Bitcoin Vocabulary

Bitcoin Vocabulary

In computer science, a bit is the smallest unit of data in a computer. A bit can store a 0 or 1, which are used to represent the two states of a digital signal. The Austrian school of economics is a free-market approach that advocates for minimal government intervention and little to no regulation.

  • Offline or ‘cold’ wallets store this information on paper, USB or a hard drive.
  • Side Chain — A sidechain is a separate blockchain that is linked to a mainchain.
  • 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.
  • Token — Coins → Smart Contract generated coins that do not have their own blockchain are usually referred to as tokens.
  • A field in the block header which contains the SHA256(SHA256()) hash of the previous block’s header.

WIF is most commonly found on paper wallets so that it can be imported to another wallet. A Bitcoin Transaction is recorded on the blockchain when any user sends bitcoin from one address to another. A transaction can be sent from as little as a single address and sent to a single address or multiple addresses. A Private Key is what allows someone to spend bitcoin at the corresponding address.

Hard Peg

Each bitcoin is divisible into 100,000,000 smaller units called Satoshis. Decryption is the act of unscrambling information with a specific code known as a decryption key. The purpose of decentralized/distributed apps is to provide a solution to a problem without a central server or point of failure.

Bitcoin Vocabulary

A storage that permanently records the Bitcoin Network Data. These units of code consist of block header and transactions’ merkle tree . Each block is linked with the previous one and takes origin from the genesis block. The data contained in the Bitcoin block cannot be modified and deleted. A value related to a public key which could only have reasonably been created by someone who has the private key that created that public key. Used in Bitcoin to authorize spending satoshis previously sent to a public key.

Deterministic Wallet

When several nodes (usually most nodes on the network) all have the same blocks in their locally-validated best block chain. One or more transactions prefaced by a block header and protected by proof of work. Generators store transactions waiting to get into a block in their memory pool after receiving them. Received transactions are stored even if they are invalid to prevent nodes from constantly requesting transactions that they’ve already seen. The memory pool is cleared when Bitcoin is shut down, causing the network to gradually forget about transactions that haven’t been included in a block.

Data generated by a spender which is almost always used as variables to satisfy a pubkey script. A P2SH output where the redeem script uses one of the multisig opcodes. Up until Bitcoin Core 0.10.0, P2SH multisig scripts were standard transactions, but most other P2SH scripts were not. A pubkey script that provides n number of pubkeys and requires the corresponding signature script provide m minimum number signatures corresponding to the provided pubkeys.

Bitcoin’s resilience above $25,000 is a ‘silver lining’ in grim crypto market, says Wolfe Research

To this day, it remains one of the largest hacks in Bitcoin history. Mixing is the generic term for CoinJoin which is the act of joining your bitcoin with others to increase privacy by making it difficult to follow ownership of bitcoin on the blockchain. Bitcoin Vocabulary If you don’t attach enough of a miner fee, you run the risk of your transaction getting stuck in the MemPool or being dropped from the network and returned to your wallet. Lambo is short for Lamborghini and is possibly the most used slang bitcoin term.

If you do not want to run your own bitcoin miners, you can sign a mining contract to earn all of the bitcoin mined by a particular miner for a predetermined amount of time. A Micro-Transaction is a very small payment that wasn’t possible until the invention of bitcoin. The Bitcoin lightning network is working to make transactions smaller than a single satoshi. Market Cap is short for Market Capitalization and is the total value of an asset such as a cryptocurrency. The market cap of bitcoin is the current price multiplied by the total supply.

The Bitcoin network must make intensive mathematical operations for security purposes. When the network reached a hash rate of 10 Th/s, it meant it could make 10 trillion calculations per second. A block is a record in the block chain that contains and confirms many waiting transactions. Roughly every 10 minutes, on average, a new block including transactions is appended to the block chain through mining. Now a similar argument has broken out around bitcoin, the first and most used cryptocurrency.

Cryptocurrency exchanges allow parties to buy and sell digital money. Bitcoin protocol
The software, or ‘rules’, that governs the Bitcoin network. All computers forming the Bitcoin network run the same software via the internet, connecting them in a decentralised network.

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