Important terms related to Bitcoins-1 {Post-15}

Bitcoins: It is a crypto currency that is generated and used within the Bitcoin ecosystem.

Block:Blocks are individual links in a chain of transactions verification.Transactions that are outstanding get added into a block and are verified approximately every ten minutes.Each new block generated helps with the verification of all previous blocks since it adds upon the previous one. Data is permanently recorded in the Bitcoin distributed network through files called blocks.

Block Chain: Each block that is generated has the hash of the previous block included in it. This creates a link to every coin ever mined in the Bitcoin network. When a lot of such blocks come together you get a block chain. A block chain can also considered as history of transactions which is shared by all nodes that are mining or participating in the Bitcoin ecosystem or basically a digital ledger. A complete copy of the Bitcoin blockchain of a will have every movement of every coin ever mined.

Difficulty:About every 2016 blocks that are realised,the Bitcoin ecosystem adjusts the difficulty of verifying the blocks depending upon the time taken for the previous 2016 blocks. This is roughly considered to be increment of 20-30% of the previous value.

The difficulty parameter is adjusted so as to keep average Bitcoin generation rate static and only one block will verified on an average of ten minutes for the next 2016 blocks.This "difficulty" parameter is usually expressed as a number.The difficulty is designed to be inversely proportional to the target.

   

  Double Spending:Trying to spend Bitcoin or any digital currency that has already been spent in previous transaction.

Generate Bitcoin: When a miner finally finds a block,it gets virgin Bitcoins as a reward. The number of bitcoin awarded for verifying a new block is 25 BTC for each segment of 210000 blocks.It is used to be 50 BTC per block but this number goes down every subsequent 210000 blocks or so.It has been 4 years since the inception of Bitcoin when the first 210000 were verified and since the rate of generation is constant, it will be another 4 years before the number of BTC is halved again .The total amount of Bitcoins that will ever be mined has been calculated to be approximately 21 million BTC.