Cryptocurrency and Blockchain FAQ
Are you new to cyrptocurrencies and blockchain? Have a bunch of questions and don’t know where to start? Checkout below for all cryptocurrency and blockchain FAQ. Feel free to email us if you still have any cryptocurrency and blockchain questions!
A digital container that holds data. Each block has a limit and once it is reached a new block is created to hold new data. Approvers create blocks and these blocks are connected (hence the name “block chain”).
What is a Block Reward?
The amount of cryptocurrency that is created when a block is closed and a new one is created. The reward is paid to approvers of transactions and this creates incentive for them to br honest.
What is a Consensus Algorithm?
The way a network comes to an agreement that transactions are legitimate. A variety of consensus algorithms types exist including Proof of Work (PoW) and Proof of Stake (PoS).
What is a DAO?
Stands for “Decentralized Autonomus Organization”. It is an organization that can operate without a hierarchical management team. Instead it operates via computer programming.
“Fear, Uncertainty, and Doubt”. When a market is experiencing FUD there will likely be a drop in prices.
A split in a blockchain network. When a hard fork occurs the new network is no longer compatible with software used to support the previous version of the network. Sometimes hard forks give rise to new tokens like Bitcoin Cash or Ethereum Classic.
The amount of computing power committed to approving transactions on the network. Generally the higher the hashrate the more secure the network.
“Hold On For Dear Life”. Cryptocurrency investors might say this when the market is going through a correction.
A person or organization that approves transactions using powerful computers. Miners are rewarded in the cryptocurrency that is newly created when blocks are closed and new ones are created.
To increase in value rapidly. For example, “I believe Ripple will go to the moon in the next few week”.
Proof of Stake (PoS)
When transactions are approved by investors who hold the cryptoasset. Powerful computers are not need to secure the network. A variety of PoS frameworks are in place that determine which investor has the right to create the next block.
Proof of Work (PoW)
When transactions are approved via computers that run continuously and find solutions to the consensus algorithm. All the computers compete to create the block.
The data that allows users to access and transact in cryptocurrency or other digitized assets. This information should be safeguarded – no private keys means no cryptocurrency.
The account code in which others can use to send cryptocurrency to you. It is safe and necessary for other users to know this information.
An update to the software the network runs on. When a network soft forks software used previously is still compatible and can be used.
Software in which investors store their private keys. A variety of wallets exist. Investors can store crypto on wallets located on exchanges, on their desktop or laptop, or on hardware devices.
A trader or investor that holds a large amount of cryptocurrency. Whales have the ability to move markets by themselves (or in conjunction).
A type of proposal document – it explains how the blockchain network will work. Most legitimate teams will put out whitepaper statements. And savvy investors read these documents to understand if the investment opportunity is worthwhile.