What is Bitcoin?
Bitcoin is a form of digital currency, if is created and held virtually. Bitcoins are not actual coins or paper, like dollars or euros. Computers all around the world are networked together to document and maintain records of this virtual currency. In order to use cryptocurancy you need a virtual wallet. Bitcoin is the grandfather of virtual money because it was the first.
a Blockchain is a public ledger that records bitcoin transactions. Blockchain technology is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Every block chain contains a hash that links to the previous block, a timestamp, and transaction date. According to the Harvard Business Review it is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.” They are managed by a peer to peer network so once recorded they can not be altered. In order to modify the ledger all previous records in the chain would need to be altered which is virtually impossible because they are stored on numerous computers all over the world.
Peer-to-peer is an application that networks computers together. The tasks of the application of software code is split between all these different computers in a redundant manner. Each node in the network or computer, makes up a small portion of the process. The concept is that it would not need any central coordination. If one network of computer gets corrupted there is no hiccup in the application because that node is just omitted and one of the other computers picks up where the break took place.
Alt Coins are any non bitcoin cryptocurrency.
Blocks are recorded about 6 times per hour. These new transactions are recorded to the block chain and published to all nodes. Think of them as pages on a ledger or record keeping book. Blocks are the files where unalterable data that are stored permanently.
The first block in the block chain.
the number of blocks in the chain. It is used as a metric to measure duration. Every ten minutes a new block is made. When you know how long the chain is you can determine information related to time.
Hashing is an essential function of the bitcoin protocol and part of the information security. Records of bitcoin transactions are recorded and stored virtual over redundant computer networks all over the world. These records create a very large amount of data that all the computers need to record. In order to store the data and share it over the internet the data needs to be as small a file as possible. Hashing is using an algorithm to shrink the data into a fixed file size in bitcoins case the formula is SHA-256. This formula shrinks the data into 256 characters.
hashing algorithm that allows the huge amount of data of all bitcoin transactions to be shared with multiple computers. The formula shrinks the data to 256 characters in length. SHA stands for Secure Hash Algorithm.
Every single transaction made and the ownership of every single cryptocurrency in circulation is recorded in the blockchain. The blockchain is run by miners, who use powerful computers that tally the transactions. Mining is how the bitcoin infrastructure works. Miners can earn new coins as payment for their efforts.
A proposed solution to the scalability problems of blockchain technology. The goal is to let participants transfer money to each other without having to make all their transactions public on the blockchain
Small amounts of bitcoin units are millibitcoin. A millibitcoin equals 0.001 bitcoin, one thousandth of a bitcoin or 100,000 satoshis.
It is a one hundred millionth of a single bitcoin (0.00000001 BTC). The smallest amount of a bitcoin is a satoshis.
Satoshi Nakamoto is the creator of Bitcoin. Not much is known about who this is. Satoshi means “wisdom” and Nakamoto can mean “Central source”. On the genesis block he states “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. which suggest the motivation for the creation of Bitcoin was a repose to the financial crisis and the reaction by central banks and governments all over the world.
Forking is a split off from the original block chain when a group of miners disagree with the rules or what changes need to be made. This is kind of like when two companies merge. If you own a coin in the existing block chain you get both coins.
The act of determining the proper price of a security. Bitcoin trades on multiple exchanges so to determine the proper price you need to inspect what the trades are on all the exchanges. Mt.Gox and BTC-e had been the market leaders because there is the most information on those exchanges. They no longer exist but with the adoption of bit coin futures there is a better valuation mechanism because short selling essentially creates true price discovery.
The largest bitcoin exchange located in Japan in 2014 it was doing 70% of all transactions. Later that year it froze all trades and filed for bankruptcy. Mt.Gox announced that 850,000 bitcoins where missing from customer accounts. Eventually 200,000 coins turned up but most are believed to have been stolen from Mt.Gox hot wallets over time.
Based on Moscow founded in February 2011. By 2015 it handled 3% of bitcoin exchange volume. In July 2017 the website went offline and all trades halted after their servers where seized by US authorities. While vacationing in Greece Alexander Vinnik was arrested and charged with stealing coins in a hack of Mt. Gox to be used for money laundering. The company stated that Alexander Vinnik was not an employee of the company and that services would be restored in one month and all coins returned to customers.
The theory is that there is a correlation between bitcoin searches and the valuation of bitcoin.
Required software for using cryptocurrency that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance. Basically like a wallet for money but this is for virtual currency.
Offers two core products. One is the exchange to trade cryptocurrency (GDAX) and the other is a virtual wallet or API to hold the coins. It is one of the most downloaded applications in the Apple Store.
This is derived from the fork that occurred August 1, 2017. The reason for the fork was to change the block size limit to eight megabytes in order to increase the number of transactions its ledger can process. This is classified as a hard fork. Coinbase stated that withdrawals of Bitcoin Cash will start on January 1, 2018. The accepted symbol is (BCH)
Initial Coin Offering. This is like an initial stock offering or IPO. There are a lot of scams and unlike stocks this is not regulated by the security and exchange commission. This allows you to invest in new coins before they are offered to the public. Study the documentation and what the philosiphy is and why it’s being created. Then look at the team and make sure they have a track record on reddit
and the github to see how active they are and involved in development. If it’s not recent know that it’s probably not going to happen so don’t invest.
This happens when a transaction is waiting in que to input the hash into the block chain. Basically data tampering happens before data is placed into the blockchain. Exchanges with vulnerable code allow for the transaction id to be modified before completion. This causes the sender to see that the transaction did not get completed thus the transaction is initiated again causing the receiver to receive the transaction twice.
Also known as recursed encryption. This is a encryption scheme where a message is encrypted, then somehow encrypted again, and again, etc. This was used to steal $50 million in The DAO Attack on June 17, 2016. It’s away to exploit faulty code specifically the DAO aka the Decentralized Autonomous Organization.
A safe wallet that you need multiple keys to operate it. This adds an extra layer of security to prevent against human error especially when the wallet is used by more than one person. In most cases the wallet issues 3 keys and you need 2 of the 3 keys to operate it.