Cryptocurrency Quick Glossary
Altcoin. Refers to any cryptocurrency other than Bitcoin, and there are thousands.
Bitcoin. First introduced in late 2008, it is a specific currency in an electronic payment system that acts as an alternative to fiat currency. It exists only on computers and the internet. It is not backed by a government, and its price is not set by a centralized authority.
Blockchain. A permanent online ledger that functions as a public accounting of cybercurrency transactions that have been executed. New “blocks” are added to the blockchain after the confirmation of each set of transactions.
Blockchain technology. Enables the electronic payment system for virtual currencies, but not tied to any specific currency. Companies are using blockchains to create a permanent record of transactions of such things as sales of investments, corporate records, and legal documents.
Cryptocurrency, "Crypto". A digital currency secured through cryptography, or codes that can't be read without a key. (What is Cryptocurrency...Forbes Article.)
Digital wallet. A software application, or other mechanism, that provides a means for holding, storing, and transferring digital currency. A wallet holds the user’s digital currency addresses, which allow the user to receive digital currency, and private keys, which allow the user to transfer digital currency. The wallet also maintains the user’s digital currency balance. A wallet provider is an individual or entity that provides the software to create and manage wallets, which users can download.
Fiat currency. A fiat currency — such as dollars, euros, pounds, or yen—is a trusted medium of exchange, or legal tender, that is issued by a recognized government or authority. U.S. dollars, for example, are backed by the “full faith and credit” of the United States government.
Initial Coin Offering. In an ICO, an entity issues virtual coins, often called tokens, to raise capital. A “token sale” is simply distributing a new cryptocurrency to investors, who typically pay for the tokens in bitcoin or another established cryptocurrency.
Mining. The process of applying high amounts of computing power to solve complex equations that verify transactions in a virtual currency. Miners who solve the equations are awarded new units of the virtual currency.
Private key. Accessing the bitcoins in a digital wallet requires a private key—an alpha-numeric code of at least 16 characters (punctuation marks are encouraged!) that is far more comprehensive than a PIN. The private key, which should be kept entirely secure, enables you spend the bitcoins allocated to your account.
Public key. A cryptographic code that allows a person to receive cryptocurrencies into his or her account. The public key is derived from the private key. In the Bitcoin system, transactions are done using a "pair" of a private and public key.
Smart Contracts: Smart contracts are contracts that have the capability to self-execute themselves when certain pre-programmed conditions are met.
Virtual currencies. Like fiat currency, virtual currencies such as Bitcoin, Litecoin, and Ether are intended as a medium of exchange that enables two parties to transact business. But there are important differences:
No physical coins or bills. Virtual currencies exist only in computer code. Except for visual representation of Bitcoin and altcoins in advertising and displays, and coin-like tokens that may be produced for marketing purposes, there are no actual coins or bills.
Not legal tender. Virtual currencies are not legal tender and are not issued or backed by a government. However, many virtual currencies, which are called convertible virtual currencies, can be redeemed for fiat currency on a number of exchanges.
No regulation. Virtual currencies are not regulated by any government agency or authority. However, regulation is being considered, especially where virtual currencies function as securities when they’re used to raise capital and when traded on exchanges.
No intermediaries. Unlike fiat, virtual currency transactions are conducted directly between two parties, on a peer-to-peer basis, using a decentralized computer network that involves no banks or other intermediaries. Trust in the system is based on digital proof, or the ability of users to access a permanent record of all of the transactions that have taken place.
Whitepaper. A startup or established company publishes a whitepaper to tell potential investors about its ICO, or Initial Coin Offering — the technical details, objectives of the product, information about the team behind the company, and other details.
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization. Ethereum was conceived in 2013 by programmer Vitalik Buterin.
ERC-721 stands for Ethereum Request for Comment, and 721 is the proposal identifier number. ERCs are application-level standards in the Ethereum ecosystem.
Solana is a public blockchain platform. It achieves consensus using proof of stake and proof of history. Its internal cryptocurrency is SOL. Bloomberg considers Solana to be "a potential long-term rival for Ethereum". Like Ethereum, Solana can interact with smart contracts.
XRP ~ Ripple is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc., a US-based technology company.
Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, Ada. Cardano was founded in 2015 by Ethereum co-founder Charles Hoskinson.
Polkadot is a sharded heterogeneous multi-chain architecture that enables external networks as well as customized layer one "parachains" to communicate, creating an interconnected internet of blockchains. The network uses an environmentally-friendly proof of stake consensus algorithm.
Terra is a blockchain that lets users create stablecoins pegged to fiat currencies. These coins primarily use the network's seigniorage mechanism. The network was founded by Do Kwon and Daniel Shim of Terraform labs in 2018 and uses Tendermint Delegated-Proof-of-Stake (DPoS) as its consensus mechanism.
Stellar, or Stellar Lumens, is an open source, decentralized protocol for digital currency to fiat money low-cost transfers which allows cross-border transactions between any pair of currencies.
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", making fun of the wild speculation in cryptocurrencies at the time. Despite its satirical nature, some consider it a legitimate investment prospect.
Chainlink is a decentralized blockchain oracle network built on Ethereum. The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.
Shiba Inu token is a decentralized cryptocurrency created in August 2020 by an anonymous person or group known as "Ryoshi".
Uniswap is a decentralized finance protocol that is used to exchange cryptocurrencies. Uniswap is also the name of the company that initially built the Uniswap protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.
Internet Computer ~ The DFINITY Foundation is a nonprofit organization that develops the Internet Computer, a decentralized, open-source, general-purpose blockchain, designed to host smart contracts. The DFINITY Foundation was registered as a non-profit foundation in Zug.
Polygon, the internet protocol and framework for building and connecting Ethereum-compatible blockchain networks, has partnered with payment gateway solution Alchemy Pay. ... The move will also simplify DeFi app payments on e-commerce platforms, such as Shopify and other networks.
Litecoin is a peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Litecoin was an early bitcoin spinoff or altcoin, starting in October 2011. In technical details, Litecoin is nearly identical to Bitcoin.
Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017. In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV.
Ethereum Classic is an open source, blockchain-based distributed computing platform featuring smart contract functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine.