The blockchain or digital currency environment is thriving. Right now, there are over 6,000 types of digital coins, and a lot of companies accept them. Even online casinos like GG.bet casino online accept them as a deposit method.
Anyone who has just heard of blockchain before may get confused, as there are so many terms to understand. Today, you will learn about the most common terms in blockchain technology. As such, you will not feel alienated when reading articles about the digital coin industry.
1. Address or Public Key
An address or public key is an alpha-numeric string. It is an identification used to send and receive transactions. The address can also come in the form of a QR code. In the digital world, there is a private key and a public key. The public key allows people to encrypt messages before sending them to the recipient. The recipient has a matching private key. The recipient uses this private key to decrypt the message. Anyone who intercepts the message but has no private key will not be able to decode it.
An airdrop refers to a distribution method to send digital coins to recipients. These recipients have wallet addresses. Not all methods of sending and receiving digital coins are the same. For example, some companies send coins as part of their marketing strategy. Some other know methods are app downloads, reshares and payment for referrals.
Any coin that is not Bitcoin is an altcoin. Bitcoin revolutionized it all, and anything that tries to mimic it is an alternative coin.
The acronym stands for Application-Specific Integrated Circuit. These are computer chips whose main function is to mine cryptocurrencies. They perform high-level calculations to solve mining problems. Once they find a solution, the solution gets into the hashing algorithm.
A block is the main unit of a blockchain. In digital currency, the ledger is constantly going through updates. Each update is like a link in the chain. Once there are enough transactions, and the computers validate them, all those transactions become one block. The block now becomes the basis of the next block.
6. Block Reward
A block reward refers to the reward a miner receives after solving calculations in the block. The reward is either a coin or a transaction fee. The amount or value of the reward depends on the digital coin. For Bitcoin, the reward is 12.5 bitcoins for every block.
The blockchain is the digital ledger that keeps all transactions in a specific cryptocurrency. Each group of the confirmed transaction is called a block. Each block has a link to the next one, and they look like a chain. For example, Ethereum is a public blockchain. What it means is that anybody can access it. Its ledger has a digital distribution. Once enough transactions are valid to make up a block, that block closes, and a new one starts.
A client is software that has access to the blockchain. It is what you use to connect your computer to the digital currency network. Usually, the client is already inclusive of a digital wallet. In most cases, you sign-up for an account with a company that has both a client and a wallet. You log in and then access the market where you can buy digital coins.
9. Cold Wallet
A cold wallet is a storage device of a digital coin that does not connect to the internet. People use this to store digital coins without the risk of getting hacked. Most people who use a cold wallet are those that mine cryptocurrencies and save them for later use.
A hash is a kind of program that takes an input and then creates an output. The output is an alpha-numeric string. The name for this alpha-numeric string is “hash value.” Some people call it “digital fingerprint.” The hash is what confirms the transaction in the blockchain.
11. Hardware Wallet
Unlike cold wallets, the hardware wallet is a physical device that one has to connect online. It interacts with other users, such as in cryptocurrency exchanges. It is the hardware wallet that sends and receives digital coins.
A hyperledger is a connection of tools, machines, libraries and other products that support high-end blockchain technology. These ledgers allow the creation of blockchains. However, they are not public. These blockchains have a different consensus to allow a transaction, which they call Proof of Work or PoW. Some people call it Proof of Stake or PoS.
Hashrate refers to the speed or total computing power used in a blockchain. Before new alpha-numeric characters get into existence, various computers need to validate if that number already exists. If it does not, then a new hash gets into a ledger. The speed and power by which all these computations happen is the hashrate.
The cryptocurrency will stay. It is the new norm, and even big companies are joining the fray. For instance, Facebook is launching its coin called Libra. However, this digital coin is backed by real currencies, so it is not going to be volatile.