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Top Crypto Terms You Need To Know

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Like any community, the blockchain community has its fair share of jargon and phrases. To anyone not in the community, words like “altcoins” or “gas” or “ERC20” may as well be a foreign language. To help, we’ve rounded up some of the most common and most important crypto terms. Take a look:

Airdrops

An airdrop for a cryptocurrency is a way to distribute cryptocurrency tokens by awarding them to existing holders of the cryptocurrency

AES-256

Advanced Encryption Standard, or AES, is a symmetric block cipher (a cipher that uses the same key for encrypting and decrypting). AES is used to protect classified information and is used in software and hardware to encrypt sensitive data. AES-256 encrypts and decrypts data using a 256-bit cryptographic key. Keys can also be 128 bits (AES-128) or 192 bits (AES-192).

Altcoins

Alternative cryptocurrency coins are simply cryptocoins that are not Bitcoin. The majority of altcoins are a variant of Bitcoin that are built using Bitcoin’s open-sourced, original protocol. Other altcoins are built on top of their own blockchain and protocol.

Blockchain

A blockchain is a decentralized, distributed ledger for maintaining permanent and tamperproof records of transactional data.

Coin

Coins are cryptocurrencies that operate on their own blockchain. This is different than a token, which operates on top of an existing blockchain

Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that are encrypted using cryptography.

Cryptowallet

A cryptowallet is a software program that stores cryptocoins with the assistance of public and private digital keys, enabling users to send and receive coins through the blockchain

Decentralized applications (dApps)

Decentralized applications, or dApps, are open source and autonomous software applications that store data or protocols in a blockchain and run on a system of tokens where no single body holds token majority and changes are executed by consensus.

ERC20 token

‘ERC20’ is a standard for tokens built on the Ethereum network, and tokens that meet that standard are deemed ‘ERC20 Tokens’. These tokens are blockchain assets that have value and can be sent and received like Bitcoin, Litecoin, Ethereum, or any other cryptocurrency.

Exchange

A service where people can buy and sell cryptocurrencies, similar in theory to a traditional stock exchange.

Fiat money

Fiat money is traditional currency. It has value because a government or similar authority uses its power to enforce the value

Fork

A blockchain is considered to be “forked” when it splits into two separate chains, usually after the rules governing the blockchain are changed in the code. The new updated blockchain continues on one fork and the old blockchain continues on the other. The best example of this is Bitcoin and Bitcoin Cash.

Gas

In the cryptocurrency world, gas is used a measurement of the processing power it will take to complete a transaction on a blockchain.  The more complex the transaction is, the more processing power it takes to complete.

ICO

An ICO, or “initial coin offering”, is a means of crowdfunding a project through the release of a new cryptocurrency or token

Node

In the blockchain ecosystem, a node is a computer that possesses and maintains a copy of a blockchain

Mining

Mining refers to the process of solving new blocks for a blockchain. This is a process that typically requires huge amounts of processing power, and miners who contribute their computer’s processing power typically receive cryptocurrency as reward.

Public/Private Keys

Public and private keys are essential for initiating, verifying, and completing transactions on a blockchain. Public keys, derived from a corresponding private key, act as a user’s public address on the blockchain while a private key is known only to one user to protect their cryptocurrencies.

Smart contracts

Smart contracts software programs that are coded to execute on a blockchain. Smart contracts help exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.

Tokens

Tokens are a cryptocurrency that is built on top of an existing blockchain. This is different than cryptocoins, which are run on top their own blockchain.

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