Glossary of Terms

Bitcoin explorer is connected to a bitcoin node and retrieves data from the BTC blockchain so that the user can check the balances and transactions at bitcoin addresses by entering the BTC address or transaction ID.

Bitcoin address is a string of 26-35 numbers and letters (starting with 1 or 3). We may send or receive bitcoin payments to this address. Any user can generate any number of addresses for free. A bitcoin address can also be assigned to you by a stock exchange or bitcoin wallet.

Block is a collection of BTC transactions. Bitcoin blocks are 1MB in size, are generated every 10 minutes and are stacked in a blockchain to bind to each other.

Hash 160 is an economical notation of Bitcoin address to save space in a block.

Input of a transaction is a reference to the output (or outputs) of a previous transaction. All new inputs are added together and their amount (minus transaction fee) is used to generate the output of the new transaction. In this way, bitcoin transactions are sequenced in time.

Output contains an instruction to send bitcoins. The output value is calculated in satoshi. A transaction may have more than one output – its amount must equal the amount of inputs. Since each output of a given transaction is necessarily dependent on input from a previous transaction, the final value of the inputs must be sent as output. So if the transaction entry is 5 BTCs, but we only want to send 2.5 BTCs in this transaction, Bitcoin will generate 2 BTC outputs (each minus a transaction fee of miners): one to the destination address and the other back to our address (this output is called change).

Bitcoin transaction is a transfer of bitcoins from an address to an address that is sent to the BTC network and collected into individual blocks. It contains a reference to outputs from previous transactions (which it uses as inputs). Transactions are not encrypted, so they can be viewed in a browser. The BTC transaction cannot be unilaterally returned after being sent and confirmed.

Confirmation – When our transaction is saved in a new block, it is so to speak mined to the depth of one block. Each new block of transactions that is mined into the chain after that block represents one new confirmation for our transaction. 4 confirmations are considered to be sufficiently secure for most payments.

Private key is a secret number that allows a Bitcoin user to send bitcoins. Each BTC wallet contains one or more private keys that are mathematically associated with all public addresses generated by the wallet. Because the private key is used to control bitcoins at a given address, it is very important that it is securely backed up – ideally on paper, offline. Sometimes a mnemonic seed is derived from a private key – 12 to 24 random English words in a row that serve as a backup and the private key can be recovered from them.

BTC QR Code – Bitcoin public address is in the form of a string of characters, but it can also be expressed in the form of a QR code that can be scanned through mobile wallets.

Merkle Root – The root node of the “Merkle” tree, a descendant of all hash pairs in the tree. Block headers must contain a valid Merkle root that comes from all transactions in that block.

Nonce is a random number that miners are looking for. Its value must be such that the block hash starts at the specified number of zeros.

Reward per block means new bitcoins distributed by the network to the miner for each successfully resolved block.

Block height is the number of blocks before a given block in the chain.