What is Ethereum

What is Ethereum

What is Ethereum

Many people are aware of the cryptocurrency world; many are familiar with the term, Bitcoin.  But if you are one, then Ethereum will not be so foreign to you. If you are not aware, no need to worry, see this as your guide to the internet world where transactions are carried out without cash as the currency.

Ethereum is a decentralized (open source, public) blockchain-based computing forum for money and new forms of applications featuring it affords you the opportunity to write codes that can monitor and control money and also develop applications that are accessible anywhere around the globe.

How Cryptocurrency Works

How Cryptocurrency Works

You have probably wondered how cryptocurrency works; you are not alone and that is what this article is for; to provide insight on the workings of cryptocurrency. To understand how Cryptocurrency works, let us consider these;

  1. Public Ledgers: All confirmed transactions are stored in a public ledger, to monitor that the person with the encrypted address is no spending beyond the coins available. Because it can be viewed by all, it reduces the risk of theft.
  2. Transactions: The transfer of funds between two digital wallets is called a transaction. The transaction is published in a public ledger and the Miners approve it and get their reward after confirming that the transaction can from the owner of the wallet. It may take some time, about 10 minutes in Bitcoins to get confirmed and added to the public ledger.
  3. Mining: Mining is the process of confirming transactions and putting it in a public ledger after solving some complex mathematical puzzle. The transaction is open such that anyone can do the mining duty and confirm and after it, they show their proof of work and get some cryptocurrency to their wallets as a reward for the job done.
Cryptocurrency Wallet – A Step by Step Guide

Cryptocurrency Wallet – A Step by Step Guide

What is a cryptocurrency wallet?

I am sure you must have come across that term before but what exactly does it mean?

These days, there is so much talk about cryptocurrency in recent times, even though it has been in existence for a few years now.

You have probably heard about it – even if you haven’t in details.

As expected, there a number of terminologies used with cryptocurrency and cryptocurrency wallet is one of them. So, what is cryptocurrency wallet?

A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance. If you want to use bitcoins or any other cryptocurrency, you will need to have a digital wallet because that is where you get to control all transactions. When someone sends you Bitcoins or any type of digital currency, the transaction cannot be reversed because they have signed off ownership, there are no real or physical coins but there are published ledgers to show the balance of how

What is Cryptocurrency

What is Cryptocurrency

If you are yet to hear of cryptocurrency by now, we could say you are far behind trends but you are probably not alone. But if you have heard of it, then there are probably more details that you need to learn about it. Now, that you know that, let’s proceed.

Over the years since the invention of currencies, as technology increased, there have been several attempts to create mobile money, it is true that there are e-transactions now where one can send money via the internet to another entity but there is still one major limitation that has made cryptocurrency a different and a better option for most people.

One major advantage this has is the fact that it bypasses the third-party financial institutions such as the banks. It doesn’t require the endorsement of a bank or the close monitoring of Government. There is no central bank involvement to sanction anyone for having too much money. The decentralized structure of the cryptocurrency has made it a more reliable way of saving and even investing money.

Cryptocurrency works through the peer-to-peer method. This simply means that you don’t have to use your social security or credit score as collateral, it allows you to be pseudonymous because you don’t need to enter your personal bio-data, you just need a digital address (that will be explained further). In other words, cryptocurrencies are like virtual accounting systems that keep a record of all transactions. The transactions are bundled into blocks, which are cryptographically signed (hence the word “crypto” currency) and the client doing the signing gets some number of units of virtual currency (and potentially transaction fees) as a reward for doing the work of calculating the cryptographic signature.

You can make some heavy duty transfer of money to your family without any internal or international financial body restrictions. 

One other exciting thing is the fact that people can only send what they have, transactions are secured using cryptography, you can’t spend the same unit twice, and this eliminates the risk of fraud. If you are transferring units to someone else, be sure of the transfer because there is no reversal, there is no central body to oversee this kind of case. So, going further to the big question, what is a cryptocurrency?

 

What is Cryptocurrency?

Cryptography is made up of two words, Cryptography and Currency, so before we give meaning to the word in itself, let us know what those two terms are

First, let’s define what normal currencies are; according to Wikipedia; currency is money in any form when in use or circulation as a medium of exchange especially circulating banknotes and coins. It is a system of money in common use, especially for a people in a nation.

A currency is token generally accepted in a country for transactions and as a means of exchange for goods and services. This can be in paper form or coins but now, with the invent of cryptocurrency, it can also be said to be not just in hard tokens that can be seen and touched but in a soft token which makes it virtual. So beyond what we know as money, actual money, there is the virtual money which cannot be touched or seen but the value cannot be denied.

So currencies allow people to convert their efforts into something that maintains its value, it is used to measure the value of a good or service and can be used at a later time.

Cryptography, on the other hand, is the study of secure communications techniques using codes that can only be understood by the sender and the recipient. It is converting a plain text to unintelligible codes that can only be decoded by the party it was meant for. It is a secure path restricting an unauthorized body from accessing the information that has been encrypted in the message. The recipient has a secret key that is used to convert the messages back to plain text to make it readable. This is used to secure credit card information, e-mail messages and some corporate data. The encrypted information gives authentication to the message, it cannot be copied or altered by a third party, and it can also be confirmed by the recipient.

Now that we have an understanding of what the two terms are; let us move further by defining the word “CRYPTOCURRENCY”

Cryptocurrency is a medium of exchange value(just like ordinary money, cash or coins) that is digitalized and relies on encryption, which guarantees the security of transactions. It is a new way of payment for goods and services that get rid of the intermediaries or a central financial institution represented by banks eliminating all commission fees and the unnecessary bank charges and what have you.

The core of cryptocurrency is the security of the transaction which is provided through a blockchain technology that serves as a public financial database. This is purely mathematical in nature.

It is a digital asset that uses strong cryptographical codes to secure financial transactions. Cryptography is used to monitor and control the creation of extra units and verification of the transfer of assets.

According to Jan Lansky, a cryptocurrency researcher who considers cryptocurrency a futuristic currency that would be widely used; he said Cryptocurrency is a system that meets six conditions

  • The system does not require a central authority; its state is maintained through distributed consensus.
  • The system keeps an overview of cryptocurrency units and their ownership.
  • The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  • Ownership of cryptocurrency units can be proved exclusively cryptographically.
  • The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  • If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs, at most, one of them.

Clearly, cryptocurrency is the next thing as far as the future of currency is concerned an understanding this is important for you and I.

Cryptocurrency Glossary: A Complete List of Crypto Terms

Cryptocurrency Glossary: A Complete List of Crypto Terms

Imagine you are a knight and you have only your sword and shield to defeat a dragon.

There are tons of things you can do.

But if you really want to be successful, you might have to find a way to avoid the dragon fire, break his teeth and claws etc.

The same rule applied if you want to become an expert Crypto trader or using a Cryptocurrency exchanger.  To become successful, you need to know a lot of things. One of them is to know your crypto glossary.

So it is a no-brainer that you have to know your terms.

This guide is perfect for you if you are:

  • Looking for a complete list of cryptocurrency terms?
  • Do you want to understand cryptocurrency better?

Then you have to take time to learn certain words that describe different things in that world.

It is exactly like the different terminologies used in different fields to explain certain things. They are a lot; however, the top ones that you are likely to encounter more have been picked for this article.

 

The A-Z of Crytpo Terms You Should Know

Address: Addresses consist of between 26 and 35 characters and represent a unique wallet ID on the blockchain, much like an account number. They are used when conducting transactions on the network, including the receipt, remittance, and storage of cryptocurrency.

Altcoin: This usually refers to any cryptocurrency coin other than Bitcoin, which was the original cryptocurrency. There are over 1,000 other cryptocurrencies in the market.

Blocks: These are packages of permanently-recorded data on the blockchain network.

Blockchain: This is a distributed ledger secured using cryptography. It’s a database that’s accessible for everyone to read. Therefore, data can only be changed by ledger owners. Data isn’t stored on a centralized server but is instead shared by thousands of computers around the globe.

Confirmation: When a transaction has been verified by miners and added to the blockchain, it receives a confirmation.

Consensus: Consensus is reached when all network participants approve the validity of the transactions by ensuring that ledgers are exact copies of one another.

Cryptocurrency: This is a type of digital asset used as a medium of exchange in business transactions. Cryptography is used to maintain the security of transactions and control the creation of additional currency coins or tokens.

Digital Asset: Not all cryptocurrencies trade as coins or currencies. If they are digital stores of value, they are termed digital assets. These can be freely exchanged or not.

Fiat currency: A fiat currency is any currency that’s issued by a government or a central bank, such as the dollar.

Fork: This term applies to a blockchain that’s split into two separate chains, normally to accommodate new governance rules.

Genesis block: This describes the very first block in any blockchain.

Going long/going short: These terms describe a margin trade that profits when the price either increases or decreases.

Hash algorithm: This transforms a large amount of data into a fixed-length hash or string of characters for a cryptographic key. Hash algorithms are central to blockchain and cryptocurrency transactions.

Hash rate: This refers to the speed at which a piece of hardware can decrypt hashes. This is the basis of cryptocurrency mining.

Hot wallet: A hot wallet is connected to the internet and used to hold cryptocurrency for everyday transactions. Because of the increased security risk over a cold wallet, a hot wallet should not store large amounts of currency

Laddering: Investors who set incremental buy or sell orders are said to be laddering.

Mining: Cryptocurrencies aren’t printed like traditional currencies – they are mined. This process uses computer hardware to solve complex mathematical problems and decrypt hashes. Miners are rewarded for their work with cryptocurrency coins.

Mining rig: Cryptocurrency mining requires a huge amount of power. Mining rigs consist of Multiple Graphic Processors (GPUs) to increase processing power.

Moon: When a cryptocurrency coin goes on a market run and drives the price up quickly, it’s referred to as mooning.

Multi-signature, or multisig: This refers to a situation where multiple signatures are required to authorize a transaction. This increases the security of cryptocurrency transactions and reduces the risk of theft.

Node: A blockchain isn’t stored in a central location. In fact, it’s distributed to any number of computers – called nodes – which host it. Each node is instrumental in verifying the ledger within the blockchain.

Private Key: This is the key – or password – which unlocks a wallet. It shouldn’t be shared with anyone.

Public Key: A public key is a wallet address that can be shared with other parties to effect transactions.

Pump and Dump: This is a form of market manipulation by traders who artificially inflate prices and then exit the market, thus causing a collapse in the price.

Spoofing: Spoofing occurs when investors with large holdings trade with themselves to create the illusion of volume.

Volatility: Market or price volatility refers to the movement in the price of a cryptocurrency over time. The cryptocurrency market typically experiences wild swings between high and low prices. 

Wallet: In the cryptocurrency sector, a wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance.

Whales: Whales are investors who hold a significant number of coins or other cryptocurrencies. They can have a marked influence on market movement.

 

If you want to move from a newbie in Crytpocurrency or Bitcoin trading, then you need to have a grasp of the terms that are used. Knowing your terms ensures that you are able to make the right decisions at all times.

Now over to you. Which of these terms don’t you know before now and which terms do you think we missed. Drop your suggestion in the comment before and we are sure to add it.