capitalization, only one is “decentralized” — and this claim does not include any other technologies or digital assets. However, if Bitcoin and Ethereum are said to have similarities, then they represent different concepts: trustlessness, reliability, and tamper resistance. “Trustlessness” refers to a mechanism that achieves trustlessness by confirming transactions without the intervention of a third party. This is completely different from the blockchain represented by Bitcoin, as its consensus algorithm is generated by computer programs and cannot be changed, and its protocol cannot be modified.

To address this, we need to explore three aspects:

1. The operation mode of the Bitcoin network. The network structure of Bitcoin can be customized according to user needs, and new blocks (each miner contributes a certain amount of computing power) can be created according to user needs, and then these newly generated tokens are sent to validator nodes to ensure network security and reliability;

2. The scalability of the Bitcoin payment system. Bitcoin is designed as a global distributed ledger as a value storage tool. This type of system allows it to be used seamlessly around the world. However, for those who want to make peer-to-peer payments using smartphones or laptops, Bitcoin has a unique advantage: it does not require permission, and all operations are public and transparent;

3. The anonymity and intermediary advantages in the Bitcoin network;

4. Some issues and risks in the Bitcoin ecosystem. (AMBCrypto)

5. The Bitcoin development team recently discovered a vulnerability that resulted in an attack on an account’s funds on the platform. Although the possibility of this problem is low, there are still many people in the Bitcoin community complaining that their applications are unregulated and they lack sufficient information to prove their security, while avoiding malicious actors.

In addition, many cryptocurrency projects have begun to test how to use smart contracts to protect their wallets from fraud and other criminal activities. For example, Brock Pierce, a co-founder of Blockchain Capital, said, “When you hand over your private keys to an exchange, you’ll see a lot of hacks.”

6. “Decentralized.”

7. What does “trustlessness” mean? Simply put, Bitcoin is an application built on cryptographic code for exchanging various goods and services. The core of Bitcoin is a decentralized ledger solution. It is written in open-source software and undergoes rigorous security audits to be successful. Although the technical principles of Bitcoin are not as complicated as most cryptocurrencies, the design concept of Bitcoin does make it the world’s first truly decentralized thing.

Why is Bitcoin called decentralized

Editor’s Note: This article is from 据(Odaily) and has been authorized for reprinting by Daily Planet.

Bitcoin is a decentralized cryptocurrency. When the genesis block was born in November 2017, it was called “Bitcoin”, but it reappeared after a period of forking and hard splitting. Just a few days ago, the Bitcoin community attacked its founder, Satoshi Nakamoto, accusing him of deceiving investors with something compared to a “fraud,” causing them financial losses. However, when we try to explain and reflect on these behaviors, we find that the term “decentralized” seems to have not been fully utilized, but instead some errors have appeared.

First of all, Bitcoin is a virtual commodity generated by computer programs, not a simple means of transaction. This mechanism allows users to send messages, receive payments, and exchange value without the need for intermediaries or any other third party. Due to its unique characteristics, features, and unique functions, Bitcoin has also received a lot of criticism, such as the Bitcoin Core team calling it “malware” because the code is unrelated to the Bitcoin network. Secondly, Bitcoin is not a completely open network. On the contrary, it is open and licensed, and it uses blockchain technology. Although there is no central entity controlling the system, Bitcoin can do this in many cases.

In addition, despite certain security issues such as hacker attacks, can Bitcoin still maintain its operation? If so, why create Bitcoin? In fact, it does not rely on a single individual or company as it did initially, but is concentrated in an organization, which may result in Bitcoin losing its dominance. However, as a decentralized economic entity, Bitcoin can achieve this goal and become one of the most powerful economic systems in the world while maintaining a high degree of autonomy to ensure the interests of everyone. So, in either way, Bitcoin is equal and free from one party to another. The reason Bitcoin is so scarce is because its creators believe that by owning Bitcoin, you can participate in the development of the entire human society, not just develop your own country and region on a global scale.

Of course, in addition to Bitcoin, another noteworthy reason is that Bitcoin has proven to be a truly decentralized financial project, which provides a more efficient way to facilitate global capital flow and eliminates people’s concerns about risk appetite. In fact, since 2009, as more and more traditional banks join in, more and more people accept digital currency payment and investment services as a new business activity, especially by providing legal tender and other alternative tools, allowing consumers to have more sources of income.

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