This article explains almost all the terminology/lingo related to cryptocurrency. After going through this, don’t wonder when someone say shilling or hodling. The ultimate cryptocurrency vocabulary.
Cryptocurrency (or crypto currency) is a digital asset used as a medium of exchange for purchases or services. It uses cryptography for secure transactions.
The act of generating new bitcoins using computing hardware by solving cryptographic problems. Here, transactions are verified and added to a blockchain.
A node is a computer connected to the Bitcoin network. A node receives a copy of the full blockchain. It supports the network through validation and relaying of transactions.
P2P means peer to peer. In peer to peer transactions, the blockchain is decentralized so that transactions are faster and easier.
5. Distributed & Central Ledger:
A distributed ledger is an agreement spread across multiple networks, across many CPU’s consisting of shared, replicable and synchronized data. Whereas, a central ledger is being synchronized and replicable is controlled by a singular network or individual.
The essential files in a ledger where unalterable data related to network is permanently stored.
7. Block Height:
Block height is the number of blocks preceding the first block on a blockchain.
A blockchain is a type of distributed ledger, digitally recorded unchangeable data in packages called blocks. It is a full list of all the blocks that have been mined.
9. Block Reward:
A reward that is given to a miner after successfully hashing a transaction block.
10. Genesis Block:
The first block in the chain. A genesis block will always have a height of zero because there is no block preceding it.
When a blockchain transaction has been verified by the network, it is called confirmation. A confirmed transaction, cannot be reversed or double spent.
Bitcoin is the first cryptocurrency that was created by Satoshi Nakamoto in 2009.
Any form of digital crypto currency that isn’t Bitcoin.
A technique used when first launching an altcoin.
A documentation describing a cryptocurrency’s protocol in detail.
The smallest possible fraction of cryptocurrency named after the inventor which is available for transactions. It is approximated to 0.00000001 Bitcoin.
An alphanumeric code used to store, send or receive any cryptocurrency. It contains 26-35 alphanumeric characters. It is also treated as a public key to digitally sign transactions.
Cryptocurrency exchanges act as an intermediary to move money and cryptocurrencies between users and networks. Centralized bodies which transfer currencies between block chains and regular currencies are referred to as exchanges.
It is digital address accessible through a private key in which crypto currency can be stored, sent or received. Software wallet is storage for cryptocurrency that can be exists purely as software files on a computer whereas hardware wallet is a device that can store cryptocurrency in the most secure way.
20. Paper Wallet:
Is a physical piece of paper print out that stores altcoins in a secure, off-line environment.
An ICO is just similar as an IPO, here instead of shares coins are offered. If a new cryptocurrency project want to raise fund for their project, they offer a particular amount of coins to the public at price.
22. Dust Transaction:
A transaction that takes up space in the blockchain for an extremely small amount of bitcoins.
23. Smart Contract:
Smart contracts are coded, autonomously executed transactions that are deployed onto the blockchain, often directly interacting with how money flows.
In simple words, a fork means changing a cryptocurrency’s software that will create two different version of the blockchain. Both these versions will have shared history.
25. 51% Attack:
A 51% attack is a situation where more than half of the computing power on a network is operated by a single individual or concentrated group, which gives them complete and total control over a network.
26. Orphan Block:
Not a part of the valid block chain, but which was instead part of a fork that was discarded.
27. Hard Fork:
A hard fork alteration to the block structure of bitcoin that changes the difficulty rules.
28. Soft Fork:
Soft fork mean changing the software protocol where only the previous blocks or transactions are made invalid.
29. Margin Trading:
The very risky act of ‘magnifying’ the intensity of your trades by risking your existing coins.
Someone who possesses a majority percentage of a cryptocurrency.
When price goes up drastically.
This is a random and complex mathematical formula that takes a variable amount of data and produces a shorter, fixed-length output.
The number of hashes that can be performed by a bitcoin or any other miner in a given period of time.
A signature is the mathematical operation that lets someone prove their identity using a private key that verify the match and validity of a transaction. These are owned by the user and mathematically impossible to generate.
Multisignature or multisig is an extra layer of security for transactions. A multisig address will need more than one user to sign the transaction. Then only it would be recorded in the blockchain.
A Distributed Denial of Service attack uses large numbers of computers under an attacker’s control to drain the resource of a central target.
37. Offline Storage:
This concept relates of storing cryptocurrency on an external drive that can be disconnected from your computer when it’s not needed, or to print it out and store it in a paper wallet. It is usually untraceable and irreversible.
38. Private Key:
A private key is a key that gives access to bitcoins in a specific wallet. Private keys must never be revealed to anyone but you, as whoever holds the private key own the value of the address which helps them spent the balance in the wallet.
39. Public Key:
A public key is a key that is shared among multiple users. A wallet is a collection of public keys. So a wallet can contain one public key or one hundred.
40. Proof of Concept:
Proof of concept is a realization of a certain method or idea to verify that some concept or theory has the potential of being used. A proof of concept is usually small and may or may not be complete
41. Proof of work:
Proof of work is system that ties mining capability to computational power.
42. Proof of Stake:
Proof of stake is an alternate to proof of work. In proof of stake, the amount of a currency that you can mine is determined by the existing stake in that currency which you are holding.
It is the synonym of the word “investment” which is used in new crypto system Bitbon.
Selling a cryptocurrency In hopes of buying it at a lower price at a later time to gain profit.
45. Shilling / Pumping:
Someone essentially advertising another cryptocurrency.
The term HODL is normally used instead of “hold”. The term was actually a typo by someone, which later got famous. So, whenever people are talking about holding their coins, they normally say it in cryptocurrency lingo as “hodl your Ethereum or Dash”.
Fear Of Missing Out.
Fear, Uncertainty, and Doubt. Baseless negativity spread intentionally by someone that wants the price of something to drop.
Someone who spreads FUD.
Taking advantage of a difference in price of the same commodity on two different exchanges.