A

34% Attack

A 34% Attack is a type of potential attack on a blockchain using the “Tangle” Consensus method where an individual or organization obtains control over at least 34% of the overall network mining power (hashrate) and then attempts to manipulate the general ledger to approve or disapprove chosen transactions by way of majority approval. See 51% Attack.

Read More

51% Attack

A 51% Attack is a type of potential attack on the Bitcoin network where an individual or organization obtains control over a majority of the overall network mining power (hashrate) and then attempts to manipulate the general ledger to approve or disapprove chosen transactions by way of majority approval.

Read More

Address

Blockchain addresses operate in a similar way to physical addresses and are used to send or receive transactions on a blockchain network. An address usually presents itself as a string of alphanumeric characters. For example, the address to which Bitcoin donations can be sent to support AllThingsCrypto.tech is:

Agreement Ledger

An agreement ledger is a distributed ledger or accounting in which certain agreements are defined. Unlike a legal contract, participants voluntarily submit to these agreements without entering into more stringent contractual obligations. The agreement is executed in plain sight of every party involved.

In this way, every Blockchain is an Agreement Ledger.

Altcoin

An altcoin is simply a “Bitcoin alternative”—basically any cryptocurrency that isn’t Bitcoin. These altcoins include coins like Ether, Ripple, Litecoin, Bitcoin Cash, NEO, Stellar Lumens, etc. Altcoins are generally forks of existing blockchain technologies, or creators of their own blockchain. Altcoins can be traded at many exchanges around the world.

Arbitrage

Arbitrage is a trading practice where a trader takes advantage of the difference in price of the same commodity on two different exchanges. Basically, a trader would buy an asset on one exchange and then sell it at a higher price on another exchange, thus taking advantage of the difference in price between the two exchanges.

ASIC

ASIC is the short form for “Application-Specific Integrated Circuit”, a silicon chip specifically designed to do a single task. Basically, the computers we use operate on general-purpose circuits, while an ASIC is utilized entirely for a single application. In the case of cryptocurrency mining, ASICs can be used to greatly increase efficiency and significantly decrease energy costs.

ATH

ATH is an acronym for “All-Time-High”. This is the highest historical price of any currency in the entirety of its life.

Attestation Ledger

An Attestation Ledger is a distributed ledger that provide a reviewable record of agreements, commitments, statements, or transactions. The purpose is to provide evidence, or attestation, of the nature and fulfillment of an agreement. These viewable records are, in essence, receipts. This type of ledger is vital to compliance with government and tax regulations.

B

Bag Holder

A bag holder is someone who is still holding on to an altcon after a pump-and-dump crash. “Bag holder” can also just refer to someone who is holding a coin that is sinking in value with few future prospects. In brief, a bag holder is a person whose investment has become worthless or almost worthless. Therefore, the investor is left “holding the bag.”

Bear Market

When the market is a Bear Market, it means that the general sentiment and and expectation of the market is that price is going to decrease, either for a single coin or asset, or in the market as a whole. This expectation is generally a self-fulfilling prophecy, resulting in price drops for individual assets or for all assets across the market as a whole. This trend continues to increase until sentiment changes, and a more Bull Market mentality starts to move prices back up.

Bitcoin (BTC)

Bitcoin is the first widely-recognized cryptocurrency, and has been the pioneer for the Blockchain industry as a whole. Bitcoin runs on a global peer-to-peer network with a distributed ledger that provides a necessary balance of encryption and transparency. Bitcoin operates on a Proof-of-Work (PoW) consensus blockchain, and has been forked into several other coins, such as Bitcoin Cash (BCH).

Bitcoin Cash (BCH)

Bitcoin Cash is a cryptocurrency that was created as a Bitcoin hard fork in August 2017. Bitcoin Cash is essentially a clone of the Bitcoin blockchain, but has improved scalability by increasing block size capacity from 1 MB to 8 MB. The goal is to make Bitcoin Cash a more usable currency in comparison with Bitcoin.

Bitcoin ATM

A Bitcoin ATM is simply an ATM machine that allows you to deposit into or withdraw funds from your Bitcoin wallet. There are already thousands of these ATM machines around the world.

Block

Blocks are data packages that include a few necessary parts. These parts include a reference to the block immediately preceding the current block, the solution to a very complicated mathematical problem or puzzle (without which the block cannot be recorded in the chain. The process of solving the puzzle and recording the block is called “mining”), and a record of the machine that gets the reward for solving the puzzle. The most important part is the general ledger of the transactions that were completed since the last block was recorded. Blocks are chained together in chronological order, thus the source of the name “blockchain”.

Blockchain

Blocks are data packages that include a few necessary parts. These parts include a reference to the block immediately preceding the current block, the solution to a very complicated mathematical problem or puzzle (without which the block cannot be recorded in the chain. The process of solving the puzzle and recording the block is called “mining”), and a record of the machine that gets the reward for solving the puzzle. The most important part is the general ledger of the transactions that were completed since the last block was recorded. Blocks are chained together in chronological order, thus the source of the name “blockchain”.

Block Ciphers

A Block Cipher is a method of encryption that encrypts data/text in chunks, called blocks, rather than each bit individually. In blockchain, Block Ciphers are the primary method of encrypting and recording the chained blocks. Each block contains a cipher and an algorithm to apply the cipher to the block. Once encrypted, the block is now in ciphertext form, and requires the encryption key to be read.

Block Explorer

A Block Explorer is a tool used to look inside the data stored on a blockchain. It has a record of all the transactions in each block, and is often made public to increase blockchain visibility and transparency. In essence, a Block Explorer is much like a web browser for the internet. It’s a friendly UI that displays the information at given block locations. There are several prominent blockchain explorers that are free to use, such as Blockchain.info for the Bitcoin blockchain and Etherscan.io for the Ethereum blockchain.

Block Height

Block Height is a measure of how large a blockchain is based on the number of blocks appended to the chain. For instance if a blockchain has 100 blocks, its block height would be 100. The first block in any chain, called the Genesis Block, is given the height of 0, and each block after just follows numerical order.

Block Reward

The amount that miners may claim as a reward for creating a block. Equal to the sum of the block subsidy (newly available satoshis) plus the transactions fees paid by transactions included in the block.

Bollinger Band

A Bollinger Band®, developed by famous technical trader John Bollinger, is plotted two standard deviations away from a simple moving average. Essentially, it is a margin around the price of a crypto that helps indicate when a coin is overbought or oversold.

Bull Market

An expectation that prices within a given financial market are going to increase or have been increasing for a period of time. Bull markets are dominated by optimism, investor confidence and expectations that strong results should continue. It is difficult to predict consistently when the trends in the market might change.

C

Circulating Supply

An approximation of the number of coins or tokens that are circulating in the public market. See also: total supply and maximum supply. Market Cap = Price x Circulating Supply. Don’t be confused with total supply and max supply. They are different. If a cryptocurrency has only the circulating supply, and does not have total supply or max supply, that means that cryptocurrency has no max supply limit. If the cryptocurrency has circulating supply and total supply but does not have max supply, that still means no maximum cap on that coin.

Central Ledger

A ledger maintained by a central agency. Also known as general ledger, a central ledger contains all the accounts for recording transactions relating to a company’s assets, liabilities, owners’ equity, revenue, and expenses.

Chain Linking

Chain Linking is the process of connecting two blockchains with each other, thus allowing transactions between the chains to take place. This will allow blockchains like Bitcoin to communicate with other sidechains, allowing the exchange of assets between them.

Cipher

A Cipher is the algorithm used for the encryption and/or decryption of information. In common language, ‘cipher’ is also used to refer to an encryption message, also known as ‘code’.

Cloud Mining

Classical cryptocurrency mining requires huge investments in hardware and electricity. Cloud mining companies aim to make mining accessible to everybody. People can simply log in to a website and invest money in the company which already has mining datacenters. The money is managed by the company and it is invested in mining equipment. Investors get a share of the revenue. The disadvantage for the user is that cloud mining has low returns compared to traditional mining.

Coin(s)

A coin is its own currency and runs on its own blockchain. See ‘token’ for a differentiation from other cryptocurrency types.

Cold Storage

The process of moving crypto-currency ‘offline’, as a way of safekeeping your crypto-currency from hacking. There are a variety of ways to do this, but some methods most commonly used:

  • Printing out the QR code of a software wallet and storing it somewhere safe, such as a safety deposit box.
  • Moving the files of a software wallet onto a USB drive and storing it somewhere safe.
  • Using a hardware wallet.

Confirmation

Confirmation means that the blockchain transaction has been verified by the network. This happens through a process known as mining, in a proof-of-work system (e.g. Bitcoin). Once a transaction is confirmed, it cannot be reversed or double spent. The more confirmations a transaction has, the harder it becomes to perform a double spend attack.

Consensus

Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the ledgers are exact copies of each other.

Consortium Blockchain

A Consortium Blockchain is a blockchain where the consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which ten must sign every block for the block to be valid. The right to read the blockchain may be public or restricted to the participants. There are also hybrid routes such as the root hashes of the blocks being public together with an API that allows members of the public to make a limited number of queries and get back cryptographic proofs of some parts of the blockchain state. These blockchains may be considered “partially decentralized”.

Cryptoanalysis (Cryptanalysis)

Cryptoanalysis, or cryptanalysis, is the study of methods for obtaining the meaning (deciphering) of encrypted information, without access to the secret information (or the key) that is normally required to do so.

Cryptocurrency

Also known as tokens, cryptocurrencies are representations of digital assets. It’s a form of digital currency based on mathematics, where encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Furthermore, cryptocurrencies operate independently of a central bank.

Cryptographic Hash Function

Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 computational algorithm is an example of a cryptographic hash.

Cryptography

Refers to the process of encrypting and decrypting information. Mathematics creates codes and ciphers, in order to conceal information. Used as the basis for the mathematical problems used to verify and secure transactions on the blockchain.

Cryptojacking

Cryptojacking is referred as a secret use of a device to mine cryptocurrency. The first widely known attempt for cryptojacking was the torrent tracker Piratebay. They enabled an in-browser mining software so when somebody visits the website his/her computer will start mining cryptocurrency via the browser. Users started noticing the unusual behavior in their browsers and Piratebay took down the software. There have been many attempts for cryptojacking since then. The easiest way to find out if a computer is mining cryptocurrency is to check the resources monitor for unusual CPU behavior or using the debug console of your browser and look for mining scripts. Developers also released Chrome browser extensions to protect users from mining occurring on their devices.

D

Decentralized

A state where there is no central control, power or function, or in reference to infrastructure, no central point of failure. Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized (there is one commonly agreed state and the system behaves like a single computer).

dApp

A decentralised application (dApp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivised in the form of cryptographic tokens and operates on a protocol that shows proof of value. For an application to be considered a dApp or decentralized application it must meet the following criteria (1) Application must be completely open-source, it must operate autonomously, and with no entity controlling the majority of its tokens. The application may adapt its protocol in response to proposed improvements and market feedback, but all changes must be decided by consensus of its users. (2) Application data and records of operation must be cryptographically stored in a public, decentralized blockchain in order to avoid any central points of failure. (3) The application must use a cryptographic token (bitcoin or a token native to its system) which is necessary for access to the application, and any contribution of value from miners/farmers should be rewarded with the application’s tokens. (4) The application must generate tokens according to a standard cryptographic algorithm acting as a proof of the value nodes are contributing to the application (Bitcoin uses the Proof of Work Algorithm).

DAO

Decentralised Autonomous Organizations can be thought of as corporations that run without any human intervention and surrender all forms of control to an incorruptible set of business rules. Instead of a hierarchical structure managed by a set of humans interacting and controlling property through a legal system, a Decentralized Organization relies on protocols set in code and enforced via blockchain. A Decentralized Autonomous Organization takes it one step further, and exists autonomously as an entity living on the internet.

The DAO

The DAO (yes, there’s a difference) was a venture capital fund built on Ethereum. The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises.In 2016, a vulnerability in the DAO code was exploited to siphon off ⅓ of the DAO’s funds to a subsidiary account. This caused a soft and hard fork. It was kinda a big deal.

Decryption

Decryption is the process of turning cipher-text back into plaintext. In decryption, the system extracts and converts scrambled data back into data that is easily understandable not only by the reader, but by the system. Decryption is used primarily for security and privacy to reduce data loss and theft. Pass keys or passwords allow the encrypted data to be decrypted, and then access that secure data.

DICO (Decentalized Initial Coin Offering)

A dICO is a new approach to an Initial Coin Offering brought to market by Komodo, which utilizes a decentralized approach, detaching coins from the blockchain that they are built on. This has been launched by Komodo, who also claim that all coins created on their platform can natively interact with any other supported coins, with Komodo serving as a bridge within a network of blockchains. All currencies created using Komodo as a dICO will operate independently, which means that not all transactions will be recorded on the parent blockchain, which would theoretically help to reduce blockchain bloat.

Digital Commodity

is a scarce, electronically transferrable, intangible, product or service with a market value.

Digital Identity

is information about an entity used to represent an external agent. This is placed online or networked identity adopted or claimed in cyberspace by an agent, which can be an individual, organization, application, or electronic device.

A Digital Identity is comprised of characteristics, or data attributes, such as the following:

  • Username
  • Password
  • Date of Birth
  • Social Security Number
  • Medical History
  • Online Search Activities
  • Electronic Transactions
  • Purchasing history or behavior
  • Email address
  • URL
  • Domain

Digital Signature

Private keys are used for signing transactions. Each time a transaction is sent over the blockchain it gets signed by the user’s private key. The signed transaction is broadcasted over the network together with the corresponding public key. Each miner is able to verify the signature by verifying the signature with the public key. The signature ensures that only the owner of the account can move money or assets out of the account.

Distributed Ledger

Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. The distribution allows for records to be independently constructed and held by every node, and not communicated to nodes held by a central authority like traditional centralized ledgers. Every single node on the network processes every transaction, coming to its own conclusions and then “voting” on those conclusions to make certain the majority agree with the conclusions. A distributed ledger does not have to have its own currency and may be permissioned and private. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.

Distributed Network

A type of network where processing power and data are spread over different nodes in the network rather than having a centralised data center. This provides a single data communication network, which can be managed jointly or separately by each network. The distributed network often also distributes communication as well as processing.

Distributed Consensus

Collective agreement by various computers in a network and allows it to work in a decentralized, P2P manner without the need of central authority to deter dishonest network participants.

Bitcoin uses proof of work to maintain consensus in its peer-to-peer network. Nodes in the bitcoin network attempt to solve a cryptographic proof-of-work problem, where probability of finding the solution is proportional to the computational effort, in hashes per second, expended, and the node that solves the problem has their version of the block of transactions added to the peer-to-peer distributed timestamp server accepted by all of the other nodes. As any node in the network can attempt to solve the proof-of-work problem, a Sybil attack becomes unfeasible unless the attacker has over 50% of the computational resources of the network.

Difficulty (Mining Difficulty)

This refers to how easily a data block of transaction information can be mined successfully. In Proof-of-Work mining, is how hard it is to verify blocks in a blockchain network. In the Bitcoin network, the difficulty of mining adjusts verifying blocks every 2016 blocks. This is to keep block verification time at ten minutes.

Mining difficulty measures how hard it would be to find the next Bitcoin block. Every proof of work consensus algorithm has a mining difficulty which is also adjustable. Depending on how many miners join the network the difficulty might rise or fall. The aim of the difficulty is to keep the block times even and make the network secure. The average time for finding a Bitcoin block is set for 10 minutes. Litecoin is set for 2.5 minutes.

Double Spending

Double spending occurs when a sum of money is spent more than once. This is a problem unique to digital currencies because digital information can be reproduced relatively easily. Double Spending refers to a scenario, in the Bitcoin network, where someone tries to send a bitcoin transaction to two different recipients at the same time. However, once a bitcoin transaction is confirmed, it makes it nearly impossible to double spend it. The more confirmations that a particular transaction has, the harder it becomes to double spend the bitcoins.

Double-spending is the result of successfully spending some money more than once. Bitcoin is the first to implement a solution in early 2009 which protects against double spending by verifying each transaction added to the blockchain to ensure that the inputs for the transaction had not previously already been spent.

Hackers have tried to get around the Bitcoin verification system by using methods such as out-computing the blockchain security mechanism, or using a double-spending technique that involves sending a fraudulent transaction log to a seller and another to the rest of the Bitcoin network. These ploys have met with only limited success. In fact, most Bitcoin thefts so far have not involved double-counting, but rather have been due to users storing bitcoins without adequate safety measures.

E

Erc-20

Erc-20 is a type of token standard specifically for the Ethereum blockchain, which ensures the tokens perform in a predictable way by defining a common list of rules for all Ethereum tokens to follow. This allows the tokens to be easily exchangeable and able to work immediately with decentralized applications that also use the ERC-20 standard. Most tokens released through ICOs are compliant with the ERC-20 standard.

Escrow

Escrow is a bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled.

Ether (ETH)

Ether (ETH) is the native token of the Ethereum blockchain, and the premier cryptocurrency that is used for operating the Ethereum platform. It is used to pay for transaction fees, miner rewards, and computational tasks. In the platform, transaction fees are measured based on the gas limit and gas price and ultimately paid for in Ether.

Ethereum

Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system. It is the first blockchain to feature smart contract (scripting) functionality. The network is aimed at solving issues associated with censorship, fraud and third party interference. Ethereum is an open software platform based on blockchain technology that enables developers to write smart contracts and build and deploy decentralized applications(Dapps). The native token of the blockchain is called Ether which is used to pay for transaction fees, miner rewards and other services on the network. The main innovation of Ethereum is the Ethereum Virtual Machine (EVM) which runs on the Ethereum network and enables anyone to run any application. The EVM makes the process of developing blockchain applications much easier.

Ethereum Classic (ETC)

Ethereum Classic (ETC) is not a new cryptocurrency, but instead a split from an existing cryptocurrency, Ethereum. Both blockchains are identical in every way up until block 1920000 where the hard-fork to refund The DAO token holders was implemented, meaning that all the balances, wallets, and transactions that happened on Ethereum until the hard-fork are still valid on the Ethereum Classic Blockchain. After the hard-fork, the blockchains were split in two and act individually. ETC still offers the same features as Ethereum, such as the creation and deployment of smart contract and Decentralized applications, and has all the same specifications. ETC was essentially created as a way to allow smart contracts to run exactly as they are programmed to, without the interference of a third party. The ETC community argues that the DAO smart contract did what it was programmed to do and that no action should be taken to censor the contract.

EVM

The Ethereum Virtual Machine (EVM) is a simple but powerful, Turing complete 256bit Virtual Machine that allows anyone to execute arbitrary EVM Byte Code. The EVM is part of the Ethereum Protocol and plays a crucial role in the consensus engine of the Ethereum system. It allows anyone to execute arbitrary code in a trust-less environment in which the outcome of an execution can be guaranteed and is fully deterministic. Executing code within the Ethereum network takes time, and execution is generally pretty slow compared to other VMs.

EVM Code

EVM Code Is the programming language in which accounts on the Ethereum blockchain can contain code. The EVM code associated with an account is executed every time a message is sent to that account, and has the ability to read/write storage and send itself messages.

Exchanges

A crypto exchange is a digital marketplace where traders can buy and sell tokens using different fiat currencies or altcoins. A cryptocurrency exchange is an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency. Some popular exchanges in North America are Coinbase, GDAX, Gemini, Polinex, Bittrex, Kraken, Quadriga, etc.

F

Fiat currency

Fiat currency can be defined as any money, or legal tender, declared by a government to be to be valid for meeting a financial obligation, like USD or EUR.

Flipping

Flipping is a type of investment strategy (popular in real estate investing) where you buy something with the goal of reselling for a profit later, usually in a short period of time. In the context of crypto-economics, flipping refers to the strategy of investing in tokens before they are listed on the exchanges and reselling them for a profit when they are trading in the secondary market.

FOMO

An acronym that stands for 'fear of missing out' and in the context of investing, refers to the feeling of apprehension for missing out on a potentially profitable investment opportunity and regretting it later.

Fork

A fork is the creation of an ongoing alternative version of the blockchain, by creating two blocks simultaneously on different parts of the network. This creates two parallel blockchains, where one of the two tends to eventually become the winning blockchain. The winning blockchain gets determined by its users, by the majority choosing on which blockchain their clients should be operating. Forks require a unanimous decision on behalf of the programmers in order to execute the action of a fork.

FUD

An acronym that stands for “fear, uncertainty and doubt”. It is a strategy to influence perception by spreading negative, misleading or false information about something, as opposed to reasoned criticism.

Full node

A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes. It is also the node that fully enforces all of the rules of the specified blockchain.

G

Gas

Gas is a measurement roughly equivalent to computational steps (for Ethereum). Every transaction is required to include a gas limit and a fee that it is willing to pay per gas; miners have the choice of including the transaction and collecting the fee or not. Every operation has a gas expenditure; for most operations it is ~3–10, although some expensive operations have expenditures up to 700 and a transaction itself has an expenditure of 21000.

Gas Limit

A term used in the Ethereum platform that refers to the maximum amount of units of gas the user is willing to spend on a transaction. The transaction must have enough gas to cover the computational resources needed to execute the code. All unused gas is refunded at the end of the transaction.

Gas Price

A term used in the Ethereum platform that refers to the price you are willing to pay for a transaction. Setting a higher gas price will make miners more incentivized to prioritize and validate that particular transaction ahead of those set with a lower gas price. Gas prices are typically denominated in Gwei.

Genesis Block

The first or first few blocks of a blockchain. Modern versions of Bitcoin number it as block 0, though very early versions counted it as block 1. The genesis block is almost always hardcoded into the software of the applications that utilize its blockchain.

Genesis Long

A margin trade that profits if the price increases.

Genesis Short

A margin trade that profits if the price decreases.

H

Halving

Bitcoins have a finite supply, which makes them a scarce digital commodity. The total amount of bitcoins that will ever be issued is 21 million. The number of bitcoins generated per block is decreased 50% every four years. This is called “halving.” The Bitcoin block mining reward halves every 210,000 blocks. The final halving will take place in the year 2140.

Hard Cap

The maximum amount that an ICO will be raising. If an ICO reaches its hard cap, they will stop collecting any more funds.

HODL

A type of passive investment strategy where you hold an investment for a long period of time, regardless of market volatility. The term was made famous by a typo made in a bitcoin forum. Also referred to as 'buy and hold' or 'hold on for dear life'.

Hard Fork

A Hard Fork is a change to the blockchain protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade their clients. The most recent example of a hard fork in public blockchains is the Ethereum hard fork which happened on July 21st, 2016. The hard fork changed the Ethereum protocol, therefore a second blockchain emerged (Ethereum Classic, ETC) which supports the old Ethereum protocol. In order to continue existing ETC needs miners, which would validate the transactions on the blockchain.

Hash

A hash function is any function that can be used to map data of arbitrary size to data of fixed size. The values returned by a hash function are called hash values, hash codes, digests, or simply hashes. One use is a data structure called a hash table, widely used in computer software for rapid data lookup. This is used for confirming coin transactions by miners on the blockchain network.

Hash Function

A cryptographic hash function is a mathematical algorithm that takes a particular input which can be any kind of digital data be it a password or jpeg file and produces a single fixed length output. Some examples of different hash function algorithms are MD5, MD4 or SHA256. The last one is used in the Bitcoin protocol. Main properties: (1) easy to compute hash value for any given message (2) infeasible to generate a message from its hash except by trying all possible input combinations(brute force attack) (3) infeasible to modify a message without changing the hash (4) infeasible to find two different messages with the same hash (5) deterministic so the same message always results in the same hash. Cryptographic hash functions have many information security applications, notably in digital signatures, message authentication codes (MACs), and other forms of authentication. They can also be used as ordinary hash functions, to index data in hash tables, for fingerprinting, to detect duplicate data or uniquely identify files, and as checksums to detect accidental data corruption.

Hashcash

Hash Cash is a proof-of-work system used to limit email spam and denial-of-service attacks, and more recently has become known for its use in bitcoin (and other cryptocurrencies) as part of the mining algorithm. Hashcash was proposed in May 1997 by Adam Back.

Hash Rate

Hash Rate is the measurement of performance for the mining rig is expressed in hashes per second. Hash rates represent the number of hashes that can be performed by a bitcoin miner in a given period of time (usually takes about a second).

Hybrid PoS/PoW

A hybrid PoS/PoW allows for both Proof of Stake and Proof of Work as consensus distribution algorithms on the network. In this method, a balance between miners and voters (holders) may be achieved, creating a system of community-based governance by both insiders (holders) and outsiders (miners).

I

Initial Coin Offering (ICO)

ICOs are types of crowdfunding mechanisms conducted on the blockchain. An ICO is an event in which a new cryptocurrency sells advance tokens from its overall coinbase, in exchange for upfront capital. ICOs are frequently used for developers of a new cryptocurrency to raise capital. The way it works is entrepreneurs present a whitepaper describing the business model and the technical specifications of a project before the ICO. They lay out a timeline for the project and set a target budget where they describe the future funds spending (marketing, R&D, etc.) as well as coin distribution (how many coins are they going to keep for themselves, token supply, etc.). During the crowdfunding campaign, investors purchase tokens with already established cryptocurrencies like Bitcoin and Ethereum.

IOTA (MIOTA)

Refers to the cryptocurrency and the name of an open source distributed ledger founded in 2015 that does not use blockchain (it uses a new distributed ledger called the Tangle). It offers features such as zero fees, scalability, fast and secure transactions, and so on. It is focused on the Internet of Things.

IPFS

The InterPlanetary File System (IPFS) is a hypermedia distribution protocol, addressed by content and identities. IPFS enables the creation of completely distributed applications. It aims to make the web faster, safer, and more open. IPFS is an open source project developed by the team at Interplanetary Networks and many contributors from the open source community. It is a peer-to-peer distributed file system that seeks to connect all computing devices with the same system of files. In some ways, IPFS is similar to the Web, but IPFS could be seen as a single BitTorrent swarm, exchanging objects within one Git repository. In other words, IPFS provides a high throughput content-addressed block storage model, with content-addressed hyperlinks. This forms a generalized Merkle DAG, a data structure upon which one can build versioned file systems, blockchains, and even a Permanent Web. IPFS combines a distributed hash table, an incentivized block exchange, and a self-certifying namespace. IPFS has no single point of failure, and nodes do not need to trust each other.

J

K

KYC (Know Your Customer)

KYC is the process of a business identifying and verifying the identity of its clients. The term is also used to refer to the bank and anti-money laundering regulations which governs these activities. Almost all exchanges nowadays are expected to have this protocol implemented.

L

Ledger

A ledger is a database where every transaction of a cryptocurrency is recorded. For example, Blockchain is the ledger for Bitcoin transactions. It is a global ledger where every transaction of bitcoin that has ever happened is recorded.

Light Node

A computer on a blockchain network that only verifies a limited number of transactions relevant to its dealings, making use of the simplified payment verification (SPV) mode.

Limit order / Limit Buy / Limit Sell

Orders placed by traders within a given crypto-exchange to buy or sell a cryptocurrency when the price meets a certain amount. They can be thought of as ‘for-sale’ signs. These orders are what are bought and sold against when traders place market orders.

Lightning Network

The Lightning network is a decentralized network using smart contract functionality on the blockchain to enable instant payments across a network of participants. The Lightning Network will allow bitcoin transactions to happen instantly, without worrying about block confirmation times. It will allow millions of transactions in a few seconds, at low costs, even between different blockchains, as long as both chains use the same cryptographic hash function. The Lightning network will allow two participants on the network to create a ledger entry, conduct a number of transactions between themselves and after the process has finished, record the state of the transactions on the blockchain. As for now, the bitcoin network is capable of processing up to 7 transactions per second. The Visa payment network, for instance, is believed to complete 45,000 transactions per second during a regular holiday period. This protocol tries to solve the bitcoin scalability problem.

Litecoin (LTC)

Launched in the year 2011, Litecoin is an alternative cryptocurrency based on the model of Bitcoin. Charlie Lee, a MIT graduate and former Google engineer, is Litecoin's creator. Litecoin is based on an open source global payment network that is not controlled by any central authority. Sometimes referred to as the silver of bitcoin’s gold.

M

MACD

MACD stands for “Moving Average Convergence Divergence”. A trend indicator that shows the relationship between two moving averages of prices. MACD indicators can be interpreted using three different methods:

  1. Crossovers
  2. Divergence
  3. Dramatic Rise

Market capitalization (Market Cap)

The total value held in a cryptocurrency. Market Capitalization is one way to rank the relative size of a cryptocurrency. It is calculated by multiplying the total supply of coins by the current price of an individual unit (or coin).

Maximum Supply

An approximation of the maximum number of coins or tokens that will ever exist for a cryptocurrency or crypto asset.

Merkle tree (or Hash tree)

The basic idea behind Merkle tree is to have some piece of data that is linking to another. You can do this by linking things together with a cryptographic hash. The content itself can be used to determine the hash. By using the cryptographic hashing we can address the content, and content gets immutable because if you change anything in the data, the cryptographic hash changes and the link will be different. Bitcoin uses cryptographic hashing, where every block points to the previous one. If you modify the block, the hash will change and will make the block invalid. Hash trees are a generalization of hash lists and hash chains.

Market order / market buy / market sell

A simple purchase or sale on an exchange at the current price. Market buys purchase the cheapest ETH (or coin) available on the order book, and market sells fill the most expensive buy order on the books.

Margin trading (or Buying on Margin)

The act of ‘magnifying’ the intensity of your trades by risking your existing coins. Margin trading is possible due to the existence of the lending market. Lenders provide loans to traders so they can invest in larger amounts of coins, and lenders benefit from interest on the loans. (NOTE: Very risky)

Mining

Mining is the process by which transactions are verified and added to a blockchain. This process of solving cryptographic problems using computing hardware also triggers the release of cryptocurrencies within a given blockchain.

Mining (Bitcoin)

Mining Bitcoin is the process of adding transaction records to Bitcoin’s public ledger of past transactions or blockchain. This ledger of past transactions is called the blockchain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the blockchain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. Mining is intentionally designed to be resource-intensive and challenging so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function. The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system

Mining Rig

A computer especially designed for processing proof-of-work blockchains (such as Etherium) often consisting of multiple high-end Graphic Processing Units (GPUs) to maximize their processing power.

Mining Pool

Multiple users that combine their computing power to mine on the blockchain. Newly created blocks are proportionally shared with users according to mining power. The mining pool itself provides the software necessary to mine, and gives the advantage of rewards getting distributed across the pool, providing stable income.

Monero (XMR)

Monero is a type of cryptocurrency created in 2014 that is focused on privacy and scalability, and runs on platforms like Windows, Mac, Linux and Android. Transactions on Monero are designed to be untraceable to any particular user or real world identity.

Multi-Signature (multisig)

Multi-signature addresses allow multiple parties to require more than one key to authorize a transaction and the number of signatures is agreed upon at the creation of the address.

N

Native Token

A native token — a.k.a. native coin or native currency — is a token (see ‘token’ for a definition) that runs on it’s own blockchain and is ‘native’ to that network, offering some greater utilitarian or resourceful value within the network. Native tokens are often used within the network as an incentive for block validation or for a form of spam prevention in transaction costs. Examples of native tokens include BTC, ETH, NXT, etc. Native tokens are also referred to as ‘intrinsic tokens’ or ‘built-in tokens.’

Neo (NEO)

Refers to the cryptocurrency and the name of a China's first open source blockchain that was founded in 2014 by Da Hongfei. It is similar to Ethereum in its ability to execute smart contracts or dApps but has some technical differences such as coding language compatibility.

Node

A node is any computer that connects to the blockchain network. Essentially, it is a copy of the ledger operated by a participant of the blockchain network. All nodes need to be in agreement in order for a block to be added to the chain.

O

Oracles

Oracles work as a bridge between the real world and the blockchain by providing data to the smart contracts. Smart contracts on the blockchain cannot access the outside network on their own. Therefore oracles sit between a smart contract and the external world, providing the data needed by the smart contract to prove performance while sending its commands to external systems.

P

Participants

A blockchain peer-to-peer network that is collectively owned and operated by a group of verified and identifiable participants such as individuals, institutions, business, universities, or hospitals.

Peer to Peer

Dealing directly through a single mediation point, participants of a Peer to Peer (P2P) network deal directly with each other using decentralized interactions in a highly interconnected network.

Permissioned Ledger

Permissioned Ledgers can have one or multiple owners that have the ability to grant permission to access the ledger. When a new record is added to the ledger, the integrity is checked by a limited consensus process carried out by trusted users that have been given permission, such as a government department or a bank. This process makes maintaining a shared record simpler than processes used by non-permissioned ledgers.

Permissioned blockchains

Permissioned blockchain networks allow the network to appoint a group of participants in the network who are given the express authority to provide the validation of blocks of transactions. All parties can therefore see the digital signatures, creating a highly-verifiable consensus process for the data sets.

Public Address

Public Addresses are a cryptographic hash of a public key. These can be published anywhere unlike private keys.

Pre-Sale

A sale that starts before an Initial Coin Offering (ICO) is available to the general public.

Private Blockchains

A private blockchain keeps write permissions centralized within an organization, and read permissions may be public or have arbitrary restrictions applied. The most common uses of a private blockchain include database management, auditing, financial management, and other internal services that are not required to have external access. In some cases, public readability is provided for the sake of auditability.

Private Key

A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address. Private keys must never be revealed to anyone but you, as they allow you to spend the coins from your coin wallet through a cryptographic signature. There are different types of wallets such as online wallets, mobile wallets, desktop wallet, hardware wallets or paper wallets. The category of each wallet is determined by where private keys are stored. Online wallets are mostly provided by exchanges and keep user’s private keys on their servers. If the service provider goes offline users would lose access to their funds. Hardware wallets for example store user’s private keys in a secure device which looks like a USB flash drive.

Proof-of-Authority (PoA)

A Proof of Authority is a consensus mechanism in a private blockchain which essentially gives one client (or a specific number of clients) with one particular private key the right to make all of the blocks in the blockchain.

Proof-of-Stake (PoS)

Proof-of-Stake is an alternative to the Proof-of-Work system, in which your existing stake in a cryptocurrency (the amount of that currency that you hold) is used to calculate the amount of that currency that you can mine. The more stake you own, the more likely you are to generate a block. In theory, this should prevent users from creating forks because it will devalue their stake and it should save a lot of energy. Proof of Stake sounds like a good idea, but ironically, there is the “Nothing at Stake” problem. Since mining Bitcoins is costly, it is not smart to waste your energy on a fork that won’t earn you any money, however with Proof of Stake, it is free to mine a fork.

Proof-of-Work (PoW)

Proof-of-Work is a consensus distribution algorithm that ties mining capability to computational power and requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with. Blocks must be hashed, which is in itself an easy computational process, but an additional variable is added to the hashing process to make it more difficult. When a block is successfully hashed, the hashing must have taken some time and computational effort. Thus, a hashed block is considered proof-of-work.

Protocols

Protocols are sets of formal rules describing how to transmit or exchange data, especially across a network.

Public Blockchains

A public blockchain is a blockchain that anyone in the world can read, anyone in the world can send transactions to and expect to see them included if they are valid, and anyone in the world can participate in the consensus process – the process for determining what blocks get added to the chain and what the current state is. As a substitute for centralized or quasi-centralized trust, public blockchains are secured by crypto economics – the combination of economic incentives and cryptographic verification using mechanisms such as proof of work or proof of stake, following a general principle that the degree to which someone can have an influence in the consensus process is proportional to the quantity of economic resources that they can bring to bear. These blockchains are generally considered to be “fully decentralized”.

Pump and Dump Schemes

A scheme in which the development team (or short-term traders) hypes up a project without fundamental basis in order to pump up the price of the tokens temporarily and then sells their holdings immediately after launch to earn a profit.

Q

R

Ring Signature

Using individual transaction outputs on the blockchain, that can’t be traced, Ring Signature is a cryptographic technology that provides a level or anonymisation. Messages signed with a ring signature is endorsed by an individual or an organisation. Ring signatures provide security by making it impossible to determine which group member’s key was used to produce the signature.

Ripple (XRP)

Ripple is a payment network built on distributed ledgers that can be used to transfer any currency. The network consists of payment nodes and gateways operated by authorities. Payments are made using a series of IOUs, and the network is based on trust relationships.

ROI

ROI stands for “Return on Investment”. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money).

S

Satoshi

The smallest unit of Bitcoin, equal to 0.00000001 BTC.

Satoshi Nakamoto

We speculate that Satoshi Nakamoto is a person or group of people who created the bitcoin protocol and reference software, Bitcoin Core (formerly known as Bitcoin-Qt). In 2008, Nakamoto published a paper on The Cryptography Mailing list at metzdowd.com describing the bitcoin digital currency. In 2009, Satoshi released the first bitcoin software that launched the network and the first units of the bitcoin cryptocurrency, called Bitcoins.

Scalability

A change in size, or scale, to handle the ongoing demand for blockchain network resources.

Scrypt

Scrypt is a type of cryptographic algorithm and is used by Litecoin. Scrypt creates a lot of pseudorandom numbers that need to be stored in a RAM location. Generating the numbers is computationally intensive and as they are accessed a few times it makes sense to use RAM in conjunction with hashing power (see Hash Rate) rather than generating them on the fly – a time and memory trade off in terms of optimizing speed. Compared to SHA-256 (see SHA-256), this is quicker as it does not use up as much processing time. It was designed to be particularly friendly to CPU and GPU miners, while offering little advantage to ASIC miners (see ASIC).

Segregated Witnesses (Segwit)

The process where the block size limit on a blockchain is increased by removing digital signature data and moving it to the end of a transaction to free up capacity. Transactions are essentially split (or 'segregated'), into two segments: the original data segment and the signature (or 'witness') segment. SegWit removes the malleability risk from the main blockchain and checks it before a transaction becomes a part of the blockchain and has all its information added to the blockchain, making the information irreversible. SegWit makes it possible to track bitcoin spending in an easy way, which is looking transactions up using their transaction identifiers.

SHA (Secure Hash Algorithm)

SHA is a family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST) as a U.S. Federal Information Processing Standard (FIPS). SHA-256 is an algorithm used in Bitcoin that takes an input of any size which can be any form of data (text, jpeg, pdf, etc.), mixes it up and creates a fixed size output (a hash) which is 256-bit (32-byte) long. You can think of the hash as the fingerprint of the data. Hashes are one-way functions – they cannot be decrypted back. The only way to decrypt a hash is by brute forcing it. Brute force means to systematically try all the combinations for an input. A brute force attack will always find the input, no matter its complexity. The only question is whether or not you will still be alive when it finally guesses it.

SHA-256

SHA-256 is a cryptographic algorithm used by cryptocurrencies such as Bitcoin. SHA-256 designed specific chips to optimize the iterations throughout the steps to increase the speed of creating a hash from an input. In the case of mining this means you can calculate more hashes per second by iterating through the nonce and extra nonce parameters and have a higher probability of winning the block reward. However, the SHA-256 algorithm still uses a lot of computing power and processing time, forcing miners to form mining pools to capture gains.

Sharding

A scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method of splitting a large piece of data into smaller pieces, each of which are called a shard, and each shard can only transact with other accounts in the same shard. This allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds. When speaking about shards, Vitalik Buterin explained them this way, “Imagine that Ethereum has been split into thousands of islands. Each island can do its own thing. Each of the island has its own unique features and everyone belonging on that island, i.e. the accounts can interact with each other AND they can freely indulge in all its features. If they want to contact with other islands, they will have to use some sort of protocol.”

Shilling

Someone essentially advertising another crypto-currency without any valid proof to be doing so. If a coin is promised to cure cancer or be the second coming of Jesus, it’s being shilled.

Sidechains

Sidechains are blockchains that are interoperable with each other and with Bitcoin, avoiding liquidity shortages, market fluctuations, fragmentation, security breaches and outright fraud associated with alternative crypto-currencies. Sidechains are new blockchains which are backed by Bitcoins, via Bitcoin contracts, just as dollars and pounds used to be backed by cold hard gold. You could in principle have thousands of sidechains “pegged” to Bitcoin, all with different characteristics and purposes … and all of them taking advantage of the scarcity and resilience guaranteed by the main Bitcoin blockchain, which in turn could iterate to implement experimental sidechain features once they have been tried and tested.

Smart Contracts

Smart contracts were first introduced to the crypto world through the Ethereum blockchain. They essentially encode business rules in a programmable language onto the blockchain and are enforced by the participants of the network. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system. Smart contracts usually also have a user interface and often emulate the logic of contractual clauses. Proponents of smart contracts claim that many kinds of contractual clauses may thus be made partially or fully self-executing, self-enforcing, or both. Smart contracts aim to provide security superior to traditional contract law and to reduce other transaction costs associated with contracting.

Soft Fork

A soft fork differs from a hard fork in that only previously valid transactions are made invalid. Since old nodes recognize the new blocks as valid, a soft fork is essentially backward-compatible. This type of fork requires most miners upgrading in order to enforce, while a hard fork requires all nodes to agree on the new version.

Soft Cap

Generally refers to the minimum amount that an initial coin offering (ICO) needs to raise. If the ICO is unable to raise that amount, it may be cancelled and the collected funds returned to participants.

Solidity

Solidity is Ethereum’s programming language for developing smart contracts. Its syntax is similar to that of JavaScript, and it is intended to compile into bytecode for the Ethereum Virtual Machine(EVM).

SPV(Simplified Payment Verification) client

SPV clients are Bitcoin lightweight clients which do not download and store the whole blockchain locally. These wallets provide a way to verify payments without having to download the complete blockchain. An SPV client only downloads the block headers by connecting to a full node.

Stable Coin

A crypto-currency with extremely low volatility that can be used to trade against the overall market. Tether (USDT) is the only coin that fits this description in the live market that we are aware of at this current time.

State Channel

State channels are interactions which get conducted off the blockchain without significantly increasing the risk of any participant. Moving these interactions off of the chain without requiring any additional trust can lead to significant improvements in cost and speed. State channels work by locking part of the blockchain state so that a specific set of participants must completely agree with each other to update it.

Stream Ciphers

A method of encrypting text (cyphertext) in which a cryptographic key and algorithm are applied to each binary digit in a data stream, one bit at a time.

Swarm

Swarm is a distributed storage platform and content distribution service, with a native base layer service of the Ethereum webthree stack. The primary objective of Swarm is to provide a decentralized and redundant store of Ethereum’s public record, in particular, to store and distribute dApp code and data as well as blockchain data.

T

TA

Trend Analysis or Technical Analysis. Refers to the process of examining current charts in order to predict which way the market will move next.

Testnet

A secondary blockchain that can be used by developers to test software and updates without risking the current assets on the main blockchain.

Token

Tokens are a digital identity for something that can be owned, created as smart contracts with complex permission systems and interaction paths. Smart contracts can be understood as software agents, which can act autonomously within a scope of a given network according to predefined rule sets. If the governance rules around issuance and management of a token are sufficiently complex regarding how they coordinate a group of stakeholders, token smart contracts may be understood as organizations sui generis.

A Tokenless Ledger

A distributed ledger that doesn’t require a native currency to operate.

Total Supply

The total number of coins or tokens that are in existence, including those circulating in the public market and those that are locked or reserved.

Transaction Block

A collection of transactions that have been gathered into a block that can then be hashed and added to the blockchain.

Transaction Fee

All cryptocurrency transactions involve a small transaction fee. These fees add up to account for the block reward that miners receive when they successfully process a block. Many transactions are typically processed in a way where there is no fee, but for transactions which draw coins from many bitcoin addresses (and have a large data size), a small transaction fee is usually expected. When a new block is generated with a successful hash, the information for all of the transactions is included with the block, and all transaction fees are collected by that user creating the block. Transaction fees are voluntary on the part of the person making the bitcoin transaction, as the person attempting to make a transaction can include any fee or none at all in the transaction. On the other hand, nobody mining new bitcoins necessarily needs to accept the transactions and include them in the new block being created. The transaction fee is, therefore, an incentive on the part of the bitcoin user to make sure that a particular transaction will get included in the next block which is generated. It is envisioned that over time the cumulative effect of collecting transaction fees will allow somebody creating new blocks to “earn” more bitcoins that will be mined from new bitcoins created by the new block itself. This is also an incentive to keep trying to create new blocks even if the value of the newly created block from the mining activity is zero.

Turing Complete

The ability of a computing machine to perform a system of data-manipulation rules (such as a programming language, or instruction set). All modern computers are Turing-complete. An example of this is the Ethereum Virtual Machine (EVM) which can process any “computable function”.

U

Unpermissioned ledgers

Unpermissioned ledgers such as Bitcoin have no single owner — indeed, they cannot be owned. The purpose of an unpermissioned ledger is to allow anyone to contribute data to the ledger and for everyone in possession of the ledger to have identical copies. True decentralization at is finest!

V

Vaporware

In the world of cryptocurrencies and ICO’s, this term refers to a token and its software that has been advertised but is not yet available to buy, either because it is only a concept or because it is still being written or designed. This word generally does not carry a very positive connotation to it.

W

Wallet

A file that houses a collection of private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for. Wallets contain keys, not coins. Wallets also require backups for security reasons.

Software wallet

Storage for crypto-currency that exists purely as software files on a computer. Software wallets can be generated for free from a variety of sources. MyEtherWallet (MEW) is one of the popular.

Hardware wallet

A device that can securely store crypto-currency. Hardware wallets are often regarded as the most secure way to hold crypto-currency. Usually in the format of some sort of USB drive.

Sell wall / buy wall

Using a depth chart, traders can see the current limit buy and sell points. The graphical representation on the depth chart looks like walls: http://media.coindesk.com/uploads/2015/05/image-1.png

Whisper

Whisper is a part of the Ethereum p2p protocol suite that allows for messaging between users via the same network that the blockchain runs on. The main task of whisper will be the provision of a communication protocol between dapps.

Whitelist

A list of registered and approved participants that are given exclusive access to contribute to an ICO or a pre-sale before the general public.

Whitepaper

In regards to crypto-economics and cryptocurrencies, a whitepaper is an informational document that generally informs readers and crypto-investors on the philosophy, objectives and technology of a given project or initiative. Whitepapers are often provided before the launch of a new coin or token.

X

Y

Z