There is a closed mountain village, the main work of the villagers is to dig jade, the wealth of the village is also calculated in jade.  We dig jade stacked together, by the village head count accounting.  The wealth of Zhang SAN, Li Si and Wang Wu was recorded in the village chief's account book, and they could exchange it for other daily necessities.  

This approach is now known as the central book-keeping financial system.  Banks, brokerages, Alipay and other financial institutions are village leaders.  Almost all of our liquid assets are in their books.  

But the village head is a mortal, old muddled, Parkinson's disease, salacious......  There is no shortage of faults.  When accounting, see beautiful peasant woman, write down two more;  Encounter a thorn, less remember a piece.  And then there were problems with the books, too, with damp blurriness in places and rats gnawed them away.  More excessive is, little widow Zhao Liu and village head fool around when, the account book was also altered by her a few pens.  

The villagers decided to get rid of the village leader who did not work, ate for free, overcharged and made mistakes.  Who's going to do the bookkeeping?  The villagers thought of a way: everyone with a ledger, who dug jade, their records at the same time to inform everyone, everyone in their books to write down the same content, ledger are respectively by the villagers custody.  After the villagers between the goods exchange, exchange jade, also through this way of accounting.  This saves a bookkeeping labor, but also to avoid problems such as dampness.  Even if the little widow altered Zhang SAN's account books, but we take li Si, Wang Wu, Sun Qi's account books out of comparison, can immediately find the problem and correct.  If there are enough villagers (and women), the little widow, no matter how powerful she is, cannot change the books of half the people.  This is decentralized distributed bookkeeping.  

The problem came, Li Si suddenly had a flash of inspiration, "IF I take the jade that has been recorded and record it again, won't my wealth soon be doubled and doubled again?"  In order to solve Li Si's fraud, the villagers came up with a solution.  Each piece of jade is marked with a record of when, where and who it was dug up, as well as information about the last piece of jade dug up.  

Therefore, each villager's ledger records complete information about each piece of jade.  Each piece of jade has information associated with the previous piece, forming a chain.  Li Si could neither make things up out of thin air nor change previous records.  This is blockchain -- P2P distributed accounting.  

In the above case, distributed bookkeeping, every time they dig jade, the villagers need to stop work and update the accounts once, but reduce production efficiency.  But in the computers of the Internet, it's all instantaneous.  

A blockchain doesn't necessarily need to mine jade. Jade (bitcoin, or anything else) can be created according to a variety of rules.  Blockchain is not equal to bitcoin, which is an application based on blockchain technology.  

The main purpose of blockchain is to keep track of these objects (virtual money).  According to the mainstream view of the blockchain industry, compared with the traditional central accounting, distributed blockchain is safe, accurate, efficient and open.  It does not need to sacrifice huge frictional costs to feed huge financial institutions (village heads), and since it is decentralized storage in the form of P2P, there is no need to worry about problems such as financial institutions' databases being hacked, computer rooms suffering from natural disasters, coups and so on.  Blockchain is a disrupter of traditional financial institutions.  

So could this new cross-border, anarchic, decentralised technology, and the financial system built around it, be jointly strangled?  

What is bitcoin?  

God sent a messenger named Satoshi, to the global village.  The messenger told the villagers, "God loves the world and has decided to give out a total of 21 million bitcoins to everyone.  What is the use of this bitcoin?  God didn't talk to me, and I don't know.  But according to what standard?  Can not be directly evenly distributed, too easy to get everyone do not understand gratitude;  Zhao Liu's legs are long, and Sun Qi's breasts are big.  More can not directly to the sky a throw, everyone rushed to rob, rob of broken and bleeding, against god's love intention.  What to do?  I'll tell you what. I'll hide all my bitcoins in fields, forests, river valleys, etc. If you dig hard enough, you'll have a chance to get them.  God helps those who work hard, so it is fair to all, just ask everyone to get bitcoin, through the way of blockchain record.  ' '  

At the beginning, the villagers didn't know what bitcoin could be used for, and not many people participated.  After receiving bitcoin, some people used it to play games, while others traded 10,000 bitcoins for a pizza.  Until one bitcoin was worth a few cows, the villagers frantically joined in.  

In order to remind the villagers of God's grace and prolong the joy of labor, Satoshi nakamoto set up the mining rules, no matter how many people participate, only once every 10 minutes, 50 bitcoins each time.  So, the more people who participate, the lower the probability of an individual getting it.  And the number of single acquisitions is halved every four years.  At first, the villagers used shovels, then excavators, and then thousands of excavators in formation.  No way, other villagers large-scale use of modern equipment, you still use a small shovel, may never dig.  

In a real Bitcoin scenario, mining involves running a set of hashing algorithms on a networked computer. If the results match the preset scenario, you get bitcoins and complete the exchange of information on the blockchain.  At first, we used ordinary PCS, and then evolved to video card machines, which greatly improved efficiency, and then there were special mining machines.  

In this digging process, like villagers everywhere digging earth, is a man-made design, no actual function of labor.  The amount of electricity consumed by millions of working mining machines in the world would rank among the top ten if calculated by country.  That's why so many miners make their homes near hydropower stations in the remote mountains of Sichuan and Yunnan.  

So bitcoin, essentially a string of computer characters, is distributed and stored in a P2P network of all participants via blockchain.  Bitcoin is decentralized, secure, open, anonymous and borderless.  

Why can bitcoin be exchanged for other things?  Nothing, as long as the villagers are willing to exchange other things, can be exchanged.  Some villagers may be pure at the beginning of a small price to spend a few coins when the collection of play.  But as more and more villagers recognized that the things they could exchange became more and more expensive, the price of Bitcoin soared.  Some villagers simply stopped mining and bought and sold bitcoin to make a difference.  It also created exchanges for bitcoin.  

In addition, Satoshi emissary, but also in bitcoin given a preset conditions for automatic implementation of the function.  For example, Egg claimed that Maotai's stock price could break 500 this year, and MAO thought he was lying, so they set up a 1 million yuan bet.  If you follow the traditional way, in order to avoid default, you need to find a reliable third party, everyone will first give 1 million to this third party, and at the end of the year, the third party will give all the money to the winner based on the result.  In the bitcoin world, Eggs and Maomao simply add words like "If Moutai's share price is above 500 in 2017, then..." to their respective bitcoins.  When bitcoin expires, the result will be executed automatically, without the need for a third party.  As a result, many people believe that Bitcoin can replace credit brokers, payment brokers, insurance companies, casinos and so on.  

Later in the story, the villagers found that Satoshi nakamoto is not the messenger of God, and he actually has more than 1 million bitcoin in his pocket, although never used, we are still worried that the function of bitcoin to exchange goods, will depreciate or even disappear, because there is no public power credit endorsement.  

More intelligent villagers found that IN fact, I can also issue a set of cat coins, dog coins what ah, simply send straight to everyone, the number can also be unlimited, to avoid the helpless and painful digging work.  

In fact, since all of bitcoin's coding algorithms are open source, anyone can issue their own catecoin or dogecoin with simple modifications.  However, if no one else is involved, your Kitty coins will only show off to your own Kitty.  Of the thousands of coins that have emerged so far, only a handful have enough people involved to keep them going.  

What is an ICO?  

In order to attract others to participate in their shanzhai coins, clever villagers thought that if the virtual coins are linked to real property, in a sense, equivalent to providing a guarantee, the shanzhai coins may have investment, collection and circulation value.  

Li Si of clever mind, collect a pile of dog excreta, legend is ancient times, Lv Dongbin's dog stole ate flat peach and pull, have the effect of nourishing Yin zhuang Yang, strong body.  Li Si now needs some capital to make dog shit into dog shit cakes and sell them all over the world.  Li Si registered a shit company and planned to sell 10% of his shares at a valuation of 100 million yuan.  In the traditional way, Li Si can either seek angel, VC direct investment, or through an exchange listing (IPO) to raise funds.  But the angel is to see the face, VC to data, listing is far from meeting the standards of the exchange, even with, layers of approval down, Lv Dongbin are resurrected.  

After li Si understood blockchain and bitcoin, he decided to issue 10 million shit coins by himself and promised 10% of the shares of the corresponding shit company.  For convenience and security, dogshit company does not accept cash or other items to buy dogshit coins, people can only subscribe through Bitcoin.  Assuming that the current unit price of Bitcoin is 20,000 RMB, then transfer one bitcoin to Li Si's shit company, and the shit company will transfer 20,000 shit coins to the other party.  In the end, the dog shit company sent 10 million dog shit coins and received 500 Bitcoins, which were then exchanged for 10 million yuan.  

This is an initial public offering, or ICO, of shit coins.  Is an ICO almost the same as an IPO?  No, people's ICO does not need law firm compliance, investment bank packaging, accounting audit, CSRC approval, exchange listing and other costly and time-consuming processes, and the real issue is global, raised funds can also be freely transferred around the world.  Icos have the characteristics of illegal fundraising, such as targeting an unspecified majority of people and public fundraising.  ICO industry chain, is in addition to the supervision of authorities, set up a full set of listed companies, securities, stocks, exchanges and other financial systems.  So...  Grief.  

Why are villagers willing to trade bitcoins for shit money?  As investors hit new, we do not care about the company behind the code is what business, only need to have a continuous soaring IPO case incentive, it is hard to find a share.  Why can shit coin go up after ICO?  The immediate reason is that some people are willing to pay a higher price for it, and those who buy it believe the price will go up.  In the world of anonymous ICOs, there are no shortage of real-life stock market stories.  Someone might seriously analyze the cost and efficacy of dog poop cookies, and estimate market sales and profit in turn.  More people are studying past price movements, gathering gossip and predicting tomorrow's prices.  Of course, not to mention the big family sitting, from buy from sell, control the price.  Where does the money that shit corporation raises end up?  Are dog poo cakes really made and selling like hot cakes?  Only God knows.  

There is a closed mountain village, the main work of the villagers is to dig jade, the wealth of the village is also calculated in jade.  We dig jade stacked together, by the village head count accounting.  The wealth of Zhang SAN, Li Si and Wang Wu was recorded in the village chief's account book, and they could exchange it for other daily necessities.  

This approach is now known as the central book-keeping financial system.  Banks, brokerages, Alipay and other financial institutions are village leaders.  Almost all of our liquid assets are in their books.  

But the village head is a mortal, old muddled, Parkinson's disease, salacious......  There is no shortage of faults.  When accounting, see beautiful peasant woman, write down two more;  Encounter a thorn, less remember a piece.  And then there were problems with the books, too, with damp blurriness in places and rats gnawed them away.  More excessive is, little widow Zhao Liu and village head fool around when, the account book was also altered by her a few pens.  

The villagers decided to get rid of the village leader who did not work, ate for free, overcharged and made mistakes.  Who's going to do the bookkeeping?  The villagers thought of a way: everyone with a ledger, who dug jade, their records at the same time to inform everyone, everyone in their books to write down the same content, ledger are respectively by the villagers custody.  After the villagers between the goods exchange, exchange jade, also through this way of accounting.  This saves a bookkeeping labor, but also to avoid problems such as dampness.  Even if the little widow altered Zhang SAN's account books, but we take li Si, Wang Wu, Sun Qi's account books out of comparison, can immediately find the problem and correct.  If there are enough villagers (and women), the little widow, no matter how powerful she is, cannot change the books of half the people.  This is decentralized distributed bookkeeping.  

The problem came, Li Si suddenly had a flash of inspiration, "IF I take the jade that has been recorded and record it again, won't my wealth soon be doubled and doubled again?"  In order to solve Li Si's fraud, the villagers came up with a solution.  Each piece of jade is marked with a record of when, where and who it was dug up, as well as information about the last piece of jade dug up.  

Therefore, each villager's ledger records complete information about each piece of jade.  Each piece of jade has information associated with the previous piece, forming a chain.  Li Si could neither make things up out of thin air nor change previous records.  This is blockchain -- P2P distributed accounting.  

In the above case, distributed bookkeeping, every time they dig jade, the villagers need to stop work and update the accounts once, but reduce production efficiency.  But in the computers of the Internet, it's all instantaneous.  

A blockchain doesn't necessarily need to mine jade. Jade (bitcoin, or anything else) can be created according to a variety of rules.  Blockchain is not equal to bitcoin, which is an application based on blockchain technology.  

The main purpose of blockchain is to keep track of these objects (virtual money).  According to the mainstream view of the blockchain industry, compared with the traditional central accounting, distributed blockchain is safe, accurate, efficient and open.  It does not need to sacrifice huge frictional costs to feed huge financial institutions (village heads), and since it is decentralized storage in the form of P2P, there is no need to worry about problems such as financial institutions' databases being hacked, computer rooms suffering from natural disasters, coups and so on.  Blockchain is a disrupter of traditional financial institutions.  

So could this new cross-border, anarchic, decentralised technology, and the financial system built around it, be jointly strangled?  

What is bitcoin?  

God sent a messenger named Satoshi, to the global village.  The messenger told the villagers, "God loves the world and has decided to give out a total of 21 million bitcoins to everyone.  What is the use of this bitcoin?  God didn't talk to me, and I don't know.  But according to what standard?  Can not be directly evenly distributed, too easy to get everyone do not understand gratitude;  Zhao Liu's legs are long, and Sun Qi's breasts are big.  More can not directly to the sky a throw, everyone rushed to rob, rob of broken and bleeding, against god's love intention.  What to do?  I'll tell you what. I'll hide all my bitcoins in fields, forests, river valleys, etc. If you dig hard enough, you'll have a chance to get them.  God helps those who work hard, so it is fair to all, just ask everyone to get bitcoin, through the way of blockchain record.  ' '  

At the beginning, the villagers didn't know what bitcoin could be used for, and not many people participated.  After receiving bitcoin, some people used it to play games, while others traded 10,000 bitcoins for a pizza.  Until one bitcoin was worth a few cows, the villagers frantically joined in.  

In order to remind the villagers of God's grace and prolong the joy of labor, Satoshi nakamoto set up the mining rules, no matter how many people participate, only once every 10 minutes, 50 bitcoins each time.  So, the more people who participate, the lower the probability of an individual getting it.  And the number of single acquisitions is halved every four years.  At first, the villagers used shovels, then excavators, and then thousands of excavators in formation.  No way, other villagers large-scale use of modern equipment, you still use a small shovel, may never dig.  

In a real Bitcoin scenario, mining involves running a set of hashing algorithms on a networked computer. If the results match the preset scenario, you get bitcoins and complete the exchange of information on the blockchain.  At first, we used ordinary PCS, and then evolved to video card machines, which greatly improved efficiency, and then there were special mining machines.  

In this digging process, like villagers everywhere digging earth, is a man-made design, no actual function of labor.  The amount of electricity consumed by millions of working mining machines in the world would rank among the top ten if calculated by country.  That's why so many miners make their homes near hydropower stations in the remote mountains of Sichuan and Yunnan.  

So bitcoin, essentially a string of computer characters, is distributed and stored in a P2P network of all participants via blockchain.  Bitcoin is decentralized, secure, open, anonymous and borderless.  

Why can bitcoin be exchanged for other things?  Nothing, as long as the villagers are willing to exchange other things, can be exchanged.  Some villagers may be pure at the beginning of a small price to spend a few coins when the collection of play.  But as more and more villagers recognized that the things they could exchange became more and more expensive, the price of Bitcoin soared.  Some villagers simply stopped mining and bought and sold bitcoin to make a difference.  It also created exchanges for bitcoin.  

In addition, Satoshi emissary, but also in bitcoin given a preset conditions for automatic implementation of the function.  For example, Egg claimed that Maotai's stock price could break 500 this year, and MAO thought he was lying, so they set up a 1 million yuan bet.  If you follow the traditional way, in order to avoid default, you need to find a reliable third party, everyone will first give 1 million to this third party, and at the end of the year, the third party will give all the money to the winner based on the result.  In the bitcoin world, Eggs and Maomao simply add words like "If Moutai's share price is above 500 in 2017, then..." to their respective bitcoins.  When bitcoin expires, the result will be executed automatically, without the need for a third party.  As a result, many people believe that Bitcoin can replace credit brokers, payment brokers, insurance companies, casinos and so on.  

Later in the story, the villagers found that Satoshi nakamoto is not the messenger of God, and he actually has more than 1 million bitcoin in his pocket, although never used, we are still worried that the function of bitcoin to exchange goods, will depreciate or even disappear, because there is no public power credit endorsement.  

More intelligent villagers found that IN fact, I can also issue a set of cat coins, dog coins what ah, simply send straight to everyone, the number can also be unlimited, to avoid the helpless and painful digging work.  

In fact, since all of bitcoin's coding algorithms are open source, anyone can issue their own catecoin or dogecoin with simple modifications.  However, if no one else is involved, your Kitty coins will only show off to your own Kitty.  Of the thousands of coins that have emerged so far, only a handful have enough people involved to keep them going.  

What is an ICO?  

In order to attract others to participate in their shanzhai coins, clever villagers thought that if the virtual coins are linked to real property, in a sense, equivalent to providing a guarantee, the shanzhai coins may have investment, collection and circulation value.  

Li Si of clever mind, collect a pile of dog excreta, legend is ancient times, Lv Dongbin's dog stole ate flat peach and pull, have the effect of nourishing Yin zhuang Yang, strong body.  Li Si now needs some capital to make dog shit into dog shit cakes and sell them all over the world.  Li Si registered a shit company and planned to sell 10% of his shares at a valuation of 100 million yuan.  In the traditional way, Li Si can either seek angel, VC direct investment, or through an exchange listing (IPO) to raise funds.  But the angel is to see the face, VC to data, listing is far from meeting the standards of the exchange, even with, layers of approval down, Lv Dongbin are resurrected.  

After li Si understood blockchain and bitcoin, he decided to issue 10 million shit coins by himself and promised 10% of the shares of the corresponding shit company.  For convenience and security, dogshit company does not accept cash or other items to buy dogshit coins, people can only subscribe through Bitcoin.  Assuming that the current unit price of Bitcoin is 20,000 RMB, then transfer one bitcoin to Li Si's shit company, and the shit company will transfer 20,000 shit coins to the other party.  In the end, the dog shit company sent 10 million dog shit coins and received 500 Bitcoins, which were then exchanged for 10 million yuan.  

This is an initial public offering, or ICO, of shit coins.  Is an ICO almost the same as an IPO?  No, people's ICO does not need law firm compliance, investment bank packaging, accounting audit, CSRC approval, exchange listing and other costly and time-consuming processes, and the real issue is global, raised funds can also be freely transferred around the world.  Icos have the characteristics of illegal fundraising, such as targeting an unspecified majority of people and public fundraising.  ICO industry chain, is in addition to the supervision of authorities, set up a full set of listed companies, securities, stocks, exchanges and other financial systems.  So...  Grief.  

Why are villagers willing to trade bitcoins for shit money?  As investors hit new, we do not care about the company behind the code is what business, only need to have a continuous soaring IPO case incentive, it is hard to find a share.  Why can shit coin go up after ICO?  The immediate reason is that some people are willing to pay a higher price for it, and those who buy it believe the price will go up.  In the world of anonymous ICOs, there are no shortage of real-life stock market stories.  Someone might seriously analyze the cost and efficacy of dog poop cookies, and estimate market sales and profit in turn.  More people are studying past price movements, gathering gossip and predicting tomorrow's prices.  Of course, not to mention the big family sitting, from buy from sell, control the price.  Where does the money that shit corporation raises end up?  Are dog poo cakes really made and selling like hot cakes?  Only God knows.