Cryptpresso - Dictionary

FIAT MONEY

by Randall Stephens

Money established by a government order, a currency without intrinsic value. To get a grasp of this term just imagine a gold coin and a paper banknote. The gold coin has intrinsic value because of the value of the precious metal it is made of. Paper money doesn’t have any intrinsic value, because the value of paper needed to print a single banknote is negligible. Fiat money has value only because a government declares that it does, or because parties engaging in an exchange agree on its value. The main problem with fiat money is that a government can lose the ability to maintain its value, which can lead to hyperinflation.

WALLET

by Randall Stephens

A wallet that you carry in your pocket is usually a small, flat case that can be used for carrying cash, as well as credit cards, identification documents, business cards, etc. Crypto wallet has the same purpose of storing your money, only, in this case, it’s your digital money or cryptocurrencies. More precisely, it stores the private and public keys to your coins. You can’t put a crypto wallet in your pocket, however, because it’s a piece of software that interacts with blockchain to send, receive and keep track of your crypto assets. All wallets can be divided into hot and cold wallets, depending on their connection to the Internet. The hot wallet can be directly accessed through the Internet or is located at a device that has an Internet connection. The cold storage means that the wallet is kept offline, on a device not connected to the Internet. Examples of cold wallets are USB drives, paper wallets or even brain wallets. For more information on wallets read this article: Cryptocurrency Wallets: How To Keep Your Coins Safe

ALTCOIN

by Randall Stephens

Altcoin stands for Alternative coin, and it refers to every other coin that came after the bitcoin. Altcoins are different than bitcoin in some aspects because their developers believe they will fix the problems that bitcoin has. One of the first altcoins is a Litecoin, created as silver to bitcoin’s gold. Compared to the bitcoin, it needs less time to generate a block and it has a larger supply of coins. Today there are more than 1,600 altcoins.

BLOCKCHAIN

by Randall Stephens

Blockchain is a technology behind cryptocurrencies that enables people to transfer value over the Internet by allowing digital information to be distributed but not copied. It is a ledger, a list of records called blocks that are linked together using cryptography. It is a new, permanent and secure way of storing information. For more information on blockchain read my article: [link].

CRYPTOGRAPHY

by Randall Stephens

Cryptography is the science of secure communication or secure information sharing. Suppose you have two persons, Bob and Alice. If Bob wants to share a message with Alice only he will scramble that information in such a way that only Alice can understand it. The process of scrambling messages is called encryption, and the process of unscrambling decryption. Let me demonstrate how it works on a simple example: Bob wants to send his email password to Alice but he doesn’t want it to come into the wrong hands. He can encrypt that password with a key, and then send that key to Alice so she could decrypt and read it. To make a key, Bob can just replace every letter in the alphabet with the corresponding number such as this: A is number 1, B is number 2, C is 3, D is 4 and so on, you get the point. Z is of course number 26. If his password is ”hello“ he will send the following message to Alice: ”8 5 12 12 15“ and no one should be able to understand what those numbers represent without the key. Alice receives the message, decrypts it with the key and she is able to read the information. Of course, this is just a basic example to demonstrate the general idea of the public-key cryptography. Encryptions for bitcoin transactions are much more complex and that is what makes them secure.

HODL

by Randall Stephens

 

HODL is just a typo of the word hold. One member called GameKyuubi misspelled the word while writing on the bitcointalk.com forum about not selling his coins. Thus he was holding them, but he wrote: ”I AM HODLING“. And people didn’t let it slide that easy. They started to write HODL in his post so it became a thing. Later, HODL evolved from a typo into an acronym meaning Holding On for Dear Life. You can see the mentioned post here: I AM HOLDING

ICO

by Randall Stephens

You have probably heard about the IPO or initial public offering. It happens when a private company or corporation raises investment capital by offering its stock to the public for the first time. Well, the ICO is kind of the same thing, only in a crypto world. It stands for Initial Coin Offering and it happens when crypto startups sell their own coins (similar to stocks) to public investors. Investors hope that the company will be successful and the coins they purchased will be worth more. It is like a massive Kickstarter campaign for cryptocurrencies.

MINING

by Randall Stephens

Mining is the process of computers validating transactions in the Bitcoin network, adding blocks onto the blockchain. Each participant in the network, or simply a miner, collects unverified transactions independently, trying to create a new block. Block is a file in which transactions are recorded, that is, all the sums that are transferred from one address to another. That block will be connected to a previous block if all other computers confirm it as valid. Computers compete who will put the block into a chain first by solving complex mathematical equations. The first one that is successful gets a certain number of bitcoins as a reward plus all the fees for transactions that the users have assigned in order to verify them. That is their incentive for participating and for maintaining the network.

BITCOIN

by Randall Stephens

First, let me make a distinction between a Bitcoin and a bitcoin. Yes, there is a difference, besides the obvious upper and lower case letter B. Bitcoin (with uppercase B) is a software that enables the creation and transfer of digital money called bitcoin (with lowercase b). And bitcoin is the first decentralized cryptocurrency, a form of electronic cash. It is a digital currency designed to work without the need for a third party such as a Central bank or other intermediaries. Stock symbol for bitcoin is BTC, and its subunits are called millibitcoin (1⁄1000) and satoshi (1⁄100000000). Satoshi is a pseudonym of the creator of both Bitcoin and bitcoin, but his true identity is still unknown.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy