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Cloud mining vocabulary

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    A

    • ALGORITHM – Set of mathematical instructions, which are coded by a computer software and used by it, in order to produce the wanted outcome.
    • ALTCOIN – A term used to address alternative crypto coins including all cryptocurrencies but Bitcoin.
    • APPLICATION – A computer program created to fulfill a specific purpose.
    • ASIC – the Application-Specific Integrated Circuit is a mining hardware specially created to mine Bitcoin. ASIC devices can be used to mine other crypto coins as well.

    B

    • BLOCKCHAIN – An online register created of constantly growing number of data sets (blocks). They are allied with one another in every cryptographic process.
    • BLOCK – the blockchain consists of blocks. Each one carries database with all transactions made till the moment they fill up the block. They are everlasting records, which can be viewed at any time.
    • BLOCK REWARD – A way of encouraging the miner who successfully verify a block. The verification of blockchain transactions creates new coins, where a portion of that amount is collected by the miner as a reward.

    C

    • COMPATIBLE WALLET – A cryptocurrency wallet that supports a particular coin.
    • COMPUTATIONAL/COMPUTING POWER – How fast a machine can do an operation.
    • CONFIGURATION – The setup of a system or the arrangement of its elements. It can involve hardware, software or a combination of them.
    • CONSENSUS METHOD – The method with which general agreement is achieved between the elements of the blockchain.
    • CONFIRMATION – every data movement in a blockchain network has to be approved and authorized. This is done according to the consensus protocol, which can be Proof of Work, Proof of Stake or another consensus.
    • CPU – Central Processing Unit or simply said a processor. It does most of the processing inside a computer.
    • CRYPTO – Short for cryptocurrency.
    • CRYPTO COIN – A digital currency unit.
    • CRYPTOCURRENCY – A cryptocurrency is basically a network which enables all computers in it to perform transactions between each other. For that they don’t require a central authority.
    • CRYPTOGRAPHY – A method of securely send and receive data in a certain form. This way only the other side of the transaction can manage it. This is actually the process of encrypting and then decrypting information.

    D

    • DECENTRALIZATION – Data is not stored on one centralized server, but across its network. Such platforms do not require information to pass through a single point, but from one to another, known as peer-to-peer.
    • DESKTOP WALLET – a software installed on the hardware of your computer, from where you reach and manage your coins.
    • DOUBLE SPENDING – A potential flaw in a digital process, where the same amount of cryptocurrency can be spent more than once.

    E

    • EXCHANGE – A platform where you can exchange all kinds of cryptocurrencies for each other or fiat money.

    F

    • FIAT CURRENCY – A national currency, such as USD and EUR.
    • FORK – the split of a blockchain resulting in two blockchain versions running simultaneously is called a fork. A fork can be either soft or hard.
    • FPGA – Field-programmable gate array – special computer, which can be modified to mine different algorithms.
    • FULL NODE – A computer that keeps the entire blockchain’s history, and thus supporting the network by proving the accuracy of the transactions.

    G

    • GB – Gigabyte or a unit of information. It is equal to 1 thousand million bytes.
    • GPU – Graphics processing unit or a video card. It can mine more than one coin.

    H

    • HARD FORK – a fork that changes the status of previously confirmed transactions as invalid to valid, and the other way around. In order the hard fork to work, all nodes must agree on it and upgrade their protocol to the latest one.
    • HARDWARE WALLET – External hard disk that is used to store user’s private keys.
    • HASH – Mathematical function used to unify information.
    • HASH RATE – The calculating power of a device measured in hashes per second. Each hash rate is a created block that is tested against the network.
    • HOSTNAME – a label under which each device connected to a computer network is recognized when participating in any form of electronic communication.

    I

    • ICO – Initial coin offering or raising funds for starting a project (creating a new coin).
    • IP ADDRESS – The Internet Protocol address assigned as a label to every device in a computer network.
    • IP REPORTER – A program, helping you see the IP address of your computer.

    K

    • KW/H – The amount of electricity used for an hour (kilowatt per hour).

    L

    • LATENCY – The internet data delay which you experience if you are far away from the server. Usually measured in ping.
    • LIGHT NODE – a node, also known as a thin client, that doesn’t store the entire blockchain. These nodes store only the block headers, therefore, they can’t check transactions on their own and must trust the full node for that.

    M

    • MARKET CAPITALIZATION – an indicator showing the relative size of a cryptocurrency. It is calculated by the following formula: Market Cap = Price X Circulating Supply
    • MINEABLE COIN – The coins acquired from the process of mining. These types of coins are those that are given as a reward to the miner who manages to find a solution to a complex algorithm that validates a transaction and add a new block to the blockchain.
    • MINER – could refer either to the hardware or the person dealing with crypto mining.
    • MINING – The process of verifying cryptocurrency transactions which are then added to the blockchain ledger.
    • MINING ALGORITHM – The cryptocurrency algorithm used to mine a particular coin. Some popular mining algorithms are SHA-256, Ethash, Scrypt, Cryptonight and X11
    • MINING CALCULATOR – A tool helping you to estimate your potential profit from cryptomining.
    • MINING DIFFICULTY – The complexity of a task, which the miners have to solve for a certain period of time in order to create a block.
    • MINING HARDWARE – The device used to mine coins. It could be CPU, GPU, ASICs or FPGA.
    • MINING POOL – A group of miners who have combined their computing power to increase their chances of mining a block. The reward is split proportionally between the participants in the mining pool depending on the amount of power they contributed.
    • MINING RIG – A set of mining hardware device that is created to mine with high power and efficiency.
    • MINING SOFTWARE – a software application that manages the mining hardware’ work. It also displays statistics such as the speed of your miner, hashrate, fan speed and the temperature.
    • MOBILE WALLET – a software application installed on you mobile device, from which you can access your cryptocurrenicies.

    N

    • NETWORK DIFFICULTY – How many machines are working in one network – the more the machines, the higher the difficulty of finding new blocks.
    • NODE – a computer connected to a blockchain network.

    O

    • OFFICIAL WALLET – The wallet offered by the developers of the coin.

    P

    • P2P NETWORK – Peer-to-peer network where two or more computers are connected and share information. This is done with no separate server PC.
    • PAPER WALLET – A piece of paper, on which you write down or print the public and private keys for accessing your cryptocurrency savings.
    • PCIE – Personal Component Interconnect Express or PCI is a type of connection for devices. It is an expansion slot, that connects the video cards with the motherboard. It allows high frequency connection between the hardware parts.
    • PING – shows how fast you get a response after sending out a request via your internet connection.
    • PROOF OF WORK (PoW) – A concept allowing people to verify transactions according to the computing power they put into solving algorithmic problem – adding a new block to the Blockchain.
    • PUBLIC KEY – a personal address that allows you to send and receive cryptocurrencies.
    • PRIVATE KEY – A code, which is kind of a certificate of ownership. This key enables you to access coins and tokens send to you on the Blockchain.
    • PREMINT COIN – The coins released in circulation as a funding campaign.
    • PUBLIC LEDGER – a record of every transaction ever made in the blockchain. It can’t be changed; only new information is added.

    R

    • RETURN OF INVESTMENT (ROI) – ROI is an indicator showing the ratio of profit or loss on initial investment in percentage.

    S

    • SMART CONTRACT – A contract written in computer code, set up to execute and carry itself out automatically under specified conditions. When it is on the blockchain, both sides can check it before agreeing to it. Such contracts cannot be tampered with or changed. No need both sides to trust each other or involve third parties.
    • SOFT FORK – A change to the existing blockchain protocol where previously valid transactions are made invalid. A soft fork is backward-compatible because the old nodes will recognize the new blocks as valid. For a soft fork to work, most of the miners powering the network will have to upgrade to the new protocol.
    • SOLO MINING – the process of mining on your own without sharing computing power with other miners (being in a mining pool).

    T

    • TRANSACTION – When cryptocurrency moved from one entity to another on a blockchain network.
    • TRANSACTION FEE – An amount paid to the miners for successfully projecting a transaction on the blockchain. It varies depending on the difficulty and overall network capabilities at that moment. If an exchange is involved it could also take some of the overall transaction fee.

    U

    • UNSPENT TRANSACTION OUTPUT (UTXO) – This refers to the amount of cryptocurrency sent just to an entity and not elsewhere. In that case, they are considered unspent, but stored in the blockchain.

    V

    • VALIDATION – A process which checks the accuracy of the information given from a computer in the network and passes it along to others. This way a transfer of cryptocurrency is enabled from wallet A to wallet B.

    W

    • WALLET – Software program or a piece of hardware holding pairs of codes (public and private keys), which you use to access the blockchain, where your cryptocurrencies are. A cryptocurrency wallet allows you can send/receive crypto coins and monitor their balance.
    • WALLET ADDRESS – Unique identifiers for each specific wallet. They are generated with the help of an algorithm. They are also referred to as hashed public or private key.
    • WEB WALLET – Virtual wallet, operating only online. It is also a hot wallet, because it is always online and more vulnerable to hack attacks. It can be reached through various web browsers like Firefox and Google Chrome. Such wallets are easy and comfortable to access, store your key pairs online and are under the control of third parties.

     

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    Eugen Tanase

    Chief Operating Officer, 1BitUp

    Eugen Tanase is Chief Operating Officer at 1BitUp. Along his long Corporate Management career he gained lots of expertise in Renewable Energy Projects, Transnational Trade of Energy Resources, and many other fields. Starting 2015 he stepped into the study Decentralized Applications and Blockchain along with Bitcoin mainstream. From 2017 he embraced WEB3 and Cloud Mining .

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