ADRESS
Addresses are used to send and receive funds in the bitcoin network. They work on a similar basis to bank accounts. An address consists of a sequence of alphanumeric characters (from 27 to 34) and can also be saved as a QR code. Every bitcoin user can generate any number of such addresses completely free of charge. Bitcoin addresses are public. Each bitcoin address has its own private key (secret) which gives full access to the address, loss of the private key leads to irretrievable loss of funds accumulated on the address. In a traditional bitcoin client, private keys are not visible, but they can be exported and saved, e.g. on a piece of paper, so that even if the data carrier with the wallet is damaged, we can restore such address.
Example of a bitcoin address: 13QtdNuN8T7n3BykszFoGBDgDgvyEHmi1zALTCOIN
Definition for alternative currencies . The popularity of bitcoin has led to the creation of dozens of other currencies based on bitcoin or altcoins – alternative currencies.AML
Anti-Money Laundering. – Money laundering. A policy applied on many bitcoin exchanges, including user verification.
ASIC
A system specialized in performing predefined tasks. Unlike a programmable FPGA, ASICs cannot perform tasks other than those for which they were designed. This makes them significantly faster, more energy efficient and cheaper to produce than multi-tasking systems. The disadvantage of such chips would be their uselessness if the bitcoin network algorithm was changed to another. ASICs have found application in bitcoin mining, displacing graphics cards and FPGA chips. The ASICs are also commonly referred to as bitcoin excavators.
Attack 51%
An attack that can theoretically be launched on a bitcoin network provided the attacker has >50% of the total network power. Such an attack could create a separate chain of blocks and discredit the original one. This would give the attacker control over the network, the ability to double spending, stop transactions in the network, and prevent others from extracting blocks. The attack is considered on a purely theoretical level, the high power of a bitcon network and the astronomically high cost of such an attack make it practically unlikely.
BLOCKCHAIN
A chain of all transaction blocks that have been generated from the very beginning of the network. Each block contains a transaction executed in a bitcoin network at a given time. Each subsequent block contains the checksum of the previous block, so that the blocks form a chain and are resistant to any manipulation. The chain of blocks is stored by all bitcon users who use a traditional client.
BLOCK (TRANSACTION)
A group of bitcoin transactions made in the network gathered into one block. New blocks are generated by miners/mines every about 10 minutes and added to the chain of blocks (Blockchain). The bitcoin network rewards a block of 25 new bitcoins (the reward decreases by half every 4 years).
BTC
short for Bitcoin
DOUBLE SPENDING
Attack trying to double-issue the same bitcoins. In order to avoid Double Spending, services accepting bitcoins require up to 6 confirmations of a given transaction. Executing such an attack is extremely difficult and requires a significant part of the bitcoin network power. In the whole history of bitcoin dubble spending took place only once and it happened during the fork.
ECDSA
Elliptic Curve Digital Signature Algorithm. Digital signature algorithm using elliptic curve cryptography. A lightweight mathematical algorithm used to sign bitcoin transactions.
ESCROW
A type of transaction brokerage by a trusted person with a reputation in the bitcoin community. Example: Seller(S) and buyer(K) want to make a transaction. The seller pays bitcoins to the person offering the escrow(E). The “K” transfers the zloty to the “S” and the “E” informs the “E” that he has received the payment. Once the “S” receives confirmation that the money has arrived, the “E” sends the bitcoins to the “K”.
FAUCET
A system for distributing free coins. This can be giving out coins on the advertising page or after registration, or giving out coins of a newly created currency to popularize it.
FEE
A small transaction fee that we can attach to a transaction to reward miners for confirming the transaction. Depending on the size of our transaction (not the value but the size of the block) the transaction may be voluntary or mandatory. If the fee is mandatory, bitcoin customers will inform us. If we send out a transaction without a Fee even though we have been informed that a fee has to be paid, our transaction may be rejected by the mines that are just confirming our transaction or will be placed at the end of the queue and the confirmation time may be significantly longer. In the case of Fee Mines, it is a fee to the mine in exchange for the opportunity to mine together.
FORK
Alternative version of the block chain – chain bifurcation. Fork can be created deliberately when a group of miners gain too much control over the network (see 51% attack), accidentally by a system error, or when a team of developers decides to introduce new features to the client. Chain bifurcation is effective if it becomes the longest version of a block chain.
STOCK
A place offering users a cryptocurrency sale/purchase. The exchange does not deal with the sale or purchase itself, it only allows for issuing user offers. Exchanges are private business and are not part of the project.
MINER
The person who makes available the computing power of the bitcoin network (not only) responsible for the transaction authorization . Anyone can become a miner by providing appropriate equipment. The miner is rewarded with newly generated coins and transaction fees (transfer commissions).
HASH/S
The number of shortcuts (operations) that can be performed by a bitcoin miner in a given period of time (usually a second).
PRIVATE KEY
Alphanumeric string, kept secret by the user and used to sign a digital transaction based on a public key. When using a Bitcoin client, the private keys are stored in a wallet file, of course you can export them and save them on a piece of paper.
PUBLIC KEY
Alphanumeric character string. The public key is derived from the private key by multiplying elliptical curves. An address is created from the public key.
MINE (MINING POOL)
The place where the miners join their forces (power) to jointly extract the blocks, dividing the reward in proportion to the input. Nowadays it can take hundreds of years to search for blocks alone, so the best way to extract blocks is to join groups working together to extract them.
DIGGING (EXTRACTION)
Performing mathematical tasks for bitcoin networks in order to confirm transactions of other users in the network and increase its security.
MBTC
One thousandth of Bitcoin, or 0.001BTC
MIXER
A service that mixes your bitcoins with the bitcoins of other users so that you cannot determine where they come from. It allows you to remain more anonymous.
MINING
See “digging”
MINING POOL
See “digging”
