For anyone who strives to make sense of the cryptocurrency term.
This post serves to explain some of those most common terms in simple language.
Address (Cryptocurrency) is a public key of cryptocurrency to which transactions can be sent. A wallet is a collection of private keys that correspond to addresses. A private key is necessary to spend from an address.
ADDY refers to a cryptocurrency public address (or key).
Arbitrage Taking advantage of a difference in price of the same commodity on two different exchanges.
ASIC Stands for "application-specific integrated circuit". In other words, a chip designed to perform a narrow set of tasks (compared to CPU or GPU that perform a wide range of functions). ASIC typically refers to specialized mining chips or the whole machines built on these chips. Some ASIC manufacturers: Avalon, ASICMiner, Butterfly Labs (BFL) and Cointerra.
ASICMiner A Chinese manufacturer that makes custom mining hardware, sells shares for bitcoins, pays dividends from on-site mining and also ships actual hardware to customers.
ATH (All Time High) the price of a certain cryptocurrency or coin has broken all of its past records and is trading at the highest price it has ever achieved.
Batch Payment is a payment processing system that send a certain amount to each recipient in one transaction (As normal payment processing is sending to one recipient in one transaction).
BEAR a trader/investor who believes the prices of a particular cryptocurrency will fall and they can make profit from the falling price.
Block is a record in the block chain that contains and confirms many waiting transactions. Roughly every 10 minutes, on average, a new block including transactions is appended to the block chain through mining.
blockchain A digital ledger in which bitcoin transactions are recorded. It comprises individual blocks, which each contain information about a single transaction.
Block Explorer is an online block chain browser which displays the contents of individual cryptocoin blocks and transactions and the transaction histories and balances of address.
Brain wallet is a concept of storing private keys as a memorable phrase without any digital or paper trace. Either a single key is used for a single address, or a deterministic wallet derived from a single key.
Bearish An expectation that price is going to decrease.
Confirmation means that a transaction has been processed by the network and is highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like 1000 US$, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.
CPU/GPU Bitcoin Mining. The least powerful category of bitcoin mining hardware is your computer itself. Theoretically, you could use your computer's CPU to mine for bitcoins, but in practice, this is so slow by today's standards that there isn't any point. ... Graphics cards feature graphical processing units (GPUs)
Cold Storage A collective term for various security measures to reduce the risk of remote access to the private keys. It could be a normal computer disconnected from the internet, or a dedicated hardware wallet, or a USB stick with a wallet file, or a paper wallet.
Confirmed Transaction Transaction that has been included in the blockchain. Probability of transaction being rejected is measured in a number of confirmations.
Confirmation Number Confirmation number is a measure of probability that transaction could be rejected from the main chain. "Zero confirmations" means that transaction is unconfirmed (not in any block yet). One confirmation means that the transaction is included in the latest block in the main chain. Two confirmations means the transaction is included in the block right before the latest one. And so on. Probability of transaction being reversed ("double spent") is diminishing exponentially with more blocks added "on top" of it.
Cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.
Visit List of Cryptocurrencies
Cryptocurrency faucet are a reward system, in the form of a website or app, that dispenses small cryptocurrency rewards in the form of a satoshi (bitcoin, ethereum, litecoin, doge etc), for visitors to claim in exchange for completing a captcha or task as described by the website.
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Digital currency (digital money or electronic money or electronic currency) is a type of currency available only in digital form, not in physical (such as banknotes and coins).
Dust Transaction A small amount of bitcoin transaction but it is listed on the blockchain.
ERC-20 A type of token standard for Ethereum which ensures the tokens perform in a predictable way.
Flipping a strategy of investing in tokens before they are listed on the exchanges and reselling them for a profit when they are trading in the secondary market.
Fork A situation where a blockchain splits into two separate chains. Forks generally happen in the crypto-world when new ‘governance rules’ are built into the blockchain’s code
Hash algorithm is a function that converts a data string into a numeric string output of fixed length. The output string is generally much smaller than the original data.
ICO 'Initial Coin Offering' An unregulated means by which funds are raised for a new cryptocurrency venture.
Mining is a process of validating a transaction or block in a network by the process of complex algorithms to prove and validate the correctness of the transaction and thereby add the new block to the chain
Mixing A process of exchanging coins with other persons in order to increase privacy of one's history.
Node, or client, is a computer on the network that speaks Bitcoin message protocol (exchanging transactions and blocks). There are full nodes that are capable of validating the entire blockchain and lightweight nodes, with reduced functionality. Wallet applications that speak to a server are not considered nodes.
Proof of work (PoW) is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. ... Bitcoin uses the Hashcash proof of work system.May 15, 2016
P2P (Peer-to-peer) refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
QR Code A two-dimensional graphical block containing a monochromatic pattern representing a sequence of data.
Script A compact turing-incomplete programming language used in transaction inputs and outputs. Scripts are interpreted by a Forth-like stack machine: each operation manipulates data on the stack. Most scripts follow the standard pattern and verify the digital signature provided in the transaction input against a public key provided in the previous transaction's output. Both signatures and public keys are provided using scripts. Scripts may contain complex conditions, but can never change amounts being transferred. Amount is stored in a separate field in a transaction output
Virtual currency also known as virtual money, is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.
Wallet or Cryptocurrency wallets are software programs that store your public and private keys and interface with various blockchain so users can monitor their balance, send money and conduct other operations. When a person sends you bitcoins or any other type of digital currency, they are essentially signing off ownership of the coins to your wallet’s address.
Whitepaper A documentation describing a crypto currencies protocol in detail
Digital currency (digital money or electronic money or electronic currency) is a type of currency available only in digital form, not in physical (such as banknotes and coins).
Dust Transaction A small amount of bitcoin transaction but it is listed on the blockchain.
ERC-20 A type of token standard for Ethereum which ensures the tokens perform in a predictable way.
Full Node A node which implements all of Bitcoin protocol and does not require trusting any external service to validate transactions. It is able to download and validate the entire blockchain. All full nodes implement the same peer-to-peer messaging protocol to exchange transactions and blocks, but that is not a requirement. A full node may receive and validate data using any protocol and from any source. However, the highest security is achieved by being able to communicate as fast as possible with as many nodes as possible.
Hash (Rate)A hash is the output of a hash function and, as it relates to Bitcoin, the Hash Rate is the speed at which a compute is completing an operation in the Bitcoin code. A higher hash rate is better when mining as it increases your opportunity of finding the next block and receiving the reward.
Hashrate A measure of mining hardware performance expressed in hashes per second (GH/s). As of July 27, 2014 the hash rate of all Bitcoin mining nodes combined is around 135 799 000 GH/s. For comparison, AMD Radeon graphics cards produce from 0.2 to 0.8 GH/s depending on model.
Mining is a process of validating a transaction or block in a network by the process of complex algorithms to prove and validate the correctness of the transaction and thereby add the new block to the chain
Paper Wallet A form of cold storage where a private key for Bitcoin address is printed on a piece of paper (with or without encryption) and then all traces of the key are removed from the computer where it was generated. To redeem bitcoins, a key must be imported in the wallet application so it can sign a transaction.
Private Key (Privkey) A 256-bit number used in ECDSA algorithm to create transaction signatures in order to prove ownership of certain amount of bitcoins. Can also be used in arbitrary elliptic curve arithmetic operations. Private keys are stored within wallet applications and are usually encrypted with a pass phrase. Private keys may be completely random (see Key Pool) or generated from a single secret number ("seed"). See also Deterministic Wallet.
Proof of Burn
is a method for distributed consensus and an alternative to Proof of Work and Proof of Stake. It can also be used for bootstrapping one cryptocurrency off of another. The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address.
The proof-of-stake (PoS) is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there's currently no standard form of it.is a method for distributed consensus and an alternative to Proof of Work and Proof of Stake. It can also be used for bootstrapping one cryptocurrency off of another. The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address.
Proof of work (PoW) is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. ... Bitcoin uses the Hashcash proof of work system.May 15, 2016
P2P (Peer-to-peer) refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
QR Code A two-dimensional graphical block containing a monochromatic pattern representing a sequence of data.
Secret key Either the Private Key or an encryption key used in encrypted wallets. Bitcoin protocol does not use encryption anywhere, so secret key typically means a private key used for signing transactions.
SegWit (Segregated Witness) The process where the block size limit on a blockchain is increased by removing digital signature data and moving it to the end of a transaction to free up capacity. Transactions are essentially split (or 'segregated'), into two segments: the original data segment and the signature (or 'witness') segment.
SegWit (Segregated Witness) The process where the block size limit on a blockchain is increased by removing digital signature data and moving it to the end of a transaction to free up capacity. Transactions are essentially split (or 'segregated'), into two segments: the original data segment and the signature (or 'witness') segment.
SHA (Secure Hash Algorithms) are a family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST) as a U.S. Federal Information Processing Standard (FIPS
Sharding A scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.
Shorting a motivation of earning profit by purchasing cryptocurrency at lower price.
Shorting a motivation of earning profit by purchasing cryptocurrency at lower price.
Testnet A set of parameters used for testing a Bitcoin network. Testnet is like mainnet, but has a different genesis block (it was reset several times, the latest testnet is testnet3). Testnet uses slightly different address format to avoid confusion with main Bitcoin addresses and all nodes are relaying and mining non-standard transactions.
TokensRefers to the ‘currency’ of projects built on the ethereum network that have raised money via issuing their own tokens. Examples: GNT – Golem REP – Augur
To the Moon the assumption that the price of a cryptocoin will keep to rise and reach the highest price.
Virtual currency also known as virtual money, is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.
Wallet or Cryptocurrency wallets are software programs that store your public and private keys and interface with various blockchain so users can monitor their balance, send money and conduct other operations. When a person sends you bitcoins or any other type of digital currency, they are essentially signing off ownership of the coins to your wallet’s address.
Whitepaper A documentation describing a crypto currencies protocol in detail
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