The Top Ten Technical Terms That Blockchain Users Should Know

June 11, 2020, by Maayan
Bitcoin users who want to branch out into the larger world of blockchain should understand some of the terms that the crypto community uses.

You’ve probably heard of Bitcoin, which is the most famous cryptocurrency and blockchain.

However, the blockchain world has also introduced many new concepts since Bitcoin went live in 2009. These are some ideas that you should understand if you want to go beyond the basics of Bitcoin.

1. Satoshi: The smallest fraction of a Bitcoin, equivalent to one hundred millionth of a Bitcoin (0.00000001 BTC). The amount was named after Satoshi Nakamato, the creator of Bitcoin.

2. Mining: The procedure by which Bitcoin and many other cryptocurrencies are generated. It is also the process by which those transactions are processed.

3. Decentralization: Describes the fact that Bitcoin does not have a central point of control, which also means that it cannot be entirely controlled by a government or authority.

4. ICO: Short for “Initial Coin Offering,” a type of token sale that sells cryptocurrencies to early investors. Many cryptocurrency projects run ICOs to raise money for themselves.

5. Altcoin. Any cryptocurrency that is not Bitcoin. This includes Bitcoin Cash, Litecoin, Ethereum, and thousands of other smaller cryptocurrencies.

6. Stablecoin. A cryptocurrency that aims to maintain a price of $1.00. There are many stablecoins, such as Tether, USDCoin, and Dai.

7. DApp: A web application that relies on a blockchain to store its data, execute its code, and handle payments. This does not include websites that simply accept cryptocurrency as payment; a complete list of DApps can be seen here.

8. Ledger: The record of transactions and blocks that underlies the Bitcoin blockchain. This is sometimes called a “distributed ledger.”

9. Wallet: An application or website that can be used to manage Bitcoin addresses, make payments, and receive cryptocurrency.

10. KYC/AML: Short for “Know Your Customer” and “Anti-Money Laundering”—two sets of anti-crime regulations that require crypto exchanges to collect user information.

Strictly speaking, you don’t need to know all of these terms—but if you want to explore blockchain beyond Bitcoin, they can help you get started.

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

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