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Important Bitcoin Terms   

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Bitcoin is one of the most popular and trending topics around the world right now. It doesn’t matter if you’re a crypto enthusiast or you want to become a Bitcoin investor; the first step is to learn important terms about Bitcoin and the Bitcoin ecosystem that will help you navigate the crypto community. For this purpose, we have compiled a list of important terms that you should know as a beginner.   

What is Bitcoin?   

Bitcoin is a decentralized and distributed cryptocurrency that was created in order to be used as a viable alternative to traditional currencies when it comes to transferring funds online. The cryptocurrency is based on blockchain technology which is the network where the transactions are verified and transferred from the sender to the receiver. Today there are over 70 million Bitcoin wallets, and there are over 15,000 businesses worldwide that accept BTC payments which mark the adoption of Bitcoin as a currency.   

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Hot Bitcoin Wallet   

A Bitcoin wallet is essentially a software program that is used to store BTC, but it is also used in the transaction of Bitcoin funds. Basically, the difference between a hot and cold wallet is that the cold wallet is specifically created as a storage option that is not connected to the Internet, whereas the hot wallet provides its functions while it’s connected to the Internet. In the category of hot wallets, there are mainly three types of wallets – desktop, online, and mobile wallets.   

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The desktop wallet is installed on your computer, and it can be used for trading, for example, but it is not as advantageous as the other two types of wallets because they can be used on the move, especially the mobile wallet. The benefit of using the online wallet is you can access your wallet from any browser.   

Automated Trading   

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Automated trading is a type of online trading that is conducted automatically without supervision or manual assistance from the user. It is widely used for other types of assets, and actually, it makes about 2/3 of the entire financial market. The advantage of automated trading is that allowed allows users to save more time because it facilities trading automatically, and all they need to do is set up their account.   

For example, an Oil Profit is a type of automated trading system which offers you to trade oil at a high profitability rate of up to 90%. Also, you only need to spend roughly 20 minutes per day on the site. You can open an account by depositing $250.   

Bitcoin Miner   

The Bitcoin miner is a user on the network that works on a computer system specifically built for mining that encompasses high-quality GPU and ASIC. The Bitcoin miners are responsible for adding the blocks of transactions on the network and their verification. This is a very important task because, without it, it would be impossible for the BTC transactions to reach the receiver. In addition, they need to spend time working out complex computational puzzles.   

So, they also are required to possess certain math skills and to be aware that working on the blockchain network is a tedious and energy-consuming process, especially since the network is quite saturated with a lot of miners that not only work as solo miners but also mine as part of groups. For example, there are a lot of different mining pools and farms.   

Bitcoin Halving   

Bitcoin Halving is an event designed in the blockchain network to cut in half the block reward assigned to every miner. The halving event is set up with the goal to control the inflation rate of Bitcoin, and it is also cutting in half the BTC that in circulation because the miners are responsible for generating new Bitcoins on the network. In 2021, after the halving in May 2020, the block reward was set at 6.25 BTC, while the next halving is expected to happen in 2024 with a reward of 3.125 BTC.   

In comparison, the block reward was 50 BTC in 2009 before the first halving in 2012. In conclusion, it is very important to do your own research, set reachable financial goals, and learn as much as possible about Bitcoin, especially if you’re looking to invest in BTC.   

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Milcah Lukhanyu
Milcah Lukhanyu
I cover tech news across Africa. Drop me an email at [email protected]

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