Being new in the cryptocurrency space is both fascinating and sometimes difficult. In this article, I’ve listed the most common crypto slang terms and glossary for beginners to learn the basics. This post is meant to be an educative read for those of you who are new to cryptocurrencies and blockchain. These crypto terms are commonly used in everyday crypto talk and you should know at least a few of them to keep up with discussions on forums or with friends. Take your time to read a couple of them to get familiar with the crypto jargon and find out what the blockchain experts are talking about. We use this crypto lingo every day in the office so it’s time for you to start studying to pick up some new vocabulary and crypto words. The crypto slang terms in this article are listed in chronological order from A to Z with numbers at the end.
Alternative coin, Altcoin
An altcoin is any cryptocurrency that is not Bitcoin, hence the term alternative coin. Any coin or token that you see or read about that is not Bitcoin, is an altcoin. It’s that simple. Altcoins are used in many different blockchains and serve different purposes. The characteristics of an altcoin are usually a low market cap cryptocurrency that is very volatile with a brand new technology that is here to revolutionize the speed and volume of transactions, but that is seldom the case. The most popular altcoins are Ethereum, Binance Coin, Cardano, Solana, and Ripple.
When new cryptocurrency and blockchain projects are started they use airdrops to promote and advertise their campaign. Early users who sign up for the project are given free cryptocurrencies through so-called airdrops. To receive an airdrop you need a cryptocurrency wallet and sign up for a new cryptocurrency project that issues an airdrop event. Once the airdrop event has received enough signups, the airdrop is issued and all new members will receive their tokens. In some cases, the company behind the airdrop will ask for a small service in exchange for the tokens but usually, it’s free.
API (Application Programming Interface)
An API is used to connect two applications through computer programming and let them talk to each other and send information. For example, every time you send a message, post an image, or download a new app, an API is used to make that possible. An API is connected to the internet and sends data to a specific server. This server then performs an action that sends the data through the API and creates a readable format for us humans to understand.
ASIC (Application Specific Integrated Circuit)
An ASIC or Application Specific Integrated Circuit is a computer hardware chip designed and customized for a specific use case. An example of an ASIC can be seen in smartphones, voice recorders, and even satellites. Lately, ASIC chips have been used in bitcoin and cryptocurrency mining to optimize computer power and increase the output when generating new Bitcoins.
Bitcoin is the first-ever created cryptocurrency that started the crypto revolution back in 2009. Satoshi Nakamoto says to be the founder and creator of Bitcoin but this is yet to be confirmed. Bitcoin is the largest cryptocurrency to market cap and it’s also the most known digital asset in the world. To own Bitcoin you first need to have a bitcoin wallet. Bitcoin is today seen as the digital gold and has taken on a store of value for cryptocurrency investors.
Blockchain is a new technology that powers cryptocurrencies to be transacted through a decentralized, distributed, public network of nodes (users) and can be used in different applications. The blockchain stores information on a distributed ledger that is immutable and completely secure. It is a digitally shared database that anyone can access but none can control. It is made up of blocks that are necessary to perform transactions. Miners of the blockchain have one role only, and that is to confirm transactions by using solving an algorithm. Data that is put into the blockchain is impossible to change or remove, it stays there indefinitely.
A coin is a slang word for cryptocurrency. A coin or a token is the currency of a blockchain that carries the value of the whole network. It can be sent to different users on the blockchain, it can be used to pay for items, and it can even be withdrawn from an ATM that offers this service. Behind each coin is a blockchain technology that is used for different purposes. To own a coin you first need to acquire a blockchain wallet. Some popular coins are Bitcoin, Ethereum, Binance Coin, and DogeCoin.
A cryptocurrency is a native asset and digital currency of blockchain technology. It can be used as a store of value or as a secure method of payment due to its cryptographic nature which makes it impossible to tamper or double-spend with. Cryptocurrencies are digital assets in a decentralized system where online transactions take place. It’s safe to say that cryptocurrencies have taken on the role of digital money. Bitcoin is the first-ever created cryptocurrency and it’s also the most popular one today. Other words for cryptocurrency are a coin, token, digital cash, peer-to-peer money, decentralized money, and internet money.
A cryptocurrency wallet is a digital wallet where cryptocurrencies are stored together with a private key. To send or receive crypto, you need to own a cryptocurrency wallet. It is secured by a digital key which is usually made up of 12 random words. These 12 random words are unique for each wallet. A cryptocurrency wallet is connected to the blockchain which means that all transactions made in and out of the wallet are stored on the blockchain forever. Considering how blockchain technology works, the wallet is very secure and impossible to hack from the outside. Some popular wallets are Coinbase, Metamask, and Exodus.
Cold and Hot Wallet
A hot cryptocurrency wallet is stored online and is connected to the internet. A hot wallet is more vulnerable to hacks. The benefit of a hot wallet is that it is faster and easier to send and receive cryptocurrencies. A cold wallet is a cryptocurrency wallet that is not connected to the internet, therefore being offline. Such a wallet is a hardware device that requires it to be accessed with a computer cable or with Bluetooth. A cold wallet is a much more secure version to store cryptocurrencies due to it being offline and out of reach of immediate threats. The downside to a cold wallet is the slow operating time. It takes longer to send and receive funds since you have to connect it to the internet every time you want to use it.
Cryptography is a computer science term that refers to writing in code. For one computer to receive and send cryptocurrencies on the blockchain a cryptographic line of code to secure the transaction. A cryptographic message is impossible to understand unless you know the meaning of each letter, this is what makes it so safe to use. Through cryptography, cryptocurrencies can be securely sent over the blockchain without a third party or a government. Cryptography also protects the blockchain from double-spending attempts.
DAO (Decentralized Autonomous Organization)
A DAO is a fully transparent and autonomous software running on a blockchain that controls a community without a central authority. To join a DAO, you need to buy(own) the specific cryptocurrency. This will make you a member of the DAO. Smart contracts are the foundations and rules of a DAO that execute any new decisions agreed upon by the members through voting. It is written in cryptographic code and is therefore immutable from the outside. The cryptocurrency DASH is a famous DAO that is controlled by its users. Augur is another DAO that works as a prediction platform.
The process of decentralization is the transfer of control and authority to several different entities instead of one single organization. With decentralization, the power is moved from one person or governing party to all members of the community. The opposite of decentralization is centralization. An example of centralization is today’s government. They control all the events and activities in society. An example of a decentralized system is blockchain technology. In a blockchain, all members of the system are contributors and have a part of the ownership. A decentralized system gives more freedom to the lower-level participants.
Decentralized Exchange (DEX)
A decentralized exchange is a crypto exchange where investors and traders exchange directly with each other instead of with a centralized platform operator. For example, if you want to trade Bitcoin for Ethereum on a DEX, you can send out an order to make the trade, then another member of the platform can take the other side of the trade and the transaction is successful. On a DEX, peer-to-peer exchanging is the only form of trading and it can only be done between users from external crypto wallets that each individual is in control of.
Decentralized Finance (DeFi)
The term decentralized finance is derived from a blockchain-based financial system where cryptocurrencies are used as a medium of transaction. The goal of Defi is to get rid of third parties, or middlemen, to make financial systems more efficient, secure, and cheap. Instead of using a broker, bank, or other intermediaries, DeFi systems used smart contracts to get rid of the middlemen and secure transactions where funds are transferred. In DeFi, cryptocurrencies such as Ethereum are used to create trustless smart contracts and both participants can feel secure.
A digital asset is anything that exists in a digital format but in crypto terms, it is essentially a cryptocurrency. It is used on the blockchain to transfer value and store information. The information carried by a digital asset is stored on the blockchain forever. Transacting with digital assets is a way of removing the trust and costs from the transaction between two parties.
A digital signature is a type of electronic signature that is used to verify the authenticity of digital documents. A digital signature uses cryptography to construct documents and messages that are commonly used in financial transactions and the distribution of software. It is a way of protecting the sender and receiver from messages sent via insecure channels. A digital signature can for example identify a sender which in turn gives the receiver a way of knowing who has sent the message.
Distributed Ledger Technology (DLT)
Distributed ledger technology, or DLT, is a protocol that allows for access, record keeping, and validation through a network of users in a safe and immutable way. Blockchain technology is the most known DLT whereas Bitcoin is the most well-known medium of transfer. The term distributed has a decentralized meaning where all users of a network keep records of all transactions made. Distributed ledger technology is what secures and runs a decentralized digital database.
Double spending is the term for a currency to be used twice or to be spent two times in an online transaction or cryptocurrency transfer. This is theoretically possible since we are only dealing with numbers and not cash. Double spend is a flaw in a cryptocurrency system that allows for a transaction to be spent twice. This is a problem since it would alter the blockchain and it will increase the circulating supply of a specific token. Double spending is a falsification and a duplication of a digital currency.
The term encryption refers to securing digital data by using mathematical or cryptographic methods where a key is needed to unlock the message or document. Encryption is used in cryptography, the general coding language of blockchain technology. Encrypted data is unreadable for any person who does not have access to the key that decrypts the data. Encryption is one of the safest ways to send and store digital information. Bitcoin, Ethereum, and other cryptocurrencies use both public and private key encryption which allows for a trustless environment.
An ERC-20 token is a protocol that runs all smart contracts of cryptocurrencies on the Ethereum blockchain. Tokens and coins are constantly being created on the Ethereum blockchain which are all ERC-20 tokens that are smart contracts that carry information. ERC-20 tokens are the technical standard used for all smart contracts. Some popular ERC-tokens are Basic Attention Token(BAT), Augur, and OMG.
A faucet in the crypto space is a website or an app that rewards users with small amounts of cryptocurrencies for completing easy tasks. The name comes from a water faucet and just like the water drops out from this kind of faucet, crypto faucets users earn digital assets in turn for doing simple tasks. The amount earned is not high but the tasks are usually very easy to complete.
A fiat currency is any standard currency that is employed by a government and controlled by a central bank. USD, EUR, and GBP are three different well-known fiat currencies. Fiat currencies can be exchanged for digital assets through fiat gateways. The biggest differences between fiat currencies and cryptocurrencies are the decentralized nature of digital assets compared to the centralized nature of fiat currencies. Fiat currencies are constantly depreciated to do printing of new money every month compared to cryptocurrencies having a pre-set total number of coins in circulation.
Cryptocurrencies are decentralized and controlled by all members of a blockchain. Blockchains are open-source protocols that anyone can contribute to. A fork is a change of the blockchain’s basic set of rules. When a fork occurs, the blockchain splits into two parts where the new version of the blockchain is called a fork. In simple terms, a fork is a modification big enough to change the entire blockchain.
Gas is what you pay Ethereum miners for validating your blockchain transaction, you could call it the blockchain fee of Ethereum. The gas fee is compensation for all the miners that contribute computing power to the Ethereum network. This is the main incentive for miners to keep mining new blocks and at the same time validate new blocks. You can choose how much gas fee you want to pay miners. The more you pay the faster your transaction will get validated. You could say that you pay your way to the front of the queue.
The genesis block in cryptocurrency is the first block ever mined in a blockchain. It is also called block 0. A blockchain is made up of a series of blocks where the genesis block is the first block ever created and mined in a blockchain. For example, the first block of the Bitcoin blockchain was mined back in 2009 which is somewhat a historical moment in the crypto space.
Gwei is the denomination of the cryptocurrency Ethereum. It is the most commonly used Ether unit used when paying for goods and services with the Ether token. Gwei comes from the two words Giga and Wei. The smallest denomination of Ether is 1 Wei and to make calculations more simple, the word Giga, meaning one billion, is used to describe 1 Gwei.
HODL is a cryptocurrency slang term for the word “hold”. It is generally used by crypto investors and crypto enthusiasts when referring to holding on to coins that they have already bought. The direct translation of HODL is “hold on for dear life”. This term was first used back in 2013 on the bitcointalk forum. Some say that he was writing this drunk and that it was a typo. Today, the term HODL is a very commonly used word in the cryptocurrency space.
Since the start of the Bitcoin blockchain, miners have been earning a reward for validating the blocks and process transactions. For every 210.000 blocks that are mined, this reward is cut in half. For every halving, miners receive 50% fewer Bitcoins for mining a block, hence the word halving. The halving process limits the supply of new coins mined.
Hash rate is a measurement of how much computer power is required for a network to stay up and running. The hash rate is also a way of measuring the difficulty, or security, of a blockchain network that is depending on proof of work to stay up and running, just like the Bitcoin blockchain. The technical description is explained by the number of times per second computers of the Bitcoin blockchain are hashing data to verify and validate transactions.
A hardware wallet refers to a physical cryptocurrency wallet that is not connected to the internet. It is also referred to as a cold storage wallet since stores the coins and tokens offline. Hardware wallets are the safest kind of storage type today for cryptocurrencies. Just like an online or “hot” wallet, hardware wallets are protected with a security key of 12 randomly generated words. Many centralized exchanges use cold storage to keep customer funds safe and out of reach for hackers. Some popular hardware wallets are Ledger, Trezor, and KeepKey.
Initial Coin Offering (ICO)
An initial coin offering is a way for crypto projects to get funding by giving away a part of their platform token to the public. When an ICO is issued, members of the platform can buy a part of the cryptocurrency project in the form of the coin that is going to be the value token. After the initial coin offering, the company token will be released in the open market for the public to trade. An ICO is the cryptocurrency equivalent of an IPO, or initial public offering, in the stock market when a company goes public on the stock market.
Something immutable is unchangeable. In the crypto world, immutable refers to the blocks of the blockchain, which are unalterable after they have been mined. The information in a block will remain the same forever. This is the key feature of the blockchain that makes it trustless. The immutability of blockchain is also what removes the need for a third party and it is was makes smart contracts 100% secure. Once a transaction has been made on the blockchain, it is immutable, it cannot be changed, ever.
The kimchi premium is a phenomenon that happened on the crypto exchanges in South Korea during the boom of Bitcoin. When prices were rising all over the world, the Kimchi region of South Korea ballooned crypto prices even more and added a premium of up to +30% in some cases. This called for a great arbitrage trade opportunity where you could buy Bitcoin in Europe, transfer it to a crypto exchange in South Korea, sell it, and collect a +30% premium in a risk-free trade.
Know Your Customer (KYC)
KYC, or know your customer, to the process when a company that handles financial transactions asks for identification documents from a user that signs up and creates an account. To identify the clients of a platform that deals with financial transactions, KYC documents are a necessary part of the business. Know your customer documents are there to protect the client’s identity in case of a hack. If an account is breached, only the original owner of the identity documentation can send the correct documents to retrieve the account. KYC is a standard process among financial services.
Lambo is short for the car Lamborghini, an Italian luxury car that has become a symbol in the cryptocurrency community. Many crypto enthusiasts dream of their coins hitting the “moon” to be able to buy their Lambo. It also refers to making so much money in cryptocurrency investing that you can afford to buy a Lamborghini.
Layer 2 refers to the secondary framework solutions made to scale an application on an existing blockchain. The goal of these protocols is to solve the scaling issues that many blockchains have. You could say that layer 2 is an attempt to upgrade a blockchain by adding another layer of technology on top of an existing blockchain in hope of improving efficiency.
A ledger refers to the chain of blocks, or the database, on a blockchain where all transactions are recorded and stored digitally. It is a type of database that is distributed, decentralized, and public. Every member of a blockchain has access to the ledger and can easily see all historical transactions stored on the ledger. All users of a blockchain network are simultaneously in control of the ledger and no single entity can control it.
Leverage is a way of borrowing money to access more capital and increase the position size when trading digital assets. Leveraging both increases the risk and the potential reward when used in cryptocurrency trading. For example, if you use 100x leverage, you are essentially borrowing 100 times the capital you currently have in your account. If your total account size is $1000 and you add 100x leverage, your maximum position size would be $1000 x 100 = $100,000.
Liquidity is a term for accessible or available capital or cash in financial terms. To be liquid means that you have access to cash. Cryptocurrency exchanges need liquidity to offer tradable products such as spot markets and derivatives to investors and traders. Without liquidity, you cannot buy or sell a financial instrument or a digital asset. The more liquid a financial asset is the more cash or capital is added to the product.
When a blockchain is created, released, and put live, this version is called the mainnet. The previous versions of the blockchain have been prototypes, testnets, or beta versions. The mainnet of a blockchain is the fully developed version that is 100% ready to handle transactions gets released to the public for live use. The mainnet can only be deployed after rigorous testing with a fully functional end product.
The market cap of a cryptocurrency is the total value of the current dollar value of the coin and the total circulating supply of coins. For example, if a coin is valued at $0.50 and has a current circulating supply of 18,000,000 tokens the total market cap for that coin would be 0.50 x 18,000,000 = $9,000,000. In this example, our coin has a total market cap of $9,000,000. The market cap is usually the measure of how valued a cryptocurrency is and not the price itself.
Mining in cryptocurrency is an incentive mechanism for “miners” to validate and process transactions on the blockchain by using computer power to solve puzzles and verify blocks. Mining is used in all Proof of Work (PoW) blockchains that require computing power to verify blocks. For each mined block, the miners will earn a fee. The more computing power that is put into the mining algorithm will solve the mathematical puzzles faster, but there is a catch. For all the extra added computing power, the blockchain increases the difficulty to solve the puzzles.
A multi-signature cryptocurrency wallet is a wallet that requires several signatures to make transactions. Multi-signature is often used in communities that are dependent on several people getting together to make transactions or unlock funds. For example, if you were to make a Bitcoin transaction with a multi-signature crypto wallet you would need multiple keys to verify the transaction. MultiSig adds an extra security layer to the community blockchain.
A node is a computer that is connected to a blockchain. Each node, or computer, supports the network by sharing and storing information on the public ledger. Each node keeps a copy of the whole blockchain. For example, without each node in the Bitcoin blockchain, it would not be possible to carry out transactions and keep the network secure. Each node in a blockchain is connected to all the other nodes to make sharing information easy and accessible.
Non-custodial means to not have custody, or to not store. If a crypto exchange or a crypto wallet is a non-custodial type it means that it doesn’t store cryptocurrencies inside the wallet. The opposite of non-custodial is custodial which means to have custody of all cryptocurrencies of that wallet or exchange. SimpleSwap is a non-custodial crypto exchange that does not store any of its customers’ cryptocurrencies.
Non-Fungible Token (NFT)
Non-fungible tokens are digital items that are stored on the blockchain and can come in several forms such as art, video, or audio. NFTs are immutable, meaning unchangeable, and this is why some of the more popular non-fungible tokens have skyrocketed in price. NFTs are tokenized assets that can represent almost anything in the real world.
Off-chain refers to blockchain transactions that occur outside the blockchain, hence the word off-chain. An off-chain transaction might be necessary when a faster and cheaper option is needed than is available on the standard blockchain. Off-chain protocols can be opened by users that exchange keys between wallets which enables a transaction to occur outside of the mainnet.
On-chain transactions refer to transactions that happen on the blockchain that is connected to the public ledger. All members of a blockchain can view an on-chain transaction and it is completely dependent on the current state of the blockchain fee and congestion. An on-chain transaction is validated by the miners of the specific blockchain and all events that happen on-chain are stored on the cryptographic ledger.
Open source means that something is public and transparent. If a blockchain project is open source it means that everyone has access to see the implementations of the source code to verify that no falsifications are being made. In an open-source project, all users are allowed to view and contribute to the code as they want.
Peer-to-peer in crypto refers to a transaction of digital assets that happens between two persons without the use of a third party such as an exchange or an intermediary. A p2p transaction relies on smart contracts where the blockchain acts as a trusted technology to verify the transaction. When Bitcoin was first launched back in 2009 the blockchain consisted of only peer-to-peer transactions between members of the blockchain. Now, with the use of centralized exchanges, p2p transacting is getting less popular.
Phishing refers to a kind of cyber attack or hack. In a phishing scam, an entity pretends to be an authority in some kind of way. Very often phishing attempts try to impose themselves as a popular crypto exchange to get access to the private information of users of that platform. The scam works like this. A fake website or email is set up to look legitimate to get users to send them private and sensitive information about their private keys or account. When the private information has been sent over to the hacker they then use this information to enter the account and steal the user funds.
A private key refers to a private cryptographic key that is connected to your cryptocurrency wallet. It is almost like a password for your crypto wallet. Anyone can deposit digital assets to your private crypto wallet but to withdraw funds from the wallet you need to be in control of the private key to access it. It is only the owner of the wallet address that can have access to the private key. If a private key is lost, access to the wallet address is lost forever.
Proof of Stake (POS)
Proof of stake, or POS, is an incentive mechanism for miners to help run a blockchain. In a proof of stake blockchain network, the persons who verify the blocks stake their capital to earn a fee for each block that is validated. The more capital you stake the higher the chance is that you will earn the reward for the next block. Proof of stake blockchains is protected by the 51% rule where no single entity can stake more than 50% of the total staking protocol.
Proof of Work (POW)
Proof of work, or POW, is an incentive mechanism for miners to help validate blocks in a blockchain. Miners verify blocks by using computer power to solve difficult puzzles and when a puzzle is solved the miner earns a reward. The more computer power you add to a network the higher the chance is that you will earn the reward from the next block. All proof of work blockchains is protected by the 51% rule where no single computer can have more than 50% of the total computing power of a blockchain.
The definition of a protocol is a set of rules that sets the structure for how data and information are shared on a blockchain. Protocols are essential for a blockchain to be able to run automatically and to keep the network secure. Protocols tell a system what is possible to do and what is not possible to do. Without protocols, there would be no rules on how the blockchain works.
A recovery seed, or recovery phrase, in crypto, is a series of randomly generated words that can be used to unlock a crypto wallet address in case it gets lost. Only the creator of the wallet address should have access to the recovery seed. The number of words varies between 12, 18, and 24. Without the recovery phrase, a wallet can not be accessed and funds inside the wallet will be lost forever.
A roadmap is a way of describing the plan of a crypto project. Normally, a roadmap consists of a time axis that displays different dates coupled with an event or a planned release such as a new app, release of a test net, or a new feature of a platform. Roadmaps are created to show the members of a network what the plan looks like.
A rug pul in crypto refers to someone scamming an audience or a community of users by first attracting them to invest or join a certain kind of platform for personal gain. Usually, in a rug pull, the scammer tells a very inviting story of how an investment shall benefit the investors. When enough investors have invested in the project the creator “pulls the rug” and empties the cash balance and disappears with all the money invested.
Satoshi Nakamoto is said to be the founder of the Bitcoin cryptocurrency and blockchain back in 2009. This person is still unknown today which is kind of a mystery considering how popular Bitcoin has become in the last years. Several people have claimed to be Satoshi Nakamoto but they have been unable to verify with proof that they are the legendary creator. Looking at the price of Bitcoin today, the real Satoshi Nakamoto is on a path to becoming the wealthiest person on earth.
Scalability in crypto refers to the limitation of a blockchain when it comes to transaction volume and speed. To increase the number of transactions and the speed at which the transactions are made, the blockchain would have to scale up. If a blockchain has good scalability it means that it can handle a larger number of transactions at a faster pace. Poor scalability means that a blockchain network is limited.
Segregated Witnesses (SegWit)
A segregated witness is an upgrade to the blockchain to deal with scalability by increasing the size of each block in a blockchain by removing the signature from the block. A SegWit creates a sidechain using a segregated witness to store the data that is transferred in a transaction. This protocol changes the way data is stored and by doing this the blockchain can handle larger transactions.
A smart contract is a digitally self-executing protocol that is activated when certain conditions are met. Smart contracts are stored and executed on the blockchain making them immutable and therefore becoming very safe and trusted. Once a smart contract is created, it can never be changed. A smart contract is run by cryptographic code that sort of “knows what to do” when given an instruction. It can for example send and receive data or information automatically.
A stablecoin is a digital asset that is pegged to a fiat currency such as the USD or the EUR. Stablecoins were introduced in crypto to combat market volatility. Before when the market made a big downswing, investors used to convert their cryptocurrencies to real USD or EUR to protect themselves. Now you can simply keep your cryptocurrencies on the blockchain and convert them into a stablecoin to protect your downside. The most popular stablecoin today is USDT (tether) which mimics the price of $1. A stablecoin does not increase or decrease in price.
Staking refers to locking up your digital assets in a smart contract to earn a reward in form of an interest payment. When staking a cryptocurrency you lock it away for a day, a week, or sometimes even a year. The reward you receive from locking up your digital asset depends on the length of your lockup period and the type of coin you choose to stake.
A token is very similar to a cryptocurrency that represents the value of a blockchain. Tokens are used for transactions and are often seen as a store of value and are often used for investment purposes but they have one use case that cryptocurrencies, or coins, do not stand for. Tokens represent a utility for a specific blockchain project and platform. For example, the cryptocurrency Ethereum is a platform where a lot of different tokens are created that serves different use cases.
A testnet is the testing environment of a blockchain where a team of developers tests and experiment with different functionalities to see that everything works as it should before the release to the mainnet. A testnet is not available for the public to use. They simulate real-world scenarios but in a test environment where mistakes or bugs are a part of the testing before the mainnet is released.
Tokenomics refers to the study of the economics surrounding a cryptocurrency. The word comes from Token and Economics. Each blockchain project that creates a new cryptocurrency will decide on its tokenomics to decide how many coins they will release. Tokenomics also refers to the management of cryptocurrencies in a blockchain.
When you send cryptocurrencies on the blockchain you need to pay a transaction fee to get your transaction verified by a miner. There are two types of transaction fees. The first one is the blockchain fee that incentivizes miners to validate your transaction. The second fee is a fee that is sometimes imposed by the platform owner in form of a crypto exchange. For example, Coinbase has a 0.50% transaction fee for sending coins on the platform. If you were to send a cryptocurrency from one wallet to another wallet without the use of a crypto exchange you would only pay the blockchain network fee.
If something is trustless it is 100% trustworthy. Cryptocurrencies are trustless due to the immutability of the blockchain. The blockchain is so trustworthy that trust is not an issue and is almost removed from the calculation. The reason cryptocurrencies a trustless is because the blockchain is tamper-proof which means that none can alter or change the code of a blockchain. This creates a trustless environment.
A validator in cryptocurrency is a node that helps validate transactions in a blockchain. To add a transaction permanently to the public ledger of a blockchain, a validator is needed. Another term for a validator is “blockchain verifier” which are computers that are crucial to the functionality of a proof of stake blockchain. All incoming transactions go through the validator before they are stored forever on the ledger.
Web 3.0 refers to the new generation of the internet where blockchain and cryptocurrencies are changing the internet to become decentralized. Web 3.0 aims to add more transparency to online activity where smart contracts act as the trustless version of previously third-party-owned services. Web 3.0 is built on the blockchain and cryptocurrencies are the medium of transactions. You could say that web 3.0 is the upgraded version of the internet.
A wallet address is a digital address that is made of randomly generated numbers and letters. A wallet address is unique for each crypto wallet and they are used to both send and receive digital assets. To send funds to someone else over the blockchain you need to know their wallet address. You could see the wallet address as an email address but for digital assets.
A whale in crypto refers to someone that owns a lot of cryptocurrencies. A whale can own up to 10,000 Bitcoins or more. When whales make transactions on the blockchain they have the power to move the price significantly which causes a spike in volume and price movement. Whales can be big investors, miners, or early owners of Bitcoin who have accumulated the coins since the launch of the blockchain.
A 51% attack refers to someone taking control over an entire blockchain by owning at least 51% of the computing power. To hack a blockchain you need to own at least 51% of the computing power to alter the code in the blockchain. This happens when a person or a group gains control over 50% of the hashing power that runs the blockchain. If you own more than half of a blockchain hashing power you can reverse transactions and do double-spending.