Blockchain, cryptocurrency, Altcoins, nodes, etc. are the jargons which have ruled 2017 and let’s admit the fact that we all have heard about them at least once. Whether it’s a peer group discussion or you are in your office, these jargons have become a part of our conversation. But, for many of us, these are just aliens. Blockchain has become a buzzing topic, so, here I have compiled a list of terms or crypto terms of jargons which will help you understand better about the new digital financial revolution.
Before any further delay, let’s get started-
- Cryptocurrency– The discussion should start with a term which has led to the financial revolution, the cryptocurrency or alternate Some of the prominent names it includes, Bitcoin, Ethereum, Litecoin, Ripple, etc. It is a currency which runs in the virtual world. Technically, cryptocurrency is a digital asset developed to work as a medium to exchange. It is done using cryptography and ensures that the transactions are safe.
- Bitcoin- The next term that you would have often heard is Bitcoin. It’s the pioneer of digital currency that started off in 2008.
- Alt Coin- Although you would have mostly heard about Bitcoin, there are others in the league as well. These coins other than Bitcoin are known as Alt Coin, or you can say alternate coins. Every day we hear about new Alt coins entering the market.
- Blockchain- Blockchain is a digital ledger which stores all the records related to digital currency. You cannot change the information in the blockchain. If at all there are any changes, you can see the changes. Thus, it is a fool-proof and secure way to store information.
- Block- Block is the file which you cannot alter or In simple words, if Blockchain is a spreadsheet then block is the page of that spreadsheet. But unlike the page of the spreadsheet, you cannot tamper it and edit it. It is a list of transactions in chronological order. You can anytime access this information.
- Node- Node is a single computer connected to the blockchain.
- Vapourware: A project which is still not in executed or implemented.
- Hashrate- It is the speed at which the block is discovered and the speed of solving a mathematical problem while mining.
- Public/Private Key– The Public key is utilized by any party to encrypt a message. In simple words, the public key is like your bank account number which is known to every
Private Key – It is the password of your account which only you know.
- Fork- Fork is cryptocurrency divided into two. It occurs when cryptocurrency code changes which lead to the formation of the old version and the new version. There are two types of forks:
- Hard Fork– A new update which may pose a problem for the older version and must be updated.
- Soft Fork- It is also a new update, but it may not pose a problem for the older version. But, if you want you can update the old version.
11. Initial Coin Offering (ICO)- To explain this in simple words, it is a way to raise funds for a cryptocurrency project. At the nascent stage of the project, the company will sell off a certain percentage of the total cryptocurrency in exchange for other cryptocurrency or USD. It is similar to crowdfunding.
- Mining- Mining involves two functions :
- Adding transactions to the blockchain
- Release of new cryptocurrency
You need computers and special programs to mine cryptocurrencies. In case of mining, the miners compete with each other to solve complicated problems. The one who can do it quickly will get the rewards.
13. Proof of work – This involves solving problems and the one who can solve it gets the benefit.
14. Proof-of-Stake- It is an alternative to proof-of-work. Here your existing stake in the currency forms the base to calculate the amount of the currency you can mine.
15. Dust Transaction- It is a transaction of the very small amount of Bitcoins. It offers little financial value but gets a space in the blockchain.
16. Smart Contract– It helps you exchange money, property, shares, etc. cutting out the need to have a middleman.
17. Token– Token is any item that stands for a value. It can be an asset, share, etc.
18. Wallet- It is the place where you store your tokens and keys. There are various types of wallets like hardware wallet and software wallet.
19. Whitepaper– Whitepaper is not specifically related to Blockchain or cryptocurrency. You will hear about this term if you are planning to start a business. It has all the details of your project, future propositions, its benefits, and ROI. Only a good and effective whitepaper will convince the investor to invest in your project. In case of cryptocurrency, the white paper will have details about cryptocurrency, ist scope in the future, use cases, mining details, etc.
- Whale– The person who has a major percentage of cryptocurrency. Example: The Winklevoss twins.
- Market Cap- It is the total value held in a cryptocurrency.
Calculation of market cap= total supply of coins *present price of individual coin
These were some of the most commonly used terms in cryptocurrency which will help you understand this technology in a better way.