Since Bitcoin and other blockchain projects began dominating news and media channels around the world, it seems like there’s been no end to hearing the word “crypto”. With a legion of paired words and contextual meanings, it can sometimes be difficult to ascertain what “crypto” actually means.

From crypto currencies to crypto assets, crypto exchanges to crypto wallets, and fiat-pegged crypto to gold-backed crypto, it seems like there are very few words that don’t precede or follow “crypto”.

So what does “crypto” actually mean?

Rooted in Cryptography

Most words that contain “crypto” do so in reference to cryptography, the ancient science and art of secret writing. The first documented use of cryptography dates back to ca. 1900 B.C, when an ancient Egyptian used non-standard hieroglyphs in an inscription, although some experts argue that cryptography appeared spontaneously after writing was invented [https://www.garykessler.net/library/crypto.html].

Today, there are three main types of cryptographic algorithms, most of which are used in blockchain technology:

1. Secret Key Cryptography (SKC)

This type uses a single key for both encryption and decryption, its primary use is for privacy and confidentiality.

2. Public Key Cryptography (PKC)

This uses one key for encryption, and a different key for decryption.

3. Hash Functions

Uses mathematical transformations to irreversibly “encrypt” information, providing a digital fingerprint.

Keys

The piece of information required to encrypt and decrypt the message is called a secret key. However, sometimes two keys are used, one for encryption and one for decryption. For example, PGP encryption utilises a private key for encrypting messages, and a public key to decipher them. In cryptocurrencies and blockchain-based assets, the owner of the wallet’s private key has control over the funds / assets.

A mixture of these cryptographic algorithms are used in a variety of I.T. and internet services, to provide secrecy and integrity to user’s data, and for anonymity in communications. Its use in existing I.T. industries that inspired the use of cryptography in the blockchain projects we know today.

Cryptionary

So now that we know why “crypto” appears everywhere, let’s look into some of the most common forms of the word used in blockchain tech today:

1. Crypto

Today, the term crypto is mainly used to refer to a cryptocurrency or crypto asset, although crypto asset can also refer to both.

2. Cryptocurrency

As the name suggests, cryptocurrency is a kind of “cryptographic currency”. The term essentially refers to a blockchain-based currency. Cryptocurrencies use cryptography to link and secure the continuously growing list of transaction records. Bitcoin was the first major cryptocurrency, and although there are many others, the term is often mistakenly used to refer to blockchain tokens or other blockchain-based assets that are not necessarily intended for sole use as a currency — for example Ethereum.

Their primary function is intended as a means of payment, but they are often used as trading commodities to profit from their volatility.

3. Crypto Asset

Although a crypto asset can also be used to refer to a cryptocurrency (since a cryptocurrency could be considered an asset), the term is mainly used to refer to blockchain-based assets. For example, if an organisation wanted to create a token on the Ethereum blockchain, and each token represented a share of an asset(s) (whether that is a stake in the company, or a physical asset like gold or silver) the token could be referred to as a crypto asset.

The term crypto asset is often used to describe cryptocurrencies as an umbrella term for both cryptocurrencies and crypto assets. For example, “the Trezor hardware wallet will provide users with the ultimate in security for all their crypto assets”.

4. Crypto Wallet

A crypto wallet refers to a digital wallet that is secured using cryptography. Today, a crypto wallet will refer to any digital or paper wallet that is used to hold crypto assets (including cryptocurrencies). The wallet consists of a unique wallet address (like an email address), private / secret key (whoever has the private key controls the wallet and its contents), and public key (can be used for a variety of functions including message decryption and verifying identity).

5. Crypto Trading

Crypto trading refers to the act of trading cryptocurrencies or crypto assets. This usually takes place over the internet via a crypto exchange.

6. Crypto Exchange

A crypto exchange is an online platform which facilitates the trading of cryptocurrencies and crypto assets. It connects buyers with sellers in an online marketplace. The term can also be used to refer to a platform which facilitates the exchange of fiat currency for cryptocurrency or crypto asset.

7. Crypto Market

The crypto market is a term used to describe the market of cryptocurrencies and crypto assets as a whole. Crypto market cap (market capitalisation) refers to the total capitalisation of all the cryptocurrencies and crypto assets in the market. While not including the valuation of private blockchain companies, it can include tokens which represent shares of a company, or provide utility in the company’s service or platform. The current crypto market cap includes valuations of over 1600 cryptocurrencies and crypto assets, and is currently worth over $337 billion [https://coinmarketcap.com]

8. Cryptosphere

This term is used to describe the cryptocurrency industry and the ecosystem supporting it. For example, venture capital firms have been eagerly investigating potential investments in the crypto sphere.

9. Crypto Options

A crypto options is the crypto version of a regular finance market option. It’s an agreement that gives buyers the right to buy (call) or sell (put) crypto, or crypto futures contract, at a specified price for a specified period of time. For the privilege of having a “put” option, a premium is paid to the seller who assumes the downside risk and is obligated to buy the crypto from the buyer at the predetermined price. For “call” options it is the opposite, allowing the holder the right to buy shares at a predetermined price.

For example, Sam buys a bitcoin call option from Jack lasting 30 days, Sam now has 30 days to buy a specified amount of Bitcoin from Jack, and must pay him a premium of two percent. Meanwhile, if the price of bitcoin goes up, Sam can exercise his call option and buy the bitcoin at its price on the 1st day of the agreement, and profit from the difference. If the price goes down, Sam doesn’t have to call, and can walk away having only paid two percent for the opportunity.

The introduction of crypto options was very controversial, and some critics claim that it was partly responsible for the crypto market crash after the bull run in December of 2017.

[https://cointelegraph.com/news/federal-reserve-bitcoin-futures-launch-led-to-december-2017-price-decline]

These are some of the most commonly used crypto-related words today. However cryptography has been around for an extraordinarily long time, and its integration with blockchain technology has secured its place in the future of common linguistics, so there will undoubtedly be many more additions to the cryptionary in the near future.

About CINDX

CINDX is an investment platform that allows individuals to combine several crypto exchange accounts into one trading terminal, and gives them the option to connect to the best managers without having to transfer their funds. Moreover, implementation of blockchain-based transactions will allow the trading history to be saved, and a rating system will be used to differentiate the successful managers from the less successful ones.

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