When Satoshi Nakamoto released the White Paper, ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, few would have imagined the revolutionary capabilities of the same twelve years ago. A new electronic financial system which would be free from governmental regulations, transparent and secure was unheard of
However, Bitcoin has been leading a new financial movement of sorts. The mainstreaming of Bitcoin and other cryptocurrencies have been accelerated by the pandemic.
In this article, we are going to list the top seven Bitcoin terminologies you should be aware of. We spoke to one of the leading names in the world of Bitcoin trading at cryptorevolt.app and asked them to help us with the list.
Whether you are someone who wants an introductory point into the world of crypto or a researcher looking to gain something new, you should pay attention to the article.
List of Top Seven Bitcoin Terminologies you should know in 2020
Blockchain is like a distributed ledger, which runs, stores, and process Bitcoin transactions. It is incredibly fast, safe, and records all transactions, which have been made in the Bitcoin world. In recent years, many companies are exploring the adoption of Blockchain in different areas including medical record-keeping, logistics, and traditional payment models.
Bitcoin comes into existence after it is mined in Crypto Farms with heavy computational equipment. After Bitcoin miners successfully solve complex algorithms, a new block of Bitcoins is created. Nakamoto envisaged a system where blocks can only be mined in a specific fashion to aid their scarcity and make the process more difficult as time passes on.
The term HODL was meant to be a strategy outlining investments in Bitcoins. It was intended to be ‘HOLD’ but was misspelled as HODL. Ever since then the term has continued to refer to the strategy of making the most out of Bitcoin investments. The person who was writing on the Reddit thread wanted to say that holding on to your Bitcoins for as long as possible is beneficial.
A Digital wallet is a place where Bitcoin owners store their Private Key. According to experts, a wallet can be of multiple forms. While some owners prefer cloud-synced wallet solutions, others prefer offline wallets for their private keys. When choosing a wallet, factors like security, ease of access and the number of private keys, which can be stored should be considered.
5. Private Key-
When it comes to Bitcoins, no one carries their own personal Bitcoins on themselves like normal money. Bitcoin owners have access to their private keys and the Bitcoins are available on the Blockchain. In other words, establishing ownership over your Bitcoins takes place through the Private Keys. By entering the key, you can start the transaction processing.
Every Bitcoin carries the cryptographic signature, which makes it impossible to lose, miss, or forget. This is where the name cryptocurrency comes from. The cryptographic signature ensures that there is a record of all Bitcoins and the transactions on Blockchain. When the Bitcoin is sent, the recipient is the only one who can unlock it with their signature.
You will routinely hear the term decentralized currency in the content of Bitcoins. Decentralization means that the currency is not under the control of governmental authority or regulations. It means that it only operates between a sender and a receiver, without having any intermediaries. Being decentralized is one of Bitcoin’s most attractive features.
The Final Word
In addition to the above seven terminologies, there are other ones as well. One Satoshi is the smallest denomination of One Bitcoin. Cold Storage refers to an encrypted offline wallet where private keys can be stored. Can you think of some more terminologies, which can be added to the list? Let us know in the comments section below.