1-0N-1 CRYPTO DEFINITIONS EXPLAINED

Hello everyone, with the massive adoption of cryptocurrencies happening in the world, i just felt like the new adopters needed to be educated and know some of the most important definitions in the crypto space, so i hard to dig in deep so that i could put together some of the most important, i hope you read to the end and like the content, with out further ado, lets kick of with

1- BLOCKCHAIN

Its a system where a record of transactions made in cryptocurrency are maintained across several computers that are linked in a peer-to-peer network. And the validity of each cryptocurrency’s coins is provided by a blockchain. blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.



2- DECENTRALIZED

A system where elements are spread out by some means, with decisions made from many points, and independence is preserved across the network. Decentralization is a combination of three: 1: Structure, a system located in multiple places across a space, 2: Management, a system managed by my many equally powerful units, with no single ruling unit. 3: Independence, a system made up of independent units working together for a common purpose.


3- MINING

Its a process of validating transactions. And people who make the process possible to happen are called MINERS, they do this with the help of powerful computing machines and for every successful transaction they obtain new cryptocurrency as a reward.


4- ALGORITHM

A series of steps that will solve a problem. In cryptocurrencies, algorithms are used to hide and reveal information.


5- SATOSHI

The smallest amount of bitcoin (0.00000001) and it was named after the founder of bitcoin know as Satoshi Nakamoto

6- HASH RATE

its the speed at which a computer can take any set of information and turn it into letters and numbers of a certain length, known as a “hash”. and its calculated at hashes per second

7- BLOCK REWARD

Its a reward for maintaining the blockchain. Maintaining the blockchain requires computer power and electricity or risking a large amount of cryptocurrency as a guarantee that you are trustworthy. Anyone doing this work is eligible to earn a reward in digital money and sometimes brand new.

8- AIRDROP

This Is the process of freely distributing a new cryptocurrency to people so that they can create more demand. its done so that new created cryptocurrencies gain users.

9- CRYPTO

Its a short form for cryptocurrency.

10- DECENTRALIZED APPLICATION (DAPP)

A software application that has its technology running publicly on a network of computers.


11- DYOR

It means DO your own research

12- HODL

it means buying cryptocurrency and hold onto it rather than selling it. And a person who does this is known as a Hodler

13- KNOW YOUR CUSTOMER (KYC)

A customer identification process required by law for financial organizations.

14- WALLET

A cryptocurrency wallet stores the public and private keys or addresses which can be used to receive or send the cryptocurrency. With the private key, it makes it easier for one to send and receive crypto’s


15- PUMP AND DUMP

Its the illegal manipulation of an asset (stock, cryptocurrency, etc.) where people increase the price (the pump) so that they can sell it at those high prices for a profit (the dump).

16- BLOCK HEIGHT

The number of blocks in the chain between any given block and the very first block in the blockchain.

17- ALTCOIN

Any cryptocurrency which is not Bitcoin. Altcoin is made up of two words: alternative Bitcoin or alternative coin

18- INITIAL COIN OFFERING (ICO)

A time-sensitive process when a new cryptocurrency or token generally becomes available for the public to invest in. This usually a high end risk investment which can some times lead to the loss of some’s initial capital

19- SMART CONTRACT

An agreement to exchange goods, services, or money that will automatically execute, without third party oversight, so long as established criteria are met.

20- PEER TO PEER (P2P)

Its a connection between two or more computers that allows them to directly share information, files, or other data.


21- DOUBLE SPENDING

its where the same money is promised to two parties but only delivered to one. If completed successfully, one of the two recipients will not be paid. This is a practice commonly performed by scammers to take other people’s hard earned money

22- ERC-20

Its a proposed set of rules and standards for creating new cryptocurrency using Ethereum as the foundation. ERC-20 describes crypto made with Ethereum technology that follow these rules and standards.


23- PRIVATE KEY

A string of letters and numbers known only by the owner that allows them to spend their cryptocurrency. And i would highly recommend for one to never share them with any one unless you want someone else to be able to take all of your money!. VERY IMPORTANT

24- EXCHANGE

Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies. But always try to DYOR before you transfer your coins to any exchange as some are fakes.

25- PROOF OF WORK (POW)

Its a process for achieving consensus and building on a digital record known as a blockchain. With PoW, users compete with each other via their computers to solve a puzzle. and whoever wins is rewarded

26- COLD STORAGE

A type of digital data storage that takes longer to access and quite often is not connected to the Internet. Also known as a (cold wallet).


27- CONFIRMATION

A type of proof that a transaction was recorded and verified on the blockchain. The higher number of confirmations, the more trusted that transaction is.

28- NODE

Any computing device (computer, phone, etc.) that is participating in a network by way of receiving and sending data. Cryptocurrencies are supported by a network of computers each keeping a digital record of the data known as a blockchain. A computer, a phone, or any other computing device that can receive, transmit, and/or contribute to the blockchain is a node.

29- TRANSACTION FEE (TX FEE)

Transaction fees for cryptocurrency depend mainly on the supply of network capacity at the time, versus the demand from the currency holder for a faster transaction. The currency holder can choose a specific transaction fee, while network entities process transactions in order of highest offered fee to lowest. Cryptocurrency exchanges can simplify the process for currency holders by offering priority alternatives and thereby determine which fee will likely cause the transaction to be processed in the requested time.

30- WHITEPAPER

A collection of documents that are designed to explain a product or service and persuade investors into believing in its benefits. Its purpose is to create interest, educate, and sell a concept to potential buyers. white papers are created as one of the very first documents to explain what it is, what makes it unique, describe the technology behind it, and the philosophy or mission. A good white paper builds trust in potential buyers.


31- ANTI-MONEY LAUNDERING (AML)

Laundering means cleaning something that is dirty. Money laundering is the process of making illegally earned money (dirty money) appear to be legally earned (clean money). Are there are Anti-money laundering rules and laws designed to make it difficult for criminals to launder their money.

32- DIGITAL CURRENCY

Digital currency / digital money or electronic currency/money is a type of currency available in digital form in contrast to physical, such as banknotes and coins, It exhibits properties similar to physical currencies, but can allow for instantaneous transactions and borderless transfer-of-ownership. Examples include virtual currencies, cryptocurrencies, and central bank digital currency. These currencies may be used to buy physical goods and services.

33- DISTRIBUTED LEDGER

A system of independent computers that are simultaneously recording data. With distributed ledger technology, identical copies of the recording are kept by each computer.

34- HARD FORK

Hard fork is defined as a decision to make a permanent change to the technology used by a cryptocurrency.

35- GENESIS BLOCK

A blockchain is a digital book of records where each new page made in that book is what is known as a block. Those blocks are connected in one group known as the blockchain. The first block in a blockchain is known as the genesis block.

36- DIGITAL SIGNATURE

A mathematical scheme for verifying the authenticity of digital messages or documents. A valid digital signature, where the prerequisites are satisfied, gives a recipient very strong reason to believe that the message was created by a known sender , and that the message was not altered in transit.



37- FUTURES

This is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future.

I’m Kenneth Kayan, thanks for reading and if you like the content in this post, please don’t forget to FOLLOW so that you don’t miss out on more of interesting posts like this. And if there are any other definitions you know of that i have not mentioned, please feel free to share them in the comment section below. THANK YOU and have a nice time