Top 10 Bitcoin Terms You Should Know

Starting your journey in the world of bitcoin requires getting to know Bitcoin is a network that has gained immense popularity in recent years. It is a decentralized digital currency that allows users to send and receive payments anywhere in the world without the need for intermediaries like banks. 

Moreover, as more people become interested in investing and using bitcoin, every bitcoin enthusiast is always eager to learn how bitcoin works and understand some common terms associated with it. Whether you're a seasoned investor or just getting started, having a solid understanding of these terms will help you make informed decisions about bitcoin.

In this article, I'll list and define some of the most frequently used bitcoin terms to help you navigate this evolving space. 

1. Blockchain

The blockchain is the underlying technology that powers bitcoin. It is a distributed ledger system that records all bitcoin transactions in a secure and transparent manner. The blockchain consists of a network of computers that work together to verify and process transactions. 

Each block in the blockchain contains a set of transactions and a unique code called a hash. Once a block is added to the blockchain, it cannot be altered or deleted, making it a tamper-proof record of all bitcoin transactions.

2. Bitcoin wallet

A bitcoin wallet is a digital wallet that allows you to store and manage your bitcoin. It is a software program that connects to the bitcoin network and enables you to send and receive bitcoin. 
 

There are different types of bitcoin wallets, including desktop wallets, mobile wallets, and hardware wallets. Desktop wallets are installed on your computer, mobile wallets are installed on your smartphone, and hardware wallets are physical devices that store your bitcoin offline for added security.

3. Satoshi

Satoshi is the smallest unit of bitcoin, named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto. One bitcoin is equivalent to 100 million Satoshis (100,000,000 Satoshis). Satoshis are used to represent small amounts of bitcoin, and they are frequently used in micropayments and tipping.

4. Mining

Mining is the process of adding new transactions to the blockchain. It is a competitive process that involves solving complex mathematical problems to validate transactions and earn new Bitcoins as a reward. Bitcoin miners use specialized hardware and software to mine Bitcoin and secure the network. As more miners join the network, the difficulty of mining increases, making it harder to earn new Bitcoins.

5. Private key

A private key is a secret code that allows you to access your bitcoin wallet and send bitcoin. It is a long string of alphanumeric characters that is generated when you create a Bitcoin wallet. Your private key must be kept secure because anyone who has access to it can access your Bitcoin. If you lose your private key, you will lose access to your Bitcoin, and there is no way to recover it.

6. Public key

A public key is a code that is used to receive Bitcoin. It is a shorter version of your Bitcoin address, which is a unique identifier that represents your Bitcoin wallet. You can share your public key with others to receive Bitcoin, but you should never share your private key.

7. Bitcoin address

A Bitcoin address is a unique identifier that represents your Bitcoin wallet. It is a string of alphanumeric characters that begins with a 1 or 3. You can share your Bitcoin address with others to receive Bitcoin, but you should never share your private key.

8. Halving

Bitcoin halving is an event that occurs approximately every four years when the reward for mining new blocks is halved. This means that the amount of new Bitcoins created is reduced by half, which is designed to limit the supply of Bitcoin and prevent inflation. The most recent Bitcoin halving occurred in May 2020, and the next one is expected to occur in 2024.

9. Lightning Address

A Lightning Address is a unique identifier used to send and receive payments on the Lightning Network, a layer-2 scaling solution for bitcoin and other cryptocurrencies. 

It is created by combining a name and a domain e.g. Sherry@bitnob.io. It can be shared with anyone who wants to send payments, and once received, the payment is instantly settled on the Lightning Network, without the need for confirmations on the blockchain. 

10. HODL

HODL is a misspelling of the word "hold," which has become a popular meme in the bitcoin community. HODL usually stands for “Hold On (for) Dear Life”. It refers to the idea of holding onto Bitcoin rather than selling it, even during periods of volatility or market downturns–HODLers believe in the long-term value of bitcoin.

Start Using Bitcoin Terms!

Although, there are more terminologies you will come across as time goes on but starting with the above-mentioned bitcoin terms will put you on the right track as a beginner. However, getting started with bitcoin requires choosing a platform that is beginner friendly for buying, selling, and saving your bitcoins. 

The Bitnob app makes it easy for you to navigate your bitcoin journey–every feature is straightforward, and there are support channels to assist you in case you have any questions or concerns. 

Ready to simplify your own world of bitcoin? Download Bitnob here.