We know that among our readers there are those who do not fully understand the insides of cryptocurrencies and are just starting their journey. Yeah, greetings to you, dear newcomers. Today we prepared for you a small dictionary of frequently used terms and abbreviations with brief explanations in a very simple language. The list contains both important concepts and comic ones (which we all also use,why not). This collection will be divided into several parts, this is the first one, about cryptocurrencies and blockchain.
Dear experienced blockchain and cryptocurrency users, forgive us for some simplifications, we want to make life of less experienced colleagues easier, not confuse them even more 🙂
A token is a digital asset in the world of cryptocurrencies and blockchain. Blockchain-based projects issue their own branded tokens, which, like tickets in an amusement park, can be bought (or received for free during distribution) and spent on certain services. Or soldl when its value rises. What can you spend your token on? Depends on the services provided. For example, to increase in the volume of its storage in the database. But this is if the token has a practical application, the so-called utilitarian value, which may not exist.
Fiat currencies are those currencies whose value is provided and controlled by the state. In other words, these are paper money and coins: dollars, euros, rubles and thousands of other currencies used in different countries.
A stablecoin is a token whose rate is linked to to the fiat currency rate, such as dollar, like Tether (better known as USDT) is.
A shitcoin is a fraudulent, joke and/or unpromising currency. Don’t buy shitcoins. And in general, do not buy anything that contains the word “shit” in the name.
An altcoin – all cryptocurrencies except bitcoin. Bitcoin came first, and everyone else is considered an alternative, hence the name.
A block – a list of transactions compiled for a certain time. After creation, this block is added to the chain of other blocks, adding its information to the general chain. Actually, a blockchain is a chain of such blocks.
A smart contract is an algorithm that runs inside the blockchain. It automates all transactions and ensures the correct execution of transactions.
In the next article, we will talk about the terms from mining and trading. By the way, feel free to write in the comments what you would like to read about next time.