Glossary of Common Cryptocurrency Terms

You may just be getting started in the cryptocurrency world or you’re simply exploring the possibility of hosting a masternode. In either case, it can be a daunting task, especially when coming across certain terminology that you haven’t seen before. To ease your endeavor, I compiled this detailed glossary of all crypto terms and lingo you may come across in the website.

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A

  • ALTCOIN – Alternative coins, a general name for all currencies that are not Bitcoin.

B

  • BLOCK – A collection of transactions on a blockchain. They’re generated at fixed amounts of time.
  • BLOCK REWARD – An incentive for participants in cryptocurrency networks distributed based on a pre-defined set of rules.
  • BLOCKCHAIN – The collection of all blocks in chronological order. In other words, a digital ledger that keeps track and stores all transactions in the network.

C

  • COIN – Synonym for Cryptocurrency, used interchangeably and generally refers to a currency that has its own blockchain.
  • COIN MIXING – Sending funds in different denominations to obscure the origin of the coins. This is a function specific to some currencies and is done automatically.
  • COLD WALLET – A wallet hosted on a device that has no access to the internet. Used for secure long-term storage of cryptocurrencies.
  • COLLATERAL – The sum of cryptocurrency invested and locked into the masternode that allows it to operate on the network.
  • CONSENSUS ALGORITHM – The method by which agreement is achieved among all users on the network for the validity and legitimacy of transactions.
  • CRONTAB – Task scheduling program that is native to Linux.

D

  • DOWNTIME – The amount of time a server (masternode) is not operational.

E

  • EXCHANGE – Online trading platform where you can trade with cryptocurrencies and/or fiat money.

F

  • FIAT (FIAT MONEY) – Traditional currencies such as the US Dollar, the Euro, Japanese Yen etc.
  • FULL NODE – A cryptocurrency wallet (or a PC/VPS that is hosting one) which has a copy of the blockchain.

G

  • GLOBAL LIST – A list of all masternodes from а particular coin, around the globe.
  • GOVERNANCE – In the case of masternodes, it refers to funds that are reserved and collected for future development of the particular coin. It is most commonly used to supply developers with a flow of money that they can use to finance improvements and create additional value.

H

  • HALVING – The process of reducing the block reward in half, at a set amount of time or completed blocks.
  • HOT WALLET – A wallet that is connected to the internet at all times. Usually used for day to day transactions.

I

  • INSTANT SEND – Function specific to DASH masternodes. As the name implies, it allows for instantly completed transactions.
  • ISP (INTERNET SERVICE PROVIDER) – The company that provides you with internet access.

K

  • KYC (KNOW YOUR CUSTOMER) – Policy of exchanges to request personal information from customers, so they can be identfied and as such, to avoid scams.

L

  • LIGHTWEIGHT NODE – A light wallet, commonly referred to as SPV (Simplified Payment Verification) wallet, it acts only as a client for connecting to the blockchain via Full Nodes and requesting transactions.

M

  • MARKET CAP – Market capitalization or the value of all coins in circulation. Calculated using the number multiplied by the value of each.
  • MASTERNODE – A server that is hosted on the blockchain. To create one, you download the core wallet, supply a fixed amount of coins (investment) and lock them in. For that, you are granted the right to receive % of each block’s reward, shared among all masternodes. You validate and process transactions, but you do not create blocks.

N

  • NODE – A node is a point of connection (access) in the blockchain. Most commonly, it is a wallet program. The type of wallet, however, can differ depending on your function in the network.

O

  • OPEN SOURCE SOFTWARE – Programs which are created under a license that dictates the base code should be available publicly to anyone interested and allows users to suggest any bug or exploit fixes etc.
  • OS (OPERATING SYSTEM) – What your PC runs on, can be Windows, Linux or MacOS. Raspberry Pi machines run a custom version of Linux and can have Ubuntu (a type of OS based on Linux) installed.

P

  • P2P (PEER TO PEER NETWORK) – The same as with torrents, a network that establishes direct connections between two parties, without going through any middlemen, servers or other users for example.
  • PAYOUT – The sum of cryptocurrency you receive in return for your services as a masternode.
  • PRIVATE SEND – An anonymous transaction option specific to DASH masternodes.
  • PROOF OF STAKE – Agreement among participants in a cryptocurrency’s network based on invested funds and their weight relative to the entire network.
  • PROOF OF WORK – A method of agreement among users in a cryptocurrency’s network by calculating mathematical problems using specialized devices.
  • PUTTY – A program for remote access.

R

  • RASPBERRY PI – A miniature PC that can be programmed to run different operating systems and consumes low amounts of energy.
  • ROI (RETURN ON INVESTMENT) – How much money you’ll get in return for the amount you invested. 1000 coins invested, 500 coins received = 50% ROI.

S

  • SELECTION POOL – A number of masternodes eligible to receive the block reward.
  • SENTINEL – Defensive/regulatory program, tracks connections and actions on masternodes as a safety measure.
  • STAKING – Buying coins and holding them with the goal of receiving dividends.
  • Static IP Address – Supplied by your internet service provider, it defines you as an entity on the internet and it remains constant. It is a mandatory criteria of some crypto networks, as if it’s dynamically changed (as it usually is), you cannot participate in the blockchain process effectively.

U

  • UPTIME – The amount of time a server (masternode) is operating.

V

  • VALIDATION – The process of determining whether a submitted transaction can be accepted as legitimate and completed, thus adding it to the block and ledger.
  • VPS (VIRTUAL PRIVATE SERVER) – As the name suggests, a server bought from a company, that provides you with the ability to install a specific operating system, on a pre-defined set of hardware, fixed amount of hard drive space and internet bandwidth.

W

  • WALLET (CORE WALLET) – The base program that is used to download a copy of the blockchain and serve as the masternode operator.