Crypto Glossary A-Z
Here's a rundown of some of the words you may come across in the Crypto world:
Cryptocurrency addresses are used to send or receive transactions on the network. An address usually presents itself as a string of alphanumeric characters.
Alternative cryptocurrencies launched after Bitcoin, any cryptocurrency other than Bitcoin.
Bitcoin is the first decentralised, open source cryptocurrency that runs on a global peer to peer network, without the need for middlemen and a centralised issuer.
A Blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
Also known as tokens, cryptocurrencies are representations of digital assets.
Ethereum is a blockchain-based decentralised platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party interference.
Fear Of Missing Out / Fear Uncertainty Doubt. These emotional terms have been related to inexperienced investors in the crypto market. As the market rises sharply, people jump in because of FOMO and then when the market comes back down FUD kicks in about their decision.
Forks create an alternative version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network.
The term HODL (or hodl) originated in 2013 with a post to the bitcoin forum. A simple spelling mistake of HOLD led to this common meme in the crypto world.
Stands for Initial Coin Offering, An unregulated means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the companies new cryptocurrency is sold to early backers of the project in exchange for legal tender, but usually Bitcoin, Ethereum or NEO.
Mining is the act of validating blockchain transactions. The necessity of validation warrants an incentive for the miners, usually in the form of coins. In this cryptocurrency boom, mining can be a lucrative business when done properly. By choosing the most efficient and suitable hardware and mining target, mining can produce a stable form of passive income.
A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
All cryptocurrency transactions involve a small transaction fee. These transaction fees add up to account for the block reward that a miner receives when he successfully processes a block.
A file that houses private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for. The name wallet is slightly misleading as a wallet doesn't contain your crypto currency, it holds the private keys for you to access the specific blockchain where your cryptocurrency is recorded.
A bitcoin whale is term in the cryptocurrency world used to refer to individuals or entities that hold large amounts of bitcoin. Equally, it can apply to large holders of any specific cryptocurrency. Whales can have have a disproportionate impact on prices, fuelling speculation that price swings maybe due to whale manipulation. In 2017 a Bloomberg report suggested that 40% of Bitcoin is held by around 1000 individuals.