<aside> 💡 Understanding the complex and often complicated terms related to cryptocurrency and blockchain technology can be challenging. This glossary is designed to provide simple definitions and explanations of key terms encountered in the Cosmostation app wallet user guide, helping users better understand the content and navigate the cryptocurrency ecosystem with more confidence.

</aside>

General Terms

• Blockchain: A technology that groups transaction records into blocks, which are then verified and recorded across multiple nodes, enabling transparent and trustworthy decentralized transactions without the need for a central authority. This allows for peer-to-peer transactions and contracts without the need for credit or authentication services.
• Wallet: A program or device used to store and transmit cryptocurrencies, allowing users to manage their mnemonic (private key) directly to secure their assets. Options include smartphone apps and USB-like hardware wallets. Careful storage of the mnemonic is crucial as losing it can make asset recovery difficult.
• Private Key: A secret key that identifies the owner of a cryptocurrency wallet and signs transactions, allowing users to freely manage the wallet's assets. The private key is critical to asset ownership and must be kept secure and never shared or exposed.
• Public Key: Generated from the private key, it forms the basis of a blockchain address. Users can receive assets through their public key, which can be safely made public without exposing the private key.
• Mnemonic Phrase: A sequence of 12 to 24 words that can be used to recover assets if the wallet is lost or the device is misplaced. Mnemonics serve as a master key capable of generating private keys, making it superior to individual private keys. It is used to regenerate a wallet’s private keys and should be kept as secure and private as the keys themselves.
• Transaction: Activities in the blockchain such as asset transfers or smart contract executions. Approved transactions are recorded in blocks and publicly disclosed. Transactions typically include information about the sender, receiver, amount transferred, and fees.
• Network Fee: A fee required to process and record transactions on a blockchain, paid as compensation to validators or miners who operate the network. Fees vary based on network conditions and transaction priority, with higher fees generally ensuring faster processing.
• HD Wallet (Hierarchical Deterministic Wallet): A type of wallet that can generate multiple key pairs from a single mnemonic (seed), helping users easily create and manage multiple accounts from one mnemonic phrase.
• DApp (Decentralized Application): An application built on blockchain technology rather than centralized servers, enabling decentralized operations.
• Centralized Exchange (CEX): A cryptocurrency trading platform operated by a central authority where users deposit cryptocurrencies to trade with others via the platform, similar to traditional banking services. Examples include Binance, OKX, and Upbit.
• Decentralized Exchange (DEX): A platform that allows direct trades between users without the need for a central authority, using smart contracts to manage cryptocurrency trades. Examples include Uniswap, 1inch, and Osmosis.

Staking

• Staking: The process of depositing tokens to support a network's operations under Proof of Stake (PoS) or Delegated Proof of Stake (DPoS) mechanisms, earning rewards proportional to the stake.
• Delegation: Assigning one's tokens to a validator to support their network validation efforts. Delegators share in the validator’s operational earnings and rewards.
• Redelegation: Transferring already delegated tokens to another validator, allowing token holders to switch to more reliable validators. Redelgation typically includes a lock-up period where tokens cannot be moved.
• Rewards: Earnings given to stakers through validators, usually derived from network fees and inflation-generated tokens.
• Validator: An entity that validates transactions and creates new blocks in a blockchain network, earning fees and rewards in return. Validators are supported by tokens delegated by delegators.