Bitcoin -Bitcoin is the very first cryptocurrency. It was created in 2008 by an individual or group of individuals operating under the name Satoshi Nakamoto. It was intended to be a peer-to-peer, decentralized electronic cash system.
Blockchain - The blockchain is a digital ledger of all the transactions ever made in a particular cryptocurrency. Each time a block’s capacity is reached and all approved, a new block is added to the chain. The blockchain is repeatedly copied and saved onto thousands of computers all around the world, and it must always match each copy. As there is no master copy stored in one location, it’s considered decentralized.
Cryptocurrency - A form of money that exists as encrypted, digital information. This concept operates independently of any banks; a cryptocurrency uses sophisticated mathematics to regulate the creation and transfer of funds between entities.
Distributed Ledger - A ledger that is stored in multiple locations so that any entries can be accessed and checked by multiple parties. In cryptocurrency, this refers to the blockchain holds on numerous nodes on the network, all of which are checked simultaneously.
Encryption - Converting plain text into unintelligible text with the use of a cipher.
Exchange - The platform through which cryptocurrencies are exchanged with each other, with fiat currencies and between entities.
Fiat - Refers to money recognized as legal tender by governments, such as the US dollar, British pound, Euro and Australian dollar.
FOMO - An acronym for “fear of missing out.”
Fork - When a new version of a blockchain is created, resulting in two versions of the blockchain running side-by-side, it is termed a fork. As a single blockchain forks into two, they will both run on the same network. Forks are categorized into two categories: soft or hard.
FUD - Acronym for “fear, uncertainty, and doubt.”
Hardware Wallet - A physical device, similar to a USB stick, that stores cryptocurrency in its encrypted form. This method of storing cryptocurrency is considered the most secure way to hold cryptocurrency.
Hard Fork - A fork in the blockchain that converts transactions previously labeled invalid to valid, and vice versa. For this fork to work, all nodes on the network must upgrade to the newest protocol.
HODL - Acronym for “hold on for dear life.”
ICO - Acronym for “initial coin offering.”
Initial Coin Offering - To raise funds, the creator of a cryptocurrency will put an initial batch of its coins up for purchase. This concept is known as initial coin offering.
JOMO - Acronym for “joy of missing out.”
Ledger - A record of financial transactions. A ledger cannot be changed; it can only be appended with new transactions.
Mining - Mining is an action to a process on a computer of verifying transactions on the blockchain. In the method of solving the encryption challenges, the person donating the computer power is granted new fractions of the cryptocurrency.
Moon - A term used to describe a significant price movement upwards. For example, XRP is mooning.
Multi-Signature (Multi-Sig) Wallets - If a transaction to go through, more than one user needs to provide their unique code, then it is multi-signature.
Network - A network refers to all the nodes committed to helping the operation of a blockchain at any given moment in time.
Paper Wallet - Storing your wallet code (your private key) on a physical document makes it a paper wallet. It’s also sometimes referred to as cold storage.
P2P - Acronym for “peer to peer.” In a peer-to-peer connection, two or more computers network with each other without a centralized third party being used as an intermediary.
PND - Acronym for “pump and dump.” The frowned-upon practice of buying a lot of one cryptocurrency to drive up its price and encourage others to invest, then selling the lot when there is a suitable margin.
Pre-Sale - A time frame before an ICO goes public when private investors or community members can buy the cryptocurrency.
Private Key - A string of numbers and letters that are used to access your wallet. While a public key represents your wallet, the private key is the password you should protect (with your life). You need your private key when selling or withdrawing cryptocurrencies, as it acts as your digital signature.
Proof of Work (PoW) - To receive a reward for mining a cryptocurrency, miners must show that their computers contributed effort to approve a transaction. A variable is added to the process of hashing a transaction that demands that effort before a block can be successfully hashed. Having a hashed block proves the miner did work and deserves a reward – hence proof of work.
Proof of Stake (PoS) - Another alternative to proof of work, this caps the reward given to miners for providing their computational power to the network at that miner’s investment in the cryptocurrency. So if a miner holds three coins, they can only earn three coins. The system encourages miners to stick with a certain blockchain rather than converting their rewards to an alternate cryptocurrency.
Public Key - This is your unique wallet address, which appears as a long string of numbers and letters. It is used to receive cryptocurrencies.
Satoshi Nakamoto - The individual, or group of individuals – it has never been confirmed – who created bitcoin.
SATS - This is the smallest unit of bitcoin, which is 0.00000001 BTC. The name SATS is shorthand for Satoshi Nakamoto, which is the fake name used by the creator of bitcoin.
Smart Contracts - When a contract is written in computer code, as opposed to traditional legal language, it is referred to as a smart contract. This programmed contract is set up to execute and carry itself out automatically under specified conditions. When a smart contract is on the blockchain, both parties can check its programming before agreeing to it, and then it completes the terms of the contract. Both parties are confident that the smart contract cannot be tampered with or changed. It also lets two parties agree to complex terms without needing to trust each other and without needing to involve any third parties. This functionality is the defining feature of the Ethereum blockchain.
Soft Fork - A fork in a blockchain protocol where previously valid transactions become invalid. A soft fork is backward-compatible, as the old nodes running the old protocol will still consider new transactions valid, rather than disregarding them. For a soft fork to work, a majority of the miners powering the network will need to upgrade to the new protocol.
Software Wallet - A common form of wallet where the private key for an individual is stored within software files on a computer. Software wallets are systems you are likely to use if you sign up for a wallet online that is not associated with an exchange.
Timestamp - The moment in time when a transaction was encrypted and regarded as proof that the data compiled in that transaction existed.
Token - The “coin” of a cryptocurrency is a token. Effectively, it’s the digital code defining each fraction, which can be owned, bought and sold.
Transaction - The value of cryptocurrency moved from one entity to another on a blockchain network.
Transaction Fee -Mostly, small fees given to the miners involved in successfully approving a transaction on the blockchain. This fee can vary depending on the difficulty involved in a transaction and overall network capabilities at that moment in time.
Volatility - Volatility measures the fluctuation in an asset's price. Cryptocurrency prices are notoriously volatile compared to other assets, as dramatic price shifts can happen quickly.
Wallet - A wallet is defined by a unique code that represents its “address” on the blockchain. The wallet address is public, but within it is a number of private keys determining ownership of the balance and the balance itself. It can exist in software, hardware, paper or other forms.
Whale - A term used to describe extremely wealthy investors or traders who have enough funds to manipulate the market.
White Paper - Business papers that give a detailed explanation of a new cryptocurrency invention, designed to offer adequate technical information, explain the purpose of the coin and set out a roadmap for how it plans to succeed.