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Cryptocurrency Technologies
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Blockchain
A distributed ledger technology crucial for the operation of most cryptocurrencies; it ensures secure and transparent transactions.
Decentralization
Characteristic of cryptocurrencies, allowing them to operate without a central authority, reducing the risk of corruption and systemic failure.
Miners
Individuals or entities that use computational power to validate transactions and secure the network, often rewarded with cryptocurrency.
Smart Contracts
Self-executing contracts with the terms directly written into code; they automate, enforce, and facilitate contractual agreements.
Wallet
A digital tool that stores public and/or private keys for cryptocurrency transactions; it enables users to send, receive, and store cryptocurrencies.
Public Key
A cryptographic key that can be distributed widely; used in conjunction with a private key to securely interact with cryptocurrencies.
Private Key
A confidential cryptographic key that allows a cryptocurrency holder to access and manage their funds; necessary for initiating transactions.
Hash Function
A function used in cryptography to convert data into a unique string of characters; essential for blockchain integrity and security.
Proof of Work
A consensus algorithm requiring miners to solve cryptographic puzzles to validate transactions and create new blocks, consuming significant computing power.
Proof of Stake
An alternative consensus algorithm where validators are chosen based on the number of coins they hold and are willing to 'stake' as collateral.
Fork
A change in protocol causing the blockchain to split into two paths; can be planned (soft fork) or contentious (hard fork).
Cryptocurrency Exchange
A platform where users can buy, sell, or trade cryptocurrencies for other digital currency or traditional currency like USD or EUR.
ICO (Initial Coin Offering)
A fundraising mechanism where new projects sell their underlying cryptocurrency tokens in exchange for Bitcoin, Ether, or fiat currencies.
Tokenization
The process of representing real or virtual assets as digital tokens on a blockchain, often used to improve liquidity and transfers.
Cryptography
The practice of secure communication in the presence of third parties; vital to cryptocurrency for ensuring transaction security and integrity.
Altcoin
Any cryptocurrency that is not Bitcoin; they can offer different features, transaction speeds, and consensus mechanisms.
Stablecoin
A type of cryptocurrency that is designed to maintain a stable value by being pegged to a currency or other external reference.
Non-Fungible Token (NFT)
A unique token that represents ownership of a specific item or asset; these tokens are not interchangeable.
Distributed Ledger
A database that is consensually shared, synchronized, and distributed across multiple sites, institutions, or geographies.
DEX (Decentralized Exchange)
A peer-to-peer marketplace where transactions occur directly between crypto traders without an intermediary.
Atomic Swap
A peer-to-peer exchange of cryptocurrencies from two different blockchains without the need for a third party.
Lightning Network
A second-layer protocol designed to allow faster transactions between participating nodes, and a solution to Bitcoin's scalability issue.
Gas (Ethereum)
A unit that measures the computational effort required to execute operations on the Ethereum network, with costs paid in Ether.
SHA-256
A cryptographic hash function used by Bitcoin to encrypt blocks and secure the blockchain.
Satoshi Nakamoto
The pseudonymous creator(s) of Bitcoin, whose true identity has never been verified; introduced blockchain and digital scarcity.
Cold Storage
A way of holding cryptocurrencies offline to protect them from hacking; considered a more secure method of storage.
Consensus Algorithm
A process in computer science used to achieve agreement on a single data value among distributed processes or systems.
Cryptocurrency Mining
The process through which transactions are verified and added to the blockchain, also resulting in the release of new cryptocurrency.
Digital Signature
A mathematical scheme for demonstrating the authenticity of digital messages or documents, securing cryptocurrency transactions.
KYC (Know Your Customer)
A process for business entities to verify the identity of clients; in crypto, used by exchanges to prevent fraud and money laundering.
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