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“5 COMMONLY USED JARGONS IN CRYPTOCURRENCY MARKET!”

 

1. BLOCKCHAIN:

  • A blockchain may be a unique database, behind the technology that powers cryptocurrency like Bitcoin.
  • The blockchain database stores information differently from a typical database.
  • Because the name suggests, data is stored in groups or blocks which are then chained together.
  • It is called a blockchain because the newest transaction block will contain details of the previous transaction block.
  • Different information are often stored during a blockchain, but it’s mostly used as a ‘ledger’ for transactions.
  •  IT’S a kind of DISTRIBUTED LEDGER TECHNOLOGY (DLT), it’s called a ‘ledger’ because it keeps track of everything that’s happening, even as a ledger does.
  • IT’S ‘distributed’ because a replica of the ledger is transmitted and stored with everyone, and isn’t a centralised network — like in banks.

WORKING OF BLOCKCHAIN

2. CENTRALIZED CRYPTOCURRENCY EXCHANGE:

  • A centralized cryptocurrency exchange may be a platform where you’ll buy or sell digital assets.
  • Here, you’ve got to trust a 3rd party to watch the transaction and secure the assets on behalf of the customer and therefore the seller.
  • Such exchanges require you to submit your personal information for verification.
  • On the opposite hand, if you’re a corporation , then you’d need to provide your corporate information to the exchange so it can verify your account.
  • In most cases, centralized crypto exchanges provide their users with flat pairs at stable prices.
  • These exchanges are widely popular among cryptocurrency users, and you can easily find one of these platforms online.

 

3. DECENTRALISED CRYPTOCURRENCY EXCHANGE:

  • A DEx or a decentralized cryptocurrency exchange is analogous to a centralized one, except it doesn’t have a 3rd party on which you’ll rely.
  • All of the funds during this exchange remain stored on the blockchain.
  • These platforms allow peer-to-peer (P2P) trading that it uses assets, proxy tokens, or an escrow system, unlike the IOU-based system a centralized crypto exchange uses.

4.  SMART CONTRACTS:

  • A smart contract may be a computer virus or a transaction protocol which is meant to automatically execute, control or document legally relevant events and actions consistent with the terms of a contract or an agreement.
  • These contracts are trustless, autonomous, decentralized, and transparent; they’re irreversible and unmodifiable once deployed.
  • A smart contract is self-executing code that carries out a set of instructions, which are then verified on the blockchain.
  • Smart contracts remove the necessity for intermediaries and contract enforcement.
  • This greatly reduces cost and simplifies the contract negotiation process.
  • With a sensible contract, the code defines the mechanisms of the transaction and is that the final arbiter of the terms.

5. HARDWARE WALLET:

  • A hardware wallet may be a special sort of bitcoin wallet which stores the user’s private keys during a secure hardware device.
  • They need major advantages over standard software wallets: private keys are often stored during a protected area of a microcontroller.
  • And can’t be transferred out of the device in plaintext.
  • The hardware wallet gets its security from the very fact that the users private keys are stored during a protected area of the microcontroller and can’t be extracted as plain text.
  • Additionally, the hardware wallet functions offline, meaning the private keys are never exposed to potential hackers.
  • Some of the best hardware wallets to use are: TREZOR ONE BLACK, LEDGER NANO S, YUBIKEY 5C NFC.

 

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