In the ever-evolving world of cryptocurrencies and blockchain technology, it’s important to understand the key terms that shape this digital landscape. Here are more 10 fundamental crypto terms explained under the TechMoran Crypto 101 series:
- Graphics Card: A high-end graphics card, commonly used in PC gaming, plays a crucial role in the cryptocurrency realm. It possesses the computational power necessary for miners to validate transactions on a blockchain through a process called proof of work.
- Hash: A hash refers to the unique alphanumeric string generated by putting data through a specific hashing algorithm. In the context of cryptocurrencies, hashing is pivotal as it helps maintain the integrity of the immutable blockchain ledger by detecting any unauthorized attempts to alter or manipulate data.
- Hot Wallet: A hot wallet is an online storage solution for cryptocurrencies, either provided by exchanges or third parties. Although convenient for quick access, hot wallets are susceptible to hacking due to their online nature. However, hot wallet operators often assist users in regaining access to their assets if they lose their access credentials.
- ICO (Initial Coin Offering): An ICO is the cryptocurrency equivalent of an initial public offering (IPO) in traditional finance. It enables investors to support new crypto projects by purchasing the newly minted coins or tokens, often at a discounted price during the early stages.
- Jager: Jager is the smallest denomination of Binance Coin (BNB), a cryptocurrency associated with the Binance exchange.
- KYC (Know Your Customer): While not mandatory for all crypto exchanges, many platforms adhere to KYC regulations, which involve conducting identity checks on their customers. This process helps ensure compliance with regulations and prevent fraudulent activities.
- Ledger: A ledger is a record of transactions maintained by both centralized financial institutions and decentralized finance applications. It includes essential details such as timestamps, sender and recipient addresses, and transaction amounts.
- Market Capitalization: Market capitalization, often abbreviated as market cap, represents the total value of a cryptocurrency. It is calculated by multiplying the current price of a coin or token by its total circulating supply. As of now, the collective market cap of all cryptocurrencies is slightly below $1 trillion.
- Mining: Mining is the process of verifying transactions on a blockchain network using a proof of work consensus mechanism. Miners employ computer hardware to solve complex mathematical puzzles, generating valid hashes and securing the network. The more computing power a miner possesses, the higher their chances of earning newly minted cryptocurrency.
- Meme Coin: A meme coin is an alternative cryptocurrency based on a meme, which is a humorous or satirical image shared and modified repeatedly online. Dogecoin serves as a prominent example of a meme coin that gained widespread popularity due to its iconic Shiba Inu dog logo and internet-driven community.
Understanding these ten crypto terms helps individuals navigate the world of cryptocurrencies, empowering them to make informed decisions and actively participate in this innovative financial ecosystem.