Useful Terminology of Crypto
Blockchain-based cryptocurrencies are becoming more and more popular. However, as a newly arising high-tech industry, most of the public and investors have very limited knowledge or information on it.
In order to help investors and interested parties better understand cryptocurrency and blockchain technology, Atlantis Coin puts the most useful terms and phrases related to cryptocurrencies and blockchain here to provide the public with a strong foundation for those interested in exploring this innovative asset class.
Should you have any questions, suggestions or business proposals, please feel free to email to Atlantis Coin.
In order to help investors and interested parties better understand cryptocurrency and blockchain technology, Atlantis Coin puts the most useful terms and phrases related to cryptocurrencies and blockchain here to provide the public with a strong foundation for those interested in exploring this innovative asset class.
Should you have any questions, suggestions or business proposals, please feel free to email to Atlantis Coin.
A
Abstract: A summary of a larger written document. Abstracts are common in the beginning of cryptocurrency whitepapers and technical documents to briefly describe the entire document.
Address or Wallet Address: Used to send and receive transactions on a blockchain network. An address is an alphanumeric character string, which can also be represented as a scannable QR code.
Anti-Money Laundering or AML: A set of laws designed to prevent converting illegally earned money into what appears to be legally earned money. Laundering just means cleaning something that is dirty. Money laundering is the process of making illegally earned money (dirty money) appears to be legally earned (clean money). Anti-money laundering rules and laws are designed to make it difficult for criminals to launder their money.
Airdrop: Is the process of freely distributing a new cryptocurrency to people hopefully creating more demand. When a new cryptocurrency is created, it needs to gain users, which may be realized through an airdrop. The group issuing the airdrop hopes new users will begin researching and sharing the coin creating more demand.
Air-gapping: A method for securing computers in which the device does not connect to the internet or any other open networks.
Altcoin: Any cryptocurrency except for Bitcoin. “Altcoin” is a combination of two words: “alternative Bitcoin” or “alternative coin”
Algorithm: A series of steps that will solve a problem. In cryptocurrencies, algorithms are used to hide and reveal information.
API or Application Programming Interface: Application Programming Interface. A software intermediary that allows two separate applications to communicate with each other. APIs define methods of communication between various components.
ASIC or Application Specific Integrated Circuit: Application Specific Integrated Circuit. ASICs are silicon chips designed to do a specific task. In ASIC use for mining cryptocurrencies, the ASIC will perform a calculation to find values that provide a desired solution when placed into a hashing algorithm.
Atomic swap: Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange.
Address or Wallet Address: Used to send and receive transactions on a blockchain network. An address is an alphanumeric character string, which can also be represented as a scannable QR code.
Anti-Money Laundering or AML: A set of laws designed to prevent converting illegally earned money into what appears to be legally earned money. Laundering just means cleaning something that is dirty. Money laundering is the process of making illegally earned money (dirty money) appears to be legally earned (clean money). Anti-money laundering rules and laws are designed to make it difficult for criminals to launder their money.
Airdrop: Is the process of freely distributing a new cryptocurrency to people hopefully creating more demand. When a new cryptocurrency is created, it needs to gain users, which may be realized through an airdrop. The group issuing the airdrop hopes new users will begin researching and sharing the coin creating more demand.
Air-gapping: A method for securing computers in which the device does not connect to the internet or any other open networks.
Altcoin: Any cryptocurrency except for Bitcoin. “Altcoin” is a combination of two words: “alternative Bitcoin” or “alternative coin”
Algorithm: A series of steps that will solve a problem. In cryptocurrencies, algorithms are used to hide and reveal information.
API or Application Programming Interface: Application Programming Interface. A software intermediary that allows two separate applications to communicate with each other. APIs define methods of communication between various components.
ASIC or Application Specific Integrated Circuit: Application Specific Integrated Circuit. ASICs are silicon chips designed to do a specific task. In ASIC use for mining cryptocurrencies, the ASIC will perform a calculation to find values that provide a desired solution when placed into a hashing algorithm.
Atomic swap: Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange.
B
itcoin or BTC: The first cryptocurrency based on the Proof of Work blockchain. Bitcoin was created in 2009 by Satoshi Nakomoto — a pseudonym for an individual whose real identity is unknown — and the concept of cryptocurrency was outlined in a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.”
Blockchain: A consensus digital ledger comprised of unchangeable, digitally recorded data in packages called blocks. Each block is ‘chained’ to the next block using a cryptographic signature. This allows blockchains to act like a ledger, which can be shared with and accessed by anyone with the appropriate permissions.
Block Height: The number of blocks in the chain between any given block and the very first block in the blockchain.
Block Reward: Reward for maintaining the blockchain. Maintaining the blockchain requires computer power and electricity or risking a large amount of cryptocurrency as a guarantee that you are trustworthy. Anyone doing this work is eligible to earn a reward in digital money and sometimes brand new, virgin cryptocurrency.
Bounty or Bug Bounty: A reward that’s paid for the completion of a given task. Tasks include identifying code vulnerabilities, creating content, design work, research, translations, social impact and more.
Blockchain: A consensus digital ledger comprised of unchangeable, digitally recorded data in packages called blocks. Each block is ‘chained’ to the next block using a cryptographic signature. This allows blockchains to act like a ledger, which can be shared with and accessed by anyone with the appropriate permissions.
Block Height: The number of blocks in the chain between any given block and the very first block in the blockchain.
Block Reward: Reward for maintaining the blockchain. Maintaining the blockchain requires computer power and electricity or risking a large amount of cryptocurrency as a guarantee that you are trustworthy. Anyone doing this work is eligible to earn a reward in digital money and sometimes brand new, virgin cryptocurrency.
Bounty or Bug Bounty: A reward that’s paid for the completion of a given task. Tasks include identifying code vulnerabilities, creating content, design work, research, translations, social impact and more.
C
Client: Software that accesses a blockchain via a local computer and helps to process transactions. A client usually includes a cryptocurrency software wallet.
Coin: A coin or altcoin is a representation of digital asset value that is generated via their own independent blockchain.
Cold Wallet or Cold Storage: An offline wallet that is never connected to the internet. These wallets protect cryptocurrencies from getting hacked online.
Confirmation or Block Confirmation: A confirmation means that the network has verified the blockchain transaction. This happens through a process known as mining, in a Proof of Work system (e.g., Bitcoin). Once a transaction is successfully confirmed it theoretically cannot be reversed or double spent. The more confirmations a transaction has, the harder it becomes to perform a double spend attack.
Consensus: The process used by a group consisting of peers that is responsible for maintaining distributed ledger use. It is the way to reach consensus on the use of the ledger’s contents.
Crypto: Short for cryptography or cryptocurrency. Crypto comes from the Greek word meaning “hidden”.
Cryptocurrency: Digital currency that is based on mathematics and uses encryption techniques to regulate the creation of units of currency as well as verifying the transfer of funds. Cryptocurrencies operate independently of a central bank.
Cryptography: A method for secure communication using code. Symmetric-key cryptography is used by various blockchain networks for transfer of cryptocurrencies. Blockchain addresses generated for wallets are paired with private keys that allow transfer of cryptocurrency. Paired public and private keys allow funds to be unlocked.
Coin: A coin or altcoin is a representation of digital asset value that is generated via their own independent blockchain.
Cold Wallet or Cold Storage: An offline wallet that is never connected to the internet. These wallets protect cryptocurrencies from getting hacked online.
Confirmation or Block Confirmation: A confirmation means that the network has verified the blockchain transaction. This happens through a process known as mining, in a Proof of Work system (e.g., Bitcoin). Once a transaction is successfully confirmed it theoretically cannot be reversed or double spent. The more confirmations a transaction has, the harder it becomes to perform a double spend attack.
Consensus: The process used by a group consisting of peers that is responsible for maintaining distributed ledger use. It is the way to reach consensus on the use of the ledger’s contents.
Crypto: Short for cryptography or cryptocurrency. Crypto comes from the Greek word meaning “hidden”.
Cryptocurrency: Digital currency that is based on mathematics and uses encryption techniques to regulate the creation of units of currency as well as verifying the transfer of funds. Cryptocurrencies operate independently of a central bank.
Cryptography: A method for secure communication using code. Symmetric-key cryptography is used by various blockchain networks for transfer of cryptocurrencies. Blockchain addresses generated for wallets are paired with private keys that allow transfer of cryptocurrency. Paired public and private keys allow funds to be unlocked.
D
DAO or digital decentralized autonomous organization: Also known as the digital decentralized autonomous organization (DAO). Alternatively, the first known example of a DAO was named The DAO. The DAO served as a form of investor-directed venture capital fund, which sought to provide enterprises with new decentralized business models. Ethereum-based, The DAO’s code was open source. The organization set the record for the most crowdfunded project in 2016, however, those funds were partially stolen by hackers. The hack caused an Ethereum hard-fork which lead to the creation of Ethereum Classic.
Decentralization: The transfer of authority and responsibility from a centralized organization, government, or party to a distributed network.
Decentralized Application or DApp: An open source, software application with backend code running on a decentralized peer-to-peer network rather than a centralized server.
Decentralized: A type of system where elements are spread out by some means, with decisions made from many points, and independence is preserved across the network. Decentralization is actually a combination of 3 parts making up a triangle:
Decentralized Finance or DeFi: Decentralized finance, often called DeFi or open finance, refers to the economic paradigm shift enabled by decentralized technologies, particularly blockchain networks. DeFi represents a shift from a centralized and closed financial system to a universally accessible economy that is based on open protocols that are interoperable, programmable, and composable.
Decentralized Application or DApp: A software application that has its technology running publicly on a network of computers.
Deposit: Digital property put into a contract involving a different party such that if certain conditions are not satisfied that property is automatically forfeited to the identified counterparty.
Digital Asset: A digital commodity that is scarce, electronically transferable, and intangible with a market value.
Digital Identity: An online or networked identity adopted by an individual, organization, or electronic device.
Digital currency: Digital currency (digital money, electronic money or electronic currency) is a type of currency available in digital form (in contrast to physical, such as banknotes and coins). It exhibits properties similar to physical currencies, but can allow for instantaneous transactions and borderless transfer-of-ownership. Examples include virtual currencies, cryptocurrencies, and central bank digital currency. These currencies may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game.
Digital Signature: A digital signature is a mathematical scheme for verifying the authenticity of digital messages or documents. A valid digital signature, where the prerequisites are satisfied, gives a recipient very strong reason to believe that the message was created by a known sender (authentication), and that the message was not altered in transit (integrity).
Distributed Denial of Service (DDoS) Attack: A type of cyber-attack in which the perpetrator continuously overwhelms the system with requests in order to prevent service of legitimate requests.
Distributed Ledger: A type of database which spreads across multiple sites, countries, or institutions. Records are stored sequentially in a continuous ledger. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.
Difficulty: The concept outlining how hard it is to verify blocks in a blockchain network during Proof of Work mining. In the Bitcoin network, the difficulty of mining adjusts alters blocks every 2016 blocks. This is to keep block verification time at ten minutes.
Double-spending: A form of deceit using digital money where the same money is promised to two parties but only delivered to one. If completed successfully, one of the two recipients will not be paid.
Decentralization: The transfer of authority and responsibility from a centralized organization, government, or party to a distributed network.
Decentralized Application or DApp: An open source, software application with backend code running on a decentralized peer-to-peer network rather than a centralized server.
Decentralized: A type of system where elements are spread out by some means, with decisions made from many points, and independence is preserved across the network. Decentralization is actually a combination of 3 parts making up a triangle:
Decentralized Finance or DeFi: Decentralized finance, often called DeFi or open finance, refers to the economic paradigm shift enabled by decentralized technologies, particularly blockchain networks. DeFi represents a shift from a centralized and closed financial system to a universally accessible economy that is based on open protocols that are interoperable, programmable, and composable.
Decentralized Application or DApp: A software application that has its technology running publicly on a network of computers.
Deposit: Digital property put into a contract involving a different party such that if certain conditions are not satisfied that property is automatically forfeited to the identified counterparty.
Digital Asset: A digital commodity that is scarce, electronically transferable, and intangible with a market value.
Digital Identity: An online or networked identity adopted by an individual, organization, or electronic device.
Digital currency: Digital currency (digital money, electronic money or electronic currency) is a type of currency available in digital form (in contrast to physical, such as banknotes and coins). It exhibits properties similar to physical currencies, but can allow for instantaneous transactions and borderless transfer-of-ownership. Examples include virtual currencies, cryptocurrencies, and central bank digital currency. These currencies may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game.
Digital Signature: A digital signature is a mathematical scheme for verifying the authenticity of digital messages or documents. A valid digital signature, where the prerequisites are satisfied, gives a recipient very strong reason to believe that the message was created by a known sender (authentication), and that the message was not altered in transit (integrity).
Distributed Denial of Service (DDoS) Attack: A type of cyber-attack in which the perpetrator continuously overwhelms the system with requests in order to prevent service of legitimate requests.
Distributed Ledger: A type of database which spreads across multiple sites, countries, or institutions. Records are stored sequentially in a continuous ledger. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.
Difficulty: The concept outlining how hard it is to verify blocks in a blockchain network during Proof of Work mining. In the Bitcoin network, the difficulty of mining adjusts alters blocks every 2016 blocks. This is to keep block verification time at ten minutes.
Double-spending: A form of deceit using digital money where the same money is promised to two parties but only delivered to one. If completed successfully, one of the two recipients will not be paid.
E
Enterprise Ethereum Alliance or EEA: A group of Ethereum core developers, startups, and large companies working together to commercialize and use Ethereum for different business applications.
EIP or Ethereum Improvement Proposals: Ethereum Improvement Proposals (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards.
Encryption: A process used to combine a document (plaintext) with a shorter string of data referred to as “a key” in order to produce an output (ciphertext). This output can be “decrypted” back into the original plaintext by someone else who has the key.
ERC20 Token Standard: ERC is the abbreviation for Ethereum Request for Comment and is followed by the assignment number of the standard. ERC20 is a technical standard for smart contracts the majority of Ethereum tokens follow. This list of rules states the requirements that a token must fulfill to be compliant and function within the Ethereum network.
ERC721 Token Standard: A non-fungible Ethereum token standard. This token standard is used to represent a unique digital asset that is not interchangeable.
Ether (ETH): Ether is the native currency of the Ethereum blockchain network. Ether, also referred to as ETH, functions as a fuel of the Ethereum ecosystem by acting as a medium of incentive and form of payment for network participants to execute essential operations.
Ethereum: A public blockchain network and decentralized software platform upon which developers build and run applications.
EVM or Ethereum Virtual Machine: The Ethereum Virtual Machine (EVM) is Turing complete and allows anyone, anywhere to execute arbitrary EVM Byte Code. All Ethereum nodes run on the EVM. The project is designed to prevent denial-of-service attacks. It is home for smart contracts based on the Ethereum blockchain.
Exchanges: Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies.
EIP or Ethereum Improvement Proposals: Ethereum Improvement Proposals (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards.
Encryption: A process used to combine a document (plaintext) with a shorter string of data referred to as “a key” in order to produce an output (ciphertext). This output can be “decrypted” back into the original plaintext by someone else who has the key.
ERC20 Token Standard: ERC is the abbreviation for Ethereum Request for Comment and is followed by the assignment number of the standard. ERC20 is a technical standard for smart contracts the majority of Ethereum tokens follow. This list of rules states the requirements that a token must fulfill to be compliant and function within the Ethereum network.
ERC721 Token Standard: A non-fungible Ethereum token standard. This token standard is used to represent a unique digital asset that is not interchangeable.
Ether (ETH): Ether is the native currency of the Ethereum blockchain network. Ether, also referred to as ETH, functions as a fuel of the Ethereum ecosystem by acting as a medium of incentive and form of payment for network participants to execute essential operations.
Ethereum: A public blockchain network and decentralized software platform upon which developers build and run applications.
EVM or Ethereum Virtual Machine: The Ethereum Virtual Machine (EVM) is Turing complete and allows anyone, anywhere to execute arbitrary EVM Byte Code. All Ethereum nodes run on the EVM. The project is designed to prevent denial-of-service attacks. It is home for smart contracts based on the Ethereum blockchain.
Exchanges: Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies.
F
Fiat Currency: Government-issued currency. For example: US Dollars (USD), Euros (EUR), Yuan (CNY), and Yen (JPY)
Fork: A fork creates an alternative version of a blockchain, and are often enacted intentionally to apply upgrades to a network. Soft Forks render two chains with some compatibility, while Hard Forks create a new version of the chain that must be adopted to continue participation. In the instance of a contentious Hard Fork, this can create two versions of a blockchain network.
Futures: A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.
Fork: A fork creates an alternative version of a blockchain, and are often enacted intentionally to apply upgrades to a network. Soft Forks render two chains with some compatibility, while Hard Forks create a new version of the chain that must be adopted to continue participation. In the instance of a contentious Hard Fork, this can create two versions of a blockchain network.
Futures: A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.
G
Gas: A measure of the computational steps required for a transaction on the Ethereum network that then equates to a fee for network users paid in small units of ETH specified as Gwei.
Gas price: A very small amount of ethereum and it is multiplied by an amount known as gas limit to pay people to record transactions and do other software actions.
Genesis Block: The initial block of data computed in the history of a blockchain network.
Gwei: A minuscule and common denomination of ETH, and the unit in which gas prices are often specified.
Gas price: A very small amount of ethereum and it is multiplied by an amount known as gas limit to pay people to record transactions and do other software actions.
Genesis Block: The initial block of data computed in the history of a blockchain network.
Gwei: A minuscule and common denomination of ETH, and the unit in which gas prices are often specified.
H
Hash: A function that takes an input, and then outputs an alphanumeric string known as the “hash value” or “digital fingerprint.” Each block in the blockchain contains the hash value that validated the transaction before it followed by its own hash value. Hashes confirm transactions on the blockchain.
Halving: Many cryptocurrencies like Bitcoin, have a finite supply, which makes them a scarce digital commodity. The total amount of Bitcoin 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 final halving will take place in the year 2140.
Hard Fork: Hard fork is defined as a decision to make a permanent change to the technology used by a cryptocurrency.
Hardware Wallet: A physical device—like the famed Ledger Wallet—that can be connected to the web and interact with online exchanges, but can also be used as cold storage (not connected to the internet).
Hash Rate: The speed at which a computer can take any set of information and turn it into letters and numbers of a certain length, known as a “hash”. Hash rate is also the combined hash speed of every computer in the network. Hash rate is calculated at hashes per second (h/s).
Hot Wallet / Hard Storage: A wallet that is directly connected to the internet at all times, for example one that is held on a centralized exchange. Hot wallets are considered to have lower security than cold storage systems or hardware wallets.
Hybrid Consensus Model: PoS / PoW: A hybrid consensus model that utilizes a combination of Proof of Stake (PoS) and Proof of Work (PoW) consensus. Using this Hybrid consensus mechanism, blocks are validated from not only miners, but also voters (stakeholders) to form a balanced network governance.
Halving: Many cryptocurrencies like Bitcoin, have a finite supply, which makes them a scarce digital commodity. The total amount of Bitcoin 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 final halving will take place in the year 2140.
Hard Fork: Hard fork is defined as a decision to make a permanent change to the technology used by a cryptocurrency.
Hardware Wallet: A physical device—like the famed Ledger Wallet—that can be connected to the web and interact with online exchanges, but can also be used as cold storage (not connected to the internet).
Hash Rate: The speed at which a computer can take any set of information and turn it into letters and numbers of a certain length, known as a “hash”. Hash rate is also the combined hash speed of every computer in the network. Hash rate is calculated at hashes per second (h/s).
Hot Wallet / Hard Storage: A wallet that is directly connected to the internet at all times, for example one that is held on a centralized exchange. Hot wallets are considered to have lower security than cold storage systems or hardware wallets.
Hybrid Consensus Model: PoS / PoW: A hybrid consensus model that utilizes a combination of Proof of Stake (PoS) and Proof of Work (PoW) consensus. Using this Hybrid consensus mechanism, blocks are validated from not only miners, but also voters (stakeholders) to form a balanced network governance.
I
Immutability: The inability to be altered or changed over time. A key element of blockchain networks, once written onto a blockchain ledger, data cannot be altered. This immutability provides the basis for commerce and trade to take place on blockchain networks.
Initial Coin Offering (ICO): An Initial Coin Offering (also called ICO) occurs when a new cryptocurrency sells advance tokens in exchange for upfront capital.
InterPlanetary File System (IPFS): A decentralized file storage and referencing system for the Ethereum blockchain. IFPS is an open source protocol that enables storing and sharing hypermedia (text, audio, visual) is a distributed manner without relying on a single point of failure. This distributed file system enables applications to run faster, safer and more transparently.
Initial Coin Offering (ICO): An Initial Coin Offering (also called ICO) occurs when a new cryptocurrency sells advance tokens in exchange for upfront capital.
InterPlanetary File System (IPFS): A decentralized file storage and referencing system for the Ethereum blockchain. IFPS is an open source protocol that enables storing and sharing hypermedia (text, audio, visual) is a distributed manner without relying on a single point of failure. This distributed file system enables applications to run faster, safer and more transparently.
K
Know Your Customer or KYC: A customer identification process required by law for financial organizations.
L
Liquidity: The availability of liquid assets to a company or market. An asset is considered more liquid if it can easily be converted into cash. The harder the ability to turn an asset into cash the more illiquid the asset. For example, stocks are considered relatively liquid assets as they can be easily converted to cash while real estate is considered an illiquid asset. The liquidity of an asset affects its risk potential and market price.
Liquid Democracy (Delegative Democracy): A government system where votes can be delegated or proxied to other individuals such as friends, politicians, or subject matter experts. For example, in a liquid democracy, Bob could give Alice his vote and Alice would then vote for both herself and Bob. A liquid democracy has been explored as a governance mechanism for Decentralized Autonomous Organizations where every participant is able to vote or delegate their vote to another individual.
Liquid Democracy (Delegative Democracy): A government system where votes can be delegated or proxied to other individuals such as friends, politicians, or subject matter experts. For example, in a liquid democracy, Bob could give Alice his vote and Alice would then vote for both herself and Bob. A liquid democracy has been explored as a governance mechanism for Decentralized Autonomous Organizations where every participant is able to vote or delegate their vote to another individual.
M
Mainnet: The primary network where actual transactions take place on a specific distributed ledger. For example, The Ethereum mainnet is the public blockchain where network validation and transactions take place.
Market Cap: Short for Market Capitalization, this term refers to the total value held in a particular industry, market, company, or asset. For a publicly traded company, the market cap is the total dollar market value of a company’s outstanding shares. For Bitcoin or Ethereum, the total market cap is a reflection of the current existing supply times the market price.
Merkle Tree: Similar to the concept of a family tree, where a parent branch splits into children branches, which then extrapolated into grandchildren branches. A merkle tree is a data structure in which a single hash code function(cryptographic code) splits into smaller branches. In the diagram Hash becomes “Hash 0” and “Hash 1,” which then splits again and is represented on the blockchain. This type of data structure enables for faster verification on a blockchain network.
Mining: In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt.
Multi Signature (MultiSig): A crypto-asset wallet that requires multiple keys to access. Typically, a specified number of individuals are required to approve or “sign” a transaction before they are able to access the wallet. This is different from most wallets which only require one signature to approve a transaction.
Market Cap: Short for Market Capitalization, this term refers to the total value held in a particular industry, market, company, or asset. For a publicly traded company, the market cap is the total dollar market value of a company’s outstanding shares. For Bitcoin or Ethereum, the total market cap is a reflection of the current existing supply times the market price.
Merkle Tree: Similar to the concept of a family tree, where a parent branch splits into children branches, which then extrapolated into grandchildren branches. A merkle tree is a data structure in which a single hash code function(cryptographic code) splits into smaller branches. In the diagram Hash becomes “Hash 0” and “Hash 1,” which then splits again and is represented on the blockchain. This type of data structure enables for faster verification on a blockchain network.
Mining: In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt.
Multi Signature (MultiSig): A crypto-asset wallet that requires multiple keys to access. Typically, a specified number of individuals are required to approve or “sign” a transaction before they are able to access the wallet. This is different from most wallets which only require one signature to approve a transaction.
N
Node: Any computing device (computer, phone, etc.) that is participating in a network by way of receiving and sending data. Cryptocurrencies are supported by a network of computers each keeping a digital record of the data known as a blockchain. A computer, a phone, or any other computing device that can receive, transmit, and/or contribute to the blockchain is a node.
Non-Fungible Token (NFT): Fungibility refers to an object’s ability to be exchanged for another. For example, an individual dollar is considered fungible as we can trade dollars with one another. Artwork is usually deemed non-fungible as paintings, sculptures, or masterpieces are likely to be unequal in quality or value. A non-fungible token is a type of token that is a unique digital asset and has no equal token. This is in contrast to cryptocurrencies like ether that are fungible in nature.
Non-Fungible Token (NFT): Fungibility refers to an object’s ability to be exchanged for another. For example, an individual dollar is considered fungible as we can trade dollars with one another. Artwork is usually deemed non-fungible as paintings, sculptures, or masterpieces are likely to be unequal in quality or value. A non-fungible token is a type of token that is a unique digital asset and has no equal token. This is in contrast to cryptocurrencies like ether that are fungible in nature.
P
Peer to peer or P2P: A connection between two or more computers that allows them to directly share information, files, or other data.
Permissioned Ledger: A blockchain network in which access to ledger or network requires permission from an individual or group of individuals. Permissioned ledgers may have one or many owners. Consensus on a permissioned ledger is conducted by the trusted actors, such as government departments, banks, or other known entities. Permissioned blockchains or ledgers contain highly-verifiable data sets because the consensus process creates a digital signature, which can be seen by all parties. A permissioned ledger is much easier to maintain and considerably faster than a public blockchain. For example, Quorum and Hyperledger Besu are permissioned ledgers that can be more easily set up for large enterprises. In contrast, the public Ethereum blockchain is a permissionless ledger which anyone can access.
Private Blockchain: A blockchain or distributed ledger that has a closed network where participants are controlled by a single entity. A private blockchain requires a verification process for new participants. A private blockchain may also limit which individuals are able to participate in consensus of the blockchain network.
Private Currency: A currency or token issued by a private individual or firm. Typically, the token or currency is limited to use within the network of that particular firm or individual. This is not to be confused with a “privacy cryptocurrency” which are cryptocurrency with specific privacy features, such as hidden user identities.
Private key: A string of letters and numbers known only by the owner that allows them to spend their cryptocurrency. NEVER SHARE your private key unless you want someone else to be able to take all of your money!
Proof of Authority: A consensus mechanism used in private blockchains to grants a single private key the authority to generate all of the blocks or validate transactions.
Proof of Work or PoW: A process for achieving consensus and building on a digital record known as a blockchain. With PoW, users compete with each other via their computers to solve a puzzle.
Proof of Stake or PoS: A process for achieving consensus and building on a digital record known as a blockchain. With PoS, users put up a collateral of tokens (or a “stake”) and use a process that is more energy and cost-efficient than previous solutions.
Protocol: A set of rules that dictate how data is exchanged and transmitted. This pertains to cryptocurrency in blockchain when referring to the formal rules that outline how these actions are performed across a specific network.
Public Blockchain: A globally open network where anyone can participate in transactions, execute consensus protocol to help determine which blocks get added to the chain, and maintain the shared ledger.
Public Key: Obtained and used by anyone to encrypt messages before they are sent to a known recipient with a matching private key for decryption. By pairing a public key with a private key, transactions not dependent on trusting involved parties or intermediaries are possible. The public key encrypts a message into an unreadable format and the corresponding private key makes it readable again for the intended party.
Pump and Dump: Pump and dump is defined as an illegal manipulation of an asset (stock, cryptocurrency, etc.) where people increase the price (the pump) so that they can sell it at those high prices for a profit (the dump).
Permissioned Ledger: A blockchain network in which access to ledger or network requires permission from an individual or group of individuals. Permissioned ledgers may have one or many owners. Consensus on a permissioned ledger is conducted by the trusted actors, such as government departments, banks, or other known entities. Permissioned blockchains or ledgers contain highly-verifiable data sets because the consensus process creates a digital signature, which can be seen by all parties. A permissioned ledger is much easier to maintain and considerably faster than a public blockchain. For example, Quorum and Hyperledger Besu are permissioned ledgers that can be more easily set up for large enterprises. In contrast, the public Ethereum blockchain is a permissionless ledger which anyone can access.
Private Blockchain: A blockchain or distributed ledger that has a closed network where participants are controlled by a single entity. A private blockchain requires a verification process for new participants. A private blockchain may also limit which individuals are able to participate in consensus of the blockchain network.
Private Currency: A currency or token issued by a private individual or firm. Typically, the token or currency is limited to use within the network of that particular firm or individual. This is not to be confused with a “privacy cryptocurrency” which are cryptocurrency with specific privacy features, such as hidden user identities.
Private key: A string of letters and numbers known only by the owner that allows them to spend their cryptocurrency. NEVER SHARE your private key unless you want someone else to be able to take all of your money!
Proof of Authority: A consensus mechanism used in private blockchains to grants a single private key the authority to generate all of the blocks or validate transactions.
Proof of Work or PoW: A process for achieving consensus and building on a digital record known as a blockchain. With PoW, users compete with each other via their computers to solve a puzzle.
Proof of Stake or PoS: A process for achieving consensus and building on a digital record known as a blockchain. With PoS, users put up a collateral of tokens (or a “stake”) and use a process that is more energy and cost-efficient than previous solutions.
Protocol: A set of rules that dictate how data is exchanged and transmitted. This pertains to cryptocurrency in blockchain when referring to the formal rules that outline how these actions are performed across a specific network.
Public Blockchain: A globally open network where anyone can participate in transactions, execute consensus protocol to help determine which blocks get added to the chain, and maintain the shared ledger.
Public Key: Obtained and used by anyone to encrypt messages before they are sent to a known recipient with a matching private key for decryption. By pairing a public key with a private key, transactions not dependent on trusting involved parties or intermediaries are possible. The public key encrypts a message into an unreadable format and the corresponding private key makes it readable again for the intended party.
Pump and Dump: Pump and dump is defined as an illegal manipulation of an asset (stock, cryptocurrency, etc.) where people increase the price (the pump) so that they can sell it at those high prices for a profit (the dump).
R
Relayer: Any party or entity which hosts an off-chain orderbook. Relayers help traders discover counter-parties and cryptographically move orders between them. 0x is an example of a popular Ethereum relayer protocol.
S
Satoshi Nakamoto: The founder and creator of bitcoin, the most popular cryptocurrency. The smallest amount of bitcoin (0.00000001) was also named after him, it is called a Satoshi.
Serialization: The process of converting a data structure into a sequence of bytes. Ethereum internally uses an encoding format called recursive-length prefix encoding (RLP).
Scalability: A change in size or scale to handle the network’s demands. This word is used to refer to a blockchain project’s ability to handle network traffic, future growth, and capacity in its intended application.
Self-executing: Functioning by itself, not controlled by any other party other than itself. Self-executing smart contracts cut costs/overhead by removing the need for an arbitrator and trust toward a third party.
Shard: Sharding refers to splitting the entire network into multiple portions called “shards.” Each shard would contain its own independent state, meaning a unique set of account balances and smart contracts. Usually, shards must be tightly coupled and side-chains must be loosely coupled.
Slashing condition: A condition that causes the validator’s deposit to be destroyed when they trigger it.
Smart contract: An agreement to exchange goods, services, or money that will automatically execute, without third party oversight, so long as established criteria are met.
Soft Fork: A change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. However, this can result in a potential divide in the blockchain, as the old software generates blocks that read as invalid according to the new rules.
Solidity: The programming language developers use to write smart contracts on the Ethereum network.
Stablecoin: Any cryptocurrency pegged to a stable asset, like fiat or gold. It theoretically remains stable in price as it is measured against a known amount of an asset not subject to fluctuation.
State: The set of data that a blockchain network strictly needs to keep track of, and that represents data currently relevant to applications on the chain.
Sybil Attack: Also known as 51% Attack, is the situation where more than half of the computer power running a blockchain are controlled by one person or one group of people with bad intentions. That person or group with the majority power can manipulate transactions in his favor. By preventing new transactions from being included in the blockchain and/or reversing transactions so they can spend the same money again and again, known as a double-spend.
Serialization: The process of converting a data structure into a sequence of bytes. Ethereum internally uses an encoding format called recursive-length prefix encoding (RLP).
Scalability: A change in size or scale to handle the network’s demands. This word is used to refer to a blockchain project’s ability to handle network traffic, future growth, and capacity in its intended application.
Self-executing: Functioning by itself, not controlled by any other party other than itself. Self-executing smart contracts cut costs/overhead by removing the need for an arbitrator and trust toward a third party.
Shard: Sharding refers to splitting the entire network into multiple portions called “shards.” Each shard would contain its own independent state, meaning a unique set of account balances and smart contracts. Usually, shards must be tightly coupled and side-chains must be loosely coupled.
Slashing condition: A condition that causes the validator’s deposit to be destroyed when they trigger it.
Smart contract: An agreement to exchange goods, services, or money that will automatically execute, without third party oversight, so long as established criteria are met.
Soft Fork: A change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. However, this can result in a potential divide in the blockchain, as the old software generates blocks that read as invalid according to the new rules.
Solidity: The programming language developers use to write smart contracts on the Ethereum network.
Stablecoin: Any cryptocurrency pegged to a stable asset, like fiat or gold. It theoretically remains stable in price as it is measured against a known amount of an asset not subject to fluctuation.
State: The set of data that a blockchain network strictly needs to keep track of, and that represents data currently relevant to applications on the chain.
Sybil Attack: Also known as 51% Attack, is the situation where more than half of the computer power running a blockchain are controlled by one person or one group of people with bad intentions. That person or group with the majority power can manipulate transactions in his favor. By preventing new transactions from being included in the blockchain and/or reversing transactions so they can spend the same money again and again, known as a double-spend.
T
Testnet: An alternative blockchain developers use to test applications in a near-live environment.
Testnet Koven: Ethereum Testnet that uses Proof of Authority consensus and currently only supports Parity clients.
Testnet Rinkeby: Ethereum Testnet that uses Proof of Authority consensus and currently only supports geth clients.
Testnet Ropsten: Ethereum Testnet that uses Proof of Work consensus, can use geth or Parity, and is currently the most similar to mainnet.
Token: A Token represents an asset built on an existing blockchain (different from a coin). Tokens are designed to be unique, liquid, secure, instantly transferable, and digitally scarce.
Timestamp: Cryptocurrencies use various time stamping schemes to “prove” the validity of transactions added to the blockchain ledger without the need for a trusted third party. The most widely used proof-of-work schemes are based on SHA-256 and scrypt. Some other hashing algorithms that are used for proof-of-work include Crypto Night, Blake, SHA-3, and X11. The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there’s currently no standard form of it. Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme
Transaction Block: A collection of transactions on a blockchain network, gathered into a set or a block that can then be hashed and added to the blockchain.
Transaction Fee: A small fee imposed on some transactions sent across a blockchain network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction.
Turing Complete: Any machine that can calculate on a level equal to a programmable computer is Turing Complete, or computationally universal.
Testnet Koven: Ethereum Testnet that uses Proof of Authority consensus and currently only supports Parity clients.
Testnet Rinkeby: Ethereum Testnet that uses Proof of Authority consensus and currently only supports geth clients.
Testnet Ropsten: Ethereum Testnet that uses Proof of Work consensus, can use geth or Parity, and is currently the most similar to mainnet.
Token: A Token represents an asset built on an existing blockchain (different from a coin). Tokens are designed to be unique, liquid, secure, instantly transferable, and digitally scarce.
Timestamp: Cryptocurrencies use various time stamping schemes to “prove” the validity of transactions added to the blockchain ledger without the need for a trusted third party. The most widely used proof-of-work schemes are based on SHA-256 and scrypt. Some other hashing algorithms that are used for proof-of-work include Crypto Night, Blake, SHA-3, and X11. The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there’s currently no standard form of it. Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme
Transaction Block: A collection of transactions on a blockchain network, gathered into a set or a block that can then be hashed and added to the blockchain.
Transaction Fee: A small fee imposed on some transactions sent across a blockchain network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction.
Turing Complete: Any machine that can calculate on a level equal to a programmable computer is Turing Complete, or computationally universal.
V
Validator: A participant in Proof of Stake consensus. Validators need to submit a security deposit in order to get included in the validator set.
W
Wallet: A cryptocurrency wallet stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet.
Whitepaper: A collection of marketing documents that are designed to explain a complex product or service and persuade investors into believing in its benefits. The purpose of a white paper is to create interest, educate, and sell a concept to potential buyers. With crypto, white papers are created as one of the very first documents to explain what it is, what makes it unique, describe the technology behind it, and the philosophy or mission. Unlike typical sales material, a white paper is more conservative. It is less about sounding special, and more about providing facts, statistics, and explanations. They are often 6+ pages long and include a title, table of contents, introduction, pages describing the problem and solution, and a conclusion. A good white paper builds trust in potential buyers.
Whitepaper: A collection of marketing documents that are designed to explain a complex product or service and persuade investors into believing in its benefits. The purpose of a white paper is to create interest, educate, and sell a concept to potential buyers. With crypto, white papers are created as one of the very first documents to explain what it is, what makes it unique, describe the technology behind it, and the philosophy or mission. Unlike typical sales material, a white paper is more conservative. It is less about sounding special, and more about providing facts, statistics, and explanations. They are often 6+ pages long and include a title, table of contents, introduction, pages describing the problem and solution, and a conclusion. A good white paper builds trust in potential buyers.
Z
zk-SNARK: zk-SNARK is an acryonym for zero-knowledge succinct non-interactive argument of knowledge, a cryptographic proof system that enables a user to verify a transaction without revealing the actual data of the transaction, and without interacting with the user who published the transaction.
