Actively participating in cryptocurrency-related conversations requires getting used to specific terms and vocabulary. The following jargon is very common in the industry but can still throw a curveball to newcomers.
The Common Terminology
There is much jargon to learn about and make sense of when it comes to cryptocurrency-related discussions and debates. Some of the following terms may seem akin to one another, yet their meaning can be miles apart. Using the correct “verbiage’ in a specific cryptocurrency conversation or setting is crucial.
For those who explore the blockchain segment, dApps will become important sooner or later. The term refers to decentralized applications or applications built on top of a decentralized blockchain. dApps exist in many different ecosystems, including Ethereum, EOS, TRON, and so forth.
In the first article of this series, we explain the concept of “mining” in the cryptocurrency world. Users who engage in this activity label their hardware setup as a “mining rig”. This structure houses cryptocurrency mining hardware, whether it be graphics cards or dedicated ASICs.
As all cryptocurrency transactions – either monetary or data-related – are recorded on the blockchain or distributed ledger, they are accessible by anyone. New data is written to the native distributed ledger around the clock in a blockchain or cryptocurrency ecosystem.
The concept of “immutability” is prominent in the cryptocurrency and blockchain world. An immutable ecosystem ensures all recorded data on the blockchain – present and future- cannot be altered in the past, present, and future. For Bitcoin, this means its record of all transactions to date will remain intact.
Although it sounds like a derogatory term, fiat currencies are an encompassing term to indicate any form of money issued by governments or central banks. Notable examples include the US Dollar, Europ, Pound Sterling, and so forth.
There are thousands of cryptocurrencies beyond Bitcoin and Ethereum. An “altcoin” or alternative cryptocurrency is an encompassing term for any cryptocurrency that isn’t Bitcoin. As such, even Ethereum is an altcoin in the eyes of many.
Contrary to what some may think, a token and an altcoin are not always the same. A token is an underlying digital asset of a cryptocurrency used to complete transactions or pay for specific network features. Ethereum, for example, is home to thousands of different tokens.
Different ways exist to store one’s cryptocurrency holdings. Cold storage is a solution everyone needs to explore. This terminology refers to keeping the private keys of one’s wallet(s) offline. Using a device not connected to the internet for this information prevents the data from being hacked.
Another way to store one’s cryptocurrency is through a paper wallet. It is akin to cold storage, but it requires users to print their private key and public key on a piece of paper. Paper wallets are popular to send Bitcoin gifts to others but are not ideal as long-term storage solutions.
Perhaps the most common way of storing cryptocurrencies is by using a hardware wallet. A hardware wallet is an external physical device designed to hold one’s private keys without being connected to the internet. Interfacing with this type of wallet occurs through a computer or mobile application.