Cryptocurrency Terminologies we should be familiar with: 3rd Edition

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Welcome to my blog, today we would be continuing the crypto lesson with the 3rd edition of the post I made about 22 days ago where we gave simple and clear meanings to some commonly used cryptocurrency Terminologies which we are to use to show our cryptocurrency prowess and to expand our vocabulary. I have succeeded in looking at over 25 words in the last two editions and we would be looking at 11 words for today. Let's have a closer look at them

Tron Power

This is simply Tronix (TRX) that has been locked up/ staked. Just like we have steem power which is staked steem, Tron power is staked tronix. On the Tron blockchain, Tron is staked to get Tron power/ energy and Tron power/ bandwidth and this Tron power can also be used for super representatives (witnesses on the Tron blockchain). During the period of freezing the Tron to Tron power, you can't sell it or transfer it so it is literally locked. 1 Tronix = 1 Tron power so the amount of TRX staked is essentially the amount of Tron power to be received.

Diamond Hands

This is used in the crypto verse to describe a trader who who a very high tolerance for the cryptocurrency in his/her custody. The have high risk tolerance as they do not sell off their assets no matter how bullish the market gets. As a normal trader and I'm holding ETH worth $50,000 and the coin dips beyond my expectation to $16,000 and other traders start pulling out. I don't sell until the very end that's what is mean by practicing diamond hands.

Blockchain Node

These are the various computers connected to the blockchain network and their main function is to check and validate transactions carried out on the blockchain (blocks). There are different types of nodes on each blockchain with their various functions. They also vary from one blockchain to another. A blockchain consists of numerous nodes which validates blocks and receives a full copy of the blockchain on every node.

Mining Rig

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These are specialize computer systems which help miners in their duty of mining cryptocurrencies. As crypto currency mining is a tasking and complex process, not just any computer can handle the mining process and when the miners utilize this mining rig, they can verify blockchain transactions and mint new cryptocurrency tokens.

Address

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A crypto currency address is cryptographic string of words and numbers which people use to receive crypto currencies. Every coin ( not token ) has its unique address where it can be used to receive those tokens. If one were to make the slightest error in the crypto address, those funds sent could be lost forever or land in the wallet of another. Also if one were to send JST to an XRP address, the funds would also be lost as they have different keys. Not all addresses are crypto currency addresses are encrypted for example Steemit usernames acts as addresses for users.

Mining Incentive

This is the reward given to miners for performing their duties. In mining, they are given complex equations and those who solve it get to mine the next block so it is both expensive, takes alot of energy, complex and competitive so it's only natural that they are rewarded for their hardwork on the blockchain.

Escrow

An escrow is a third party who holds crypto currency for another party and they are mostly used when there is an exchange between two or more parties. When two traders A & B want to swap tokens and they don't trust each other, they look for a trusted third party (the escrow) to help facilitate the exchange. Trader A sends his tokens to the escrow and trader B send the equivalent needed for the swap to the escrow then escrow completes the transaction by finishing the exchange.

Software Wallet

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As an alternative to the hardware wallet and as the name implies, a software Wallet is a wallet for cryptocurrencies that is not physically seen and touched by man. Software wallets can exist in devices and as applications where we can safely store our currencies. These are the most popularly used method of crypto currency storage in the modern world today and incase of loss, once can retrieve their wallet with the help of their mnemonic keys, Json file or their private keys.

dPOS

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This is a blockchain consensus mechanism that allows one to stake their cryptocurrencies inorder to vote for those who would validate and verify transactions for the blockchain. It is seen as one of the most effective consensus mechanisms in use now as it counters the POW mechanism by reducing the energy consumption and it beats the POS mechanism in terms of speed too. It helps to keep the blockchain scalable and reduce transaction cost and increase its speed. Examples of blockchains that utilize the dPOS includes the Tron (as explained above) and the Cardano Blockchain.

REKT

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This is a crypto currency slang for wrecked. It is used to describe crypto investors and traders who have lost a large amount of their capital if not all to price crashes and miscalculated entries and exits into and out of the market. The people who are exposed to this situation is newbies who expect FOMO and end up buying scam token which are undergoing a rug pull or pump and dump.

Whale

I saved the best for last. This happens to be my favorite word in the crypto verse as it describes someone who has a substantially large amount of a cryptocurrency in their possession. The activities of Whales definitely affect the market because if a new whale were to be enter a buy a large amount of that coin, it's prices would go up but if a whale were to exit and sell all their holdings of a coin, the price would drop. If I were to buy $20m worth of steem, the prices would definitely go up and if I were to sell that same amount worth of steem then the market would definitely go down.

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Other Related Topics and Editions

Cryptocurrency Terminologies we should be familiar with: 1st Edition

Cryptocurrency Terminologies we should be familiar with: 2nd Edition

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