Cryptocurrency Jargons: 8 Terms to Understand Blockchain Technologies
These days, almost everyone has heard of blockchain or cryptocurrency. The whole Internet is constantly getting updates on how increasingly popular these terms are in business and financial industries. With the availability of tons of helpful guide, videos, and articles about Blockchain, it’s safe to say that everyone can crypto or invest in Blockchain.
If you are a beginner and want to decipher a few cryptocurrency jargons before you invest, this article will surely be a good place to start. Below are 10 terms to help you get started with Blockchain and cryptocurrency
First and foremost, we need to start by defining what blockchain is. By definition, blockchain is a continuously growing list of records or blocks, which are linked through cryptography. A digitized public ledger, this list allows market investors to track their digital currency transactions.
Cryptocurrency is a digital currency designed to work as a medium of exchange. It uses cryptography for security to strongly control the creation of new units, protect any financial transactions, and authenticate the transfer of assets. Unlike the centralized electronic money we use or the central banking systems, this digital currency use decentralized control, making it exempted to any government interference or manipulation.
Blockchain networks use peer-to-peer protocols to allow network users to interact directly. They can do this without worrying that the data will be changed or without the need for an intermediary party check their transactions and communications. This protocol let distributed ledgers to no longer use any intermediary parties to mediate between any transactions.
A node is a blockchain network’s device that serves as the foundation of the technology since it allows it to function. It is distributed across the network to carry out a variety of tasks. Nodes can be a computer, a phone, a printer, or any other electronic devices with an IP address, and are connected to the Internet.
Since blockchain works without any central authority to run it, there still needs to be a way for participants to collate all the transaction carried out with a cryptocurrency to make a new block. The miners’ role is to inspect and validate all the transactions using timestamps and IDs.
Just like banks, wallet is a digital address you will use to store, send, and receive your cryptocurrency tokens. It is basically a software program with and public keys. By interacting with various blockchain, you are able to transact using these tokens. There are different types of wallets, and each of them has a different way of storing and accessing digital currency. Here are the different types of wallets:
If you are having doubts whether cryptocurrency wallets are safe or not, it actually depends on the type of wallet you use. Be sure to use and follow security precautions to avoid any problems. Each wallet has 3 main components, which are address, the public key, and their private key. The public key is for sending and receiving funds, while the private key is for accepting and authorizing release of funds. Users should never publish their private keys, send them to other individuals, or share them in any other way.
- ICO or Initial Coin Offering
ICO or Initial Coin Offering is similar to IPO or Initial Public Offerings used for publicly held corporations. As for ICO, it used to raise funds to proceed with a blockchain’s developmental phases. Although with ICO, the investors will get a token or crypto coin instead of securities. ICOs are usually split into two main periods, which are public sale and pre-sale periods. A pre-sale is a token reserved for participants on the whitelist who can buy the coins before they are made public. As for a pre-sale, the tokens are used to reward initial supporters by giving them tokens for promoting the entire project. If you need ICO advisory, check out Kryptoia. The offer efficient marketing strategy to get the best results for your business.
When centralized bodies transfer currencies from one blockchain to another, this transaction is called an exchange. Similar to stock exchanges, exchanges in cryptocurrency serve as an intermediary to transfer or send money and cryptocurrencies between the users and the networks.
With these terms defined, it will be easier for you to better understand what blockchain is and how it works. If you want to learn more about cryptocurrency, visit Kryptoia. They offer helpful information about cryptocurrency to prove that everyone can crypto, whether you are a beginner or an expert in the field.