Understanding cryptocurrency involves learning the relevant language. It can be difficult to keep up with this rather complicated subject unless you are familiar with numerous key terms. These include:

    Blockchain: This is basically a public read-only database that can only be updated by the owners. It is copied to thousands of computers across the globe through a peer-to-peer network. Blockchains are the foundation of most forms of cryptocurrency, including Bitcoin.

    Block: This is a recording of information and the part of the blockchain that nodes and miners work to set up.

    Hash: Hashes are codes comprised of numbers and letters generated by a mathematical operation to refer to a particular file or unit of cryptocurrency. They are unique, in that two different units of currency cannot ever produce the same hash and they cannot be reversed, so you cannot “reverse engineer” your way into knowing what was in a certain file by looking at the hash alone. Cryptocurrency relies on hashing, to guarantee that data is uncompromised and free from fraud. It prevents people from sending the same unit of cryptocurrency to multiple people.

    Hash Rate: This refers to how quickly blocks are discovered, along with how fast the associated mathematical problem is solved.

    Node: A computer that is working to maintain the database is called a node.

    Mining: This is the process of trying to solve the mathematical equation in order to set up the next block in the blockchain. In order to do so, it requires an immense amount of central computing processing power to prove that the entry is valid, but miners are typically given amounts of the cryptocurrency as compensation.

    PoW or Proof-of-work: Proof-of-work is a way to prevent service abuses on networks by requiring the service requester to complete work or a task, typically requiring processing time by the requesting computer.

    PoS or Proof-of-stake: The Proof of Stake concept states that a person can mine or validate block transactions according to how many coins he holds. This means that the more coins owned by a miner, the more mining power they have.

    Software Wallet: If you want to store your cryptocurrency as software files, you would want to generate a software wallet.

    Hardware Wallet: These are devices that store cryptocurrency in a secure fashion and are much harder to hack than software wallets.

    Public / Private Keys: Cryptographic keys that can be used by anyone who wants to encrypt a message are called public keys. Another individual can use a private key, known only to other individuals or groups, to decode the message. Keys are the way most cryptocurrency transactions are conducted.

    Signature: This does not refer to your own signature, but instead a way to assert your ownership over a wallet through a mathematical operation. For example, you may have a public address for your wallet, but only a private key can access it. Unlike the private keys used by groups, this particular key is usually known only to the owner.



    To be continued...

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