Albert Einstein once quoted “You have to learn the rules of the game. Then Play it better than anyone else”.
That’s exactly the reason we need to understand the basic rules of this digital game of Cryptocurrency and Blockchain.
I know it’s very easy for your readers. You people know more than me. But that’s is the exact reason I am explaining you few basic terms…Hahaha…!!
Every one of us wants to get filthy rich, ride a dope car and roam around with both arms around women/men. But is really investing in cryptocurrency the right thing?
It is very necessary to understand what exact things shake hands together to give rise to this billion-dollar industry of cryptocurrencies and understanding these basic terms will give you a small idea of how to reserve some money for yourself from those billions of dollars.
Following are few basic and important terms used in cryptocurrency world:
It is basically a simple computer which has the blockchain information.
Nodes are used to store Blockchain data as well as maintain them.
Nodes basically act like your husband/wife. They know everything about you, and also keep a track of your activities. In the crypto world, you are the blockchain entity and nodes are your husband/wife.
This is a process of extracting data from a block to keep track of transactions.
These transactions mainly include Crypto exchange.
Mining basically allows the users and the cryptocurrency controllers to maintain a smooth flow of the monetary outcomes of the same.
It’s exactly like how income tax department keeps a track of the fiat currency and takes down the people who are bringing in the black economy in circulation.
It is a situation in which a blockchain splits into two or more individual chains.
It happens in cases like where a person holds multiple crypto entities and the nodes are obliged to create fork chains for each cryptocurrency entity undergoing transaction in the user device (Damn!! I did not understand a single thing.).
It’s exactly like your mind splits between choosing dark chocolate and milk chocolate. And in this situation, we end up choosing both.
The wallets which operate transaction through software and a manual verification by the user to buy or sell a crypto entity.
A device which is specifically designed to store the cryptocurrency. They are basically more secure than software wallets.
These are not in trend as of now because the security measures taken in software wallets are very good.
It is a process which allows multiple nodes to store parts of a single blockchain.
This basically helps in improving the overall performance of a node, when observed on an individual level.
It’s like if you’re carrying eight shopping bags for your girlfriend, you’ll be tired after a while and you won’t be able to perform as much expected. But if you both carry four bags each, the weight to be carried will be distributed and you can roam around with your girl for a longer time.
This process of distributing the load of holding block data among nodes is called Sharding.
Cold storage is a process by which a cryptocurrency entity can be moved to offline storage.
Just like you keep your important movies stored on an external hard drive(LOL).
This feature is not provided by any software but can be manually practiced.
> Hardware wallets can be used.
> A specific device can be used just to store a crypto entity and another one can be used to undertake transactions.
> Moving files to an external storage and storing the device somewhere safe.
Cold storage is very similar to keeping a backup of your block data in your pocket. Hackers cannot hack your pocket to steal data, which basically makes the crypto entity safe.
I have written a whole article on blockchains, please follow this link to know more:
That was all about basics terms related to cryptocurrency.
I know this article was not that funny, but sometimes it’s fun to be not funny.