Midterm 01 - Definitions (Fall 24)

BIPS

Bitcoin improvement proposals

publicly proposed changes to bitcoin that are voted upon

Difficulty

Number of guesses on average winning miner is making (today around 90 trillion)

Hash rate

number of guesses entire network makes each second (620 quintillion)

Target value

the numeric value that miners use to compare their candidate block hashes (attempting to be lower than)

UTXO

Unspent transaction output

Coin-oriented tracking of transactions

Nonce

one of the values used to generate the blockhash/block ID

The nonce (and therefore blockhash) is regenerated until it is below a target value

Pools

miners who share work and payouts (centralized)

Mitigating private key theft/loss risk

seed phrases (24 words corresponding to number corresponding to bits from private key)

multisig solutions