Important terms related to Bitcoins-2 {Post-16}

Hash: The output generated by a hash function is called a hash. 

Hash Function: It is a computer algorithm which takes any input data

and then runs it through a few calculations and shifting processes before generating a fixed length output called the hash. Passwords are commonly stored as a hash so that your actual password is never stored anywhere.Depending on the algorithm used, the probability of two inputs having the same hash does exist. In the Bitcoin system, a hash is difficult to produce but easy to verify and forms the backbone of the whole mining process.

Hash Rate: The number of hashes calculated by the hardware is the hash rate. Commonly used indices are Megahashes/second and Gigahashes/second.

Miner: It is a computer software or a hardware that is designed to calculate the hashes needed for the inception of a new block. The miner also

gets a reward in the form of bitcoins and transaction fees for aiding in the

creation and the maintenance of the bitcoin blockchain.

Node: Every participant is a node in the bitcoin network, certain client allow you to save a copy of the blockchain on your computer while some don’t. Nevertheless, they are both nodes.

Satoshi: The smallest unit of a Bitcoin which amounts to 0.00000001 BTC is called a Satoshi after the creator of Bitcoin i.e., Satoshi Nakamoto.

Transaction free:This is a fee that is added voluntarily to any transaction so as to add the transaction to the block. The fee also determines whether a transaction will be added or not since a higher transaction fee gains priority over lower transaction fee. Since it is voluntary it may be added with

any transaction but it is the sender who always pays the fee since bitcoin transactions are always one sided. For transactions that are large which means a high addition needs to be done to the blockchain a fee is expected and charged by most online services.

Virgin Bitcoin: When a miner generates a block that has never been spent a Virgin bitcoin is produced as a reward. Thus it is the only true anonymous portion of the bitcoin system. All subsequent transactions can be traced back to the virgin bitcoin.