All who are new to the world of cryptocurrency, but would like to start understanding how everything is functioning should start by just reviewing a glossary. Of course, it is hard to memorize all the important information, but it will be the first step in the process of learning.
A Brief Introduction to Cryptocurrency Essentials
Bitcoin or any other cryptocurrency is fully virtual and there are no correlations with real money or banking system. Such coins are decentralized and no one from legal authorities can control this online money system.
Bitcoin started functioning in 2009. In order to be transparent with the clients, codes, and algorithms are open-source. And since then, the number of clients has been exponentially growing, and even those users who have never used crypto surely heard about it.
If starting from the very basis, then Bitcoin is stored in a wallet. This storage place is not something real, but a virtual address where with the help of a password you can create an account. Some of such wallets are online, others are located on the hardware which is considered to be more secure. Via this personal account, users can interact with the entire network.
Now it is clear, that there is a network of users who can exchange crypto with one another. But what is blockchain and how does it work? This is one of the distributed ledgers which is accessible to all in the network. If simply, it is like a list of all the online transactions that have happened starting from the first launch of the currency. It is accessible data and technically, it is possible to detect how many bitcoins are in a certain wallet. The anonymity of the users is possible because of the pseudonymous system.
Essential Bitcoin Glossary: Top 30 Terms
This term is used in the context of blockchain and it is almost a synonym to a PC. In case this computer in the network stores and validates the transactions’ history, then it can be called a node.
This is a method of securing data in the cryptocurrency. It functions by transforming info that only intended recipients can read and process it.
Mining is like a process of solving a puzzle at the end of which you can receive a coin. The challenges in this process are connected with the time frame during which you can solve this puzzle. On average, every 10 min a puzzle is completed and a new block is added to the chain.
It is an alternative virtual currency to Bitcoin. It is the term for the group of cryptocurrencies that are other than Bitcoin.
This is a cryptocurrency that is functioning without any control or management of the government. It is a specific money system where miners work to verify online transactions and the security of the process in general.
It is a part of the data that is stored in the blockchain.
It is a financial approach when a user buys during the down period and sells when the prices increase.
It is a virtual market where crypto can be bought and sold.
This currency is fully controlled by a certain government and there are no real physical commodities, for instance, silver value. They are derived between demand and supply, and of course due to the stability of certain governments.
This characterizes the process when one cryptocurrency code is divided into 2.
This is an acronym that stands for Initial Coin Offering. Here investors play an important role in the further development of a certain crypto.
This means you are storing the coins offline as a physical doc.
Proof of work
It is proof of how secure the crypto network is. The so-called result of the competition among those PCs that are solving the “puzzle”.
This is just a collection of some rules that secure the P2P network.
Satoshi is the name of the programmer who created the whole idea of Bitcoin. No one could guarantee the existence of this specific person or maybe a group of programmers, but it happened in 2008.
This term is used to specify the smallest unit of Bitcoin.
This is a specific device that is applied to get access to the resource. It can be also used instead of the word “password” and functions as a s key.
This is an automated process where due to some previous agreements, another result will be conducted. For instance, the payment transaction has been done.
Most of the users in the crypto network regularly upgrade the soft. However, for the others who are still using the old version, it will function.
This token gives access to a specific service or product.
This is a character string that is used for the receiving and sending of the cryptocurrency.
This is an acronym that stands for doing your own research. This approach allows investors to perform their individual analysis for better profitability.
This fear of missing out is connected with some concerns that users have while reviewing the prices. There is such a strong emotional belief that you will definitely lose unless you make a purchase.
This fear of doubt usually occurs after bad news or even potentially bad information. This is commonly a provocation for the investors to make irrational decisions.
This means that every currency is interchangeable and that every unit of virtual or real money is the same.
This number is calculated by multiplying the price of the coin by the number of these coins on the market. For instance, 2 million coins at $50 means that the market cap is $100m.
This is a secure number that helps cryptocurrencies to be easily transferred or spent.
Proof of stake
This protocol helps to decide what user/users validate the newly-created block and get a reward for this.
Pump and dump
It is a characteristic of the market when after a rapid rise, it experiences a huge crash. Sometimes such situations can be explained by the intentional work of the special groups.
The method of prediction during which investors analyze the prices and volumes before actually investing in something.
To Sum Up
This crypto glossary includes all the helpful info, for the new users of Bitcoin or already experienced ones. Now, you can easily use such terms as proof of stake, pump and dump, FOMO, FUM, and soft fork.