Glossary

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51% Attack – is an attack on a blockchain by gaining control of more than 50% of a distributed computers’ mining hashrate or computing power.

 

A

Address – a string of letters and numbers that are used to receive cryptocurrency which is similar to a traditional bank account number and can be shared publicly with others.

All Time High (ATH) – refers to the maximum price of an asset, higher than at any other time in its trading history.

Altcoin – short for “Alternative Coin” which describes all crytocurrencies that are created after Bitcoin such as Ethereum, Litecoin, and Monero.

Anti Money Laundering (AML) – laws and regulations to prevent illegal activities compelling exchanges and other money transmitters to report suspicious activity.

Arbitrage – the price difference of an asset on two different markets or exchanges, often internationally used to make a quick profit.

ASIC – short for Application Specific Integrated Circuit is a type of computer chip used to mine new coins efficiently.

Attestation Ledger – a distributed ledger that codifies agreements, statements, and other facts into the Blockchain providing evidence to “attest” that information has indeed changed.

B

Bagholder – a person who is still holding an asset or coin after a pump and dump scheme.

Bear – aka “bearish”, is a person who is pessimistic about market prices and expects them to go down.

Bear Trap – a false market signal where the rising trend of an asset appears to be turning down, when it’s actually not and short sellers are forced to exit their positions to stop losing money.

bitcoin (lowercase) – described as a unit of measure (e.g. 1 bitcoin), upper case (Bitcoin) is when its used as the name.

Bitcoin (uppercase) – the first decentralized cryptocurrency created 2008 by Satoshi Nakamoto. It allows one to send and receive money without any middlemen such as banks.

Bitcoin Cash – a clone (AKA “fork”) of Bitcoin that focuses on processing high volumes of transactions differently which was created because of disagreements about how to best grow digital currency.

Bitcoin Gold – A clone (AKA “fork”) of Bitcoin that focuses on handling high volumes of transactions differently and also created because of community disagreements.

BitLicense – a controversial business license issued for cryptocurrency companies which was created and provided by the New York State Department of Financial Services (NYSDFS) in New York.

Block – a collection of transactions that have occured during a certain amount of time (10 minutes for Bicoin) and have been bundled in a block and added to the Blockchain.

Block Explorer – a tool used to view detailed information of transactions, accounts, and other activity on a Blockchain.

Block Halving – 50% cut of Bitcoin’s supply of new coins issued to miners and cut in half about every four years to keep it scarce.

Block Height – the total number of blocks on a given cryptocurrency blockchain starting with the first block, also known as the Genesis Block (Height 0) and counting up from there.

Block Reward – payment, usually a mix of new coins and transaction fees made to the volunteers who offer their computers to facilitate transactions on a blockchain network.

Block Size – is the file size of each block on a blockchain showcasing how many transactions can be bundled and processed in each one.

Blockchain – a decentralized, unchangeable record of all transactions that have occurred for a cryptocurrency. It bundles transactions in order on blocks and stores them permanently.

BTC – is the short ticker symbol for Bitcoin, the first decentralized cryptocurrency created back in 2008 and is often used on exchanges and other financial platforms.

Bug Bounty – a reward offered by exchanges or wallets for finding vulnerabilities and other issues in computer code to prevent hacks.

Bull – a person aka as “bullish” that is optimistic and confident that market prices will be going up.

Bull Trap – a false market signal where the falling trend of an asset appears to be turning up, but is not, forcing long buyers to exit their positions to stop losing money.

C

Chargeback – prevented with cryptocurrencies, a customer can reverse a transaction and force the merchant to return funds.

Client – software that can access blockchain on a local computer and help process blockchain transactions.

Cold Storage – offline safekeeping of private keys that allow for access to cryptocurrency funds which are typically done through hardware wallets, USB drives, and paper wallets.

Confirmation – an action that each past block takes making a transaction more irreversible because it stores them more deeply in the blockchain.

Consensus – an automated mechanism that allows blockchain participants to agree on which transactions happened and in which order.

Consensus Point – a point in time when blockchain participants agree on which transactions happened and in which order and they can be based on a time interval or based on a volume of transactions.

Cryptocurrency – a digital currency that uses strong computer code (cryptography) and a decentralized system to allow for transactions without using middlemen like banks.

D

Darknet – a peer-to-peer layer of the internet, often involving illegal marketplaces and illicit activity, that can only be accessed with special software.

Decentralized Application – applications that run without the control of a central authority such as a software company or government. Ethereum is the first and largest decentralized application platform.

Decentralized Autonomous Organization (DAO) – an investor-funded and directed venture capital crowd-fund built on the Ethereum network that was hacked back in June 2016 and subsequently shut down.

DAICO – a method for decentralized funding of projects that was proposed by Vitalik Buterin, the creator of Ethereum, that combines ideas from Decentralized Autonomous Organizations (DAOs) and Initial Coin Offerings (ICOs) providing investors with the ability to vote and, if dissatisfied with the project’s progress, could get their money back.

Decentralized Exchange – a peer-to-peer exchange that allows users to buy and sell cryptocurrency and other assets without the control or fees of a central authority.

Decentralized Organization – a smart-contract based organization that uses automated rules to run without a central authority.

Difficulty – a measurement of how difficult, it is for a miner to solve the mathematical puzzle required to process a cryptocurrency block.

Digital Currency – AKA as cryptocurrency, is currency that uses strong computer code (cryptography) and a decentralized system to allow for transactions without using middlemen like banks.

Digital Identity – personal identifiable information like name, address, social security number, and more that are bundled and stored digitally.

Distributed – a system, that is not controlled and cannot be changed by a central authority like a person, company, or government.

Distributed Ledger – a type of computer database that is stored on many private computers at the same time, instead of central company servers. Blockchains are also known as distributed ledgers.

Double Spend – a problem in which somebody fraudulently sends digital money to two different receivers when they only have enough for one transaction.

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E

Encryption – the use of mathematics and computer code (cryptography) to protect sensitive data like digital wallets, private keys, and personal information from unauthorized access.

Enterprise Ethereum Alliance (EEA) – a group of Ethereum core developers, startups, and large companies working together to commercialize and use Ethereum for different business applications.

Equity Tokens – tokens that represents an ownership interest in a company. Equity tokens work similar to traditional stocks and may include voting rights. Equity tokens are also used to represent ownership rights in company debt. They are designed to improve transparency and liquidity.

ETH – is the short ticker symbol for Ethereum, a platform for creating and running smart contracts, which is often used on exchanges and other financial platforms.

Ether – is the digital currency of the Ethereum network which is used to pay the transaction and processing fees of Ethereum decentralized applications and smart contracts.

Ethereum – a platform for creating and running smart contracts. These are programmable applications that run exactly as promised – without downtime, censorship, or interference.

Exchange – a system on which assets like cryptocurrencies can be bought, sold, and stored. Exchanges can be centralized where a company controls them; or decentralized (peer-to-peer).

Exchange Traded Fund (ETF) – a security that tracks a basket of assets such as stocks, bonds, and cryptocurrencies but can be traded like a single stock and can be bought and sold on traditional stock exchanges.

F

Fiat – a term used to describe traditional government-issued and backed currencies like dollars, Euros, and Yen which are not backed by physical commodities but by legal tender laws.

Flippening – a potential future event, hoped for by Ethereum fans, where the total market cap of Ethereum surpasses the total market cap of Bitcoin – making Ethereum the most valuable.

FOMO – Internet culture term that stands for Fear of Missing Out describing actions taken by investors based on emotions and the fear of not benefiting from a price rise or drop.

Fork – soft or hard, a change to the software and rules of a cryptocurrency that creates two separate versions of the currency’s blockchain.

FUD – Internet culture term that stands for Fear, Uncertainty, and Doubt. It means negative information that is being purposefully spread about an asset to make people sell.

Futures – contracts to buy assets (like cryptocurrencies and stocks) with an agreement for future delivery on a regulated stock exchange.

G

Gas – an internal pricing unit paid in Ether, calculated by apps to run decentralized applications and smart contracts on the Ethereum network.

Genesis Block – the very first block of a blockchain, which is a string of “blocks” that are linked together in order. Each block is a collection of bundled transactions.

H

Halving – when Bitcoin’s supply of newly generated coins is cut in half about every four years to keep it scarce.

Hard Fork – a change to the rules of a cryptocurrency, which creates two separate versions of the blockchain that are not backward compatible with previous rules.

Hardware Wallet – a physical storage device for cryptocurrencies such as Ledger Nano S and Trezor, that uses special technologies to protect the assets on it.

Hash Function – cryptographic computer code that works like a one-way street. It’s easy to decipher 150 + 150 = ? but much harder to find the correct answer (out of many) for ? + ? = 300.

Hash Rate – the number of hash computations that can be performed by a cryptocurrency miner with their computer hardware.

HODL – Internet culture term that stands for the resolve to hold assets over a longer period without selling which became popular after an Internet user misspelled the word “hold”.

Hot Storage – the online safekeeping of private keys, which are typically done through open-source online wallets and digital asset exchanges which allow for access to cryptocurrency funds.

I

Initaal Coin Offering (ICO) – a public, crowdfunded sale of cryptocurrency tokens to raise money for a project. Typically, company-specific tokens are offered in exchange for Bitcoin and Ethereum.

Intermediary – is a traditional middleman like a bank. It’s a central third party that no longer is required in a decentralized Blockchain system.

J

K

Know Your Customer (KYC) – laws and regulations that require banks and other financial institutions to keep and report many details of their customers’ personal information and transactions.

L

Ledger – a store of records that can only be added to but unchangeable after the fact. Blockchains use decentralized ledgers as their core technology.

Ledger Nano S – a popular hardware wallet, designed and sold by the French company Ledger Wallet.

Lightning Network – a proposed change to Bitcoin’s blockchain that’s designed to facilitate faster transactions and better scaling involving bi-directional payment channels and other changes.

Litecoin – an offshoot of Bitcoin with very similar features but designed for very cheap and fast transaction with the goal to become digital money.

LTC – is the short ticker symbol for Litecoin, which is often used on exchanges and other financial platforms, focusing on cheap transactions.

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M

Margin Trading – a trading practice where existing assets are used as collateral for short-term loans. The loans are then used in risky trades to magnify the gain or loss of the trade.

Market Capitalization – the total value of an asset, calculated by multiplying the total number of outstanding shares (or coins) and the price per share (or coin).

Merkle Tree – a system that splits complicated hash code functions into smaller chunks (creating a tree-like shape) allowing for faster verification on large-scale blockchains.

Microtransaction – a business model where very small payments can be made in exchange for digital goods and services such as paying a tiny fee for every page of an ebook you read.

Middleman – is a traditional intermediary like a bank. It’s a central third party that no longer is required in a decentralized Blockchain system.

Miner – a participant in the blockchain network, who bundles transactions and gets paid in new coins and transaction fees in return for helping to run the system.

Mining – an essential process by which transactions get verified, bundled, and added to the Blockchain.

Mining Pool – a group of people or organizations who come together to pool and share their computer resources for cryptocurrency mining often splitting the rewards.

Mining Reward – the payment, often a mix of new coins and transaction fees, resulting from volunteering computer resources to process cryptocurrency transactions.

Mining Rig – a complicated computer setup that uses multiple graphic cards (GPUs) for maximum efficiency specially designed for mining a cryptocurrency.

Monero – a secure, private, and untraceable cryptocurrency focused on being anonymous internet money, hiding your accounts and transactions from anybody but the holder.

Moon / Mooning – a popular internet slang term used to describes the positive past or future performance of cryptocurrencie prices shooting up to astronomical levels.

Multi Signature (MultiSig) – cryptocurrency wallets and addresses that are protected by multiple keys requiring several people to approve (sign) transactions before they can take place.

N

Node – a participant in a cryptocurrency network that provides a copy of the entire blockchain to the network. All miners host a node, but not all nodes have to mine cryptocurrency.

O

Off-Ledger Currency – a digital currency that is created (minted) outside of the blockchain ledger but used on the blockchain ledger.

Offline Storage – cryptocurrency wallets that can be stored on devices and systems that are or are not connected to the Internet with offline storage providing additional protection from hacking.

On-Ledger Currency – a digital currency that is both created (minted) on the blockchain ledger and also used on the blockchain ledger such as Bitcoin.

Online Storage – cryptocurrency wallets that can be stored on devices and systems that are or are not connected to the Internet with online storage offering more convenience but also increased risk of being hacked.

Open Source – a collaborative and open software development approach that encourages experimentation, modification and sharing of computer code.

Oracle – an oracle is an automated system that makes decisions based on pre-set rules and real-world events which is an essential function that helps to arbitrate smart contracts.

P

Paper Wallet – a type of cold storage where private and public keys and  QR codes are printed or written on physical paper to prevent hacking and theft.

Peer-to-Peer (P2P) – a peer-to-peer network that distributes computing tasks among clusters of private computers (decentralized approach), instead of using company computers (centralized approach).

Permissioned Ledger – a ledger designed with restrictions so that only a select group of people or organizations have permission to access it.

Private Key – a string of letters and numbers that are used for sending cryptocurrency which should be kept secret because it enables spending with the cryptocurrency wallet.

Proof of Stake (POS) – a system designed to financially incentives honest behavior and be more environmentally friendly than Proof of Work occurs when miners process and validate transactions by proving that they have ownership of a certain amount of the asset, rather than by performing energy-intensive computations. For PoS, miners “lock up” their assets (that’s the “stake”) and then promise to fairly process transactions. If miners do an honest job, they get rewarded with transactions fee payments, but if they try to cheat, they get penalized and lose some or all of their locked assets.

Proof of Work (POW) – when miners process transactions by using computers to solve complicated mathematical puzzles. They “proof” that they did this computational work by finding solutions to those puzzles. By doing this, they help validate and process transactions and in turn are paid for their work with transactions fees and with newly created coins.

Public Key – a string of letters and numbers that are used to receive cryptocurrency which works similar to a traditional bank account number and can be shared publicly with others.

Public Key Cryptography – a cryptographic system that uses both a private key and public key to safeguard transactions. It’s the central security-layer behind Bitcoin.

Pump & Dump – investment scheme that advertises the benefits of a certain asset, with the hope that a lot of people buy it, naturally raising the price, then sold by the originator for profit.

Q

QR Code – a machine-readable label that shows information encoded into a graphical black-and-white pattern often used to easily share wallet addresses with others.

R

Raiden Network – an upcoming protocol change to the Ethereum blockchain that is designed to allow for high-speed transfers and better scaling, similar to Bitcoin’s proposed Lightning Network.

Replicated Ledger – a blockchain ledger with one main copy of the data (master ledger), connected to a set of sub-layers of the same data (slave ledgers).

Return on Investment (ROI) – the percentage gain that was made with an investment or asset. For example, a 100% ROI means that the price of the asset or investment has doubled in value.

Ripple – a Blockchain payment system for banks, payment providers, digital asset exchanges, and other companies that is designed to move large amounts of money more quickly and reliably.

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S

Satoshi – is the smallest unit of measure of the cryptocurrency. Each Satoshi is 0.00000001 Bitcoin, making the currency very divisible. It was also named after the creator of Bitcoin.

Satoshi Nakamoto – the mysterious creator of Bitcoin which was created back in 2008, and to this day, nobody knows his or her true identity. Satoshi could be a woman, a man, or a group.

SEC – short for Securities and Exchange Commission is a United States government agency that regulated securities (stocks, bonds, etc.) as well as stock exchanges.

Segregated Witness (SegWit) – a proposed change aka fork, to Bitcoin’s blockchain that would increase the block size limit from 1MB to 2MB for faster transactions.

SHA 256 – a very strong cryptographic standard that is used as the basis for Bitcoin’s and other Proof of Work systems. It is also the technology that protects wallets.

Sharding – a scaling solution for blockchains to improve high-volume transaction speeds, so instead of every node holding a full blockchain copy, they only hold partial copies.

Shill / Shilling – aka as pumping, is aggressively advertising an asset for personal financial gain, even to the detriment of others and often while distorting the truth.

Silk Road – a now defunct marketplace on the Darknet that was shut down by the FBI which was best known for selling drugs and other illegal products and accepted Bitcoin.

Smart Contract – self-running computer code that makes decisions based on pre-set rules that later cannot be changed with Ethereum being the most well-known implementation system.

Soft Fork – a change to the rules of a cryptocurrency that creates two separate versions of the blockchain that are backwards compatible with previous rules.

Solidity – computer programming language that is used to develop smart contracts and decentralized applications on the Ethereum platform and other blockchains.

State Channel – a system that moves transaction interactions off the blockchain to reduce cost and increase speed. Transactions are then locked until all participants agree and verify them.

T

Testnet – an alternative blockchain that is not public or live and used to test new code. It doesn’t transact any real money or value but allows developers to experiment and learn.

Token – a unit of value for a blockchain system that can be used for payment, access, voting, and facilitating the overall blockchain infrastructure.

Tokenless Ledger – a distributed blockchain ledger that doesn’t require a token or other native digital currency to function or to facilitate transactions.

Transaction Fee – payment made to the volunteers who process transactions on a blockchain (miners) which can vary by cryptocurrency and also by the desired transaction speed.

Trezor – was the first Bitcoin hardware cryptocurrency wallet now offering support for altcoins such as Ethereum, Litecoin, Dash, and more.

Trustless – the back bone of blockchains because no participant needs to trust any other participant for transactions to work out as trust comes from the system itself, which is impartial.

Turing Complete – a computationally universal computer system or computer language that can process any code that a general-purpose computer could. An example would be Ethereum.

U

Unpermissioned Ledger – a ledger that doesn’t require the approval of a central authority to be used nor is it owned by anyone or open to participation. A good example is Bitcoin itself.

Utility Token – aka as utility coins, app coins, and user tokens, grants owners access to Blockchain products or services for specific projects. These tokens are not intended to be investments or to grant equity ownership in a project, though some investors speculate on a potential future price increase.

V

Vanity Address – a cryptocurrency public address that includes custom letters and numbers that are human-readable. An example would look like 2r85046COINSPOTTER6u02248468kf.

Vitalik Buterin – born in 1994, a Rusian-Canadian programmer and creator of the decentralized application platform Ethereum who also contributed to other open-source projects.

Volatility – is created by the rapid and repeated move of an asset’s price in both directions (up and down). Volatility can add uncertainty and risk to a market, but can also present opportunity.

W

Wallet – aka a digital wallet is where cryptocurrencies like Bitcoin are stored. More specifically, coins are actually stored in the Blockchain itself, to which the wallet merely gives access.

Web Wallet – an online cryptocurrency wallet. Most cryptocurrency exchange wallets are web wallets. Popular for their convenience, but run a risk of being hacked.

Wei – the smallest fraction of an Ether coin (Ether is the native currency of the Ethereum network). One Ether is made of 1000000000000000000 Wei, making Ether very divisible.

Whale – an investor that holds a very large amount of an asset. For cryptocurrencies, whales are often early buyers of a coin or large, institutional buyers that hold a massive stake.

Whitepaper – a formal, scientifically-written description of an idea or project that cover the theory and practical applications of cryptocurrencies, as well as many technical details.

X

XMR – is the short ticker symbol for Monero, a privacy-focused, untraceable cryptocurrency, which is often used on exchanges and other financial platforms.

Y

Z

Zero Confirmation Transaction – are transactions that are confirmed at regular intervals. New transactions have zero confirmations, which means they have not been verified yet and are less reliable.

Zero Knowledge Proof – enables one party to provide evidence that something happened to another party without revealing private details.

 

 

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