Can You Hold a Crypto-Conversation?
With Thanksgiving in one day and cryptocurrency being a hot topic, you would like to be able to hold a crypto-conversation when it comes to Bitcoin.
With Thanksgiving in one day and cryptocurrencies being a hot topic, you are going to want to be able to talk the talk when it comes to Bitcoin. If not, you’ll at least want to understand what grandpa Rick is saying at the dinner table when he tells the family he is thankful he HODL’d .
There is a set of words that you can be confident will come up in a crypto-related conversation. Having a good understanding of these words will allow you to better navigate and understand cryptocurrencies and will provide you with a decent basis to grow your crypto-related knowledge upon.
Regarding the Bitcoin Network
First, you will want to be aware of these four words associated with the Bitcoin Network. There are a lot of technicalities in cryptocurrency, but I believe knowing these four words will give you a strong understanding for all the tech that comes after.
Blocks: Each transaction that occurs on the Bitcoin Network, is recorded into a 1MB file called a block. A block contains some of the most recent transactions that took place on the Bitcoin Network. A block can be thought of as a ledger.
Blockchain: We know that a block is a ledger of the most recent transactions that occurred over the Bitcoin network, and we know that each block is limited to 1MB in size… but this means that the entire transaction history of Bitcoin will not fit into a single block.
This is where the Blockchain comes into fruition; because the entire transaction history of Bitcoin cannot fit into a single block. Instead, the blocks build on top of each other, stacking new blocks (new information regarding the network's transaction history) on top of old blocks (the past record of the Bitcoin network’s transaction history), to create the Blockchain, the record of every transaction that has ever occurred over the Bitcoin network.
Nodes: Any computer that is connected to the Bitcoin Network is considered a node. Every node keeps a copy of the Blockchain and verifies if the chain sequence is valid or not if a node finds that a block is not in consensus with a majority of the nodes on the network, it will reject that block.
Mining: Miners are the individuals who keep the bitcoin network afloat. Their duties include mining: verifying transactions (adding new blocks to the Blockchain) and releasing new Bitcoin into circulation (when they receive their reward for block discovery).
Bitcoin Miners run protocols through powerful computers that attempt to solve the complex algorithms that verify blocks and release new Bitcoin into circulation. When a Miner discovers