Important terms associated with Bitcoin
Bitcoin has become one of the most sensational items in our world today. It has transcended the popularity of the digital world and is being talked about almost everywhere.
Bitcoin is one of the first cryptocurrencies ever created, which hundreds of other cryptocurrencies have now followed. If all the hype around Bitcoin has made you excited and curious to know more about it, some terms are often used when speaking about Bitcoin that you must be acquainted with. Especially if you are looking forward to investing in Bitcoin, it is essential to do your research right, and for doing so, here are a few terms that you need to keep in mind:
Altcoin includes any other cryptocurrency that is not Bitcoin. Since Bitcoin is the most popular cryptocurrency globally, all other cryptocurrencies can be grouped under altcoin. When investing, it is essential to look at all the altcoin options available to diversify your profile.
Blockchain is a type of digital record keeping. It is the technology that powers almost all cryptocurrencies. Blockchain is being applied in many sectors apart from cryptocurrencies as well. Blockchain consists of blocks that are built one upon the other. Information can be entered in these blocks, and they cannot then be tampered with or removed from.
Cryptography means understanding for making meaning out of codes. Cryptocurrencies work in alignment with cryptography, giving it its name. Since all Bitcoin transactions are anonymous, it is done through cryptography. All information about the transaction is sent in an encrypted form which can then be decrypted once it reaches the receiver so that nobody else can see it. Thus, it is through cryptography that transactions using Bitcoin are made secure and anonymous.
Better understood as a hardware wallet is mostly marketed as a cold wallet . For storing digital money, these wallets act much like normal day to day wallets. These devices can look like a USB drive and can help you against theft and hacking.
When dealing with blockchain, you will often hear the word decentralized. This means that the power is not distributed from a central point. When used in the context of blockchain, any transaction using blockchain is not controlled by a single entity and requires majority approval. Thus, the blockchain system essentially works on a decentralized platform.
This is where all transactions around cryptocurrencies take place. This is like a portal through which you can buy or even purchase various forms of cryptocurrencies.
A hot wallet, or what is also known as a software wallet is a cryptocurrency wallet that is available on the internet. While hot wallets are undoubtedly more convenient when accessing cryptocurrency, they are more susceptible to theft and hacking. For this reason, many seasoned cryptocurrency owners prefer to store that cryptocurrency in cold wallets compared to hot ones.
Mining is the process through which a new cryptocurrency comes to be. Mining is essentially done by solving challenging cryptic puzzles by the computer. There are various forms of cryptocurrency mining nowadays, which makes them available for public use. It also helps in keeping track of transactions made by users.
The public key is the number associated with your wallet that you can safely share with others. By sharing the public wallet key with others, you let them know where to deposit money. This way, once authorized, they can take money from your account or send the same.
This is an encrypted code that allows you to access all your cryptocurrency. This is comparable to a password to a bank account. As it can be understood, this is extremely sensitive information and should not be shared with anyone and kept secret at all times.
With these crucial terms in mind, you can start your journey in Bitcoin and cryptocurrency. Visit Bitcoin Pro to start investing in digital currency now!