Bitcoin, an example of a digital currency, functions as a medium of exchange like cash, but is not backed by a government and does not have legal tender status.

Bitcoin, an example of a digital currency, functions as a medium of exchange like cash, but is not backed by a government and does not have legal tender status.

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In this brave new world of crypto and blockchain, it pays to know the language. Here is a list of terms related to virtual currencies and the technology that supports them

Cryptocurrency

Digital currencies – such as Bitcoin – that function as a medium of exchange like cash, but are not backed by a government or have legal tender status. These virtual currencies are backed by encryption and other cryptographic technologies and enable secure online transactions without third-party intermediaries.

blockchain

The technology that supports cryptocurrency. Blockchain is an encrypted database powered by computer networks that can store, create, and share information. Information is stored as “blocks” of data and can be viewed similarly to cell phone minutes or bytes of data. These blocks are protected by encryption and can be connected to each other – the blockchain. As data arrives and fills a block, it is linked to the previous block.

Web3

Web3 is described as the latest iteration of the internet based on blockchain technology.

Non-fungible tokens (NFT)

Non-fungible tokens are financial securities consisting of digital data that cannot be copied and are stored on the blockchain. These tokens can be transferred by the owner and can therefore be sold and traded.

Mobile wallets

Mobile wallets are digital means of storing credit, debit, ID and gift cards allowing users to make purchases using mobile smart devices instead of credit cards, debit or plastic gifts.

Private keys

A password sequence of letters and numbers that gives you single-handed access to your crypto assets. A private key is, in Coinbase’s words, a password “that unlocks the virtual safe that holds your money.”

Public keys

An online address that allows you to send and receive funds.

Keys can be stored online in a virtual or mobile wallet; or offline in what’s called “cold storage” – everything from a computer not connected to the internet to an old-fashioned notepad.

Market capitalization

The value of an individual coin multiplied by the number of existing coins. Holders use the measure to compare currencies.

Stable Coins

Any cryptocurrency designed to have a relatively stable price, whether pegged to virtual currency, silver, gold, or commodities.

Fiat money

Silver. What the crypto industry calls standard legal tender such as government-issued dollars, pounds, or yen.

This story was originally published June 21, 2022 5:00 a.m.

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Darrell Smith is the Elk Grove reporter for The Sacramento Bee. He joined The Bee in 2006 and previously worked at newspapers in Palm Springs, Colorado Springs and Marysville. Smith was born and raised at Beale Air Force Base, near Marysville, and lives in Elk Grove.