Glossary

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Altcoins

Any other digital currency except bitcoin. Bitcoin as the first mover is considered by some to be more stable and less riskier than other cryptocurrency investments.

Bitcoin

The first decentralised digital currency. The bitcoin network is peer-to-peer meaning that transactions take place directly between users without an intermediary such as a bank. Transactions are verified by nodes located in different geographic locations around the world and recorded on a public distributed ledger with cryptography. This ledger is called a blockchain.

Block

A collection of validated transaction data which is bundled together. Each block has a predetermined block size.

Blockchain

A decentralised distributed ledger where transactions are recorded publicly with a time stamp. Each block contains this transaction information and is added to the previous one to form an immutable (permanent) database called the blockchain.

Dollar Cost Averaging

The process of buying/selling a fixed amount of an investment on a regular basis. Typically done in bearish markets for eg. In week 1 buying a fixed amount of bitcoin at say $9000, in week 2 the price goes down to $8500 thus providing a cheaper price at which to buy another fixed amount and so on. It’s very difficult to call tops and bottom in a market and this process allows an investor to get a better average price.

Ethereum

A decentralised blockchain platform similar to bitcoin which features smart contract functionality. Ether is the cryptocurrency used in this platform.

Exchange

A place to exchange one currency for another. Fiat exchanges allow you to exchange government issued money like the Dollar, Euro or Rand for cryptocurrency like Ethereum and Bitcoin. Crypto exchanges allow only the exchange between 2 cryptocurrencies.

HODL

A slang term used in the bitcoin community used to indicate “hold”ing onto your crypto instead of selling it. It originated from a 2013 post in the bitcoin forums by a drunk poster who made a mistake in the heading of his post “I AM HODLING”. The term has now also been used by many in the community to mean “hold on for deal life”.

ICO’s

Initial Coin Offerings – An unregulated way of raising funds for new cryptocurrency/blockchain ventures. In return for fiat (paper money) or bitcoin, early backers receive a percentage of the cryptocurrency used in the proposed system.

Inflation

The rate at which the prices of goods and services rise and consequently the value that your paper money is decreasing. When central banks print money without anything backing it they are essentially transferring wealth from those with existing money to those who have been given the additional printed money.

Liquid/Liquidity

This refers to how easy it is to buy and sell an asset or cryptocurrency in the marketplace. If you cannot find a buyer for your coin at any moment then your coin is not very liquid. The most popular cryptocurrency bitcoin is very liquid because it is very easy to buy and sell at any moment in the marketplace.

Market Capitalisation

This equals the amount of coins in circulation multiplied by the current price for one coin.

Mnemonic Seed

A collection of random words which need to be put in the correct order to recover access to a lost digital wallet private key.

Public Key

A text string, which can be made public, usually of 30 characters or more which indicates an address where currency (eg. Bitcoin) can be stored (digital wallet).

Private Key

A text string, that only you should know, used to decrypt or unlock the digital wallet mentioned above.