The downward spiral of FTX and its former CEO, the 'King of Crypto', has attracted massive media attention and thrust conversations about cryptocurrency back into the spotlight.
But for many, the language of crypto – bitcoin, blockchain, crypto exchange – still remains cryptic.
Worry not.
If you're hearing these words for the first time or are simply in need of a refresher, here are a few key terms and what they mean…
Bitcoin is a type of digital currency (cryptocurrency). Similar to traditional currencies, like the dollar, pound or euro, there are many types of digital currencies. Other popular ones include Ethereum and Dogecoin. Unlike traditional currencies, though, Bitcoin is not backed or controlled by centralised financial institutions. Instead, it is decentralised. This makes it popular for people who think decentralisation can bring financial freedom, but it also makes it extremely volatile – rising and falling in value at the whim of Bitcoin buyers and sellers.
Blockchain is the technology underpinning all cryptocurrencies, and many other products like NFTs (Non Fungible Tokens). All of the buying, selling and trading of cryptocurrencies is recorded onto this virtual spreadsheet, which is arranged in blocks linked together in a giant chain. Every cryptocurrency transaction is individually recorded onto the blockchain by a huge network of volunteers verifying its authenticity by using computer programmes. Since the blockchain is decentralised, it's not stored on one machine or network or owned by one company. The information is accessible to everyone.
This video can not be played
Are crypto-currencies the future of money?
Cryptocurrency is the term used for digital currencies like Bitcoin that exist on the blockchain.
A crypto exchange is the digital platform where investors can buy, sell and trade cryptocurrencies. Similar to traditional investing, a crypto exchange acts as a brokerage where people can transfer traditional money, like pounds or dollars, from their banks into cryptocurrencies like Bitcoin or Ethereum. Most transactions are accompanied by fees.
A crypto wallet is a place where investors hold their cryptocurrency. It stores the virtual assets much like a traditional wallet holds cash. There are two types, a hot wallet and a cold wallet. Hot wallets are connected to the internet, and thus more accessible for quick transfers and easy access. Cold wallets are physical devices like specially designed USBs that store crypto offline typically for safer and longer term storage.
What is Bitcoin? Video, 00:01:32
A million owed money by failed crypto exchange
The fall of ‘King of Crypto’ Sam Bankman-Fried
Ukraine's second city without power after strikes
Twitter condemned by UN and EU over reporters’ ban
Peru ministers quit as toll mounts from protests
'My online cocaine delivery arrives in 19 minutes' Video
How the US-China chip war is playing out
The rape victim’s mum fighting for India’s daughters
Weekly quiz: Who is the world's new richest man?
Puppies, pageants and paddles – stunning shots from across Africa
After the FTX chaos, is crypto down and out?
US courts Africa as rivals make advances
Can nostalgia revive a dead discount store?
Skilled tech workers snapped up despite downturn
The dark side of a children's classic
Asia's most beautiful train route?
The diseases soaring post-lockdown
© 2022 BBC. The BBC is not responsible for the content of external sites. Read about our approach to external linking.


Write A Comment