Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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Miner

Miner – has two definitions. A node which carries out the mining process. A person who owns the working hardware for mining.

Other Important Terms

PoW – short for Proof of Work. A type of consensus mechanism, where nodes validate transactions by using computing power. Here is how it works: User A makes a transaction; User A’s transaction gets bundled into a block along with other users’ transactions; Transactions get validated; The header of the most recent block is inserted into this block as a hash; The cryptographic problem is solved during the mining process; The block is published to the blockchain; User B receives a transaction. For example, Bitcoin uses PoW consensus mechanism.

ATH

Short for All Time High. Refers to the highest price a cryptocurrency asset has ever had.

2 Factor Authentication (2FA)

2 Factor Authentication is a double layer security measure. Most crypto exchanges use it. In order to log in, you not only need to enter a password, but also a code that you receive from the Google authenticator for example.

Trading Pair

Trading pair – a trade between one type of cryptocurrency and another. Allows trader to purchase one of these two currencies with the another one. For example, BTC/ETH is a trading pair. It allows the trader can buy Bitcoin with his/her Ether or Ether with his/her Bitcoin.

Physical Cryptocurrency Wallet

Physical cryptocurrency wallet – a physical object containing user’s private keys. There are several types of physical wallets: Hardware wallet is a device that has user’s private keys saved to its memory. In order to access them, user has to connect such a wallet to a device that is connected to the Internet, such as PC or smartphone, and enter a pin code. For example, Ledger Nano X is a hardware wallet; Paper wallet is a copy or printout of user’s public and private keys.

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