The eToro Guide to Cryptocurrencies

Bitcoin (BTC)

Bitcoin (BTC)

Bitcoin remains the big boy of blockchain technology, the undisputed king of cryptocurrencies. It is the forerunner and category-defining originator of all things blockchain – the groundbreaking new way of managing data and payment transfer, from which countless other exciting digital currency initiatives and start-up projects have since been born.

Blockchain essentially enables data to be distributed rather than copied. Bitcoin (BTC) became the first real-life manifestation of the blockchain concept in 2009 when a group of programmers unveiled the open-source software under the name Satoshi Nakamoto. This quickly had the global tech community frothing with excitement. The many potential benefits for the future of digital transfers, particularly regarding payments, was now clear to see.

The very essence of Bitcoin – and indeed blockchain per se – is that transactions take place between users directly, without an intermediary. The transactions are verified by network nodes and recorded in a public ledger, again available for all to see – and this is the ‘blockchain’. Because of this, bitcoin is also referred to as a decentralized digital currency – and is the first of many!

Nobody owns the Bitcoin network much like no one owns the technology behind email or the Internet. Bitcoin transactions are verified by Bitcoin miners. All users need to work to the same software and operational rules, making Bitcoin a true democracy.

Bitcoin is no longer a scientific, technological brainwave. Far from it. Bitcoin has genuine, transferable value. It can be exchanged for other currencies, products and services in legal markets. There are thousands of ATMs across the world. In some places you can use Bitcoin to pay for your groceries and even your university fees.

Bitcoin has also been arguably the investment sensation of the past decade. Available for just a few cents in 2009 it has been trading for thousands of US dollars this year.

There’s no doubt Bitcoin has earned some people a lot of money. It has become the centre of many an online trader’s strategy in recent years. Its volatility as an investment asset and explosive growth as a technical innovation make it incredibly attractive to day-traders.

Ethereum (ETH)

While Bitcoin is still considered the king of cryptocurrencies – for now, at least – Ethereum is arguably the biggest challenger to its throne. Ethereum is the one that many believe has the best chance of matching, and even surpassing, the magical allure of Bitcoin.

Ethereum uses the same innovative blockchain technology as Bitcoin. But unlike Bitcoin, it’s not just about creating a new network for online payments. The potential for Ethereum goes way beyond that. In addition to running its own digital currency – Ether – it also supports ‘smart contracts’, which are basically agreements written in computer code that sit on the platform and execute transactions automatically when certain conditions are met.

This makes Ethereum a very different beast. As some pundits like to describe it, you could say that while Bitcoin is a new, alternative online payment mechanism, Ethereum is laying the foundations for a whole new internet.

Ultimately developers using Ethereum blockchain can create apps and systems in this way that cut out the need for any central intermediary. Imagine, for example, a world where we don’t need the banks to service loans, or estate agents for property, or insurance brokers, or even government departments.

With Ethereum apps, you cannot in theory have one person corrupt, tamper or destroy the data because it effectively exists across multiple places on the network. It can be more secure and there can be zero, or close to zero, downtime.

In its short history, Ethereum has already undergone a major transformation and there are in fact now two strands of Ethereum, known as Ethereum (ETH) and Ethereum Classic (ETC). The original Ethereum platform split into two in June 2016 when a technical loophole was exposed by a hacker. In the ensuing mess there were two trains of thought as to how to best evolve the Ethereum platform. This created the divergence, commonly known as a ‘hard fork’ in crypto circles. Ethereum Classic, which reasons that the platform concept of complete democracy should prevail, despite risks of attack, has grown much slower than Ethereum, which argues the need to give greater control to a core group of developers.

Whichever broad church of Ethereum you belong to – and many people are happy to sit in both camps – the potential for Ethereum to transform our lives is mind-boggling. No wonder it’s caught the imagination. But remember, the excitement is still firmly focused on its future potential – the realisation of which is a long way off. This makes it incredibly appealing to some investors who may see it as an opportunity to get on board now while it’s still relatively early days and therefore can be purchased at what might be seen as a very low price in five years’ time.

Ethereum Classic (ETC)

Despite its formative years, there has already been a conflict in the Ethereum community and a divergence in the technical development of the Ethereum blockchain platform – more commonly known as a ‘hard fork’.

Ethereum Classic (ETC) was born out of the original Ethereum platform and its philosophy that the technology should operate in a way that was entirely democratic across the user-base. Following an attack on the platform in 2016, when vast amounts of money were syphoned off by a hacker exposing a technical loophole, the Ethereum community were at loggerheads as to how they should react.

A lot of money was now at stake and for a large swathe of the Ethereum community, that forced the issue and changed the fundamental belief-system around how Ethereum could successfully grow.

One group in the community initiated a plan that was largely intended to refund the money  that had been taken by introducing a certain ‘smart contract’ and integrate security measures so as to avoid similar attacks in the future. The proposal caused a lot of controversy and there was a split. Those against the proposal refused to move to the new blockchain and decided to remain in the old blockchain, changing its name to Ethereum Classic, or ETC.

Most people switched to the new blockchain, including many of the big players in the community and indeed founders Vitalik Buterin and Gavin Wood. Those that stayed with the original platform see the argument as a largely philosophical one, believing in Ethereum’s conceptual power to stand up against financial corruption and corporate greed. They are often labelled ‘Crypto-idealists’. Whether you consider the name to be negative or positive may indicate which of the two flavours of Ethereum you prefer the taste of.

While Ethereum Classic may lack the forward momentum of Ethereum, both in terms of increasing value and pace of technical advancement, it remains an area of interest for traders and investors, as well as developers. There are reportedly many scammers in the Ethereum Classic platform which has put a lot of people off but it still garners considerable attention purely because of its unique potential.

Will Ethereum Classic now fade away as Ethereum marches onwards, breaking new ground? Or will the champions of a true blockchain democracy find a way to revitalise Ethereum Classic, give it new life and prove the doubters wrong?

 

Dash

Dash

Dash is a digital currency based on the Bitcoin software that focuses on privacy and scalability as its main distinguishing features. You can make instant, private payments online or in-store using its secure open-source platform hosted by thousands of users. And the technology is expanding incredibly quickly.

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In that sense, Dash has solved many of the problems inherent in Bitcoin, which have centred around slow transaction speeds and inabilities to scale quickly and become a genuine mass-market mainstream offering. By comparison, Dash has been designed from the very start as a scalable and user-friendly currency platform for mass adoption.

In addition to the traditional rewards for mining Dash, users are also rewarded for running and maintaining special servers called ‘masternodes’. In brief, these masternodes provide a good deal of the network infrastructure on which Dash operates.

Bitcoin runs on a single-tier network with an average blocktime of ten minutes. They require six of these to fully confirm a transaction, which means a Bitcoin transaction can take up to an hour to complete.

Dash works on a two-tier network. The first tier operates in much the same way as the Bitcoin network but the second tier, comprised of these special servers known as masternodes, allow for additional operating features such as instant transactions (InstantX), private transactions (Darksend), and decentralized governance and budgeting. It’s this second tier that gives Dash a competitive edge.

Anyone can run a masternode – hosted on virtual private servers run by companies such as Amazon Web Services. They just need to first evidence that they own 1000 DASH. If the owner spends their 1000 DASH then their masternode gets turned off.

Dash users running a masternode are further incentivized to by virtue of receiving a portion of the reward when miners find new blocks, with 45% of that reward going to the network of masternodes.  That in itself may make Dash an interesting and very different kind of investment opportunity.  

Dash clearly means business. It has created a new team based in Hong Kong called Dash Labs to focus on developing custom hardware. Meanwhile, the core team aims to increase speed, size and scope with each development stage, doubling the number of developers with each release. They are also committed to publishing a large amount of private documentation to ensure complete transparency and trust in the evolution of the platform.

Dash has certainly been one of the fastest growing cryptocurrencies in 2017 and has attracted a lot of interest among cryptocurrency traders and investors.

 

         

Ripple (XRP)

Ripple, also known as the Ripple Transaction Protocol (RTXP) or Ripple protocol, is a real-time payments and settlements system. It also operates as a currency exchange with its native currency known as XRP, and boldly claims to enable ‘secure, instant and nearly free global financial transactions of any size with no chargebacks.’

Much like the Bitcoin software and other blockchain technologies, Ripple (XRP) is built on a distributed open-source protocol and consensus ledger where users in the system agree and confirm transactions. And like a number of competitors to Bitcoin, Ripple has arguably done a better job of creating a platform that works much faster than Bitcoin and executes transactions at very low cost.

If it works as well as they claim, the benefits to companies who adopt Ripple are clear. They can generate new revenue opportunities, enjoy lower processing costs and ultimately deliver better overall customer experiences through their payment processes.

The beginnings of Ripple actually pre-date Bitcoin and blockchain in many respects. Back in 2004, developer Ryan Fugger had the vision that he wanted to create a decentralized monetary system, one that relied solely on individual users and communities and cut out the middle-men and governmental authoritarians.

He created RipplePay, a financial service that intended to provide secure payment options in an online community. It was the nucleus of Ripple. Over the years Fugger continually refined and expanded his concept, working with a range of other digital payment entrepreneurs and developers.

Ripple itself, and as we know it today, first came to light in 2012. The effect ever since has very much been true to its name with a rapidly increasing number of technology enthusiasts and crypto traders keen to understand its potential implementations and unique benefits over other digital currency platforms and operating structures.

It is now undoubtedly one of the biggest cryptocurrencies in the world and is actively used by a range of well-known financial businesses, including the likes of UniCredit, UBS and Santander. The Ripple protocol has excited the major banks and payment networks with its settlement infrastructure and advanced technology, especially the low cost and security it offers, all on a major scale.

That said, we must remember that this is still very early days in the grand scheme of things. Yes, there are household brand names actively using Ripple but they are doing so in a controlled manner. And there are plenty more big financial houses and commerce giants yet to fully commit, still assessing their options from the touchlines.

 

Litecoin (LTC)

Litecoin (LTC)

The open-source Litecoin is often billed as a companion to Bitcoin, although many now regard it as a direct competitor. It is effectively a peer-to-peer online currency that you can use to make instant payments at near-zero cost to anyone in the world.

Litecoin was created in October 2011 by former Google engineer Charles Lee. The idea behind Lee’s project was to create a digital currency that fixed many of Bitcoin’s issues or improved in areas where Bitcoin was perceived to be weak.

Transactions are super-fast with block transactions typically around 2-3 minutes compared to Bitcoin’s 10 minutes. Because of this, it has created a lot of industry support, has a decent trading volume and for those looking to buy and sell Litecoin, it has very good liquidity.

The fundamental and technical difference between the two – Litecoin and Bitcoin – is centred around their respective mining capabilities. When users mine Litecoin (LTC) they do so using a different kind of algorithm, known as the scrypt algorithm. It incorporates Bitcoin’s SHA-256 hashing algorithm, but improves upon it by running calculations that can be greatly accelerated in parallel processing.

As a result, Litecoin can handle a higher volume of transactions, thanks to its considerably faster block generation process. The one slight disadvantage of this higher volume of blocks is that the Litecoin blockchain will be proportionately larger than Bitcoin’s, which means it will have more orphaned blocks.

However, Litecoin boasts greater efficiency and more supply for the market while still being inflation proof due to limiting the number of coins that are in circulation, with potentially 84 million coins rather than the 21 million that Bitcoin has as its upper limit. Consequently, it could be argued that Litecoin has the upper hand for general day-to-day buying and selling as there’s a larger amount in supply.

For cryptocurrency traders and investors, Litecoin has many attractive qualities. Because it is years behind Bitcoin in its integration into global systems and adoption by commercial enterprises, it is currently a lot cheaper to invest in. Bitcoin is further down the track and Litecoin may never catch it up, of course, but it clearly has some compelling features and advantages over Bitcoin that could make it a more attractive proposition to retailers and banks in the long run.

If Bitcoin trips over a few major obstacles, such as the ongoing and much-debated scalability challenges it needs to overcome, then major commercial brands may become frustrated and, in a bid to accelerate their own corporate growth and expansion plans, particularly overseas, turn to Litecoin as a viable alternative.

 

Bitcoin Cash (BCH)

Bitcoin Cash (BCH)

On 1st August 2017, bitcoin underwent a ‘hard fork’ and split, with a collection of enthusiasts, miners and engineers forming a new currency, called bitcoin cash (BCH).

The split occurred because of challenges around bitcoin’s ability to service the enormous number of transactions that were taking place involving the currency. This led to a backlog of transactions and placed the entire bitcoin network under strain, with investors and miners growing frustrated. In short, bitcoin had grown too big for its own good, and the bitcoin network could no longer cope.

Of the many proposals put forward that attempted to offer solutions to the problem, bitcoin cash has been one of the most popular. The split away from bitcoin took place following a successful hard fork in August 2017, and BCH has not looked back.

Bitcoin cash describes itself as: “The Best Money in the World”. And, given the rise in the price of BCH since its launch, it is clear that BCH is gaining in popularity.

More pragmatically, bitcoin cash calls itself “Peer-to-Peer Electronic Cash”. Like bitcoin, it is fully decentralised, with no central bank and it requires no trusted third parties to operate. The use of the term peer-to-peer is important as the emphasis of BCH is based upon the speed of transaction. This is its key benefit over bitcoin, with BCH offering a far higher transaction speed. Hence its capacity to deal with far more transactions.

As its popularity increases, more exchanges are setting up BCH on their systems. More and more miners are also being attracted to the currency, and the value of the currency is increasing as a result. Whether the increased transaction speed is indeed enough, remains to be seen. But for now, it’s looking like a worthy alternative to bitcoin.

 

Stellar Lumens (XLM)

Stellar Lumens (XLM)

The Steller Network is an open source blockchain that allows cross-border transactions with equal access for all users involved. Launched in 2014, Stellar was the brainchild of Ripple’s co-creator Jed McCaleb after he and the rest of the board had conflicting ideas for the overall vision of Ripple. The concept behind the Stellar Network is to push currencies to the background, fiat or digital, enabling people to have access to a quicker, cheaper and more efficient way to make cross-border transactions.

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Stellar use Lumens (XLM) as the network currency; there were initially 100 billion Lumens created but the supply is infinite as Lumens have an annual growth of 1%. The current transaction time when using Lumens is minimal, taking between 2 and 5 seconds to complete. Not only is this network fast, but the cost of a transaction using Lumens is only .0001 XLM.

Partner organisations of the Stellar Network, dubbed ‘Anchors’, are trusted entities such as banks or companies which provide a line of credit for people to use the Stellar network using assets such as pounds and euros.

Stellar has an impressive inbuilt feature which is a decentralised exchange that matches buy and sell offers from Anchors that hold currencies, in an attempt to find the best exchange rate. The Stellar network can be used to exchange any currency the Anchors hold; this includes other cryptocurrencies.

For example:

  •         Person A lives in the UK and needs to send $100 to Person B in the US.
  •         Person A uses the Stellar Network to send the equivalent amount in pounds to a UK Anchor.
  •         The UK Anchor updates the balance on the Ledger.
  •         A US Anchor see the balance update on the Ledger and then sends the $100 to Person B.
  •         The US & UK Anchor use Lumens to settle the books between which costs a fraction of a penny.

It is easy to see the similarities between Stellar and Ripple but the main difference is that Stellar aims to help simplify payments between individual users, whereas Ripple aims to provide solutions for large financial institutions. Stellar works for the people and Ripple for ‘The Man’ if you will.

Furthermore, Ripple hold around 60% of their original XRP issued which gives them the opportunity to influence the market if they so wish, whereas Stellar has given up control of their excess supply of tokens to the not-for-profit Stellar Development Foundation.

Stellar is undoubtedly making its way up the crypto table. A combination of significant partnerships with likes of IBM and Deloitte, fast transaction times and low fees mean Stellar could be in for a promising 2018.

 

NEO Coin

NEO (NEO)

NEO is one of the relatively new cryptocurrencies with the vision to create a smarter economy platform. Aptly named, the word NEO means ‘new and fresh’ in Greek. Formerly known as Antshares, the first open-source blockchain in China, NEO has been dubbed as China’s answer to Ethereum and has since made a name for itself in the industry by giving a powerful return to its investors. The vision is to become something more than just another cryptocurrency, but what exactly is NEO?

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What is NEO?

NEO is a blockchain and coin system that creates a more efficient way to transfer currency between users. It is a smart contract and decentralised application (DaPP)

platform. Similar to Ethereum, NEO divides into two token types, both aimed at specific users of the NEO platform.

The first being NEO (or Antshares code: ANS), and the second is GAS (or Antcoins, code: ANS):

NEO (ANS) remains as a single unit that, unlike Bitcoin, cannot be divided into a fraction, this works similarly to shares in a company; a share cannot separate into smaller units. Despite this posing a potential problem in the future as the value increases, exchanges are already devising their own methods of the division for NEO.

The NEO blockchain has a cap of 100 million tokens which will be pre-mined during the genesis block creation. Tokens will be used for network changes, block creation,

network management and other agreement requirements.

GAS (ANC), like its name, is the fuel for the NEO platform. Currently only Chinese-specific markets can buy GAS tokens. Instead, users must purchase NEO that ensures their stake in the future of the platform. The GAS tokens are also capped at 100 million. Unlike the NEO token, GAS is divisible by a facto of 1/10^8 and was not pre-mined. GAS tokens will eventually be used as incentives for maintaining the blockchain and transaction fees once payments using the NEO network begin.

 

EOS Coin

EOS (EOS)

Like Ethereum in its function, EOS aims to make it easy for developers to create user-friendly blockchain apps. For example, EOS uses smart contracts to make blockchain technology accessible to businesses which may not be familiar with the complexities of the technology. The founder behind EOS, Dan Larrimer, has already created two very successful projects; Bitshares and Steem. He has even dubbed the EOS. IO (the blockchain that supports EOS crypto) the ‘Ethereum Killer’.

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What is EOS?

EOS is another altcoin that recognised the potential of the blockchain technology and sought inspiration from the likes of Ethereum. EOS is an open source platform that claims to be the most powerful infrastructure for decentralised applications (DApps) and aims to support thousands of commercial-scale DApps in the future. The white paper calls the blockchain ‘a holistic blueprint for a globally scalable blockchain society’. Unlike many other similar DApp networks, creating a user-friendly interface for developers, is a feature that is apparently of great importance to the EOS team. EOS has a toolkit for interface development and has created a fee-free process for building on the network. The only cost involved is the initial purchase of EOS tokens, which of course, users are free to sell whenever they like. EOS tokens offer users a proportionate share in the network bandwidth, storage and processing power. Instead of using a mining-based blockchain, EOS uses a Delegated Proof of Stake (DPOS), which works by permitting users who wish to create blocks depending on the number of votes that that particular user accrues. The system works by selecting a delegate for 21 blocks, one block is produced every 3 seconds, and after those 21 blocks have been created, a new representative is elected. In the case of a selected user failing to produce a block, that particular block is then skipped, creating a 6 or more second gap in the blockchain. To ensure that the network continues to run smoothly, a producer who is absent for 24 hours is completely removed from the system. In another bid to get rid of centralisation, all system changes must be approved by a majority of the block producers for a minimum of 30 days.

What drives EOS’s price?

  1. Adoption: If EOS becomes the platform of choice for enterprises, the growth in value of the tokens will be substantial. Features such as parallel execution are grabbing the attention of large companies as the potential of blockchain technology is starting to become clear.
  2. Partnerships: Significant partnerships with prominent companies and figureheads within the industry can spark fluctuation in prices. EOS partnerships with Richard Lang (former CEO of Bithumb) and Mike Novogratz, (CEO of Galaxy Digital) signify a vote of confidence and, therefore, have encouraged users to invest in the platform.
  3. Social Media: EOS is very active on social media; continually updating followers on the progress of the network. Depending on the scale of the announcement, this can trigger the value of the crypto as users rush to either invest or sell as a reaction to the updates.

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Cardano (ADA)

Cardano (ADA)

Cardano is a decentralised, scientific peer-reviewed public blockchain (known as Ouroborous) that uses ADA as the platform currency. The Cardano project started in 2015 with the vision to create a distributed, resilient, smart contract platform that offers more advanced features than any development has ever been delivered before. The platform is the creation of an incredible team armed with in-depth research and feedback from expert engineers and academics from across the globe.

The fact that Cardano has been so highly scrutinised by the academic community is what makes it so unique. The team behind Cardano produced numerous scientific papers that were put under the microscopes of mathematicians, cryptographers and engineers, who in turn, provided their feedback for improvements. The team recognised that to create a flexible, scalable and secure platform that will be ready for mass adoption; detailed research would need to be at the forefront of their minds.

Cardano will, of course, be home to the Ada cryptocurrency but on top of that, it is a platform that will be used to run monetary applications similar to Ethereum and Neo. What makes Cardano more scalable than the two mentioned cryptos is that it is being built in layers. The layers make the platform more adaptable, allowing for updates by way of soft forks. The foundation layer, named Cardano Settlement Layer (CSL), will run Ada and the second will be dedicated to dealing with smart contracts- Cardano Computation Layer (CCL).

Cardano consists of three organisations which all contribute to the development of the project.

  1. The Cardano Foundation, which acts as a governing body to ensure that all Cardano technology is standardised and adheres to government regulations. The foundation also aims to protect and enhance the Cardano ecosystem while growing the community and creating partnerships.
  2. The second is IOHK (Input Output Hong Kong), an engineering and technology company that is contracted to design, build and maintain the Cardano platform until 2020.
  3. The final is Emurgo, which is responsible for the development of applications based on Cardano by way of investment, research and partnerships.

 

IOTA

The IOTA project aims to become the distributed ledger for the Internet of Things (IoT). Its growing legion of supporters believe that as a cryptocurrency IOTA, which uses unique Tangle architecture, has a number of advantages over blockchain-based cryptos. Namely: it is infinitely scalable; decentralised; modular; and has zero transaction fees.

What Is IOTA?

In 2018 there are some 31 billion devices that rely on the Internet of Things (IoT) in the world, according to London-headquartered analysts IHS Markit. That number is growing exponentially, with millions of more new sensors added every week, as the planet becomes ever-more connected. David Sønstebø, the founder of IOTA, believes he has devised a solution that will serve as the backbone of the emerging IoT world.

Mr Sønstebø says IOTA – an open-source distributed ledger protocol that goes “beyond blockchain” and is an acronym of Internet of Things Application – was developed to enable the “paradigm shift” to IoT by establishing a “de facto standardised ‘ledger of everything’”. The thinking is that this cryptocurrency will allow data exchange between sensor-equipped devices that populate IoT.

IOTA’s maximum and current circulating supply is a whopping 2,779,530,283,277,761. While the number seems daunting, it is only so large because of the way in which IOTA is measured. IOTA is broken down in to six tiers of measurement: iota (i); kilo iota (Ki); mega iota (Mi); giga iota (Gi); terra iota (Ti); and peta iota (Pi). To the average user, the last two will be of little concern, due to their size; one Pi is equal to one quadrillion IOTAs (a factor of 1012 ). At the other end of the scale, one iota – at the time of writing, in early August 2018 – is worth 0.00000087 cents. One Ki equals 1000i, while one Mi makes 1 million i, and a Gi is 1 billion i.

What Drives IOTA’s Price?

  1. Demand And Competition: As developers continue to push the boundaries of blockchain technology, competitors naturally utilise new findings and implement them into new cryptos. As news of emerging cryptocurrencies with similar goals materialise, prices are often influenced as users are drawn to new opportunities. IOTA’s Tangle architecture promises to go “beyond the blockchain”.
  2. New Price Highs: Crypto prices reaching a new high can often set off a trend of investors look to take their profits. With the ratio of buyers and sellers shifting, it can have a snowball effect, sending the price plummeting as more and more users hope to sell in time to secure a profit. Frequent occurrences such as this have even resulted in invention of the word and acronym “HODL” (hold on for dear life). Originally a typo for “HOLD”, the phrase was first used on the Bitcoin talk forum and used to express the user’s belief that the crypto will eventually be profitable in the midst of a downward trend.
  3. Speculation: Speculation will always play a part in the prices of all cryptocurrencies, especially as the sector is relatively young, with events that have never happened before, users can’t confidently predict the outcome. Frenzied speculations can cause prices to plummet or skyrocket, either way, prices often stabilise as facts become more evident.

 

Cryptocurrency Jargon

51% attack      

This occurs when more than half the computing power on a digital currency network is run by a single miner, which theoretically makes them the main controller and authority of that network.

Altcoin

The alternatives and rivals to Bitcoin are collectively known as Altcoins.

Bitcoin Whitepaper

Written by Satoshi Nakamoto in 2008, the famous document explains the Bitcoin concept and protocol. The Bitcoin code was released the following year.

Block reward

The recompense a miner receives when they have successfully hashed a transaction block. It can be a mixture of coins and transaction fees.

Faucet

This is where a number of coins are given away for free to generate interest and build initial momentum in a cryptocurrency mining community.

Fiat currency

Currency that a government has declared to be legal tender, but it is not backed by a physical commodity.

Fork

The emergence or creation of a new version of a particular blockchain. It typically happens when one set of miners begins hashing a different set of transaction blocks from another.

Genesis block

If you know your biblical readings you’ll get know why this is the term for the very first block in the block chain.

Mining

Basically, this is where new Bitcoins are generated, which happens as crypto problems are solved.

Satoshi Nakamoto

The inventor of the Bitcoin concept and protocol. Some believe it is a group of people rather than one individual. The term ‘Satoshi’ refers to the smallest subdivision of a Bitcoin currently available (0.00000001 BTC).

Silk Road

The controversial underground online marketplace, which has been often linked to cryptocurrencies in the past, was shut down by the FBI in 2013.

Virgin Bitcoin      

Bitcoins purchased as a reward for mining a block. These have not yet been spent anywhere.

Trading Cryptocurrencies is not appropriate for everybody. Cryptocurrencies are not regulated. They are not backed by governments or central banks. Cryptocurrencies are backed by technology and trust. You will not benefit from the protections available to clients receiving regulated investment services, such as access to the Investor Compensation Fund (ICF) for Customers of Cypriot Investment Firms, or Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS) for dispute resolution. You are at risk of losing all of your invested capital. The figures shown relate to past performance, which is not a reliable indicator of future results.

eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.