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Jargons of the Crypto Cosmos!

Tags :
#bitcoin
#alt coin
#hash rate
#death cross
#how to invest in cryptocurrency
#terminologies use in cryptocurrencies
#role of a blockchain in cryptocurrency
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Rasheem James NorthingtonWriter : Rasheem James Northington Monazza AarfaVoice : Monazza Aarfa United States 87 Listens

Introduction

The world of cryptocurrencies and blockchain continues to expand and there is a probability that Digital currency may become a future currency due to its unique and secured prospects. Few countries are considering making digital currency their official currency, and a number of well-known companies and their multi billionaires CEOs, such as Elon Musk and Mark Cuban are considering to use it for trading. Recently, Rapper Rafaar has become the first Indian artist to accept cryptocurrency as performance fee and he says that now he will eliminate middleman interference through this route.

For those who are tuning in for the first time, I want to let you know that DueClixVoiceFM is an educational cloud radio station, which invites professionals from different industries to share their knowledge with our listeners and today we have invited Rasheem James Northington, the spokesperson of InfoTaxSquare in our studio to explain the numerous terminologies of cryptocurrencies.

InfoTaxSquare.com is registering businesses across the United States since 2003 and so far it has established thousands of new businesses across the USA.

Rasheem, There are thousands of cryptocurrencies in existence today and it is causing a stir among the wider populace.The number of crypto enthusiasts among celebs is steadily increasing, and billionaires are plunging in this crypto race.Cryptocurrencies have caught an eye of the investors around the world. Since, digital currency is becoming increasingly popular. We, the common man, must learn about it and try to figure out how we may benefit from it.

I am sure you all must be knowing that cryptocurrency is a type of digital asset that is meant to be a medium of exchange and exists outside the control of governments and central authorities because of its decentralized structure. If you are a newcomer to the cryptocurrency world, you must have realized that there’s a whole lot of jargon and technical terms that you need to learn to fit them in your head.

I must tell you that we are neither advocates nor advisors of cryptocurrency rather our goal is to create awareness about the different features of cryptocurrency. So, Today, in our program we will cover some common cryptocurrency terminologies that can assist you in better understanding of this revolutionary technology.

Frequently Asked Questions

Let me get it started with the first question of today’s program. What does the term “Crypto” in cryptocurrency refers to? +

The term “crypto” in the context of cryptocurrencies refers to the complex encryption that enables the creation and processing of digital currency as well as their transactions across decentralized platforms.

Now, Why do not you explain the various categories in which a cryptocurrency might be classified?
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Cryptocurrencies can be simply divided into two groups and they are:

  • First, are Coins ( which can be further divided into Bitcoins and Altcoins)
  • And second, are Tokens.

Now, we have an idea that a cryptocurrency can be classified into two categories which are Coins and Tokens. Could you explain the distinction to us between both of them?
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Let me share briefly before we go into detail. Coins have their own blockchain's whereas tokens use the existing blockchain. Doge is coin, whereas Shiba Inu is a token. First of all, Coins and Tokens are two separate kinds of units and there are several dynamic features that make them distinct from each other. Let us try to understand what are they:

  1. Infrastructure - Coins comprises of the cryptocurrencies that are built on their independent blockchain network to keep a track of all the data whereas, A token doesn’t have a blockchain of its own and it is built on the existing blockchain as well as benefits from that technology.
  2. Usage - If we talk about the uses of both Coin and Tokens then Digital coins can be used only for processing payments or in simple terms it can be used for monetary exchanges but if we talk about tokens then they can be used for a variety of purposes like it can be used as a prepaid credit for an Application programming interface, piece of artwork, for an education certificate or even playing games. It can also be used for donations to publishers and advertisers.
  3. Security –While purchasing tokens an individual must also purchase security tokens as this ensure that the transactions being conducted are both safe and secure. But while buying a coin it is not required to buy a token as coins are already secured due to the leverage of powerful block chain technology. Also, The chances of stealing coins are less compared to that of tokens.
  4. Development - Digital Coins are more complex to develop than tokens. All the programming and coding are done from the scratch in the creation of Coins, but creating tokens are a lot easier because a developer is not required to change the code of a protocol, do additional coding or start from scratch with a blockchain. Simply, they need to follow a common blockchain template.
  5. Acquiring – Crypto coins are widely available in the market and most corporations and organizations can sell them, but to obtain tokens from the NEO network, GAS as a transaction fee should be paid.
  6. Fee – Since Coins are not dependent on any platform, no additional fees per transaction are required. Whereas,Token needs to pay a small fee for the platform it is deployed.
  7. Examples - Some of the examples of Coins are Bitcoin, Ethereum, Litecoin and Dogecoin as they have their respective blockchain technologies whereas an example of token is ERC 20 which is built on Ethereum blockchain. Majority of tokens on the ethereum blockchain are designed to power decentralized applications. Also, you can buy tokens for coins but not vice versa.

You mentioned that “tokens on the ethereum blockchain are designed to power decentralized applications.” Listeners who are unfamiliar with the term \"decentralized applications. I would like to clarify that DApps or Decentralized Applications is basically an app which runs on blockchain and acts as a kind of operation system. Most of the apps that we used in our day to day lives are centralized.But Dapps are designed in a way which makes it Decentralized. +

The most widely used apps that we use on a day to day basis like Facebook and Instagram are centralized. The owner or the central authority is the one who’s in charge of the app and has complete control over its functionality and data.

For Example, We certainly know that there are specific policies that one must observe while using applications like Instagram or Facebook. If you upload something that violates the guidelines, then the authority has the power to remove it. Your content can also be censored.

This is where DApps come into play. DApps give data ownership to the consumers and eliminates the role of a central authority. These are open-source application, governed by the community and crucially profitable for both the creators and users. They operate autonomously on a decentralized public block chain. It can’t be controlled by a single entity and generates and uses tokens by following a standard cryptographic algorithm.

You mentioned at the outset of the program that a coin can be separated further into Bitcoin and Altcoins. Could you explain to the listeners how the two coins differ from one another?
Difference between Bitcoin and Altcoin +

Bitcoin, as we all know is a purely virtual form of money. It's similar to an electronic version of cash, which can be used to purchase goods and services and is the first cryptocurrency to gain mainstream appeal thanks to blockchain technology’s success.

Altcoin on the other hand, simply refers to coins that are an alternative to bitcoin. These are digital currencies that were launched following the success of Bitcoin. They use secure blockchain technology as well, however they have been created by taking the fundamental programming of bitcoin and tweaking it to create a whole new coin with its own set of features. I must tell you that there are over a thousand different altcoins in existence today. Neo, cardano, litecoin, Name coin and Dogecoin are among examples. These coins work much like Bitcoin where using a private key, a payment can be sent from a digital wallet A to digital wallet B. But Altcoins charge lower transaction fees than Bitcoin, which is a significant advantage. Each of these alternative cryptocurrencies operates under its own rules but also shares some similarities with Bitcoin.

What should a person do if he is thinking to dip his toes into the cryptocurrency market? How can an individual buy his first cryptocurrency?
How to buy Cryptocurrency? +

Let's try to understand this simply :

There are three stages involved in purchasing any cryptocurrency, and they are :

  1. Researching before buying : Instead of succumbing to the hype, it is strongly encouraged to conduct adequate research and decide which coin you want to purchase before spending your money.
  2. Obtaining a wallet – Next, step is to obtain a “wallet,” which is an online app that can store your cryptocurrency. When looking for a secure place to keep your cryptocurrency,you can choose from a variety of wallets like, mobile wallet, hardware wallet, web based and desktop wallets.
  3. Purchasing coins – Coins can be purchased using online exchanges. You should also be aware that not all exchanges sell all cryptocurrencies. Some examples of exchanges are : coin base, binance and coin market cap.

I would also like to give a piece of advice to the listeners. When it comes to investment, you should never invest an amount that you can’t afford to lose. For example, If you just have $ 100 on hand, invest a modest proportion of it. Moving further, let us talk about the widely used term which is cryptography. Why don’t you explain the listeners about it? What is cryptography? +

Cryptography is basically the method of sending encrypted data, messages or information from person A to person B keeping it a secret from third parties.The sender “encrypts” the message, which obscures its content to a third party, and the receiver “decrypts” the message, making it decipherable once again.This framework allows transactions to be anonymous and secure by building methods and conventions as well as analyzing mathematical, scientific and physical protocols intended to keep outsiders from perusing or meddling with exchanges and other delicate information that is relayed across the network.

In the context of cryptocurrencies, cryptography is used for a variety of purposes like :

  • To prevent unauthorized access to a network transaction.
  • To validate the transfer of digital assets in a transparent manner.
  • To enable secure network communications that cannot be intercepted.
  • To ensure that emails are compatible and secure.

I read somewhere that there are three types of cryptographies which are mostly used, and they are, Symmetric key cryptography, assymetric Key Cryptography and Hash Functions.c +

These three encryption algorithms are widely used.

Symmetric Key Cryptography – First, is Symmetric key cryptography. It is an encryption scheme in which the sender and receiver of a message, encrypt and decode messages using a single common key. This system is faster and easier to use, but they have the drawback of requiring the sender and receiver to exchange keys in a secure manner.

Asymmetric Key Cryptography – This cryptography system encrypts and decrypts information using a pair of keys. Encryption is done with a public key, and decryption is done with a private key and both the keys are different from each other.

 

For Example: If I get a message from a friend. Then, even if everyone knows the public key, I’ll be the only one to decode the message since I am the intended receiver and I am the one who has the private key.

Hash Functions – This algorithm doesn’t make use of any keys. It is a type of encryption that turns any type of data into a single text string. Simply expressed, it means producing a fixed-length output from an input of any length.As a result, the output is never more than the input. Different cryptocurrencies use different kinds of hashing algorithms.

You pointed out that Public and private keys form the basis for asymmetric cryptography. Why don’t you explain about both the keys in detail?
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Let me begin this answer with an example :

Imagine a new restaurant named xyz is inaugarated in your neighbourhood. Now the restaurant invites customers to leave feedback on the food, ambiance, and other aspects by filling a feedback form and submitting it in a wooden box. Although, everyone gets a chance to drop a review, but it’s only the owner of the restaurant who can take out the feedback form and go through the reviews. The public private key works in almost the exact same way.

Public-private key encryption is a mechanism which is used by many cryptocurrencies. Each user in this network is given a private key, following which public key is generated cryptographically. These keys are typically alphanumeric.

The public key’s function is to give users with an address to which they can send coins to.So, you can freely share your public key with others. The private key’s purpose is to unlock the public key so that the coins can be received. Only the person who knows the private key can unlock the public key. Furthermore, you should never ever share your private key with anyone because If you inadvertently disclose your private key information to a third party, that third party could possibly gain access to the account and steal all of the Coins that you have.So, A private key should be kept confidential.

To gain a better understanding of how this mechanism works, Let me try to give you another example : Imagine Monazza, you want to send an encrypted mail to your friend Emma. To do this, you take Emma’s public key and encrypt a message for her. Then, when Emma receives the message, she takes the private key that is known only to her in order to decrypt the message that you shared with her.

Conclusion

Thank you for citing a wonderful example. I am sure our listeners must have gained a lot of the information that you shared with us.

Now, we have come to the end of today’s program. I want to say that in the trading and investment circles Cryptocurrency has become a hot button topic.

Every product has both positive and negative aspects. The negative aspects begin with poor experiences as a result of lack of knowledge, while the positive aspects emerge during the process that begins after going through the learning process. Due to a lack of awareness, you may come across as having a different opinion; however, it may eventually become a world-wide official digital currency due to its dynamic and transparent features once it is regularized and more people are educated.

So, With the rapid growth of cryptocurrencies, it is important to understand the differences between the terminologies involved and what they refer to.

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