Some Cryptocurrency Terms You Must Know
Before you decide to invest in any cryptocurrency, you must know about some of the related terms. There remain several things that you need to learn in this regard. You will understand some of the most important terms related to cryptocurrencies once you read the following discussion.
Satoshi Nakamoto
Satoshi Nakamoto was a cypherpilot engineer for several decades before developing and deploying the peer-to-peer transaction system called bitcoin. The original version of this digital currency was called the bitcoin network.
Later on, several versions of this system came into being, with different attributes and features. Satoshi Nakamoto is the only person known to have released the source code for the bitcoin wallet. This information is essential for any intelligent person to understand what this technological innovation is and how it works.
Blockchain
A basic introduction to the blockchain concept would be to define it as a distributed ledger system that does solve many of the problems associated with conventional ledgers, such as double-entry bookkeeping and fraud. It is a ledger that is not centralized but rather consists of a network of computers and their connections via nodes.
The major feature of the ledger is that every transaction is recorded in real-time by all the systems existing on the network without the need for a third party or a mediator. This makes the ledger completely transparent and allows anyone to check the transactions without any obstruction.
Decentralized Exchange
A decentralized exchange does not require a centralized administrator or a clearinghouse. This type of exchange works by allowing users who wish to trade in currencies to meet in real-time with each other so that they can trade in real-time for their preferred currencies.
It is crucial to understand that this type of trading differs from a decentralized swap because anyone’s central body or entity does not back it.
Mining
The term Mining does refer to the process of securing and managing a cryptocurrency ledger. Various methods can get used to secure the ledger, including Distributed Ledger Technology (DLT), Proof of Stake Mining (POS), and Peer to Peer (P2P) networks.
These methods can all be automated, although some miners still use manual Cryptocurrency Mining.
Private Key
A private key in terms of Cryptocurrency is one of the most highly utilized methods to access information and make transactions in the Cryptosphere. The process of private key ownership involves a person or entity creating a specific digital key that can get used to sign documents, create access credentials, generate signatures, and perform other tasks depending on the use of the key.
The primary purpose of creating a private key is to provide individuals and organizations an opportunity to secure their transactions without worrying about their information being released to unauthorized parties.
Public Key
In the Cryptocurrency market, a public key allows individuals to use their private key to make transactions on the said Cryptocurrency. Usually, private keys are kept confidential and are not meant to be shared with the general public.
However, in some cases, when a business or individual needs to make public key transactions for the sake of securing financial transactions or other sensitive information, it will be required. Public key infrastructure is a special system that ensures that a business receives its public key in an encrypted form and can access its private key in an encrypted form.
Wallet
A Cryptocurrency wallet is an online service that holds the public and private keys for Cryptocurrency transactions. In addition to the fundamental aspect of storing the private keys, a crypto coin wallet also comes with the additional functionality of signing and encrypting information.
Nowadays, many businesses use Cryptocurrency as a payment option, especially for small and medium-sized businesses. With the help of a good and secure crypto-coin wallet, the business owner can transfer funds in real-time directly from their account.
Whale
A whale is defined as “a huge, powerful creature, usually found in the ocean for those who are not familiar with the term.” Now granted, most people will probably not find the ocean to be their home, but this is what the whales are; they seek to control the wealth and the currency.
So, in cryptocurrency’s terms, a ‘Whale’ is defined as an investor or a group of individuals who invest enough to influence the value of a crypto-coin significantly.
Endnotes
Now that you understand the basic terminologies related to cryptocurrencies keep on enhancing your knowledge about this ever-evolving field and shine on with your investments. What we have explained here are terms and not A to Z glossary related to the same. We’ll come up to it step by step. So, stay tuned to know more!