Blockchain is a system of recording information in a way that makes it difficult or impossible to modify, hack, or cheat the system. A blockchain is essentially a digital ledger that is duplicated and distributed throughout the network of computer systems on the blockchain.
FAQ
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What is Blockchain?
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Block
Blocks reside on the Bitcoin blockchain. Blocks connect all transactions together. Transactions are aggregated into individual blocks and verified by mining every ten minutes. Each subsequent block strengthens the verification of the previous blocks, making it impossible to double-spend bitcoin transactions (see double-spend below).
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BIP
Bitcoin Improvement Proposal or BIP is a technical design document that provides information for the bitcoin community or describes a new feature for bitcoin or its processes or environment affecting the bitcoin protocol. New features, suggestions and design changes to the protocol should be submitted as BIP. The BIP author is responsible for building consensus within the community and documenting dissenting opinions.
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Blockchain
DThe Bitcoin blockchain is a public record of all Bitcoin transactions. You may also hear the term "public ledger." The blockchain sequentially displays each and every record of bitcoin transactions, going back to the very first. The entire blockchain can be downloaded and openly verified by anyone, or you can use a block explorer to verify the blockchain online.
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Block Height
The block height is simply the number of blocks connected together in the blockchain. For example, the height 0 refers to the very first block, called the "Genesis Block".
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Block Reward
When a block is successfully mined on the Bitcoin network, there is a block reward that helps incentivize miners to secure the network. The block reward is part of a "Coinbase" transaction, which may also include transaction fees. Block rewards halve roughly every four years; see also "halve".
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Change
Let's say you spend $1.90 at your local supermarket and give the cashier $2.00. You get back 0.10 cents in change. The same logic applies to bitcoin transactions. Bitcoin transactions consist of inputs and outputs. When you send bitcoins, you can only send them in one whole "issue". The change is then sent back to the sender.
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Cold Storage
The term cold storage is a general term for various ways to back up your bitcoins offline (disconnected from the internet). This would be the opposite of a hot wallet or hosted wallet, connected to the internet for day-to-day transactions. The purpose of using cold storage is to minimize the chances of your bitcoins being stolen by a malicious hacker and is commonly used for larger sums of bitcoins.