A friend asked if I could explain Bitcoin in a simple and easy-to-understand way. My model is very simple; even a child could understand it. It can help someone quickly grasp what Bitcoin is in 10 minutes. On a secluded island, 100 people live, each with their own job. Everyone produces their own food, which they exchange when needed. These 100 people find exchanging food too cumbersome, so they invent bookkeeping. This bookkeeping is only known to two people; for example, I owe you 2 chickens, and you owe me 10 fish. Later, someone found individual bookkeeping too tedious, so they invented using an item to represent food, such as a special stone representing the price of one chicken. This special stone cannot be counterfeited. This is the earliest form of currency. As exchanges become more frequent, someone suddenly realizes that currency is unnecessary. An institution can be established specifically for trading goods and recording transaction data. A dedicated person keeps the books, and others supervise the process. This is the earliest form of bank. Now the problem arises: someone secretly alters the data (this is inflation), which is disastrous. Here's the key point: Later, someone invented another method of bookkeeping: instead of assigning a dedicated person to keep records, each of the 100 people on the island has their own ledger. Every time two people make a transaction, the other 98 people on the island are called over to witness the transaction, and each person records the transaction in their ledger. This way, everyone on the island has an identical ledger, recording each transaction. If someone's ledger is lost or missing a record, the ledger with the most people's records becomes the official one. This is distributed ledger technology. If you want to forge data, you would need to call over 50 people on the island to modify the data, which is a 51% attack. Now there are two problems: 1. Calling over 98 people for every transaction is too cumbersome. 2. Why should I have to go and record every transaction? The first problem was impossible in the agricultural era. Later, someone invented the internet, and people didn't need to go to the island; they could download an app and record transactions online together. The second problem is that each transaction might earn a corresponding transaction fee reward, paid by the transacting participants—this is cryptocurrency mining. This is the simplest Bitcoin model. (Of course, this does not include models of deeper financial support and monetary systems.)