Crypto from A to Z

A unique identifier that assigns cryptocurrencies on the Blockchain. Essential for transactions and Mining rewards without revealing the identity of the Wallet owner. The IBAN equivalent for cryptocurrencies.

Free distribution of Tokens, often used as a marketing strategy.

Mathematical instructions that define Mining processes such as Proof-of-Work and Proof-of-Stake.

The highest price a cryptocurrency has ever reached, often an indicator of Mining interest.

The term comes from "alternative coins" and describes any cryptocurrency other than Bitcoin.

Highly specialized hardware developed specifically for Mining, optimized for algorithms such as SHA-256 (Bitcoin), SCRYPT (Litecoin and Dogecoin), or KHEAVYHASH (Kaspa).

The first and most well-known cryptocurrency, which popularized Proof-of-Work mining. Bitcoin is a digital, decentralized, self-regulating currency and store of value, whose rules are secured by a computer network, the Blockchain.

The process of validating new transactions and adding them to the blockchain. Miners provide computing power and receive block rewards in return.

A data unit within the Blockchain in which confirmed transactions and technical metadata are compiled. Blocks are chronologically linked together and collectively form the Blockchain.

The reward for successfully Mining a new Block. It consists of newly issued Bitcoins not yet in circulation and the Transaction-Fees.

A decentralized, digital ledger in which transactions are stored in chronologically linked Blocks and jointly verified by many independent computers. Through cryptographic security and Consensus-Mechanisms, it is transparent, tamper-proof, and functional without a central controlling authority.

While cryptocurrencies were once traded exclusively peer-to-peer, there are now two common access methods: Exchanges and Brokers. A broker acts as an intermediary through whom cryptocurrencies are bought or sold, handling the transaction and holding the coins until resale.

Refers to the number of coins of a cryptocurrency currently in circulation and is an important factor for valuation and Mining economics. It indicates how many units are actually available and can be traded on the market.

The renting of Mining capacity from third-party providers without owning hardware.

An offline storage solution for cryptocurrencies, protecting Mining earnings from cyberattacks. Typical forms include hardware wallets or paper wallets.

Occurs as soon as a transaction is included in a Block. Every subsequent Block added to the Blockchain counts as an additional confirmation and increases the security of the transaction. For Bitcoin, six confirmations are generally considered sufficiently secure.

Derived from the concept of "consensus," it describes the mechanism by which all computers in the network agree on the same valid state of the Blockchain. It ensures that transactions are confirmed uniformly and remain verifiable without a central authority.

A cryptographic hash function converts input data into a unique, irreversible Hash value of fixed length, and is a core foundation of Blockchain and Mining. It enables the verification of data without revealing its content, since identical inputs always produce the same Hash.

Describes the level of difficulty with which a new Block can be mined, and automatically adjusts to the total network Hashrate. The more computers participate in Mining, the higher the difficulty rises and the greater the competition. This dynamically regulates the computing power provided to the Blockchain in response to economic and technical conditions.

Describes the property of digital assets being provably limited and not arbitrarily reproducible. With Bitcoin, a digital system was created for the first time in which a fixed maximum supply exists, thereby generating true scarcity.

A decentralized register in which identical data is stored across many computers in the network. New entries are only accepted when the majority of participants agree on their validity (Consensus). This technology existed before the Blockchain but was further developed and popularized through it.

A cryptocurrency that originally emerged as a Memecoin and has grown into one of the most well-known projects in the industry. Through faster transactions and a moderate, code-defined inflation rate, Dogecoin complements Bitcoin by ensuring lost coins do not permanently lead to artificial scarcity.

Refers to the attempt to spend the same digital unit more than once, which is a fundamental problem in purely digital systems. Through Blockchain technology and Mining, every transaction is uniquely verified and permanently stored, technically preventing double spending.

A very small transaction whose value barely exceeds the associated Transaction-Fees. Such transactions can unnecessarily burden the network and are sometimes misused for analysis or tracking of Wallets.

A formalized proposal for the further development of the Ethereum protocol, describing technical changes or new standards. These proposals are reviewed by the developer community and either implemented or rejected through an open decision-making process.

Describes the ratio between computing power and power consumption of a Mining device, and is crucial for profitability. The more efficiently a miner operates, the lower the ongoing costs and the longer its economically viable lifespan.

A Pool-Mining payout method in which miners receive their earnings not immediately, but depending on the Blocks actually found. Miners who have the largest outstanding balance of unpaid shares are given priority in payouts.

A decentralized Blockchain platform that enables not only cryptocurrencies but also Smart-Contracts and decentralized applications. It forms the technical foundation for numerous DeFi projects, NFTs, and Tokens, and has used the Proof-of-Stake consensus mechanism since 2022.

A trading platform for cryptocurrencies where buyers and sellers trade directly with each other. Unlike a Broker, the coins are not held by the operator, the exchange merely provides the infrastructure, enabling transparent, market-price-driven trading.

Describes a market-based system in which Transaction-Fees regulate themselves through supply and demand. Higher fees generally result in faster transaction processing, while lower fees suffice during periods of low network activity.

State-issued means of payment such as the Euro or US Dollar, whose value is not backed by a physical commodity like gold. Their value is based on government recognition and trust, whereas Bitcoin uses a technically limited money supply to create Digital-Scarcity.

A fork occurs when the rules of a Blockchain change and the network splits into two versions as a result. Well-known examples are Ethereum / Ethereum Classic following community disagreements, or Bitcoin / Bitcoin Cash, which arose from differing views on scaling.

A Pool-Mining payout method in which miners receive a fixed share per submitted unit of computing power. Additionally, Transaction-Fees are paid out regardless of whether the pool has actually found a Block.

Also known as "Fear of Dump," refers to the deliberate or unplanned spread of fear, uncertainty, and doubt that creates negative market sentiment. This sentiment can lead to sharp price declines and indirectly affects Mining profitability and network participation.

A computer in the network that stores a complete copy of the Blockchain and independently verifies new transactions. It ensures that the network remains independent, secure, and functional without central control.

Fees charged on Ethereum for transactions or Smart-Contracts.

The maximum amount of Gas that can be spent on a transaction.

The first Block of a Blockchain, from which all subsequent Blocks originate. It marks the technical and historical starting point of the entire network.

Grants its holder voting rights within a Blockchain project. This allows decisions such as protocol changes, fee structures, or the use of community funds to be determined in a decentralized manner.

Refers to the mining of cryptocurrencies using graphics cards, which was the standard in the early days of many blockchains. Today, many networks rely on ASIC mining (e.g. Bitcoin) or have switched to Proof-of-Stake (e.g. Ethereum).

Bitcoin is capped at a maximum of 21 million coins to prevent unlimited money creation as seen with traditional Fiat-Currencies. New Bitcoins are paid out as Block-Rewards to miners, with this reward halving approximately every four years. In the long term, miners will therefore be compensated primarily through Transaction-Fees rather than newly created coins.

A permanent change to the Blockchain protocol that causes a split in the Blockchain. Examples include Bitcoin Cash and Ethereum Classic.

A unique string of characters generated from data such as transactions through a Cryptographic-Hash-Function. It enables data to be securely verified without revealing its content, as even the smallest change to the original input results in a completely different hash.

Describes how many Hashes a Mining device can calculate per second, i.e. its computing power. The higher the hashrate, the greater the share of the Mining process and thus the probability of finding a Block and receiving the Block-Reward.

Refers to the strategy of holding cryptocurrencies long-term, regardless of short-term Volatility. The term originated from a typo in an early Bitcointalk forum post ("I am holding") and later became a fixed expression in the crypto community.

Housing and operating mining hardware in a professional data center, including power supply, cooling, monitoring and maintenance.

An internet-connected Wallet that provides quick and easy access to cryptocurrencies, for example through Exchanges or web wallets. The permanent internet connection makes it convenient but also more vulnerable to security risks.

A method for financing a Blockchain project in which Tokens are sold to early investors. The tokens are usually issued before the official launch and are intended to be used or traded within the project at a later stage.

A measure for assessing the Energy-Efficiency of Mining hardware based on its power consumption relative to computing output.

Professional Mining operations run by large organizations.

Describes the ability of different Blockchains or systems to communicate with each other and exchange data or value. It enables cross-chain transactions and improves collaboration between different networks.

Mining of cryptocurrencies directly in a web browser using JavaScript code. This method is very inefficient, consumes users' resources, and was frequently used without consent in the past, which is why it is rarely used today.

Groups of miners who pool their computing power to increase the chance of finding a Block. Since solo mining is rarely viable today, pools distribute earnings according to defined payout methods such as PPS, PPS+, FPPS, PPLNS, PROP, SMPPS, and ESMPPS. The most commonly used models are PPS and PPS+, as they enable particularly predictable income.

A metric for measuring the Energy-Efficiency of Mining hardware. It indicates how much energy is required to produce a given amount of computing power, with Watt per Terahash (W/TH) now commonly used as a comparable unit (scaled to a larger unit of computation).

The use of Blockchain technology in legal contexts, e.g. for preserving evidence.

A strategy in which Mining hardware is only operated when it is short-term profitable. Factors such as electricity costs, Difficulty, and market price are considered to avoid losses during unprofitable periods.

A Proof-of-Work cryptocurrency based on the GHOSTDAG protocol that enables a very high block frequency. Unlike Bitcoin, multiple Blocks are processed in parallel, allowing for faster transactions and more efficient use of computing power.

A Hash algorithm used in newer Blockchain networks such as Ethereum.

A Mining method in which storage space rather than computing power is used as the decisive factor. It is primarily used in Proof-of-Capacity systems, such as Chia, and reduces the conventional energy consumption of Mining hardware.

Consists of a public key and a Private-Key that together enable access to cryptocurrencies. The public key is used to receive coins, while the private key proves ownership and authorizes transactions.

A Proof-of-Work Algorithm primarily used by the cryptocurrency Kaspa.

An identity verification procedure in which users must verify their personal data, for example through an ID or proof of address. It is primarily used by Exchanges, Brokers, and Mining-Pools to prevent money laundering and fraud.

The base layer of a Blockchain that directly processes all transactions and Smart-Contracts. Extensions such as the Lightning-Network can be built on top of it.

A digital transaction record that serves as the foundation for Blockchain networks.

The Lightning Network is a Layer 2 protocol for Bitcoin that enables fast and low-cost transactions. Payments are first processed off-chain in payment channels between two parties, with only the final result later recorded on the Blockchain (Layer 1).

A SCRYPT-based cryptocurrency that enables faster transaction times and more efficient Mining. Officially the second cryptocurrency ever released.

The total value of a cryptocurrency, a key factor in determining Mining profitability.

An Algorithm that requires large amounts of memory to perform calculations. This makes it harder to develop specialized ASIC hardware, aiming to keep Mining more accessible to GPUs and standard computers.

A data structure that condenses many transactions into a single Hash summary. This allows transactions to be verified quickly and efficiently without having to search through all the data in a Block.

Describes the process by which computing power is provided to secure and process transactions on the Blockchain. As a reward for this work, miners receive newly generated coins and Transaction-Fees.

A community of miners who pool their computing power to increase the probability of successfully mining a Block. A found Block is then distributed proportionally among pool participants based on their contributed computing power.

The process of creating new coins or Tokens, primarily in Proof-of-Stake networks and for NFTs.

Environmentally friendly Mining methods with minimal CO₂ output.

The delay in communication between Nodes, which can affect the efficiency of Mining.

A unique digital Token on a Blockchain that makes the ownership and origin of a digital object verifiably traceable. NFTs are frequently used for digital art, collectibles, or in-game assets, enabling virtual goods to be unambiguously assigned to an owner.

A computer in the Blockchain network that verifies transactions and stores a copy of the Blockchain. Through many independent nodes, the network remains decentralized, verifiable, and resilient against failures or manipulation.

The term nonce stands for "Number Used Once" and refers to a number that is used only once. In Mining, miners continuously change this number in order to generate a valid Hash. The miner who first finds a matching Hash is allowed to create the Block and receives the Block-Reward.

This well-known saying means that cryptocurrencies only truly belong to their owner if the Private-Keys of the Wallet are controlled personally. It serves as a reminder not to store coins permanently on Exchanges, Pools, or other platforms, as those providers hold control over the keys.

Processes or data handled outside the Blockchain that can still interact with it to increase efficiency.

A transaction that, unlike an Off-Chain transaction, actually takes place on the Blockchain.

Public Mining pools that any miner can join to collaboratively mine Blocks and share rewards.

Algorithms used in Mining software to maximize hardware efficiency and minimize energy consumption.

A system that feeds external data into a Blockchain and is frequently used in Smart-Contracts to enable automated decision-making.

A component of a Blockchain transaction that defines under what conditions coins may be spent. It functions like a small piece of code or "contract" on the Blockchain that determines who can spend the coins at a later time.

A Blockchain in which anyone can participate without restrictions and validate transactions.

Fees charged by Mining-Pools for participation, which can affect miners' profitability.

As a Miner, many join a Mining-Pool to generate regular and predictable income, since in solo mining only the finder of a Block receives the Block-Reward. Common pool payout methods are: PPS, PPS+, FPPS, PPLNS, PROP, SMPPS, and ESMPPS.

With PPLNS, miners only receive a payout when the Pool finds a Block. The reward is distributed based on the most recently submitted shares of computing power.

A Pool payout method in which miners receive a fixed amount for each submitted share of computing power. The payout occurs regardless of whether the Pool actually finds a Block.

A secret key that enables access to cryptocurrencies and is essential for the security of Mining rewards.

A Consensus-Mechanism in which validators deposit their cryptocurrencies as a stake to confirm transactions and add new Blocks to the Blockchain. Validators are selected based on their deposited capital, securing the network without significant energy expenditure.

A Consensus-Mechanism in which miners use computing power to confirm transactions and add new Blocks to the Blockchain. The miner who solves the task first is allowed to create the Block and receives the Block-Reward.

With PROP, the earnings from a found Block are distributed proportionally among all miners based on their contributed computing power. A so-called round begins with the search for a Block and ends as soon as one is found.

A new form of computer that works with qubits instead of classical bits and can therefore perform certain calculations significantly faster. In cryptography, it is debated that highly powerful quantum computers could in the future attack some current encryption methods, which is why the potential impact on Blockchain systems and Proof-of-Work is being researched.

Systems in Mining-Pools that prioritize and optimize transactions to maximize rewards. The amount of a Transaction-Fee can be set individually, the higher the fee, the higher the priority in the queue.

A Mining method that optimizes the calculation of Hashes to improve the performance of older hardware.

A Consensus-Mechanism used in private Blockchains to validate transactions more quickly and efficiently.

A concept in which miners validate a fixed quota of transactions per Block.

The use of renewable energy sources such as solar or hydropower to reduce the environmental impact of Mining.

An attack in which an adversary attempts to reorder Blocks in the Blockchain in order to reverse transactions.

The top-level Hash in a Merkle-Tree that represents all underlying transactions and is used for Block validation.

A Hash algorithm used in the Mining of cryptocurrencies such as Litecoin and Dogecoin.

A cryptographic Hash algorithm that converts data into a unique string of fixed length. It forms the foundation of Proof-of-Work mining for Bitcoin, as miners find a valid Block by repeatedly calculating SHA-256 Hashes.

A self-executing piece of code on the Blockchain that automatically carries out actions once predefined conditions are met. Smart contracts form the foundation for many applications on Ethereum, such as decentralized exchanges, DeFi protocols, and NFTs, and are considered a key building block of Web3.

A Pool payout method in which miners are paid regularly, but only from the earnings actually generated by the Pool. The pool pays out the maximum possible amount without going into deficit, meaning payouts may be delayed if prior claims exceeded income.

A backward-compatible protocol change that allows old Nodes to continue interacting with the updated Blockchain.

A process in which cryptocurrencies are deposited as a stake to validate transactions and earn rewards. As a staker, you provide capital as collateral and thereby contribute to the functioning of a Proof-of-Stake network.

The control of operating temperatures of Mining hardware to ensure optimal performance.

A time marker indicating when a Block was created. It is an important component of Block validation.

Cryptocurrencies that have been "destroyed" by sending them to an inaccessible Address in order to reduce the Circulating-Supply.

Refers to the process by which real-world assets are converted into digital Tokens on a Blockchain. This allows values such as real estate, art, or commodities to be divided into tradeable shares and transferred digitally.

The fee that miners receive for validating and adding transactions to a Block.

A transaction that has not yet been included in a Block. This can depend on the self-selected Transaction-Fee, if it is too low compared to others, it will be deprioritized and not processed immediately.

A list of trusted #Nodes used in some Blockchain networks such as Ripple.

The amount of cryptocurrency remaining after a transaction, used for the validation of Blocks.

Refers to the period during which Mining hardware operates without interruption, providing computing power. It describes how reliably and consistently a Mining system functions over a given period of time.

A digital Token that grants access to specific functions, services, or products within a Blockchain project. It frequently serves as a usage or access right within an ecosystem and can also be issued as a reward for network activity.

A participant in Proof-of-Stake systems who validates transactions and creates Blocks. Also known as a Staker.

The time required to verify a transaction and add it to the Blockchain.

A software environment that executes Smart-Contracts, such as the Ethereum Virtual Machine (EVM).

The price fluctuation of a cryptocurrency, which can affect the profitability of Mining.

A digital or physical tool used to manage cryptocurrencies and interact with the Blockchain. It stores the Private-Keys that enable access to coins and are required for sending or receiving transactions.

Refers to a potential evolution of the internet in which digital services operate in a decentralized manner on Blockchain technology, with greater control by users rather than centralized platforms. The foundations for this are Smart-Contracts and networks such as Ethereum, which enable digital ownership and decentralized applications.

Refers to a market participant with very large holdings of cryptocurrencies. Through large purchases or sales, whales can have a noticeable impact on price movements and Volatility.

The distribution of computational tasks within a Mining-Pool to maximize efficiency.

A Mining algorithm that combines eleven different Hash functions in sequence to enhance network security. It is used by Dash and some smaller Altcoins, among others.

A specialized Blockchain protocol for fast transactions that does not use conventional Mining.

A measure of the annual return on Mining or Staking investments.

A DeFi strategy in which cryptocurrencies are provided to protocols in order to earn interest or rewards. This is done, for example, through Liquidity-Mining, lending, or Staking, where capital is used to provide liquidity within the network.

Strategies for maximizing returns from Mining and Staking through the selection of the most efficient networks and hardware.

A cryptographic method for proving the validity of data without revealing it. Relevant to Blockchain security.