Bitcoin Glossary


Address means a Bitcoin address which is used to send and receive Bitcoin transactions. The address is made up of sequence of letters - both upper and lower case - and numbers, but can also be represented as a QR Code.

 

Altcoin is the name for cryptocurrencies which are alternatives to Bitcoin. An example of altcoins is Litecoin.

 

ASIC is the acronym for Application Specific Integrated Circuit which is a chip meant to do one thing. In Bitcoin’s case they are used to process hashing problems to mine Bitcoins.

 

Bitcoin is a decentralized, peer-to-peer online currency with open source software.

 

Bitcoin ATM is like a regular ATM, Bitcoin ATMs offer people with Bitcoins after depositing regular currencies.

 

Bitcoin Whitepaper was written by Satoshi Nakamoto in 2008, it describes the original plan and protocol for Bitcoin.

 

Blockchain means a a list of every block which has been mined since Bitcoin began. All Bitcoin transactions are displayed within the Blockchain in order to provide transparency for the currency.

 

BPI is the Bitcoin Price Index which is showing the price of Bitcoin against a number of other crypto and fiat currencies.

 

BTC means the shorthand name for Bitcoin, and also the unit for 1 Bitcoin.

 

Cold Storage is a security measure for Bitcoin which is disconnected from the internet. It could be a paper wallet, USB stick or hardware wallet.

 

Confirmation means hashing a Bitcoin transaction successfully and its being added into the Blockchain.

 

Cryptocurrency is a currency which is based on mathematics and cryptography.

 

Difficulty means a number defining how difficult it is to hash a new block. As computing power for hashing increases, the difficulty level increases.

 

Dogecoin is a cryptocurrency featuring a Shiba Inu dog from the famous “Doge” internet meme. This is one of the top altcoins.

 

Exchange means a resource for exchanging currencies. Bitcoin exchanges are used to convert fiat currencies into Bitcoin and vice versa, or to exchange Bitcoin with other cryptocurrencies.

 

Faucet is a resource which provides free Bitcoins, normally in the form of hourly or daily deposits of several Satoshis.

 

Fiat Currency means “regular” currencies such as Dollars or Pounds which are given value based on people giving them a value.

 

Genesis Block is the very first block in the Blockchain.

 

Gigahashes/sec is the amount of hashes possible every second, measured in billions of hashes.

 

Hash or hashing is an action of performing a hash function to output data. It is used in order to confirm and process Bitcoin transactions.

 

Hashrate means the level of performance of mining computer hardware which is expressed in hashes/second.

 

Input or the input side of a given Bitcoin transaction is the side where the Bitcoin payment is coming from. Normally this is expressed with a Bitcoin address.

 

Litecoin means another top altcoin.

 

mBTC means 1 thousandth of a Bitcoin (0.001 BTC)

 

Microtransaction is the ability to pay for things in very small sums thanks to the fact that Bitcoin can be extended to 8 decimal places. Microtransactions are mainly important to Bitcoin casinos by providing players the ability to deposit and gamble fractions of Bitcoins.

 

Mining means the act of creating new Bitcoins using computer hardware.

 

Mixing Service is the act of combining Bitcoins from different people by switching their addresses. This can help to improve privacy and anonymity, but also can be used for money laundering.

 

Mt. Gox is one of the first Bitcoin exchanges which began liquidating after more than 850,000 of its users’ Bitcoins were lost or stolen, an amount equal to more than $450,000,000 at the time.

 

Namecoin means an altcoin which is allowing people to use the currency to purchase domain names.

 

Node is a computer which is connected to the Bitcoin network in order to input and process transactions.

 

Output means the output side of a given Bitcoin transaction is the side where the Bitcoin payment is being sent to. Normally this is expressed with a Bitcoin address.

 

Paper Wallet means paper versions of Bitcoins which are meant to be more secure due to being offline.

 

Pre-mining means mining of a cryptocurrency before it is actually public and live, generally performed by its creator.

 

Private Key is an alphanumeric string of characters which is meant to be kept private. This, in connection with the public key, is used for digital communication and completing Bitcoin transactions.

 

Public Key is used in connection with the private key, and also known as the Bitcoin address.

 

QR Code is like a barcode on products, the QR Code contains a pattern which is meant to be scanned by cameras and can be used to directly connect to a Bitcoin address.

 

Reward means when you are mining for new Bitcoins, the miner may claim new coins in a new block as a reward for helping to add new Bitcoins into circulation.

 

Satoshi is a Bitcoin “cent” which is the smallest form of Bitcoins. One Bitcoin is equal to 1 million Satoshis.

 

Satoshi Nakamoto is the creator of Bitcoin and the author of the original Bitcoin whitepaper and code. His real identity is unknown to the world.

 

Signature means a series of bytes which is a digital signature to connect someone to their public key in performing Bitcoin transactions.

 

Stale means when a Bitcoin clock is successfully hashed, the act of hashing it becomes ‘stale’, that means that no other miner may attempt to hash it.

 

Testnet is an alternative to the Blockchain which is used for testing, as the name suggests.

 

uBTC is the unit for a microbitcoin (0.000001 BTC).

 

Vanity Address means a Bitcoin address which is personalized, like a vanity license plate.

 

Wallet is a method for storing Bitcoins, and is normally the first step for anyone who is looking to buy or own Bitcoins. There are various forms of wallets – online, offline (software), hardware and paper – with varying levels of security.

 

Zero-Confirmation Transaction means when during a Bitcoin transaction the seller may choose to send the product before the transaction has received confirmations. This is normally a show of good faith but also runs the risk of using the Bitcoins twice.