A Beginner’s Dictionary For Crypto Jargon PART 2

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A Beginner’s Dictionary For Crypto Jargon PART 2

This guide is the second in a two-part series about the most common terminology used in the cryptocurrency industry. If you haven’t yet, be sure to also check out Part 1.

  • ICO – meaning Initial Coin Offering, this is the crowdfunding mechanism of the industry which allows businesses to issue their own cryptocurrency in exchange of investor’s fiat or crypto assets.
  • Lightening Network – a payment protocol which is based on blockchain and able to processes billions of transactions per second.
  • Market Cap – the total availability of a particular cryptocurrency multiplied by its current price.
  • Mining – the process by which dedicated software works to solve a block in a blockchain and is rewarded in cryptocurrency.
  • Mining Rig – a powerful computer with high graphics processors designed to process blockchains.
  • Moon – a colloquial term associated with the probable increase of a cryptocurrency’s volume and price.
  • Node – an individual computer which holds a copy of the blockchain and continually maintains it.
  • Paper Wallet – probably the least secure type of wallet, involves keeping public and private keys written on a piece of paper.
  • POW – meaning proof of work, this is the algorithm used by cryptocurrencies to reward a miner to solve a block.
  • Private Key – a code held privately which allows a user to unlock a cryptocurrency wallet.
  • Proof of Stake – the creator of a new blockchain block based on his/her wealth.
  • Public Key – sometimes referred to as the crypto address, this is the string of numbers and letters used to send and receive cryptocurrencies from an exchange or wallet.
  • Pump and Dump – when a cryptocurrency suddenly gets a lot of attention leading to a massive price increase, followed, shortly afterward, by a steep decline.
  • ROI – meaning return on investment, this term is commonly used in investing sectors and refers to the percentage profit one can expect to make on a given investment.
  • Satoshi Nakamoto – the mysterious and elusive person or group of people behind Bitcoin.
  • Sharding – a method of scaling blockchains by getting nodes to include partial copies of entire chains which allows them to increase network speed and performance.
  • Shilling – when a group or individual advertise a crypto coin in order to raise its price and personally gain from their investment.
  • Smart Contracts – applications which run based on pre-defined algorithms which cannot be influenced by unauthorised external sources once set.
  • Software Wallet – a virtual wallet, such as Exodus or Coinbase Wallet, where cryptocurrencies can be stored in a computer, just like any other file.
  • Stable Coin – a low volatility cryptocurrency which is a preferred choice for investors looking for a long-term trading pair, such as BTC/NEO.
  • Tokens – a cryptocurrency built on the Ethereum blockchain which is awarded as part of an ICO before the currency itself is available on major exchanges, such as Binance or Kraken.

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