Crypto Glossary

We have put together a collection of the most important terms used in the cryptocurrency world and we present them here to you using short explanations.

A

Address: much like an email address, this is an address made up of letters and numbers and it is an individual address, which can be shared publicly to send and receive Bitcoins.

Attack Surface: this describes a place which is susceptible to hackers or users who want to get access into a computer system.

B

BCC: A ticker symbol for Bitcoin Cash; used mostly on Asian exchanges.

Bitcoin: The first global, decentralized currency created in 2009.

Bits: A sub-unit of one bitcoin. There are 1,000,000 bits in one bitcoin.

Block: A collection of Bitcoin transactions that have taken place during a period of time (typically about 10 minutes). Miners process Bitcoin transactions not one-by-one but in groups or blocks.

Blockchain: works like a ledger, recording every Bitcoin transaction that has ever taken place. As blocks are verified by miners, they are added to the chain of previous blocks, hence the name.

Block Reward: An amount of Bitcoin that miners earn upon creating a block (of pending transactions). The reward is equal to the sum of 1) the block subsidy (newly ‘minted’ satoshis) plus all transactions fees attached to transactions included in that block. The subsidy reward is halved every four years.

BTC: The abbreviation for the bitcoin currency.

C

Centralized: having a central control of a service.

Chargeback: When the execution of a bank payment or money transfer is reversed, usually due to fraudulent activity. 

Coinbase: A unique type of Bitcoin transaction with no inputs that is created by miners after finding new blocks. This type of transaction is, in most cases, the first transaction within new a block. Coinbase transactions reward miners for their work.

Cold Storage: storing of information on anything that is not the internet, such as USB drives, offline computers or paper wallets.

Cold Wallet: A Bitcoin wallet that is in cold storage (not connected to the internet).

Confirmations: A bitcoin transaction is deemed unconfirmed until it has been included in a block on the blockchain, at which point it has one confirmation. Each additional block is another confirmation for that transaction.

Co-signer: An additional person or entity that has partial control and is a co-signer over a Bitcoin wallet.Cryptocurrency: A digital currency that uses cryptography instead of a central bank or entity to provide security and verify transactions. Bitcoin is the first cryptocurrency.

Cryptography: Regarding Bitcoin, cryptography is the use of mathematics to secure information. Cryptography is the maths used to create and secure wallets, sign transactions, and verify the blockchain.

D

Decentralized: Without a central authority or banks controlling the activity. Bitcoin is a decentralized network since no bank, government, or individual controls it. Bitcoins governance relies on the community and its code is open-source.

Distributed: A distributed network specifically designed without a central server. Due to this, the participants all connect to each other instead of a central server. Bitcoin is classified as a distributed network.

E

Encryption: The use of cryptography to encode a message,and secure wallets so that only those in control of the private key associated with that wallet may access it to send Bitcoin from that address. 

Exchange: A service, usually a website that allows users to buy, sell, and trade cryptocurrencies.

H

Hash: 1) A unique identifier of a Bitcoin transaction. 2) A mathematical function that Bitcoin miners perform on blocks to make the network secure.

Hot Wallet: A Bitcoin wallet that resides on a device connected to the internet. Hot wallets are those installed on a desktop computer or smartphone

L

Ledger: A physical or electronic logbook containing a list of transactions as well as balances of financial accounts. The Bitcoin blockchain is the first distributed, decentralized, public ledger.

M

M of N: The number of co-signers that must provide signatures (M) out of the total number of co-signers (N) in order for a multi-signature bitcoin transaction to take place. A common M of N value is "2 of 3" meaning two of the three co-signers’ signatures are required.

Miner: Every 10 minutes or so a miner or computer collects a few hundred pending Bitcoin transactions (a block) and turns them into a mathematical puzzle whilst processing them and verifying blocks created by other miners. The miner who finds the solution gets a number of bitcoins as a reward, but only after another 99 blocks have been added to the ledger.

Multi-Signature: often referred to as multisig wallets – are quite popular in the world of bitcoin and cryptocurrency. Unlike a regular software wallet, a multi-signature wallet requires authorization from more than one key holder before funds are transferred. 

N

Node: Any computer that connects to the Bitcoin network is called a node. 

O

Open Source: Software whose code is publicly available and free to distribute. Bitcoin is an open source project and arguably the first open source money.

Paper Wallet: A public and private key printed together as an offline wallet, and regarded as a type of "cold storage".

Peer to Peer: A type of network where participants communicate directly with each other rather than through a centralized server. The Bitcoin network is peer to peer.

Private Key: A secret number that allows Bitcoins to be spent. Every Bitcoin wallet contains one or more private keys, all saved in the wallet file. Private keys are mathematically generated.

Proof of Work: A piece of data that requires a significant amount of computation to generate but requires a minimal amount of computation to be verified as being correct. Bitcoin uses proof of work to generate new blocks.

Protocol: The official rules and regulations which govern how all participants on a network must communicate. The Bitcoin protocol specifies how each node connects with each other, how many bitcoins will exist at any given point in time, and defines other aspects of the network.

Public Key: A string of letters and numbers that is mathematically derived from a private key. Public keys allow one to receive bitcoins from other users.

Q

QR Code: similar to a bar code which digitally represents a Bitcoin public and private key. It is easily scanned by digital cameras and embody importance identification data.

S

Signature: A portion of a Bitcoin transaction that proves that the owner of the private key has approved the transaction.

Satoshi: The smallest divisible unit of one bitcoin. There are 100 million satoshis (8 decimal places) in one bitcoin. One satoshi = 0.0000001 bitcoins.

Satoshi Nakamoto: The creator of Bitcoin. It was a pseudonym used by the inventor of the Bitcoin in 2009. Nobody yet knows for sure who Satoshi really is, nor whether Satoshi was an individual (male or female), nor whether Satoshi was a group of people.

SHA-256: The specific hash function used in the mining process to secure bitcoin transactions.

T

Transaction: An entry into the blockchain that describes a transfer of bitcoins from one address to another. Bitcoin transactions may contain several inputs and outputs.

Transaction Fee: referred to as “miner's" fee, a transaction fee is the amount of Bitcoins which are included in each transaction and collected by miners. This s encourages miners to add the transaction to a block. A typical bitcoin fee amount is 0.0001 BTC.

X

XBC: A ticker symbol for Bitcoin Cash used to meet the International Standard for currency codes (ISO 4217). 

W

Wallet: A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance