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Cryptocurrency Terminology
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Blockchain
A decentralized digital ledger that records transactions across many computers so that the records cannot be altered retroactively without the alteration of all subsequent blocks and the network consensus.
Bitcoin
A digital currency created in 2009, which uses decentralized technology for secure payments and storing money that doesn't require banks or people's names.
Ethereum
An open-source, blockchain-based platform known for its smart contract functionality, which are self-executing contracts with the terms directly written into code.
ICO
Initial Coin Offering, a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether.
Smart contract
A protocol or computer program that automatically executes, controls, or documents legally relevant events and actions according to the terms of a contract or an agreement.
DeFi
Decentralized Finance, an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. It removes the control banks and institutions have on money, financial products, and financial services.
Altcoin
Alternative digital currency to Bitcoin, often with unique features or different underlying technologies.
Mining
The process by which new cryptocurrency coins are made available and the log of transactions between users is maintained.
Satoshi
The smallest unit of Bitcoin, named after the pseudonymous creator Satoshi Nakamoto. One Satoshi is equal to a hundred millionth of a Bitcoin (
Wallet
A digital place for your cryptocurrencies to be stored. Each wallet has a public address and a private key to encrypt and decrypt the funds within it.
Exchange
A digital marketplace where traders can buy and sell cryptocurrencies using different fiat currencies or altcoins.
Hash Rate
The measure of a miner's performance, the speed at which a miner solves the Bitcoin code.
Public Key
An alphanumeric string which is derived from a private key and used to encrypt data or transactions for secure communications on a blockchain network.
Private Key
A secret alphanumeric string that proves your right to spend bitcoins from a specific wallet through a cryptographic signature.
Proof of Work
A consensus mechanism for blockchain networks that requires participants to perform work -- solving complex puzzles -- to verify transactions and create new blocks.
Proof of Stake
A consensus mechanism for blockchains that selects validators in proportion to their quantity of holdings in the associated cryptocurrency.
Node
A computer connected to the blockchain network that uses a client to validate and relay transactions and, depending on its capabilities, may also participate in mining or maintaining the network.
Fork
A change to the software protocol of the blockchain that results in two separate versions of the blockchain: one that follows the old protocol and one that follows the new.
Cryptocurrency
A type of digital or virtual currency that uses cryptography for security and operates independently of a central bank.
Token
A representation of an asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes.
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