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Bitcoin is Developed by - Sathoshi Nakamoto
He unknown person who developed Bitcoin is known as
SATHOSHI NAKAMOTO
Quick Glossary
This quick glossary contains many of the terms used in relation to bitcoin. These terms
are used throughout the book, so bookmark this for a quick reference and clarification.
address (aka public key)
A bitcoin address looks like 1DSrfJdB2AnWaFNgSbv3MZC2m74996JafV - they consist
of a string of letters and numbers starting with a “1” (number one). Just like you
ask others to send an email to your email address, you would ask others to send
you bitcoin to your bitcoin address.
bip
Bitcoin Improvement Proposals. A set of proposals that members of the bitcoin
community have submitted to improve bitcoin. For example BIP0021 is a proposal
to improve the bitcoin URI scheme.
bitcoin
The name of the currency unit (the coin), the network and the software
block
A grouping of transactions, marked with a timestamp, and a fingerprint of the
previous block. The block header is hashed to find a proof-of-work, thereby vali‐
dating the transactions. Valid blocks are added to the main blockchain by network
consensus.
blockchain
A list of validated blocks, each linking to its predecessor all the way to the genesis block.
confirmations
Once a transaction is included in a block, it has “one confirmation”. As soon as
another block is mined on the same blockchain, the transaction has two confirma‐
tions etc. Six or more confirmations is considered sufficient proof that a transaction
cannot be reversed.
difficulty
A network-wide setting that controls how much computation is required to find a
proof-of-work.
difficulty target
A difficulty at which all the computation in the network will find blocks approxi‐
mately every 10 minutes.
difficulty re-targeting
A network-wide re-calculation of the difficulty which occurs once every 2106 blocks
and considers the hashing power of the previous 2106 blocks.
fees
The sender of a transaction often includes a fee to the network for processing their
requested transaction. Most transactions require a minimum fee of 0.5mBTC.
hash
A digital fingerprint of some binary input.
genesis block
The first block in the blockchain, used to initialize the crypto-currency
miner
A network node that finds valid proof-of-work for new blocks, by repeated hashing
network
A peer-to-peer network that propagates transactions and blocks to every bitcoin
node on the network.
proof-of-work
A piece of data that requires significant computation to find. In bitcoin, miners
must find a numeric solution to the SHA256 algorithm that meets a network wide
target, the difficulty target.
reward
An amount included in each new block as a reward by the network to the miner
who found the proof-of-work solution. It is currently 25BTC per block.
secret key (aka private key)
The secret number that unlocks bitcoins sent to the corresponding address. A secret
key looks like 5J76sF8L5jTtzE96r66Sf8cka9y44wdpJjMwCxR3tzLh3ibVPxh
transaction
In simple terms, a transfer of bitcoins from one address to another. More precisely,
a transaction is a signed data structure expressing a transfer of value. Transactions
are transmitted over the bitcoin network, collected by miners and included into
blocks, made permanent on the blockchain.
wallet
Software that holds all your bitcoin addresses and secret keys. Use it to send, receive
and store your bitcoin.
About The Bitcoin
Bitcoin is a fully-distributed, peer-to-peer system. As such there is no “central” server
or point of control. Bitcoins are created through a process called “mining”, which in‐
volves looking for a solution to a difficult problem. Any participant in the bitcoin net‐
work (i.e., any device running the full bitcoin protocol stack) may operate as a miner,using their computer’s processing power to attempt to find solutions to this problem.
Every 10 minutes on average, a new solution is found by someone who then is able to
validate the transactions of the past 10 minutes and is rewarded with brand new bitcoins.
Essentially, bitcoin mining de-centralizes the currency-issuance and clearing functions
of a central bank and replaces the need for any central bank with this global competition.
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