From Blockchain to Metaverse: Your Pocket Cryptocurrency Glossary

These days, discussing cryptocurrency can feel akin to discussing the weather — even for those of us not in the fintech space, it’s often hard to avoid. But for all its popularity, it’s not exactly easy to engage with the ecosystem that underpins it. The world of digital currency is not without barriers to entry, especially for newcomers.

Why do you ask? Well, on the one hand, it’s a whole new way of conceptualizing commerce and value itself. But on top of that, the market is often associated with words like ‘volatile’, ‘unpredictable’ and ‘fickle’ (hardly welcoming terms). In fact, the whole category is covered in jargon, making it a daunting subject to discuss (think: “NFT”, “gas”, and “dApps”). For people looking to dip their toes into the underlying blockchain technology, the jargon can certainly be confusing (read: daunting). Think about it: you need to translate new currency names, wallet types, and NFT requirements just to join the conversation. It’s like learning a new language.

That’s why we partnered with Venmo – where crypto newbies can easily buy, sell, and hold digital currencies using an app they already keep in their regular rotation – to run the crypto journalist and author of Cryptopians: Idealism, Greed, Lies, and the Creation of the First Big Cryptocurrency Craze, Laura Shin, for a lingo lesson. Ahead, find our pocket crypto glossary: ​​all your fintech terms needed to thrive in the blockchain world, according to Shin.

This is by no means a crypto bible, but if in doubt, feel free to come back here for the basics – whether you’re buying, selling, holding, or just having dinner conversation.

Alt-corner

This word has two meanings, according to Shin. “[Alt-coin] is sometimes used in a pejorative way, implying that a coin doesn’t have much merit on its own,” she explains. The rest of the time it is used to describe any room that is not bitcoin (for example: Ethereum, Litecoin, Bitcoin Cash, the list goes on).

Bitcoin

Bitcoin is another word with two meanings. Shin says that technically bitcoin (lowercase) refers to the first developed cryptocurrency while Bitcoin (uppercase) is the first blockchain. It is governed by an algorithm in which only 21 million bitcoins can exist. Its abbreviation is BTC.

Bitcoin Cash

Bitcoin Cash (abbreviated as BCH) is a cryptocurrency and blockchain that originated from the same blockchain as bitcoin in an event known as the “Bitcoin fork”.

blockchain

Simply put, the Blockchain system is a digital ledger that stores transactions in a digital format. Each transaction that occurs is recorded as a block of data intrinsically linked to the block that precedes it, creating a secure chain of information that cannot be modified. These blocks are connected chronologically, with new blocks being added as transactions continue.

Blockchains are typically stored on a distributed network of servers, each of which is constantly exchanging, storing, and updating the ledger. This allows information to be decentralized and not be corrupted by a single user.

cold wallet

A physical device to store your crypto offline. Modern cold wallets look like a USB drive and reduce the risk of hacking because they are not connected to the internet. It is important to keep the device in a safe place as crypto is not recoverable if lost or stolen.

dApps

Short for decentralized applications, “dApps” are applications or programs that run on a blockchain and are developed without any middlemen. Instead of a single company hiring employees, dApps have a coin designed to entice people to offer their services.

Decentralization

Decentralization is a movement to design programs, applications and other digital projects without requiring centralized actors. “For example,” Shin offers, “if you were designing a new online application, usually in Web 2.0, it would be done with a centralized company like a startup that would hire all the people to run it. But in the decentralized world, you would build by designing a coin to get people to fill all the roles. Those who contribute to the creation of these applications are generally compensated with the parts of the system on which they run.

Challenge

Decentralized finance (DeFi) is a system in which different financial services operate online without having financial institutions behind them. “You replace these financial institutions with software or protocols, and incentivize different actors in a network to provide the services you need,” Shin explains.

Ethereum

It is the second most popular blockchain – and the second in terms of market capitalization. It is a platform for other decentralized apps, like CryptoKitties game. People often call it a decentralized world computer. “Another way to describe it would be an app store where any developer can imagine a decentralized app and upload it to Ethereum,” Shin explains.

Ethereum 2.0

You might hear Ethereum 2.0 referred to as the consensus layer. “Basically, Ethereum 2.0 refers to a proof-of-work blockchain that has evolved into a proof-of-stake blockchain,” Shin explains. “And all that means is that instead of electricity [through crypto mining] being the way the network is secured, it will now be secured by people depositing certain coins, which is called staking them, and earning interest on them to secure the chain.

Fiat money

Fiat currency is a type of currency issued by government decree – but is not necessarily backed by anything (i.e. gold).

FUD

Meaning “fear, uncertainty and doubt”. It is a term often used to describe those who criticize the crypto world. These people are said to “have FUD.”

HODL

“It just means to hold,” Shin said. “The misspelling is from a drunk forum post on a bitcoin discussion board, where someone wanted to write hold and they wrote, HODL. But that just means what it means: don’t sell your rooms.

Initial coin offering

Think of this as a fundraiser. An initial coin offering is essentially a crowd sale in exchange for company-issued cryptocurrency tokens used to fund the development of a new blockchain project. Tokens may also have utility for a particular service or product.

Litecoin

Litecoin is often called digital money (unlike bitcoin called digital gold). “It’s designed like bitcoin but with slightly different parameters,” Shin explains. “There are more litecoins than bitcoins and block time – the time between transaction broadcasts – is shorter on litecoins.”

Metaverse

Simply put, the metaverse is an alternate virtual world where you can own digital assets like NFTs and transact using cryptocurrencies. But it’s not enough it’s simple. “The way it’s being developed right now, it doesn’t look like there’s going to be a single metaverse,” Shin says. “There are centralized companies building their own versions of the metaverse, so that term is poorly defined at the moment. It’s unclear what it’s going to be, in the end.

Mining

One way people try to get a new coin being minted (essentially, formalized) by a blockchain or by a crypto network. Crypto mining requires solving complex equations. The first miner to solve the problem receives a reward from the next block in the blockchain, which causes a new transaction to be added to the ledger.

NFT

NFT is the abbreviation of non-fungible token and a new concept of ownership. “It’s what allows you to own items in the digital metaverse. Basically, it’s a single token,” Shin explains. “If I asked you to pay me bitcoin for a huge, huge object, I wouldn’t say I prefer this bitcoin to this bitcoin or something like that. With a non-fungible token, since it is unique, each is distinct from the other.

Each bitcoin has the same value and each is interchangeable. In contrast, the value of an NFT comes individually, as each token is different. For example, think about how your child’s artwork on your fridge will have a different market value than, say, a Picasso – even though they’re both technically works of art.

“There may be a particular class of NFT that is unique within that class,” Shin clarifies. “So, for example, you could have a series of 100 tickets to an event that are NFTs, so they’re fungible with each other but not with anything outside.”

Private key and public key

“A private key is what allows you to send crypto of your wallet or address to another one purse or address, whether it belongs to you or someone else,” Shin explains. “But a public key is what allows you to accept cryptography when it’s sent to you from a different user. A public key would be like a mailbox where you receive money, and then a private key would be the door in the back that allows you to send money.

Smart contracts

This is software that automatically executes the terms of an agreement between two parties to the transaction without a company or other intermediary needing to step in and ensure that both parties abide by the terms of the transaction. their agreement. The contract runs on its own, without anyone monitoring it. For example: An ATM transaction. You put a dollar in the vending machine, and the machine gives you a soda. Nobody has to impose this transaction. Smart contracts are often used to efficiently execute contracts and agreements on blockchains, such as Ethereum.

Wallet

A hardware device or application used to protect private keys. “Your wallet allows you to interact with the blockchain: you can check your balance and send or receive money,” Shin explains.

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