Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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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.

Other Important Terms

DApp

DApp – short for decentralized Application. They are applications that run on a P2P network of computers rather than a single computer. There are several blockchains that support dApps. For example, Ethereum is a blockchain that supports dApps.

Futures Trading

Futures trading refers to a method of speculating on the price of assets, including cryptocurrencies, without actually owning them. Like commodity or stock futures, cryptocurrency futures enable traders to bet on a digital currency’s future price.

Mining

Mining – a process during which transactions are verified and added to the P2P network. It is conducted by the miners, which have to solve a cryptographic problem. In order to do it, miners have to produce the hash equal or less than the target hash; they try to do it again and again, inputting the combination of the block header and nonce into a hash algorithm, until the solution is found.

Bitcoin ETF

Short for Bitcoin Exchange-Traded Fund. A financial asset that is tied to Bitcoin price, allowing its holder to benefit from Bitcoin price fluctuations without having to store and trade Bitcoin itself.

Stablecoin

Stablecoin – a type of cryptocurrencies designed to have the lowest volatility possible. For example, Tether (USDT) is a stablecoin.

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