Cryprocurrencies have become extremely popular nowadays. For many people it is a great way of investing money whereas others are using it as a reliable form of anonymous transactions. Whatever it is you are looking for, even if you just want to understand the news about the crypto world better, you should certainly learn the basic vocabulary. Here, you will find all the essential terms.
Pay your attention to the organisation of this small guide on the cryptocurrency vocabulary. I have put the terms categorising it by meaning rather than using a typical alphabetical order.
First of all, let’s decide what a word cryptocurrency means in the first place. Actually, cryptocurrency refers to the entire system of all-dsig9ital money which is based on tokens or coins. Their crucial feature is being under the control of a decentralised ledger.
Undeniably, the most popular and the most valuable cryptocurrency at the moment is bitcoin. Since 2009 when it was first introduced by Satoshi Nakamoto which is, in all likelihood an alias rather than a real name of an anonymous person or even a group of people, bitcoin has become thus expensive that it is popularly called “digital gold”.
Satoshis (aka Sats)
As you can guess the word Satoshis is closely related to the alias of Satoshi Nakamoto and thus, to bitcoin. Actually, for the time being, satoshis is a term used for the smallest part of bitcoin which is exactly a millionth part of one bitcoin.
Dogecoin is one of the most popular cryptocurrencies today as well. It was introduced as a joke in 2013 using the “doge” meme. Yet, this currency unexpectedly gained huge public interest and so far its market cap has over 30 billion USD surging more than 5000% during this year already. Unlike many other cryptocurrencies, dogecoin is so far available in an unlimited amount, thus, it remains pretty cheap with a maximum value of 45 cents. Taking into consideration these facts, it is not obvious whether investing into this cryptocurrency is a good idea or not.
For the time being, ether is the second most popular and most valuable cryptocurrency to bitcoin. Its blockchain software known as Etherium is open-source. At the moment, the market cap of ether is around 300 billion USD.
NFT or non-fungible tokens is a term very closely related to cryptocurrency, however, it is not exactly the same thing. The term “non-fungible” means something absolutely unique, one-of-a-kind and thus, something which cannot be replaced. To be precise, such tokens are pieces of content available in a digital form, usually a work of digital art or another collectible item linked to the blockchain of Etherium which makes such a token a verifiable asset.
The technology behind cryptocurrencies
Now, let’s look at some of more technical terms related to cryptocurrencies.
Undeniably, the most crucial term when it comes to cryptocurrencies is blockchain. Blockchain itself is a technology which is acting as a digital ledger for the majority of non-fungible tokens and cryptocurrencies. This technology can actually be used for storage of various forms of information, however, its major usage now is getting cryptocurrency transactions recoded. All the transaction after being performed are entering on the blockchain public ledger being managed by an entire global network of peers which can count even millions of computers as it is for instance in the case of bitcoin.
As I have already mentioned, a crucial feature of this technology is that the currencies are decentralised and any user can control them which make the technology different from fiat currencies controlled by governments of different countries.
Another essential term connected to the cryptocurrency technology is mining. This is a quite complex process allowing some cryptocurrencies such as bitcoin to get into circulation. The whole process is very energy-consuming requiring the use of extremely powerful computers which are engaged into solving rather complicated mathematical puzzles in order extend the blockchain by adding a new block. The process is thus power-consuming that it has even raised some concerns about the negative impact on the environment.
Coinbase has become public recently making an essential step for bringing cryptocurrencies into mainstream. So far, Coinbase is regarded to the leading platform used for exchanging cryptocurrecy.
Just like tangible money, cryptocurrency is kept in a special wallet. Of course, it is available in a digital form and protected by a password which you should keep in a secret in order to prevent third parties from stealing its content.