Cryptocurrency is decentralized because money is issued and transactions are conducted across a distributed network, not through a bank or the government. Decentralized – The transfer of authority from a centralized entity to a distributed network, enabling individuals to facilitate transactions directly with one another instead of using an official third party.In a DAO, a small group of people come together exclusively online and collect capital to make investments or manage blockchain-based projects. DAOs – Decentralized autonomous organizations that act as investment firms, VC firms, or LLCs.In most cases, cryptocurrency refers to any decentralized currency that’s not issued by a traditional financial institution. Cryptocurrency – Digital currency that can be used to purchase goods and services.CBDC aims to provide more regulation, transparency, and prevention of illicit activity than decentralized cryptocurrency. Central Bank Digital Currency (CBDC) – Virtual money that’s backed and issued by a central bank.The blockchain is a shared, immutable ledger that facilitates crypto transactions, chronologically records transaction data, and tracks crypto-exchanged assets. Blockchain – The underlying technology that powers cryptocurrency.Bitcoin is also used as shorthand to describe the overall concept created by founder Satoshi Nakamoto ( see definition below). Bitcoin – The first decentralized digital currency to be exchanged on a peer-to-peer basis without intermediaries like governments or banks.There are more than 12,000 altcoins on the market. Altcoins – All cryptocurrencies other than Bitcoin.Adoption – The legitimization of cryptocurrency through various market actions, like businesses accepting it as tender, traditional institutions adding it to their portfolios, and everyday investors purchasing it more widely.But this glossary – featuring working definitions for 30 commonly used terms – will at least get you started learning about the digital economy. It contains brief definitions for some of the most common terms you’ll encounter in conversations or articles discussing crypto.Įach of these concepts is worthy of its own deep dive. Then improve your digital literacy with this cheat sheet. Are you confused about cryptocurrency? Baffled by digital assets? Or just curious to better understand some of the lingo you hear people using when referencing Bitcoin, blockchain or other things related to cryptocurrencies?
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