What is the first thing that made you learn more about cryptocurrency? Is it Bitcoin or Blockchain or any other cryptocurrency? For your information, if we want to discuss or understand any basic cryptocurrency terminology, you should be aware of which one has happened first.

Its Bitcoin first, when Satoshi Nakamoto created bitcoin in 2009, there are no terms like blockchain or cryptocurrency. Bitcoin is referred to as digital cash and he explained blockchain as simply a chain of blocks, I mean to say that, there is no word called Blockchain as such.

Now we are clear here, we can move on to the most frequently used cryptocurrency terms that you may come across while you wander in this space.

basic cryptocurrency terms explained

Cryptocurrency Terminology for Beginners


Bitcoin was created as a digital cash system by Satoshi Nakamoto in 2009. Cash is a medium of exchange. Bitcoin is meant to be digital cash used on the internet without any trusted third party, like a bank or some authority to issue it, like a government. Anyone in the world with an active internet connection can use bitcoin. Bitcoin has no boundaries, it can be sent anywhere around the world in minutes.

Read more about Bitcoin here.


Nodes are the computers that are connected to the cryptocurrency blockchain network. Anyone can become a Node. Nodes that are connected to Bitcoin blockchain are called Miners. Nodes verify the transactions and add new blocks to the blockchain.

Bitcoin Mining

Bitcoin Mining is the process of creating new bitcoins. Read more about Bitcoin Mining here.


Blockchain is basically a chain of blocks. Each block contains some data. Blockchain is a decentralized network where nodes(computers connected to the blockchain) update and verify the data in the blockchain.

Blockchain is immutable which means once some data is fed into a block in the blockchain, we cannot change or manipulate it forever. Anyone in the world can access the data on the blockchain. Every cryptocurrency runs on a blockchain. Read more about blockchain here.


The word 'Crypto' means secret. A cryptocurrency is a secret currency. How exactly is it a secret? We said blockchain is transparent and anyone can access the data. But now we say cryptocurrency is a secret currency. So what exactly is secret? Your identity while using a cryptocurrency is secret.

There are more than 6000 cryptocurrencies. Every cryptocurrency has it's own ecosystem and utility. Not every cryptocurrency is Bitcoin.


ICO means Initial Coin Offering. It is a type of funding for new cryptocurrency projects. Projects raise money by selling new tokens to the public. Good projects generate great returns for ICO investors.


An airdrop is a free distribution of cryptocurrency tokens. Tokens are generally airdropped to the cryptocurrency community or the early adopters and also to promote the project.

Smart Contract

A smart contract is an agreement between two or more people in the form of a computer code. Smart contracts are automatically executed once the conditions of the agreement are met. Smart contracts are used in hundreds of applications like supply chain, copyright protection, elections etc.


Ethereum is the second-largest cryptocurrency network. We can build decentralized applications and run them on the Ethereum network. The currency used on the Ethereum network is called Ether(ETH).

ERC-20 Tokens

The cryptocurrencies that are built on Ethereum are called ERC-20 tokens. ERC means Ethereum Request for Comment. ERC-20 tokens are stored in Ethereum wallets and they require Ether(ETH) to transfer them.

Cryptocurrency Wallet

A cryptocurrency wallet is a software to store cryptocurrencies. It can be a mobile app, PC app or a chrome extension. Each wallet contains your wallet address also known as a public address, which you can share with others to receive cryptocurrencies.

Click here to create a simple cryptocurrency wallet.


Cryptocurrencies other than Bitcoin are called Alternate coins or in short Altcoins.

Stable Coin

The cryptocurrencies that have fixed value are known as Stable coins. Stable coins are generally backed by an underlying asset like the US Dollar. Examples of stable coins are Tether(USDT), DAI etc.

Privacy Coin

Privacy coins allow users to gain complete anonymity while using them. Privacy coins are generally used on the Dark web. Data on privacy coins blockchain is completely hidden.


Testnet is a blockchain network that is used to test new cryptocurrency projects. After a successful testnet, mainnet will be launched. Testnet coins cannot be used on Mainnet and also vice-versa. It is like a mirror network where original coins are not used.


Mainnet is simply the main network. When a cryptocurrency is completely developed and deployed, it will be taken as the mainnet is released. Original cryptocurrency is used on Mainnet. Mainnet is an indicator of an active project. News of Mainnet is bullish for the price.


When a blockchain splits into two branches, it is called Forking. The new branch is called the Fork of the original cryptocurrency. When a software change is required, a fork is made. The original chain continues to exist.

Coin Burn

Coin burn is a process of permanently removing coins from circulation. When coins are burned, the total supply decreases. Coins are burned to increase scarcity or decrease inflation.

Market Capitalization

Market capitalization is the product of the circulation supply of the cryptocurrency to the price of the cryptocurrency.

Fully Diluted Valuation

Fully Diluted Valuation is the product of the total supply of the cryptocurrency to the price of the cryptocurrency.

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