Cryptocurrency Terms

There may seem to be a lot of technobabble thrown around in cryptocurrency culture, but most of these terms are understandable with a brief definition. Here is a list of commonly used terms to be familiar with as you dive into the world of crypto:

Bitcoin - A peer-to-peer form of electronic cash which allows online payments to be sent directly from one party to another without going through a financial institution.

Bitcoin Address (see also: public/private key) - Similar to an e-mail address, a bitcoin address is where you send and receive bitcoin.  It is comprised of an alpha-numeric string of characters such as 1D5jeT2BuD97Mar3Ft93NhleJ496FEafV. 

Blockchain - A digital ledger which records transactions into blocks.  Once a block is full a new block is created and linked ("chained") to the prior block using cryptography.  In order to altar a transaction from a prior block all future blocks must be simultaneously altared to reflect the change. Thus, transactions recorded on the blockchain are extremely secure since any attempt to revise a transaction from a prior block would require tremendous amounts of computing power to overwrite all succeeding blocks.

Cryptocurrency - A broad term encompassing all digital assets created using cryptography which can be used as a medium of exchange between two parties.

Cryptography - A method of storing and transmitting data in a particular form so that only those for whom it is intended can read and process it.

Decentralization - The distribution of power and functionality among a group of individuals rather than one central entity.

Mining - The process by which new bitcoin is discovered. For an extensive look into bitcoin mining visit www.bitcoinmining.com.

Private Key - The digital signature proving ownership of bitcoin or any other cryptocurrency.  The coin can only be sent if "signed" using the private key, and therefore the private key should be held in complete confidentiality.

Public Key - The address where cryptocurrency can be deposited.  This address can be displayed publicly since funds cannot be withdrawn from the address unless the user has access to the associated private key. The private key cannot be derived from the public key.