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bitcoinbook/glossary.asciidoc
2014-11-21 05:10:41 -08:00

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[preface]
== Quick Glossary
This quick glossary contains many of the terms used in relation to bitcoin. These terms are used throughout the book, so bookmark this for a quick reference.
address::
A bitcoin address looks like +1DSrfJdB2AnWaFNgSbv3MZC2m74996JafV+. It consists of a string of letters and numbers starting with a "1" (number one). Just like you ask others to send an email to your email address, you would ask others to send you bitcoin to your bitcoin address.((("bitcoin address")))((("address", see="bitcoin address")))((("public key", see="bitcoin address")))
bip::
Bitcoin Improvement Proposals. A set of proposals that members of the bitcoin community have submitted to improve bitcoin. For example, BIP0021 is a proposal to improve the bitcoin uniform resource identifier (URI) scheme.((("bip")))
bitcoin::
The name of the currency unit (the coin), the network, and the software.((("bitcoin")))
block::
A grouping of transactions, marked with a timestamp, and a fingerprint of the previous block. The block header is hashed to produce a proof of work, thereby validating the transactions. Valid blocks are added to the main blockchain by network consensus.((("block")))
blockchain::
A list of validated blocks, each linking to its predecessor all the way to the genesis block.((("blockchain")))
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, and so on. Six or more confirmations is considered sufficient proof that a transaction cannot be reversed.((("confirmations")))
difficulty::
A network-wide setting that controls how much computation is required to produce a proof of work.((("difficulty")))
difficulty target::
A difficulty at which all the computation in the network will find blocks approximately every 10 minutes.((("target difficulty")))
difficulty retargeting::
A network-wide recalculation of the difficulty that occurs once every 2,106 blocks and considers the hashing power of the previous 2,106 blocks.((("difficulty retargeting")))
fees::
The sender of a transaction often includes a fee to the network for processing the requested transaction. Most transactions require a minimum fee of 0.5 mBTC.((("fees")))
hash::
A digital fingerprint of some binary input.((("hash")))
genesis block::
The first block in the blockchain, used to initialize the cryptocurrency.((("genesis block")))
miner::
A network node that finds valid proof of work for new blocks, by repeated hashing.((("miner")))
network::
A peer-to-peer network that propagates transactions and blocks to every bitcoin node on the network.((("network")))
Proof-Of-Work::
A piece of data that requires significant computation to find. In bitcoin, miners must find a numeric solution to the SHA256 algorithm that meets a network-wide target, the difficulty target. ((("proof-of-work")))
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.((("reward")))
secret key (aka private key)::
The secret number that unlocks bitcoins sent to the corresponding address. A secret key looks like +5J76sF8L5jTtzE96r66Sf8cka9y44wdpJjMwCxR3tzLh3ibVPxh+.((("secret key")))((("private key", see="secret key")))
transaction::
In simple terms, a transfer of bitcoins from one address to another. More precisely, a transaction is a signed data structure expressing a transfer of value. Transactions are transmitted over the bitcoin network, collected by miners, and included into blocks, made permanent on the blockchain.((("transaction")))
wallet::
Software that holds all your bitcoin addresses and secret keys. Use it to send, receive, and store your bitcoin.((("wallet")))