This is a glossary of the key terms and their definitions that are related to cryptocurrency, blockchain and investing. This pagina also contains linksom to official websites where you can obtain more information and will evolve spil fresh terms are added. Feel free to voeling us with suggestions on terms to add to this pagina.
Address – A secure identifier marked by a unique string of characters that enables payments to an individual or entity via blockchain transactions. It usually requires a private key to exclusively access the funds. For example, Bitcoin addresses are alphanumeric strings that start with a 1 or Three, Ethereum addresses start with ‘0x’.
Altcoin – A cryptocurrency or a category of cryptocurrencies that are an alternative to bitcoin. Many altcoins project themselves spil better alternatives to bitcoin ter various ways (e.g. more efficient, less expensive, etc.).
Bitcoin (BTC) – A type of cryptocurrency created by Satoshi Nakamoto ter 2009. It wasgoed one of the very first digital currencies that enabled instant P2P payments. Bitcoins are created through a process known spil bitcoin mining that requires a massive amount of computing power. For more information, please see the Bitcoin whitepaper.
Bitcoin Contant (BCH) – A type of cryptocurrency that wasgoed created ter August 2018 and is essentially a clone of the Bitcoin blockchain but has enhanced block size capacity (from 1 MB to 8 MB) spil a way to solve the scaling problem. For more information, please visit their official webstek.
Block – Refers to a collection of gegevens related to transactions that are bundled together with a predetermized size and are processed for transaction verification and eventually becomes part of a blockchain.
Blockchain – A decentralized, digital ledger where transactions made ter Bitcoin or other cryptocurrencies are recorded chronologically and publicly. The block contains information that, once it goes into the blockchain, it becomes part of the voortdurend and immutable database, connecting to other blocks ter the blockchain like the linksaf ter a chain.
Circulating supply – An approximation of the number of coins or tokens that are circulating ter the public market. See also: total supply and maximum supply.
Cryptocurrency – A type of digital currency that is generally decentralized and uses cryptography (i.e. gegevens is converted into a format that is unreadable for unauthorized users) for added security, making it difficult to counterfeit or manipulate.
DASH – A type of cryptocurrency based on Bitcoin software but has anonymity features that makes it unlikely to trace transactions to an individual and other capabilities. It wasgoed created by Evan Duffield te 2014 and wasgoed previously known spil XCoin (XCO) and Darkcoin. For more information, visit the official webstek for DASH.
Decentralized – A state where there is no central control, power or function, or ter reference to infrastructure, no central point of failure. See Vitalik Buterin’s definition of decentralization.
Decentralized applications (dApps) – A type of software program that runs on a decentralized P2P network rather than on a single pc. Albeit similar, it differs from clever contracts spil it can have any number of participants on all sides of the market and it does not have to be financial. Ethereum is a popular development verhoging for creating dApps. For more information, see Vitalik Buterin’s terminology guide.
Distributed overeenstemming – Collective agreement by various computers te a network and permits it to work ter a decentralized, P2P manner without the need of central authority to deter dishonest network participants.
ERC-20 – A type of token standard for Ethereum which ensures the tokens perform ter a predictable way. This permits the tokens to be lightly exchangeable and able to work instantly with decentralized applications that also use the ERC-20 standard. Most tokens released through ICOs are compliant with the ERC-20 standard.
Ether (ETH) – A type of cryptocurrency that is used for operating the Ethereum podium and is used to pay for transaction fees and computational tasks. Te the podium, transaction fees are measured based on the gas limit and gas price and ultimately paid for te Ether. For more information, see the Ethereum Foundation’s official definition.
Ethereum – An open source, decentralized podium based on blockchain technology created by Vitalik Buterin te 2013. It runs brainy contracts on a custom-built built blockchain that permits developers to create markets, store registries of debts, and so on. For more information, please visit the Ethereum Foundation webstek or read their whitepaper.
Ethereum Classic (ETC) – A type of cryptocurrency that is a continuation of the original Ethereum blockchain following the DAO attack te June 2016. Ethereum is essentially a hard fork of the blockchain that wasgoed formed to refund the money that wasgoed siphoned during the attack (around $50 million). Ethereum Classic assumes no hard fork occurred and is supported by those who believe ter accomplish immutability of the blockchain. For more information, visit the webstek for Ethereum Classic.
Fiat money – Refers to currencies that have minimal or no intrinsic value themselves (i.e. they are not backed by commodities like gold or silver) but are defined spil legal tender by the government, such spil paper bills and coins.
Rolling – A type of investment strategy (popular te real estate investing) where you buy something with the purpose of reselling for a profit zometeen, usually te a brief period of time. Te the setting of ICOs, rolling refers to the strategy of investing te tokens before they are listed on the exchanges and reselling them for a profit when they are trading te the secondary market.
FOMO – An acronym that stands for ‘fear of missing out’ and te the setting of investing, refers to the feeling of apprehension for missing out on a potentially profitable investment chance and regretting it straks.
FUD – An acronym that stands for fear, uncertainty and doubt. It is a strategy to influence perception by spreading negative, misleading or false information about something, spil opposed to reasoned criticism.
Gas limit – A term used te the Ethereum toneelpodium that refers to the maximum amount of units of gas the user is willing to spend on a transaction. The transaction voorwaarde have enough gas to voorkant the computational resources needed to execute the code. All unused gas is refunded at the end of the transaction.
Gas price – A term used ter the Ethereum toneel that refers to the price you are willing to pay for a transaction. Setting a higher gas price will make miners more incentivized to prioritize and validate that particular transaction ahead of those set with a lower gas price. Gas prices are typically denominated te Gwei. For more information on the various ether denominations, see this documentation.
Genesis block – The very first block of gegevens that is processed and validated to form a fresh blockchain, often referred to spil block 0 or block 1.
Hard cap – The maximum amount that an ICO will be raising. If an ICO reaches its hard cap, they will zekering collecting any more funds. See also: soft cap.
HODL – A type of passive investment strategy where you hold an investment for a long period of time, regardless of market volatility. The term wasgoed made famous by a typo made ter a bitcoin forum. Also referred to spil ‘buy and hold’ or ‘hold on for dear life’.
Initial coin suggesting (ICO) – An unregulated means by which a cryptocurrency venture, typically early stage, can raise money from volgers by issuing tokens. It is often referred to spil a crowdsale spil ICO participants may potentially earn a come back on their investments (spil opposed to crowdfunding, where volgers donate money to a project or cause). Ethereum is presently the most popular toneelpodium for launching ICOs.
IOTA (MIOTA) – Refers to the cryptocurrency and the name of an open source distributed ledger founded te 2015 that does not use blockchain (it uses a fresh distributed ledger called the Tangle). It offers features such spil zero fees, scalability, prompt and secure transactions, and so on. It is focused on the Internet of Things. For more information, visit the official webstek and the FAQs pagina for IOTA.
Lightning Network – A low latency, off chain P2P system for making micropayments of cryptocurrencies. It offers features such spil instant payments, scalability, low cost and cross-chain functionality. Participants do not have to make individual transactions public on the blockchain and security is enforced by clever contracts. For more information, visit the official webstek or the whitepaper.
Litecoin (LTC) – A type of cryptocurrency that wasgoed created by former Google employee Charlie Lee ter 2011. It offers features such spil Segregated Witness and the Lightning Network which permits for swifter processing at lower cost. For more information, visit the Litecoin webstek.
Market capitalization (market cap) – The market value of a company, market or sector at a point ter time commonly used to rank relative size. Te equities, it refers to the total market value of a company’s outstanding shares. Te cryptocurrency investing, it refers to either price multiplied by the circulating supply (i.e. free float market cap) or price multiplied by the total supply (i.e. fully diluted market cap).
Maximum supply – An approximation of the maximum number of coins or tokens that will everzwijn exist for a cryptocurrency or crypto asset. See also: circulating supply and total supply.
Mining – A process where transactions are verified and added to a blockchain. It is also the process where fresh bitcoins or certain altcoins are created. Ter theory, anyone with the necessary hardware and access to the internet can be a miner and earn income, but the cost of industrial hardware and tens unit has limited mining for bitcoins and certain altcoins today to large-scale operations.
Monero (XMR) – A type of cryptocurrency created ter 2014 that is focused on privacy and scalability, and runs on platforms like Windows, Mac, Linux and Android. Transactions on Monero are designed to be untraceable to any particular user or real world identity. For more information, please visit the Monero webstek.
NEM (XEM) – Refers to the cryptocurrency and the name of a verhoging for management of a multiplicity of assets, including currencies, supply chains, ownership records, etc. It offers extra features to blockchain technology such spil multi-signature accounts, encrypted messaging, etc. For more information, please visit their official webstek.
NEO – Refers to the cryptocurrency and the name of a China’s very first open source blockchain that wasgoed founded ter 2014 by Da Hongfei. It is similar to Ethereum te its capability to execute brainy contracts or dApps but has some technical differences such spil coding language compatibility. For more information, visit their official webstek.
Pre-sale – A sale that takes place before an ICO is made available to the general public to participate.
Proof of Stake (PoS) – An algorithm that prizes participants that solves difficult cryptographic puzzles to achieve distributed overeenstemming. Unlike proof of work or PoW, a person can validate transactions and create fresh blocks based on their individual wealth (i.e. stake) such spil the total number of coins possessed. One of the key advantages that PoS has overheen PoW is lower energy consumption.
Proof of Work (PoW) – An algorithm that prizes the very first person that solves a computational problem (i.e. mining) to achieve distributed overeenstemming. Miners contest to solve difficult cryptographic puzzles ter order to add the next block on the blockchain. It prevents spam and cyber attacks such spil DDoS spil it requires work (i.e. processing time) from the service requester.
Pump and dump scheme – A scheme ter which the development team (or short-term traders) hypes up a project without fundamental ondergrond ter order to pump up the price of the tokens temporarily and then sells their holdings instantaneously after launch to earn a profit. See the US SEC’s investor waaks on pump and dump schemes.
Ripple (XRP) – Refers to the cryptocurrency and the name of an open source payment podium where the cryptocurrency (Ripple or XRP) can be transferred. The vision for the toneelpodium is to enable real-time global payments anywhere around the world. The Ripple payment protocol wasgoed built by OpenCoin which wasgoed founded te 2012. For more information, visit Ripple’s official webstek.
Segregated Witness (SegWit) – The process where the block size limit on a blockchain is enhanced by removing digital signature gegevens and moving it to the end of a transaction to free up capacity. Transactions are essentially split (or ‘segregated’), into two segments: the original gegevens segment and the signature (or ‘witness’) segment.
Wise contracts – An automated mechanism involving two or more parties where digital assets are waterput te and redistributed at a zometeen date based on some preset formula and triggering event. The contract can run spil programmed without any downtime, censorship, fraud or third party interference. For more information, see Vitalik Buterin’s terminology guide.
Soft cap – Generally refers to the ondergrens amount that an initial coin suggesting (ICO) needs to raise. If the ICO is incapable to raise that amount, it may be cancelled and the collected funds returned to participants. See also: hard cap.
Token – Crypto tokens enable the creation of open, decentralized networks, and provides a way to incentivize participants ter the network (with both network growth and token appreciation). This innovation, made popular with the introduction of Ethereum, has given rise to a wave of token networks (e.g. prediction markets, content creation networks, etc.) and token pre-sales, or ICOs.
Total supply – The total number of coins or tokens that are te existence, including those circulating ter the public market and those that are locked or reserved. See also: maximum supply and total supply.
Wallet – A store of digital assets such spil cryptocurrencies, analogous to a digital canap account. Crypto wallets can be divided into two categories: hosted wallets (e.g. wallets store on exchanges or third-party servers) and cold wallets (e.g. hardware wallets such spil the Ledger Nano S, paper wallets and desktop wallets).
Whitelist– A list of registered and approved participants that are given off the hook access to contribute to an ICO or a pre-sale.
Whitepaper – An informational document that generally informs readers on the philosophy, objectives and technology of a project or initiative. Whitepapers are often provided before the launch of a fresh coin or token.