Bitcoin: Peer-to-peer (p2p) electronic money.
The popularised name, Bitcoin, was the first crypto-currency, created back in 2009 in response the 2007 financial crisis. There are now over 1,000 alt-coins on the market, some similar and others offering different advantages such as larger block size for lower costs, faster transaction times or easier mining (which again equates back to lower cost). There are also different flavors of bitcoin (BTC).
BCC – bitcoin cash
BTG – bitcoin gold
BTD – bitcoin diamond
The majority of coins utilize a technology called block-chain whereby transactions are cryptographically confirmed by a decentralized community (as opposed to a bank or money agent which is centralized). There is a 7 page white paper which is worth a read, but basically, the decentralization adds a level of safety and lowers costs in a way that a single bank or entity cannot (or will not) do. The transactions costs in cases are ~ 100x lower and the speeds are in the order of seconds compared to days for the fiat counterpart. Some of the words used appear to be complicated, but have been simplified for your convenience.
As a quick summary, one may want to draw parallels between posting a letter and sending an email. 30 years ago, before the advent of the internet, post would have been optimal, a developed system whereby messages are put into envelopes, stamped and sent to a sorting office for onward distribution to a final destination. However, along came fax machines, shortly followed by email (and then social media). The public did not know what the “@” sign was nor how it would be used. Now with billions of users all connected via the web, the choice mechanism for sending a message is undoubtedly email over post.
More traceable than any money that has ever preceded it. Many of the naysayers claim that the sole purpose of bitcoin is for negative uses. However, this could not be further from the truth. At the time of writing there are now over a quarter of a million outlets that accept the payment method across the globe and this number is increasing by the thousands on a continual basis. Bitcoin (and most crypto-currency) offers a payment means as good as the USD, EUR, GBP, JPY or any other major currency or source of wealth transfer including gold with the added advantage that unlike all those that has preceded it, it is actually traceable via a chain of connected transactions.
Reaching out worldwide, bitcoin provides a facility for transfer of value to the un-banked (estimated 6 billion) and totally un-banked (estimated 2 billion) people on the planet. The term un-banked describing a person who does not have a good facility to transfer movey via the banking system. These people stand to gain huge efficiency from an electronic payments transfer system that is cheaper, faster and removed from an isolated banking system that wields control over its users.
Having executed 6,000 trades in 60 days. This product has begun to take priority over other asset classes.
The underlying technology, by which bitcoin or other crypto-currencies are transmitted. The blockchain itself is a series of blocks which are confirmed in order by a decentralized community. When one block is confirmed, it becomes irreversible (or extremely expensive to reverse). The blockchain used for Bitcoin uses a time stamp along with the transaction to create the new hash.
Shared among a network with no one owner (such as the internet). There are many advantages and disadvantages between centralized and decentralized systems which are used. One such example, by the military, spreading resources across nodes so that it cannot be wiped out in single attack.
A method used for thousands of years whereby messages are encrypted in a manner that prevents them from bring intercepted or read by an unwanted third party sometimes referred to as adversaries.
Dynamically stable and resistant to attacks.
An object which can be transmitted cross border. Something that can cross nation states with low or zero friction.
a mathematical construct which improves on the blockchain in the sense that the peers approve preceding transactions according to a given algorithm. This reduces / eliminated the mining fee which subsequently enables micro transactions.
A term used for a bad or corrupt node. In a decentralized system, the bad actor cannot have significance or power over the process, whereas in a centralised system if the bad actor is the trusted party, then it will corrupt the entire system.
A person who does not own bitCoins or any other crypto currency. Also known as a “no-coiner”.
A term used when one of the alt-coins generates a market cap greater than that of bitcoin. This has recently been approached with ETH and BCC but has not yet occurred to date.
The reverse of a flippening. When an alt-coin gets close to the market cap of bitcoin, but then radically reduces in price resulting in a low % of BTC market cap.
An event whereby bitcoin hits / passes $10,000 per coin. This has the impact of waking up the mass market to the realisation of bitcoin as a credible asset class. This occurred at the latter end of Nov 2017.
When a trader frantically tries to cover an underweight position after a massive bitcoin price rally.
What an uninformed person uses as the term for block-chain before then claiming their company is in fact a block-chain. This term was first used in an interview with Bloomberg.
A person who has access to the banking system in a limited form. The can send money locally but the costs, timescales & complexities anything beyond this are prohibitive.
A person who has no access to the banking system. This mainly applies to billions of people on the African continent.
The price differential between the Asian and Europe live trades. In November / December 2017 the basis reached 20% (Asia leading Europe).
When > 90% of the top 100 currencies by market cap are down over > 10% on a 7 day range.
Understanding the lightening network:
Understanding a DDoS attack: