Initial Coin Offering (ICO) – Similar to an initial public offering (IPO) in the stock market, ICOs amount to a crowdfunding equivalent alternative to raising traditional investment capital via venture capital firms, angel investors, traditional investment firms, etc…
Cryptocurrency Exchange – A web platform where you can buy and sell cryptocurrencies in exchange for fiat currency or other cryptocurrencies. Notable exchanges include Coinbase/GDAX, CEX.io, Gemini, and Kraken.
Fiat Currency – Legal tender currency as issued and defined by the government of a state/nation. Examples include the US Dollar, the Pound Sterling, the Euro, and more.
Altcoin – A blanket term for any coin that is not Bitcoin or Ether. These include Ripple, Litecoin, Iota, and many, many more.
Token – The cryptocurrency of projects built on the Ethereum blockchain. Examples include OMG (OmiseGO), GNT (Golem), QSP (Quantstamp).
Pump And Dump – A repetitive cycle of low-value coins being pumped up with cash infusions to increase valuation, then being flipped for return on investment, without any actual value being driven for the coins or the underlying technology.
Market Cap – Not just a cryptocurrency term, but applicable to traditional markets as well. A measure of the total value held by a coin, company stock, etc… Calculated by multiplying the number of available coins/shares by the current value of a single coin/share.
Blockchain – Cryptographically secured distributed ledgers that are the basis for all technology enabled by cryptocurrencies like Ether. A blockchain is a public database of all transactions, coins, technology, etc… Data on the blockchain resides on computers across the entire world rather than on a single server or a set of servers, enabling everyone to see all data publicly, but allowing only owners of a specific data set to make changes/transactions with that data.
Node – A computer on the blockchain, that actively works to maintain the blockchain and validate transactions, new blocks, etc…
Wallet – Can come in software (Parity, MyEtherWallet) or hardware (encrypted drives) formats, a cryptocurrency wallet is a digital place where you store your cryptocurrencies. It’s critical to have high-grade security attached to these wallets to ensure hackers and thieves won’t get access to your coins.
Mining – The process of using the computing power of high-powered “mining rigs” (i.e. powerful computers with heavy CPU and GPU processing power) to execute functions that complete portions of the next available block in the blockchain. The return for using this processing power is a fraction of a cryptocurrency coin.
Gas – The amount of a given cryptocurrency that it takes to make a transaction based on the processing power required to complete it.
Fork – When a cryptocurrency splits into two separate coins as a result of a split in the blockchain. This is typically the result of differing views in the original blockchain system’s governance for the right path forward for the blockchain’s technology.
Proof of Stake – A proposed system that would remove work requirements, and therefore massive amounts of computing power, by allowing individuals to mine or validate a block without having to actually produce a proof of work. This is based on the amount of a given cryptocurrency they have, and the more of the coin they have the more validating power they have in this system.
Proof of Work – The current system by which a block on the chain is validated. “In order for a block to be accepted by network participants, miners must complete a proof of work which covers all of the data in the block.”
Smart Contract – A protocol that enables secure contracts to be signed, verified, and enforced without middlemen (government, corporation, etc…) involved. A great explanation of smart contracts from Blockgeeks follows:”The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account.