The Complete Cryptocurrency Glossary 2020

The Complete Cryptocurrency Glossary 2020

If you want to understand cryptocurrency better, you have to take time to learn certain words that describe different things in that world.

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It is exactly like the different terminologies used in different fields to explain certain things. They are a lot; however, the top ones that you are likely to encounter more have been picked for this article.

Address: Addresses consist of between 26 and 35 characters and represent a unique wallet ID on the blockchain, much like an account number. They are used when conducting transactions on the network, including the receipt, remittance, and storage of cryptocurrency.

Altcoin: This usually refers to any cryptocurrency coin other than Bitcoin, which was the original cryptocurrency. There are over 1,000 other cryptocurrencies in the market.

Blocks: These are packages of permanently-recorded data on the blockchain network.

Blockchain: This is a distributed ledger secured using cryptography. It’s a database that’s accessible for everyone to read. Therefore, data can only be changed by ledger owners. Data isn’t stored on a centralized server but is instead shared by thousands of computers around the globe.

Confirmation: When a transaction has been verified by miners and added to the blockchain, it receives a confirmation.

Consensus: Consensus is reached when all network participants approve the validity of the transactions by ensuring that ledgers are exact copies of one another.

Cryptocurrency: This is a type of digital asset used as a medium of exchange in business transactions. Cryptography is used to maintain the security of transactions and control the creation of additional currency coins or tokens.

Digital Asset: Not all cryptocurrencies trade as coins or currencies. If they are digital stores of value, they are termed digital assets. These can be freely exchanged or not.

Fiat currency: A fiat currency is any currency that’s issued by a government or a central bank, such as the dollar.

Fork: This term applies to a blockchain that’s split into two separate chains, normally to accommodate new governance rules.

Genesis block: This describes the very first block in any blockchain.

Going long/going short: These terms describe a margin trade that profits when the price either increases or decreases.

Hash algorithm: This transforms a large amount of data into a fixed-length hash or string of characters for a cryptographic key. Hash algorithms are central to blockchain and cryptocurrency transactions.

Hash rate: This refers to the speed at which a piece of hardware can decrypt hashes. This is the basis of cryptocurrency mining.

Hot wallet: A hot wallet is connected to the internet and used to hold cryptocurrency for everyday transactions. Because of the increased security risk over a cold wallet, a hot wallet should not store large amounts of currency

Laddering: Investors who set incremental buy or sell orders are said to be laddering.

Mining: Cryptocurrencies aren’t printed like traditional currencies – they are mined. This process uses computer hardware to solve complex mathematical problems and decrypt hashes. Miners are rewarded for their work with cryptocurrency coins.

Mining rig: Cryptocurrency mining requires a huge amount of power. Mining rigs consist of Multiple Graphic Processors (GPUs) to increase processing power.

Moon: When a cryptocurrency coin goes on a market run and drives the price up quickly, it’s referred to as mooning.

Multi-signature, or multisig: This refers to a situation where multiple signatures are required to authorize a transaction. This increases the security of cryptocurrency transactions and reduces the risk of theft.

Node: A blockchain isn’t stored in a central location. In fact, it’s distributed to any number of computers – called nodes – which host it. Each node is instrumental in verifying the ledger within the blockchain.

Private Key: This is the key – or password – which unlocks a wallet. It shouldn’t be shared with anyone.

Public Key: A public key is a wallet address that can be shared with other parties to effect transactions.

Pump and Dump: This is a form of market manipulation by traders who artificially inflate prices and then exit the market, thus causing a collapse in the price.

Spoofing: Spoofing occurs when investors with large holdings trade with themselves to create the illusion of volume.

Volatility: Market or price volatility refers to the movement in the price of a cryptocurrency over time. The cryptocurrency market typically experiences wild swings between high and low prices.

Wallet: In the cryptocurrency sector, a wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance.

Whales: Whales are investors who hold a significant number of coins or other cryptocurrencies. They can have a marked influence on market movement.

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