From last year's inscription to the current Bitcoin split, the Bitcoin ecosystem has always ushered in a wave of speculation and become the focus of the market when the market is sluggish. The main reason for this is probably that this round of VC coins have all failed, causing everyone's interest in VC coins to drop to freezing point instantly.
Besides, some data will not lie. The top projects in the Bitcoin ecosystem still maintain good data levels when the market is down, while VC coins have plummeted by 7-80% . If there are any tracks worth paying attention to in the current market, in addition to the projects in the TON and SOL ecosystems, the only remaining track is the Bitcoin ecosystem.
Therefore, at a time when Bitcoin is causing a large-scale FOMO in the community , if you don’t know enough about BTC , you will always be one step behind others when speculating. But don’t worry, this issue has prepared the basic knowledge you need to enter the Bitcoin ecosystem, so that you can have an optimal understanding of most projects when participating in the Bitcoin ecosystem.
Basic knowledge of Bitcoin ecology
1. Bitcoin Ecological Wallet
If you want to participate in an ecosystem, you must have a wallet, just like if you participate in an airdrop of a project, you must have a Metamask/Keplr wallet for you to use when transferring and signing. So if you want to participate in the Bitcoin ecosystem, the first thing you need to understand is the wallet.
There are many wallets in the Bitcoin ecosystem, among which Unisat wallet has the largest number of users. It has been spreading since the Inscription period last year. Other popular wallets include: Xverse , Magic Eden and OKX Wallet . If you are a novice to the Bitcoin ecosystem / crypto community, it is recommended to start with Unisat wallet and try other wallets after you are familiar with the basic operations.
Currently, Unisat provides plug-in wallets and mobile terminals, which have good support for Bitcoin inscriptions and BRC-20 protocols and are favored by Bitcoin ecosystem players. Using Unisat , users can store and transfer assets in the Bitcoin ecosystem, such as BTC , Ordinals , and BRC-20 tokens, and the addresses in each wallet are used to receive these assets.
For users who are using a Bitcoin ecosystem wallet for the first time, it is very important to understand the security of the wallet, how to back up seed phrase, and how to manage assets.
2. Unisat Bitcoin wallet address
When using the Unisat Bitcoin wallet, as a user you will see four different Bitcoin addresses. They are: Legacy , Nested SegWit , Native SegWit , and Taproot .
Key points:
1. Addresses starting with bc1 are usually used . This type of address is modern, compatible, and suitable for daily use.
2. Bc1q addresses are usually used for daily payments and transaction fees, while bc1p addresses are more suitable for receiving Ordinals and BRC-20 assets.
3. BTC can be transferred between the four types of addresses , but Ordinals and BRC-20 assets are best transferred only between addresses of the same type to avoid compatibility issues. It should also be noted that the mining fee will be different for different types of address transfers, and using isolated witness will save some mining fees ( Gas ). In addition, in actual operations, it is necessary to choose the appropriate transfer method according to the specific situation to ensure the security and quick confirmation of the transaction.
Legacy address: The old format starting with 1 has a higher handling fee and is no longer commonly used.
Nested SegWit address: starts with 3 , suitable for receiving BTC , but cannot be used to receive Ordinals or Runes .
Native SegWit address: starts with bc1q , has high compatibility, and is especially suitable for interacting with mainstream CEX platforms (such as exchanges).
Taproot address: starts with bc1p , which is more advanced than bc1q and supports complex smart contracts.
When users hold Bitcoin assets, they will inevitably conduct transactions. At this time, you will encounter the term Sats/vb in the Bitcoin ecosystem , which means the transaction fee per virtual byte ( Gas ).
3. Bitcoin Ecosystem Gas - Sats
First of all, we should make it clear that Sats here does not refer to the Sats tokens in the Ordinals system , but to the smallest unit of Bitcoin, Satoshi ( SAT for short ). 1 Bitcoin is equal to 100 million Satoshis, that is, 1 Satoshi = 0.00000001 BTC . This unit of account appeared as early as around 2011. Although it did not receive widespread attention at first, as the price of Bitcoin rose, the advantages of "Satoshi" gradually emerged in payment and transfer scenarios.
For example, if the current price of Bitcoin is $ 60,000 , then $ 1 is approximately equal to 0.000017 BTC . Using this method to mark prices is very inconvenient and prone to errors when making actual payments and transfers. Using "satoshis" as units is much simpler, with $ 1 equal to 1700 satoshis. This conversion method is more intuitive when making payments, transfers, or records, and is especially suitable for small transactions.
Because "Satoshi" can more conveniently represent small payments, many industry insiders support this pricing method. Jesse Xiong, the legal representative of JPMorgan Chase , has also publicly stated that the reason why "Satoshi" is becoming more and more popular is that it can simplify records and avoid processing long strings of complex decimals, which greatly reduces the complexity of the payment process. "
This statement will make it easier for users to understand the smallest unit of Bitcoin and its advantages in practical scenarios.
So we can know that in the Bitcoin network, transaction fees are calculated based on the size of the transaction, and the unit is vByte (virtual byte). Therefore, sats/vb refers to the Bitcoin transaction fee required to be paid for each virtual byte.
Additionally, when you make a transaction, you may see two status words: 'available' and 'unavailable' . 'Available' refers to the available balance, which is the Bitcoin you can use immediately to send transactions, while 'unavailable' refers to the balance that is temporarily unavailable, usually due to reasons such as unconfirmed transactions.
When in the 'unavailable' state, it is usually in the following situations: waiting for confirmation, if the bitcoins received by the user do not have enough block confirmations, these bitcoins are temporarily unavailable; locked state, sometimes bitcoins may be locked due to contracts, pending orders and other reasons, and temporarily cannot be used for new transactions; input in use, if the user is conducting another transaction and the amount involved has not been confirmed, the relevant bitcoins will be marked unavailable.
4. Input and Output
In Bitcoin transactions, there are two key concepts: Inputs and Outputs .
Inputs : Inputs are the source of bitcoins used for payment. They come from a bitcoin that the user has received before. These bitcoins have not been spent, so they can be used for payment. For example, if a user has received 1 BTC before , then when the user wants to initiate a new transaction, this 1 BTC is the "input" used for payment.
Outputs : Outputs are where your bitcoin payments go. Each transaction can have one or more outputs, which indicate which addresses the user has transferred bitcoins to. For example, if a user transfers 0.5 BTC to someone, these 0.5 BTC become the "output" of this new transaction and will be recorded on the chain.
Simple analogy:
You can think of input as the paper money in your wallet, and output as the money you use to buy things, and the remaining money will be given to you. Therefore, every time you pay with Bitcoin, new "change" (unspent transaction output, UTXO ) will be generated, and these "change" will be used as new inputs in the next transaction.
5. UTXO
UTXO is the balance model adopted by the Bitcoin network. In simple terms, UTXO can be understood as the " change " in your wallet that has not been spent , and these changes will become the source of funds for future payments.
At this point, everyone may have the same question. Isn't Bitcoin a decentralized ledger? But why not just use the familiar account model, but use the UTXO model?
The account model is like your bank or Alipay account, which clearly records how much money you have. 10 yuan is 10 yuan, written in the system. This model is intuitive and flexible, and is also adopted by other blockchains such as Ethereum.
But Bitcoin is different. For example, if Xiao B has 10 Bitcoins, he can't see the number " 10 " on the blockchain, because Bitcoin does not record account balances, but only transactions. So where does the balance we see on the blockchain browser come from? In fact, it is calculated by the browser, not stored by the blockchain itself.
So why do many people in the industry think that the UTXO model is good? The reason is that it is particularly suitable for parallel processing and is more efficient in distributed networks, especially in a network environment like Bitcoin, it is very clever. The essence of the UTXO model is that each transaction consumes old UTXO and generates new UTXO , which can be used in future transactions.
But this is not all about Bitcoin ecosystem transactions. Transactions still need to wait in the Mempool (memory pool) for execution.
6. Mempool
Mempool is a queue used by Bitcoin network nodes to store pending transactions. Each node has its own mempool, so the mempools of different nodes may contain different transactions.
The mempool explorer allows you to view real-time and historical information about your node’s mempool, as well as visualize, search, and view transactions.
That is to say, the BTC on-chain browsers we used to look at were all data on the chain, while Mempool had already broadcast transaction information that had not yet been uploaded to the chain. Understanding Mempool can help you be one step ahead.
Bitcoin mining, as we know it, is the process of confirming pending transactions in the memory pool to the blockchain. Miners select pending transactions from their memory pool and arrange them into a block in order to solve a specific mathematical problem. The first miner to find a suitable block will receive the transaction fees of all transactions in that block. Therefore, miners tend to prioritize transactions with higher transaction fees.
To view the Mempool (memory pool), the tool currently used by everyone is: mempool.space .
When using mempool.space , you will see some blocks separated by dotted lines at the top of the screen. The yellow part on the left represents the blocks that have not been mined yet, and the purple part on the right represents the blocks that have been successfully mined.
Whether it is the yellow unexplored area or the purple excavated area, there are some key information on them:
Average Fee Rate: This number represents the average fee rate paid by each transaction in the block (unit: Satoshi / byte)
Fee range: Displays the fee rate range for transactions within the block (unit: Satoshi / byte)
Total Fee: Displays the total fee paid for the entire block packaging transaction (unit: BTC )
Transaction number: The number of transactions contained in this block
Block time: The yellow block will show the estimated block time, while the purple area will show the actual block time
Block height: This is the number in the purple area, indicating the number of blocks in the current Bitcoin network that have been mined. The miner's name is displayed below the block height.
If you click on a mined purple block and scroll down the page, you can see detailed information about each transaction, such as input address, output address, transaction fee, and number of confirmations.
Here is a little tip when using mempool.space :
Put the mouse on the visualized memory pool diagram, a small pair of glasses will appear, click on it, select Consolidation , and all the consolidated transactions will be automatically highlighted. You can see that in the blocks queued in the memory pool, consolidated transactions account for a relatively high proportion. If you are not in a hurry to perform operations such as transfers or wallet splitting, you can avoid the peak of consolidated transactions and wait until the consolidated transactions are digested before initiating them.
7. Miners and Block Packaging
In the Bitcoin network, miners play a very important role. They are not only responsible for verifying, propagating and storing transactions, but also maintaining the security and stability of the entire decentralized network by running nodes.
The main task of miners is to find qualified blocks by solving complex mathematical problems. These blocks contain transactions submitted by users. When miners successfully find a block and package the transactions, they can add this new block to the Bitcoin blockchain.
For every successful block, miners will receive a certain number of newly generated bitcoins as rewards. This is how Bitcoin is distributed, but with the Bitcoin halving, the miner's block reward will be reduced by half every approximately four years ( 210,000 blocks). This process will continue until the total supply of Bitcoin reaches 21 million.
So, when you know that Unisat 's latest Bitcoin mining can be double-mined, how happy are the miners? The work of miners not only ensures the decentralization of the network, but also ensures the authenticity and immutability of each transaction.
Summarize
Due to limited space, the above is part of the Bitcoin Ecosystem Getting Started Manual, and other updates will be made to the Bitcoin Ecosystem Getting Started Manual later. This content is very suitable for novices who want to get in touch with the Bitcoin ecosystem. At a time when the Bitcoin ecosystem is about to explode, it is very important to master every knowledge point.
