- May 6, 2020
- Posted by: Lara Tlass
- Category: Blog
The Crypto Terminologies you need to know series part two, where you can explore the popular terms and phrases relevant to cryptocurrencies. When reading through cryptocurrency related forums on the internet and having no clue what people are talking about? Certain lingo is highly unique to digital currencies that could prove helpful by simply learning the basic industry terminology. Therefore, we thought it would be useful to have a glossary of some terms you may come across. You can also read Part 1 for more terminologies.
The blockchain is made up of blocks. Each block holds a historical database of all cryptocurrency transactions made until the block is full. It is a permanent record, like a bag of data that can be opened and viewed at any time or in banking terminologies, a ledger. Many digital currencies make use of blocks, most notably Bitcoin and Ethereum.
Crypto wallets are used to store your coins and tokens. A wallet is defined by a unique code that represents its “address” on the blockchain. The wallet address is public, but within it is a number of private keys determining ownership of the balance and the balance itself. It can exist in software, App, hardware and paper or other forms. Check out this video explaining different types of wallets and if you haven’t installed the iOWNX wallet that can store both iOWN Tokens and Ethereum, you can download it now on Apple and Android.
FOMO & JOMO:
The term “FOMO” is an acronym for “fear of missing out.” This occurs when investors start buying up a particular asset based on their expectations that it will rise in value or even buying blindly sometimes based on gut feeling. Market participants can easily flock to an asset should that asset experience sharp gains. Getting caught up in FOMO can be dangerous. More specifically, buying up an asset because it has recently enjoyed some notable upside can cause one to fall victim to market manipulation. On the other had “JOMO” is an acronym for “joy of missing out” this occurs when an investor celebrates the fact he missed out on an opportunity to invest in asset that turns out to be somehow a gradually failing concept.
Mining is the process for creating new units of a digital currency. For example, the bitcoin network releases new bitcoins every time a block is mined. In this instance, mining involves confirming transactions and combining them in to blocks.
This verification requires computer hardware and electricity, the person (miner) donating the computer power is granted fractions of the cryptocurrency for contributing these needed resources.
Miner could also team up and combine their computing power together to try and help complete the transactions required to start a new block in the blockchain, they are in a mining pool. The rewards are spread proportionately between those in the mining pool based on the amount of power they contributed. The idea is that being in a mining pool allows for better chances of successful hashing and therefore getting enough cryptocurrency reward to produce an income. To read more about mining, check out our blog or this video.
A detailed explanation of a cryptocurrency, designed to offer satisfactory technical information, explain the purpose of the token or coin and set out a roadmap for how it plans to succeed. It’s designed to convince investors that it’s a good choice ahead of an ICO or IEO. Invertors seeking a good return on investment with low risk typically spends a good amount of time going through the whitepaper and analyze the potential of the project before investing. To read iOWN Token’s whitepaper click here.
IEO is short for “Initial Exchange Offerings” it is an initial investment collection event administered by a cryptocurrency exchange. Unlike the traditional Initial Coin Offering (ICO), the IEO startup team does not launch a fundraising platform and does not conduct the event but undergoes a financial and legal check on the exchange. If the test is passed and the project is verified, the exchange launches a token sale in which all its users can participate and typically receive bonus tokens or a discount on the token price.
This approach allows to solve the main problem of ICO and the large number of scams. According to 2017 research by Satis Group LLC, 80% of ICO are fraudulent projects. No scammers have yet been discovered among IEO projects.
When a transaction is made, all nodes on the network verify that it is valid on the blockchain, and if so, they have a consensus. The consensus process refers to those nodes that are responsible for maintaining the blockchain ledger so that a consensus can be reached when a transaction is made.
This is a marketing campaign that refers to the distribution of a cryptocurrency through a population of people. It usually occurs when the creator of a cryptocurrency provides its coin or token to low volume traders or existing community members in order to build their use and popularity. They are usually given away for free or in exchange for simple tasks like sharing news of the coin or token with friends.
The total number of coins or tokens that are in the publicly tradable space is considered the circulating supply. Some coins and tokens can be locked, reserved or burned, therefore unavailable to public trading.
Cryptocurrency investors developed the term “HODL,” which stands for “hold on for dear life.” The acronym originally came from a misspelling of the world “hold.” Cryptocurrencies can be highly volatile, so when they start experiencing significant price fluctuations, some market participants state that they should simply “HODL” and be patient.
You can see many people at blockchain events sporting the “Stay Calm and HODL” and “HODLERS are Winners” t-shirts.
Crypto has its own language, we hope that these terminologies will make it easier for you to dive into the Crypto World. If you are interested to learn more, check out our Knowledge Center videos, where we explore different topics related to the crypto space.