Cryptocurrency Terms and Languages You Should Know
Cryptocurrencies are the hottest topic for the last few months now. Unless you are very much actively reading up on these digital currencies, it can be difficult to understand the terminologies being used. Here’s a small list of some basic terms that will help you gain grounds. For your convenience, the list is in alphabetical order:
Altcoin: Bitcoin was the first cryptocurrency in the world. Any other cryptocurrency is called Altcoin (short for alternative coin).
ASIC: Cryptos like Bitcoin depend upon complex computing to mine new coins. At first, simple computers were able to do that, but as competition increased, Application Specific Integrated Circuits (ASICs) chips were built that dealt away with everything and have only mining program installed.
Bitcoin Cash: Wait, Bitcoin is Bitcoin, right? Yes, but down the road, the community split over the direction the blockchain system should take and the two groups went their separate way. One retained the Bitcoin name, while the split currency called itself Bitcoin Cash.
Block: After specific time, the transactions on the network are recorded into a file, called a block. As the next block is created, it is linked to the previous one. Hence, a chain of blocks (or blockchain) is formed.
Decentralization: The key concept behind cryptocurrencies and blockchain is that there isn’t a single entity that can create authority to control it. All the data is copied between nodes, servers and miners to ensure that even if several points fail, there will always be some that are online and the network can work nonstop.
Ether/Ethereum: Ethereum is the second largest blockchain system, after Bitcoin. It is essentially a decentralized virtual computer that operates apps and is run by its native token, the Ether.
Fiat: Traditional money like Dollars, Euros and others. Fiats are issued by central banks, their value set by governments and is subject to value loss through inflation. Cryptocurrencies, on the other hand, are aren’t.
Fork: Remember Bitcoin Cash above? The process is splitting a cryptocurrency to kick off another version of it is called forking.
ICO: Initial Coin Offering is the crypto equivalent of an IPO, where tokens are offered at a cheaper rate to early investors. ICOs have had their set of problems for skirting SECs security regulations.
Mining: The process of solving complex calculations in order to complete a block is called mining. The word chosen to reflect the difficulty of mining out gold or precious metals.