Cryptocurrency Dictionary for Beginners.
FUD? Mining? Bitcoin? Address? Cryptocurrency? What in the Blockchain are these folks yapping about?!
If you’ve kept a keen eye open for the past few years, you’ve probably seen these terms strewn about. Especially within this past year when Bitcoin and most Altcoins stampeded on a historic bull run. Cryptocurrency seems to be discussed everywhere nowadays. The news, the radio, the Internet, your Uncle Greg, podcasts and virtually any other modern form of media aggregate.
Truth be told, you’re only going to be hearing and seeing more of this burgeoning field for the foreseeable future! It’s time to make some sense of all of this. Cryptocurrency may seem quite hieroglyphic to many, but I’ve put together this list of must-know terms, minus that technical computer-speak mumbo jumbo. Aunt Jane and Grandma Edith can finally understand why Uncle Greg keeps telling everybody he’s HODLing during Thanksgiving dinner! 🦃
An address is a unique string of letters and numbers that is used to receive cryptocurrency from another person.
Altcoins (alternative coins) are any cryptocurrency other than Bitcoin. There are currently over 1,500 altcoins in existence. Most altcoins possess their own separate blockchain.
ATH is an acronym for All Time High. This refers to the highest priced milestone a cryptocurrency has achieved. You can identify a cryptocurrencies ATH by the biggest peak on its historical (date range: ALL) price chart.
Bitcoin (with a capital B) refers to the overall concept of the Bitcoin P2P protocol & Bitcoin payment network. Bitcoin is the first open-source & decentralized cryptocurrency invented by Satoshi Nakamoto. The Bitcoin whitepaper was published in 2008, and Bitcoin was released in 2009.
Blocks are the main component of blockchain technology. Blocks contain a summary of validated transactions that were made through a specific cryptocurrency network over a given time period. Along with a summary of validated transactions, blocks also contain a block header, which includes the necessary metadata to ‘chain’ blocks together. Once a block has been appended to the blockchain, it is improbable to alter.
The key technology behind most cryptocurrencies, blockchain serves as a cryptographically-secure distributed ledger of records on a network. A blockchain in cryptocurrency is comprised of tamper-proof blocks that record all cryptocurrency transactions for a set period of time. Blocks get appended to a blockchain in specified intervals through a process called mining.
Cold storage refers to cryptocurrency wallets that are not accessible to the internet. Some examples of cold storage include hardware wallets (also referred to as hard wallets) and paper wallets. Cold storage is a safer approach to storing your cryptocurrency, as they’re offline from potential breaches or hackers.
Confirmation means a cryptocurrency transaction has been verified (via the mining process) and added to a block that contains many other transactions. Confirmations (plural) are more blocks containing many more transactions that have been added to the blockchain.
Cryptocurrencies (also referred to as coins) are digital currencies that exist on their own blockchain. A common misnomer with cryptocurrency is it’s an actual ‘computer file’ that can be sent that stores value. This is not the case. Owning cryptocurrency means you have a special ‘password’ (known as a private key) that grants you access to a specific amount of coin allocated to it on the distributed ledger known as blockchain.
Ether (ETH) is the main cryptocurrency of Ethereum. It is known as the ‘crypto-fuel’ for the Ethereum network, because along with ether being a cryptocurrency, it is also used to execute smart contracts.
Created by Vitalik Buterin, Ethereum is an open source decentralized platform that focuses on smart contracts and executing the code of decentralized applications (DApps). Ethereum runs on its own currency called ether.
An Exchange is a website or mobile application where individuals can buy and sell cryptocurrencies using fiat money, bitcoin or altcoins.
A fork is the splitting of a blockchain into an alternate version. Forks may result from disagreement between community members / developers / miners on which direction the cryptocurrency project should take. This disagreement may create a new set of governing rules (aka protocol), thus forming either a hard fork or a soft fork.
FUD is any form of distributed information that elicits Fear, Uncertainty, Doubt. In the cryptocurrency world, FUD is most commonly spread by individuals who are intentionally trying to manipulate the price of a specific coin. FUD may also be unintentionally elicited by misinterpreting cryptocurrency news articles and/or media coverage.
A FUDster is an individual who is intentionally spreading FUD.
Hardware wallets (also known as hard wallets) are a form of cryptocurrency cold storage. Resembling the appearance of a USB thumb drive, hardware wallets store your private keys offline from potential breaches or hackers. Note — not all cryptocurrencies are supported by hardware wallets!
In the world of cryptocurrency, HODL simply means HOLD. HODLing cryptocurrency is the process of holding onto your cryptocurrency over long periods of time, regardless of market fluctuations. HODL originated from a popular Bitcoin message board back in 2013, in which a user stated he was HODLing his BTC. It has then snowballed into the most popular meme in cryptocurrency.
Hot storage refers to cryptocurrency wallets that are connected to the internet. Some examples of hot storage include online wallets, software wallets, and storing your cryptocurrency within an online exchange account. The opposite of hot storage is cold storage.
Market cap (shortened term for market capitalization) is the total amount of fiat money currently invested into a cryptocurrency; used to illustrate a coins dominance. Market cap is calculated by multiplying the coin’s price by the circulating supply.
Mining is the process of expending computing power to process and verify cryptocurrency transactions. The mining process effectively adds blocks (these blocks contain the latest transactions) to the blockchain. Miners are incentivized with mining rewards and TX fees.
Mooning is a rapid price increase in a specific cryptocurrency. Interchangeable with the phrase ‘To the Moon!’ 🚀🌖✨
Paper wallets refer to a physical print-out of your public key(s) and private key(s). This form of cold storage is typically treated like expensive jewelry and stored folded in multiple (as a backup precautionary) waterproof and fire-resistant safes. Funds that are stored on paper wallets can be accessed by sweeping or importing.
A private key is the PRIVATE portion of a wallets key pair. It is a long string of random characters that proves you have access to cryptocurrency in your wallet. Private keys allow you to spend cryptocurrency from a wallet, therefore they must NEVER be revealed to anybody. This is especially the case for paper wallets, where your private key gets printed on a piece of paper (which can be sneakily photographed by somebody in an attempt to steal your coins. 📸💸)
The public key of a wallets key pair is used to create an address to receive cryptocurrency. A public key is created from a private key in a key pair.
Satoshi Nakamoto is believed to be the pseudonym for the programmer (or programmers) who invented Bitcoin.
Software wallets (commonly referred to as soft wallets) are cryptocurrency wallets that are based in software. Soft wallets come in three forms: desktop wallets, mobile wallets and web wallets. Soft wallets are a form of hot storage.
A symbol (also referred to as ticker symbol) is a unique identifier for a particular cryptocurrency. Examples of symbols include: XRP — the symbol for Ripple, XBT/BTC — the interchangeable symbols for Bitcoin, XLM — the symbol for Stellar, TRX — the symbol for TRON, and LTC — the symbol for Litecoin.
Tokens are units of value that are built on top of existing platforms such as Ethereum, Omni, Nxt & NEO. Examples of tokens include EOS, TRON & OmiseGO (each built on top of Ethereum) & Red Pulse (built on top of NEO). Tokens are often distributed to backers of an ICO as a reward for funding the initiative.
A trader (in the context of this Medium blog post: a cryptocurrency trader) is one who buys and sells cryptocurrency.
TX stands for transaction. A transaction is the transfer of cryptocurrency. Transactions are collected in blocks and permanently recorded on the blockchain through the confirmation process.
Wei is the lowest denomination of ether. It is similar to a satoshi of bitcoin.
A whale is an individual or group of people who hold an immense amount of cryptocurrency. Although speculative, whale’s are known to hold in excess of 10,000 bitcoin.
A whitepaper (in the cryptocurrency world) is the main component of an ICO. It is what a company or startup publishes about their new product. Whitepapers inform and encourage potential investors with the technical details, proof of concept, roadmap of development milestones, token distribution details, information about the startup team/advisors, main objectives of their product (problem & solution,) among other details.
If you enjoyed reading these Cryptocurrency definitions, and your heart is yearning for more 😍, then clap your Medium hands and check out Crypto Galaxy on the iOS App Store! 115+ Cryptocurrency definitions in a snazzy UI that will bring Uncle Greg to his knees. To the moon!! 🚀
CRYPTO GALAXY & THIS ARTICLE ARE FOR GENERAL INFORMATIONAL PURPOSES ONLY. CRYPTO GALAXY & THIS ARTICLE ARE NOT FINANCIAL, LEGAL OR INVESTMENT ADVICE. YOU SHOULD SEEK PROFESSIONAL FINANCIAL, LEGAL AND INVESTMENT ADVICE IF YOU ARE CONSIDERING AN INVESTMENT.