Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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Block Reward

The block reward is the payment that is offered to the node that is securing the blockchain. In the case of Bitcoin, which is has a Proof-of-Work consensus algorithm, these would be the miners. The payment is in the form of the native cryptocurrency of that blockchain. The amount is a predetermined reward per block, but often that is supplemented with the fees that are paid for the transactions that block contains. For Bitcoin the current block rewards are cut in half every four years. This is called the ‘halvening’.

Other Important Terms

Double Spending

With digital currency, there is a risk that the holder could make a copy of the digital token and send it to a merchant or another party while retaining the original.

Altcoin

An altcoin is any cryptocurrency or token created after the Bitcoin was developed.

Anti-Money Laundering

AML is the abbreviation for ‘anti-money laundering’. AML stands for policy and legislation on money laundering. This prevents illegally acquired funds from being converted into a legal variant. Within the crypto world, it is no longer unusual for AML techniques to be used by exchanges and wallets. This term is often used as AML/KYC, where KYC stands for ‘Know your customer’.

Cold Storage

Cold storage refers to storing cryptocurrency on a place where the private key cannot be accessed via the internet. This can be done on a hardware wallet, paper wallet or software wallet in an offline environment.

Block explorer

A block explorer is an online service to track blockchain transactions. It usually is a website where you can see all the new blocks that are being created. You can also search for transactions and wallet addresses. The best-known block explorers are blockchain.info for Bitcoin and etherscan.io for Ethereum.

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