Bitcoin Dictionary

Address – Think of an address as your bitcoin email address; however, instead of mail, that is how you will receive bitcoin. You can provide your address to anyone and they can send bitcoins to it. Same goes for you sending bitcoins to someone – simply ask for their “address”. Addresses in bitcoin are typically 34 characters long.

Block – A block includes all of the transaction information (buyer, seller, amount, etc.) for all of the Bitcoin transactions over a certain time period (this time period is roughly 10 minutes). The Blockchain is a combination of all of the blocks created.

Blockchain – The blockchain is an accounting ledger that stores information from every Bitcoin transaction ever. It includes information about the buyer and the seller and the amount transferred for every transaction. With a physical accounting ledger book, information must be broken up into pages, where a certain number of transactions fit on one page. This is very similar to the world of Bitcoin, where the ledger, or blockchain, is broken up into many different blocks.

Double Spend – In the real world, when you pay for something with cash (USD), you physically exchange the dollar bills with the seller. In the virtual world, you don’t have the luxury of handing over the physical money. With credit cards and bank transfers, the bank and the credit card company verify that the funds can only be spent once. With bitcoin; however, there is no central authority to check an account and confirm that someone is only spending the money once. bitcoin has certain security protocols built into it to prevent this from occurring. If bitcoins are attempted to be spent twice, this is called a double spend.

Hash Rate – The hash rate is a measure of quickly a computer is “mining”. The larger the number, the better. See “What is Mining?” to learn more about hashing and mining.

Mining – The simplest explanation of mining is using computers to provide the processing power necessary to support the bitcoin network. The current banking model typically uses server farms to provide this computing power, but with Bitcoin, this computing power is decentralized among its users.

Wallet – A bitcoin wallet is similar to a real wallet in that it holds your money, or bitcoins. With bitcoin, the wallet provides a means to hold all of your addresses, which allow you receive bitcoins from other users and send bitcoins from.