Bitcoin as Digital Gold Flashcards

Flashcards for reviewing Bitcoin lecture notes.

Bitcoin

A consensus network that enables a new payment system and a completely digital money.

Bitcoin

Refers to protocol, software, and community.

bitcoins

Units of the bitcoin currency.

Private Key

Used to generate digital signatures without being revealed.

Public Key

Used by anyone to verify digital signatures.

Medium of exchange

Swappable and fungible, portable, divisible, easily recognizable and resistant to counterfeiting.

Store of value

Reliably saved, stored, and retrieved, retain usefulness and storage properties over time, non-perishable and with low preservation cost.

Unit of account

The unit of account against which the value of every other good is measured.

Inflation

A hidden tax.

Private money

A medium of exchange or payment issued by a non-governmental body without legal privileges.

Miners

Transactions are validated and cleared and are bundled in and sequentially chained.

Hash Function

This function map input data of arbitrary size to a fixed size output.

Blockchain

A history of transactions resilient to network attackers because it cannot be altered without huge resources.

Efficiency

Lower power consumption for higher hash rate.

Bitcoin Mining

New bitcoins are awarded to miners for each block.

Block

A collection of transactions bundled together.

Blockchain

A series of blocks.

Proof-of-Work

Cryptographic puzzle miners compete to solve.

Encryption

The process of converting plain text into ciphertext.

Decryption

The process of converting ciphertext into plain text.

Combining

Combining

Blockchain

A distributed, decentralized, public, digital ledger that is used to record transactions across many computers so that the record cannot be altered without alteration of all subsequent blocks and the consensus of the network

Cryptography

A method by which one secret is transformed mathematically in a way that only someone else holding a specific piece of information can reverse the transformation and discover the original secret.

Uncensorable

A permission-less system that anyone can use, and no one controls.

Peer to Peer Network

A network in which participants (nodes) all maintain a copy of the ledger and follow a set of rules for validating new transactions, adding them to new blocks, and broadcasting to the rest of the network.

Merkle Tree

A data structure used to efficiently summarize the data in a block, ensuring that transactions are not tampered with.

Mining

The process by which transactions are added to the blockchain, involving solving complex cryptographic puzzles.

The measure of the computational power being used by miners to secure the Bitcoin

A measure of how difficult it is to find a new block compared to the easiest it can ever be.

Difficulty

The risk that a bitcoin owner could spend the same bitcoin more than once.

Double Spending

The first block of a blockchain.

Genesis Block

A change to the Bitcoin protocol that is not backward compatible, requiring all users to upgrade to the new protocol software.

Hard Fork

A computer running the Bitcoin software and participating in the Bitcoin network.

Node

A valid block that is not part of the main chain, usually because another block was added to the chain first.

Orphan Block

A sequence of characters or encoded information identifying when a certain event occurred

Timestamp