Glossary

Here is a complete glossary for all terms related to cryptocurrency and Bitcoin. Terms are arranged in alphabetical order for quicker reference.

Address

An address is a random string of characters used to send or receive transactions to or from your wallet. An example of an address is, “13snd9i711ZXdW6rAAZFv61TNGetX7rUq3″.

Altcoin

An altcoin is any coin that can be considered an alternate to Bitcoin. Litecoin, Dogecoin, and Worldcoin are some examples of altcoins.

ASIC Miner

An ASIC Miner is a machine in which its sole purpose is to solve specific hashing algorithms. In a sense, they are simply machines that are made only to mine coins, and as such, generally do so at a rate much faster than standard computers.

Bitcoin

A Bitcoin is the first and most popular cryptocurrency.

Block

A block is a group of coins that can be found and thus generated through mining.

Block Chain

The block chain is the full list of blocks that have been found since the cryptocurrency originated.

Block Reward

The amount of coins given to the miner when a block has been found. Generally, this number decreases over time.

BTC

The shortened name of Bitcoin.

Confirmation

A confirmation is used to ensure a transaction’s validity. This process takes place when a transaction is hashed into a transaction block. This generally takes around 10 minutes for a Bitcoin transaction, but can be much quicker with other cryptocurrencies such as Litecoin and Worldcoin.

Cryptocurrency

A cryptocurrency is a form of digital currency that is generated through cryptography. Unlike regular money which is printed, cryptocurrency is generated by solving hash algorithms (mining). Cryptocurrencies are not tied to any government or central authority.

Difficulty

The difficulty of a network determines how hard it is to find new blocks.

Escrow

Escrow services act as a middleman between a buyer and seller.

Exchange

An exchange is used to trade money for cryptocurrencies, or cryptocurrencies for other cryptocurrencies.

Fork

A fork happens when an additional form of the blockchain is created. A fork is successful if it becomes the longest version of the blockchain. Any transactions that are made on the wrong fork are invalidated.

Hash Rate

Your hash rate determines how quickly you are able to solve the cryptographic functions needed to generate coins.

Litecoin

Litecoin is the most popular alternate form of Bitcoin. Litecoin was created by a former Google employee named Charles Lee. It uses the scrypt hashing algorithm to generate coins rather than Sha-256, making it useless for current ASIC miners. Litecoin also has a much faster confirmation time than Bitcion.

Mining

The act of using computing power to crack cryptographic hashes, and generate new coins. In a sense, you are using your computer’s hardware to generate coins.

Paper Wallet

A form of cold storage for cryptocurrencies. Paper wallets contain an address and a private key, and can be redeemed for the amount of coins within the paper wallet.

Premine

The act of mining a coin before its released to the public.

Private Key

A private key is essentially a secret number which allows transactions to be made with the address it is tied to.

Proof Of Stake

Proof of stake is a system which determines how many coins can be generated based on how many you already possess. Think of proof of stake similar to a stock in which its dividends are used to purchase more stock.

Proof Of Work

Hashed blocks that are generated through mining are considered proof of work.

Satoshi

The smallest subdivision of Bitcoin. Named after the founder of Bitcoin, Satoshi Nakamoto. One satoshi is equal to 0.00000001 BTC.

Scrypt

An alternate hashing algorithm used to mine Litecoin and the majority of other altcoins. Coins that are mined through the Scrypt hashing algorithm are invulnerable to ASIC miners, as Bitcoin uses the SHA-256 hashing algorithm instead.

Wallet

A wallet is used to store cryptocurrencies. They can either be in digital form (a program on your computer), or in paper form. (See: Paper Wallet)

 

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