Surely, from the moment you discovered Bitcoin you have found many terms that you do not understand, either because everything is entirely new to you or because there isn’t enough information available about them. In this mini-guide, you will find the basic terms of Bitcoin and the cryptocurrency world.
It is a program used to receive and send bitcoins. The most popular is the standard Bitcoin client, downloadable from Bitcoin.org; although there are many other versions with different characteristics.
This term can have two meanings: The first one is synonymous with the bitcoin client, and the second refers to the wallet.dat file of the standard client that hosts the private keys, which allow us to control our currencies.
In practice, however, the terms are used with a slight difference: “client” usually refers to the desktop program that is downloaded and stored on our computer, while wallet does rather refer to light programs hosted in our browser, or online services.
Public Bitcoin Address
It is a series of characters, such as “185MZPVxc3asL88PYwJjybkuqUwQy4EMrc”, necessary to send bitcoins to a secure wallet. The process of creating a Bitcoin address, and its corresponding private key, is done through the Bitcoin client.
In the context of Bitcoin, it is that associated with a Bitcoin address and which allows sending bitcoins that have been received previously at that address. Note that due to the operation of the encryption algorithm used by Bitcoin (ECDSA), it is possible to generate the public key and the public address from the private key.
It is a signed public statement by the private key corresponding to a Bitcoin address. This is equivalent to putting on record that certain control has been transferred over a number of bitcoins (or fraction of Bitcoin) specified to another address.
It is a transaction database shared by all nodes in the network that maintain an integral copy of it. A complete copy of the currency block string contains every transaction ever executed in the currency. With this information, you can find out the amount of BTC that belonged to each address at any time in the story.
The Bitcoin network is the peer-to-peer computer system through which Bitcoin transactions are issued and maintain the blockchain.
It is important to differentiate Bitcoin from bitcoin since the term in lower case will refer to the network token or value unit. In short: the bitcoins we exchange.
It is the first block of the blockchain that was released on January 4, 2009.
Bitcoin or cryptocurrency mining
It is the decentralised consensus process which occurs in the p2p network to validate users’ transactions and prevent double-spending from being included in the block chain. In this process, network nodes are rewarded with blocks of digital coins. Mining can be seen as a payment to the node in exchange for the service to create a block in the consensus chain.