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The Bitcoin white paper teaches everyone how to transfer money directly from peer to peer on the internet, without intermediaries like banks or Alipay.
The core issue to solve is a tricky problem: “double spending,” which is how to prevent the same amount of money from being spent twice. In the past, it relied on a central authority like a bank to keep track, and when the bank said the money was spent, it was spent.
The innovation of Bitcoin is that it does not require this central authority, but instead allows everyone to participate in bookkeeping.
We can imagine the entire process as a decentralized banking system where everyone participates in bookkeeping:
1. Transaction and Broadcasting: Xiao Ming wants to give Xiao Hong 1 Bitcoin, he will shout to the whole network: “I, Xiao Ming, give Xiao Hong 1 Bitcoin! Everyone, please remember this!”