Here’s a handy list of word definitions that are commonly used in the cryptocurrency sphere in alphabetical order. If you see a link from a word you’re not familiar with in the text on this site, it will bring you here to find a definition.
“Etoro” This in investing platform located at www.etoro.com. It’s a very simple interface that allows easy trading of around a dozen major cryptos and takes care of wallets and converting backwards and forwards between fiat and cryptocurrency. I often recommend it for users when first starting, but it suits more advanced traders too.
“Fiat Money” This is money you or I are traditionally familiar with. Literally translated from the Latin meaning ‘Let it be done’, it is money that, in itself, has no real value other than the faith of the bearer. The British Pound or American Dollar would be classed as fiat money.
“ICO” Stands for ‘Initial Coin Offering’. Much like companies raise capital through selling off shares when float, new coins and currencies often offer coins and preferential rates to new investors when starting. ICOs are, at the time of writing, outside any regulation and, as a result, many have been poor quality, badly organised or downright fraudulent.
“Masternode” A device, usually a server, holding a pre-determined number of a coins of a Proof of Stake currency designed to lock in and stabilise a network. The people who have bought and locked those coins are seen as contributors to the currency’s network and are rewarded with payments in that currency for doing so.
“Proof of Stake (POS)” is a concept of running a coin’s network whereby a person can mine (or validate) block transactions according to how many coins he or she holds. In other words, the coins in wallet owned by a miner, the more mining power he or she has.
“Proof of Work (POW)” is a system of running a coin’s network that requires some work from the service requester, usually meaning processing time by a computer. The idea is to create an economic measure to deter denial of service attacks and other service abuses such as spam or double spending on a network.
“Wallet” Usually a piece of software (but can also be hardware) installed on your devices that holds the coins of the currency you own. Some wallets support more than one coin, and some have different functionality, but unless you’re going through a trading platform, you will need a wallet of some sort to be involved with cryptocurrencies. Think of it as a software version of the wallet in your pocket!