Bitcoin Terms That Beginner Traders Should Know

Beginner guide

Bitcoin Terms That Beginner Traders Should Know (Courtesy)

Bitcoin managed to shake the world once again as it broke the 2017 record in value. After many months of speculation, the price for 1 Bitcoin has finally crossed $20,000 and many experts believe that this cryptocurrency even has the potential to cross $50,000, which would be a historical moment.

The recent surge in value attracted many new traders which are keen to make a profit with Bitcoin. Not only that, but this cryptocurrency also has numerous advantages over the standard FIAT currencies when it comes to being used as a payment method. Some of those advantages are instant transactions, user anonymity, no added or hidden fees, and lower general fees.

As the stage is getting filled with new traders, we wanted to take a moment and explain several Bitcoin terms which can be very helpful for the novices as they hunt for profit and work to become wealthy people. Let’s check them out.

Miners/ Mining

Through mining, traders are able to earn Bitcoin, thus make money. The process of mining is creating new Bitcoin by solving computer puzzles. The people who perform these actions are called miners. The more puzzles you solve, the more Bitcoins you will earn. The reason why mining is so popular is that it allows miners to earn money without actually investing a penny.

Miners need a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC) to set up a mining rig.

Trading Sites

Trading sites are platforms where traders buy and sell Bitcoins. Some of these sites even use the technology to their best benefit by calculating the future price of Bitcoin and thus, enabling people to make the biggest possible profit.

As we all know, it is hard to determine what the future price of Bitcoin will be, since the cryptocurrency has a high volatility rate. That means that its value is a subject to frequent changes. In many cases, the price for 1 Bitcoin changes day by day.

One of the trading sites that uses an AI-powered system which is able to calculate the future price of Bitcoins is https://bitcoinera.app/. This site’s system determines the value for 1 Bitcoin with great precision, which is why it has a huge daily profitability rate. There are thousands of users from all around the world here and that is why it is considered as one of the most reputable trading sites.

Cryptography

We previously mentioned that one of the biggest advantages that Bitcoin has is that it provides traders with a certain level of anonymity. That benefit is given to them thanks to the process called cryptography. Cryptography is a method used to protect various information through the use of codes.

In Bitcoin’s case, the protected information is the trader’s true identity – hence why they are provided with a certain level of anonymity. Now, mind you, we say a certain level because even though most of the information is hidden, that doesn’t mean that traders are completely off the grid. Full anonymity cannot be provided.

Blockchain

Blockchain is probably one of the most popular terms in this sphere and one that you sure came across multiple times. But, what does it mean?

A blockchain is a log which contains all of the transactions that Bitcoin traders do. In this area, we also come across the term block, which is a fraction of a blockchain. If the blockchain is the full log of activities, a block would represent one recorded transactions.

Bitcoin users are in charge of verifying Bitcoin transactions and listing them in the blockchain. For every completed transaction, they receive Bitcoins as a reward.

Satoshi Nakamoto

Finally, we have one Asian name that we can meet on almost every Bitcoin article, but no one knows what it means. Satoshi Nakamoto is the founder of Bitcoin and the man that completed the first transaction with this cryptocurrency.

The tricky part here is that Satoshi is actually not the founder’s true name – it’s a pseudonym. The real identity of this person remains unknown to this day and although there have been many speculations, we are still struggling to determine who that is.

Some rumours that were circulating were that Satoshi is a Japanese male that is in his mid-40s, but it was never confirmed. Some of the criticism of the claim that Satoshi is Japanese is that there is no way that is true, considering the fact that Bitcoin used the English language when it was created. If the person was Japanese, it would be logical for him or her to incorporate its native tongue.

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