Blockchain technology is much more than just Bitcoin. The disruptive technology has the potential to change, generate or even destroy entire markets. But what exactly is behind this technology and what added value does this digital revolution offer to society, the individual industries and of course to you in particular? The simplified answer to this question is: A lot!
Of course, the advantages and benefits of crypto currencies cannot be explained, if you do not know the basic terms. Exactly for this reason we have summarized all important technical terms around the blockchain technology in this Cryptopedia.
If you want to know more about the basic correlations of blockchain technology, you should visit our blog.
As the name already suggests, these are alternative coins. In general, Bitcoin is referred to as the “standard and leading currency”. Altcoins simply describe all coins on the market except Bitcoin. Known representatives are Litecoin (LTC), Ripple (XRP) or Ethereum (ETH).
Basic Attention Token (BAT)
The Bitcoin is the pioneer of cryptocurrencies. In short, Bitcoin is a purely digital and centrally managed currency. As the first cryptocurrency ever, Bitcoin enjoys a special position in the market and not only enjoys broad acceptance, but also an unprecedented increase in value. More information about Bitcoin can be found here.
Bitcoin Cash (BCH)
The crypto currency Bitcoin Cash (abbreviation: BCH) is the result of a hard fork in August 2017.
The size of the transaction blocks was increased from 1 MB to 8 MB in the course of establishing Bitcoin Cash. This has increased the number of transactions that the network can handle. Today BCH is one of the most popular and most traded crypto currencies on the market.
Bitcoin SV (BSV)
Bitcoin SV (Satohi Vision) was developed in November 2018 as a hard fork of Bitcoin Cash (BCH) by Dr. Craig Wright and, according to its name, is intended to reflect the vision of Bitcoin creator Satoshi Nakamoto. In principle, BSV is intended to help restore the characteristics of the original Bitcoin. Bitcoin SV focuses on raising the block size limit from 1 MB to up to 128 MB. This will significantly increase the number of maximum transactions over the block chain network.
Shortly after its launch, Bitcoin SV has already gained a lot of popularity. This was reflected in massive price increases.
Digital currencies, or cryptocurrencies, which work on their own platform or blockchain and can be used independently, are called coins.
Common examples are the Bitcoin, Ether or Litecoin
Ethereum is a platform for distributed applications. At the heart of this blockchain network are the so-called Smart Contracts. These are contracts that are reliably executed for all contracting parties without the need for an intermediary, notary or other controlling institution.
Learn more about Smart Contracts in this blog article.
Bitcoin and Ethereum are often incorrectly compared directly with each other. Ethereum itself is a platform for distributed applications. Ether, on the other hand, serves as a digital means of payment within the platform. Ether is therefore the cryptocurrency of the Ethereum network and is used there for payment.
The means of payment, defined by a government, are called fiat currencies. In principle, this definition applies to all currencies that are not linked to commodities such as gold or silver. Unlike commodity money (= the opposite of fiat money), fiat money has no intrinsic value.
Here you can learn more about this topic.
As the name suggests, Halvings reduces the rewards for mining blocks by half. This means in detail: Miners will receive 50% less coins for transaction verification.
In Bitcoin, halving is always performed after 210,000 blocks have been mined. This happens approximately every four years until the maximum of 21 million Bitcoins has been generated. The last Bitcoin halving was performed in May 2020.
In the course of a hard fork, a change is made to the blockchain which is so far-reaching that the old blocks of the blockchain are no longer compatible with the changed ones. An example is Bitcoin Cash, whose block size has been increased from 1 MB to 8 MB.
A specific block within the blockchain is defined in advance, with which the “hard cut” is to be made. After the hard fork, the old blockchain continues to run unchanged. The changed blocks of the hard fork are ignored by the old network. At the same time, the hard fork creates a new network in which only the new modified blocks are considered.
The old blockchain and the newly created chain share an identical past, but operate independently of each other from the key date.
Litecoin is one of the oldest Altcoins and was introduced by Charlie Lee in 2011. The focus of his work was to improve the everyday suitability of Bitcoin. On the one hand, this was related to the transaction speed, which is much faster with Litecoin than with the model Bitcoin. On the other hand, the costs for transactions were significantly reduced. Litecoin uses its own blockchain, which is based on a less computationally intensive hash algorithm, but at the same time can be considered sufficient from a cryptanalytical point of view to guarantee the integrity of the network.
Mining is one of the essential functions of a blockchain network. In this process, transactions that are carried out within the network are verified by highly specialized computing machines, so-called miners. The miners and their activities thus form the backbone of the blockchain network. The miner owners are rewarded for their work with newly generated coins.
Digital currencies, or cryptocurrencies, which do not use their own platform, but build on an existing blockchain, are called tokens.
Hard forks in particular, such as Bitcoin Cash or Bitcoin SV, are classified as tokens because they are based on existing protocols.