Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Cryptocurrency key terms: A guide to making sense of digital money

Cryptocurrency key terms: A guide to making sense of digital money

What's the difference between altcoins and stablecoins? What's hashing and mining? Sometimes the jargon around cryptocurrencies can make your head spin. Here's how to make sense of it all.

As with any new technology, cryptocurrency comes with its own jargon. For the uninitiated, this can be confusing, even intimidating, at first glance.

If you’re looking to buy, invest or trade in cryptos, a grasp of the most commonly used terms will go a long way to help you understand how blockchain and cryptocurrencies work.

Here are just some of the key terms you will come across:

Bitcoin


Bitcoin was invented in 2008 by a mysterious person or group named Satoshi Nakamoto. While it is now one of thousands of cryptocurrencies, it continues to hog the limelight as the first ever crypto.

Altcoin


"Alt" being short for alternative, altcoin is a term which applies to cryptocurrencies that aren’t Bitcoin and which followed in the wake of its launch.

Stablecoin


While Bitcoin and other altcoins are decentralised, stablecoins are pegged to something else of value, be it an existing currency like the US dollar, or a commodity, in order to make them less volatile.

Ethereum


Ethereum is an open-source, blockchain-based software platform that has its own cryptocurrency called ether. Much like Bitcoin, there are terms that are specific to dealing with Ethereum, including Solidarity, a coding language invented by the platform which is similar to JavaScript.

Non-fungible token (NFT)


While cryptos are fungible, meaning they can be exchanged on a one-to-one basis, NFTs are not interchangeable as they are of different values. NFTs are a form of cryptocurrency which hold assets like music and art rather than money.

Cryptography


The study of secure communications in which the sender and recipient are the only ones who are able to see a message. It’s the basis for blockchain technology used in cryptocurrency transactions.

Fiat currency


Fiat currencies are ones that are issued by governments or banks, but are not backed by a commodity, such as gold. Most modern paper currencies we use today are fiat currencies.

Commodity currency


Unlike fiat currencies, commodity currencies are linked to commodities such as gold, and fluctuate based on the world market value of those products or materials.

An employee inspects machines for the production of bitcoins at a mining centre.


Decentralised finance


Also known as DeFi, decentralised finance is the notion that crypto entrepreneurs can recreate a financial system outside the control of the government and traditional financial institutions like banks and brokerages using blockchain technology.

Blockchain


A block is one record of transaction data. Once a transaction is completed, it goes into the blockchain, which is a network of blocks that act as a public ledger that keeps a record of transactions, much as a bank would.

For every transaction, a new block is generated and added to the blockchain. Each block contains a mathematical puzzle with a unique answer which needs to be solved before it can be added to the blockchain. The more blocks that are added, the more secure the blockchain becomes.

Hashing


Hashing is the process of using a function or algorithm to encrypt and decrypt the data in each block. The hash code - or simply hash - can be used as a way of narrowing down the search for data when trying to validate each new block, known as mining.

Mining


The process of finding new coins and validating them for rewards, mining involves supercomputers to unlock blocks by solving - or "hashing" - the complicated mathematical puzzles within each one.

Mining rig


A rig is a computer specifically designed and used to mine for blocks.

Public key


This is the publicly available code that you share with people to receive cryptocurrency into your account.

Private key


This is the confidential code which you use to access your wallet where your cryptos are stored. Only you should have access to this. If someone else finds this key, your stored cryptos are vulnerable to theft.

Whale


As the name suggests, whales are players in the cryptocurrency pond who own large amounts of cryptos. By moving large amounts of cryptos in a sale or purchase, whales have the ability to significantly impact the market, so traders try to keep track of their activities.

Wallet


As with other terms, this is borrowed from our everyday financial vocabulary. Just as with fiat currencies, cryptos are stored in a virtual wallet to keep them safe.

Cold storage


Often regarded as more secure than a wallet, cold storage entails storing bitcoins offline in a device known as a hardware wallet. Owners tend to use both - a wallet for regular spending and cold storage for savings.

Paper wallet


A form of cold storage, a paper wallet is the printed version of your public and private keys on paper in the form of QR codes.

Satoshi or "sat"


As with physical currencies, Bitcoin comes in denominations. A Satoshi - named after Bitcoin’s creator - is the smallest denomination of this particular crypto, equating to 100 billionth of one Bitcoin.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×