Bitcoin Dictionary

Address

A Bitcoin address is like real addresses or e-mail addresses. This address is all you need to receive payments with Bitcoin. An important difference of these addresses is that they can only be used once for each transaction.

Bit

A bit is used to identify a used subunit of a bitcoin – 1,000,000 bits are equivalent to 1 bitcoin (BTC or B). This unit is generally more suitable for pricing tips, sales and services.

Bitcoin

Bitcoin, which starts with a capital letter, refers to the concept of Bitcoin and the entire network that belongs to it. Example; “I learned a lot about Bitcoin today”. Bitcoin, on the other hand, that starts with a lowercase letter only defines bitcoin as an amount. Example;" I spent ten bitcoins today.” It is often abbreviated as BTC or XBT.

Block

A block is a record that contains and confirms many pending transactions on the chain. About every 10 minutes, on average, a new block containing transactions is added to the blockchain through mining.

BlockChain

The blockchain is a public record of all Bitcoin transactions in chronological order. The blockchain is shared with all Bitcoin users. This verifies the permanence of Bitcoin transactions and prevents double spending.

BTC

BTC is a common symbol for a bitcoin.

Wallet

A Bitcoin wallet is basically like your real wallet in the Bitcoin network. Your wallet contains the private key (or keys) that you can use to spend your bitcoins to get onto the blockchain. Each Bitcoin wallet shows you the total bitcoin balance it controls, allowing you to send any amount you want to anyone you want. It is not like credit cards as you can spend as much as your money.

Double Spending

When a user who thinks he is smart tries to make two payments at the same time, we call it double spending. Bitcoin mining and the blockchain have created a consensus on the network about which of these transactions will be confirmed and considered accurate.

Private Key

A private key is a piece of confidential information that gives you the right to spend bitcoins from a specific wallet via a cryptographic signature. The private key (or your keys) is stored on your computer if you use wallet software; if you are using an online wallet it is stored on a remote server. These private keys should never be disclosed as they enable you to make purchases from this specific wallet.

Hash Rate

Hash rate is a unit of measurement of the processing power of the Bitcoin network. The Bitcoin network must perform extreme mathematical operations for security purposes. The network's hash rate of 10 TH/s means that it can perform 10 trillion calculations per second.

Signature

It is a mathematical mechanism that proves cryptographic signature. In Bitcoin, there is a magic mathematical link between the Bitcoin wallet and its private key (or keys). When your bitcoin software signs a transaction with the appropriate private key, the entire network can see that the bitcoins spent match the signature. However, there is no chance for anyone to break this secret key and steal your bitcoins.

Cryptography

Cryptography is the branch of mathematics that allows us to create mathematical proofs that provide a high level of security. Online banks and shopping already use cryptography. In the case of Bitcoin, cryptography is used to prevent anyone from using someone else's money or corrupting the blockchain. It also encrypts wallets so that no one can use it without a password.

Mining

Bitcoin mining means having computers perform mathematical operations and increase security in order for the Bitcoin network to validate transactions. As a reward for their work, Bitcoin miners can collect invoices for transactions they approve and newly created bitcoins. Mining is a specialized and competitive market where rewards are directly proportional to how many calculations are made. Not all Bitcoin users are mining and it is not an easy way to make money.

Confirmation

Confirmation means the transaction has been completed by the network and is highly likely irreversible. Transactions receive confirmation as soon as they join a block and each subsequent block. A low-fee transaction becomes secure with a single confirmation, while higher fees such as $1000 can wait for 6 or more confirmations. Each confirmation increases the reliability of the transaction exponentially.

P2P

Peer-to-peer refers to systems that work as an organized society, allowing each person to communicate directly with the others. In Bitcoin, the network is built in such a way that each user broadcasts other users' transactions. And, most importantly, there is no need for any bank as a third party.

Source: www.bitcoin.org