Glossary of Terms

ASIC (Application-Specific Integrated Circuit)  

A specialized type of computer chip designed specifically for a single task, such as mining Bitcoin. ASICs are far more efficient at this task than general-purpose computers.

Bitcoin

A decentralized digital currency that operates on a peer-to-peer network, enabling users to send, receive, and store value without the need for intermediaries like banks.

Blockchain 

A digitally distributed, decentralized, and immutable public ledger where all Bitcoin transactions are recorded in blocks that are linked together in chronological order.

Block

A batch of Bitcoin transactions that is added to the blockchain approximately every 10 minutes. Miners compete to add new blocks to the blockchain and are rewarded with newly created Bitcoin (block subsidy) and transaction fees.

Block Subsidy  

The amount of newly created Bitcoin awarded to miners each time they successfully add a new block to the blockchain. This reward halves approximately every four years in an event known as the "halving."

BTC (Bitcoin) 

The currency unit of Bitcoin. BTC is used to denote amounts of Bitcoin in transactions and balances.

Cryptography

The practice of secure communication using mathematical techniques. In Bitcoin, cryptography is used to secure transactions, control the creation of new units, and verify the transfer of assets.

Difficulty Adjustment

The process by which the Bitcoin network automatically adjusts the difficulty of mining a new block approximately every two weeks to ensure that blocks are added to the blockchain at a consistent rate of one every 10 minutes.

Double-Spending

A potential flaw in digital cash systems where the same digital token can be spent more than once. Bitcoin's blockchain and consensus mechanism prevent double-spending by ensuring that once a transaction is confirmed, it cannot be altered.

Efficiency

A measure of how much energy a mining rig uses to produce computing power, expressed in watts per terahash (W/T). The lower the W/T, the less electricity the rig needs to perform, making it more energy-efficient and potentially more profitable. For example, a rig with 15 W/T uses 15 watts of energy to generate one terahash of computing power.Energy Consumption:  

FPPS (Full Pay Per Share)  

A mining pool payment method where miners are paid not only for the blocks found by the pool but also receive a share of the transaction fees included in each block, making payments more predictable.

Halving 

An event in Bitcoin's protocol that occurs approximately every four years, reducing the block subsidy (the amount of newly created Bitcoin) by half. This process limits the total supply of Bitcoin to 21 million BTC.

Hashrate  

A measure of the computational power used by a Bitcoin mining rig or the entire network to solve the cryptographic puzzles that secure the blockchain. Hashrate is typically measured in terahashes per second (TH/s) or petahashes per second (PH/s).

Hashprice

The expected revenue a miner can earn per unit of hashrate, usually expressed in dollars per terahash per day ($/TH/day). Hashprice is influenced by factors such as Bitcoin’s price, mining difficulty, and transaction fees.

Hosting Contract

An agreement between a Bitcoin miner and a hosting provider (like Blockware) that covers the physical installation, operation, and maintenance of mining rigs in a data center. The contract typically includes a fixed electricity rate and technical support services.

Immersion Cooling

A method of cooling Bitcoin mining rigs by submerging them in a specialized non-conductive liquid that efficiently dissipates heat, allowing for better performance and longevity of the hardware.

Kilowatt Hour (kWh) 

A unit of energy measurement equivalent to one kilowatt (1,000 watts) of power consumed over one hour. It is commonly used to calculate the cost of electricity for Bitcoin mining.

Megabyte (MB)

A unit of digital information storage, typically used to measure the size of data files. In Bitcoin, each block on the blockchain has a maximum size of 4 megabytes, limiting the number of transactions that can be included.

Mining Pool 

A group of Bitcoin miners who combine their computational resources (hashpower) to increase their chances of mining a new block. The rewards are then distributed among all pool participants based on the amount of hashpower they contributed.

Node

A computer that participates in the Bitcoin network by validating and relaying transactions. Nodes enforce the rules of the Bitcoin protocol, ensuring that all transactions and blocks comply with the consensus rules.

Petahash (PH/s) 

A measure of hashrate equivalent to 1,000 terahashes per second (TH/s). It represents a large amount of computational power used by mining rigs to solve the cryptographic puzzles in Bitcoin mining.

Proof of Work (PoW)

The consensus algorithm used by Bitcoin to secure the network. PoW requires miners to solve complex mathematical puzzles, proving that they have expended computational effort before adding a new block to the blockchain.

Revenue (Mining Revenue) 

The income generated by Bitcoin miners from the block subsidy and transaction fees. Revenue is influenced by factors such as hashrate, hashprice, and energy costs.

SHA-256

The cryptographic hash function used by Bitcoin to secure transactions and generate new blocks. SHA-256 converts input data into a fixed-length string of characters, ensuring data integrity and security.

Terahash (TH/s)

A measure of hashrate equivalent to one trillion hashes per second. It is used to quantify the computational power of a Bitcoin mining rig.

Transaction Fee

The fee paid by users to have their Bitcoin transactions processed and confirmed by miners. Transaction fees are included in the block reward and are an essential part of a miner’s revenue.

True-up

An adjustment made to account for discrepancies between estimated and actual energy usage in a hosting contract. If a mining rig uses less energy than anticipated due to downtime, a credit is applied to the account.

Uptime  

The amount of time a mining rig is operational and actively mining Bitcoin. Uptime is crucial for maximizing mining revenue, as more uptime means more opportunities to earn rewards.

Wallet 

A digital tool that allows users to store, send, and receive Bitcoin. Wallets can be software-based (online or mobile) or hardware-based (physical devices) and provide varying levels of security and control.

Watts (W) 

A unit of power measurement that indicates the rate of energy consumption by electrical devices, such as Bitcoin mining rigs. Lower wattage generally means better energy efficiency for a mining rig.