Cryptocurrency is a rapidly growing industry, with billions of dollars in circulation and thousands of people using it daily. But with this popularity comes a lot of confusion. So I’m here to break down some of the most popular cryptocurrency terms and phrases so that you can get on board without breaking your head.
A blockchain is an underlying technology that allows cryptocurrencies like Bitcoin to exist. The blockchain is a continuously growing list of records, called “blocks,” which are linked using cryptography. Each block typically contains a hash pointer as a link to a previous block, timestamp, and transaction data. By design, blockchains are inherently resistant to modification of the data — once recorded, the data in a block cannot be altered retroactively. Blockchains were originally developed for digital currency but had many other potential applications besides. Quantum AI Trading specializes in Bitcoin and other cryptocurrencies, with a focus on execution-driven strategies.
- Proof of Work (PoW)
The proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. Producing a proof of work can be a random process with low probability, so a lot of trial and error is required on average before a valid proof of work is generated. Bitcoin uses the Hashcash proof of work system.
- Alternate coin (altcoin)
The term “altcoin” is used to describe cryptocurrencies launched after the success of Bitcoin. Currently, there are over 700 alternative digital coins. The most notable altcoin is Ethereum, which launched with a market capitalization exceeding $1 billion in early 2017 and has remained the cryptocurrency with the second largest market cap for much of the year.
Advisors have been the best thing that happened to cryptocurrency in terms of publicity for several reasons. One, it gives people who are not familiar with cryptocurrency an idea of what it’s about, and it’s helped the adoption rate by mainstream media outlets be very helpful in spreading the word. In addition to that, it also makes it easier to develop brands because there are already many people who have been in this industry for years and have established themselves as brand names in the crypto space.
- Auction Sale:
This is the time when a new cryptocurrency project opens its doors to the public, allowing everyone to take part in a certain number of crypto coins. The way it usually works is that people spend cryptocurrency, which is then sent to the team developing the coin. After this period of time has elapsed, everyone who took part will be able to start using their new coins. Of course, the amount of coins you will receive will be based on how much you spent.
- Auction Protocol:
The purpose of an Auction Protocol is to prevent the creation of so-called “synthetic” tokens whose supply would be considerably higher than the real thing. The protocol regulates how many pennies are released and at what rate. The lawyers in this matter are currently raging about whether or not it would be legal to create a token that doesn’t correspond to anything. It’s an interesting question, but it’s one that can only be decided by courts and lawmakers, not by the crypto community itself.
- Blockchain Advisor Club:
The Blockchain Advisor Club is a free online institution that provides people with educational resources, events, and news on the blockchain industry. It’s a place where anyone can participate, get informed, or just hang out. The organization is hosted by Blockchain University, which has been in business since 2015 and are pioneers in the cryptocurrency education space.
A broker is someone who provides a link between buyers and sellers of certain goods or services. These services can be called everything from an auction house to exchange, but in the context of cryptocurrency, the term is used to refer to platforms that offer the buying or selling of cryptocurrencies.
A wallet is a special type of software program that stores your cryptocurrency, private key, and all the necessary information to be able to send and receive it. These are usually downloaded from the internet to your computer or mobile device, although there are also password-protected hardware wallets which can be used with PIN codes.
The term “mining” refers to the use of computers solving complex mathematical equations that produce new currency blocks (“coins”) once every alternating set of time. This usually takes anywhere between ten minutes and two hours, depending on the algorithm used. The amount of new coins that are mined are determined by the difficulty level of mathematical problems. The more difficult the problem, the smaller the reward for completing it.
In this article, I have tried to describe most of the terms and phrases that you might encounter in a cryptocurrency exchange. I have also explained how these things work and the different ways in which you can make some money using cryptocurrencies. Always remember to do your research because only a thorough understanding of cryptocurrencies will enable you to make smart cryptocurrency investments and trades.