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The Bitcoin Glossary: All The Terms You Need To Know

Venturing into the wonderful world of Bitcoin? You'll come across a few new terms that could leave you scratching your head. If that's the case, take a look at our Bitcoin Glossary — it contains everything you could ever need to know.

◘ Bits —  A sub-unit of a Bitcoin. There are 1,000,000 Bits in one Bitcoin.

◘ Block — A collection of Bitcoin transactions that occurred during a specific period of time. Think of it as one page in a ledger, with the ledger itself being the Blockchain.

◘ Blockchain — A digital record of every Bitcoin transaction that's ever occurred. It's a bit like a massive virtual ledger; all transactions and balances are recorded on it.

◘ BTC — An abbreviation of Bitcoin.

◘ Cold Wallet — A Bitcoin Wallet that is in cold storage, meaning that it's not connected to the Internet. It's stored offline on a ledger, hard drive, or something similar. 

◘ Confirmation — A Bitcoin transaction is considered Unconfirmed until it has been included in a Block on the Blockchain, at which point it has one. The inclusion on additional Blocks marks additional Confirmations. A Transaction is considered Confirmed when it has six Confirmations.

◘ Distributed Ledger (Ledger) — A virtual logbook that tracks all balances and transactions in a decentralized format that's visible to the public.

◘ Hash — The definition is two-fold: 1) The unique identifier of a Bitcoin transaction; 2) A mathematical function Miners perform on Blocks to make the network secure.

◘ Hot Wallet — A Bitcoin Wallet that's located on a device that is connected to the Internet, like a computer, smartphone, or tablet. 

◘ Miner — A computer dedicated to processing a transaction. It's tasked with solving a computational process that’s triggered when a transaction is initiated to confirm it’s legitimate.

Paper Wallet — A form of Cold Wallet where Private Keys are printed on a piece of paper, written on a Post-it, or stored on another physical medium.

Satoshi — The smallest divisible unit of Bitcoin recorded on the Blockchain. It carries a value of 0.00000001 BTC, one-hundred-millionth of a single Bitcoin.

Satoshi Nakamoto — The name used by the unknown person (or persons) who created Bitcoin.

Transaction — An entry in the Blockchain that outlines the transfer of Bitcoin from one address to another. Sometimes one main Transaction contains a number of smaller sub-Transactions.