Topic: Terminology of bitcoin transactions|Novice must see (Read 217 times)

Bitcoin transactions are considered to be the most secure and the confidential one as they promise to provide 100% confidentiality to their user and that is why it is trusted by millions of people around the world and make them to invest into bitcoin as they find it most trustworthy, bitcoin transactions does not involve any third party seizure and it also provides user anonymity so it is like next to impossible to involve any third person in the transaction of two and thus it makes bitcoin, 100% scam free.

Dude, you really did a great job. I stressed a lot of useful information on mining. I am not interested in mining, so I did not understand many things, and now it has become much better and clearer.

A good array of terminology, we should also add some commonly used lingua  in cryptocurrencies, terms such as HODL which is used to mean keeping hold of your cryptocurrencies, FUD, which stands for fear, uncertainty and doubts, FOMO which is short for: fear of missing out

i hope some of these terminologies that am about to explain can help some people who have been coming across them to understand them more better, bitcoin transaction is broad and have a lot of terminologies below are few that i can explain for now;
1. Encryption
In the IT world, encrypting information consists of hiding it in such a way that it can only be interpreted if the user has a password or code. In cryptography, ciphering has the same purpose. It’s a technique that allows users to protect the exchange of data and in which the processes in which they are used are more secure.

2. Cryptocoin or cryptocurrency
Just like cash money, crytocurrency is a means of exchange, but in this case, a digital one. The first cryptocurrency to begin operating was bitcoin, in 2009, after Satoshi Nakamoto established the basis of the system (eight years after, though, it´s still not 100% clear who created the currency). From that time on, other crytpcurrencies have appeared, with different specifications and characteristics. Today, there are more than 1,000 in the market, of all kinds.

3. Bitcoin
TECHNOLOGY
There is life after Bitcoin, these are the most innovative cryptocurrencies
There’s a growing number of cryptocurrencies other than Bitcoin and although they’re all similar, each is unique in its own way. Understanding these differences can be very helpful since it allows us to find unique opportunities.

Bitcoin is a decentralized currency, meaning it is not supervised by any authority or institution. It is not controlled by anyone in particular; that’s why it´s said that everyone who participates in the system controls it – and, at the same time, no one does. Bitcoin is an open code and is identified  through ciphered and anonymous codes (instead of bills and coins). It allows all kinds of financial transactions to be registered easily, in a secure environment among equals, since it uses peer-to-peer (P2P) technology.

Blockchain was first created as a core component of bitcoin which made it the first digital currency to solve the double spending problem without the need of a trusted authority or central server. Bitcoin’s value doesn´t cease to amaze: as of November 2017, a bitcoin is valued at more than $7,100.

More and more suppliers are accepting bitcoin as a form of payment. Already, all kinds of products and services can be bought with the cryptocurrency. For example, Microsoft allows customers to use bitcoin to buy apps, games or videos in Windows, Windows Phone and Xbox; in Overstock, customers can purchase jewels, furniture and home appliances; at Showroomprive, a European retail company, clients can buy cosmetics, accessories or clothes, just as they can in many more physical and online stores. Nevertheless, due to the steady increase in its price during the last months, its use as a means of payment has decreased.

Also, the word Bitcoin (with a capital B) is used to refer to the protocol that uses blockchain and to the P2P network that underpins it.

4. Ethereum
Ethereum is a decentralized platform that enables the creation of “smart contracts”; some have dubbed it a “decentralized supercomputer.” It also operates on its own blockchain and was orginally conceived as an improved version, to surpass the programming limits of Bitcoin. It codifies data in the same way, but one of the principal differences is that it can be used to execute smart contracts (pieces of software that automate and shield the execution of previously programmed orders) and has a large variety of applications beyond those related to the field of finance. Its cryptocurrency is Ether, the second most used after Bitcoin; as of mid-October, it was valued at $338.

5. Miners and digital mining
Mining is the process through which new bitcoins are launched onto the market, according to the timing set by Nakamoto in his protocol, through the creation of “chained blocks.” The people who are in charge of doing this are “miners”; they work with powerful computers connected 24 hours a day, making sure that all the transaction are performed correctly. To validate each transaction and create the blocks, the miners must find the “hash” or digital key, for each block, in order to link it with the next one. Each time one of the miners finds one of these crytographic keys a bitcoin is “mined” and they receive payment in this same currency.

6. Nodes
The nodes are the computers that form part of the blockchain network. They are charged with storing and distributing, in real time, the updated copies of the transactions that are carried out. Each time a new block is generated and added to the general ledger, a copy is also added to all the nodes in the network. All the miners are nodes, but not all the nodes are miners.

Here you have discussed about POW, then discusses about blockchain, multisig,transaction fee and then mining, ballet. I have learned a huge idea about cryptocurrency. It also be good for newbie.

You have discussed many important things here like Blockchain,POW, Mining and many others. I have really benefited from this topics. Everyone should read it and I think it will good for getting better knowledge.

Very good information about terminologies used in cryptocurrency community where newcomers could able to read and understand the meaning of the most commonly used words. This will be a good start and continue doing it as this could be a big help for those beginners and non beginners that are not very familiar with some of the crypto words and it's meaning.

bitcoin are basically decentralization. i have no idea about government framework about. it is not possible because it is against bitcoin policy. i want know more about this. bitcoin are more secure and its future are more profitable.

Please keep posting such helpful articles, helps a lot

bitcoin are following decentralization that's why it is totally third party control free. if government want to add a framework i think it will be against bitcoin policy. it is not easy to private information giving here. i'm agree with you. and i also want to know more about this.

im agree with you because bitcoin are following decentralization that's why it is control free. if government add a framework it will be against to bitcoin policy. i have no idea about this. i want to know more about this.

I had some confusions with some things mentioned here. Thanks for clearing me about these. I hope people will learn many basic things from this post. Best of luck.

Thanks for sharing these things. Newbies will be highly benefited with these information. I think all beginners should learn these things before entering the crypto market.

Though I have been looking for simple and easy definitions like these to make my friends understand the crypto market but honestly, you have simplified it too much and as a result some of the definitions also need good explanation. Moreover, you can add FOMO, FUD, HODL to the list as these are some key terms that the newbies should know of.

Thanks for this post. Very helpful. Hope that lots of crypto newcomers will approach it as they will invest their first money in cryptocurrencies.

Thanks for translating it. It has one of the most simplified and accurate definitions of these terms that are being used in the crypto field for a long time now. Newbies who find it hard to undestand the concept of such things should definitely get helped from your post.

I have benefited greatly by posting you because you have discussed many things like how to get profit in blockchain and cryptocurrency, which includes mining, POW, private key, ballet, KYC etc and I hope everyone will be benefited from it.

It is translated, so there are some better explanations for everyone to improve.

Hash Rate：The unit of measure for the processing power of the Bitcoin network, expressed in seconds.

POW：The "number of times a mining machine can make a hash collision per second" is usually called the calculation power. 1P computing power (1P = 1024T, 1T = 1024G) is equivalent to 1.05 million G. This means that if you have 1G of total network computing power, you can get almost one-thousandth of the bitcoin produced by the whole network. Based on Bitcoin's daily output of 3,800 calculations, 1G computing power per day is about 0.0036 bitcoins.

Blockchain：Is a public list of all transactions that have been sent, which ensures that everyone knows the true owner (address) of each bitcoin. A full-featured node on all networks maintains a copy of the blockchain.

Multisig:A technology that allows multiple public keys to jointly sign a bitcoin transaction. With this technology, it takes a lot of private keys to sign and verify when it is spent on Bitcoin, which is then accepted by the Bitcoin network, thereby improving Bitcoin's safety.

Transaction Fee:Each bitcoin transaction receives a certain transaction fee from the payer. Transaction costs typically account for a small portion of Bitcoin transactions and are a reward for mining miners.During the mining process, the miner dug a data block, and in addition to the bitcoin rewarded by the block itself, the transaction fee income can be obtained.

Mining:The process of consuming computing resources to process transactions, ensuring network security, and maintaining the synchronization of information for everyone in the network is similar to gold mining.It can be understood as a bitcoin data center, miners can operate in countries around the world, no one can have control over the network.

Ballet:Refers to a lightweight browser-based online management service, or a file containing the owner's bitcoin address and the corresponding private key needed to use those addresses.Similar to a bank account, in the world of Bitcoin, the bitcoin address is equivalent to a bank account number, the bitcoin private key is equivalent to the password for opening the account, and an address (account) corresponds to a private key (password), missing any element. Can't move the bitcoin in the wallet.

Private Key:A key associated with an address (this address is the hash of the public key corresponding to this private key).Applications that support the Bitcoin protocol can convert the private key of Bitcoin out of the public key and get an address. If there is a corresponding bitcoin on the address, you can use the private key to spend the bitcoin, which is dug up. "mine".

AML/KYCrule:The government has established a regulatory framework for digital currency (anti-money laundering / understanding of your customers) in order to prevent criminals from illegally using tokens.