What are crypto currency terms?
- Cryptocurrency: A digital currency that is generated and transferred in an encrypted manner. Cryptocurrencies are traded independently of a central authority and are recorded in a distributed database called the blockchain.
- Blockchain: It is a digital ledger where crypto currency transactions are recorded chronologically and consists of interconnected blocks. Blockchain provides a secure, transparent and immutable database.
- Mining: It is the mathematical operations performed to verify crypto currency transactions and produce new cryptocurrencies. Miners are called miners and receive cryptocurrencies as a reward.
- Wallet: It is a digital application where cryptocurrencies are stored and transferred. Wallets usually consist of two passwords called private and public keys. The private key authenticates the wallet owner and enables them to transact. The public key is the address of the wallet and can be shared with others.
- Stock Exchange: Online platforms where cryptocurrencies are bought and sold. Exchanges can be made with different cryptocurrencies or traditional currencies.
- Fork: The block chain is split into two. Forks are usually caused by changes to the rules or software of the blockchain. Forks can be hard or soft. In a hard fork, the blockchain is completely separated and a new cryptocurrency is formed. In a soft fork, the blockchain is temporarily separated and then re-merged.
- ICO: Abbreviation for Initial Coin Offering. It is the first public offering of a new cryptocurrency project to raise funds. In ICOs, investors receive new cryptocurrencies in exchange for cryptocurrencies to support the project.
- DeFi: Abbreviation for Decentralized Finance. It stands for decentralized financial services. DeFi offers services such as interest, loans, insurance, stock market as an alternative to traditional financial institutions using blockchain technology.