If you are new to the world of cryptocurrencies and the blockchain, it is easy to get overwhelmed by all the new words and phrases that you will come across. What is a hash? Or a District Attorney? And what does “hodl” mean?
Here’s the only blockchain and cryptocurrency glossary you’ll ever need.
Percent Attack 51
- 1Percent Attack 51
- 2Hot wallet
- 3Block Height
- 5Blockchain or Blockchain
- 6Cold Wallets
- 7Private Key
- 8Public Key
- 10Smart contracts
- 14Fork or Fork
- 15Halving, Halving
- 16Hash Rate
- 21Authorized Ledger
- 22Lightning Network, Lightning Network
The most significant weakness of the blockchain from a security point of view. An entity on a blockchain only needs 50% + 1 to control the entire network, which allows it to do almost anything it wants: spend the same coins twice, prevent the validation of certain transactions, stop miners, etc.
Hot wallet refers to cryptocurrency storage that is connected to the web. The coins that are kept on an exchange platform fall into this category. Due to security vulnerabilities, you shouldn’t keep large amounts of coins in a hot wallet.
The Block Height is the number of individual blocks in a blockchain. The first block is height 0. It is also known as the Genesis block.
The blockchain is made up of blocks. Each block resembles a page from a traditional paper ledger; contains a list of recent transactions. When a block is finished, it is added to the end of the previous block, giving rise to the word “blockchain”. Each block also contains the solution to your math puzzle. Without this response, the block cannot be added to the chain.
Blockchain or Blockchain
A distributed ledger that records all transactions and smart contracts for a cryptocurrency or platform. The blockchain is replicated in several thousand nodes around the world.
You cannot keep your cryptocurrency in your bank account or under your bed. Instead, you need to keep them in a cold store.
Cold storage is typically done in three ways: a printed QR code that is kept in a safe place, a USB drive, or a specialized hardware wallet. For more information, take a look at our article 7 best Bitcoin and other cryptocurrency wallets .
If you want to send or withdraw coins, you must use your private key. Anyone who knows the key can access your funds, so you must protect it carefully. If you lose your private key, you will lose access to your funds forever.
If you want to receive cryptocurrencies, either from a stock exchange or from other people, you must provide them with your public key, also known as a public address. Sharing the key has no negative effect from a security point of view.
A transaction receives confirmation when it has been successfully processed and added to the blockchain. For Bitcoin, most businesses will need six confirmations before processing a transaction.
In addition to cryptocurrencies, also known as tokens or coins, some blockchains also support smart contracts. The most important smart contract network is Ethereum.
Smart contracts allow non-monetary assets to exchange hands on the blockchain without the need for an intermediary. Assets can include membership records, insurance, or even real estate.
A decentralized digital currency that can be used for goods, services, and asset transfers. The first cryptocurrency was Bitcoin. It went into operation in January 2009.
DApp is short for “decentralized app”. Unlike a normal application, which uses centralized servers to run its code, a DApp runs on a decentralized peer-to-peer network. The best known example is CryptoKitties, a cat breeding game. The popular EtherDelta exchange is also a DApp.
Decentralized applications also need an interface. This requirement differentiates them from smart contracts, which only work on the backend. More information about what decentralized applications are and how they are used at this link .
The fiat or fiat currency is the usual national currency, such as the US dollar, the British pound and the euro. It is declared legal tender by a government but is not backed by physical assets such as gold.
Fork or Fork
A blockchain fork can arise for a number of reasons. Maybe it’s necessary for security, maybe part of the community wants to take the project in a different direction, or maybe new governance rules are added to the blockchain code. A hard fork will make previously invalid blocks / transactions valid, while a soft fork will make previously valid blocks invalid.
The Bitcoin code dictates that only 21 million coins can exist. To manage the flow of coins, the reward for discovering a valid block is due in half at certain times. The reward was originally 50 BTC. This figure was reduced to 25 BTC in 2012 and 12.5 BTC in 2016. Once 64 “halves” have been produced, the supply of new Bitcoins will cease. That is expected to happen sometime in the next century.
The hash rate refers to the number of hashes that a cryptocurrency miner can perform every second.
Hashing is a cryptographic term that refers to converting input of any length to output of fixed length. In the blockchain world, the input is every transaction that has occurred, which means that the output is a direct representation of the current state of the blockchain. A change in the input (such as an edited transaction) would drastically change the output and alert people to the attempted fraud.
Hodl is a cryptocurrency meme to preserve your crypto assets instead of selling them. The meme was born in December 2013 when a user who had had too many drinks made a typo on a popular Bitcoin forum. You can still see the original topic on bitcointalk.org.
As cryptocurrencies grow in popularity, an increasing number of start-ups are launching coins. Each of them promises to fix, address, or improve a particular aspect of the cryptocurrency landscape in use. These new coins are made available to the public through ICOs (initial coin offerings). They are like the crypto version of an initial public offering of the stock market.
It is a phrase that you will see over and over again in forums and chat rooms. There is nothing technical about this, it is just the car that we are all going to buy when the cryptocurrency we use finally makes us rich.
Also called a private ledger. Most blockchains, including Bitcoin, allow anyone to join them. This creates some risks, namely that the blockchain could become vulnerable to a 51 percent attack. An authorized ledger means that only verified people can join the blockchain. However, it is still not perfect. Who sets the criteria for verification? And who is doing the verification? They are million dollar questions.
Lightning Network, Lightning Network
The Lightning Network is a possible answer to the scalability issues inherent in Bitcoin. Using the functionality of smart contracts, it allows payments to be made instantly. It even allows cross-chain payments, as long as they both use the same crypto hashing function. Regarding Bitcoin, the Lightning Network is still in its infancy.
Due to the cryptographic nature of cryptocurrencies, transaction verification requires an enormous amount of computing power and specialized hardware. In exchange for computing power, people who resolve, and therefore authorize, a transaction receive some cryptocurrency for doing so. This process is called mining.
In 2017, the coins would explode in price seemingly overnight. The market cap for the entire sector went from $ 15 billion in January to $ 600 billion in December. Ripple was the biggest winner; its price increased 28.963 percent during the 12 months. By comparison, the S&P 500 was up 19.4 percent. The phenomenon of massive gains from a single currency is known as “mooning.”
A node is a computing device on the blockchain. He is responsible for verifying transactions and keeping the distributed ledger up to date.
A Satoshi, named after Bitcoin founder Satoshi Nakamoto, is the smallest unit of Bitcoin that can be registered on the blockchain. It has a value of 0.0000000001 BTC.
Of course, the more you dive into the world of crypto, the more terms you don’t understand you will come across. If you’d like us to explain something to you, get in touch with us in the comments below.