Welcome to the cryptocurrency encyclopedia
You will find cryptocurrency terminology and related information in this section. You can also comment and add to this list as it will be constantly growing.
A cryptocurrency address is referring to the wallet address of a particular cryptocurrency. These addresses will differ in terms of length and also the beginning letters or numbers. For instance a Bitcoin address will start with a 1, 3, or bc dependant on the version of the type of Bitcoin wallet and what type of addresses are supported by that wallet.
In contrast an Ethereum wallet will start with 0x. Any ERC20 token will also start with 0x.
An altcoin refers to any cryptocurrency other than Bitcoin.
Arbitrage refers to a cryptocurrency trading strategy. Cryptocurrencies are listed on hundreds of exchanges. There is a price difference between exchanges. Arbitrage refers to the buying of a cryptoccurency on one exchange and selling it on another for a higher price.
Bitcoin is the alternative financial system, payment system built by a person or group known as Satoshi Nakamoto.
Built after the economic crash of 2008. The original whitepaper states it was built to stand up against times of economic turmoil.
Bitcoin in its simplest form is a virtual currency without the disadvantages that come with traditional fiat currency.
Bitcoin is permissionless – a person does not need any permission to use it such as sending money through a bank account requires the permission of a financial instituion using a persons own funds. The bank also knows the details of your purchases which are available on statements.
Bitcoin is anonymous. Since the currency is not attached to an account or profile the sender or receiver remains anonymous. As well as purchases made by Bitcoin cannot be retrieved by anyone except for the buyer and seller of the goods or services who would more than likely know what was bought and sold and for how much Bitcoin.
Bitcoin is fast. If a person were to send an international wire the regular turn around time is 5-10 business days. There is also a good chance that these wires are held by either the sending financial institution or the receiving financial institution. This is extremely inconvenient especialy if a family member needs funds or a purchase is made where time is of the essence. Bitcoin can be sent and received in minutes.
Bitcoin was built to bank the unbanked. Many people in this world do not have trust worthy banks especially in the 3rd world where the banks can crumble. The currency in 3rd worlds can also become worthless. There are many instances of this happening the most recent in Venezuela. The country then turned to Bitcoin and the creation of their own cryptocurrency the Petro.
Bitcoin Cash is what is known as a Fork of Bitcoin. Bitcoin Cash was created in 2017.
There was a dispute about the Bitcoin block size. Without increasing the block size meant it would favor people who wanted to treat Bitcoin as an investment rather than what Bitcoin is suppose to be.
The original Bitcoin white paper is titled “Bitcoin: A Peer-to-Peer Electronic Cash System” Bitcoin originally was suppose to be a cash system and to be treated like digital cash. Obviously there’s a lot more to the whitepaper than it’s title. However this was a major turning point for the currency and the birth of a new cryptocurrency BCH(Bitcoin Cash), an electronic peer to peer cash system.
The Bitcoin blockchain is a publicly available record of all Bitcoin transactions. You might also hear the term used as a “public ledger.”
This does not just apply to Bitcoin. Cryptocurrencies can be developed on the same blockchain if the programming allows it or they can also be developed on stand alone blockchains. For instance Bitcoin has the Bitcoin blockchain and Ethereum has the Ethereum blockchain. Ethereum also allows developers to easily create DAPPS(decentralized applications) on it’s blockchain. Most of the cryptocurrencies that are available are actually built using the Ethereum blockchain.
The blockchain shows every single record of bitcoin transactions in order, dating back to the very first one.
This revolutionary techonology brings scalability and complete transaction transparency.
Note: This means that if you were to create a Bitcoin wallet your transactions will be available to view publicly. However this doesn’t mean an invasion of privacy.
A Bitcoin wallet address will look something like this:
There is no name or personal data attached. The only information available are the transaction records. How many Bitcoin the wallet currently has and all previous transactional data. This does not include names of any vendors or if making a purchase it does not include what was purchased.
A blockchain explorer can be used to search transactional data.
A blockchain explorer is used to search for all transactional data dependant on the explorer. There are different explorers for different cryptocurrencies. A blockchain explorer for bitcoin can be found here.
Give it a try and look up anyones Bitcoin address. It can even be a random address found online. All transactional data will be shown.
Centralization or Centralized refers to an organization, or entity which is conrtolled by one or more individuals or entities. For instance almost every retailer store offline or online would be centralized including the local mom and pop grocery store to the giant financial institutions.
Cold storage often interchangeably used with the term cold wallet refers to a cryptocurrency wallet which is completely offline.
For example the most well known cold storage provides would be a company called Ledger and a company called Trezor.
Cold storage wallets are usually in the form of a piece of hardware that look like USB sticks.
Paper wallet are seen as cold storage to most people however there is an argument to be made due to the fact that in order to create a paper wallet this has to be done online through a website which may or may not store your private keys which has led to fraud and theft in the past.
A confirmation is the process of confirming a transaction by the network. When sending cryptocurrencies a transaction is unconfirmed until verified by the network. Once verified Bitcoin transactions are irreversible.
Cryptography is basically mathematical equations and algorythms used to secure information.
In the case of cryptocurrencies cryptography is used to sign transactions, secure addresses, and to verify the blockchain.
Dapp’s refer to decentralized applications. Applications with no central network or controlling parties.
Most cryptocurrencies are actually Dapps.
There is no controlling individual or entity in a decentralized network. This is one of the key features of Bitcoin and most cryptocurrencies.
The network is peer to peer and controlled by the users not a central agency, financial institution or the government.
If you have ever seen a credit card statement where 2 identical transactions are charged when there was only supposed to be one. This is a double spend and this happens quite often.
Bitcoin’s confirmation system makes it nearly impossible for double spending to occur.
Erc-2o tokens are cryptocurrencies built on the Ethereum blockchain which is more than 95% of all cryptocurrencies.
Ethereum was created by genius college dropout Vitalik Buterin who is actually a Canadian from Toronto.
He was awarded the Thiel Fellowship. This is a prestigious award created by Peter Thiel, the Co-Founder of Paypal. $100,000 dollars is awarded to a young adult who leaves post secondary education for 2 years in pursuit of their dreams. They also get mentored by professionals in all fields of work including the likes of Peter Thiel and Mark Zuckerberg(Facebook).
Ethereum is the 2nd largest cryptocurrency by marketcap only ousted by Bitcoin. It is a revolutionary cryptocurrency which allows anyone to create Dapps and cryptocurrencies on top of the Ethereum blockchain. Hence almost all of the cryptocurrencies that we hear about today are known as ERC20 tokens which are all built on the Ethereum blockchain.