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Beginner’s Crypto Economy Glossary

The following is a list of terms used in the cryptocurrency world. The terms appear often in the industry, and are important to underlying key concepts.

They are:

1 – Address. Storage spot or destination where cryptocurrency assets are sent. Addresses are recognized by alphanumeric references.

2 – Bitcoin. A global, scarce, and decentralized crypto currency. Bitcoin is the first of its kind, and was introduced through Satoshi Nakamoto’s paper “A Peer-to-Peer Electronic Cash System.”

3 – Block. Can be compared to a ledger’s pages, only here they’re digital. New ones can be added together to form a blockchain. They’re added with every new transaction on a crypto network. All miners are given rewards for mining new blocks.

4 – Blockchain. A series of blocks together form a Blockchain. Those are digital ledgers that keep records of every transaction done on a network. Blockchain follows consensus protocols for confirming additional blocks admitted to a Blockchain.

5- Cold Storage. A method of storing private keys where there is a lack of internet connectivity. Examples include paper records, USBs, and offline computers.

6 – Crypto. A wide term used for any cryptocurrency market, application, system, or network.

7 – Crypto Asset (Tokens). Digital assets that use blockchain tech. Cryptocurrencies, security tokens, and stable-coins are included.

8 – Crypto Assets (Volatility). A way of measuring how volatile any cryptocurrency is on the market throughout a specific period of time. Crypto asset volatility can be measured hourly, and sometimes within 10 minute intervals within an hour. The volatility is then measured against total asset shares to properly represent how volatile an asset can be.

Those measurements are used in a variety of crypto platforms, such as Poloniex, Bittrex, Gemini, Kraken, Binance, Binance US, bitFlyer, Bitstamp, Bitfinex, itBit, and Coinbase.

9 – Cryptocurrency. Includes Bitcoin or any alternative coin that have been launched after Bitcoin’s success. Cryptos are mediums of exchange, and to hold storage power and value. This category does not include security tokens.

10 – Cryptoeconomy. An open financial system built on crypto.

11 – Customer. Retail users, ecosystem, or institutions operating on a crypto platform.

12 – DeFi. Abbreviation for decentralized financing. Those include protocol network software that are peer-to-peer. DeFis are useful for optimizing common services, such as lending, borrowing, insurance, and trading derivatives using smart contracts.

13 – Ecosystem Partners. Include any entity that contributes to developing decentralized applications, products, protocols, and services for a crypto economy. Partners can be individuals, financial institutions and organizations, in addition to asset issuers, merchants, creators, and developers.

14 – Ethereum. A worldwide computing platform. It’s decentralized, supporting minor contract transactions. Also supports peer-to-peer apps. The assets on Ethereum’s network are often called Ether.

15 – Fork. A change in the basic structure of a software. This leads to the creation of two differing Blockchains, a new version, and an old original one. In some cases, forks result in the creation of new tokens.

16 – Hold. Signifies holding onto an asset through its rise and fall in value, rather than giving it up.

17 – Hot Wallet. Wallets connected to an internet connection, letting it broadcast transactions.

18 – Institutions. A business which can be a corporation, financial institution of varying sizes, or hedge funds.

19 – Miner. Entities and individuals who run a joined computer (or series of them) aimed at adding new blocks to transactions, thus verifying that other miners have created. A miner collects transaction fees, where they are rewarded with new tokens.

20 – Mining. The method of creating new blocks. It’s how a Blockchain receives additions from new transactions.

21 – Network. A collective of every miner that uses computers to keep a blockchain ledger, while adding to a blockchain new blocks. The majority are decentralized, thus reducing risks of a single failure running the network.

22 – Protocol. A form of software or algorithm that directions the operation of a blockchain.

23 – Private Key or Public Key. All public addresses have their corresponding public or private keys that are generated cryptographically. Private keys allow recipients access to every fund belonging to an address, just as with a banking account’s password. Thus, transactions broadcasted through an address are validated by a public key. Private keys however are the source from which public keys are derived, where public keys are short versions of an address.

24 – Retail Users. Individuals with accounts on a crypto platform.

25 – Security Token. Crypto assets that are also securities. They include digital modes of traditional equities. They are also digital forms of a fixed income security. Alternatively, they might be assets classified as securities as a result of their classification, as with a note or investment contract.

26 – Smart Contract. A software that implements terms and agreements with transacting parties that are rules-based.

27 – Stabelcoin. Cryptocurrencies that are meant to reduce volatility. Stablecoins are designed where they track exchange-traded commodities and fiat money. Stablecoins are often backed by crypt assets or fiat currencies.

28 – Staking. A way of mining that focuses on energy efficiency. Stakers create a collateral using token pools for transaction validation and the creation of blocks. Such stakers earn rewards in exchange for their service.

29 – Supported Crypto Assets. Crypto assets that are supported for custody and trading by a certain platform. This differs from one platform to another.

30 – USDC Coin (USDC). A Centre Consortium (and Coinbase) issued stablecoin. Issuers held fully reserved assets backed with USDC. They can be sold or purchased for US dollars on a 1:1 basis.

31 – Wallet. A location where private and public keys for a crypto asset are stored. Wallets can include paper, hardware, or software.

32 – Wallet User. Retail users with an established account (a user name) on a wallet provider. One example is Coinbase Wallet, an app that lets users collect self-managed crypto assets and DeFi applications.

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Written by Piyush GRCG


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