The Cryptocurrency Glossary

Are you confused by some of the terms used on CoinSpeaker? To get you started, here is the beginning of our glossary of cryptocurrency terms.

Photo: Antan/Flickr

Photo: Antan/Flickr


An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially unwise in some countries and setups.


… is a form of electronic money independent of traditional banking, bitcoins started circulating in 2009 and have become the most prominent of several fledgling digital currencies.

… for more details see bitcoin guide.


The block chain is distributed; to independently verify the chain of ownership of any and every bitcoin amount, each network node stores its own copy of it. Approximately six times per hour, a group of accepted transactions, a block, is added to the block chain, which is quickly published to all nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, which is necessary to prevent double-spending in an environment with no central authority.

Block reward

The reward given to a miner which has successfully hashed a transaction block. This can be a mixture of coins and transaction fees, depending on the policy used by the cryptocurrency in question, and whether all of the coins have already been successfully mined. Bitcoin currently awards 25 bitcoins for each block. The block reward halves when a certain number of blocks have been mined, 210,000 in bitcoin’s case.


This number determines how difficult is it to hash a new block. It is related to the maximum allowed number in a given numerical portion of a transaction block’s hash. The lower the number, the more difficult it is to produce a hash value that fits it. Difficulty varies based on the amount of computing power used by miners on the computing network. If large numbers of miners leave a network, the difficulty would decrease.

Genesis Block

… is the very first block in the chain.


… is a fork of Bitcoin created as its improved alternative. Some people say if Bitcoin is a gold, then Litecoin is a silver.

… for more details see litecoin guide.


… is a random string of data used as an input when hashing a transaction block. A nonce is used to try and produce a digest that fits the numerical parameters set by the bitcoin difficulty. A different nonce will be used with each hashing attempt, meaning that billions of nonces are generated when attempting to hash each transaction block.

Orphan block

… is not a part of the valid block chain, but which was instead part of a fork that was discarded.

Paper Wallet

… is a physical piece of paper you print out that stores your altcoins in a secure, off-line environment. Paper wallets are inherently impervious to hacking and other forms of internet theft but vulnerable to acts of nature (fire and flood), burglary, and human error (simply losing your wallet). Basically, all a paper wallet contains is a printed public key and private key for a respective address. The data is NOT stored on a computer. Often a paper wallet has a QR code of the public and private keys to make it easy when you need to get the key values on your computer or phone — you just scan the paper instead of manually typing the keys out.

Private Key

… is a private address that is paired with your public key. Private keys allow you to spend your coins or take them out of your wallet for using. The private key looks very similar to a public key but it’s slightly longer. You can get your public key from a private key but you can not get a private key from a public key.  It is the key to the balance of the address. Whoever holds the private key owns the value of the address.

Proof of Concept (POC)

… is a realization of a certain method or idea to demonstrate its feasibility, or a demonstration in principle, whose purpose is to verify that some concept or theory has the potential of being used. A proof of concept is usually small and may or may not be complete. POC is also known as proof of principle.

Proof of concept in software development describes distinct processes with various objectives and participant roles. It may also refer to partial solutions involving a small number of users acting in business roles to establish whether a system satisfies certain requirements.

Public Key

… is like the bank account for your personal digital currency. It is where you store your coins. If you have multiple types of coins, you must have a separate wallet for each type. A wallet is a collection of public keys. So a wallet can contain one public key or one hundred. How much you decide to put in each is up to you and there is no cost. An example of a Bitcoin public key : 14euyjBip1t2aWax5ZSg5YGHR8WW34CnEjAnyone can send you coins or you can transfer coins to other address as long as you have the private key.


… is the smallest possible fraction of cryptocurrency available for transactions. It refers to 0.00000001 Bitcoin, and is named after Satoshi Nakamoto, the enigmatic creator of the first publicly-available digital currency.

Wire transfer

Electronically transferring money from one person to another. Commonly used to send and retrieve fiat currency from bitcoin exchanges.

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