Expand your Bitcoin vocabulary

Bitcoin Vocabulary

After a valid block hash is calculated, the miner gets fixed reward with transaction fees included into the block. Forging –the process in proof of stake blockchains where there is no block reward for crypto miners. Forgers however are able to keep transaction fees instead, as a reward. A Digital Signature is a unique cryptographic signature using a private key. Similar to physically signing a credit card transaction; digital signatures are for signing bitcoin transactions.

People who actively participate in guessing an accepted solution of the hash function are called miners. If a miner is successful, he can publish a valid →Block. In return he (or she) receives in compensation and the miner reward (a certain number of newly created coins).

Hard Fork

Onchain — When a transaction is written to →Blockchain it is called an onchain. Nano ledger  — Nano Ledger” is the name of a → hardware wallet “Nano Ledger. Merkle Tree — A Merkle Tree (also Hash Tree) is a concept from computer science, which is used in (some) crypto currencies.

Bitcoin Vocabulary

With proof of work, → miners calculate various → hashes with high energy consumption. GPU — Graphics processing unit is a hardware part in a normal computer. GPUs are usually more powerful than CPUs and are therefore sometimes still used for →Mining, especially in coins that are →ASIC-resistant. Flippening Bitcoin Vocabulary — an event where a cryptocurrency (altcoin) surpasses bitcoin in market capitalization (yet to happen at time of writing). It has been stated on numerous occasions that at the rim may be the currency to cause this event. Exchange (trading) — websites where you can buy, sell, and trade cryptocurrency.

Some Bitcoin words you might hear

A Soft Fork is a change to a piece of software that is backwards compatible and doesn’t create an entirely new blockchain. The old software is compatible with the new software fork. There are two basic types of Bitcoin forks; soft forks and hard forks.

Bitcoin Vocabulary

Non-Custodial service is one that puts the user in control of their own private keys. All hardware wallets such as Trezor and Ledger are non-custodial. A Confirmation on a bitcoin transaction verifies that the transaction has been included in a block. The more confirmations that a transaction has, the more secure it is.

CPU Miner

When a new block is mined with your transaction in it, there is one confirmation. When another block is mined after that, your transaction has two confirmations. The safest and most secure way to generate and store Bitcoin private keys is with Armory using an offline computer (cold storage).

  • Address clusters are thought to be owned by the same person or entity.
  • A hard fork makes the new version incompatible with the old one.
  • In computer security, an attack surface of a system is the totality of ways in which an adversary can attempt to compromise security.
  • There is nothing inherently smart about it and it’s not necessarily a contract either.
  • However, in order to operate a master node, certain conditions must be met.

Your Bitcoin address can be likened to your bank account number or e-mail. Memory pool, files with data about valid transactions that are not included into the block as they are unconfirmed. A cryptographically-verifiable receipt created using parts of a payment request and a confirmed transaction. Part of the Output part of the PaymentDetails part of a payment protocol where receivers can specify the amount of satoshis they want paid to a particular pubkey script.

Premine — A premine (pre-mining) takes place if a developer sends a certain number of coins to his own address before the blockchain is made public. Premine can be fraudulent, but it can also be seen as a means of paying for development https://www.tokenexus.com/ and listing on exchanges. Gas — Gas is the name of a cryptocurrency that is needed to send tokens on the NEO platform. Gas is generated by holding NEO in a compatible → wallet. Gas also refers to the → transaction fees in → Ethereum.