fbpx
Reading Time: 2 minutes

Bitcoin Glossary

This page is a collections of terms to know relating to OpenNode and Bitcoin in general. Updated weekly.

Altcoin

Term used by Bitcoin enthusiasts to refer to any or all non-Bitcoin cryptocurrency coins.

Block

A block is a collection of transactions that occur during a period of time, typically every 10 minutes. Blocks are fundamental element of the blockchain. In fact, a string of blocks is what creates the blockchain itself.

Blockchain

A string of blocks.

Block Time

Blocks are mined every ten minutes, on average. Block time is measured in number of blocks instead of regular time. For example, three blocks should take an average of 30 minutes for the network to produce, but instead we can just say “three blocks” as our block time measurement.

Decentralized

The concept of not having a single point of failure. The Bitcoin protocol is distributed over many computers all over the world. There is no central repository for Bitcoin, therefore it is decentralized network.

Encryption

Encryption is a form of digital cryptography. Other forms of cryptography include: Cyphers, invisible ink, and the WW2 enigma machine.

Encryption is used to protect digital data from unauthorized access.

ERC-20

A technical standard used on the Ethereum blockchain for smart contracts and token issuance.

Hash Power/Hash Rate

Hash Power measures how much power the Bitcoin network is consuming to maintain the normal mean processing time of 10 minutes per block. Power is usually categorized in multiples of hashes per second (H/s), thousands of hashes per second (kH/s), or millions of hashes per second (gH/s).

Hyperbitcoinization

A colloquial phrase used in the Bitcoin community to describe the situation where Bitcoin has gone global, and the entire world runs on Bitcoin.

Immutable

Unchangable. Bitcoin’s transaction history, after a few blocks have been mined, is immutable.

Mempool

The mempool is where Bitcoin transactions go before they are confirmed on the blockchain.

Miner

A miner is a computer or group of computers that validate Bitcoin transactions in blocks. Miners collect transaction fees and rewarded with new bitcoins when they mine a block.

Mining Fee

A mining fee is a small sum of money added on to a transaction that makes it more likely to be added to a block from a miner.

SHA-256

An acronym for the algorithm used to secure (encrypt) Bitcoin transactions. It stands for Secure Hash Algorithm – 256 bits. What this means is that a 256 character long, nearly-unique, hash is created for each transaction. SHA-256 is a one way algorithm, meaning it cannot be decrypted back.

Stablecoin

A stablecoin is a cryptocurrency that is pegged to another asset, such as a fiat currency. Stablecoins aim to have the instant payment processing and security of a cryptocurrency but also a volatility-free price: a US dollar stablecoin should not have value that fluctuates away from $1.