In ancient times,there was a village.The villagers exchanged labor crops with each other,such as food,utensils,handicrafts,and so on.At first,they chose the most trustworthy elder to help everyone keep accounts.Every transaction had to be conducted in front of the elder,who would help record it.This is centralized accounting.

However,centralized accounting comes with centralized risks.For example,the elder might have ulterior motives and tamper with the ledger.Or there might be a natural disaster,and the ledger gets burned in a fire,and so on.So the villagers switched to decentralized accounting.

The method was for everyone to have their own ledger.Whenever any two people conducted a transaction,they would send a message to the entire village to inform them,and then everyone would record the event in their own ledger.

The benefits are obvious.If anyone tries to tamper with their own ledger,others can easily notice that their record does not match those of others.If some people accidentally lose or damage their ledger,it can be easily restored because others have the same record,and the transactions in the village are unaffected.

The story ends here.The conclusion is that blockchain is about joint accounting.

Unfortunately,this story,as told about blockchain,is incorrect.

The key error lies in the fact that joint accounting was described as everyone accounting for themselves—each person keeping their own records.

As a result,this critical error leads to the omission of an important question:How is consensus on the ledger formed?

It can be said that the story does not cover the most important part,and the missing part is the key point discussed in Satoshi Nakamoto's 2008 Bitcoin white paper.

Saying that the missing important issue is"consensus"is still too abstract.Most people may still find it difficult to understand what the problem is.

Specifically,it is the issue of how to avoid double spending,as mentioned by Satoshi Nakamoto in the white paper.

Going a layer deeper,it is the issue of transaction ordering.

Another layer deeper,it is the issue of clock synchronization.

At the very bottom,it is the issue of global time.

Taking the scenario in the story as an example:

On Monday morning at 8:30 AM,Zhang San transferred 1 BTC to Li Si in exchange for goods in Li Si's possession.He asked Zhang Xiaoya to send a message to the entire village saying,"At 8:30 AM,Zhang San transferred 1 BTC to Li Si;everyone,please make a note!"

At 8:40 AM,after Li Si left,Zhang San quickly asked Wang Xiaohu to send another message to the village before Zhang Xiaoya,saying,"At 8:00 AM,Zhang San transferred 1 BTC to his wife;everyone,please make a note."

As a result,most of the villagers who were ahead of Zhang Xiaoya recorded in their ledgers that Zhang San had already transferred 1 BTC to his wife.When Zhang Xiaoya finally arrived,everyone compared their ledgers and saw that Zhang San's 1 BTC was gone,so the transaction of Zhang San transferring 1 BTC to Li Si was invalid.

Since it was invalid,it was not recorded.

Not being recorded,Li Si was deceived by Zhang San,losing his goods without receiving BTC in return.

You might wonder,why not record it as Zhang San owing Li Si 1 BTC?This is debt.If debt accounting is allowed,it would be equivalent to unlimited issuance of BTC.

Some clever friends might say,why not let Zhang San use a loudspeaker to announce directly to the entire village?

When we assume the existence of a loudspeaker,we have already made a crucial implicit assumption that everyone in the village has perfectly synchronized clocks,and these clocks are all in sync,so they can determine the order in which Zhang San issued the transaction information based on the time they heard him announce it,whether it was first to his wife or first to Li Si.

Also,if Zhang San announces two transaction messages through the loudspeaker,the one announced first must be heard first by everyone,and the one announced later must be heard later.

The third point is that everyone in the village can hear and record Zhang San's announcement correctly,without any situations like being in the basement at the time or sleeping and not hearing it.

However,on the internet,the above three key assumptions or conditions are not met.

First,all computers on the internet cannot ensure consistent timekeeping.Second,messages sent from one computer to another on the internet may arrive out of order,with later messages arriving before earlier ones.

Satoshi Nakamoto's approach is very creative.He allows everyone in the global village who wants to participate in accounting to compete for a loudspeaker,which is the broadcasting right.

Whoever gets the loudspeaker can summarize all the transaction information from the past period(on average about 10 minutes)and broadcast it to the entire village.

How can one get this loudspeaker?One must solve an extremely difficult mathematical problem(specifically,reverse calculating the hash value).Whoever solves the hash value).Whoever solves correct answer first gets the loudspeaker to broadcast.

To motivate people to solve the problem and compete for the loudspeaker,it is stipulated that whoever successfully gets the loudspeaker and broadcasts correctly will be rewarded with the transaction fees included in those transactions,plus an additional BTC issuance bonus.

This is Proof-of-Work(PoW).

All the above logic is interlocking and indispensable.

If any link is missing,the entire logical chain will break.

If the logical chain breaks,decentralization will regress into centralization.At least,it introduces a centralized point of failure.

In ancient times,there was a village.The villagers exchanged labor crops with each other,such as food,utensils,handicrafts,and so on.At first,they chose the most trustworthy elder to help everyone keep accounts.Every transaction had to be conducted in front of the elder,who would help record it.This is centralized accounting.

However,centralized accounting comes with centralized risks.For example,the elder might have ulterior motives and tamper with the ledger.Or there might be a natural disaster,and the ledger gets burned in a fire,and so on.So the villagers switched to decentralized accounting.

The method was for everyone to have their own ledger.Whenever any two people conducted a transaction,they would send a message to the entire village to inform them,and then everyone would record the event in their own ledger.

The benefits are obvious.If anyone tries to tamper with their own ledger,others can easily notice that their record does not match those of others.If some people accidentally lose or damage their ledger,it can be easily restored because others have the same record,and the transactions in the village are unaffected.

The story ends here.The conclusion is that blockchain is about joint accounting.

Unfortunately,this story,as told about blockchain,is incorrect.

The key error lies in the fact that joint accounting was described as everyone accounting for themselves—each person keeping their own records.

As a result,this critical error leads to the omission of an important question:How is consensus on the ledger formed?

It can be said that the story does not cover the most important part,and the missing part is the key point discussed in Satoshi Nakamoto's 2008 Bitcoin white paper.

Saying that the missing important issue is"consensus"is still too abstract.Most people may still find it difficult to understand what the problem is.

Specifically,it is the issue of how to avoid double spending,as mentioned by Satoshi Nakamoto in the white paper.

Going a layer deeper,it is the issue of transaction ordering.

Another layer deeper,it is the issue of clock synchronization.

At the very bottom,it is the issue of global time.

Taking the scenario in the story as an example:

On Monday morning at 8:30 AM,Zhang San transferred 1 BTC to Li Si in exchange for goods in Li Si's possession.He asked Zhang Xiaoya to send a message to the entire village saying,"At 8:30 AM,Zhang San transferred 1 BTC to Li Si;everyone,please make a note!"

At 8:40 AM,after Li Si left,Zhang San quickly asked Wang Xiaohu to send another message to the village before Zhang Xiaoya,saying,"At 8:00 AM,Zhang San transferred 1 BTC to his wife;everyone,please make a note."

As a result,most of the villagers who were ahead of Zhang Xiaoya recorded in their ledgers that Zhang San had already transferred 1 BTC to his wife.When Zhang Xiaoya finally arrived,everyone compared their ledgers and saw that Zhang San's 1 BTC was gone,so the transaction of Zhang San transferring 1 BTC to Li Si was invalid.

Since it was invalid,it was not recorded.

Not being recorded,Li Si was deceived by Zhang San,losing his goods without receiving BTC in return.

You might wonder,why not record it as Zhang San owing Li Si 1 BTC?This is debt.If debt accounting is allowed,it would be equivalent to unlimited issuance of BTC.

Some clever friends might say,why not let Zhang San use a loudspeaker to announce directly to the entire village?

When we assume the existence of a loudspeaker,we have already made a crucial implicit assumption that everyone in the village has perfectly synchronized clocks,and these clocks are all in sync,so they can determine the order in which Zhang San issued the transaction information based on the time they heard him announce it,whether it was first to his wife or first to Li Si.

Also,if Zhang San announces two transaction messages through the loudspeaker,the one announced first must be heard first by everyone,and the one announced later must be heard later.

The third point is that everyone in the village can hear and record Zhang San's announcement correctly,without any situations like being in the basement at the time or sleeping and not hearing it.

However,on the internet,the above three key assumptions or conditions are not met.

First,all computers on the internet cannot ensure consistent timekeeping.Second,messages sent from one computer to another on the internet may arrive out of order,with later messages arriving before earlier ones.

Satoshi Nakamoto's approach is very creative.He allows everyone in the global village who wants to participate in accounting to compete for a loudspeaker,which is the broadcasting right.

Whoever gets the loudspeaker can summarize all the transaction information from the past period(on average about 10 minutes)and broadcast it to the entire village.

How can one get this loudspeaker?One must solve an extremely difficult mathematical problem(specifically,reverse calculating the hash value).Whoever solves the hash value).Whoever solves correct answer first gets the loudspeaker to broadcast.

To motivate people to solve the problem and compete for the loudspeaker,it is stipulated that whoever successfully gets the loudspeaker and broadcasts correctly will be rewarded with the transaction fees included in those transactions,plus an additional BTC issuance bonus.

This is Proof-of-Work(PoW).

All the above logic is interlocking and indispensable.

If any link is missing,the entire logical chain will break.

If the logical chain breaks,decentralization will regress into centralization.At least,it introduces a centralized point of failure.