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The jargon buster

A quick guide to the language of bitcoin...

The jargon buster

_{A new language enters our everyday conversations when we start talking bitcoin so let's start by busting some jargon for you. Here's a quick guide to help you navigate the most commonly used terminology.}

_{Decoding the terminology}

_{Multi-signature wallet:}_{A cryptocurrency wallet that requires multiple private keys to authorise a transaction, increasing security. Businesses use multi-signature wallets to ensure no single person can move funds without group approval.}_{Bitcoin halving:}_{An event that reduces the reward for mining bitcoin by half, occurring approximately every four years. This mechanism is built into bitcoin’s code to control its supply and make it a scarce asset, similar to gold.}

_{Hash rate:}_{The total computational power used to process and secure transactions on a blockchain network. A higher hash rate makes a blockchain more secure, reducing the risk of attacks. Investors monitor it to gauge network health.}_{Bitcoin blockchain:}_{A decentralised digital ledger that records all bitcoin transactions securely and transparently.}

_Off-chain:_{Anything done outside of the main blockchain network by a secondary layer or chain.}_{Lightning Network:}_{A second-layer solution for bitcoin that enables faster and cheaper transactions by processing them off-chain, making it practical for everyday purchases.}

_{Exchange Traded Funds (ETFs):}_{Investment funds that trade on stock exchanges, allowing investors to buy shares representing assets like stocks, bonds, or cryptocurrencies. Investors use bitcoin ETFs to gain exposure to bitcoin’s price movements without directly buying or holding bitcoin.}

The jargon buster

_{Decoding the terminology}

Remittance payments: Money transfers sent by individuals working abroad to family or friends in their home country.

Crypto / cryptocurrency exchange: A platform where users can buy, sell, and trade cryptocurrencies like bitcoin.

Custodian wallet: A cryptocurrency wallet where a third party holds and manages private keys on behalf of the user. Beginners often use custodian wallets (like those provided by exchanges) because they don’t have to manage private keys themselves.

GDP (Gross Domestic Product): The total value of goods and services produced within a country in a specific period, measuring economic activity.

Debt-to-GDP ratio: A measure of a country's debt compared to its GDP, indicating its ability to repay obligations and used to determine if it is at risk of a financial crisis.

Unfunded liabilities: Future financial obligations, such as pensions or social security, that a government has promised but hasn't set aside money for.