Crypto Dictionary
# Altcoins
The term “altcoin” is shorthand for “alternative coins” and simply means cryptocurrencies other than Bitcoin. After Bitcoin, the nine most popular cryptocurrencies are as follows: Ethereum, XRP, Tether, Cardano, Polkadot, Stellar, Dogecoin, Litecoin…
# Blockchain explorer
A Blockchain Explorer is a tool or site that allows anyone to explore any public cryptocurrency's blockchain for blockchain network, transaction, block, addresses history, balance and other statistic information.
# CBDC
Central Bank Digital Currencies are digital tokens, similar to cryptocurrency, issued by a central bank. They are linked to the value of that country's fiat currency.
# Cold storage
Cold storage is offline cryptocurrency storage. Any crypto wallet that's not connected to the internet is considered to be of the cold storage and is referred to as a cold wallet. The most common type of the cold wallet is a hardware wallet, which is typically a small device that connects to a computer.
# Crypto processing
Crypto payment processing means processing transactions made in cryptocurrencies. Crypto processor is a service that allows merchants to accept payments in cryptocurrencies.
# Custodial Wallet
A Custodial Wallet is defined as a wallet in which the private keys are held by a third party. It means the third party has full control over your funds while you only have to give permission to send or receive payments.
# DeFi tokens
A new world of cryptocurrency-based protocols that aim to reproduce traditional financial-system functions (lending and saving, insurance, trading) has emerged in recent years. These protocols issue tokens that perform a wide variety of functions but can also be traded or held like any other cryptocurrency.
# Double spend
Double Spending means to undertake, or attempt to undertake, two or more different transactions on the Bitcoin blockchain or any other digital asset network and spend the same account balance on each of the transactions. Usually, miners prefer more profitable transactions to add to the next block. After confirmation, other double spent transactions will be abandoned.
wikipedia.org
# Faucet
A Bitcoin faucet can be defined as a reward system from which small amounts of Bitcoin can be rewarded, known as Satoshi, the one-millionth unit of 1 Bitcoin (0.00000001 BTC). The reward system offers you Satoshis in exchange for solving captchas, clicking links or other simple tasks.
# Governance tokens
These are specialized DeFi tokens that give holders a say in the future of a protocol or app, which (being decentralized) don’t have boards of directors or any other central authority. The popular savings protocol Compound, for example, issues all users a token called COMP. This token gives holders a vote on how the Compound is upgraded. The more COMP tokens you have, the more votes you get.
# Mining
It is a competitive process that verifies and adds new transactions to the blockchain for a cryptocurrency that uses the proof-of-work (PoW) method. The miner that wins the competition is rewarded with some amount of the currency and/or transaction fees. The ways mining is performed are as follows.
# Network fee
Network Fees are paid to miners or validators of a blockchain network to adding transactions into the block and confirm transaction. Transactions compete with each other because miners or validators choose more profitable transactions in the first place. Network Fee increase and decrease algorithmical as stated in a blockchain protocol.
# Non-Fungible Tokens (NFTs)
NFTs represent ownership rights to a unique digital or real-world asset. They can be used to make it more difficult for digital creations to be copied and shared (an issue anyone who has ever visited a Torrent site full of the latest movies and video games understands). They’ve also been used to issue a limited number of digital artworks or sell unique virtual assets like rare items in a video game.
# Private key
A private key is a secret number used in cryptography, similar to a password. In cryptocurrency, private keys are also used to sign transactions and prove ownership of a blockchain address.
# Public key
The public key is a unique personal address that is shared in the blockchain. A public key is a cryptographic code that is created using asymmetric-key encryption algorithms and is used to convert a message into an unreadable format. As the bitcoin public key is made up of an extremely long string of numbers, it is compressed and shortened to form the public address. If an owner loses their public key, it is possible to recreate it using the private key.
oreilly.com
# Security tokens
Security tokens are a new class of assets that aim to be the crypto equivalent of traditional securities like stocks and bonds. Their main use case is to sell shares in a company (very much like the shares or fractional shares sold via conventional markets) or other enterprises (for instance, real estate) without the need for a broker. Major companies and startups have been reported to be investigating security tokens as a potential alternative to other methods of fundraising.
# Smart contract
A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control, or document legally-relevant events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of the need for trusted intermediators, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions. Smart contracts are commonly associated with cryptocurrencies, and the smart contracts introduced by Ethereum are generally considered a fundamental building block for decentralized finance (DeFi) and NFT applications.
wikipedia.org
# Stablecoins
Stablecoins are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin (BTC), which has made crypto investments less suitable for common transactions.
# Testnet
In blockchain technology, a testnet is an instance of a blockchain powered by the same or a newer version of the underlying software, to be used for testing and experimentation without risk to real funds or the main chain.
wikipedia.org
# Wallet
A cryptocurrency wallet is a device, physical medium, program, or service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often also offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction, identification or legally signing a 'document'.
wikipedia.org