What is Bitcoin Mining & How Does It Work? The Complete Guide

Cryptocurrency Terms And Definitions - Common Crypto Words To Know

The blockchain community is not left out when it comes to the use of jargon and phrases. The use of words that look strange to those who are not involved in crypto is totally inevitable. It’s definitely going to be difficult for anyone not in this space to understand words like “ERC20, ICO or gas. So in order to help such people out, we have made a list of the most common cryptocurrency terms and definitions. Please sit back and enjoy your ride.

Cryptocurrency Terms And Definitions
One can categorize these terms into various parts. First of all, we will deal with general cryptocurrency terms and definitions.

Blockchain
Blockchains are distributed ledgers which are secured by cryptography. Everyone has access to read the information on every blockchain which means they are essentially public databases but the data update can only be done by the data owners. In the case of blockchains, data doesn’t remain on a single centralized server, they are copied across hundreds of thousands of computers worldwide. Projects such as Ethereum, Vechain, EOS etc. fall under this class of technology.
Mining: The means of trying to ‘solve’ the next available block. One needs huge amounts of computer processing power to carry this out effectively. There is always a reward for doing this.
Mining rig: A specially designed computer that processes proof-of-work blockchains such as Ethereum. They consist of multiple high-end graphic processors (GPUs) so as to maximize their processing power.
Node: This is a computer that has a copy of the blockchain and is working to keep it in a good shape.
PoW: The full meaning of this is Proof-of-work. The Ethereum network currently makes use of this algorithm.
PoS: Its full meaning is Proof-of-stake. It is the proposed future algorithm for Ethereum. Those that own ETH will be able to lock up all or a portion of their ether for a given amount of time in order to ‘vote’ and generate network consensus instead of mining in its current form. Stakeholders will get rewards in form of ETH by doing so.
Fork: This takes places when a certain blockchain splits into two different chains. This usually happens in the crypto space when new ‘governance rules’ are infused into the blockchain’s code.
Software wallet: A crypto-currency storage that exists purely on a computer as software files. You can generate these kinds of wallets for free from diverse sources. MyEtherWallet (MEW) is one of the most popular sources around.
Hardware wallet: A device that one can securely keep cryptocurrency. People often say that these wallets are the most secure way to store cryptocurrency. Examples of the most common hardware wallet models around are Ledger Nano S and Trezor.
Cold storage: This is a way of moving your cryptocurrency from an online wallet to an offline one, as a means of safekeeping them from hack. There are a lot of ways to carry this out. Some methods that are commonly used include:
· Using a hardware wallet to store your cryptocurrency.
· By printing out the QR code of a software wallet and keeping it somewhere which is safe.
· You can also move the files of a software wallet onto an external storage device such as USB drive and keeping it somewhere safe.

Trading Related Cryptocurrency Terms And Definitions
Exchange: These are websites where people trade (buy and sell) their cryptocurrencies. Some of the popular crypto exchanges we have around include Binance, Poloniex, Bittrex etc.
Market order / market buy / market sell: A sale or purchase which is made on an exchange at the current price. A market buy acquires the cheapest Bitcoin available on the order book while a market sell fills up the most high-priced buy order on the books.
Limit order / limit buy / limit sell: These are orders which are placed by traders to buy or sell a cryptocurrency when the price reaches a certain amount. They are pretty much like ‘for-sale’ signs you see on goods.
Sell wall / buy wall: Cryptocurrency traders are able to see the current limit buy and sell points using a depth chart. The chart’s graphical representation is very much like a wall.
FIAT: Refer to a government-issued currency. An example is the US dollar.
Whale: A person who owns huge amounts of cryptocurrency.
Margin trading: This is an act of increasing the intensity of a trade by using your existing coins. It is very risky for an inexperienced trader to partake in this. Stay safe!!
Going long: This is a margin trade that gives profit if the price goes up.
Going short: It is a margin trade that gives profit if the price goes down.
Bullish: Being optimistic that the price of cryptocurrency is going to increase.
Bearish: This is an expectation that the price of cryptocurrency is going to decrease.
ATH: This simply means All-Time-High. This is the highest point that has been reached by a particular coin or token. Take for instance, Bitcoin’s ATH is about $20,000 and this was achieved around December 2017 and January 2018.
Altcoin: A word used to qualify other cryptocurrencies which is not Bitcoin. Examples of altcoins are Ripple, NEO, EOS, Vechain, Electroneum etc.
Tokens: These are ‘currency’ of projects which are hosted on the ethereum network. They raise money by issuing their own tokens to the general public. Tokens have a significant use in the project's ecosystem. Examples of tokens are Enjin Coin (ENJ), Zilliqa (ZIL), OmiseGO (OMG), Augur (REP) etc.
ICO: The full meaning is Initial Coin Offering. This is synonymous to an IPO in the non-crypto world. Startups give out their own token in exchange for Bitcoin or ether.
Shilling / pumping: An act of advertising another cryptocurrency. It is mostly done in a way that tricks as many people as possible into believing that a coin or token will get to a higher price in the future.
Market Cap: This is the total value of a cryptocurrency. To calculate this, one has to multiply the total supply of coins by the current market price. You can get a run-down of several cryptocurrency projects on Coinmarketcap.
Stable coin: This is a cryptocurrency which has an extremely low volatility. You can use a stable coin to trade against the overall crypto market.
Arbitrage: A situation where a trader takes advantage of a difference in the price of the same coin / token on two different exchanges.
FOMO: Simply means Fear Of Missing Out. That overwhelming feeling that one needs to get on board when there is a massive rise in the price of a commodity. This is also applicable in the crypto space.
FUD: Fear, Uncertainty, and Doubt. It is a baseless negativity which is spread intentionally by someone or a group of people who want the price of cryptocurrency to decrease.
FUDster: A person who spreads FUD.
Pump And Dump: This happens when an altcoin gets a ton of attention, leading to a massive increase in price, and likewise followed by a big price crash of that altcoin.
ROI: Return on Investment. The percentage profit a trader makes on an initial investment (i.e. A 100% ROI simply indicates that a trader doubled his money).
TA: Trend Analysis or Technical Analysis. A way of examining current coin charts so as to make predictions for the next market movement.

Next, we will be moving on to crytocurrency terms and definitions that are ethereum related.
Dapp: Decentralized Application. It is an application that uses a decentralized peer-to-peer network like Ethereum smart contract as its back-end code.
Bagholder: A person who still holds on to a particular altcoin despite having a pump and dump crash.
Smart contract: This is a code that is deployed onto the Ethereum blockchain, it often helps with the direct interaction of how money flows from one point to another.
The Flippening: A future event showing the capacity of Ethereum’s market cap (or some other cryptocurrency) surpassing Bitcoin’s market cap, making Ethereum the most ‘valuable’ crypto-currency.
Gas: It is a measurement of the amount of processing needed by the ethereum network to execute a transaction. More complex transactions like deploying a smart contract onto the network requires more gas than sending ether from one wallet to another which is obviously a simpler operation.
Gas price: This is the amount of ether an initiator of a transaction is willing to spend for each gas unit on a transaction. The higher the gas price, then the faster the processing of the transaction.
Wei: It is the smallest denomination of ether.
Gwei: This is a denomination of ether (ETH). Gwei is the unit for measuring gas prices. 1 Ether = 1,000,000,000 Gwei (109).
MEW: MyEtherWallet is a site where users can generate ethereum wallets for free.

We also have a handful of cryptocurrency terms and definitions that are memes. See some of them below;
Hodl: People use this word when signifying that a person is keeping his coins / tokens for a long period of time. A couple of years back, someone on a Bitcoin forum made a post with a typo HODL in place of HOLD. Ever since then, this term has become one of the most popularly used term in crypto.
Mooning: In crypto, this term comes to play when the price of cryptocurrencies move up astronomically.
Lambo: This is highly synonymous with crypto. You can't leave out this word when discussing about cryptocurrency terms and definitions. This is the car we’re all goona buy when crypto makes us rich.
This is gentlemen: People use this phrase when pointing out positive things that are currently taking place in the cryptosphere.

Now that you are conversant with some of the commonly used cryptocurrency terms and definitions, you can now go out there and showcase your new crypto vocabulary to the world.
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First time mining for bitcoin BTC using 2x USB 2PAC BM1384 Sticks (*FOR FUN*)

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