Crypto Concepts & FAQs
Bitcoin is both a peer-to-peer network and protocol and is often used to refer to the native asset in the network, BTC. The Bitcoin network is responsible for propagating and verifying transactions, The blockchain records the confirmed transaction status, and BTC is the asset unit used for transfer and valuation.
Let's look at the conclusion first:BTC is not stored inside a phone, computer or hardware wallet. The wallet manages keys and related account information used to authorize transactions; Confirmed transactions generally cannot be unilaterally reversed by UKey, miners or customer service.
What is the difference between the Bitcoin network, BTC and blockchain?
concept | function |
Bitcoin Network and Protocol | Specifies transaction, block, issuance and verification rules and is jointly maintained by global participants running compatible software |
BTC | Native cryptoassets and units of account in the Bitcoin network |
Bitcoin Blockchain | A public Ledger that saves transaction records and current spendable status in block order |
wallet | Manage keys and addresses to help users query, construct and sign transactions |
Therefore, "Bitcoin" and "Blockchain" are not synonymous. The blockchain is the part used by Bitcoin to organize and verify the status of the Ledger. And Bitcoin also includes peer-to-peer network, consensus rules, digital signatures and native assets BTC.
How did Bitcoin come into existence and run?
In 2008, the author named Satoshi Nakamoto released "Bitcoin: A Peer-to-Peer Electronic Cash System"; in 2009, The Bitcoin network is up and running. It enables participants to verify and transfer digital value without a single central clearing authority through peer-to-peer networking, digital signatures, proof-of-work, and public consensus rules.
An ordinary BTC transaction can be simplified to the following process:
The wallet builds and signs the transaction:After the user confirms the address, amount and fee, the corresponding key is used to generate a valid signature.
Transactions propagate through the network:The wallet sends the signed transaction to the Bitcoin peer-to-peer network.
Node independent verification:full node Check signatures, spendable status and consensus rules and reject transactions or blocks that do not comply with the rules.
Miners compete to generate blocks:Miners use proof of work to participate in block production and include valid transactions into candidate blocks; small-scale miners usually join Mining pool Work together.
Miners are responsible for organizing candidate blocks and performing proof of work (PoW), but cannot unilaterally change the consensus rules of Bitcoin. Nodes will still verify newly received blocks; blocks that do not comply with the rules will not be accepted simply because of the investment of computing power.
How is BTC recorded, issued and measured?
Bitcoin uses UTXOs (unspent transaction outputs) to represent spendable BTC rather than storing a single account balance like a bank account. The balance shown by a wallet is usually the sum of the unspent outputs it identifies and can control. When a transaction is sent, existing outputs are spent and new outputs are created for the recipient and, if needed, for change.
The issuance of BTC follows the decreasing plan set by the agreement, and the theoretical total upper limit is approximately 21 million pieces. New block subsidies will gradually decrease according to the established block height cycle, but the limited total amount does not mean that the market price will only increase.
BTC can be subdivided, there is no need to buy or hold the entire coin:
1 BTC = 100,000,000 satoshi
What is the relationship between BTC, private key, address and wallet?
The spendable status of BTC is recorded on the blockchain. Addresses are used to receive assets, keys are used to generate signatures that meet the corresponding locking conditions, and the wallet is responsible for managing this information and interacting with the network. A single-signature wallet may be authorized by a single key, while multi-signature or other script conditions may require multiple keys or additional conditions to be met, so all Bitcoin control methods should not be summarized as "unique private keys."
Once the mnemonic phrase or private key is leaked, attackers may bypass the original device and control related accounts; when recovery data is lost and there are no other recovery conditions, users may also lose access capabilities. For the detailed relationship between wallet, address and key, seeWhat is a blockchain wallet, and how does it work?.
When using a UKey hardware wallet, the client is responsible for querying the network, constructing transactions and broadcasting the results, and the device is responsible for displaying the transaction information it can parse and signing after the user confirms it. For specific procedures, seeHow does a UKey hardware wallet secure transaction signing?;Risk reduction capabilities and usage boundaries seeWhy choose UKey?.
What boundaries do you need to understand when using Bitcoin?
The number of confirmations will affect transaction stability:The network may experience brief competing blocks or reorganizations. The more confirmations a transaction receives, the more difficult it is generally to be replaced by subsequent chain reorganizations; unconfirmed transactions should not be considered final.
Double spending is prevented by both rules and confirmation mechanisms:Nodes will reject conflicting transactions that repeatedly spend the same output; when the transaction has not yet been confirmed, users still need to consider substitution, conflict and reorganization risks and wait for appropriate confirmation.
Bitcoin uses pseudonymous addresses:The address itself does not directly display the real name, but the transactions on the chain are publicly available; after the address is associated with the real identity, historical activities may be analyzed.
Transactions generally cannot be reversed by customer service:After transferring to the wrong network, address or amount, UKey cannot modify the on-chain record for the user. Returns via another transaction are only possible if the payee is willing to cooperate.
Price and compliance risks remain:BTC prices may fluctuate significantly, and requirements for holding, trading, payment and taxation may vary in different regions.
FAQ
Are Bitcoin and Blockchain the same thing?
No. Blockchain is a Ledger structure that records and verifies transaction status; Bitcoin is a complete system including network, consensus rules, cryptography mechanism and BTC.
Is BTC stored in a UKey hardware wallet?
No. BTC is recorded on the Bitcoin blockchain. Hardware wallets manage the keys used to authorize transactions and help users review and sign transactions on a separate device.
Can I contact UKey to cancel the wrong transfer?
Confirmed Bitcoin transactions generally cannot be reversed by UKey or customer service. When an error is discovered, the operation should be stopped, the transaction status should be checked, and the payee should be contacted through trusted channels; Don't trust people who claim you can "recover assets" by requesting a mnemonic phrase.