Cryptocurrency terms you should know:
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Bitcoin - The first and most valuable cryptocurrency, launched on Jan. 3, 2009.
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Bitcoin - The first and most valuable cryptocurrency, launched on Jan. 3, 2009.
Block - groups of data within a blockchain. On cryptocurrency blockchains, blocks are made up of transaction records as users buy or sell coins. Each block can hold only a certain amount of information. Once it reaches that limit, a new block is formed to continue the chain.
Blockchain - a digital form of record keeping, and the underlying technology behind cryptocurrencies. A blockchain is the result of sequential blocks that build upon one another, creating a permanent and unchangeable ledger of transactions (or other data).
Coin - a representative store of digital value that lives on a given blockchain or cryptocurrency network. Some blockchains have the same name for both the network and the coin, like Bitcoin. Others can have different names for each.
Coinbase - a popular centralized cryptocurrency exchange. Coinbase made history recently as the first cryptocurrency exchange to go public on the Nasdaq.
Cold wallet/cold storage - a secure method of storing your cryptocurrency completely offline. Many cold wallets (also called hardware wallets) are physical devices that look similar to a USB drive.
Cryptocurrency - a type of currency that’s digital and decentralized. Cryptocurrency can be used to buy and sell things, or as a long-term store of value.
Decentralization - the principle of distributing power away from a central point. Blockchains are traditionally decentralized because they require majority approval from all users to operate and make changes, rather than a central authority.
Ethereum - the second largest cryptocurrency by trade volume, Ethereum is a crypto network and software platform that developers can use to create new applications, and has an associated currency called ether.
HODL - stands for “Hold On for Dear Life” though the term originated from a user typo on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.
Hot wallet - software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets.
Market capitalization - cryptocurrency market capitalization refers to the total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins.
Node - a computer that connects to a blockchain network.
Non-fungible Tokens (NFTs) - are units of value used to represent the ownership of unique digital items like art or collectibles. NFTs are most often held on the Ethereum blockchain.
Mining - the process whereby new cryptocurrency coins are made available and the log of transactions between users is maintained.
Public Key - your wallet’s address, which is similar to your bank account number. You can share your public wallet key with people or institutions so they can send you money or take money from your account when you authorize it.
Private Key - the encrypted code that allows direct access to your cryptocurrency. Like your bank account password, you should never share your private key.
Satoshi Nakomoto - the pseudonymous creator of Bitcoin. No one knows the true identity of Nakomoto — or if it’s more than one person.
Token - a unit of value on a blockchain that usually has some other value proposition besides just a transfer of value (like a coin).
Vitalik Buterin - programmer who invented Ethereum in 2015.
Wallet - a place to store your cryptocurrency holdings. Many exchanges offer digital wallets. Wallets may be hot (online, software-based) or cold (offline, usually on a device).
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