{"id":39528,"date":"2018-07-06T10:39:38","date_gmt":"2018-07-06T08:39:38","guid":{"rendered":"https:\/\/www.coinpro.ch\/uncategorized\/understanding-important-terms-cryptocurrencies-explained-simply\/"},"modified":"2025-08-08T15:08:10","modified_gmt":"2025-08-08T13:08:10","slug":"understanding-important-terms-cryptocurrencies-explained-simply","status":"publish","type":"post","link":"https:\/\/www.coinpro.ch\/en\/knowledge\/understanding-important-terms-cryptocurrencies-explained-simply\/","title":{"rendered":"Understanding Important Terms \u2013 Cryptocurrencies Explained Simply"},"content":{"rendered":"

Anyone interested in the production and trading of digital currencies like Bitcoin will initially encounter unfamiliar terms again and again. We have explained important keywords related to cryptocurrencies in a simple way. Let’s start with the production of coins. Mining them is done through mining<\/a>, in which computers use complex calculations to combine transactions and integrate them into the blockchain. <\/p>\n

There are various risks involved, one of the best known being the 51% attack<\/a>. In this scenario, attackers provide more than half of all miners, can gain control over the chain and, for example, feed fake blocks into the chain. <\/p>\n

What is Bitcoin Synchronization?<\/strong><\/h5>\n

All computers that are connected to the network in question, in our example the Bitcoin network, are referred to as nodes. They are subject to the rules of their network, so that all important basic requirements can be met: decentralization, transparency and immutability. <\/p>\n

Often a Bitcoin synchronization<\/a> must first take place. This involves downloading and checking all previous transaction blocks of the blockchain using a client. <\/p>\n

What is Meant by a Token?<\/strong><\/h5>\n

Some terms from the crypto area are used synonymously, although they differ by definition. All cryptocurrencies are coins, but these are further divided into Bitcoins, the leading digital currency, and all other coins, the so-called altcoins. <\/p>\n

Tokens<\/a> are something different again. There is no detailed definition, but roughly speaking it is understood to be a voucher for an economic good or an asset. A token is therefore like a share certificate, the value of which results from how great the demand for it is on the market. <\/p>\n

A token can also be a subscription right to a future cryptocurrency that is yet to be placed on the market. In this case, the corresponding company sells tokens in order to collect capital in the form of central bank currencies. This is also known as Initial Coin Offering<\/a> or ICO for short. <\/p>\n

What is the Bitcoin Price Index?<\/strong><\/h5>\n

On the stock market, certain stocks are grouped together within an index. This then shows the average price of the shares contained in it. Examples of this are SMI, DAX and DJIA. <\/p>\n

There is also an index for Bitcoin: The Bitcoin Price Index,<\/a> or BPI for short. Its only title is Bitcoin and so it makes a statement about the average price at which the digital currency is traded on the various crypto exchanges. <\/p>\n

How are Cryptocurrencies Taxed?<\/strong><\/h5>\n

Like most other countries in the world, Switzerland also has its own regulations for the taxation of cryptocurrencies<\/a>. According to current law, digital currencies are to be regarded as a monetary right to an item. They therefore belong to net assets and are subject to wealth tax. <\/p>\n

However, the tax system is still struggling with the valuation of coins. Specifically, it is about the question of when the valuation should take place. One possibility would be a procedure analogous to foreign currencies. This would make December 31 of a year the cut-off date for the valuation of crypto coins. <\/p>\n

Capital gains are counted as capital gains and are therefore tax-free in Switzerland. Mining, i.e. mining coins, is one of the commercial activities. All income generated as a result is therefore subject to income tax. <\/p>\n

The CoinPro.Ch Provider Test – the Best Options for Buying, Trading and Trading Cryptocurrencies<\/strong><\/h2>\n
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