Bitcoin & Crypto Vocabulary

Bitcoin Vocabulary

Nothing we state, share, express, or allude to should be considered professional advice or recommendations of action! All content contained within is all just our own opinion and experience. Consult a professional (or two…or more) for any financial, tax, accounting, or legal related questions you may have. An attack when the same coins are used in more than one transaction. When a miner sends a block message without sending an inv message first. A version number prefixed to transactions to allow upgrading.

Side Chain — A sidechain is a separate blockchain that is linked to a mainchain. Shitcoin — Shitcoin is a derogatory (but sometimes sarcastic / lovingly-meant) collective term for all “useless” coins. Bitcoin maximalists often unironically refer to all coins, except Bitcoin, as Shitcoin.

Block Explorer

It’d take so much money to move Bitcoin or Ethereum, that individual Pump & Dump groups couldn’t pull it off. FUD is spreading conspiracy theories, fake news, and all types of uncertainty. People are usually blamed for spreading FUD when prices are falling. It’s also true that some entities try to manipulate markets by spreading misinformation and uncertainty via news websites.

Bitcoin Vocabulary

Leveraged trading can be very risky since you run the risk of losing borrowed money and may be left with even less than a bag of shitcoins. KYC is short or Know Your Customer and are a common set of financial surveillance regulations that are being implemented in the bitcoin industry. Inputs are the fractions of a bitcoin that are destroyed to generate the outputs in a transaction. Bitcoin Dust is any amount of bitcoin that is worth less than the amount of bitcoin required to send it. If you have a tiny amount of bitcoin that you are unable to send from an address, it is considered dust. Divisibility is how easy it is to break up something into smaller pieces.

Network

Since old nodes will recognise the new blocks as valid, a softfork is backward-compatible. A script included in outputs which sets the conditions that must be fulfilled for those satoshis to be spent. Data for fulfilling the conditions can be provided in a signature script.

  • It’s only possible to make a profit when your investment goes up in price.
  • You need to be running a lightning node in order to use the lightning network and open/close payment channels.
  • The original and main network for Bitcoin transactions, where satoshis have real economic value.
  • The result of a deflationary currency is usually a decrease in prices for goods and services priced in that currency.

Proof of stake — Proof-of-stake (POS) is a consensus algorithm in which the amount of coins you have is directly related to the probability that you can publish a block. Proof of Stake is very environmentally friendly compared to Proof of Work. OTC — Over the counter.is a purchase / sale of a (usually large amount) of coins that does not take place on a public exchange.

Byzantium Fork

At approximately every 10minutes, a new block of transactions by the process of mining gets added to the blockchain. A block which is not included into the valid blockchain. It occurs when two or more miners simulataneously find a block.

It also provides access to testnet, a global testing environment that imitates the bitcoin main network using an alternative blockchain where valueless „test bitcoins“ are used. Transactions are verified through cryptography and recorded on a blockchain – a kind of digital public ledger. Bitcoins can be exchanged for services, products and other currencies. Wallet
Think of a wallet as you would your internet banking system. This system stores information about all the accounts you hold with that bank and can also serve as a transaction platform.

Signatures created and recognized by major SSL implementations such as OpenSSL. A strategy for selecting which outputs to spend that avoids merging outputs Bitcoin Vocabulary with different histories that could leak private information. An index number used in the HD wallet formula to generate child keys from a parent key.

  • Multi-sig addresses are more secure since they require more than one private key to spend bitcoin.
  • Node — Every computer that participates in the network represents a node.
  • A soft fork is an update, where the old software version is still compatible with the new one.
  • The higher the transaction fee, the faster (relatively speaking) a transaction is processed by the network.
  • Signature hash type that signs the output corresponding to this input (the one with the same index value), this input, and any other inputs partially.

If you have Ethereum tokens, they can be all stored in one single Ethereum address. A smart contract is a piece of software running on a blockchain. Cryptocurrencies labeled as platforms (operating systems) are the ones with a good smart https://www.tokenexus.com/ contract supports. These include Ethereum, Binance Smart Chain, Polkadot, etc. Some investors would argue that a shitcoin is any cryptocurrency that isn’t in my own portfolio. This is also a term Bitcoin maximalists are using a lot.