Jargon Buster: Bitcoin
The start of 2021 has seen Bitcoin at the forefront of FinTech news, following its record valuation, surpassing the $30,000 mark (£22,000) this month. Whilst Bitcoin has become a household name, the technology surrounding cryptocurrency and blockchain as awhole can prove confusing. Hopefully this glossary can help!
Bitcoin: The best-known cryptocurrency, founded in 2009 by Satoshi Nakamoto. It is an open source peer to peer payment network, meaning that intermediaries (central banks and governments for example) are omitted from the transfer of money.
Ether: The second-largest crypto currency by market capitalization, and built on top of the Ethereum blockchain.
Blockchain: Blockchain is the technology underpinning cryptocurrencies. It can be defined as a system or database in which a record of transactions made in a cryptocurrency is maintained across several computers which are linked in a peer-to-peer network. Simply put, blockchain is literally a chain of blocks, with each block containing data. As new data comes in, it is entered into a new block, and once this block is filled with data, it is chained on to the previous block. In each block, there is a cryptographic ‘hash’of the previous block, a timestamp, and transaction data.
Hash or Hashing: Hashing is a method of cryptography (information protection through the use of code) that converts data into a unique string of text.
Ethereum: The best known, and most actively used blockchain. While blockchain is currently associated predominantly with cryptocurrencies, by use of ‘Smart Contracts’, it can be used for other functions, including the secure sharing of medical data.
Smart Contracts: An agreement between two people in the form of computer code. As they are run on the blockchain, theyare stored on a public database, and therefore cannot be changed. Due to being processed by the blockchain, smart contracts are able to be sent automatically without a third party.