A Glossary of Cryptocurrency terms

Blockchain

Blockchain is a public ledger which is distributed and decentraliezd.

Testnet

A blockchain that is used by developers for testing purpose only is termed as testnet.

BTC

It is a common abbreviation used to represent Bitcoin.

Altcoin

Any cryptocurrency other than bitcoin is called as an altcoin.

Centralized

If a system is controlled by a single person or a group of people than it is called as a centralized system.

Decentralized

If there is no governing authority or single entity controlling the system, then such system is termed as a decentralized system.

Fiat

The government-issued currencies like the U.S. dollar, the euro, Indian rupee, and the Renminbi, etc. are referred to as a Fiat.

Exchange

A marketplace where the individuals can buy and sell cryptocurrencies.

Wallet

A cryptocurrency wallet is a software that stores the keys (public and private) and creates cryptocurrency transactions.

Public key

A public key is a string of numbers and letters that have to be given to the general public in order to get funds from them

Private key

A private key is a string of numbers and letters used as a password on your account. Anybody holding this key has direct access to the account and can control the cryptocurrency within it.

Multisig

Multisig acts like a permissions system for crypto wallets. Single signature wallets need only one person’s private key to control the balance within it. But in the multisig wallet, you need more than one private to spend the funds. For eg., you may need 2 out of 3 signers to approve a transaction.

Address

The string of letters and numbers working as an account number which are publicly shared for cryptocurrency transactions are termed as address or wallet address.

Double spending

When someone tries to spend the same cryptocurrency at two places at the same time is called as double spending. In such cases, only one transaction would be recorded in a block and the other transaction would be considered as not valid.

Escrow

Escrow is a third-party legal concept that holds cryptocurrency or funds on behalf of the two parties during a transaction. The cryptocurrency is held by the escrow until the proper instructions are given to release the funds.

Faucets

Faucets are the sites that give away small amounts of bitcoins. Initially, it was done to spread the currency and get people interested

Frok

A fork is produced when two blocks are dealing with the same transaction. In such cases, only one set of blocks will be recognized.

Hash

A concept that takes a large amount of data and produces a short, fixed-length output

Hash rate

The number of hashes a miner produces per second is termed as the hash rate. The more is the hash rate, the more active is the chain and more appealing it is to the miners also making the chain harder to attack

Liquidity

The ability to switch any two given cryptocurrencies easily

Mining

The act of solving mathematical problems using specialized equipment and producing cryptocurrency

Node

Any computer that is connected to the internet and running the blockchain. Each node in a blockchain plays an important role in verifying the ledger.

P2P

It is a system of sharing information on a network between two individuals without going through a central authority

Proof of stake

A concept that determines the number of coins you can mine depending on how many coins you hold/own. The more coins you hold, the more mining power you have.

Proof of work

Proof of work is a consensus algorithm used for confirming transactions and producing new blocks to be added on/to the chain

Smart contracts

Smart contracts are a set of codes that are placed on a blockchain and then executed on it. These set of codes are audited by the public

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