Fintech, Bitcoins and other related financial terms decrypted

Anybody who reads the newspaper has been inundated with the word Bitcoin. And all the old adjectives (astronomical) and adverbs (dramatic) nouns (bubble) and verbs (to increase, to skyrocket, to crash) for the financial market are at play. But if you’re like me, you’re pretty confused. Am I supposed to be buying bitcoins? Ethers? Should I wait? How do you spend it? Do I need a digital wallet? What’s a blockchain? Has this got anything to do with the Internet of things?

And then, on 09/01 over a cappuccino I read an article in the finance section of the Corriere Della Sera. I’m not sure if it was the caffeine or the content that was so exciting and stimulating but, either way, it was the catalyst for me trying to clear up the “bits and coins” of the financial world of today that I need to come to “terms” with.

So what better way than to explore the English financial “terms” that are becoming truly global

Let’s start with fintech or FinTech, bringing us to our word of the week. When I was recently on a trip to the States I first started noticing that I was behind the times. I would pay for a coffee with a credit card and sign a tiny rotating device with my finger, there were no cash drawers, and no receipts unless I wanted one sent via email, an interesting concept which gave the bar, café, or store a chance to start hammering me with offers and sending out newsletters. Not for the first time did I marvel at tiny market stalls that all had the Square to take payments via mobile phone. But, Most of the time I just flashed the card in the vicinity of whatever device, no sliding, no punching numbers, everything contactless. I watched other people use their phone for payment, just touching against wherever. But it all came to a heedy head when a friend commented on the fact that she had just saved the change from her coffee in an online investment account via a phone app. I wanted in. The app rounds up her spend to the nearest dollar and puts it directly into an account, investing it, she never misses those pennies, quarters and dimes and they sure weigh less than the piggy bank that you have to take to the bank to get counted out. This was fintech.

Fintech

Originally a computer aided back office banking term is now a global term, all-encompassing to mean a technological innovation in the financial sector that includes banking, crypto-currencies (bitcoin), trading, peer-to-peer lending, financial learning and literacy apps, a term that covers how we conduct our personal and commercial financial transactions. A start-up dream, which currently North America seems to be leading.

And, you can’t read “fintech” without a host of other incomprehensible terms.

Token

A tradable digital asset, which can be anything from a “crypto-currency” to loyalty points or any other commodity of value.

Crypto-currency

A digital asset. It can be in coin form (Bitcoin, Dogecoin, Ethereum) or a token. It is essentially a currency or asset with no centralized government or bank behind it, in digital form obviously.

Coin

A crypto-currency coin (aka Altcoin)

Bitcoin

This is a Pandora’s box in itself, put simply it is a decentralized crypto-currency. A digital currency that only exists online for peer-to-peer transactions with no central banking or government authority.

Ether (ETH)

The number two form of digital currency at time of writing. The token that feeds Ethereum, a peer-to-peer financial transaction blockchain.

Ethereum

A “blockchain” for “smart contracts” (sounds like gobbledy gook? Read on!)

Mining

The creation of digital currency by a supercomputer.

Blockchain

This one is for the diehards of terminology and/or technology. Just the word sounds daunting. It’s a digital ledger technology. Basically it is the technology behind a fintech transaction. A public ledger, that records a growing list of records called blocks that are interconnected and secured using cryptography.

Cryptography

The old system of encryption used during the war to scramble messages so they couldn’t be intercepted, now on steroids. The intervention of computer science and complicated mathematical algorithms brings cyber security to a whole new level making transactions and data secure.

Digital currency wallet

(Aka crypto-currency wallet.) Like a wallet that holds your cash or cards but a software program that holds instead the keys to interact with various “blockchains” to send or receive your “digital currency” and check your balance. Can be on a desktop, mobile, hardrive or more.

Open banking

The idea that anyone should be able to build an app to further the cause and convenience of a great big global network of interconnected financials.

Smart contract

An automated computerized contract between buyer and seller, excluding the need for a middleman in any financial dealings.

P2P lending

Peer-to-peer lending or social lending in laymen’s terms, or, you can lend to or borrow money from people instead of banks in my terms. Read debt financing where anyone can lend money to anyone and get a return. Soisy is one of the hot start-ups apps for it in Italy.

There is still a lot of digging for me to do so you might be hearing from me again soon on my exciting journey putting the “bits and coins” of financial terminology and understanding together. In the meantime get in touch for financial translations and financial business English courses by our team of sector experts!