Glossary of terms

Crypto Lingo 101

If you’re new to the crypto industry, a lot of what you’ll see on Coinmama might be confusing. We’re hoping this glossary of terms will help ease that confusion a bit and open up a whole new world. Click through for more in-depth descriptions, let us know if there's a term we missed, and check out the rest of our help center for relevant articles:

Altcoin: While Bitcoin was the first cryptocurrency, many, many, many other cryptocurrencies now exist. These are all called altcoins. Coinmama carries the most often requested altcoins, but you can see a list of over 2000 altcoins here.

Bitcoin: The first cryptocurrency, the original, and the one that’s still best known.

Blockchain: A decentralized digital database of records and transactions, as well as the technology that's used to create and maintain that database.

Coin: A cryptocurrency that operates as a currency on its own platform.

Cryptocurrency: A decentralized digital (or virtual) currency, that uses cryptography to prevent fraud.

Fiat: This word meaning "an authoritative or arbitrary order" has been adopted by the crypto community to mean government-backed or centralized currencies, such as the US Dollar, European Euro, or Japanese Yen.

Hard Fork: A radical change in a network's protocol (such as Blockchain) that results in a new token, but is based on the previous protocol. The most well-known hard fork is Bitcoin to Bitcoin Cash.

Hash Function: A cryptographic hash function is used to convert data of any size into a 64-character numeric string. This function is crucial in mining.

Hash Rate: A measurement of ASIC miner hardware's processing capacity, measured in hashes per second. 

ICO: An ICO or Initial Coin Offering is a cross between an IPO (Initial Public Offering) and a crowdfunding campaign for a blockchain-based project, offering the project's own coin in exchange for funds.

Mining: The process of creating new cryptocurrency coins.

Mempool: Short for memory pool, where all unconfirmed transactions are placed before being added to the next block on the Blockchain.

Node: A computer that connects to and supports a cryptocurrency network by validation, relaying and recording transactions.

Private Key: The password to your wallet, which only you know. (Do not lose this!!)

Proof of Stake: In the process of mining, this concept means that the creator of the next block is chosen according to how many coins they hold, in addition to other factors that help make sure that not just the largest stakeholders can forge new blocks. Block generation is rewarded with transaction fees.

Proof of Work:  In the process of mining, this concept means that whenever a new block needs to be added to the blockchain, miners compete with one another to be the first to guess that block’s hash. Miners do so by making several guesses as to what the block’s hash is, and the more computing power a miner has, the more guesses they can make in a given timeframe, and therefore the more likely they are to be the first to output the correct hash. Block generation is rewarded either with newly mined coins or with transaction fees.

Public Key: The code to accessing your wallet that other people know.

SEPA: An acronym that stands for Single Euro Payments Area and includes most European countries. Coinmama accepts bank transfers only from SEPA banks.

Soft Fork: Like hard forks, this is a general change in a network's protocol, but unlike hard forks, it is backward compatible, meaning that it doesn't result in the division of one Blockchain into two. A great example of this would be the Lightning network.

SWIFT: The Society for Worldwide Interbank Financial Telecommunication is a global network that enables international bank to bank wire transfers.

Smart Contract: Some blockchains, like the Ethereum blockchain, support a specific type of transaction called smart contracts, which work like a computer program, using if-then-else statements to carry out a particular command. These are essentially legal contracts with code instead of official documents.

Token: See Coin.

Verification: The onboarding process for new customers, which includes verifying that you are who you say you are.

Wallet: Where you store your cryptocurrency.

 

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