CRYPTOCURRENCY GLOSSARY

The blockchain and cryptocurrency ecosystem has a lot of words and terms which can be difficult to understand for beginners. That is why we have made, just for you, a cryptocurrency glossary.

A

ADDRESS

An address is a random group of characters that is used as a public key when you need to send or receive cryptocurrency. An address can be compared to a bank account number in the traditional banking system.

ALTCOIN

An altcoin is an expression that designates all cryptocurrencies other than Bitcoin. Altcoins are considered alternative currencies because of the importance of Bitcoin.

ASIC

An ASIC or Application Specific Integrated Circuit is a machine dedicated to mining. Generally used to mine Bitcoin, it is much more powerful than a simple RIG and resolves the proof of work much faster.

B

BITCOIN

Bitcoin is a blockchain and cryptocurrency developed by the mysterious Satoshi Nakamoto.

BLOCK

A block is a file containing information such as ongoing transactions. This block is subject to verification and will be attached to the previous block if it is considered valid. In the Bitcoin blockchain, a block is created every 10 minutes.

BLOCK EXPLORER

A Block Explorer is an online tool that allows you to view the transactions, network hashrate, and other information of a blockchain.

BLOCK HEIGHT

This is the total number of blocks on a blockchain. This data is written when you count the number of blocks before the last block of a blockchain.

BLOCK REWARD

It is a reward that is given when a miner validates a block. Because of his contribution to keep the blockchain alive, the miner is rewarded with cryptocurrencies.

BLOCKCHAIN

The blockchain is a technology that allows information and transactions to be stored and transmitted in a safe and transparent way and most importantly, in a decentralized way. It is a secure system open to all users that can contain transactions. Each user can check the validity of a transaction in the blockchain, which can be considered as a kind of electronic ledger that is anonymous, public and non-falsifiable.

BYZANTINE FAULT TOLERANCE

Byzantine Fault Tolerance or BFT is a consensus mechanism that is derived from the problem of Byzantine generals. This is a dilemma that represents the problems that Byzantine generals could have when they had to communicate and agree between themselves on the next strategic move during a siege. Byzantine Fault Tolerance allows us to determine if we can trust the blockchain if it is infected by malicious machines.

C

CRYPTOCURRENCY

A cryptocurrency is an electronic, virtual and decentralized currency that is used in the blockchain. Unlike traditional currencies such as the dollar or euro, cryptocurrencies are created by solving mathematical problems based on cryptography.

D

DAO

A DAO or Decentralized Autonomous Organizations is an organization that is run through rules encoded in smart contracts.

dApp

A dApp or Decentralized Applications is a kind of application that runs on a decentralized network.

DIFFICULTY

Difficulty, as its name suggests, is a measure that defines the difficulty of finding a new block.

DOUBLE SPEND

A double spend is a malicious action by a person who tries to send a transaction to two receivers at the same time. The goal is to spend cryptocurrency that you don’t have.

DELEGATED PROOF-OF-STAKE

Delegated Proof of Stake or DPoS is a variant of the consensus Proof of Stake. A certain panel of users will be responsible for validating the blocks for the entire network, contrary to the Proof of Stake which makes it possible for any member of the blockchain possessing cryptocurrency to validate a block.

DECENTRALIZED

The objective of decentralization is that no one entity should have the control. In the context of a blockchain, the objective is that no single company or individual can control the entire network. The more actors are in the blockchain, the more decentralized the network is.

E

ERC

ERC or Ethereum Request for Comments is a protocol of the Ethereum network. The tokens resulting from this protocol have the objective to improve Ethereum.

ETHEREUM

Ethereum is an open source blockchain that allows developers to create dApps but also smarts contracts. Today, Ethereum is one of the most interesting projects to follow and its currency, Ether or ETH, is one of the most capitalized.

EXCHANGE

An exchange is a platform where cryptos are traded with each other or against cash. This makes it possible to invest or to speculate on the price of cryptocurrencies.

F

FIAT

FIAT is the diminutive of fiduciary money. These are the classic currencies such as the euro – € and dollar – $, etc.

FORK

A fork is a major or minor change of a blockchain. Indeed, a blockchain is always in development. When there is an addition or modification in the network code, the new version replaces the old one. There are Hard Fork, which are major changes and Soft Fork, which are minor changes.

G

GAS

The Gas is a unit that measures the computational effort when you make a transaction, when you use a smart contract or when you launch a dApp on the Ethereum network. So, Gas is the price you will pay to be able to use its services.

GWEI

Gwei is a currency that defines the cost of Gas when you make a transaction on the Ethereum network.

H

HALVING

A Halving is the division by two of the reward for mining a cryptocurrency. This division has been set since the launch of the cryptocurrency since it is written in the code of the coin. The halving is activated when a certain number of blocks are mined.

HARD FORK

A Hard Fork is a major change in the life of a blockchain. It is during a Hard Fork that the development can be split in two, as for the Ethereum and the Ethereum Classic.

HARDWARE WALLET

A hardware wallet is a physical wallet of cryptocurrencies such as Ledger and Trezor.

HASH

Hash is an abbreviation for the cryptographic hash function. The hash function is a mathematical process that measures a quantity of power.

HASHRATE

The Hashrate is the unit of power of a miner or a network.

HODL

HODL is a term that defines holding cryptos for a long period of time. This expression comes from a mistake made by a user on the Bitcoin Talk forum, where he wrote HODL instead of HOLD several times.

I

ICO

An ICO or Initial Coin Offering is a distribution of tokens when a cryptocurrency project is fundraising. In an ICO, the purchase of tokens is equivalent to the purchase of shares in a traditional company.

M

MINING

Mining is a practice that allows a blockchain to verify transactions through decentralized machines. These machines, which are owned by miners, validate transactions, also called blocks. Then the miners receive a reward, in cryptocurrency, for their mining.

MINING POOL

A mining pool is a service that allows miners to join together as a single entity for the purpose of mining cryptocurrencies.

MINING FARM

A mining farm is an area dedicated to the mining of cryptocurrencies. Some people invest in buildings and hundreds of machines in order to mine as much cryptocurrency as possible.

MINING RIG

Mining RIG is the term used to define a mining machine. These machines composed of graphic cards (GPU) make it possible, thanks to their hash power, to verify the transactions of a blockchain.

N

NETWORK

The network is the set of engaged nodes that helps the operation of the blockchain.

NODES

In the network, a node represents a machine that works for the good working of the blockchain.

NONCE

When a transaction is validated by a miner, it is embedded in a block that is named by a series of random characters, called a nonce.

P

PROOF-OF-WORK

Proof of Work or PoW is the first proof system used in the blockchain. This proof was introduced with the Bitcoin blockchain. It is a consensus algorithm that checks a block by asking the machines, also called miners, to do a very complex job. The objective of this work is to eliminate the potential proliferation of inappropriate information that could affect the proper operation of the blockchain.

PROOF-OF-STAKE

Proof of Stake or PoS is a verification process that is completely different from the algorithm Proof of Work. In fact, there is no question of working on a complex job to validate a new block. Proof of Stake is based on the principle that it is required to own and stock a certain part of the blockchain, also called staking, to take part in the block validation process. This part is represented by the cryptocurrency of the blockchain.

PPS

PPS or Pay Per Share is a pretty simple method of payment. Miners are paid for each validated share. Then the mining pool will pay a small reward to thank the miners for validating a share. Please note that you will always be paid with the PPS payment method, no matter if the mining pool finds a block or not.

PPS+

It is an identical payment method similar to regular Pay Per Share. The one and only difference is that the mining pool also pays the fee transactions that are included if a block is found. Fee transactions are a small, but a necessary fee when you make a transaction.

PPLNS

PPLNS or Pay Per Last N Share system rewards miners once a block has been found by the mining pool. You will therefore only be paid after the block has been found. It is important to know that you lose your reward if you disconnect from the mining pool before the block is found.

S

SATOSHI NAKAMOTO

Satoshi Nakamoto is the mysterious creator of Bitcoin. He is also the founder of Bitcoin.org and the Bitcoin Talk forum.

SHITCOIN

A shitcoin is a term used to refer to the not-so-serious crypto-currencies that are only used to scam people.

SOFTWARE WALLET

It is a wallet to store your cryptocurrency. They are software wallets like MyCrypto or Exodus.

SMART CONTRACT

A smart contract is a computing protocol designed to facilitate, verify or apply a contract on the blockchain.

STABLE COINS

A stable coin is a cryptocurrency with very low variability, similar to fiat currencies like dollar – $ or euro – €

T

TOKEN

A token is a digital unit that allows access and use of an element of a blockchain. It is developed to be used with third-party applications to accomplish a specific function. As for example the ERC-20 token which is used in Ethereum smart contracts.

TRANSACTION FEE

There is a fee that allows you to make a transaction on a blockchain.

W

WALLET

There is a wallet that allows you to store, send and receive one or several cryptocurrencies. There are two kinds of wallets ; Hardware wallet and Software wallet

WHITE PAPER

A white paper is a complete document written by the initiators of a cryptocurrency project which allows to know the vision, the use and various technical information concerning this project.