Blockchain 101, Everything You need to know!

Education Blockchain 101
Welcome to the educational side of TBW here you will learn more about the wonderful world of Bitcoin, Blockchain and Cryptocurrencies. You utilize this space best by going through the information below, open the collapsible content to read it all and stay on this page. After you have done this you are ready to read Satoshi Nakamoto's original Bitcoin White paper. Good luck and spread your newfound wisdom!

What are you waiting for, lets get started.

What is Bitcoin? A short explanation.

Who created it?

A pseudonymous software developer going by the name of Satoshi Nakamoto proposed bitcoin in 2008, as an electronic payment system based on mathematical proof. The idea was to produce a means of exchange, independent of any central authority, that could be transferred electronically in a secure, verifiable and immutable way.

To this day, no-one knows who Satoshi Nakamoto really is.

In what ways is it different from traditional currencies?

Bitcoin can be used to pay for things electronically, if both parties are willing. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

But it differs from fiat digital currencies in several important ways:

1 – Decentralization

Bitcoin’s most important characteristic is that it is decentralized. No single institution controls the bitcoin network. It is maintained by a group of volunteer coders, and run by an open network of dedicated computers spread around the world. This attracts individuals and groups that are uncomfortable with the control that banks or government institutions have over their money.

Bitcoin solves the “double spending problem” of electronic currencies (in which digital assets can easily be copied and re-used) through an ingenious combination of cryptography and economic incentives. In electronic fiat currencies, this function is fulfilled by banks, which gives them control over the traditional system. With bitcoin, the integrity of the transactions is maintained by a distributed and open network, owned by no-one.

2 – Limited supply

Fiat currencies (dollars, euros, yen, etc.) have an unlimited supply – central banks can issue as many as they want, and can attempt to manipulate a currency’s value relative to others. Holders of the currency (and especially citizens with little alternative) bear the cost.

With bitcoin, on the other hand, the supply is tightly controlled by the underlying algorithm. A small number of new bitcoins trickle out every hour, and will continue to do so at a diminishing rate until a maximum of 21 million has been reached. This makes bitcoin more attractive as an asset – in theory, if demand grows and the supply remains the same, the value will increase.

3 – Pseudonymity

While senders of traditional electronic payments are usually identified (for verification purposes, and to comply with anti-money laundering and other legislation), users of bitcoin in theory operate in semi-anonymity. Since there is no central “validator,” users do not need to identify themselves when sending bitcoin to another user. When a transaction request is submitted, the protocol checks all previous transactions to confirm that the sender has the necessary bitcoin as well as the authority to send them. The system does not need to know his or her identity.

In practice, each user is identified by the address of his or her wallet. Transactions can, with some effort, be tracked this way. Also, law enforcement has developed methods to identify users if necessary.

Furthermore, most exchanges are required by law to perform identity checks on their customers before they are allowed to buy or sell bitcoin, facilitating another way that bitcoin usage can be tracked. Since the network is transparent, the progress of a particular transaction is visible to all.

This makes bitcoin not an ideal currency for criminals, terrorists or money-launderers.

4 – Immutability

Bitcoin transactions cannot be reversed, unlike electronic fiat transactions.

This is because there is no central “adjudicator” that can say “ok, return the money.” If a transaction is recorded on the network, and if more than an hour has passed, it is impossible to modify.

While this may disquiet some, it does mean that any transaction on the bitcoin network cannot be tampered with.

5 – Divisibility

The smallest unit of a bitcoin is called a satoshi. It is one hundred millionth of a bitcoin (0.00000001) – at today’s prices, about one hundredth of a cent. This could conceivably enable microtransactions that traditional electronic money cannot.



Bitcoin & Crypto Vocabulary

The most complete collection of Bitcoin & Crypto Vocabulary! The Crypto community has developed a vocabulary of its own and it can be a bit confusing in the beginning, but don't worry, after reading this you will most probably be a bit more fluent in the jargon of the Bitcoin lingo.

Address or public key — Your Bitcoin address can be likened to your bank account number or e-mail. This is the only information required to receive payment in Bitcoins. It is important to note that for every transaction a different address should be used.

Accumulation — Accumulation means to buy as many coins as possible at the lowest possible price. It is often claimed that →Whales projects →fudden to accumulate as many coins as possible at a low price.

Airdrop — An Airdrop refers to the distribution of free → coins. New projects sometimes give away some of their coins to promote their product. For some Airdrops you have to actively do tasks to get them. Sites like Airdropking are specialized in finding the latest Airdrops.

Altcoin — any cryptocurrency that isn’t bitcoin. Yes, I do mean ANY!

Antminer — An antminer is a popular mining hardware, produced by →Bitmain.

Arbitrage — taking advantage of the different cryptocurrency prices, of the same coin, from one exchange to the other.

ASIC — stands for Application Specific Integrated Circuit. Specialized silicon chips which process SHA-256 algorithms in order to mind cryptocurrency and validate transactions.

ASIC Miners — the actual hardware which is used to house the ASIC silicon chip which is inherently connected to the Internet.

Ask — The price for which market participants are willing to sell their →Coins.   (opposite — →Bid)

ATH — All Time High. When a cryptocurrency breaks its current record with regard to price.

Atomic swap — An atomic swap is a token exchange of two coins located on different → blockchains, which takes place → on-chain. The exchange happens at a predetermined rate and does not require an→ exchange

Bagholder — someone holding onto an altcoin that has dropped in price, with the intent of holding onto it until it increases in price, to where they originally purchased at.

B2B — B2B is an abbreviation for business to business, in contrast to →P2P or →Peer to Peer

Bearish — an expectation of when the price is set to decrease.

BearWhale — The so-called BearWhale is a user unknown to date, who owned at least 36,000 Bitcoin in the years 2013 / 2014. According to his own account, a large part of his lifelong savings was invested at a price of about $8 per BTC. He HODLed these Bitcoins for a long time until the discussion about reducing the blocksize shook his confidence and he decided to sell. On a memorable day in 2014 (October 5), he finally sold 30,000 BTC in a block! at a price of $300 over Bitstamp. This event became famous in the crypto community as the “Battle of BearWhale”.

Bit —  It’s a sub-unit of a single bitcoin. One (1) bitcoin (BTC or B⃦) equals a million bits (1,000,000bits). This makes for ease of transacting with goods and services.

Bitcoin — When communicating Bitcoin as an idea, the first letter is capitalized. For example a sentence like — “Let us discuss the process of Bitcoin mining at lunch”.
On the other hand, bitcoin without capitalization represents a unit of account. For example — “Did you get the 3 bitcoins Trevor sent you?”

Bitcoin (maximalist) — Bitcoin (BTC) is the oldest → cryptocurrency. It was developed by → Satoshi Nakamoto. Bitcoin is currently the → cryptocurrency with the highest → market capitalization. A Bitcoin maximalist only accepts Bitcoin as the “one, true” → cryptocurrency

Bitcoin cash — Bitcoin Cash (BCH) is a → hard fork of Bitcoin, which promises to increase the → transaction speed of Bitcoin and additionally reduce the → mining fees by increasing the → block size. Increasing the block size has advantages and disadvantages, and it remains to be seen whether this approach is a sensible approach for → scaling. Bitcoin Cash has not activated → Segwit and does not intend to scale with the → Lightning Network. Bitcoin Cash and Bitcoin both want to bear the name “Bitcoin” and the ticker symbol BTC, since they both claim that they represent the “real” vision of Bitcoin, created by → Satoshi Nakamoto. One of the most influential Bitcoin Cash supporters is → Roger Ver

Bitcointalk — Bitcointalk is the largest discussion forum for cryptocurrencies.

Bitfinex — The Bitfinex is a → cryptocurrency exchange on which → Fiat can be exchanged for → Crypto.

Bitmain — Bitmain is a company that sells hardware for → mining

Bitstamp — The Bitstamp is a → cryptocurrency exchange on which → Fiat can be exchanged for → Crypto.

Block producer — In some → cryptocurrencies, only a few → nodes can publish a → block (for example → EOS). These nodes are called → block producers.

Block Reward — Number of coins →Miner receives for publishing a valid →Blocks if it becomes part of →Blockchain

Binance — Binance is one of the largest →cryptocurrency exchanges.

Block — This is a collection of transactions records in the blockchain that confirms a lot of pending transactions. At approximately every 10minutes, a new block of transactions by the process of mining gets added to the blockchain.

Blockchain — blockchain’s are distributed online ledgers, that are secured by cryptography. Look at them like public databases that anyone can access and read, however the data can only be updated by the owners. Also note, the data is copied and resides across thousands of computers worldwide. For a more in depth explanation, check out — https —//

Blockfolio — A popular app to track the current exchange rate of crypto currencies.

Block size — Denotes the size of a → block. Usually the size of a block is between a few kilobytes and a few megabytes. Some cryptocurrencies prefer to have a fixed, small block size (→ Bitcoin), while others prefer to use a larger block size (→ Bitcoin Cash). Some cryptocurrencies use a dynamic block size that can change over time (→ Monero). Still other cryptocurrencies like → IOTA or → Nano don’t have conventional block sizes because they don’t use blockchain technology. A larger block means that more transactions can be accepted per unit of time, which reduces the → transaction fees and empties the → mempool more quickly. However, large blocks make the → blockchain grow faster, which can lead to → centralization, since fewer people are willing to operate a → full node. Different perspectives on the block size has led to the → hard fork between → Bitcoin and → Bitcoin Cash.

Block Lattice — Block Lattice is an alternative data structure, which promises some advantages over the block chain. For example, a block lattice allows faster →transactions for fewer fees. The block lattice works fundamentally differently than the →Blockchain. This data structure is currently used by the crypto currency →Nano.

Block time — The average time it takes to publish a block. Longer block times result in a lower transaction speed.

Blox — A popular app to track the current exchange rate of cryptocurrencies.

Bounty — Some →ICOs pay people to find bugs, translate documents and promote the ICO. The payment for these activities is often called bounty

Breakout — A breakout usually refers to a sharp and sudden rise in prices. In rare cases, a breakout can also mean a sharp and sudden fall in prices

BTC —This is the token symbol for representing Bitcoin.

Bullish — an expectation that price is going to increase.
Bubble — A bubble occurs when the prices of a commodity (here — crypto-currencies) in the market significantly exceed the intrinsic value of this commodity. Bubbles can “burst” at any time within a very short time, which causes a →bear market to be created.

Burning — Burning crypto-currencies means sending them to an address that is/can’t be controlled by anyone. They are effectively destroyed and removed from circulation forever.

Buywall — A high demand of crypto currencies at a certain price. A buywall graphically appears as a high vertical wall on the bid side in a depth chart.

Casper — Casper is an update of the Ethereum Blockchain. It will switch the → Consensus mechanism of the Ethereum Blockchain from → POW to → POS.

Charlie Lee — Also known as Satoshi Lite, is the founder of the crypto currency Litecoin.

CMC — Coinmarketcap

Coinbase — The Coinbase is one of the largest crypto → exchanges. Coinbase accepts → Fiat. Coinbase is one of the most user-friendly exchanges.

Coinmarketcap — Usually refers to the crypto currency website But Coinmarketcap (coin market capitalizations) also means the current price multiplied by the number of all tokens.

Coins — A collective term for all cryptocurrencies.

Cold storage — Usually denotes a →Paper wallet. A cold wallet usually means that the →Private key has never come into contact with the Internet. Cold wallets are not intended for everyday use. Wallets that are intended for everyday use are called →Hot wallets.

Confirmation — This implies a hand shake i.e. a particular transaction has been sorted out by the network, added to a block of transactions and are most likely irreversible. Transactions receive a confirmation when they are included in a block and for each subsequent block. For low value transactions, a single confirmation may be considered to be secured, however waiting for 6 confirmations or more when dealing with huge volume of Bitcoins is considered best practice. The more confirmations that get stacked on top of your blocks’ transaction, the less the risk of getting your transaction reversed.

Cryptographic Signature — A particular Bitcoin wallet and its corresponding private key are connected via cryptographic wizardry. Using an appropriate private key, your Bitcoin wallet signs a transaction, which is easy for the entire network to validate that the amount of Bitcoin being sent corresponds to your signature. The magic here now is the impossibility of guessing your private key.

Cryptography — This is a branch of mathematics that helps establish tamper evidence, providing a high level of security. Software version control tools, banking and ecommerce already make use of some form of cryptography. The Bitcoin blockchain is built on cryptographic hashes, which culminate into an ever growing blockchain ensuring tamper evidence and tamper proof on the network.

Craig Wright — Also known by the nickname →Fake Satoshi or →Faketoshi is a well-known →Bitcoin cash advocate. Craig Wright himself says that he is →Satoshi Nakamoto, but he has not been able to prove this beyond doubt until today. Many people, including →Vitalik Buterin doubt very strongly that Craigh Wright is Satoshi.

Crash — A very sharp drop in prices.

Crypto(currency) — Cryptocurrency.

Crypto Kitties — Cryptokitties is a popular →dApp on the →Ethereum →Blockchain

Double Spending — The double spending problem has been a major issue with previous digital currencies, where an unscrupulous user tries to manipulate the system by transacting their Bitcoins to different recipients at the same time. The process of mining Bitcoin on the blockchain is a way of reaching consensus, i.e. to validate one of the two transactions using cryptographic hashes.

DAG — Directed acyclic graph

Dan Larimer — Programmer who founded Bitshares, Steemit and →EOS

DAO — Decentralized autonomous organization

dApp — Short for Decentralized Application. Usually this describes an app that is controlled by →Smart contracts.

Darknet — The Darknet is a special part of the “Internet”, which can only be accessed by specialized software. Compared to the normal Internet, Darknet provides higher anonymity, which makes it more difficult for the legislator to control.

Day traders — A person who tries to generate profit through active trading (from → cryptocurrencies). A day trader typically only holds a cryptocurrency for a short time (usually a maximum of a few hours) before selling it for another currency.

Decentralized — In a decentralized system, the users are linked to each other via →P2P. There is no central authority, with special privileges.  Anyone can join a decentralized network, it is difficult to take offline and – in the best case – almost impossible to hack. A real decentralized network is →trustless. Decentralized autonomous organization — A decentralised autonomous organisation is an organisation which is regulated by →Smart contracts.  The idea of a DAO comes from →Dan Larimer. The hack of the Smart Contracts of the first decentralized autonomous organization  ́The DAO ”. Leads to →Hard Fork of the →Ethereum network. The hard fork is now known as →Ethereum, the old block chain where the hack is still present is known as Ethereum Classic.

Decentralized exchange — A →stock exchange, which is regulated by →Smart Contracts. Decentralized exchanges are in theory cheaper and safer than centralized exchanges. Unfortunately they often have less good design and little Trading→Volume

Delegated Proof of Stake — Dan Larimer has proposed delegated proof of stack as an alternative to the energy-intensive →Proof of Work algorithm dPOS is a special type of →Proof of Stake

Delta — A popular crypto currency price tracking gapp

Depth chart — A graphic representation of the →Bid and →Ask offers

DEX — Decentralized Exchange

Difficulty — Difficulty is mostly used in connection with the →Hashrate Difficulty indicates the hashrate needed to mine a block in a given average time span.

Dip — A drop in price.

Directed acyclic graph — A concept that is often used as an alternative to the block chain. Coins that use DAGs are for example — →IOTA, →Nano and Byteball.

Distributed Ledger Technology or DLT — Mostly describes →Blockchain (or blockchain-like) technologies. Distributed ledger means that several participants in the network have a complete copy of all transactions. The ledger is distributed.

Downtrend — Bärischer Trend

Dump — To “dump” means to sell. “To get dumped on” means that someone else is selling so much that it causes a drop in price. If someone dumps and you yourself continue to hold the currency, it can happen that you become →Bagholder.

Early adopter — Someone who uses new technology early on. Here is someone who was interested in →Bitcoin (or e.g. →Ethereum) at an early stage. Since crypto currencies have been very →bullisch in the last few years, many early adopters have become very wealthy (→Whales).

EOS — EOS is the name of a crypto currency that uses →Dan Larimer’s →dPOS. It is a direct competitor of the →Ethereum network. EOS promises free and fast transactions and →Smart contract functions.

ERC-20 token — ERC – 20 Token (Ethereum Request for Comment) is a set of standard program code often used to create personalized →Token on →Ethereum →Blockchain as part of a →Smart contract. This functionality is often used by →ICOs. All these tokens can be used in Ethereum compatible →Wallets. Since these →Token use the Ethereum blockchain, you need Ethereum to pay the →Transactions fees for sending the tokens.

Escrow — Escrow payment means that the coins are held by a third party until both the buyer and the seller signal that the purchase/sale has gone smoothly. If there are any problems with the transaction, the third party will decide whether the buyer or the seller will get the money back.

ETF — ETF is short for Exchange-Traded Fund (A fund traded on an exchange)

Eth(ereum) — ETH is the →Tickersymbol of Ethereum. Ethereum is the second largest crypto currency. The founder of Ethereum is →Vitalik Buterin. Ethereum is the largest platform. Most →ICOs are launched on the Ethereum Blockchain. The Ethereum Blockchain hosts many →dApps and →Smart contracts. →Smart Contracts must be written on the Ethereum Blockchain in the programming language →Solidity. The consensus algorithm is →POW and not →ASIC resistant. However, the →Casper update will cause an →Hardfork of the Ethereum network and then make Ethereum a →POS block chain. The →Blockzeit is faster than the block time of →Bitcoin. The currency of the Ethereum block chain is Ether.

Etherscan — Etherscan is a popular →Ethereum →Blockchain explorer. A software that allows you to search the Ethereum block grove for transactions

Exit scam — Exit scamming (= cheating by running away). Exit scammers get people to give them money. Mostly they promise the money lenders fantastic profit expectations. However, these profit expectations are not fulfilled. On the contrary, the exit scammer runs away – goes abroad – and steals the whole investment. Many →ICOs were exit scams

Exchange (trading) — websites where you can buy, sell, and trade cryptocurrency. Some of the more popular and established trading exchanges in the US are Coinbase, Binance, Bittrex, and Poloniex.

Fake Satoshi — This “nickname” refers to →Craig Wright.

Faucet — A crypto-currency faucet issues →Coins for free (until the faucet is empty). Usually you have to solve easy tasks (for example a captcha) before using the faucet. For example, the crypto currency → Nano was completely distributed by a captcha faucet.

Fairy — (Small) number of coins that must be paid to trigger an action on the block chain. Miners earn the fees in addition to the →Block

Fiat — currency issued by the government, like the US dollar.

Flash crash — A very sharp drop in price that lasts only a few minutes before the price returns to the previous price level.

Flippening — an event where a cryptocurrency (altcoin) surpasses bitcoin in market capitalization (yet to happen at time of writing). It has been stated on numerous occasions that at the rim may be the currency to cause this event.

Fluffyponny — The pseudonym of Riccardo Spagni, a well-known →Monero developer.

FOMO — Fear of missing out. This is yet another term for greed, where you have the overwhelming emotional need to purchase a cryptocurrency when the price starts for has been skyrocketing.

Forging –the process in proof of stake blockchains where there is no block reward for crypto miners. Forgers however are able to keep transaction fees instead, as a reward.

Fork — this is where blockchain splits into another separate chain (AKA — splitting into 2 separate cryptocurrencies). These typically happen when new rules or updates to the blockchain’s code are built.

FUD — Fear, Uncertainty, and Doubt. Another negative based emotion spread intentionally by the media or a group of people within the crypto sphere that are typically looking to cause a price to drop, in hopes that they can purchase the cryptocurrency at a discount.

FUDster — anyone who is intentionally spreading FUD.

Fungibility — Fungibility. The property that coins cannot be assigned to a previous owner and are therefore 1 —1 interchangeable. →Monero has this property.

Fullnode — Node, which has downloaded and recalculated the whole blockchain.

Gains — Profit (in cryptocurrencies)

Gas — Gas is the name of a cryptocurrency that is needed to send tokens on the NEO platform. Gas is generated by holding NEO in a compatible → wallet. Gas also refers to the → transaction fees in → Ethereum. Gas is paid in → Gwei. Before you can make a transaction you have to decide how high the gas limit for the transaction should be. Gas limit is the maximum number of Gwei that you want to spend on the transaction. Complicated calculations require a higher gas limit. Increasing the gas limit will not make the Ethereum transaction faster.

Github — A popular website for uploading computer code and working together on it.

GPU — Graphics processing unit is a hardware part in a normal computer. GPUs are usually more powerful than CPUs and are therefore sometimes still used for →Mining, especially in coins that are →ASIC-resistant.

Gwei — 1 Gwei denotes 0,000 000 001 (1×10^-9) ether. 1 Gwei is therefore 10^9 Wei. The →Gas price is paid in Gwei and increasing it enhances the speed of a →Ethereum transaction.

Genesis Block — the first block to be mined in a blockchain.

Going Long — a margin trade where you profit from the price increase

Going Short — a margin trade where you profit from the price decrease

Halving –rate at which the block reward creates a new Bitcoin.

Hardcap — Hardcap usually refers to the maximum number of coins that an ICO will create/sell. Once an ICO project has reached its hardcap it will not sell any more tokens. Sometimes hard cap also refers to the maximum number of coins that can ever be put into circulation. For example, the hardcap for →Bitcoin is approximately 21 million BTC.

Hard Fork — new blockchain software that is non-backwards compatible. This causes a cryptocurrency to split into 2 separate currencies.

Hardware wallet — A hardware wallet is an electronic device that can create and store keys offline →Private . This method of storage is one of the most secure. Only using a →Paperwallets can be considered more secure. However, hardware wallets are much easier to use. Therefore, unlike paper wallets, they can also be used in everyday life. Paper wallets are more suitable only for →cold storage. The two best known hardware wallets are the Trezor and the Ledger Nano S. There are also e.g. Keepkey and CoolWallet S.

Hash Rate — The processing power of the Bitcoin network has a unit of measurement called a hash rate. In order to ensure security of the Bitcoin network, intense mathematical operations must be carried out by the network. At a hash rate of 10 Th/s, you would expect 10 trillion calculations per second.

HODL — slang for “hold your coins”. This was an un-intentional misspelling of the word “hold” which was used among the cryptocurrency community when encouraging traders to resist the urge to sell their holdings when market fluctuations were bearish.

High — The price is at a (local) maximum

Hot wallet — A wallet that is easy to use. Hot Wallets are suitable for daily use. The →Private keys are not permanently separated from the Internet.

Huobi — The Huobi is one of the largest crypto exchanges.

ICO — stands for Initial Coin Offering. This is basically crowd funding for the crypto world. These startups issue their own proprietary token in exchange for your fiat investment. You’re hoping that the exchange will result in the tokens (altcoin) gaining value once the ICO has been released

Institutional money — This is the money of industrial investors (= investment funds, large banks, other large companies)

Interoperability — Refers to the ability to perform certain functions across different →Blockchains.

IOTA — IOTA is a cryptocurrency that wants to penetrate the Internet of Things market. IOTA does not use a → blockchain, but a → tangle.

Iron Hands — Iron Hands” = A person who, even if a coin loses value, does not sell it.

IPO — Short for Initial Public Offering. It’s the stock market equivalent of a →ICO. In an IPO you do not receive coins but shares of the company. IPOs are highly regulated and only a few people have enough financial resources to participate in an IPO as an investor.

John McAfee — John McAfee, is one of the greatest known →Shills. His investment tips are therefore highly questionable.

Kraken — The Kraken is a crypto currency exchange, which allows the trading of crypto with →Fiat.

Lambo — To buy a Lambo(rghini) after getting rich through crypto is the “meme-goal” of every investor. Instead of asking when the price of a currency will rise again, people often ask jokingly “When Lambo?

Ledger (Wallet) — Ledger is the name of the manufacturer of →Hardware wallets “Ledger Nano S”, you can buy it here.

Lightening Network — is a payment protocol which is operational on top of the blockchain which is capable of millions to billions of transactions per second across the entire network. Has been touted as one of the most potent solutions to the cryptocurrency scaling issue.

Liquidity — The more liquid a market is, the less effect a purchase or sale will have on the price. A high trading volume usually also leads to high liquidity.

Long — If a position is “long”, then it makes a profit when the price rises.

Low — The price is at a relative low

Mainnet — Projects that start as →Token on other blockchains often decide to migrate to their own blockchain at a later time. These blockchains are usually completely new developed and often a →Testnet of the network is created first to check the functionality of the network. After the testnet has proven itself, the mainnet (main network) is started.

Market capitalization — Coin market cap (coin market capitalizations) means the current price multiplied by the number of all tokens

Masternode — Master nodes are a special type of →Full nodes. They usually have more functions than a normal full node. Master nodes often receive block rewards or fees. However, in order to operate a master node, certain conditions must be met. Not every crypto currency has master nodes.

Mempool — Short for memory pool. In effect, the mempool is a list of all (→Bitcoin) transactions that have been sent to the network but are not yet included in any block

Merkle Tree — A Merkle Tree (also Hash Tree) is a concept from computer science, which is used in (some) crypto currencies. The root (the value from which the tree or graph extends) is also called the Merkle root or top hash.

Metamask — Metamask is a browser extension which can be used as →Ethereum →Wallet. Metamask also makes it easier to interact with →Smart Contracts within the browser.

Mining (pool) — Mining is the process of finding a correct solution of the →Hash(function) in a →POW network. People who actively participate in guessing an accepted solution of the hash function are called miners. If a miner is successful, he can publish a valid →Block. In return he (or she) receives in compensation and the miner reward (a certain number of newly created coins). In principle, anyone can become a Miner, but for most people it will not be financially rewarding. In →POW currencies, mining secures the network from attacks. A Mining Pool is a collection of miners who work together and share the reward among themselves.

Mining — This is a process performed by special nodes on the Bitcoin network called miners. It involves them competing against themselves to solve a computationally intensive cryptographic puzzle in order to decide who gets to add the next block of transactions to the blockchain, as well as securing the network. As a result the miner who completes/solves this puzzle earns a reward in the form of Bitcoins. Mining requires special computer hardware and electricity to get up and running, and the puzzle difficulty keeps increasing.

Mining fee — Transaction fee

Mineable — A coin that is distributed and/or secured by →Mining

Monero — Monero is a crypto-currency which allows anonymous transactions.

Moon — When Moon ” – is the question that asks how long you have to keep your investment →hodlen until you can buy →Lambos.

Multisignature — A multisignature →Wallet needs more than one →Private key to send/sign outgoing →Transaction

Myetherwallet — It is the name of a very popular website that provides a simple interface to the Ethereum Blockchain. There you can easily create your own private key online and use the website as a wallet. →ERC20 tokens are also supported by myetherwallet.  Myetherwallet is one of the most popular →Ethereum wallets.

Nano — Nano is the name of a cryptocurrency that uses → Block Lattice technology to enable free, fast and environmentally friendly transactions.

Nano ledger  — Nano Ledger” is the name of a → hardware wallet “Nano Ledger.

Node — Every computer that participates in the network represents a node. A → full node is a special type of node.

Offchain — If a transaction is not recorded on the blockchain, it takes place offchain

OkEX — OkEX is one of the largest crypto currency exchanges.

OTC — Over the a purchase / sale of a (usually large amount) of coins that does not take place on a public exchange. This type of buying / selling can be one of the best ways to trade a large amount of coins if there is no liquidity. An over the counter deal usually leaves the price untouched.

Onchain — When a transaction is written to →Blockchain it is called an onchain.

P2P — A Peer-to-peer network generally involves a group of computers having direct interaction in an organized manner without a central authority to authenticate the communication process between nodes. Bitcoin adopts a similar approach, whereby each user/node broadcasts the transactions of others on the network, without a central bank.

PND — Pump and Dump

Ponzi scheme — A fraudulent system in which victims are encouraged to invest in an → ICO or company that does not conduct a legitimate business, but only by making a profit to find more and more lenders. So the system builds on exponential growth and will implode over time and will not be able to pay off many investors.

POS — Proof-of-Stake (POS)

POW — Proof-of-Work (POW)

Premine — A premine (pre-mining) takes place if a developer sends a certain number of coins to his own address before the blockchain is made public. Premine can be fraudulent, but it can also be seen as a means of paying for development and listing on exchanges.

Privacy (coin) — Privacy coins usually use a → bitcoin-like ledger system, but add technology that obscures the path of the transaction. → Monero and ZCash are popular examples.

Private Key — This is for your eyes only secret piece of alphanumeric data which proves your right of ownership to spend Bitcoin from your Bitcoin wallet. It can be likened to your Bank vault combination lock. Private keys are either stored on a remote server for web/app based wallets; stored on your computer for software wallets; or they can even be printed on a piece of paper or metal. There specially designed hardware wallets that are similar to flash drives.

Proof of stake — Proof-of-stake (POS) is a consensus algorithm in which the amount of coins you have is directly related to the probability that you can publish a block. Proof of Stake is very environmentally friendly compared to Proof of Work. There is no mining at Proof of Stake.

Proof of work — Proof of Work is a consensus algorithm to achieve global → consensus. This algorithm is used by → Bitcoin and other cryptocurrencies. With proof of work, → miners calculate various → hashes with high energy consumption.

Public key — A public key is a cryptographic key that can be shared publicly without any problems. Transactions are often sent to the public key. It is important never to confuse the private key with the public key. The public key can be thought of as the address of a mailbox for which the private key is the key to unlocking it.

Pump — With a pump, a few → Whales (a less liquid) coin ask very strongly in a short time, which results in an immense price increase.

Pump and dump — A → pump and → dump is a scam that requires a group of investors to buy a certain (less liquid coin) at the same time. As soon as uninitiated investors start to develop → FOMO and invest in the coin due to the price increase, all the initiated investors start selling off their previously purchased coins. This sale in turn leads to a drop in prices. The portfolio of uninitiated investors often lose a large amount of value in a very short time.

Reddit — Reddit is a popular American social media platform. It serves as a news aggregator, but also hosts some popular cryptocurrency discussion forums, such as — / r / cryptocurrency and / r / bitcoin.

Rekt — Someone is destroyed when their investment is (almost) completely gone.

Return on investment — Return on Investment (ROI) measures the percentage of profit made in relation to the start investment.

Ripple — Ripple is the → cryptocurrency of the Ripple network. It is currently the third largest cryptocurrency according to → Coinmarketcap

Roadmap — A roadmap is a strategic plan that defines goals, specifies a sequence of goals and shows a rough schedule until the goals are reached.

Roger Ver — Roger Ver is the CEO of He is one of the 5 founding members of the Bitcoin Foundation and a strong supporter of the → Bitcoin Cash → fork.

Satoshi (unit) — 1 Satoshi = 0.00000001 BTC

Satoshi (Nakamoto) — Satoshi Nakamoto is the anonymous founder of Bitcoin. Until today it is not known which person or which collective is behind the nickname Satoshi Nakamoto. The smallest unit in Bitcoin is called Satoshi → Satoshi (unit).

Satoshi Lite — Nickname of Charlie Lee, founder of Litecoin. (→ Charlie Lee)

Sat (s) — 0.00000001 BTC is 1 Sat (oshi), the smallest unit of Bitcoin

Scaling — Scaling. Many → cryptocurrencies have problems supporting many transactions within a short time and keeping them cheap. Many different cryptocurrencies try to solve this problem in the most intelligent way possible.

Scam — Scam for fraud or rip-off.

SEC — SEC stands for the Securities and Exchange Commission. The SEC is an American (stock exchange supervisory) authority that is responsible, among other things, for protecting investors from fraudsters

Seed words — A set of (semi-) random words with which you can derive your private key. Seed words, like private keys, must be kept secret as they can give full access to the account.

Segwit — Segregated witness, or SegWit, is an update of the Bitcoin network, which creates more space in blocks and simplifies the compatibility of Bitcoin with the Lightning Network

Sell ​​wall — A “sale wall” means that many sales orders have been placed at a specific price.

SHA-256 — SHA-256 is the hash function used in Bitcoin

Sharding — Sharding means dividing a chain into several separate chains.

Shill — A shill is someone who (often paid) advertises a cryptocurrency. The goal of a shill is to trigger FOMO. He is thus the “antagonist” to the Fudster, whose goal is to trigger FUD.

Shitcoin — Shitcoin is a derogatory (but sometimes sarcastic / lovingly-meant) collective term for all “useless” coins. Bitcoin maximalists often unironically refer to all coins, except Bitcoin, as Shitcoin.

Short — If a position is “short”, it makes profit when the price drops

Short squeeze — A short squeeze is a rapid rise in price that occurs when there is a shortage of supply and excess demand triggered by people who have an open short and are forced to buy back the coins to minimize their losses, which is what Price keeps going higher and higher.

Side Chain — A sidechain is a separate blockchain that is linked to a mainchain.

Sign — Before you can send a → transaction you have to sign it with the → Private key. In wallets, this often happens automatically in the background.

Smart contract — Smart contracts are self-executing contracts in which the conditions are stored as snippets of code on the blockchain. Smart contracts, once published, cannot be changed again. Bugs in smart contracts can therefore have devastating consequences.

Softcap — Softcap is the minimum amount of capital that an ICO would like to collect to start the project

Softfork — A soft fork is a rule change (update) of the node software. A “soft fork” will not create “new” coins, since a soft fork is fully backward compatible.

Solidity — Solidity is a contract-oriented programming language used to write smart contracts.

Spooning — Spooning means that a → token is copied to another blockchain.

Spread — The spread is the difference between the supply and demand price.

Stablecoin — Stable coin” refers to cryptocurrencies that are supposed to maintain a “stable value”, for example because they are covered with collateral. One of the most famous “stable coins” is the → “tether” that is covered with the US dollar.

Staking — Analogous to mining, there is the term staking in → Proof of Stake currencies. By holding coins, “staked”, you get part of the block guard.

Supply — Offer, the number of coins circulating in the market

Support — Denotes a price level that has not fallen below several times.

Tangle — Tangle is the alternative to blockchain used by IOTA.

Telegram — Telegram is a communication app similar to Whatsapp that is popular in the cryptocurrency world.

Testnet — A testnet is a test network to be able to test new functions for the → mainnet in a secure environment.

Tether — Tether (USDT) is a cryptocurrency whose value tries to mirror that of the US dollar. It is the best known → “stable coin”.

Ticker symbol — Ticker symbols are the, usually three-digit abbreviations, of the individual cryptocurrencies with which they are listed on the → exchanges. Examples — BTC, ETH, XRP, LTC, …

Token — Coins → Smart Contract generated coins that do not have their own blockchain are usually referred to as tokens.

Trade (s / r) — A trade is a trade. Someone who trades is a trader.

Transaction (fee) — Transaction fees are fees that can be used to give your transaction a higher priority. The higher the transaction fee, the faster (relatively speaking) a transaction is processed by the network.

Transaction speed — The speed at which a transaction is carried out.

Trezor — Trezor is the name of a popular → hardware wallet. You can buy it here

Trustless — Cryptocurrencies are trustless if you don’t have to trust anyone that the system works

Uptrend — An uptrend is a → bullish phase.

Vitalik Buterin — Vitalik Buterin is a programmer and co-founder of → Ethereum. He published the Ethereum → white paper at the age of only 19. He is also known for his very special fashion taste.

Volume — The amount of trade that is done.

Wallet — This is similar to a physical wallet that stores your cash, considering that it safely stores your private key hence making it possible to carry out transactions. You can send and receive bitcoins, as well as view your account balance and transaction history.

Weak hands — Investors who sell immediately when the price drops and thus push the price slump further. Weak hands are not → hodlers.

Whale — A whale is someone who has a lot of money to trade and can generate massive price increases or price drops.

White Paper — In the crypto world, a white paper is a document that explains the intentions and strategies as well as the technical aspects of a project in detail.

XRP — XRP is the → ticker symbol of the cryptocurrency Ripple.


Congratulations! If you made it through (no cheating) you can now consider yourself to be educated in the wonderful world of Crypto abbreviations and vocabulary, you speak fluent Bitcoin!

Thank you for taking your time to read this, HODL on!


Why do you need Bitcoin?

Learn why Bitcoin is superior to fiat currency. and what advantages it can give you. These are just a few examples of advantages more can be said.

1. Bitcoin can be used as an independent store of value

Bitcoin, unlike any other fiat currency, is independent and does not come under any bank. For example, unlike a government currency, bitcoin cannot be printed and hyper-inflated regularly. The assured shortage makes Bitcoin an attractive store of value despite its enormous fluctuations in value.

The Bitcoin developer Satoshi Nakamoto designed Bitcoin for exactly this purpose and it was apprehended on the first block of Blockchain (the so-called Genesis Block). There he left a message: “The Times 03 / Jan / 2009 Chancellor on brink of second bailout for banks”

2. Bitcoin makes donations to government critical organizations possible

In addition, Bitcoin accounts cannot be frozen, which can be particularly beneficial in dictatorial governments. While system-critical organizations such as Wikileaks’s financial transactions in fiat currencies have been under scanner by governments, Bitcoin continues to allow these organizations to raise funds

3. Anyone with a mobile can open a Bitcoin account  

If you do not want to have any account maintenance fees, then Bitcoin is the right place, because Bitcoin does not need banks. You can even send your bitcoins around the globe in no time without having to create a bank account. This is particularly interesting in countries with poor infrastructure because it is often difficult to open an account with a bank, which makes the lives of people extremely difficult. Bitcoin offers an easy way out.

4. Bitcoin allows cheap and fast international transfers

Unlike banks, Bitcoin does not differentiate whether the recipient of a transaction is local or global. Therefore, foreign transfers or “sending money home” with Bitcoin are extremely cheap. You only pay the normal Bitcoin transaction fee, which is usually in the cent range. In addition, the transaction is usually completed in 10 minutes.

5. You can pay someone more anonymously

Some people don’t want to be an open book and don’t want every bank transfer openly viewable. Bitcoin can also help here because bitcoin transactions are much more anonymous than a traditional bank transfer.

6. One can speculate on a price increase

Trading with Cryptocurrency can (exactly like when trading stocks et.c) make you money, this is extremely hard if you daytrade. An easier method is to buy and HODL your coins in hope for a price increase (the usual "This isnt financial advice text" do your OWN research).


Bitcoin is interesting for many applications and there are many reasons why Bitcoin should or should not be used in some situations. Nowadays, for many of the features listed here, there are alternative coins that can be used instead of Bitcoin or are more appropriate than Bitcoin in some aspects.

For example, Bitcoin only offers a relatively weak pseudo-anonymity, whereas the cryptocurrency “Monero” offers a good and much safer anonymity.

Disclaimer:  DYOR! Do your research before buying anything. Do not invest more than you can afford to lose.The authors of this website may or may not have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets. Trading is on your own responsibility, do your own research. The authors of this text takes no responsibility on how you as a reader act on this text, this is not financial advice.


Credits to:

6 reasons why Bitcoin has value!

What makes Bitcoin valuable?

Everyone knows by now that Bitcoin is worth a lot of money, but what are the reasons for the emence value growth? What makes Bitcoin and other Cryptocurrencies valuable?

In this page we will very shortly present the 6 main reasons that makes Bitcoin valuable.


Firstly there is value in scarcity, only 21 million Bitcoin will ever exist, and millions have already been lost due to loss of private key and so on, put simply, the supply is limited.


Gives Bitcoin value since you and everyone else easily can verify where a transaction came from and where it went.


Is one of the larger value makers for Bitcoin and blockchain since the entire chain is stored and verified through a growing number of nodes all around the world.

No borders

Bitcoin is borderless and therefor can be spent, sent and seen across the globe.


Bitcoin is not controlled and cannot be controlled by any government or organization, this gives great value in Freedom.

Backed by Math

Math is the sixths value giver for Bitcoin, since the Blockchain is backed by math in contrast to fiat currency. This enables real life backing of the currency.

//Christoffer Junros


Bitcoin: A Peer-to-Peer Electronic Cash System (White paper)

Think you are ready to read the white paper? I'm sure you are, this link will take you to, the original upload of the White paper after Satoshi made it public. External link to the Bitcoin White paper

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