There is no hotter topic in the financial and cryptocurrency world right now like Bitcoin. It is becoming hard to read the business news without stumbling upon an article about Bitcoin. Since Bitcoin is relatively a new concept, most of the Bitcoin jargon used in print is difficult to grasp. Here are the most used Bitcoin terms and their meanings.
A distinct address is assigned to each wallet and consists of numbers that act and work the same way as a bank account number. You can send and receive cryptocurrencies directly using this address. You need a different address for every cryptocurrency link Etherium, Bitcoin etc.
This is a collective term describing all other coins besides Bitcoin. Only three such coins are popular but they are in thousands out there all with particular purposes. Examples of Altcoins include Etherium, Dash, Monero, and Litecoin. Altcoin actually means “alternative coins” or “alternatives” to Bitcoin.
The cryptocurrency market is said to bearish if it is going down. You know how a Bear keeps its head projected down to the ground? The Bear/Bearish term is derived from the traditional financial world where it has a similar meaning.
It is an acronym for Bitcoin Improvement Proposal. It refers to a document that provides information the Cryptocurrency community describing new features, processes, and change in the Bitcoin protocol environment. Therefore, all the emerging suggestions, features and changes to the design of the Bitcoin protocol need to be submitted in form of a BIP. The author of the BIP has the responsibility of creating the consensus in the community and keeping the record of dissenting opinions.
Refers to a common unit often used for designating the subunit of a bitcoin. 1 Bitcoin is equivalent to 1,000,000 bits. This unit tends to be convenient when pricing goods, tips, and services.
With capitalization, Bitcoin refers to the Bitcoin concept or the whole of its network. Someone emerging from an economics class may be overheard saying “I’ve been learning the Bitcoin protocol”. Without capitalization, however, bitcoin describes its own unit of account e.g. “I’ve received 4 bitcoins”. Note that capitalization is used when bitcoin
It refers to a batch of transactions that have been processed and recorded on the blockchain.
The Blockchain refers to a public record holding all Bitcoin transactions. Actually, Block Chain is synonymous with Public Ledger. The Block Chain has all the records of all transactions that have ever taken place at the time it has been in operation.
9. Block Reward
Refers to the reward aimed ton incentivize the miners every time they successfully mine blocks on Bitcoin network. It is part of the extensive “coinbase” transaction which includes a transaction fee at times. The block rewards tend to half approximately every four years.
The common unit often used to designate 1 bitcoin.
The term used to describe the situation when the cryptocurrency market is rising. A Bull always has its head up compared to the Bear, right? This term means a similar thing in the Fiat financial world.
Let’s imagine you’ve spent $1.40 in a local supermarket and you hand $2.00 to the cashier. You will be given back 60 cents as change. The same logic is used in Bitcoin transactions. Transactions are done in terms of “outputs” and “inputs”. Sending a Bitcoin is considered to be a whole output. The change is received as an input.
A confirmation is a verification cue indicating that a network has processed a transaction and is less likely to reverse it. Transactions receive the confirmation when they are reflected in a block and all the subsequent blocks. Larger amounts require more confirmation. For instance, low-value transactions will require just one confirmation while those amount to, say 1000 US$ will require close to 6 confirmations. The increasing number of confirmations reduces the risk of having your transaction reversed.
14. Cold storage
Cold storage refers to ways used for securing or storing Bitcoins offline (with internet disconnected). It is the opposite of hosted wallet or hot wallet which is ever connected to the internet. Users opt for Cold Storage when storing huge sums of Bitcoins or if they fear incidences of theft by hackers.
This is a branch of mathematics that deals with the creation of mathematical proofs that ensure higher levels of security. Banks and almost everyone else involved in online commerce use cryptography. In Bitcoin terms, cryptography is essential in curbing the risk of one individual spending the funds in another person’s wallet or activities that may be aimed at corrupting the blockchain. Additionally, cryptography is used to encrypt user wallet so that another password isn’t able to unlock it.
In cryptocurrency terms, it refers to a copy of the digital ledger or the blockchain on every device/node connected to the Cryptocurrency network. This is what makes cryptocurrency awesome. Instead of these copies being available only at the bank and the government records as it is the case with traditional currencies, the exact copy of the blockchain is distributed to everyone else on Cryptocurrency network.
17. Distributed Ledger
This is the basis for the decentralization concept in Cryptocurrency. Distributed ledger basically consists of a group of transactions that are copied to all computers and software linked to the network. The ledger is instantly updated in all locations at once every time a transaction takes place.
18. Double Spend
Refers to a situation whereby a malicious Bitcoin user attempts to spend his/her Bitcoins to two or more recipients all at the same time. It is illegal. The blockchain and Bitcoin mining has a set consensus on the Bitcoin network dictating which of the two running transactions will make the confirmation to make it valid.
It is an online hub use for trading cryptocurrencies. However, not all exchanges taking place on the exchange involves coins changing hands.
This term defines the major difference between regular currencies and currencies. Fiat describes the traditional currencies issued by the government and recognized as legal tender but lacks the backing of a physical commodity. In this perspective, the US dollars, Japanese Yen, British Sterling Pound and the Euro qualify as Fiat.
An acronym for Fear Of Missing Out. It describes that feeling you get when you see prices rising or falling, the availability of ICO on the market or a hot coin – all these happening while you are confined to your couch. You just don’t want to miss the opportunity. There is nothing so hard to resist in the world of cryptocurrency like FOMO.
It is an acronym for Fear, Uncertainty, and Doubt. It describes the misinformation strategy that is used to cause panic and fear in the competition and consumers. Emotions drive the markets more effectively than anything else.
23. Full Node
This describes the situation in which a Bitcoin user decides to download an entire blockchain with the aid of a Bitcoin client which allows him to validate, relay and secure all data in the blockchain. In this situation, data includes blocks and Bitcoin transactions which are routinely validated across the whole network.
Bitcoins are scarce because they are in a finite supply. The total Bitcoin amount that will ever be issued stands at 21 Million. For this reason, the amount of Bitcoins generated on every block keeps decreasing by 50 percent every four years.
25. Hard Fork
Hard refers to the change experienced in any of software that comprises Bitcoin. The change tends to be significant and is mainly intended for improvement purposes. For example, Bitcoin Cash can be described as Bitcoin’s Hard Fork
26. Hash Rate
This refers to the overall speed of the computing power used to mine a particular coin on a given network. The Hash Rate should be big for better results.
It is an acronym for Hold On for Dear Life whose origin is purely accidental. A legend runs in the word of cryptocurrency asserting that it began as a misspelling in one of the posts in the Bitcointalk.org forum. It roughly alludes to the practice of sticking to your coins and resisting the push to sell them.
It is an acronym for Initial Coin Offering. Refers to the very first time a coin puts its currency or token on the market to be purchased by buyers
Acronym for Know Your Customer. Much the same way it is used in banking regulations, it calls for the need to verify the identity of your customer.
Mining is the process of processing transactions on the blockchain using powerful computers. Every block processed by the miners creates a cryptocurrency which is awarded to the involved miners.
A node describes a computer or software connected to Bitcoin’s or any other Cryptocurrency’s network. The entity serves to maintain copies of Blockchains.
It is lso known as the peer-to-peer system. P2P refers to a system of entities that allow involved individuals to directly interact with each other. In Bitcoin perspective, the network is designed in such a way that each user has the privilege of broadcasting other users’ transactions. And, more importantly, no banking institution is involved as a third party player.
In bitcoin mining, “pools” are described as a network of a given number of miners that work as a unit to mine a given block. It is an excellent strategy by miners to combine resources and boosting profitability.
It is an acronym for Proof of Stake. It is an alternative or another different way of validating transactions. The decision of choosing a block and mining is based on the overall wealth or “stake” it has. There is no reward when it is processed, but the foragers (groups of individuals similar to miners) take its transaction fee instead.
An acronym for Proof Of Work. POW is a set of ways used to validate transactions. It deters attacks on the Cryptocurrency network by stopping multiple fake requests and making the mining calculations hard to crack. It takes a great deal of time for miners crack out the block equations but gets rewarded when they are solving the block.
36. Private Key
It refers to a top secret password that is used to secure your Wallet. Sharing it means you have compromised 100% of your cryptocurrency privacy. Nothing protects your wallet so entirely like the private key.
37. Public Key
Public Key is used to accept cryptocurrency to the wallet. If any of your friends intend to send 2 Bitcoins to you then you will have to give him your Public Key which is distinct to your Wallet.
38. Pump and Dump
This practice involves an individual or entity hyping a coin by purchasing it and hoarding leading everyone else to buy. The entity then suddenly “dumps” it or sells at a higher price.
You can purchase tiny amounts of Bitcoins instead of a full Bitcoin. The smallest unit of a Bitcoin is known as a Satoshi. 1 Satoshi is equivalent to 0.00000001 BTC.
40. Satoshi Nakamoto
It’s the pseudonym or rather the name referring to the mysterious individual who created the Bitcoin. Nobody knows if she or he is a real person or if he exists at all. Therefore, no one really knows the proprietor of Bitcoin.
A signature is cryptographic or mathematical mechanisms tasked with the role of allowing an individual prove ownership. In Bitcoin perspectives, the private keys and the Bitcoin wallet are linked together by a signature. Every time the Bitcoin software signs your transaction with the specific private key, the entire network will be able to see that the Bitcoin being send indeed matches the signature. However, no one on the network will be able to guess your private key in any way.
A token is based on and similar to a Cryptocurrency but its chief purpose is more than merely transferring value. Etherium tokens are an excellent example of this concept and probably the most popular of its kind. ERC-2O tokens are made on Etherium network.
In the world of cryptocurrency, a wallet is a location you keep/store your Bitcoins. There is more than one type of Wallets, the most popular being Exodus Wallet.
A whale is an investor who owns and controls a huge amount of a particular cryptocurrency. This gives the investor advantage to lean on the market and cause ripples.