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Andreas M. Antonopoulos 2013-08-18 19:28:29 -07:00
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@ -13,6 +13,64 @@ Under the hood, bitcoin is the culmination of decades of research in cryptograph
More than all of these parts, bitcoin is a digital economy platform, just like the Internet is a digital communications platform. With bitcoin, it is possible to build entire new financial systems, transaction types and economies on top of a purely digital, instantaneous and frictionless platform, an Internet for money.
==== Quick Glossary
bitcoin::
The name of the currency unit (the coin), the network and the software
address (aka public key)::
A bitcoin address looks like +1DSrfJdB2AnWaFNgSbv3MZC2m74996JafV+, they always start with a one. You can have as many as you like, share them so people can send you coins.
wallet::
Software that holds all your addresses. Use it to send bitcoin and manage your keys.
secret key (aka private key)::
The secret number that unlocks bitcoins sent to the corresponding address
transaction::
A transfer of bitcoins from one address to another.
hash::
A digital fingerprint of some binary input
block::
A grouping of transactions, marked with a timestamp, and a fingerprint of the previous block. The block header is hashed to find a proof-of-work, thereby validating the transactions.
network::
A peer-to-peer network that propagates transactions and blocks among all nodes
blochchain::
A list of validated blocks, each linking to its predecessor all the way to the genesis block.
genesis block::
The first block in the blockchain, used to initialize the crypto-currency
proof-of-work::
A piece of data that requires significant computation to find. In bitcoin, a hash that is less than a target.
difficulty::
A network-wide setting that controls how much computation is required to find a proof-of-work.
target difficulty::
A difficulty at which all the computation in the network will find blocks approximately every 10 minutes.
difficulty re-targetting::
A network-wide re-calculation of the difficulty which occurs once every 2106 blocks and considers the hashing power of the previous 2106 blocks.
miner::
A network node that finds valid proof-of-work for new blocks, by repeated hashing
reward::
An amount included in each new block as a reward by the network to the miner who found the proof-of-work solution. It is currently 25BTC per block.
fees::
An excess amount included in each transaction as a network fee or additional reward to the miner who finds the proof-of-work for the new block. Currently 0.5 mBTC minimum.
confirmations::
Once a transaction is included in a block, it has "one confirmation". As soon as _another_ block is mined on the same blockchain, the transaction has two confirmations etc. Six or more confirmations is considered final.
=== Stories
It is easiest to experience bitcoin from the perspective of a few specific stories that we will explore in detail throughout the book.