Terminology

Crytpo Terms

  • Fiat - is currency that a government has declared to be legal tender, but it is not backed by a physical commodity.  The value is derived from the relationship between supply and demand rather than the value of the material that it is made of.  


  • Cryptocurrency -  an independent digital currency in which cryptography techniques are used to regulate the creation of currency and verify the transfer of funds. The value is derived from the relationship between supply and demand much like FIAT. 


  • Block - container for a group of transactions and other data. The current block height indicates how many total blocks are in the current blockchain.  The first block is called the GENESIS block.  


  • Blockchain - Ledger of events or transactions.  The transactions or history is held in "blocks", each block contains data and these blocks are cryptographically linked together forming a chain of blocks or BLOCKCHAIN.  


  • Proof of Work (PoW) - the way blocks are linked together is determined by the miners performing computational intensive calculations 


  • Decentralized - There is no central authority controlling the BLOCKCHAIN creation and management. The power to add blocks to the (PoW) chain is distributed among the miners of the BLOCKCHAIN. 


  • Permissionless - participation in the network (the ability to use the coin) is not gated by anyone/anything  


  • Open-source -  software for which the source code is made freely available to the public (usually on github.com).   


  • Core Wallet - software that runs the entire blockchain network. Included in the Core software is a digital wallet that can be used to store, send and receive coins.

   

  • Node - a core wallet that accepts incoming connection from other nodes, running on a computer that possesses a copy of the blockchain. Nodes make up the network and are used to relay transactions.


  • Algorithm -  specification of how to solve a class of problems. Each cryptocurrency validates the blocks in the blockchain with a class of problems solved by the algorythm used by the blockchain network.


  • Hash -  Cryptographic Signatures which are a fundamental part of blockchains. Similar to signing a check, cryptographic signatures determine which transactions are valid.


  • Mining - The process of creating blocks and linking them to the blockchain.


  • Hashrate - Number of hashes a machine runs per second when mining or creating blocks.