- Cryptocurrency: A digital or virtual form of currency that uses cryptography for secure financial transactions and control the creation of new units.
- Blockchain: A decentralized, distributed ledger that records all transactions across multiple computers or nodes. It ensures transparency, security, and immutability.
- Bitcoin: The first and most well-known cryptocurrency created by an anonymous person or group named Satoshi Nakamoto. Bitcoin operates on a peer-to-peer network and uses a blockchain to record transactions.
- Altcoin: Any cryptocurrency other than Bitcoin. Altcoins include Ethereum, Ripple, Litecoin, and many others.
- Token: A unit of value issued by a project or organization on a blockchain. Tokens can represent assets, rights, or access to services.
- ICO: Initial Coin Offering, a fundraising method used by startups to issue tokens in exchange for investment. Investors receive tokens that may have future utility within the project’s ecosystem.
- Fork: A split in a blockchain, resulting in two separate chains with different protocol rules. It can occur as a result of disagreements within the community or to introduce new features.
- Wallet: A digital software or hardware device used to store, manage, and secure cryptocurrency. Wallets can be hot (online) or cold (offline).
- Private Key: A secret cryptographic code that allows users to access and control their cryptocurrency. It should be kept secure and confidential.
- Public Key: A cryptographic code derived from the private key that allows users to receive cryptocurrency. It can be shared openly with others.
- Mining: The process of validating and adding new transactions to a blockchain, typically involving solving complex mathematical puzzles. Miners are rewarded with newly created cryptocurrency as an incentive.
- Proof of Work (PoW): A consensus mechanism where miners compete to solve complex mathematical problems to validate transactions. It is used by cryptocurrencies like Bitcoin.
- Proof of Stake (PoS): A consensus mechanism where users can “stake” their cryptocurrency as collateral to validate transactions and create new blocks. It is energy-efficient compared to PoW.
- Decentralized Finance (DeFi): A system that uses blockchain and cryptocurrency to recreate traditional financial instruments and services in a decentralized manner, eliminating intermediaries.
- Smart Contract: Self-executing contracts with terms written into code on the blockchain. They automatically execute when predetermined conditions are met.
- DApp: Decentralized Application, an application that runs on a blockchain network instead of a centralized server. DApps are open-source, transparent, and resistant to censorship.
- Exchange: A platform where users can buy, sell, and trade cryptocurrencies. Examples include Binance, Coinbase, and Kraken.
- Market Cap: The total value of a cryptocurrency calculated by multiplying the current price by the total supply of coins or tokens in circulation.
- Whale: A term used to describe individuals or entities that hold a large amount of cryptocurrency. Whales have the potential to influence market prices due to their significant holdings.
- HODL: A misspelling of “hold” that originated in the cryptocurrency community. It refers to the strategy of holding onto cryptocurrency for the long term, despite market fluctuations.
Note – the cryptocurrency landscape is continuously evolving, and new terms and concepts may emerge over time.