cryptocurrency
cryptocurrency
A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds.
blockchain
A digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly
decentralized finance
DeFi, financial activities conducted w/o the involvedment of an intermediary, like a bank, government, or other financial institution
digital exchange
a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies
crypto coin
a cryptocurrency that operates on its own blockchain
crypto token
a cryptocurrency that uses the blockchain of another established cryptocurrency
proof of stake
a cryptocurrency transaction verification process that involves miners 'staking' an amount of crypto they already own in order to participate in validating transactions; miners lose their stake if they validate an invalid transaction and an amount of crypto is awarded to the miner who staked the most of their existing crypto and successfully verified the transaction
proof of work
a cryptocurrency transaction verification process that involves miners competing to be the first to solve a complex math puzzle and receive an amount of cryptocurrency as a reward
cryptocurrency wallet
a device, physical medium, program, or a service which stores the public and/or private keys for cryptocurrency transactions
currency
a medium of exchange for goods and services
smart contract
a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code
investing
allocating money with the expectation of generating profit over time
token
built on and uses another blockchain
fiat money
currency issued by the government, not tied to a commodity
coin
has its own blockchain
each block is connected to the hash of the previous block
how do individual blocks of information create a chain?
peer-to-peer network
how is a transaction verified on a cryptocurrency network?
no physical nature, only online
how is cryptocurrency different from government issued currency?
supply and demand, being compared to other cryptocurrencies
how is the value of cryptocurrency determined?
to gain a higher return than inflation, long term
investing
fiat money
money that has value because the government has ordered that it is an acceptable means to pay debts
to grow money quickly, short term
speculating
speculation
the act of conducting a financial transaction that has substantial holds the expectation of a significant gain or other major value
mining
the competitive process of validating a cryptocurrency transaction and adding it to the blockchain in hopes of receiving an amount of cryptocurrency as a reward
FOMO
the fear of missing out on an opportunity that others seem to be taking advantage of
bitcoin
the largest cryptocurrency in terms of market cap
more prone to hacking
the main disadvantage of storing your cryptocurrency in a hot wallet
ethereum
the second largest cryptocurrency in terms of market cap, famous for smart contract technology
market cap
total market value of a cryptocurrency's circulating supply
less secure, trading is stopped if server goes down, high transaction fees
what are the major downsides of centralized exchanges?
slow, easier to hack, no way to recover lost funds, doesn't allow fiat payments
what are the major downsides of decentralized exchanges?
government action, outside influence
what can impact the value of a cryptocurrency?
mortgage companies
what centralized institution is removed from cryptocurrency transactions when compared with traditional transactions?
Ethereum's creation
what event made cryptocurrency more appealing to mainstream banks and large companies?
2008 recession
what event was cited as the inspiration for the creation of Bitcoin?
verify transactions and help keep the ledger free of tampering
what is the purpose of blockchain technology?
pay off debt, contribute to retirement, create an emergency fund
what should you do before you buy cryptocurrency?
proof-of-work and peer-to-peer network
what two features help blockchain remain secure?
do be a joke
what was the original purpose of Dogecoin when it was created?
government says it does
why does fiat money have value?
to be a medium of executing smart contracts
why was ethereum created?
