Basic terminology Flashcards
Bitcoin
Bitcoin is an electronic payment system, which means that it exists only as an electronic record. It is stored in an open distributed ledger across the globe. There is no gold or other tangible asset backing this form of currency.
Decentralised
The system is decentralized as there is no central repository or single administrator. Instead it is a peer-to-peer (P2P) network and transactions take place between users directly without an intermediary.
A transaction consists of many “nodes” — computers connected via Internet, each of them running a Bitcoin software and keeping a copy of the distributed ledger. It is important to note that all nodes are equal.
In P2P networks, all nodes communicate directly, rather than through some central server. Some examples of P2P networks are: private networks (Darknet), file sharing networks (Bittorrent), distributed computing network systems (GIMPS), and messaging networks (Firechat), among others.
Crypto currency
A cryptocurrency is a digital asset based on Blockchain technology, which is a public ledger that records transactions. This technology is based on cryptography and a mathematical algorithm and is used to generate new money, to perform transactions and to validate these transactions.
Open source
All Bitcoin nodes and users run the same software. Its source code is free and available to anyone.
Anyone can install the Bitcoin software and run a new node or nodes. No “authorization” or “permission” is required. It is even possible to create a new cryptocurrency by modifying the original code.
Distributed Ledger
All nodes have a copy of the distributed ledger (Blockchain). A Blockchain contains the records of ALL Bitcoin transactions and is constantly being updated.
Bitcoin with a capital B is?
The entire payment system
bitcoin with a lower case b is?
the currency unit (coin) of that system
What are the abbreviations for a bitcoin?
XBT or BTC
One bitcoin is divided into?
100,000,000 satoshis
