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Cryptocurrency and Banking
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Cryptocurrency
Digital or virtual currency that uses cryptography, serving as an alternative to traditional fiat currency.
Blockchain
A digital ledger comparable to a bank's ledger but decentralized and immutable.
Public Key
Equivalent to a bank account number, it's used to receive funds in cryptocurrency transactions.
Token
Digital representation of value or utility, which can be seen as the virtual equivalent of a bank's certificates of deposit.
Exchange
Functions like a traditional bank's currency exchange but for trading various cryptocurrencies.
Ledger
Serves the same purpose as a bank ledger to record transactions, although it's distributed and public in the case of cryptocurrencies.
Wallet
Similar to a bank account, used to store cryptocurrency but is not insured by FDIC.
Decentralization
Contrasts with centralized banking system by distributing control across a network rather than a single entity.
Transaction Fee
Fees paid for processing transactions, akin to bank's service charges, but not set by a central authority.
Stablecoin
Designed to work like electronic fiat on blockchain platforms, typically pegged one-to-one with traditional currencies.
Mining
Analogous to the minting of currency or printing of banknotes, but performed by solving complex mathematical problems.
Smart Contract
Comparable to traditional contracts or agreements in banking, but is self-executing with the terms written into code.
Initial Coin Offering (ICO)
Like an Initial Public Offering (IPO) in traditional banking, but for new cryptocurrency projects seeking to raise funds.
Private Key
Similar to a bank account's password, it is used to authorize outgoing cryptocurrency transactions.
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