The Crypto Mining Glossary

The vocabulary of crypto mining is packed with anglicisms and technical words. Here is a mining glossary to help you find your way.

A

• Altcoin: short for « alternative coin. » It refers to all cryptocurrencies other than Bitcoin.
• ASIC (Application-Specific Integrated Circuit): computer chips built for a specific use. Bitcoin mining hardware uses ASICs to compute the SHA-256 algorithm as fast and efficiently as possible, putting them in the best position to successfully mine Bitcoin blocks.

B

• Bitcoin (BTC): a decentralized digital currency created in 2008 by « Satoshi Nakamoto. » Unlike conventional currencies, bitcoin is not issued or administered by a banking authority.
• Block: an individual unit of the blockchain. Each block contains the hash of the previous block, the confirmed transactions and a number called a nonce. Whoever creates a block must find a nonce such that the block’s hash falls below a certain target — which can only be done by trying nonces one after another until a suitable one is found; the harder the target, the harder it is to find. Block creation is made deliberately difficult to prevent someone from spending bitcoins and then creating and pushing their own blockchain that omits the spending transaction, effectively erasing that record and letting them double-spend. When a valid block is created, it is distributed across the network and work on a new block begins.
• Blockchain: a technology that stores and transmits information transparently, securely and without any central controlling body. It is a kind of large ledger of accounts that anyone can access.

D

• Difficulty: how hard it is to create new blocks (for machines to find a hash below a given target). Difficulty is automatically adjusted every 2,016 blocks so that Bitcoin blocks are validated roughly every 10 minutes.
• Double spend: an attempt to send the same bitcoin twice. In principle, the machines prevent this, but such an attack is possible against users who accept unconfirmed transactions, in combination with a 51% attack.

E

• Exchanges: trading platforms or marketplaces where you can exchange fiat (euro, dollar, etc.) for cryptocurrencies and vice versa.

F

• Fiat: government-issued currencies created by central banks (euro, dollar, etc.).

G

• GPU: graphics processing unit.

H

• Hashrate: the computing power delivered by mining machines (miners).
• HODL (hold): keeping your cryptocurrency and not selling.

M

• Mining: the act of verifying transactions via miners (machines). In exchange, those who mine receive fresh bitcoins and transaction fees as a reward.

P

• Payout: the minimum number of coins required before the pool makes a payment to your wallet.
• Pool: a website that connects several miners so they all work together and share the rewards in proportion to their machines’ computing power.
• Proof of Work: a system for validating a blockchain’s blocks using the computing power (hashrate) supplied by a computer.
• Proof of Stake: a system for validating transactions made within a blockchain.
• Public key: an address in the form of a line of code (a string of letters and numbers, or a QR code) used to send or receive cryptocurrencies.

R

• Rig: all the hardware without its case, on a wooden, aluminum or other support.
• ROI: return on investment.

S

• Satoshi: the smallest unit of bitcoin value. 1 satoshi equals 0.00000001 BTC.
• Satoshi Nakamoto: the pseudonym of Bitcoin’s creator, whose identity remains unknown to this day.
• Smart contract: autonomous programs that automatically execute the conditions and terms of a contract, with no human intervention needed once started.

W

• Wallet: a file that stores bitcoin addresses and the private keys needed to use them.
• Whale: a person who holds more than 1,000 BTC.
• White paper: a document used to present blockchain or cryptocurrency projects, aimed at convincing investors to buy.

Want to dig deeper into some of these topics? See our articles on the Bitcoin revolution and on crypto mining. Found this mining glossary useful? Feel free to share it.