No… Not quite. And you certainly don’t eat a Bitcoin Pizza with a Hard Fork! Welcome to Part II of “Cryptocurrency Dictionary for Beginners.” In which “beginners” should be taken with an iota of salt. Learn about some more terms and definitions you’ll see as you orbit into the Crypto Galaxy.
P.S. We know Uncle Greg… You’re still HODLing!
bitcoin
bitcoin (with a lowercase b) refers to an amount of Bitcoin. Example: 0.07 bitcoin. Bitcoin also has a Unicode character: ₿, which also refers to an amount of Bitcoin. Example: 0.07 ₿
Bitcoin Pizza
On May 22, 2010, the first-ever transaction of bitcoin for a physical product took place. The transaction was two pizza pies in exchange for 10,000 ₿. On that date, 10,000 ₿ was valued around $30 USD. 🍕💸
Block Height
The block height is the number of blocks in a blockchain since the genesis block (the first block in a Blockchain). Since new blocks get added to a blockchain in regular intervals, block height can be used as a measurement of time signifying an approximate ‘age’ of a blockchain.
Decentralized
Decentralized means not controlled by any single entity or institution. Blockchain is an example of something that is decentralized; all full nodes in the network own a copy of the blockchain — not a single entity (which would make it centralized.) In a decentralized system, if one node goes down, the rest of the network continues to operate without hiccups!
Dip
A dip is when a cryptocurrency experiences a decline in price. Dips are visually identified as a ‘valley’ on a price chart.
Double Spending
Double spending is the improbable act of spending the same cryptocurrency in more than one transaction. The fundamentals of blockchain prevent double spending by requiring multiple confirmations before a transaction is considered secured. Double spending could theoretically occur during a 51% attack.
Halving
Halving is when the mining reward for a cryptocurrency is split in half. If miners are awarded 50 coins for validating a block, halving would cut the mining reward down to 25 coins. Halving does not happen just once; it occurs after a certain number of blocks have been mined. In the case of Bitcoin, halving occurs after every 210,000 blocks have been mined (1 Bitcoin block gets mined every ~10 minutes.) Halving intervals are set forth in the cryptocurrencies source code, and they occur to control the supply.
Hard Fork
A hard fork occurs when the new fork (and new protocol) is incompatible with the legacy protocol. The result of a hard fork creates a new cryptocurrency on a separate blockchain. Bitcoin Cash (BCH) and Bitcoin Gold (BTG) are two examples of Bitcoin hard forks. Ethereum Classic (ETC) and EtherZero (ETZ) are two examples of Ethereum hard forks.
Hash Rate
Hash rate (also referred to as hash power) in a PoW (Proof of Work) system is the collective measurement of computing power in a specific cryptocurrency ecosystem. Bitcoin and most PoW altcoins have their own hash rate. Hash rate is measured in a unit called h/s (Hash per Second.) Examples of h/s denominations include Gigahash/s (billion h/s), Terahash/s (trillion h/s), Petahash/s (quadrillion h/s) and Exahash/s (quintillion h/s).
ICO
ICOs (Initial Coin Offerings) are when funds are raised for a new cryptocurrency venture by a startup. The funds are raised in a similar fashion to crowdfunding projects. Backers of an ICO are rewarded with the ICO’s tokens in exchange for ether, bitcoin, altcoins or fiat money. The main component of an ICO is the whitepaper.
IOTA
Powered by the Tangle, IOTA is a Cryptocurrency designed for the Internet of Things. IOTA does not have miners; instead, it relies on each transaction having to approve two previous transactions on the network. Because of relying on transactions to help secure the network, there are no transaction fees. The lack of transaction fees allows the IOTA network to scale through nano-payments between IoT ‘things’. IOTA was released in June of 2016.
Importing
Importing is a method of moving funds from a paper wallet. This method imports the paper wallet private key (with the cryptocurrency funds allocated to it) to your soft wallets private key collection. This means that while the funds are now in the soft wallet, they can also still be spent from the paper wallets private key. Sweeping is the more frequently used method of moving funds from a paper wallet.
Mempool
The mempool (short for memory pool) contains all unconfirmed TXs (transactions) that have not-yet been picked up by a miner to be added in a block. If an unconfirmed TX remains in the mempool for longer periods of time, there’s a potential that the TX fee was set too low.
Mining Reward
In a PoW system, a mining reward is a small amount of NEW cryptocurrency that is awarded to miners for adding a new block to the blockchain. Mining rewards are an incentive for maintaining a blockchain and adding hash power to the network. On top of a mining reward, miners also receive TX fees from transactions that have been added to the mined block.
Mining Rig
In a PoW system, a mining rig is a computer that is used (and often specifically designed) for mining cryptocurrency. The hardware and software requirements of a mining rig will greatly vary depending on which cryptocurrency you’re seeking to mine.
Tangle
The distributed ledger that IOTA runs on. The Tangle utilizes a Directed Acyclic Graph (DAG) based transaction settlement to secure the network. All transactions have to approve two previous transactions through a small amount of computational work. The Tangle allows for a high scalability of transactions, because the more transactions that occur in parallel, the faster they can be confirmed.
Tip
A Tip is an unapproved transaction on the Tangle. This means the transaction has yet to be approved by new incoming transactions.
TX Fee
TX fees (also known as miner fees) are fees from a cryptocurrency transaction that get distributed to a miner for adding the transaction into a block. Most wallets and exchanges set TX fees automatically, but some allow you to specify. If TX fees are set too low, the transaction may not be picked up by a miner. Outgoing transactions with a higher TX fee tend to get processed by the miners quicker. TX fees are pertinent in both PoW and PoS systems.
Wallet
A wallet is a collection of private keys which allow you to spend your cryptocurrency allocated to it. There are several forms of cryptocurrency wallets that all fall under two categories: hot storage & cold storage.
Weak Hands
Weak hands are individuals who panic sell when the cryptocurrency market is down. The opposite of weak hands are strong hands.
Whitelist ICO
A whitelist ICO is an ICO that you must pre-register for to participate in. An ICO that utilizes a whitelist typically has a limited amount of tokens to offer.
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