• Address: A string of letters and numbers which bitcoins can be sent to and from. A bitcoin address can be shared publicly, and like sending a message to an email address, a bitcoin address can be provided to others that wish to send you bitcoin.
  • Bitcoin: The first global, decentralized currency.
  • Bits: A sub-unit of one bitcoin. There are 1,000,000 bits in one bitcoin.
  • Block: A collection of Bitcoin transactions that have occurred during a period of time (typically about 10 minutes). If the blockchain is thought of as a ledger book, a block is like one page from the book.
  • Blockchain: The authoritative record of every Bitcoin transaction that has ever occurred.
  • BTC: An abbreviation for the bitcoin currency.
  • Cryptocurrency: A type of currency that uses cryptography instead of a central bank to provide security and verify transactions. Bitcoin is the first cryptocurrency.
  • Cryptography: In the context of Bitcoin, cryptography is the use of mathematics to secure information. Cryptography is used to create and secure wallets, sign transactions, and verify the blockchain.
  • Private Key: A string of letters and numbers that can be used to spend bitcoins associated with a specific Bitcoin address.
  • Public Key: A string of letters and numbers that is derived from a private key. A public key allows one to receive bitcoins.
  • Centralized: Organized such that one or more parties are in control of a service.
  • Decentralized: Without a central authority or controlling party. Bitcoin is a decentralized network since no company, government, or individual is in control of it.
  • Encryption: The use of cryptography to encode a message such that only the intended recipient(s) can decode it. Bitcoin uses encryption to protect wallets from unauthorized access.
  • Cold Wallet: A Bitcoin wallet that is in cold storage (not connected to the internet).
  • Hot Wallet: A Bitcoin wallet that resides on a device that is connected to the internet. A wallet installed on a desktop computer or smartphone is usually a hot wallet.
  • Hash: 1) A unique identifier of a Bitcoin transaction. 2) A mathematical function that Bitcoin miners perform on blocks to make the network secure.
  • Miner: A computer or group of computers that add new transactions to blocks and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new bitcoins for their services.
  • 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.
  • Transaction: An entry in the blockchain that describes a transfer of bitcoins from address to another. Bitcoin transactions may contain several inputs and outputs.
  • Transaction Fee: Also known as a "miner's" fee, a transaction fee is an amount of bitcoin included in each transaction that is collected by miners. This is to encourage miners to add the transaction to a block. A typical bitcoin fee amount is 0.0001 BTC.
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