Common cryptocurrency terms, part 2
Here we go with the second part of our article with the common cryptocurrency terms. The first part is here, by the way. Enrich your vocabulary and feel free to ask our experts about any confusing terms!
Key pairs
Public and private keys together. When you create a wallet, you get a pair of keys — one of them is private. You should backup it and never show to the third parties.
Legacy address
The old format of Bitcoin crypto-addresses, which started with “1”. The same format was present in Litecoin and Bitcoin Cash, but they started with different numbers. The new formats appear as the result of SegWit or the need to differ from other cryptocurrencies.
Litecoin
The oldest bitcoin fork, cryptocurrency and the network of the same name. Litecoin is characterized by more stable cost and cheaper commissions.
Market cap
The shorthand of “market capitalization” — this term implies the total value of the entire asset traded in the market. For cryptocurrencies, the market cap is the total value of each coin, it is calculated as the number of coins in circulation multiplied by the price of one coin.
Mempool
A set of all transactions waiting to be confirmed on the network
Mining
The process of calculating complex cryptographic tasks that are necessary to confirm transactions on the blockchain.
Miner fee
Payment received by the miner for the fact that his equipment is used to maintain the network — to include the transaction into the block.
Multisignature
Multisignature allows users to sign a document digitally to confirm a transaction. Multisignature is a condition for a transaction to be executed only if it is signed by several private keys.
Node
Node is any computer with the full downloaded blockchain that helps other components to communicate with each other in the network and to disseminate information about transactions and blocks.
Payment ID
A number consisting of letters and numbers that confirms that the transaction in Monero will pass to the correct recipient. Not all Monero wallets require you to enter a payment ID, but many of them have this option. Some other cryptocurrencies also have their equivalents for payment ID.
Phishing
Cheating users when a fraudulent website or app disguises itself as a real one but actually steals money or information.
Privacy coin
Cryptocurrencies that focus primarily on the security and anonymity of users. Such coins include, for example:
- Monero (XMR)
- Dash (DASH)
- ZCash (ZEC)
Private key
A private cryptographic key that only the user knows. The key is used to decrypt messages generated by the public key.
Public key
A cryptographic key used to encrypt messages that are then decrypted using a private key.
Refund address
The address that the user specifies if the funds are intended to be returned.
Replay attack
An attack on the authentication system by recording and playing back previously sent valid messages or parts thereof.
Satoshi
A satoshi is a small amount of bitcoin. One bitcoin contains 100,000,000 satoshis.
Satoshi Nakamoto
The alias of the creator of bitcoin, who wants to remain unknown.
SegWit
SegWit stands for “Segregated Witness”, it is a superstructure over the existing cryptocurrency protocol, which helps to “boost” the network, to improve network throughput, while not breaking main-chain blocks.
SHA-256
SHA-256 is the cryptographic hash algorithm. It uses 256-bit signature.
Smart contract
A computer algorithm designed to conclude and maintain commercial contracts in blockchain technology. Smart contract is a digital protocol written with the help of computer code. Its purpose is to transfer information and ensure the execution of the contract by both parties.
To the moon
This phrase expresses a sharp jump in the value of cryptocurrencies. For the first time, they began to say so when Dogecoin increased in its price abruptly.
Transaction fee
The commission, which is taken for each operation on the transfer of cryptocurrencies.
TXID/hash
The TXID (transaction ID) or the hash is a memo consisting of numbers and letters, marking each transaction in the blockchain.
UTXO
A UTXO stands for “unspent transaction outputs”. This is used for validation via nodes on the network. The sum of these outputs is the user’s total balance.
Wallet
E-wallet, which stores cryptocurrencies
Whitepaper
The main document, which is written by those who launch a new crypto-coin. This document explains all aspects and importance of this coin: how will it be used, for what purposes, why will it grow in price.
Withdrawal address
The address that the user specifies to get his money after the exchange.
