Bitcoin Dictionary

All you need to know about Bitcoin and Blockchain

Wallet
A wallet stores the information necessary to transact bitcoins via the blockchain. A wallet stores the digital credentials for your bitcoin holdings and allows you to receive, access and send them. Bitcoin uses public-key cryptography, in which two cryptographic keys, one public and one private, are generated. At its most basic, a wallet is a collection of these keys. There are several types of wallet. Software wallets installed on a computer, smartphone or tablet and online wallets like Blockchain.info, Circle, Coinbase or CoinCorner. Online wallets may be easier to use; in essence, bitcoin credentials are stored with the online wallet provider rather than on the user’s hardware. Hardware wallets like Trezor keep credentials offline in special devices.
Blockchain
The blockchain is a public ledger that records bitcoin transactions. The blockchain is a peer-to-peer network that works without any trusted central clearing authority: maintenance of the blockchain is performed by a network of communicating nodes running the bitcoin software. Transactions of the form payer X sends Y bitcoins to payee Z are broadcast to this network using the bitcoin software. Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. The blockchain is a distributed database; to achieve independent verification of the chain of ownership of any and every bitcoin (amount), each blockchain node stores its own copy of the blockchain. Approximately six times per hour, a new group of accepted transactions, a block, is created, added to the block chain, and quickly published to all blockchain nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, which is necessary in order to prevent double-spending in an environment without central oversight. Whereas a conventional ledger records the transfers of actual bills or promissory notes that exist apart from it, the blockchain is the only place that bitcoins can be said to exist in the form of unspent outputs of transactions.
Bitcoin Privacy
Privacy is achieved by not identifying owners of bitcoin addresses while making other transaction data public. Bitcoin users are not identified by name, but transactions can be linked to individuals and companies. Additionally, bitcoin exchanges, where people buy and sell bitcoins for FIAT money, may be required by law to collect personal information. To maintain financial privacy, a different bitcoin address for each transaction is recommended. Transactions that spend coins from multiple inputs can reveal that the inputs may have a common owner. Users concerned about privacy can use so-called mixing services that swap coins they own for coins with different transaction histories. It has been suggested that bitcoin payments should not be considered more private than credit card payments.
Internet of Things
The Internet of Things (IoT) is the network of physical objects or “things” embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data. The Internet of Things allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computer-based systems, and resulting in improved efficiency, accuracy and economic benefit. Each thing is uniquely identifiable through its embedded computing system but is able to interoperate within the existing Internet infrastructure. Experts estimate that the IoT will consist of almost 50 billion objects by 2020. Peer-to-peer computing with blockchain technologies is considered to be the communication concept for the era of IoT.
Bitcoin
Bitcoins are the units of account of the bitcoin system. As of 2014, symbols used to represent bitcoin are BTC or XBT. The Bitcoin Foundation disseminated a plan to apply for an ISO 4217 currency code for bitcoin, and mentioned BTC and XBT as the leading candidates. Small amounts of bitcoin used as alternative units are millibitcoin (mBTC), microbitcoin (µBTC), and satoshi. Named in homage to bitcoin’s creator, a satoshi is the smallest amount within bitcoin representing 0.00000001 bitcoin, one hundred millionth of a bitcoin. A millibitcoin equals to 0.001 bitcoin, which is one thousandth of bitcoin.[40] One microbitcoin equals to 0.000001 bitcoin, which is one millionth of bitcoin. A microbitcoin is sometimes referred to as a bit.
Bitcoin Mining
Mining is a record-keeping service. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. A new block contains information that “chains” it to the previous block thus giving the block chain its name. It is a cryptographic hash of the previous block, using the SHA-256 hashing algorithm.
Where do I get my Wallet?

The get your wallet is quite easy. If you use a smartphone (iPhone or Android) you can download a wallet app from the App Store. Alternatively or additionally you can use an online wallet or a browser wallet. You find online wallets at blockchain.com and browser wallets at RushWallet.com. If you want to have the highest security level you can buy a hardware wallet – we recommand TREZOR.