So, if a system has ten potential vulnerabilities, then its attack surface would be ten. ASIC Miner is short for Application-Specific Integrated Circuit and they have become the de facto standard for mining since they were engineered specifically for mining Bitcoin. From Address to Zero-Confirmations, the Bitcoin industry is full of all sorts of jargon, tech-speak, and slang.

Medium of Exchange

WIF is most commonly found on paper wallets so that it can be imported to another wallet. A seed phrase is a list of common English words that contain all of the information required to restore a bitcoin wallet if it is lost, stolen, or compromised. With these 12 – 24 words, anyone can access all of the bitcoin in the corresponding wallet.

On-Ledger Currency

Private keys are used to digitally sign bitcoin transactions so that they can be spent. Off-Chain refers to any type of transaction that takes place off of the blockchain. This can be Bitcoin Vocabulary trading on a custodial exchange, sending/receiving with a layer 2 scaling solution such as the lightning network or spending bitcoin offline with a bitcoin USB stick like OPENDIME.

Proof of Attendance Protocol

Not all wallets have support for multi-sig addresses so if you would like to use multi-sig, you will need to find a wallet that supports this feature. Online or ‘hot’ wallets include various apps and software that also facilitate transactions.There you have it. The process of mining Bitcoin on the blockchain https://www.tokenexus.com/cryptocurrency-security-standard-ccss/ is a way of reaching consensus, i.e. to validate one of the two transactions using cryptographic hashes. A Digital Signature is a unique cryptographic signature using a private key. Similar to physically signing a credit card transaction; digital signatures are for signing bitcoin transactions.

Peer-to-Peer (P2P)

An Unconfirmed Bitcoin Transaction is any transaction that has not yet been added to the blockchain by a bitcoin miner yet. While a bitcoin transaction is waiting to be added to the blockchain, it waits in a queue of transactions called the MemPool. A Confirmation on a bitcoin transaction verifies that the transaction has been included in a block. The more confirmations that a transaction has, the more secure it is.

A Paper Wallet is any piece of paper with a private key and the corresponding address written or printed on it. A seed phrase written down on a piece of paper is also considered a paper wallet. A Micro-Transaction is a very small payment that wasn’t possible until the invention of bitcoin. The Bitcoin lightning network is working to make transactions smaller than a single satoshi. The Lightning Network is a layer that is built on top of the bitcoin blockchain to allow for large numbers of microtransactions. Hot wallets are considered to be much less secure than cold wallets.

Coinbase Transaction

This is a collection of transactions records in the blockchain that confirms a lot of pending transactions. At approximately every 10minutes, a new block of transactions by the process of mining gets added to the blockchain. The processing power of the Bitcoin network has a unit of measurement called a hash rate.

• This process was undertaken in order to avoid double-spending attack.
• The term mining is used because bitcoin mining is meant to digitally simulate doing something that requires difficult work such as mining gold.
• A Paper Wallet is any piece of paper with a private key and the corresponding address written or printed on it.
• Consensus is the agreement between all of the bitcoin nodes on the current state of the blockchain.
• Inputs are the fractions of a bitcoin that are destroyed to generate the outputs in a transaction.
• Altcoin is short for “alternate coin” since Bitcoin is the first and most dominant cryptocurrency.

Within the Bitcoin cryptocurrency, the user can set up a fee that he prefers, but he needs to take into account that if it is too small the transaction can stay unconfirmed for a long time. This is a process performed by special nodes on the Bitcoin network called miners. As a result the miner who completes/solves this puzzle earns a reward in the form of Bitcoins. Mining requires special computer hardware and electricity to get up and running, and the puzzle difficulty keeps increasing. Multi-Sig, Multiple Signature for short, and is a feature of a bitcoin address that requires multiple signatures to send outgoing bitcoin transactions. Multi-sig addresses are more secure since they require more than one private key to spend bitcoin.

• Currently a number of legacy finance companies are trying to launch a Bitcoin ETF to allow investors to gain access to bitcoin price exposure without having to hodl their own bitcoin.
• An altcoin (alt for short) is any cryptocurrency that isn’t bitcoin.
• The fee collected through the transaction goes to miners to encourage them to keep mining.
• While a bitcoin transaction is waiting to be added to the blockchain, it waits in a queue of transactions called the MemPool.
• A Change Address is an address where the remaining balance from a bitcoin transaction is sent.