Feb 12, 2023
Advanced crypto terminology
Blockchain - A decentralized ledger that records all transactions in a secure, transparent and tamper-proof manner.
Proof of Work (PoW) - A consensus mechanism used to secure a blockchain network, where nodes compete to solve a complex mathematical problem in order to validate transactions and add them to the blockchain.
Proof of Stake (PoS) - A consensus mechanism used to secure a blockchain network, where nodes validate transactions based on the amount of cryptocurrency they hold and are willing to "stake" as collateral.
Mining - The process of validating transactions and adding them to the blockchain, often performed by nodes in a PoW network in exchange for a reward.
Token - A unit of value issued on a blockchain, often representing assets such as commodities or stocks, or used to access a specific application or service within a blockchain network.
Smart Contract - A self-executing contract with the terms of the agreement directly written into lines of code, stored and replicated on the blockchain.
Decentralized Exchange (DEX) - A platform for trading cryptocurrencies and tokens without relying on a central authority.
Atomic Swap - A type of transaction that allows for the exchange of one cryptocurrency for another without the need for a centralized exchange.
Oracles - Third-party services that provide real-world data to smart contracts on the blockchain.
Non-Fungible Token (NFT) - A unique, indivisible token that represents ownership of a digital asset, such as a piece of art or music.
Liquidity - The ability of an asset to be easily bought or sold in the market without affecting its price.
Volatility - The degree to which the price of an asset fluctuates over time.
Hard Fork - A significant change to the protocol of a blockchain network, leading to the creation of a new blockchain and potentially splitting the network into two separate versions.
Soft Fork - A backward-compatible change to the protocol of a blockchain network, preserving the existing version of the blockchain and its history.
HODL - An acronym for "Hold On for Dear Life," referring to the strategy of holding onto a cryptocurrency for an extended period of time, regardless of market conditions.
Whales - Large cryptocurrency holders who have the ability to significantly influence the market through their trades.
Public Key - A cryptographic code used to receive or transfer cryptocurrency, made publicly available to others in the network.
Private Key - A cryptographic code used to access and control a cryptocurrency wallet, meant to be kept secret and secure.
Cold Storage - The process of storing cryptocurrency offline in a secure device, such as a hardware wallet, to protect against theft or hacking.
51% Attack - A situation where a group of miners or nodes controlling over 50% of the network's computing power could potentially manipulate the network and its transactions.
Airdrop - A marketing strategy used by cryptocurrency companies to distribute free tokens to a large number of users, often as a way to build awareness and drive adoption.
Stablecoin - A type of cryptocurrency that is pegged to a stable asset, such as the US dollar, in order to reduce volatility and provide a more stable store of value.
DeFi (Decentralized Finance) - A growing ecosystem of financial applications and services built on blockchain technology, offering decentralized and trustless alternatives to traditional finance.