Some BitcoinV words you might hear
BitcoinV provides a new approach to payments and, as such, there are some new words that might become a part of your vocabulary.
A BitcoinV address is similar to a physical address or an email. It is the only information you need to provide for someone to pay you with BitcoinV. An important difference, however, is that each address should only be used for a single transaction.
Bit is a common unit used to designate a sub-unit of a bitcoinv - 1,000,000 bits is equal to 1 bitcoinv (BTC). This unit is usually more convenient for pricing tips, goods and services.
A block is a record in the block chain that contains and confirms many waiting transactions. Roughly every 10 minutes, on average, a new block including transactions is appended to the block chain through mining.
The block chain is a public record of BitcoinV transactions in chronological order. The block chain is shared between all BitcoinV users. It is used to verify the permanence of BitcoinV transactions and to prevent double spending.
BTC is a common unit used to designate one bitcoinv.
Confirmation means that a transaction has been processed by the network and is 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 USD, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.
Cryptography is the branch of mathematics that lets us create mathematical proofs that provide high levels of security. Online commerce and banking already uses cryptography. In the case of BitcoinV, cryptography is used to make it impossible for anybody to spend funds from another user's wallet or to corrupt the block chain. It can also be used to encrypt a wallet, so that it cannot be used without a password.
If a malicious user tries to spend their bitcoinvs to two different recipients at the same time, this is double spending. BitcoinV mining and the block chain are there to create a consensus on the network about which of the two transactions will confirm and be considered valid.
The hash rate is the measuring unit of the processing power of the BitcoinV network. The BitcoinV network must make intensive mathematical operations for security purposes. When the network reached a hash rate of 10 Th/s, it meant it could make 10 trillion calculations per second.
BitcoinV mining is the process of making computer hardware do mathematical calculations for the BitcoinV network to confirm transactions and increase security. As a reward for their services, BitcoinV miners can collect transaction fees for the transactions they confirm, along with newly created bitcoinvs. Mining is a specialized and competitive market where the rewards are divided up according to how much calculation is done. Not all BitcoinV users do BitcoinV mining, and it is not an easy way to make money.
Peer-to-peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of BitcoinV, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
A private key is a secret piece of data that proves your right to spend bitcoinvs from a specific wallet through a cryptographic signature. Your private key(s) are stored in your computer if you use a software wallet; they are stored on some remote servers if you use a web wallet. Private keys must never be revealed as they allow you to spend bitcoinvs for their respective BitcoinV wallet.
A cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of BitcoinV, a BitcoinV wallet and its private key(s) are linked by some mathematical magic. When your BitcoinV software signs a transaction with the appropriate private key, the whole network can see that the signature matches the bitcoinvs being spent. However, there is no way for the world to guess your private key to steal your hard-earned bitcoinvs.
A BitcoinV wallet is loosely the equivalent of a physical wallet on the BitcoinV network. The wallet actually contains your private key(s) which allow you to spend the bitcoinvs allocated to it in the block chain. Each BitcoinV wallet can show you the total balance of all bitcoinvs it controls and lets you pay a specific amount to a specific person, just like a real wallet. This is different to credit cards where you are charged by the merchant.