The specialized jargon used in the cryptocurrency world can make understanding basic concepts hard for beginners. To help you get started on your cryptocurrency journey, we have compiled a list of the top 10 cryptocurrency terms that every beginner should know. From blockchain and wallets to mining and altcoins, these terms are essential for understanding how cryptocurrency works. So, let\’s dive into these key terms and take the first step towards becoming a cryptocurrency expert!
A blockchain is a digital ledger that records all transactions made using a particular cryptocurrency, like Bitcoin. Each transaction is verified by a network of computers on the blockchain, which ensures that no single entity can manipulate the system. This technology is considered to be secure, transparent, and decentralized.
A cryptocurrency wallet is a digital wallet that is used to store, send, and receive cryptocurrency. It works like a traditional physical wallet, but instead of holding cash, it holds digital coins or tokens. Users can access their wallets through a private key, which is a secret code that’s known only to the user.
A Bitcoin ATM is a kiosk that allows users to buy and sell Bitcoin using cash. Users can insert cash into the machine and receive Bitcoin in their cryptocurrency wallet. Some Bitcoin ATMs also allow users to sell Bitcoin for cash. RockItCoin operates over 2,000 Bitcoin ATM locations across 45 states. If you’d like to visit one, visit our locations page.
To put it simply, cryptocurrency mining is the process of validating transactions on the blockchain network by solving complex mathematical problems. Miners use powerful computers to compete with each other to solve these problems and validate transactions. The first miner to solve the problem is rewarded with newly created coins for their work.
A private key is a secret code that is used to access a user\’s cryptocurrency wallet. It is a long string of random characters that is known only to the user. Anyone who has access to the private key can access the funds in the wallet, so it’s essential to keep it secure.
A public key is a code that is used to receive cryptocurrency transactions. It is a public address that can be shared with anyone who wants to send cryptocurrency to the user. Unlike a private key, a public key is not secret and is safe to share with others.
An altcoin is any cryptocurrency that isn’t Bitcoin. There are hundreds of altcoins available in the market, and each has its own unique features and uses. Some popular altcoins include Ethereum, Litecoin, and Bitcoin Cash.
A smart contract is a self-executing contract that is coded into the blockchain. It allows for secure and transparent transactions without the need for intermediaries. Smart contracts can be used to execute financial transactions, manage supply chains, and even enforce agreements in legal disputes. Ethereum is the largest network that uses smart contracts.
Fiat currency is any government-issued currency, such as the US dollar or the Euro. It is not backed by a physical commodity like gold, but by the government that issues it. Fiat currency is used to buy and sell goods and services and is accepted as legal tender by governments.
Cold storage refers to the practice of storing cryptocurrency offline to protect it from hacking or theft. It’s the most secure way to store cryptocurrency, as it’s not connected to the internet and therefore cannot be accessed by hackers. Cold storage options include hardware wallets, paper wallets, and offline computers. While cold storage provides the highest level of security, it can also be less convenient to access and use for transactions. If you’d like to learn more about the difference between hot and cold wallets, read our blog here.
Whether you\’re planning to invest in cryptocurrency, or just interested in learning more, it\’s important to do your own research and learn as much as possible. With the information provided in this blog, you\’re now equipped with the fundamental knowledge needed to get started on your journey into the world of cryptocurrency.