WATCH: The 4 Stage Stock Market Cycle

Articles

Your Guide to Crypto Lingo Part Two - Advanced

By Marco Wutzer August 10, 2022 Facebook Logo Twitter Logo Email Logo LinkedIn Logo

 

Over the last few years, cryptocurrency has grown like a beanstalk.

From mainstream and social media, to all corners of the internet, crypto coverage is everywhere.

Regardless how much you think you know about crypto and the technology behind it, this lingo can be challenging to understand. 

As part of my mission to educate you on all things crypto, it’s my responsibility to help you understand these. In turn, I hope it helps you gain confidence to make wise crypto investments. 

Last week, I published a list of entry-level crypto terms. Today, I’ll cover some more advanced lingo. 

Address (Wallet Address)

A unique identifier used to make transactions in a blockchain network. Wallet addresses are represented by alphanumeric characters, and also as QR codes. You can think of addresses like bank account numbers.

Altcoin 

Short for Alternative Coin. Any coin that is not bitcoin. Can be the second-most popular coin (Ethereum) or any of the thousands of other coins with a very minimal market value. There are many high-quality coins appropriate for use-cases very different from those of bitcoin.

Block Height

The current block in the chain of blocks that make up the blockchain database. 

Block Reward

The amount of newly-minted coins in a crypto network awarded to a minder or validator who creates a new block. 

Confirmation/Block Confirmation 

The number of blocks that have been added to the blockchain since a transaction has been included in a block. The more confirmations a transaction has, the less susceptible it is to being reversed or double spent. Bitcoin for example requires 6 blocks before a transaction is considered finalized.

Consensus 

A trustless mechanism that defines which transactions are valid and in which block they get included.

DAO (Decentralized Autonomous Organization)

A community-led entity having no central authority. Power is distributed across token holders who collectively vote on decisions. 

Distributed Ledger

A fancy word for a blockchain. A distributed ledger can be permissioned, permission-less, centralized, or decentralized.

Fiat Currency

Government-issued currency like the US dollar or the Euro with no intrinsic or fixed value, and  unbacked by any tangible asset.

Fork 

When an upgrade changes the rules of a blockchain. The changes to the protocols of a blockchain often result in two new paths – one that follows the old rules, and a new blockchain that splits off from the previous one. For example Bitcoin and Bitcoin Cash.

Genesis Block

The first block of cryptocurrency ever mined. 

HODL

“Hold On for Dear Life.” The term originated from a user typo on a Bitcoin forum in 2013. It refers to the long-term investment strategy in which people buy and hold cryptocurrency instead of trading it. 

Hash

A unique string of numbers and letters that’s a summary of data. For example the transactions that are included in a block on the blockchain

Scalability

A network’s ability to increase the number of transactions or computations. Different blockchains have different limits on how much they can process. 

Testnet

A replication of a blockchain used to test upgrades and new features.

Transaction Fee

A fee charged to execute a transaction on a blockchain network. 

Validator 

Someone that stakes a certain amount of coins and runs a computer to be allowed to verify transactions of a Proof-of-Stake blockchain. 

Web3

The next evolutionary stage of the internet. Where value and data can be transferred directly peer-to-peer in decentralized fashion without the need for an intermediary. I often refer to it as the Blockchain Ecosystem.

I hope this helps you avoid confusion in your research. Ultimately, I hope it helps you make wise decisions when investing in crypto. 

To sovereignty and serenity, 

Marco Wutzer

FREE e-Letter
Sign Up

Archives