For starters, what is Cryptocurrency? Here are the 25 top most important crypto terms you should know.
Cryptocurrency, or crypto, is a digital and decentralized currency based on a cryptographic system. A cryptographic system is concerned with communication security, be it confidentiality of messages, sender authentication, non-repudiation of messages, regardless of the medium (pen, paper, or computers) used.
One of its clear benefits is that it is a completely different asset class than stocks, bonds and real estate. It is still evolving and has many unfamiliar acronyms and terms. Some of the terms below will help you understand the new world of crypto.
Crypto projects that send free tokens hoping to encourage adoption.
The most valuable cryptocurrency that was launched on Jan 9, 2009. Its price has seen many crests and troughs ranging from $60,000 to $30,000. Any coin that’s not bitcoin is “altcoin.”
A digital ledger of transactions that has sequential blocks built upon one another. Group of data within a blockchain is known as a block.
It is a centralized cryptocurrency exchange.
- Cold wallet
Also known as cold storage, it is a secure method of storing cryptocurrency offline. They are devices that are similar in appearance as USB devices.
When the power is not focused at a central point, but is distributed.
Decentralized applications designed by developers and deployed on a blockchain for carrying out actions without any intermediary like a bank, government or any financial institution.
- Digital Gold
Bitcoin is also known as digital gold as it can be stored and can increase in value.
By trade volume, it is the second largest crypto. It is also a software program that developers deploy to create new apps.
Those dollars or rupees in your wallet is a fiat currency. It is backed by the government.
It is a change in the protocol of blockchain resulting in one path that follows old rules and another has a new blockchain that splits off from an already existing one.
An acronym for “Fear, Uncertainty, and Doubt.” It is a trick used to spread negativity about a crypto coin and influence a future drop in price.
A user fee paid by the developers to the Ethereum network before they use it.
An acronym for “Hold On For Dear Life” that is a passive investment strategy in which people hold onto cryptocurrency instead of trading it in the hope that its value will increase over time.
A string of numbers and letters that is unique to each crypto buyer and seller. It is used to identify blocks.
- Initial Coin Offering
ICO is a way that funds are raised for a new crypto project, similar to IPOs for stocks.
The process in which new cryptos are made available and the transactions are maintained between the users.
A computer connecting a blockchain network.
- Non-Fungible Tokens
NFTs are units of value that represent the ownership of digital items such as art or unique collectibles.
- Public Key
Similar to a bank account number, it’s a person’s wallet address. Fortunately, the crypto terms relating to keys are relatively easy to remember, since they are based on real-world examples.
- Private Key
It is the encrypted password to your cryptocurrency. Again, a real-world example of a crypto term or concept.
- Smart Contract
Ethereum network can execute smart contracts which are algorithmic programs that enact the terms of contract based on its code.
Also referred to as Digital Fiat, it pegs its value to either a commodity or any non-digital currency. For instance, Tether is pegged to the US Dollar.
A unit of value on a blockchain.
A place to store crypto, just like you have for your physical money. These could be cold, that is, offline on a device or hot, that is online and software based. This is probably the simplest crypto term to remember.
There you have it–-the 25 most common crypto terms. This list is not exhaustive by any means, but it’s a start.
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