Cryptocurrency is the new word that many are eager to learn but the concept seems very new and challenging to understand.
At the time of writing this article, I am 6 months old into the study of cryptocurrency and I saw it fit to share with you. Before you start learning what cryptocurrency is and how to make money from it. Here is a list of the most important terms that you’ll encounter frequently. It is absolutely necessary you master them before you open the first chapter into this new world. Imagine this as a prologue to your favorite novel.
Cryptography: Cryptography is a method of protecting information and communications through the use of codes, so that only those for whom the information is intended can read and process it. The prefix “crypt-” means “hidden” or “vault” — and the suffix “-graphy” stands for “writing.
Currency: A system of money in general use in a particular region. It can also be defined as a system and its units for exchanging value. The value of each unit is agreed to be worth something. Currency is used to pay for things and services as well as debts. The history of the word currency comes from current, meaning in use now. Currency is usually in use now because the government or banks produced it and we all agree it has value.
Cryptocurrency: Cryptocurrency is an electronic money that uses technology to control how and when it is created and lets users directly exchange it between themselves, similar to cash. It can also be defined as digital cash designed to be quicker, cheaper and more reliable than our regular government issued money. Instead of trusting a government to create your money and banks to store, send and receive it, users transact directly with each other and store their money themselves.
Address: Every cryptocurrency coin has a unique address that identifies where it sits on the blockchain. It’s this address, this location, at which the coin’s ownership data is stored and where any changes are registered when it is traded. These addresses differ in appearance between cryptocurrencies but are usually a string of more than 30 characters.
Blockchain: The blockchain is a digital ledger of all the transactions ever made in a particular cryptocurrency. It’s comprised of individual blocks (see definition above) that are chained to each other through a cryptographic signature. Each time a block’s capacity is reached, a new block is added to the chain. The blockchain is repeatedly copied and saved onto thousands of computers all around the world, and it must always match each copy. As there is no master copy stored in one location, it’s considered decentralized.
Wallet: A wallet is a software that interacts with the blockchain and lets users receive and send their digital money. Take note, these blockchain wallets do not store money but rather provide security that must be authenticated before you can access your stored cryptocurrency. A good example of a wallet is Trust Wallet.