Crypto can be a tough nut to crack – not only do you have to stay on top of the latest news and developments, but you also need to understand all the technical terms being thrown around. This can be daunting for even the most experienced investor.
But never fear – in this article, we’ve compiled a list of essential crypto technical terms, so that you can hit the ground running and start making money in no time! Knowing Them Is Vital To Your Success!
Blockchain
The complete list of technical terms in crypto can be found here. Knowing them is vital to your success.
Blockchain is a digital ledger that records all transactions made in a network. It is a distributed database that is used to keep track of all digital currency transactions.
A blockchain is made up of blocks, each of which contains a record of all the transactions made in the network since the last block was created. The first block in a blockchain is called the genesis block.
Blocks are linked together using cryptography, so it is not possible to change the contents of a block without changing all the blocks that come after it. This makes blockchain a very secure way of storing data.
Bitcoin
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
Ethereum
When it comes to cryptocurrency, Ethereum is one of the most popular and well-known platforms. It is a decentralized platform that runs smart contracts. These contracts are applications that run exactly as programmed without any possibility of fraud or third party interference.
Ethereum is not just a platform but also a programming language running on a blockchain that helps developers to build and publish decentralized applications. The native currency of the Ethereum blockchain is called Ether. Ether can be used to pay for transaction fees and services on the Ethereum network.
The Ethereum platform has attracted a lot of attention from developers and investors because it enables them to create decentralized applications with no third party interference. The applications built on Ethereum are run on a decentralized network of nodes and are therefore not subject to any single point of failure.
If you’re interested in learning more about Ethereum, check out our blog section for more articles and resources.
Smart contracts
A smart contract is a computer protocol that allows for the verification, facilitation, or enforcement of a contract. Smart contracts were first proposed by Nick Szabo in 1996 as a way to create “a digitally facilitated transaction between strangers without the need for a trusted third party.”
Smart contracts have been used in a variety of different ways since their inception. One early use case was to create a decentralized Autonomous Organization (DAO). A DAO is an organization that is run by its code, rather than by traditional hierarchical structures. The first DAO, The DAO, was created on the Ethereum blockchain in 2016. Unfortunately, The DAO was quickly hacked and lost $50 million worth of ETH.
Despite this setback, smart contracts have continued to be developed and used in a variety of ways. For example, they can be used to create decentralized exchanges (DEXes), which are online platforms that allow users to trade cryptocurrencies or other digital assets without the need for a central authority. IDEX is one popular DEX that uses smart contracts.
Overall, smart contracts offer a way to create trustless transactions between parties. By eliminating the need for a third party intermediary, they have the potential todisrupt many industries.
Initial coin offerings (ICOs)
An ICO is a type of crowdfunding that allows startups to raise capital by selling tokens. ICOs have become increasingly popular in recent years, as they offer a way for companies to raise large amounts of money quickly. However, they are also highly unregulated and have been associated with scams.
In an ICO, a company creates a new cryptocurrency or token and sells it to investors in exchange for more established cryptocurrencies like Bitcoin or Ethereum. The tokens sold in an ICO are typically used to access the services of the company that issued them. For example, the Basic Attention Token (BAT) can be used to access advertising services on the Brave browser.
Investors typically purchase ICO tokens with the hope that the company will be successful and the value of its tokens will increase. However, there is no guarantee that this will happen, and many ICOs have turned out to be scams. As such, investors should be very careful when considering an ICO investment.
Decentralized applications (DApps)
A decentralized application (DApp) is an application that runs on a decentralized network like a blockchain. DApps are often open source, meaning anyone can contribute totheir development.
DApps have a variety of different use cases. For example, CryptoKitties is a DApp that allows users to breed and trade digital cats. Augur is a DApp that allows users to make predictions about real-world events and earn rewards if they are correct.
Because DApps are decentralized, they are often more secure than traditional centralized applications. They are also less likely to be censored or shut down by authorities. However, they can be more difficult to develop and deploy than traditional applications.
Initial exchange offerings (IEOs)
An initial exchange offering (IEO) is a type of crowdfunding that allows startups to raise capital by selling tokens on a cryptocurrency exchange. IEOs have become increasingly popular in recent years as they offer a way for companies to raise money quickly. However, they are also highly unregulated and have been associated with scams.
In an IEO, a company creates a new cryptocurrency or token and sells it to investors on a cryptocurrency exchange. The tokens sold in an IEO are typically used to access the services of the company that issued them. For example, the Basic Attention Token (BAT) can be used to access advertising services on the Brave browser.
Altcoins
What are altcoins? Altcoins are alternative cryptocurrencies to Bitcoin. They are also known as “altcoins” since they are alternatives to Bitcoin. There are hundreds of altcoins, and new ones are created every day. Bitcoin is the first and most well-known cryptocurrency, but it is not the only one.
Altcoins are often created to improve upon the original Bitcoin design or to address certain issues that Bitcoin users may have. For example, some altcoins focus on anonymity and privacy features, while others focus on improved scalability or speed. Some altcoins even offer unique features that you won’t find in Bitcoin.
Due to the large number of altcoins, it can be difficult to keep track of them all. However, knowing about the most popular altcoins can give you a better understanding of the cryptocurrency ecosystem as a whole. In this article, we will provide an overview of the top 10 altcoins by market capitalization.
Mining
Mining is how new bitcoins are created. Miners are basically the backbone of the bitcoin network. They validate transactions and add them to the blockchain. In return, they’re rewarded with newly minted bitcoins. Mining is a computationally intensive process that requires a lot of power and resources.
Conclusion
Technical terms are an integral part of the crypto world, and it’s important to know them in order to be successful. This list is by no means exhaustive, but it covers many of the most important terms you need to know. Take some time to familiarize yourself with these terms and make sure you understand what they mean — it could make a big difference in your success as a crypto investor.
