Pirate Coin Basic BlockChain Terms:
Used to receive and send transactions on the a blockchain network. It contains a string of alphanumeric characters, but can also be represented as a scannable QR code.
Generally any cryptocurrency other than Bitcoin or Ethereum — though some Bitcoin folks would probably still say Ethereum is an altcoin. Altcoin is an abbreviation of “Bitcoin alternative.” Altcoins are their own cryptocurrency and run on their own native blockchain (see tokens for a differentiation from altcoins or ‘coins’). Currently, the majority of altcoins are forks of Bitcoin with usually minor changes to the proof of work (POW) algorithm of the Bitcoin blockchain. The most prominent altcoin is Litecoin. Litecoin introduces changes to the original Bitcoin protocol such as decreased block generation time, increased maximum number of coins and different hashing algorithm. Read about popular cryptocurrency and altcoin projects here.
A type of digital currency, where encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Read more about Bitcoin here.
Blockchains are distributed ledgers, secured by cryptography. They are essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Instead of the data residing on a single centralized server, the data is copied across thousands and thousands of computers worldwide. The consecutive string of every block ever executed makes up a blockchain. A distributed database of chronologically ordered transactions; these are all of the validated transactions that have ever been executed. Read more about blockchain technology here.
Transactions from the network fill blocks. And, as the transactions are validated, they are compiled into the blockchain permanently. Blocks include a timestamp. They’re built in such a way that they cannot be changed once recorded.
See ‘altcoins’ for a more in depth description. A coin is it’s own currency and runs on it’s own blockchain. See ‘token’ for a differentiation from other cryptocurrency types.
Mathematics creates codes and ciphers, in order to conceal information. Used as the basis for the mathematical problems used to verify and secure transactions on the blockchain.
Decentralized applications, or applications that exist on a decentralized network. They often use smart contracts in their back-end code, and are common in the Ethereum network.
Distributed ledgers are a type of database that are spread across multiple sites, countries or institutions. Records are stored one after the other in a continuous ledger. Distributed ledger data can be either “permissioned” or “un-permissioned” to control who can view it.
A place to buy and sell cryptocurrency. Some popular exchanges in North America are Coinbase, GDAX, Gemini, Polinex, Bittrex, Kraken, Quadriga, etc. Check out our post about how to buy and sell crypto if you are interested!
Government-issued currency, such as the US Dollar or Euro.
An Initial Coin Offering is somewhat similar to an IPO in the non-crypto world. Startups issue their own token in exchange for ether or bitcoin. This is essentially crowdfunding in exchange for a token. See a more in-depth explanation on ICO’s here!
The total value held in a cryptocurrency. It is calculated by multiplying the total supply of coins by the current price of an individual unit. This site shows a great run-down of each coin’s market cap.
The process of trying to ‘solve’ the next block. Through mining, the users secure the network and verify computation and transactions. Currently, systems including Bitcoin’s blockchain, miners are incentivized to validate transactions based of off Proof-of-Work (PoW) protocol, fees, and protocol subsidies. PoW typically requires huge amounts of computer processing power. Proof-of-Stake (PoS) is the upcoming, virtualized system of incentivization for validating transactions. Both of these systems provide economic guarantees and a form of consensus by bet. But, Proof-of-Stake relies more heavily on the betting concept. (See our Intermediate Glossary for more specific definitions of PoW and PoS.)
A computer especially designed for processing proof-of-work blockchains, like Ethereum. They often consist of multiple high-end graphic processors (GPUs) to maximize their processing power.
A native token — a.k.a. native coin or native currency — is a token (see ‘token’ for a definition) that runs on it’s own blockchain and is ‘native’ to that network, offering some greater utilitarian or resourceful value within the network. Native tokens are often used within the network as an incentive for block validation or for a form of spam prevention in transaction costs. Examples of native tokens include BTC, ETH, NXT, etc. Native tokens are also referred to as ‘intrinsic tokens’ or ‘built-in tokens.’
A private key is a string of data that shows you have access to bitcoins in a specific wallet. Private keys can be thought of as a password; private keys must never be revealed to anyone but you, as they allow you to spend the bitcoins from your bitcoin wallet through a cryptographic signature.
A cryptographic key that can be obtained and used by anyone to encrypt messages intended for a particular recipient, such that the encrypted messages can be deciphered only by using a second key that is known only to the recipient (the private key ).
Basically, it’s the Bitcoin or cryptocurrency equivalent of a bank account. It allows you to receive cryptocurrency, store them, and then send them to others. There are two main types of wallets: software and hardware.
A software wallet is one that you install on your own computer or mobile device. Software wallets are storage for cryptocurrency that exists purely as software files on a device. Software wallets can be generated for free from a variety of sources. Read more about different software wallets, and explore some options, here.
A hardware wallet stores private keys on a secure hardware device. Hardware wallets are often regarded as the most secure way to hold crypto-currency, partly due to being ‘cold storage’ devices and having additional security features. Read more specifically on hardware wallets here!
