10 Cryptocurrency Terms You Should Know

10 Cryptocurrency Terms You Should Know

To new crypto enthusiasts, the fledgling world of cryptocurrency is one that can be exciting, yet intimidating. The various phrases and jargon of Cryptonese gets thrown around with reckless abandon, leaving scores of confused faces in its wake. The world of cryptocurrency is one which has similar potential to disrupt and change the way the world functions, so it is no surprise that it has gained serious momentum over the past year. So why not get a headstart by getting to grips with these 10 key terms?

  1. Blockchain

    A list of records that is constantly updated and secured using cryptography. Each block contains a timestamp and transaction data. It is also linked to a previous block, creating a chain that cannot be modified without changing all subsequent blocks behind it. As an open and public ledger, it is transparent and transactions between parties can be recorded and verified permanently.

  2. Fiat money

    A form of currency with an assigned value, such as legal tender made by a government decree.

  3. Cryptocurrency exchange

    A platform that allows individuals to trade cryptocurrencies for other assets such as fiat money, or even other cryptocurrencies.

  4. Decentralized

    A term used to describe a system that operated and is held accountable by peers rather than a central body or single individual.

  5. Bitcoin

    The first decentralized cryptocurrency invented, with all transactions occurring on a peer-to-peer network. All transactions are recorded on an open, public ledger known as the blockchain.

  6. Altcoin

    A term used to describe alternative currencies to Bitcoin, the first successful peer-to-peer digital currency. Many position themselves as superior currencies to Bitcoin.

  7. Private keys

    A form of cryptography that gives users access to their cryptocurrencies. Although any party can deposit cryptocurrencies into an address, only the person with a private key is authorized to access and use those funds.

  8. Satoshi Nakamoto

    The name used by the inventor(s) of bitcoin. Although there have been several leads, the real identity of Nakamoto has not been established to this day.

  9. Cold storage

    A term used to describe the act of storing cryptocurrencies offline, away from any access to the internet. This significantly reduces the threat posed by hackers and malicious software.

  10. Initial coin offering (ICO)

    Similar to an initial public offering (IPO), an ICO is a method used by cryptocurrency companies to raise funds. Investors receive a percentage of all coins or tokens in circulation based on their investment, with the startup often using the funds raised as capital.

As with any new technology or major development, there will always be a learning curve for early adopters. Not too long ago, audiences were learning to figure out smartphones and apps; prior to that, websites and the internet. Everyone’s been there before. Hopefully the 10 key terms above have helped you to start understanding this brave new world a little more.

Click here to read up on the 10 blockchain terms you should know.

Click here to read up on the 10 cryptocurrency trading terms you should know.

Cover image from cryptohq.org
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