Glossary

Address: A string of alphanumeric characters that represents a unique identifier for a cryptocurrency wallet.
Altcoin: Any cryptocurrency other than Bitcoin.
ASIC: An application-specific integrated circuit, designed specifically for mining cryptocurrencies.

Blockchain: A distributed, decentralized ledger that records all cryptocurrency transactions.
Block reward: The amount of cryptocurrency awarded to a miner for adding a new block to the blockchain.

Centralized exchange: A cryptocurrency exchange that is owned and operated by a single entity.
Cold storage: The practice of storing cryptocurrency offline in a secure, offline wallet to protect it from hackers.
Confirmation: The process of validating a cryptocurrency transaction by adding it to the blockchain.
Consensus: A mechanism used by blockchain networks to ensure that all nodes agree on the state of the ledger.
Cryptocurrency: A digital or virtual currency that uses cryptography for security and operates independently of a central bank.

Decentralized exchange: A cryptocurrency exchange that operates on a decentralized blockchain network.
Decentralized ledger: A distributed, decentralized ledger that records all cryptocurrency transactions.
Difficulty: The measure of how difficult it is to find a valid block in a blockchain network.
Double spending: The act of spending the same cryptocurrency twice, which is prevented by the blockchain network.

ERC-20: A technical standard used for smart contracts on the Ethereum blockchain.

EVM: EVM stands for Ethereum Virtual Machine. The EVM is a virtual machine that runs code on the Ethereum blockchain.

Faucet: A website that gives away small amounts of cryptocurrency as a promotional tool.
Fiat currency: A government-issued currency that is not backed by a commodity such as gold.
FOMO: Fear of missing out, a psychological phenomenon that can influence cryptocurrency market behavior.
Fork: A split in a blockchain network, resulting in the creation of two separate cryptocurrencies.

Gas: The fee paid to miners to process a transaction on the Ethereum blockchain.

Halving: The process of reducing the block reward in a cryptocurrency network.
Hash: A mathematical function that converts data into a fixed-length string of alphanumeric characters.
Hash rate: The measure of the computational power of a miner or mining network.
HODL: A misspelling of “hold,” which has become a popular meme among cryptocurrency enthusiasts.

ICO: Initial Coin Offering (ICO) is a fundraising mechanism used by new cryptocurrency projects.

KYC: Know your customer, a regulatory requirement for cryptocurrency exchanges and other financial institutions.

Ledger: A record of all cryptocurrency transactions in a blockchain network.
Lightning network: A layer 2 scaling solution for the Bitcoin network.

Market capitalization: The total value of all cryptocurrency in circulation.
Mining: The process of adding new blocks to a blockchain network.

Node: A computer that participates in the validation and processing of cryptocurrency transactions on a blockchain network.
Nonce: A random number used in the mining process to create a valid block hash.

On-Chain: When transactions are registered directly on the blockchain and distributed to all parties involved, they are considered on-chain transactions.
Off-Chain: An off-chain transaction refers to a transaction that takes place outside of the blockchain network, enabling quicker processing times and lower costs.

Paper wallet: A form of cold storage for cryptocurrency that involves printing out a wallet’s private key.
Peer-to-peer: A type of network architecture that allows users to communicate directly with each other, without a central authority.
Private key: A string of alphanumeric characters that allows a user to access their cryptocurrency wallet.
Proof of work: A consensus mechanism used by some blockchain networks that requires miners to perform computational work to validate transactions.
Public key: A string of alphanumeric characters that is used to receive cryptocurrency.
Pump and dump: A type of market manipulation where traders artificially inflate the price of a cryptocurrency before selling off their holdings.

Ripple: A real-time gross settlement system, currency exchange and remittance network, and cryptocurrency.

Satoshi: The smallest unit of a Bitcoin, named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto.
Scrypt: A mining algorithm used by some cryptocurrencies, such as Litecoin.
Segregated Witness: A protocol upgrade for the Bitcoin network that allows for increased transaction throughput and reduced fees.
SHA-256: A hashing algorithm used by the Bitcoin network.
Smart Contract: A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
Soft fork: A protocol upgrade that is backwards compatible with older versions of the software.
Solidity: A programming language used for writing smart contracts on the Ethereum blockchain.
Stablecoin: A cryptocurrency that is pegged to the value of a fiat currency or other asset.
Supply cap: The maximum number of units of a cryptocurrency that will ever exist.
Sybil attack: An attack on a blockchain network where an attacker creates multiple fake identities in order to gain control of the network.

Token: A digital asset that represents ownership in a particular project or network.
Transaction fee: The fee paid to miners to process a cryptocurrency transaction.
Trustless: A system or transaction that does not require trust in a third party or intermediary.
Two-factor authentication: A security measure that requires two forms of verification before granting access to a cryptocurrency wallet or exchange.

Unconfirmed Transaction: A transaction that has been broadcast to the network but has not yet been added to the blockchain.
Utility Token: A token that is used to access or purchase a product or service on a blockchain network.

Vanity address: A cryptocurrency address that has been customized to spell out a particular word or phrase.
Volatility: The degree of variation of a cryptocurrency’s price over time.

Wallet: A software program or device used to store and manage cryptocurrency.
White paper: A technical document that outlines the features and functionality of a new cryptocurrency project.