Blockchain technology has overcome all obstacles and entered the mainstream. Cryptocurrency is becoming a household term in the modern world. Some financial institutions are either investing in cryptocurrencies or allowing their customers to follow them.
However, Crypto and Blockchain are vast topics so it’s really important to be familiar with their terms. There are many blockchain terms that are crucial while working with cryptocurrency.
Whether you are a beginner or a professional, there are some blockchain terms that you should always keep in mind. In this article, we have listed 50 of the important crypto and blockchain terms for you to know and understand.
50 Essential Crypto and Blockchain Terms
On a blockchain network, you can send and receive payments via address. An address is a sequence of numbers and letters that can be scanned using a QR code.
A technique of distributing tokens to wallet addresses for sending cryptocurrencies or tokens.
The first cryptocurrency with Proof of Work (PoW) blockchain.
A digital ledger that is made up of immutable, digitally recorded data in the form of blocks. With the help of cryptographic signatures, each block is linked to the next.
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5. Brain wallet
A blockchain account is created with your own password, seed phrase, or passphrase. Since humans are incapable of producing sufficient entropy, or unpredictability, the wallets produced from these texts are unsafe.
In cryptocurrency, a coin is a symbol of digital asset value created by its own blockchain.
7. Cold wallet
An offline wallet that isn’t linked to the internet at all. These wallets keep bitcoins safe from online hackers.
Digital currency is based on maths and encryption methods to control the generation of units of currency and the verification of payment transfers. Cryptocurrencies are based on distributed ledger technology and function independently.
A dedicated storage area for digital currency with a source and the destination address. For example, the WAX cloud wallet is a popular wallet in the market.
10. Decentralized application (dApp)
An open-source application that runs its backend code on a decentralized peer-to-peer network.
11. Decentralized exchange (DEX)
A decentralized exchange is a cryptocurrency trading platform based on blockchain capabilities. The trading is done on a peer-to-peer basis or between liquidity pools.
12. Digital asset
A digital resource with a market price that is finite, digitally transferrable, and intangible.
Public blockchain network and decentralized software platform.
Entropy means ‘randomness’ in cryptography. In general, the increase in randomness increases security.
An epoch is a unit of time or blockchain progression on a specific blockchain.
A faucet is a cryptocurrency-dispensing program i.e. a website or more sophisticated program that solely distributes cryptocurrency for usage on test networks.
A denomination of ether.
A fork is a deliberate tactic that produces another version of a blockchain. It is frequently used to improve a network. Hard forks generate a new version of the chain whereas soft forks establish two compatible chains.
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A metric measuring the number of computing steps needed to complete an Ethereum network transaction.
20. genesis block
The first block of data is calculated in a blockchain network’s history.
21. gas limit
The gas limit is the utmost sum you’re ready to spend for any Ethereum transaction.
22. hardware wallet
A physical gadget that can access the web and participate in online trades while also serving as cold storage.
23. hot wallet
A wallet that is always linked to the internet, such as a wallet that is stored on a centralized exchange. Cold storage methods and hardware wallets are regarded to be more secure than hot wallets.
A programming method that accepts an input and returns an alphanumeric string called a “hash value” also referred to as “digital fingerprint.”
The lack of ability to change or alter. This is a major feature of blockchain networks: data cannot be changed once it is entered onto a blockchain ledger. On blockchain networks, this immutability is the foundation for commerce and trade.
When the latest cryptocurrency decides to sell tokens in return for advance capital, it is known as an Initial Coin Offering (ICO). They are subject to ever-changing regulations and regulations.
27. internal transaction
On the Ethereum network, an internal transaction takes place between contracts instead of addresses. It is not on blockchain and thus eliminates gas fees. However, they are frequently required to complete the operation in effect and can be seen on Etherscan.
28. Know Your Customer (KYC)
A method by which a company verifies a customer’s identification and additional info.
29. keystore file
A Keystore file is a JSON-formatted, encrypted form of a private key.
30. Layer 2
Layer 2 is a series of future Ethereum scaling solutions.
31. light client
A user that only downloads a tiny portion of the blockchain. It allows users of medium or low-range hardware such as smartphones and laptops can get close to the same level of security by deliberately downloading tiny portions of the blockchain.
If an asset can be easily changed into cash, it is said to be more liquid.
The principal network is where real transactions on a distributed ledger take place.
34. market cap
The total value owned in a specific industry, market, or asset is referred to as market capitalization. The market cap of a publicly traded firm is the dollar market value of the company’s shares. The overall market cap of Bitcoin or Ethereum is equal to the current stock multiplied by the current market price.
MetaMask is a tool for accessing and interacting with blockchains and the decentralized web. It is available as a mobile app or as a browser extension. It is used as a wallet, a permissions manager for dapps, and a token swap network.
“Fungibility” refers to the capacity of one object to be traded for another. Painting or sculptures are often regarded as non-fungible since their quality and value are likely to differ. A non-fungible token is a sort of cryptocurrency that is a one-of-a-kind digital asset with no counterpart.
“Nonce” refers to a distinctive transactional id number on the Ethereum mainnet that grows in value with each subsequent transaction to ensure different safety measures.
A node refers to any computer that is linked to the blockchain network. A full node is a machine capable of fully validating transactions and downloading all of a blockchain’s data.
39. Optimistic rollup
It accepts the transactions’ authenticity and faithfulness then only performs a fraud-proof if fraud is suspected.
Any entity or person who is trusted to predict the outcomes of an event is referred to as an oracle. An oracle in blockchain network assists in the communication of data to a contract which can subsequently be used to confirm an event or a specified outcome.
Interactions between two parties, usually two independent people, are referred to as P2P. A P2P network can consist of any number of people. Individuals can exchange or engage with one another on a blockchain network without depending on a mediator or a point of failure.
42. Private key
The private key is an alphanumeric piece of data that associates with a particular wallet account. Private keys are similar to passwords in that they allow a user to access their cryptocurrency account.
43. Public key
Anyone can acquire the public key to encrypt messages before sending them to a known destination that has a matching private key.
Any company or party that manages an off-chain order book. Relayers assist traders in locating counter-parties and transferring orders between parties using cryptography.
Any cryptocurrency that is linked to a stable asset, such as fiat money or gold. Its price should presumably remain stable because it is weighed against a known quantity of a less volatile asset.
A token is a digital asset that is developed on top of an existing blockchain.
47. transaction block
On a blockchain network, A set of transactions can be encrypted and added to the chain.
48. transaction fee
Transactions sent through a blockchain network are subject to a modest fee. The transaction fee is offered to the miner who hashes the block with the appropriate transaction.
49. validity proof
The evidence, including certain forms of rollups, is submitted to demonstrate that the transactions are genuine.
Proof of Stake (PoS) agreement participant.