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To understand Bitcoin, we need to understand what it is and what Cryptocurrency is. But again, to understand these things, we need to get down to the list of terms used in Cryptocurrency. Or else the whole thing would be as good as alien to us. But first, let us understand what Bitcoin and Cryptocurrency are.
What Is Cryptocurrency?
Cryptocurrency, when explained very simply, is a form of money that is digitally exchanged and handled. It is free of any central force regulating its every transaction and exchange. They are run on the principle of Blockchain technology and peer-to-peer functioning. It has open-source software. And everyone who wants to participate in this form of money exchange actively can participate. No rule or regulation binds anyone to it or forces anyone against it.
Bitcoin
Bitcoin is internationally famous and is known to be the first Cryptocurrency. It is a leader of some sort among the 5,000 other existing cryptocurrencies. Nowadays, Bitcoin is the most trending topic for investors, and every sort of media is eager to cover it up voraciously. Bitcoin coverage is simply inescapable.
It is one Cryptocurrency that is handled only digitally. It is a decentralized form of money with no central authority governing every transaction and the people who transact. It requires neither a bank nor any head regulator. But to get to the basics of Bitcoin, you need to understand the glossary of terms to make it easier to comprehend the whole thing.
There are certain apps like The News Spy from where you can safely make your transactions or even buy Bitcoins.
The Glossary of Bitcoin Related Terms
The few base terms involved in Cryptocurrency or Bitcoin are as below:
- Encryption – When you encrypt data, you are hiding the data from public view. It becomes a secret then. But to access that data, you need to have a password or code that will immediately let you in on the data.
- Cryptocurrency – Cryptocurrency is as good as the traditional form of money that goes around in every country of the world, but it is country-specific. Here Cryptocurrency is a common form of digital money that is the same throughout the world.
- Wallet – A wallet is where digital money is stored in, sent from and received.
- Blockchain is as good as the ledger that you know exists in a bank. But unlike the bank ledger, it is public and decentralized for all users to see. A whole group of people here need to authenticate the ledger, unlike the bank ledger.
- Nodes can be likened to the person who maintains the bank ledgers. They are responsible for preserving and circulating the copies of transactions that have been updated, and even a new block added to the ledger must be updated.
- Private Key – It is a series of any arbitrary digits needed to complete the transaction and a wallet. It essentially has to be kept a secret, unlike the address.
- Bid Price – It is that price that is quoted for someone to sell out an asset.
- Ask Price – The purchase price of the asset.
A Few Basic Constituents Of Bitcoin
Bitcoin has four basic constituents that are:
- Software – At the core of everything, Bitcoin ultimately rules how it should be used and passed on. Everything about Bitcoin is this software that specifically is the bitcoin program. It is available 24×7.
- Cryptography – Bitcoin and cryptography are entangled with one another. Without encryption, there would have been no digital transfer of money, and hence Bitcoin would have been invalidated. It is simple mathematics that is calculated using machines instead of humans.
- Hardware – Much hardware is required to run and solve cryptography, and it is the CPU power that helps the software to run. This hardware is different from the hardware of normal home or commercial computers.
- Miners – Miners are those people who participate in the game of Bitcoin.
Conclusion
So now armed with the basic list of terms used in Bitcoin, you might be able to participate in the game, but of course, after treading with much caution. Here the alarm bell is sounded because Bitcoin is very volatile, and you may stand to lose money if its value falls.
