The words behind the world of digital assets, explained without the jargon.
Bitcoin is the world’s first and most well-known cryptocurrency. Launched in 2009, it was designed as a digital form of money that operates without banks or central authorities. Bitcoin runs on blockchain technology, allowing peer-to-peer transactions that are transparent and secure via a public transaction record. It can be seen as an alternative to traditional currency.
Ethereum is a blockchain platform that goes beyond simple payments. While it has its own cryptocurrency (ether), Ethereum is best known for enabling applications such as decentralised finance (DeFi), NFTs and smart contracts. Think of Ethereum as a programmable blockchain rather than just digital money.
A meme coin is a cryptocurrency inspired by internet culture, trends or jokes. While some gain popularity through online communities, they are often highly volatile and speculative. It’s important to approach them with caution and understand the risks involved. They function more like collectibles, rather than traditional currency.
An NFT is a unique digital asset stored on a blockchain. Unlike cryptocurrencies, NFTs aren’t interchangeable, as each one is distinct. NFTs are commonly used to represent ownership of digital art, music, collectables or in-game items. Emerging real world use cases include ticketing, where NFTs can help prevent duplication and fraud
Fiat currency refers to traditional government-issued money, such as Australian dollars, US dollars or euros. Unlike cryptocurrencies, fiat money is regulated by central banks and governments and is not backed by a physical commodity like gold.
Cold storage is a way of storing cryptocurrency offline, away from the internet. This is considered one of the safest ways to protect digital assets from hacking or cyber threats, as private keys are kept disconnected from online systems.
Crypto mining is the process of validating transactions on a blockchain network by solving complex mathematical problems. Miners are rewarded with new cryptocurrency for helping secure and maintain the network. Bitcoin is the most well-known example of a mined cryptocurrency.
Staking involves locking up cryptocurrency to help support a blockchain network’s operations. In return, participants can earn rewards, similar to earning interest. Staking is commonly associated with blockchains that use a proof-of-stake networks like Ethereum.
A stablecoin is a type of cryptocurrency designed to maintain a consistent value by being linked to an underlying asset, such as fiat currency. For example, some stablecoins are pegged to the Australian dollar, helping reduce the price volatility commonly seen in crypto markets. It can also help speed up payments, particularly cross-border payments as there is no intermediary.
A smart contract is a self-executing digital agreement stored on a blockchain. Once preset conditions are met, the contract automatically carries out its terms. Smart contracts reduce the need for intermediaries and underpin many crypto applications, including DeFi and NFTs. Real world use cases can include automated payments, or for fractional ownership of assets such as property.