Mining

This word is simple to understand because even though it means finding bitcoins digitally using specialized software and code, it is a lot like mining for gold. Gold is finite like bitcoin, so the idea fits. Each miner gets transaction fees for each transaction they confirm, and are also awarded bitcoins for each verified block (see below).

Private Key

This is like your handle or username, but it’s a string of numbers (up to 78 of them) that gives you access to a wallet that contains the bitcoins. It’s more like a password if you think of it, and is tied to a wallet via your alias.

Wallet

This is a cloud place that enables you to collect private keys and manage those keys to let you make transactions using the bitcoin network. It works just like a wallet that is physical. It contains and lets you access the bitcoins that you have. You can have more than one wallet.

Blocks

Blocks connect every transaction together, forming block chains that are verified every ten minutes via mining. This process ensures that you avoid double spending, since technically a bitcoin can easily be copied on your own computer inside your wallets. Using this method makes it impossible to spend copies.

Block Chain

This is the public record of the bitcoin transactions. It’s really a very orderly ledger of blocks, maintaining a chain in chronological order of all transactions. Anyone on the net can download the block chain to view with a block explorer.

Block Explorer

This is like a browser that lets you look at the contents of blocks so that you can view the transactions and the history of all the balances and addresses of the transactions.

Halving

Because there will never be more than 21 million bitcoins issued, they are halved every four years with the last one happening in 2140. This essentially means that the number of bitcoins it takes to form a block is decreased by half or 50 percent.

Confirmation

When a transaction is verified by a network, it’s considered a confirmation. The process that does this is what is known as mining (see above). Once a transaction has been confirmed, it cannot be reversed or changed.

Change

This is the same concept that you have with fiat money. You pay 5 bucks for something that cost 4.50 and you get back 50 cents. This is no different with bitcoin.

Address

When you use bitcoin, you provide an address for that particular unit or transaction. Each address can only be used for one transaction.

Signature

This refers to a cryptographic signature, which is really a mathematical formula that lets someone prove that they own the bitcoin. For example, your wallet and the private keys associated to that wallet, enables you to provide a signature so that no one can steal your bitcoins.

As you learn more about bitcoin and cryptocurrencies, you’re going to come across even more new terms that mean something important. Some of the terms seem obvious (like mining), but others are a little harder to understand. Take the time to learn all that you can so that you can make good choices when it comes to using bitcoin.

Studies show that Bitcoin experienced a drop in its price. It seems like a cheaper cryptocurrency by the name Ether, reached its highest at $40 a unit. That’s right. Although the mechanism behind Ether prevents it from being used as a direct payment method, this cryptocurrency seems to have brighter future ahead. This is all thanks to its smart contract concepts.

On the other hand, cryptocurrencies who is concerned over privacy are starting to gain more prominent favor amongst users. Bitcoin, unfortunately despite their security measures, it continues to have loopholes that can be exploited for access to users’ personal data. But this doesn’t stop users from investing to Bitcoin. Up to this day, Bitcoin is still being accepted as a means of payment.

The level of acceptance is clearly bringing this alternative currency to the mainstream. Some companies are genuinely considering to invest in this currency, further fueling its journey to the world of financial currency. Are we going to witness a new norm of currency by cryptocurrency one day? Researchers concluded that it is still too early to predict that it would, but one thing is for sure that this currency is slowly making its way to the world.

The most targeted group of all would be the technologically savvy individuals and most of us are already part of this group. More than 50% of our time spent online and it won’t be long until it reaches a hundred. One day, we might even consider using Cryptocurrency as our standard currency for a more universal transaction.