Recently, a new nitrogen-rich compound, dihydroxylanmonium 5, 5′-bistetrazole-1, 1′-diolate(TKX-50) was synthesized. It possesses low impact sensitivity and a high energy content, and is readily synthetized. We use ab initio molecular dynamics method to simulate the decomposition process of TKX-50 under various pressure and temperature. The formation mechanism of the main product N₂ is then analyzed. There are three main paths for the N₂ generation: two paths are derived from the break of the tetrazole ring and the remaining is related to the interaction between the ammonium ion and the triazole ring. The rate of the N₂ generation is affected by the temperature and pressure. That is, the higher the temperature, the lower the pressure, and the faster the reaction rate. The N₂ generation rate by the intermolecular interactions between the ammonium ion and ammonium ring depends on diffusion, because the diffusion rate is observed positively correlated with temperature while negatively with pressure. The reaction rate of the TKX-50 thus increases with temperature increasing and pressure decreasing.