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“5 COMMONLY USED JARGONS IN CRYPTOCURRENCY MARKET!”
- 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.
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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