Some NewBitcoin words you might hear
NewBitcoin provides a new approach to payments and, as such, there are some new words that might become a part of your vocabulary.
Address
A NewBitcoin address is similar to a physical address or an email. It is the only information you need to provide for someone to pay you with NewBitcoin. An important difference, however, is that each address should only be used for a single transaction.
Bit
Bit is a common unit used to designate a sub-unit of a NewBitcoin - 1,000,000 bits is equal to 1 NewBitcoin (NBTC). This unit is usually more convenient for pricing tips, goods and services.
NewBitcoin
NewBitcoin - with capitalization, is used when describing the concept of NewBitcoin, or the entire network itself. e.g. "I was learning about the NewBitcoin protocol today."
NewBitcoin - without capitalization, is used to describe NewBitcoins as a unit of account. e.g. "I sent ten NewBitcoins today."; it is also often abbreviated BTC or XBT.
Block Chain
The block chain is a public record of NewBitcoin transactions in chronological order. The block chain is shared between all NewBitcoin users. It is used to verify the permanence of NewBitcoin transactions and to prevent double spending.
Block
A block is a record in the block chain that contains and confirms many waiting transactions. Roughly every 10 minutes, on average, a new block including transactions is appended to the block chain through mining.
BTC
BTC is a common unit used to designate one NewBitcoin.
Confirmation
Confirmation means that a transaction has been processed by the network and is highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like $1000 USD, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.
Cryptography
Cryptography is the branch of mathematics that lets us create mathematical proofs that provide high levels of security. Online commerce and banking already uses cryptography. In the case of NewBitcoin, cryptography is used to make it impossible for anybody to spend funds from another user's wallet or to corrupt the block chain. It can also be used to encrypt a wallet, so that it cannot be used without a password.
Double Spend
If a malicious user tries to spend their NewBitcoins to two different recipients at the same time, this is double spending. NewBitcoin mining and the block chain are there to create a consensus on the network about which of the two transactions will confirm and be considered valid.
Hash Rate
The hash rate is the measuring unit of the processing power of the NewBitcoin network. The NewBitcoin network must make intensive mathematical operations for security purposes. When the network reached a hash rate of 10 Th/s, it meant it could make 10 trillion calculations per second.
Mining
NewBitcoin mining is the process of making computer hardware do mathematical calculations for the NewBitcoin network to confirm transactions and increase security. As a reward for their services, NewBitcoin miners can collect transaction fees for the transactions they confirm, along with newly created NewBitcoins. Mining is a specialized and competitive market where the rewards are divided up according to how much calculation is done. Not all NewBitcoin users do NewBitcoin mining, and it is not an easy way to make money.
P2P
Peer-to-peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of NewBitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
Private Key
A private key is a secret piece of data that proves your right to spend NewBitcoins from a specific wallet through a cryptographic signature. Your private key(s) are stored in your computer if you use a software wallet; they are stored on some remote servers if you use a web wallet. Private keys must never be revealed as they allow you to spend NewBitcoins for their respective NewBitcoin wallet.
Signature
A cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of NewBitcoin, a NewBitcoin wallet and its private key(s) are linked by some mathematical magic. When your NewBitcoin software signs a transaction with the appropriate private key, the whole network can see that the signature matches the NewBitcoins being spent. However, there is no way for the world to guess your private key to steal your hard-earned NewBitcoins.
Wallet
A NewBitcoin wallet is loosely the equivalent of a physical wallet on the NewBitcoin network. The wallet actually contains your private key(s) which allow you to spend the NewBitcoins allocated to it in the block chain. Each NewBitcoin wallet can show you the total balance of all NewBitcoins it controls and lets you pay a specific amount to a specific person, just like a real wallet. This is different to credit cards where you are charged by the merchant.
