The Ultimate Bitcoin Glossary

Bitcoin Vocabulary

Most bitcoin wallets as well as the blockchain itself are zero knowledge software. XPub is short for xPublic Key and the key used to generate all of your bitcoin addresses. An Unconfirmed Bitcoin Transaction is any transaction that has not yet been added to the blockchain by a bitcoin miner yet. While a bitcoin transaction is waiting to be added to the blockchain, it waits in a queue of transactions called the MemPool. Off-Chain refers to any type of transaction that takes place off of the blockchain.

Hardware wallets almost all use cold storage to store your private keys in a secure offline environment. Bitcoin transactions are usually confirmed by apps after 2, 3, or 4 confirmations. Some altcoins might require dozens or even 100 confirmations. This could be a case with a currency, which creates new blocks every 5-10 seconds. The number of required confirmations depends on the currency and the service (wallet, exchange) being used.

Multi-Coin Wallet

The idea is to participate early before the masses and make a profit. A soft fork is an update, where the old software version is still compatible with the new one. The term fiat is often used when buying or selling bitcoins.

  • Private key(s) are generally generated and stored using a computer using Bitcoin wallet software.
  • When you send bitcoins from your wallet, they go to the memory pool.
  • Antminer — An antminer is a popular mining hardware, produced by →Bitmain.
  • Charlie Lee — Also known as Satoshi Lite, is the founder of the crypto currency Litecoin.
  • This is where all new transactions are picked from by miners.
  • The Bitcoin lightning network is working to make transactions smaller than a single satoshi.

Transactions are cryptographically secured and become legitimate as soon as they are included into the block. The process of being included into the block is called the confirmation process. Within the Bitcoin cryptocurrency, a transaction can be considered confirmed after 6 confirmations. It takes on average 10 minutes for a transaction to be confirmed. This process was undertaken in order to avoid double-spending attack.

Digital Identity

This is yet another term for greed, where you have the overwhelming emotional need to purchase a cryptocurrency when the price starts for has been skyrocketing. Coinmarketcap — Usually refers to the crypto currency website But Coinmarketcap (coin market capitalizations) also means the current price multiplied by the number of all tokens.

Bitcoin Vocabulary

1 MB blocks refers to the hard cap on the amount of data that can be included in a block that is added to the blockchain. Learn all of the most important blockchain and cryptocurrency terms and jargon here. Peer-to-peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. The hash rate is the measuring unit of the processing power of the Bitcoin network.

Enterprise Blockchain

A hard fork makes the new version incompatible with the old one. Hard forks happen when a project is split into two different versions. It’s often the driving force for newbie investors buying the market top.

  • Gas limit is the maximum number of Gwei that you want to spend on the transaction.
  • Mining requires special computer hardware and electricity to get up and running, and the puzzle difficulty keeps increasing.
  • The more confirmations that get stacked on top of your blocks’ transaction, the less the risk of getting your transaction reversed.
  • A transaction that passes Bitcoin Core’s IsStandard() and IsStandardTx() tests.
  • The longer bitcoin remains idle at an address, the greater its days destroyed.

Mobile Wallets are wallets that operate on a mobile device such as an iPhone or Android device. Technically an iPad is not a “mobile” device but you can still run mobile wallets on tablets such Bitcoin Vocabulary as the iPad. Liquidity is the amount of money that is on an exchange and as a result, how easy it is to make a trade. The more liquidity, the easier it is to exchange one asset for another.

Trading Bot

Most cryptocurrencies are by very nature, decentralised. They are not governed or maintained by a central authority, but are jointly maintained by all their participants. Practically speaking, people who transact in cryptocurrency do so ‘peer-to-peer’ — without the oversight of a third party. This implies a hand shake i.e. a particular transaction has been sorted out by the network, added to a block of transactions and are most likely irreversible.

Bitcoin Vocabulary