Bitcoin Vocabulary

address (noun): A bitcoin address is a string of letters and numbers that bitcoins can be sent to and from. If you want someone to pay you with bitcoin, a bitcoin address may be the only information you need to provide. - You can send payment to my bitcoin address 3J78t1WpEY73CNmQviecrnyiWrnqRhWNLy.

attack surface (noun): In computer security, an attack surface is all the points where an unauthorised user (the "attacker") could try to access the system. - In designing this program we were careful to keep the attack surface as small as possible.

₿ (symbol): capital letter B with two vertical strokes, representing the bitcoin unit (similar to $ for dollar or ¥ for yen) - Some analysts predict that ₿1 will be worth $500,000 by the year 2030.

bitcoin, Bitcoin (uncountable noun): a cryptocurrency invented in 2008. Bitcoin is a decentralized digital currency, without a central bank or country controlling it, that one person can send direct to another person through the bitcoin network (on internet) without a bank as intermediary. The word bitcoin is sometimes capitalized as Bitcoin, but there is no broad agreement on this.- I like to use a big B when writing about the Bitcoin system as a whole and a small b when writing about the currency units, as in "I sent five bitcoins today."

bitcoin (countable noun): a unit of bitcoin, often abbreviated as BTC or ₿. See also BTC - How many bitcoins are there in the whole world?

bitcoiner (noun): a person who uses bitcoin; a bitcoin miner - He's been a bitcoiner since the early days and has made a small fortune.

bit (noun): A sub-unit of the bitcoin. There are one million (1,000,000) bits in one bitcoin. See also satoshi - So for example instead of saying that this beer costs 0.00055 bitcoins we could say it costs 550 bits.

blockchain (noun): The public record of every Bitcoin transaction that has ever occurred, in chronological order. - Let's can take a look at the blockchain and see what's really going on.

block: A single record in the blockchain that contains all the transactions over a short period of time. A new block is added to the blockchain about every 10 minutes. - If we think of the blockchain as a ledger book, a block is like a single page from that book.

BTC (abbreviation): derived from BiTCoin, representing the bitcoin unit (similar to USD for US Dollar or EUR for Euro) - Some analysts predict that 1 BTC will be worth 500,000 USD by the year 2030.

cold storage (noun): storage of bitcoin private keys in any way that is not connected to the internet. Examples of cold storage are USB drives, offline computers and real paper. - Cold storage is more like a deposit account in a bank, and hot storage is like a checking account.

cold wallet (noun): bitcoin wallet in cold storage - I keep most of my bitcoin in my cold wallet - it's safer.

confirmation (noun): a bitcoin transaction is not confirmed until it has been included in a block on the blockchain, which earns it one confirmation. Each additional block is a further confirmation. For low value amounts, one confirmation may be considered secure, while higher value amounts may require three or more confirmations to be considered final. - This is a pretty big order. How many confirmations do you think we should wait for before delivering the products?

cryptocurrency (noun): a digital currency that uses a decentralized system of cryptography instead of a centralized authority such as a central bank to provide security and verify transactions. Bitcoin is the first cryptocurrency. - As Bitcoin gains in popularity, reputable companies are starting to accept the cryptocurrency.

cryptography (noun): In terms of Bitcoin, cryptography is the use of "secret" mathematical codes to secure information. These codes are used to maintain wallets, sign transactions and verify the blockchain. - I always thought that cryptography was a science, but my dictionary defines it as an art - "the art of writing and solving codes".

decentralized (adjective): not controlled by one (central) authority - Bitcoin is a decentralized network with no government, company or individual in charge of it.

distributed (adjective): shared, spread out. A distributed network has no central server that users must connect to. - Bitcoin is a distributed network.

double spend (noun/verb): trying to send the same bitcoins to two different recipients at the same time - The blockchain makes it impossible for bad actors to double spend.

encryption (noun): conversion of information and data into a "secret" code such that only the authorized people can read it. - Bitcoin uses a high level of encryption to protect wallets from unauthorized access. 

hash (noun): a complex mathematical function used in (blockchain) blocks to help keep the bitcoin network secure; also a unique identifier of a bitcoin transaction - How many hashes does it take to create one bitcoin?

hashrate, hash rate (noun): unit of measure of the processing power of the bitcoin network (measured in hashes per second or H/s) - If the network has a hashrate of 10 TH/s, it can make 10 trillion calculations per second.

hot storage (noun): storage of Bitcoin private keys in a way that is connected to the internet. - Hot storage is generally less secure than cold storage.

hot wallet (noun): bitcoin wallet in hot storage - The majority of wallets downloaded to phones are hot wallets.

ledger (noun): a physical or electronic log book of (financial) transactions. - The bitcoin blockchain is the world's first distributed, decentralized public ledger.

mining (noun): mining is the process of using computers to make fast, highly complex mathematical calculations for the bitcoin network to confirm each transaction. - Part of the mining process involves adding the transaction/calculation to the bitcoin blockchain.

miner (noun): person or computer responsible for mining. Miners collect transaction fees for their services. - A friend of mine who works as a bitcoin miner says it's not as easy as it sounds.

node (noun): a server or computer connected to the bitcoin network and running the bitcoin software. - Nodes keep copies of the bitcoin blockchain and relay new transactions to other nodes.

open source (adjective): software that is freely distributed with publicly-available code is called open source. - Bitcoin is an open source project and is sometimes called open source money.

paper wallet (noun): a kind of cold storage wallet where private keys are printed on paper - Some people believe that a paper wallet is the most secure way to keep bitcoins safe from cyber-attacks, malware and so on.

peer-to-peer, P2P (adjective): describing a network where users connect directly with each other instead of through a centralized server - Bitcoin is a peer-to-peer network.

private key (also secret key): a randomly-generated, secret string of letters and numbers that allows a bitcoin owner to spend bitcoins from a bitcoin wallet. - A public key is available to everyone but a private key is confidential and shared only with its owner.

proof-of-work, PoW (noun): the algorithm that secures bitcoin and makes double-spending virtually impossible - It's really the PoW that creates trust and gives everyone confidence in each new block added to the bitcoin blockchain.

protocol (noun): an established set of rules that say how data is transmitted between different devices on a network. - The Bitcoin protocol defines how transactions take place from creation, through validation to final confirmation; how nodes connect with each other; how many bitcoins can exist at any point in time; and other aspects of the network.

public key (noun): a string of letters and numbers derived from a private key that allows people to receive bitcoins. See also private key - If you lose your public key, at least you can recreate it using your private key.

QR code (noun): similar to a barcode, a bitcoin QR code is a digital version of a private or public key that can be scanned by cameras, phones etc. - A bitcoin QR code is permanent and will always connect you provided you can scan it with a smartphone.

satoshi (noun): smallest divisible unit of a bitcoin. There are 100 million satoshis in one bitcoin. 1 satoshi = 0.0000001 BTC (8 decimal places). See also bit - According to The Times newspaper, the Saw Mill Café in east London accepts satoshis.

Satoshi Nakamoto (proper noun): the name used by the (presumed) pseudonymous person or group that created bitcoin - The true identity of Satoshi Nakamoto is the topic of much discussion.

SHA-256: the cryptographic hash function used in the mining process that secures bitcoin transactions - The Bitcoin protocol uses the SHA256 function for this.

signature (noun): segment of a bitcoin transaction that proves it is approved by the owner of the related private key - How do I verify my bitcoin signature?

transaction (noun): an entry in the bitcoin blockchain that records a transfer of bitcoins from one address to another - How long does a bitcoin transaction take?

transaction fee: an amount (in bitcoin) included with each transaction and collected by the miner. Also known as a miner's fee - Do you know the average transaction fee for bitcoin at the moment?

wallet (noun): a bitcoin wallet is a collection of bitcoin private keys that can be used to spend bitcoins - Many bitcoin wallets can also be used for litecoin, ethereum and other cryptocurrencies.