Bitcoin Vocabulary

Most bitcoin wallets as well as the blockchain itself are zero knowledge software. Non-Custodial service is one that puts the user in control of their own private keys. All hardware wallets such as Trezor and Ledger are non-custodial. Confirmation means that a transaction has been processed by the network and is https://www.tokenexus.com/ highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like 1000 US$, it makes sense to wait for 6 confirmations or more.

Market Order/Market Buy/Market Sell

Bitcoin Vocabulary

If you intend to stay in the game, it is very important that you understand the terms used in the cryptosphere. More and more people are joining the space every day with the hopes of making quick money.

Secure Proof of Stake (SPoS)

Double spends take place every day on legacy payment networks such a VISA and PayPal. Burn is a term used to describe bitcoins that are lost and gone forever. If you have lost the private key for an address, the bitcoin at that address is considered burnt or has been burned. A Bitcoin Miner is anyone who operates a computer to compete to find the next bitcoin block. Whoever finds the next bitcoin block is rewarded with newly minted bitcoins. Anyone in the world is able to become a bitcoin miner however it is incredibly competitive.

Bitcoin Vocabulary

Distributed Ledger

All KYC exchanges are legally required to collect your personal info. Bitcoin exchanges are not zero knowledge because they are legally required to collect an array of your personal information. A Vanity Address is an address with specialized characters that you can manually select. Common vanity addresses might begin with initials, a moniker, or maybe the first few letters of your name or company.

  • Dust refers to tiny amounts of Bitcoin or other cryptocurrencies left in a user’s wallet.
  • The hash rate measures the computational power per second of a blockchain network.
  • Money is a technological advancement that enables humans to store value, exchange value, and account for value.
  • In order to use the lightning network, you need to run your own lightning node.
  • A computer science field that uses principles of quantum physics to process much larger data sets at much greater speeds than traditional computing methods.

Dust Transactions

Bitcoin Vocabulary

  • It is a common misconception that “the mempool” is one single network-wide thing, when in reality it is a different (though probably similar) set of transactions for every node.
  • If you don’t attach enough of a miner fee, you run the risk of your transaction getting stuck in the MemPool or being dropped from the network and returned to your wallet.
  • It can also be used to encrypt a wallet, so that it cannot be used without a password.
  • You will need to pay capital gains tax in Australia if you buy cryptocurrency and later sell or exchange it at a higher price — a crypto tax Australia.
  • It compresses data into a nearly unique alphanumeric string of text.
  • The more confirmations that a transaction has, the more secure it is.

Time-Weighted Automated Market Maker (TWAMM)

Bitcoin Vocabulary