Cryptocurrency is a relatively new concept that has gained a lot of popularity in recent years. There are many different types of cryptocurrency, but they are all based on the same principles.
Cryptocurrency is basically virtual money that can be used to buy goods and services just like traditional currency can. It is essentially a digital form of cash. You can purchase cryptocurrency with real money or mine your own currency.
Cryptocurrency works in a similar way to online banking, so it’s important to understand the jargon associated with this new form of payment if you want to get into it yourself.
Crypto Terms You Should Know
Table of Contents
Altcoins
Altcoin is the collective name for cryptocurrencies that are not Bitcoin. This is a helpful way to refer to the concept of altcoins without getting caught up in the minutia of how they’re all different. If you want to talk about a specific coin, you should use more specific terms, such as “Litecoin,” “Dogecoin,” etc.
Bitcoin
Bitcoin is a type of cryptocurrency. Cryptocurrency is a digital currency that uses encryption to transfer funds and verify transactions. This payment system also has no central authority, which means that transactions are not stored in banks or any other financial institution and there is no central server.
Instead, they are verified by nodes in the network, each of which have a distributed public ledger called blockchain. When it comes to market capitalization, Bitcoin price comes first place.
Bitcoin Cash
Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate. Bitcoin Cash brings sound money to the world, fulfilling the original promise of Bitcoin as “Peer-to-Peer Electronic Cash”. Merchants and users are empowered with low fees and reliable confirmations. The future shines brightly with unrestricted growth, global adoption, permissionless innovation, and decentralized development.
Block
Block is a part of cryptography. It usually refers to the act of building the chain of data or information that has been encrypted. Technically, it means to create a list of new transactions and add them to the end of the list in a database or a blockchain. In layman’s terms, it means to create a set of new data and add it to an existing database on a particular network.
Blockchain
The blockchain is simply a database (or ledger) of information. It is decentralized, meaning that it isn’t stored on one computer but is instead copied to all the computers in the network. This prevents anyone with malicious intent from altering the data. Each time a new block of information is added, it is linked to the existing chain using cryptographic hash functions, hence the name “blockchain”.
Coin
A cryptocurrency coin is a digital asset designed to work as a medium of exchange. Cryptocurrencies are considered to be decentralized digital currencies because they are not issued by any central authority. Instead, they use cryptography to secure their transactions and to control the creation of new units of the currency.
Cryptocurrency coins are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Cold Wallet or Cold Storage
A cold wallet is essentially a storage device that is not connected to the internet. This gives you much more security than you get from an ‘online’ wallet. You are essentially keeping your cryptocurrency completely offline and away from the reach of hackers, phishers and fraudsters.
These days, most crypto exchanges offer some sort of online wallet solution for their customers, but this is by no means secure! It goes without saying that you should never store large amounts of crypto in an online wallet.
Cryptocurrency
Cryptocurrency is a digital medium of exchange that uses cryptographic protocols to control the creation of new units and to verify the transfer of funds. It is a decentralized system, meaning there is no central authority that controls it (e.g., the Federal Reserve).
Cryptocurrency relies upon blockchain technology, which is a distributed database that keeps track of all transactions made on the network. This technology makes cryptocurrency more transparent and secure than other forms of digital payment such as PayPal or credit cards.
One of the most popular cryptocurrency aside from Bitcoin is Ethereum ETH, and is the second in line to have the highest market cap.
Decentralization
Decentralization happens when a network (or cryptocurrency) has no central point of control. It means that the network has no single administrator. This means that there is nobody to make arbitrary decisions about the network. The participants in the network govern it by consensus.
Decentralized cryptocurrencies typically use peer-to-peer networking as opposed to using a central server. There are many benefits of this type of setup, but it also comes with some disadvantages.
Decentralized Finance
Decentralized finance, or DeFi, is a term that’s been gaining popularity in the crypto space as more and more projects are released that are part of this new market. While still in its infancy, DeFi has the potential to change the way we make and use money in ways we didn’t even think were possible just a few years ago.
Decentralized Applications
Decentralized applications or DApps are applications that run on a P2P network of computers. The computers communicate with each other by means of the internet. They are not controlled by any single authority.
Trading Pairs
Cryptocurrency trading pairs is a term that refers to the pairing of two different cryptocurrencies. When you trade a cryptocurrency for another cryptocurrency, you are using a trading pair. For example, when you trade Bitcoin for Ether or Litecoin for Stellar Lumens, you are using a trading pair because both Bitcoin and Ether as well as Litecoin and Stellar
Lumens are cryptocurrencies. There are only a very limited number of trading pairs in the markets today such as BTC/USD, ETH/BTC, ETH/USD , ALGO USDT and LTC/BTC.
