A Crash Course In Crypto Mining Lingo
The cryptocurrency industry is loaded with jargon that is unfamiliar to many. You might have heard of the term "cryptocurrency," but there are many others that you may find difficult to comprehend. How frequently did you stumble upon phrases like hash rate, fiat, altcoin, and so on?
There are a few phrases you should be familiar with before getting started with crypto mining. They are fundamental, and knowing them should give you a head start over your competitors.
10 Cryptocurrency Terminology That You Should Know
As already stated above, there are countless cryptocurrency terms. You can't learn all of them overnight. So here are the 10 most essential and elementary cryptocurrency terms you should know:
Blockchain is the foundation on which cryptocurrency-related operations take place. It is the digital storage of all cryptographic transactions' information. A single computer or data center does not contain blockchain information. The records are kept on several computers maintained by several people on a P2P network.
The blockchain guarantees data security and yields trust among its users. A blockchain collects data in groups. A block has limited data holding capacity. Once that capacity is filled, that block is closed and linked to the previous filled block like a chain. Hence the name "blockchain."
Bitcoin and cryptocurrency are often used interchangeably since Bitcoin is the first cryptocurrency. But they are not the same. There are many cryptocurrencies, and bitcoin is one of them. Altcoin or alternate coin, is a term that indicates any other cryptocurrency other than bitcoin.
Some people consider all cryptocurrencies altcoins, except bitcoin and Ethereum. Many altcoins use different blockchain technologies to operate. The creators of altcoins want to distinguish themselves from bitcoin in terms of purpose or usage. That's why there are so many variations.
Ether is the second most popular cryptocurrency, only next to Bitcoin. Ethereum runs on its own blockchain technology known as Ethereum. It is a decentralized software system that runs on blockchain technology.
Ethereum is scalable, secure, and decentralized. Many developers and corporations who choose this blockchain prefer Ethereum for various projects. Anyone can use the Ethereum blockchain or any secure technology as they desire. Ethereum supports smart contracts, which is highly necessary for decentralized applications.
A cryptocurrency wallet is just like any other digital wallet. It acts as a wallet for the cryptocurrency you own. The functionality of a cryptocurrency wallet is the same as that of a real-life wallet, hence the name. The only difference is that crypto wallets do not hold physical currency; they store digital currencies in the form of crypto.
When cryptocurrency first came out, crypto transactions were tiresome work that needed manual labor, like writing long codes. With the inception of crypto wallets, the software does all the heavy lifting for you.
No government agencies back cryptocurrencies by any standards used with real currencies. The value of a cryptocurrency depends on the market value and various factors. In the cryptocurrency sector, "fiat" means any government-issued currency. In the USA, fiat is the US dollar. In the UK, fiat is pounds.
With fiat money, government-owned central banks can control their economy. Printing too much fiat money can cause inflation which is dangerous for the economy.
In a blockchain, no single entity controls the currency and the transactions. The term "decentralization" means that control is transferred from a centralized entity to a distributed network.
The decentralization of the blockchain removes trust issues. No one has to trust or know anyone else because every network member has an exact copy of the data. Decentralization also helps optimize the distribution of resources.
NFT is the next evolution of cryptocurrency. NFT stands for nonfungible tokens. It means that it can not be exchanged for anything else. They represent real-world things like a piece of art, music, video clip, in-game digital items, etc. Each NFT is unique, unlike bitcoins or Ethereum coins.
NFTs are part of the Ethereum blockchain. Although the majority of NFTs are encoded within the Ethereum blockchain, other blockchains have already implemented their own versions of NFTs.
In real life, minting a coin means simply manufacturing a coin. You are likely to know this term if you are familiar with the coin collecting hobby. In the world of crypto, minting means pretty much the same. It is the process of producing new coins by making new blocks and recording information in the blockchain. You can mint both cryptocurrency and NFTs by this method.
Newly minted cryptos then become a part of the circulation for trading. The Crypto minting process is decentralized, meaning anyone can create crypto without permission from any central authority. The minting process is a valuable part of the cryptocurrency ecosystem.
Hash rate dictates the amount of computing power that a network uses to process transactions. By measuring the hash rate, crypto investors can figure out the security of a cryptocurrency network. A higher hash rate means a network is more secure, and it's difficult for hackers to attack the network.
Hash rate is how many calculations a network can make per second. 1th/s hash rate means that a network can make one trillion calculations per second. More miners in a network means a higher hash rate, resulting in higher security. Fewer miners implies the opposite.
As we all know, cryptocurrencies are part of a decentralized network. This decentralized network is called the blockchain. Anyone can contribute to the network. As the web is open source, it requires the community's help to maintain its foundational code.
When the community makes any change to the protocol, the chain splits. It produces a second blockchain that originated from the first one, but the direction is new. This incident is known as a fork. Forking happens to make a cryptocurrency more secure or to add features.
How Can You Learn Crypto Terms?
Stepping into the world of crypto is not as easy as it sounds. There are a plethora of terminologies that are enough to make your head spin. Besides the terms, there's a lot to know about getting involved in cryptocurrency. How you should start, what should be your initial budget, which area is best for crypto mining etc., are essential factors that you should consider beforehand.
With the surge in popularity of cryptocurrency, many seminars, conferences, hands-on training, workshops, etc., are being organized frequently. Various new platforms offer guidelines to help new users quickly learn about multiple avenues of cryptocurrency with simple yet engaging content.
You should also watch online forums and interact with the community. You can learn the best from those who are the best. By being a part of a community, you find help from many seasoned crypto miners in such discussions. You can also find similar trainers on various platforms.
Cryptocurrency has been slowly becoming both a lucrative and exciting venture. Even a few years ago, cryptocurrency seemed like rocket science. Although it's not rocket science, no one can deny that it's pretty tricky initially. Memorizing all those terms is not enough; you have to understand them to the core and learn to implement them functionally.
With the rise of many platforms, things have become easier for enthusiasts and beginners alike. Becoming a part of the crypto world is becoming more accessible thanks to the all-around effort from everyone from respective places. For more in-depth discussions on cryptocurrency be sure to get tickets to our live NewYork shows where we bring you the brightest miners in the industry to teach you how to start.