The innovative digital currency known as Bitcoin was released as open-source software in 2009, and since then it’s become a true player on the international financial scene. A wide range of websites have started accepting bitcoins as a form of payment, and this includes numerous casinos and poker sites catering to fans of virtual cash.
Whether you’re a confused noob or a long-time user looking to brush up on your jargon, the terms included in our glossary should help you interact with fellow Bitcoin fans. Just drop them sparingly into a conversation and feel your online credibility start to soar.
Address – Similar in nature to a physical or email address, this information must be provided in order to receive money via Bitcoin.
Bitcoin – When the first letter in the word is capitalized, it’s referring to the overall system of currency (“I love to use Bitcoin.”). When the first letter is lower-case, then the word is referring to a unit of transaction (“I just received 1,000 bitcoins as payment.”).
Blockchain – The list of blocks that have been mined since the beginning of Bitcoin, with each block containing a hash drawing of the blocks that preceded it. This can help validate the address of a Bitcoin account, as well as preventing double spending.
Block Reward – The reward given to a bitcoin miner who has completed hashing a transaction block.
BTC – An abbreviation for “Bitcoin currency,” much like USD is shorthand for “US dollar.”
Confirmation – A confirmation occurs when a transaction has been verified by the network and a reversal has been deemed unlikely. Multiple confirmations make a transaction less likely to be reversed, and at least six are often required for any monetary exchange in excess of $1,000.
Cryptocurrency – A mathematical form of currency. This is the opposite of fiat currency, which is money printed on paper.
Cryptography – Using mathematics to create codes in order to conceal information and provide additional security for Bitcoin accounts.
Double Spend – The bitcoin currency cannot be spent in two places at once, and this is assured by the block chain and mining. If someone attempts to spend the same currency in multiple places at the same time, it’s known as “double spending.”
Exchange – This is a place for exchanging different forms of assets. In the case of Bitcoin exchanges, the digital currency is most often traded in for paper money.
Genesis Block – This initial block in a block chain.
Hash – By using a hash algorithm, a large amount of data can be transformed into a fixed-length hash. If the data is altered, the hash will be completely changed. One of the main goals is to ensure that it’s difficult for someone to look at the output and determine the original input.
Hash Rate – A unit of measurement meant to indicate how many transactions can be performed by a bitcoin miner within a specified period of time.
Mining – This is the process used by Bitcoin members who help perform mathematical calculations and confirm transactions. These individuals are known as “Bitcoin miners,” and they receive a small fee for every transaction they help confirm.
Private Key – All Bitcoin addresses are given a private key, and this information must be known before the bitcoins in an account can be spent.
PSP – Short for “payment service provider,” which is a company that offers payment processing services for those who wish to accept Bitcoin as a method of online payment.
Pump and Dump – A person cheaply acquires a financial asset and uses unethical tactics to inflate its value. When the price is high enough, the same person sells all their assets, floods the market, and causes the value to radically diminish.
Satoshi Nakamoto – The inventor of Bitcoin.
Stale – A term used to refer to a bitcoin block that has already been hashed.
TOR – If a person wants to hide their online identity, they can use this anonymous routing protocol to do so.
Volatility – A way to measure the changing value of a traded financial asset. This can apply to both stocks and bitcoins.
Wallet – A method of storing bitcoins for later use. A wallet holds the private key information associated with a user’s addresses.
Zero-confirmation Transaction – When a merchant is willing to provide goods or services before a bitcoin’s transmission has been confirmed and included in the blockchain.