Also popularly known as a majority attack, a 51% attack occurs when a single individual or a small group of people gains control of over half of a blockchain’s hashing power.
Attackers that are successful with this manoeuvre can then block new transactions from being authenticated or manipulate the details of new transactions. With this ability, attackers can wreak havoc on the blockchain they are using by rewriting parts of the blockchain and even reversing their own transactions. This leads to double-spending.
However, a 51% attack has limitations. While attackers can duplicate their own transactions, they cannot alter the transactions of other users on the blockchain, nor can they create new assets or steal them.
For a 51% attack to be successful, the attacker needs to rent mining hash power from a third party.
Addresses in the blockchain are similar to your regular bank account number, just longer. They’re like a temporary bank account number to send and receive cryptocurrencies.
Addresses in the blockchain are usually in the form of a randomly generated string of numbers and letters. It is just like your normal website, email and physical address.
Every address on the blockchain is unique and impossible to read as a single word. Even though most blockchain addresses are anonymous, their transaction records and current worth are readily available to be seen by everyone.
The major difference is that unlike your regular bank account, most crypto wallets can generate multiple addresses to receive payment. It’s like having a new bank account number for every transaction.
Addresses are also peculiar to cryptocurrencies, you cannot send Bitcoin to an address that was created to receive Ethereum. It’s like trying to send pounds to a dollar account. It is not compatible.
An account is a profile that is created in a blockchain-related app/website. Before an account is created, the identity of the user has to be verified. Accounts enable users to create an unlimited number of wallets.
We can basically say accounts give birth to wallets. You can create an account on any crypto app like Binance, Blockchain, Metamask.
Creating and verifying an account on a cryptocurrency exchange app is the first step to gaining access to the world of buying and selling cryptocurrencies.
A price and volume-based indicator that is used by cryptocurrency traders. It is used to estimate the increase or decrease in the price of a crypto asset. Traders make decisions based on analysing and predicting this indicator.
In essence, before some crypto traders decide if they would buy or sell a cryptocurrency, they study and analyse this signal.
An adoption curve is the rate at which a population uses a new product, service, or technology over a period of time.
An adoption curve is made up of five different types of adopters based on their willingness and speed to learn and utilize new products and technologies.
The five different types of adopters include the Innovators, the Early Adopters, the Early Majority, the Late Majority, and the Laggers.
Currently, the world’s population is still at the Innovators and Early Adopters stage of decentralized finance and the blockchain. In 2013 the number of cryptocurrencies stood at 66, however, by 2021 the number of cryptocurrencies stands at 6,044, which is a 9,000% increase.
An airdrop is a marketing tactic that involves sending coins and/or tokens to random addresses in order to promote awareness of a new virtual currency.
Tiny amounts of the new virtual currency are shared to the wallets of new and active members of the blockchain community for free or in return for performing a task, such as retweeting a tweet or referring friends to join the promotion.
An air gap is a concept that refers to a situation where the data within a system has restricted access to prevent it from being infected or corrupted. This data protection technique is popular within the IT industry, it is often used to duplicate data on a secondary data system. This secondary data system is made to be offline, so there isn’t any connection to any kind of online network, greatly reducing the chances of it being hacked.
The air gap practice has been utilised in cryptocurrency to add a layer of protection to crypto wallets and restrict access to them, except to the original owner, making it operate through an offline system.
So, when a device that runs on an online connection is taken offline to protect the data, it can be said to be air-gapped.
This is a decentralized application (dApp) that carries on the meaning of the term, air gap.
It is a hardware wallet that is used to secure crypto and store private keys offline. AirGap is designed to be installed on a smartphone that is completely offline and thus cannot be accessed by any online network, thereby adding an extra layer of protection to the crypto wallet of the user.
AirGap also offers an AirGap Wallet that completes the function of data protection of the AirGap application. This can be said to be similar to a hardware token offered by banks, just with a decentralized approach.
Airnode is an oracle node and API blockchain gateway that offers a simple way of connecting with Web 3. It is an open-source Web 3 API middleware that allows any web API to be easily connected to a blockchain application.
With decentralization being the major feature of Web 3, it has become a challenge for API providers to offer their services. An API is a software intermediary that essentially allows two applications to interact with each other. But the smart contracts offered through blockchains, because of their decentralized nature, cannot connect to APIs which provide access to the real world and its services.
Airnode serves as the API gateway for blockchains. When smart contracts are unable to connect to APIs, Airnode comes to the rescue by being the bridge that links blockchains to APIs.
An oracle (what Airnode is) acts as a bridge between the blockchain and the real world. But Airnode isn’t just any oracle. Regular oracles require the input of a third party. AIrnode eliminates this need. Also, third-party oracles demand substantial fees for connecting companies to the blockchain. Airnode allows any business or company to connect with blockchain apps, while keeping their full revenue.
Algo-Trading (Algorithmic Trading)
Short for Algorithmic Trading. Also called Automated trading or blackbox trading.
It is the use of computers to trade cryptocurrencies in the absence of human supervision. It’s just like autopilot on a plane. The computer has been told what to do and it takes it from there. It controls the plane while the pilot does other things.
Some conditions need to be met before the computer carries out a trade. Those sets of conditions are taught to the computer using programming and are called algorithms.
Algorithms can be based on different factors including time, price, quantity, and other trading indicators.
Algo-trading reduces the possibility of human error and emotions in the process of trading cryptocurrencies, all that matters is what the numbers say. It has become increasingly popular as it frees up the time of human traders. They can just set up their computer to trade in their stead and relax.
An algorithm is a set of instructions used to solve particular problems or execute specific tasks. Using an algorithm is like sending your computer on an errand.
Let’s say you can send your computer to Walmart for groceries. The amount of instructions that the computer will need to get there, including driving/walking to the destination, what specific groceries to buy, how much it’ll cost and the journey back home makes up an algorithm.
Every computer follows algorithms to accomplish tasks and perform functions. In cryptocurrency trading, algorithms are quite popular in HFTs (High Frequency Trading Systems) as they enable traders to buy and sell with incredible speed, precision and minimal possibility of error.
In centralized finance, algorithms are already used by big investment firms, hedge funds and stock traders. It is estimated that 50% of the US stock market is traded by algorithms. It significantly reduces the possibility of human error and emotional trading.
An Algorithmic Stablecoin is a special type of crypto currency that operates on an algorithm.
The coin tries to counter the general instability of cryptocurrencies by automatically releasing more coins when the price increases and tying the value of the coin to a more stable asset like the dollar and gold.
The coin tries to stabilize the market by making sure there’s not too much or too little of it in circulation, thereby keeping the price stable at all times. The longest-running algorithmic stablecoin is currently Ampleforth (AMPL)
AMO (Algorithmic Market Operations)
Algorithmic Market Operations automatically control the supply of algorithmic stable coins to the cryptocurrency exchanges. It helps to keep the stability of those coins and aids transparency as the price and supply of the coin is determined by a computer software. There’s no space for human manipulation and emotions.
Anonymous means an unknown entity or personality. In the blockchain, every user has a chance to be anonymous (to an extent). During the first Bitcoin boom, people criticized the ease with which criminals could perform transactions and get away with crimes by using Bitcoin.
However, as time went on, it became increasingly clear that though anonymous, the blockchain is one of the biggest and most transparent public ledgers of all time.
Every transaction carried out is recorded and can be linked to an address. Addresses are linked to wallets and wallets to verified accounts.
API (Application Programming Interface)
An Application Program Interface is a computer software program that is designed to interact with another piece of software.
APIs are like the base of a Lego house. You can literally build any kind of house on top. Once the API is available, it can be plugged into another software directly and start functioning immediately. For the blockchain, APIs are very important. They help developers build and ship things faster.
For example, financial technology companies just need to add a few lines of code from the Blockchain API to be able to receive payment in Bitcoin. It’s literally just plug and play.
ATH (All Time High)
All Time High is the highest price level a cryptocurrency has ever attained in its existence.
The all time high is measured from the first time a cryptocurrency starts trading on exchanges and updates whenever the last all time high is exceeded.
ATL (All Time Low)
All Time Low is the lowest price level a cryptocurrency has ever dropped to during trading. The all time low is measured from the first time a cryptocurrency starts trading on exchanges and updated whenever a new all time low is reached.
An allocation is the portion of a token(s) or equity, that can be earned, bought, or set aside for use by investors, founding team, company group, or the entire organization, or other related entities.
When a crypto company is still in its early stages, the founding members can decide what amount of the tokens will be reserved for different activities like seeking investors and departments like marketing, operations and development.
Those amounts and the percentage with which they have been set aside are called allocations.
Alphanumeric basically means combinations that involve letters and numbers.
Alphanumeric combinations are very popular across the blockchain. They are a good fit for strong account passwords and make up wallet addresses.
Short for Alternative Coin. Any cryptocurrency that is not Bitcoin is an Altcoin. Altcoins are all the cryptocurrencies that were created and are still being created after Bitcoin.
As of November 2021, over 14,000 altcoins have been created and they have 60% of the total cryptocurrency market share. This includes meme coins like Shiba Inu and even popular coins like Litecoin.
An Altcoin Trader is a crypto trader who focuses on buying and selling cryptocurrencies that aren’t Bitcoin.
A political philosophy conceived by an American Economist, Murray Rothbard, widely accepted by members of the blockchain community.
The philosophy argues that the world should exist as a free and decentralised state where governments aren’t needed but instead individuals can employ private agencies to handle tasks like law enforcement.
Anarcho-capitalists believe that the government restricts people and individuals should engage each other using smart contracts, just like on the blockchain.
They also believe that the blockchain solves the hurdles to implementing their philosophy while blockchain enthusiasts believe that for the blockchain to achieve its full potential, the world needs to embrace anarcho-capitalism.
Annual Percentage Rate (APR)
Annual Percentage Rate is the amount of money an investor or lender gets for making their crypto coins available for borrowing.
Many cryptocurrency exchanges, platforms where people can buy/sell cryptocurrencies, allow their users to lend out their crypto and earn interest on it. Peer to Peer Borrowing. The agreed interest at which the money is borrowed out is the Annual Percentage Rate.
Annual Percentage Yield (APY)
Annual Percentage Yield is the agreed rate of returns that an investor gets for depositing money in a crypto savings account.
Many exchanges, platforms where people can buy/sell cryptocurrencies, offer savings and investment accounts where you can deposit your coins and receive a fixed amount of profit after an agreed period of time.
Anti Fragile assets are assets that thrive with risk, uncertainty and a high level of volatility. Crypto assets like Bitcoin fall into this category. The more instability there is, the better the assets perform.
Another feature of antifragility involves the assets getting stronger after a major setback. This is pretty normal for cryptocurrencies.
Apeing is the situation whereby a crypto investor buys a crypto coin shortly after its release without conducting proper research. When new crypto coins drop, the fear of missing out on possible financial gain can make amateur investors jump into these projects.
Apeing became popular in the summer of 2020 with the Altcoin boom. Investors were making incredible profit from buying new and unknown coins. As news of this spread through the internet, other investors began to buy new coins without doing thorough research in the hopes that it’ll make them rich. It turned out badly for most of them.
A cryptocurrency trading technique in which traders try to take advantage of the price difference between a coin in different markets.
A coin can trade at different prices on different crypto trading platforms. Traders can make gains by buying at a low price and selling at a higher price or selling at a high price and buying at a lower price.
Arbitrage is made possible by Algo trading. A computer program analyzes information and the current trading prices of a coin. It executes the trade of that particular coin in order to gain profit from the up and down movement.
The complete loss of all the money in a crypto trader’s portfolio specifically after shorting Bitcoin. Shorting is a trading practice where traders bet that an asset would reduce in value and make gains if it actually does.
The term “Ashdraked” was coined from the name of a popular trader in the mid 2010s who was adamant about shorting Bitcoin. He enjoyed considerable success for a while until Bitcoin exceeded expectations and he lost all his invested capital.
ASIC (Application Specific Integrated Circuit)
A computer that’s built specifically for the purpose of mining cryptocurrencies. The process of mining cryptocurrency involves using supercomputers to solve complex analytical problems. Once a problem is solved, it adds another block to the blockchain and the miner gets rewarded with tokens for their work. This process requires a lot of energy and processing power.
In the early days, cryptocurrencies were mined with normal computers with high CPU power. But overtime, the power demands have increased and most large scale miners only use ASICs.
Cryptocurrencies are usually mined in closed data centres, in countries where power is relatively cheap.
These are cryptocurrencies that can still be mined with a normal PC and CPU. They don’t require as much power to generate blocks on the blockchain and get crypto rewards.
Ethereum is largely ASIC-Resistant as you can mine it from anywhere with a great CPU or GPU.
The minimum price that a seller is willing to sell a crypto asset. It is also called Offer Price.
Asset-Backed Tokens are items that are a digital representation of a particular physical asset. The value of the digital item is based on the real world value of the physical asset.
For example, physical assets like gold and real estate can be tokenized and turned into cryptocurrency tokens. An increase/decrease in the value of the physical asset would also lead to an increase/decrease in the value of the crypto token.
AUM (Assets Under Management)
Asset Under Management is the total monetary value of crypto assets managed by an individual or organization on behalf of others.
It’s just like how investment bankers and stockbrokers manage their client’s assets like stocks and mutual funds. AUM is always changing based on the market value of the assets that make up the investment portfolio.
A marketing strategy in which a company or team infiltrates an online community and tries to frame sponsored messages as if they were genuine and organic thoughts from members of the community.
This style of marketing is popular with crypto communities on Telegram and Discord.
Atomic swap is the exchange of crypto assets from one party to another without the use of an intermediary like a crypto exchange platform.
Think of it like performing a cash transaction. When you want to perform a cash transaction, you don’t need a middleman as long as you have the cash. That’s how Atomic Swap works. It enables you to exchange crypto directly like a cash transaction.
However, if you were making an interbank transfer, there would be a central system that the money passes through before it gets to the other party, depending on your country. This is exactly how other cryptocurrency exchanges work.
Atomic Swap enables direct exchange of crypto from wallet to wallet through the use of specially designed automated software called smart contracts.
A document that shows the transactions that have been carried out by a particular wallet, the equivalent of a bank account on the blockchain. It is used to “attest” that financial transactions have taken place.
Attestation Ledgers are publicly available on the blockchain and can be seen by anyone. Imagine all the transactions that have been carried out with your account being available on the internet for anyone who cares to look. This can help curb a lot of financial crime that goes on in the current financial systems.
An Auction is a public sale of assets where participants can bid for the assets based on what they perceive the value to be. Auctions happen everywhere. Customs Docks, Garage Sales, Art Exhibitions, Political Campaigns and even Crypto Exchanges.
In the world of blockchain, auctions are usually associated with NFTs, unique and rare digital assets that cannot be exchanged for another. Just like at any other auction, the highest bidder gets the asset.
An Audit is a process whereby developers check the underlying system and algorithm of a blockchain system or app.
This allows them to spot bugs and potential issues that might affect the smooth execution of the system in the future.
There are two ways to audit code, automatic and manual. Automatic involves the use of another algorithm while manual involves looking at every line of code. The manual method is tedious but more effective.
Augmented Reality (AR) is an innovative system that seeks to merge both the physical and virtual space. The aim is to enhance understanding of the real world by using visually stimulating digital representations of real world experiences.
Imagine being in a historical site like the colosseum in Rome, you put on your AR hardware and you can see and hear gladiators fighting in the arena and the crowd cheering at the top of their voice. They stop once you take off the AR kit and it all goes back to normal.
Augmented reality differs from virtual reality in the sense that it seeks to improve real world experiences using technology while virtual reality seeks to create an entire digital universe of its own, removed from the real world.
Authentication is the confirmation of a user’s identity either through password, biometrics or any other means of identification.
Automated Market Maker
An Automated Market Maker (AMM) is a preset trading system that constantly monitors the amount of money that is in circulation on the platform. The AMM does this through the use of automatic trading.
Average Directional Index
A technical indicator for crypto traders that tries to predict the movement of market prices by comparing the average price movement.
Informal. A slang used to describe the ownership of a large quantity of a specific cryptocurrency. It can also be used to refer to the value of a person’s crypto portfolio.
When there is a dip in the price of a promising coin, crypto investors usually tell each other to “load their bags,” that is, buy more of that cryptocurrency.
Informal. A slang used to refer to an investor who holds large amounts of a specific cryptocurrency. Bagholders do not sell their assets even if the value drops to a dollar. They remain dedicated to the potential value of the coin.
Bakers are individuals who participate in the appending new blocks of transactions to the Tezos Blockchain Network. It is basically miners but specifically for the Tezos blockchain.
For every block of transaction that is baked, bakers get rewards. Baking is the process of solving complex mathematical problems that will lead to the creation of a new block on the Tezos blockchain.
Tezos is a platform for building smart contracts and as well as decentralised applications (Dapps).
The process whereby individuals append new blocks of transactions to the Tezos Blockchain.
Baking is the process of solving complex mathematical problems that will lead to the creation of a new block on the Tezos blockchain.
Developers who participate in the baking process are called bakers and they are rewarded with Tezos tokens (XTZ) for their work.
Tezos is a platform for building smart contracts and as well as decentralised applications (Dapps).
Bandwidth is the amount of data capacity available for transactions on a particular blockchain network. It refers to the amount of data that a blockchain network can process at once. Bandwidth is measured in megabytes or gigabytes per second.
BaaS (Blockchain As A Service)
Works just like Software As A Service (SaaS) solutions.
Blockchain As A Service is any tool that enables customers to build, operate and host their own applications on the blockchain.
Microsoft and Amazon are already leading the charge for this service.
A bank run, also known as bank on the run, occurs when a large number of depositors or clients withdraw their money from banks out of the fear that the banks may become insolvent and cease to function in the future.
A bank run in cryptocurrency would be a situation when crypto investors and holders withdraw or exchange all their cryptocurrency out of fear that it’ll lose its asset value.
As of now, it is still a theory and hasn’t actually happened yet. Because of the decentralized nature of cryptocurrency which guards it against insolvency, the cryptocurrency market is in the position to self-correct because of the level of distribution between buyers and sellers, and not being at the mercy of a centralized institution.
A basket refers to a collection of different cryptocurrencies being managed as a single asset.
Think of it as a basket of fruits. Every fruit has its individual taste and benefits that it adds to the body. If you keep eating just one of the fruits, you are not bound to get the most nutrients from the meal. However, if you diversify and eat different fruits, your body will get the maximum requirements.
Same as fruits, cryptocurrencies have individual behaviors and benefits that will interest an investor based on what they want. Some coins have a tendency to make/lose a lot of money while some are stable and have their value pegged to a real world currency.
As a crypto investor, you can mix your holding and buy coins with different levels of stability and risk. This diversification helps to mitigate risk and manage the volatility of crypto investments.
An aggregation of crypto transactions. In a batch auction, different individual orders to buy or sell crypto are grouped together and executed simultaneously.
Imagine hosting a party and running out of food. Instead of everyone going out to buy food, two friends take all the orders and drive to the restaurant. They buy for everyone in a batch instead of individually.
A new blockchain technology that powers the new Ethereum network. It is responsible for automatically giving out rewards to Ethereum miners, keeping track of all transactions on the Ethereum network and dishing out penalties to defaulters of the system.
Think of it like the principal of the Ethereum Blockchain.
A person who is pessimistic about cryptocurrencies. Bears believe that crypto prices will either crash or flatline in the nearest future.
A crypto market trend where the prices of crypto assets are on a downward spiral. In bear markets, traders are more likely to sell than buy because of the constant reduction in price.
Whenever you keep hearing about a continuous “dip” in cryptocurrencies, it means the crypto market is a Bear market.
The trend is named after Bears because they are thought to be slow animals for most of the time.
An attempt to manipulate the price of a specific cryptocurrency through coordinated activity by a group of traders who hold a large amount of that cryptocurrency.
A bear trap happens when different crypto traders who own a particular cryptocurrency come together to try and increase the price by buying more of that cryptocurrency.
If they succeed, other people think the coin is promising because the price is rising and decide to buy it. When they do, these majority holders quickly sell off their holdings. This causes the price to drop, leaving the new investors with a devalued coin.
An individual who has a large amount of some cryptocurrencies and uses this quantity to drive the price down and make profit by buying it back at a lower price.
Imagine if Jeff Bezos traded cryptocurrencies in his spare time. He could buy a large amount of a relatively new coin. Let’s use Doge for example. Let’s say Jeff has $100 million worth of Doge at $1 per Doge. If Jeff decides to sell half of that $100 million, there will be a reduction in the price of Doge.
This is because crypto prices are tied to demand. The more people want to buy a coin, the more the price increases. If that volume of the coin is available for sale or is sold, other investors would panic and start selling, thereby, reducing the price of the coin. So Jeff’s Doge could go from $1 to 50 cents.
Once the value reduces, Jeff can now buy the same quantity of coin he sold with half the amount. If the coin price increases again to $1, Jeff has made 100% and still has a lot of cash to spare. That’s how Bear Whales manipulate the price of cryptocurrencies.
A situation where individuals believe that the price of crypto assets will fall.
Many traditional finance experts and mainstream financial institutions have been very vocal about their bearish predictions for cryptocurrencies.
It is also used to refer to a downward trend in the market where asset prices are on a steady decline.
A benchmark or the practice of benchmarking is a financial baseline that serves a reference point in comparing the performance of your assets or investment portfolio to that of similar assets in order to find out if there is a way or gap that can be bridged in order to improve the performance of your assets, in this case, cryptocurrency.
Simply put, Benchmarking is the process of comparing your investment portfolio to that of others and deciding if you should invest in the coins in that portfolio or stick to yours.
BEP-2 (Binance Chain Evolution Proposal)
BEP-2 is a technical standard for creating and using new tokens on the Binance Smart Chain.
It is the set of rules and specifications that tokens must follow for them to be listed and function properly on the Binance Smart Chain.
The Binance Smart Chain is an offshoot of the Ethereum Blockchain and is native to the cryptocurrency exchange platform, Binance.
Different developers and engineers have built new coins and projects on the Binance Smart Chain and the BEP-2 enables them to do that correctly.
A Binance Smart Chain Token Standard built for the purpose of extending and improving the Ethereum Token Standards (ERC-20), one of the many protocols to follow before you build coins based on the Ethereum Blockchain, making it more inclusive and easy to use.
The Binance Smart Chain is an offshoot of the Ethereum Blockchain and is native to the cryptocurrency exchange platform, Binance.
BEP-20 determines how a token is spent on the network and who can spend it. However, it makes it easy for developers to generate new tokens on the Binance Smart Chain.
BEP-721 is a Binance Smart Chain token standard, a set of rules and regulations that govern creating new coins, that powers the generation of non-fungible tokens (NFTs). It is said to be an extension of ERC-721 from the Ethereum Chain, which is one of the most popular NFT standards.
The Binance Smart Chain is an offshoot of the Ethereum Blockchain and is native to the cryptocurrency exchange platform, Binance.
The highest price a buyer is willing to pay for a crypto asset.
The difference between the highest price a buyer is willing to pay for a crypto asset and the lowest price that a seller is willing to accept for the asset.
It’s also referred to as just Spread or Transaction Fees. This is how crypto exchanges make money from transactions.
‘Big Tech’ is an informal term that is used to refer to the four or five biggest and most innovative technological corporations, namely Facebook (now Meta), Apple, Google (and its parent company, Alphabet), and Amazon. Also called the ‘Big Four’, Microsoft makes up the fifth, making it the ‘Big Five’.
The objective of decentralisation has been to shift the focus of technological power and control from ‘Big Tech’ which handles the data of its wide range of users. It may be said that the mission of decentralisation is to topple Big Tech and release the hold on technological innovation and benefits and make it accessible to all.
The first and most popular digital currency. Bitcoin was invented by anonymous developer, Satoshi Nakamoto, in 2009 and is the most valuable cryptocurrency in existence.
Bitcoin has moved from being an abstract concept to a valid means of exchange acceptable on many payment platforms.
A Bitcoin ATM works just like the normal ATM. Instead of bank accounts, users can buy and sell bitcoin in exchange for cash.
Machines that enable users to just buy bitcoin are called unidirectional while those that enable buying and selling are called bi directional.
The first Bitcoin ATM was installed at a coffee shop in Vancouver, Canada. As at 2020, about 2500 Bitcoin ATMs have been installed across the US. El Salvador plans to install 1500 Bitcoin ATMs in 2020.
A cryptocurrency that is derived from Bitcoin. It was created in August 2017 using the code from the Bitcoin creation process.
However, it does not have the same value as Bitcoin. It is a “transaction” coin, that means, it was created to be able to accommodate more transactions than the regular Bitcoin.
Bitcoin Dominance (BTCD)
Bitcoin Dominance refers to the amount of crypto market share that belongs to Bitcoin.
As at 2013, before the rise of altcoins and stable coins, Bitcoin had 94% market share. As of 2021, this has drastically reduced to about 45% due to the rise of competitors like Ethereum, Litecoin and Ripple.
Bitcoin Improvement Proposal (BIP)
A BIP is a structured formal proposal to make changes to Bitcoin. Because it is also a software, Bitcoin usually undergoes upgrades in order to eliminate bugs and cracks in its system.
Bitcoin Pizza refers to the legendary transaction where a crypto holder named Laszlo Hanyecz conducted the first business transaction involving Bitcoin, paying 10,000 Bitcoin for two pizzas from Papa John’s.
With the value of the Bitcoin with which he purchased just two pizzas now worth more than $365 million according to recent prices, Hanyecz is regretful and about his careless decision. The 10th of May, the day the transaction took place, is now famously referred to as “Bitcoin Pizza Day”.
A person who believes in the vision of Bitcoin and can’t stop talking about it.
One of the largest blockchain communities where people can ask any questions, make comments and discuss topics related to the blockchain, bitcoin and cryptocurrency.
It is rumoured to have been created by the anonymous inventor of Bitcoin, Satoshi Nakamoto.
A business license that allows the use of virtual currencies. It was first issued in the state of New York in 2015.
Bits refers to a subdivision of one bitcoin. Just like byte is to gi gabytes.
A block is a publicly available file on the internet that contains records of transactions completed in a particular time period. Blocks are created from solving complex cryptographic problems randomly generated by a computer software.
Blocks are sequentially organized, every new block joins the end of the chain and together, they make up what we call the blockchain.
The more the blocks created, the bigger the blockchain network is. It’s like building houses with Legos. The bigger you want your house to be, the more blocks you unpack and use.
An application that enables users to view details of the blocks of a specific blockchain.
Block Explorers make a case for the transparency and decentralization of cryptocurrencies as every single transaction is available to the public. It is also called a Block Browser.
When you want to see transactions that have happened in a particular crypto wallet or exchange, a block explorer is all you need.
The unique signature that separates an individual block, a publicly available file on the internet that contains records of transactions completed in a particular time period, from the rest blocks in a blockchain.
Think of it like the divider between cars in a train.
The value of the number of blocks that precedes a certain block in the blockchain.
Basically, if you’re monitoring transactions in the blockchain, the amount of blocks before the one which the transaction is contained is called the block height.
A person or group of persons whose hardware has been chosen to verify a block’s transaction and create the next block in the blockchain.
The process of being a block producer involves solving complex problems that are randomly generated by computer software. If the problem is successfully solved, a new block is created.
The coins that are awarded to a miner or group of miners for solving the cryptography problem which leads to the creation of a new block in a blockchain.
The amount of transaction data that a single block on a blockchain can carry.
The approximate amount of time it takes a blockchain network to generate a new block.
A block trade is a large-scale transaction that occurs outside of an open market. It could be a large-scale purchase or sale of securities (financial instruments of value such as stocks, bonds, and options).
This kind of transaction needs a blockhouse, which is a financial intermediary committed to aiding investors with risk management, to conduct block transactions safely. Through a combination of a block trade and a blockhouse, traders can simultaneously purchase or sell a large number of securities without causing any harm to the market price.
The same logic applies to cryptocurrency. A crypto block trade refers to large volume sales or purchases of cryptocurrencies that are typically performed outside of the open market for security purposes and needs a secure and trustworthy platform to act as a blockhouse in conducting the transaction.
Blockchain refers to the connected blocks of transaction information, sequentially organized and stored consecutively in a public database.
Just like the name implies, the blockchain is made up of a series of connected blocks, each block contains information about transactions which occurred at a particular time period.
Each block also has a unique signature which differentiates it from other blocks. Blocks are generated by solving cryptographic problems. The process of solving this problem is called mining.
The first generation of blockchain technology. It was largely focused on cryptocurrencies and decentralisation.
An improved and extended version of Blockchain 1.0. The focus is on exchanging value in a fully decentralised manner, using peer to peer transactions.
A more improved version of the blockchain technology with a focus on global adoption, practical usage and real world applications.
This is a concept conceived by Ethereum founder, Vitalik Buterin. He opined that there are three sets of problems that plague developers while building blockchains.
They are; decentralization, security and scalability. Most developers have to forgo trying to solve one of these in order to accommodate the solution for the other two.
A bonding curve derives its meaning from a mathematical theory. The curve is used to describe the relationship between price and the supply of an asset.
In more detail, the idea is that when an individual purchases an asset that is available in limited quantity, the next buyer will have to pay slightly more for it. This applies to subsequent buyers also.
The logic behind this price increase is that the number of the available assets decreases as each one is sold. This system profits the earliest investors who purchased the asset. This applies to cryptocurrency, especially Bitcoin, and accounts for its massive appreciation in value over the years.
An automated software that can carry out specific tasks like trading cryptocurrencies without human interaction.
The rewards that are given to miners for solving problems related to a blockchain network or crypto token.
A blockchain bridge allows the seamless transfer of data between two different blockchain networks.
The abbreviation of Bitcoin.
When an asset is accorded more value than its intrinsic value, it is said to be in a bubble.
That means people are buying the asset for more than it’s actually worth. Let’s say you’re at an auction and there’s a Honda Civic being sold. But there’s one issue with the Civic, it can’t drive. You turn around and people are bidding millions of dollars for a Civic that can’t drive.
That’s exactly how most people view cryptocurrencies and decentralized finance. They exist but haven’t proven useful for mainstream application hence people do not believe in them yet.
Many Financial Experts have argued that cryptocurrencies are being traded in a bubble that will burst eventually.
An individual that is convinced and optimistic about the future value of cryptocurrencies. A bull believes that cryptocurrency prices will rise astronomically in the not too distant future.
A market occurrence where the prices of cryptocurrencies are rising astronomically and are maintaining an upward movement.
Cryptocurrencies usually have a joint bullish season. That is, at a certain time in the year, their prices rise together.
This market movement is modelled after bulls because they’re always charging forward.
A bull trap is a situation where a cryptocurrency whose price is steadily declining appears to find some momentum and starts rising, enticing investors, only to crash down again.
Buy The Dip (BTD)
A chant by crypto bulls, people who are convinced that cryptocurrencies will keep increasing in value. They believe that a fall in the price of a cryptocurrency is only temporary and beckon on others to take advantage of the crash to buy more of that crypto.
All crypto bulls believe that their favourite coins will get to the moon (rise astronomically) and a dip is only a temporary setback in their journey.
The decision to sell some or all of a crypto asset at a loss because of a lack of belief in its potential to rise back.
A physical bitcoin unit that comes in different shapes and sizes. It was invented by Mike Caldwell in 2011.
CeDeFi (Centralized Decentralised Finance)
A philosophy that there can be a middle ground between centralised and decentralised finance. A financial utopia of sorts where the speed of DeFi and the security of Cefi is combined.
Central Bank Digital Currency (CBDC)
A digital currency approved and regulated by the central bank of a country to be used as legal tender. A CBDC is not a cryptocurrency, rather, it’s just a digital representation of an already existing fiat currency.
An occurrence in the blockchain which allows node operators to replace old and adopt new blocks. This allows for better structure and an extension of the blockchain.
This happens when a cryptocurrency is split (forked) into several other cryptocurrencies. This usually occurs when developers take the code of an already existing coin and alter the code to make another independent coin.
An algorithm that can be used to encrypt and decrypt information.
The approximate amount of a cryptocurrency that is in the market and is being held by individuals.
The remote mining of cryptocurrencies through hardware rented from mining companies.
A cryptocurrency that operates independently on its own blockchain.
A physical and offline store of cryptocurrencies. It could be a hard drive, USB or a computer’s memory.
This occurs when a cryptocurrency transaction is verified and recorded on a block in the blockchain.
Cross-chain is a blockchain technology that strengthens the interconnection between different blockchain networks by allowing the exchange of information. This helps to create a connected blockchain ecosystem instead of independent systems.
CRUD stands for create, read, update and delete. In computer programming, it refers to four basic operations of persistent storage. It can also represent a user interface that creates the opportunity to view, search, and change information using computer-based forms and reports.
In blockchain technology, CRUD can be utilized to build smart contracts because it represents a very standard set of data operations that most applications need to do.
Short for cryptocurrency. A digital currency that enables financial transactions on the blockchain.
Crypto Debit Card
A special kind of debit card that allows users to pay for goods and services using cryptocurrencies.
The use of another person’s computer to mine cryptocurrency without their knowledge.
A digital currency that is hosted on the blockchain and secured by cryptographic technology.
Cryptocurrencies make it easier for people to perform financial transactions on the web. It’s faster and more transparent than traditional fiat currencies.
The first cryptocurrency to achieve mainstream distribution is Bitcoin, founded in 2009.
This is just a market comparison between two different types of cryptocurrencies. It helps to facilitate trade between the currencies in the pair.
This is a type of transaction in which a middleman/third party is involved. Both the buyer and the seller have to trust that the middleman has their best interests at heart and will be fair to them.
These are the programmes that run on top of the blockchain and determine how blockchain applications interact with the distributed ledger and with each other.
A field of practice that is focused on securing information and preventing those who are not authorised from gaining access to information.
Consensus is achieved when all participants of a blockchain network agree on the content and sequence of the blocks in the network.
DAO (Decentralised Autonomous Organisation)
DAOs are basically an internet community with a shared bank account. A group of people with shared interests come together via social media and form some sort of community where they contribute financially.
The fund is either used to seek other investment opportunities or donated to relevant persons/bodies. The rules that govern the DAO are written in smart contracts and hosted on the blockchain. DAOs are usually hosted on the Ethereum Blockchain.
Decentralized API (dAPI)
This refers to API services that can share and exchange data and information with blockchain technology. Called decentralized application programming interface, dAPIs are simply the reason why it is easy to create decentralized applications (dApps).
To understand what dAPIs are, it’s important to first understand what APIs are. This is a well-structured and meticulously designed mechanism that allows web and mobile applications to communicate with one another through the transfer of data and services. The major difference between APIs and dAPIs is the decentralized bit; APIs have been centralized for a long time.
Through its compliance with blockchain technology, dAPIs solve the challenge of one centralized entity by managing several data providers, ensuring greater data transparency down to the original data source level.
Decentralised Apps are applications that are built and run on the blockchain, especially the Ethereum Network.
Their purpose is to disrupt existing business models and create new ones by taking censorship and control rights from one party and spreading it to others in the app..
Dapps take control from one entity and spread it evenly across. Anyone can make edits and see the back end of the blockchain on which the decentralised app works.
A trading technique that involves frequently buying and selling crypto assets within the space of a day in order to make profit from the disparity in prices.
A collection of properly structured and organised data, typically stored in an offline storage or on the web.
In regular computing terms, a distributed denial-of-service attack is a cyber-attack where the perpetrator tries to make a machine or network resource unavailable to intended users and, thereby, temporarily or indefinitely disrupts the services of a host connected to the network.
A DDos attack can also be carried out in a blockchain. This is when a DDos attack is designed to overwhelm a bottleneck within the software or hardware on a blockchain node. The primary ways to defend against them are to ensure that nodes have adequate storage, processing power, and network bandwidth and to build fail-safes into the code.
DeFi (Decentralised Finance)
Short for Decentralised Finance. This is a blockchain-based financial system that doesn’t rely on third party central systems like banks and exchanges to carry out transactions.
DeFi allows people to lend to and borrow money from each other, trade cryptocurrencies, invest and earn interest all without the intervention of a central financial institution like a bank.
DeFi transactions are automated and hosted on the blockchain. DeFi is powered by Smart Contracts on the blockchain network.
An asset that only exists on the blockchain and has no physical form. However, if it is valuable enough, it can be converted into physical cash.
A currency that is only available on the web. It has no physical form but can be used to buy and sell as far as there’s a consensus between the two parties at the different ends of the transaction.
A unique link for identifying a digital asset. Every digital asset has a distinct signature.
Distributed Ledger Technology
A digital system for recording the details of transactions from multiple sources in multiple places at the same time.
A potential flaw in cryptocurrencies where a particular coin can be spent more than once. Bitcoin tried to combat this by making sure every single transaction on its network is verified and confirmed. Other cryptocurrencies are not so particular about such security.
DYOR (Do Your Own Research)
Slang. A disclaimer used by crypto enthusiasts after expressing the possibility of an increase in the value of a coin. It’s basically a warning to potential investors to do their own technical and fundamental research before purchasing the asset.
EOA (Externally Owned Account)
A special type of blockchain account that is controlled with a private key. Anyone with the key can get access to the account and all its details.
ERC-20 (Ethereum Request for Comment Standards)
A plethora of tokens that are designed to operate on the Ethereum Blockchain. They are usually limited in supply and form the basis for Dapps.
The abbreviation of Ethereum. Usually used to refer to the coin.
The actual name of the coin which runs on the Ethereum Blockchain. The term is used interchangeably with Ethereum but in reality, they are distinct. Ether is the cryptocurrency while Ethereum is the network.
A decentralised, open-source, blockchain network that has become the basis for a lot of blockchain networks. Ethereum is the second most popular blockchain network. It was created by Vitalik Buterin and Gavin Wood in 2015 to have real-world applications for the blockchain.
Ethereum allows for the functioning of decentralised systems like Dapps and DAOs. It also allows for the minting of NFTs.
EVM (Ethereum Virtual Machine)
A computation engine that serves as the backbone of the Ethereum Blockchain. It helps to execute transactions and deploy smart contracts on the Ethereum Blockchain.
Extended Reality (XR)
This is the umbrella term for the different types of tech-driven realities such as virtual reality (VR), augmented reality (AR), and mixed reality (MR).
A fork occurs when changes are made to a blockchain. Fork generally refers to an event where a blockchain network is split into two different independent versions.
Being open-source, the blockchain can be easily changed and altered without permission from a central entity.
FOMO (Fear Of Missing Out)
This is a situation where investors panic about not owning a crypto asset that might blow up. Blockchain organisations regularly use FOMO to market their tokens and acquire users.
This is the payment blockchain users have to make to compensate for using the Ethereum Virtual Machine to execute transactions and deploy smart contracts. It is usually referred to as gwei.
Also known as Block 0. This is the first block in a blockchain network, upon which all other blocks are built. The Genesis Block serves as the foundation and every other block lays on top of it.
Golang (Google language)
Golang is a programming language that was created by Google in 2009. Its basic function is to create ease in the building of simple, reliable, and efficient software.
Golang has been a necessary tool in the development of the blockchain. Today, most of the stable blockchain-based dApps and tools are built using Golang. Some of the popular blockchains that have been developed using Golang are Ethereum, Hyperledger, and GoChain.
Some of its advantages over other programming languages like C, C++, and Java, include its simplicity, speed, and low startup time. It also builds code that is manageable in the long run, as well as easy to use in distributed systems.
A peer to peer communication protocol between nodes (computers) connected by the blockchain. The nodes regularly exchange information and fix issues within the chain.
A situation where the rewards for mining a particular cryptocurrency are reduced by 50%. Cutting the rewards in half helps to reduce inflation of the coin, and curb over circulation.
The process of converting long lines of code into a fixed string or numbers to enable it to fit into the blockchain algorithm.
Any programming function that can be used to turn long lines of code into a short string for the blockchain algorithm.
This works as a unit of measurement for the amount of computational power consumed by a blockchain/cryptocurrency network in order for it to operate efficiently. It is a term used in and popularized by cryptocurrency miners.
Also known as hash rate, miners mine cryptocurrency on a crypto network and the overall computational power of that network is referred to as hash power. It could be a combined computing output or the power of an individual mining rig. Sometimes, miners band together to join their computational power together on a cryptocurrency network to work more efficiently on mining operations.
When multiple people combine their computational strengths on a blockchain network, they could gain control of half of the blockchain hash power, leading to a 51% attack.
HODL (Hold On For Dear Life)
Derived from a spelling of the word “Hold.” It is a cryptocurrency investing strategy that involves holding on to your assets despite market fluctuations. It frowns against day trading and arbitrage.
A hot wallet is a cryptocurrency wallet that is software-based and connected to the internet. It is simply the online version of a physical wallet where you keep your money and other valuables. However, a hot wallet is considered to be vulnerable to cyberattacks and could be hacked at any given time, which makes it inferior to hardware/offline wallets and the better security they offer.
A multi-project, open-source, blockchain effort hosted by the Linux Foundation. The Hyper Ledger is supposed to help blockchain application and adoption across different industries. The project started in 2015.
Hyper Ledger Fabric
Also known as Hyper Ledger. The blockchain framework created by the Linux Foundation in collaboration with other top tech companies to build enterprise software solutions with the help of the blockchain.
IDE (Integrated Development Environment)
A software that helps developers write and alter already existing code on the blockchain.
A defining characteristic of blockchain technology. It means that the records of transactions that are carried out on the blockchain are permanent, they cannot be altered or deleted. This makes a case for the transparency and decentralization of blockchain networks.
An individual who buys cryptocurrencies with the hope that they’ll increase in value and can make them a sizable profit within a fixed amount of time.
Initial Coin Offering (ICO)
A popular fundraising technique used by blockchain startups to raise money to work on their products and services. It is the crypto equivalent of companies going public and offering their shares to retail investors (IPO).
IPFS (InterPlanetary File System)
A protocol network that enables peer to peer communication and exchange of files within a distributed system. It is acclaimed to be a better alternative to the Hypertext Transfer Protocol, Https.
A record of financial transactions that cannot be altered or deleted. The blockchain is a public distributed ledger where everyone is privy to every single transaction.
A new protocol that aims to solve the scalability problem of Bitcoin by allowing for more speedy transactions.
This refers to the ease with which a crypto asset can be converted into cash. The liquidity of an asset determines how easily it can be bought and sold without affecting the overall market.
The Klinger oscillator is a financial tool that can be used to forecast long-term money flow trends as well as to detect short-term fluctuations.
In trading, there are different methods that traders use to predict or analyze outcomes in the market. This analysis is done with a technical indicator. An example of a technical indicator in the trading market is the Klinger Oscillator. These indicators are useful because they help traders forecast the movement of financial assets like currencies, stocks, and commodities.
Know Your Customer refers to a financial institution’s obligation to verify the identity of those who use its platform.
KYC stands for “Know Your Customer.” It is a process that all businesses must follow in order to identify the customers with whom they conduct business. KYC involves collecting information such as the customer’s name, phone number, National identity card, drivers license, international passport, email address, home address, as well as any additional information that may be required.
Latency refers to the period between submitting a transaction to a blockchain network and the network’s initial confirmation of acceptance is known as network latency.
When it comes to trading, receiving pricing data, and formulating judgments, implementing this knowledge is critical for any trader. When any of these processes are slow, it might influence how quickly traders can place buy and sell orders. Latency is defined as any lag in a trader’s interaction with the market. This influences how quickly they can place buy and sell orders.
In the cryptocurrency space, a public ledger for bitcoin is a record keeping system for keeping track of transactions. Participants’ identities are kept anonymously on the ledger, as are their separate cryptocurrency balances and a record of all authentic transactions between network participants.
Ledger is also a physical, offline device with a small screen used to store digital assets like NFTs.
Leveraged tokens are a unique crypto trading instrument used to take a leveraged position in cryptocurrency trading. which means your profits or losses are multiplied. A token named 5X Long Ethereum Token (ETHBULL), for example, is five times the reward from an Ethereum investment. So if Ethereum increases by 1%, ETHBULL’s value increases by 5%. It works the same way if Ethereum decreases in price.
Lightning Network is a “layer 2” payment protocol that runs on top of a blockchain-based cryptocurrency like bitcoin. It was offered as a solution to the bitcoin scalability problem to facilitate quick transactions among participating nodes.
Light node is a piece of software that links to the main blockchain network as well as the Lightning Network itself. The primary blockchain here refers to any blockchain network, such as Bitcoin and Litecoin, on which LN can be used.
A limit order is a form of exchange order that allows traders to buy or sell cryptocurrencies at a predetermined price or better.
Liquidation is a term used in cryptocurrency markets to describe when an exchange forces a trader’s leveraged position to liquidate due to a partial or whole loss of the trader’s initial margin.
Location swap allows for a change of claim to assets manifested in the form of a token with no influence on other attributes.
Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions.
Market capitalisation, especially when it comes to cryptocurrency, is the total value of all the coins that have been mined and that are in circulation. There is a simple formula for calculating the market capitalisation of digital assets. This is done by multiplying the current number of coins available by the current value of the coins.
For example, the total number of bitcoins in circulation is approximately 19 million and the value of bitcoin in dollars is a little above $47,000. This puts the current market cap of bitcoin at around $891 billion.
Metamask is a software cryptocurrency wallet used to interact with the Ethereum blockchain.it allows users to access their Ethereum wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications
Metaverse refers to an immersive virtual reality — a virtual world in which people’s avatars can interact with each other, attend meetings and network together. Think of it as a simulation of the real world, everything you do here can be done in the virtual world.
Mempool is a cryptocurrency node’s mechanism for storing information on unconfirmed transactions, acting as a waiting room for transactions that have not yet been included in a block.
Merkle tree is a data structure that is used in computer science applications. In cryptocurrencies, it serves to encode blockchain data more efficiently and securely. They are also referred to as “binary hash trees
Miner extractable value(MEV)
Miner extractable value(MEV) is a measure of the profit a miner can make through their ability to arbitrarily include, exclude, or re-order transactions within the blocks they produce.
Mining in cryptocurrency or crypto mining is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Also known as cryptocoin mining, altcoin mining, or Bitcoin mining.
Minimum Viable Product (MVP)
Minimum Viable Product (MVP) development is the process of developing the leanest version of a blockchain application with minimum functionality. Typically an MVP blockchain development follows the process of proof of concept (POC) development.
A mining contract is an agreement where a customer pays for the output of mining power from hardware placed in remote data centres
A mining farm is a data centre, technically equipped to mine bitcoins or other cryptocurrencies. Mining farms emerged as a result of the constant complication of the mining process, which requires more technical, energy and financial resources.
A mining pool is a joint group of miners who pool their resources together by combining their computational and processing power over a cryptocurrency network to increase their chances of finding a block or successfully mining for cryptocurrency. They usually agree to split the rewards after their operations of mining cryptocurrency or finding a new block.
MIST is a cryptocurrency token that is offered through the Binance blockchain. It has a total supply of 1,000,000,000 tokens and, as at April 2021, it had a circulating supply of 56,357,088 tokens.
The token is based on Mist, an open-world role-playing game (RPG) on the Binance Smart Chain (BSC). It offers players the ability to easily exchange in-game assets without any intermediaries. The MIST token also runs on the Binance Smart Chain (Binance’s own blockchain) and is compatible with every wallet on the network.
Moon refers to a situation where there is a continuous upward movement in the price of a cryptocurrency. Often used in communities to question when a cryptocurrency will experience such a phenomenon.
MSP (Membership Service Provider)
A Membership Service Provider (MSP) is a Hyperledger Fabric component that allows blockchain users to prove their identity to the rest of the network in order to transact on the network. Therefore, an MSP abstracts away all cryptographic mechanisms and protocols behind issuing certificates, validating certificates, and user authentication.
Usually, Certificate Authorities issue identities for blockchain users by generating a public and private key that forms a key-pair which would help the users prove their identities on the network. However, because a private key cannot be shared publicly, an MSP helps to authenticate and prove the identity of the user.
NFT is a non-fungible token that is a one-of-a-kind and non-transferable data unit kept on a digital ledger. NFTs can be used to represent easily replicable goods like images, movies, audio, and other sorts of digital assets as unique items, and blockchain technology can be used to provide verified and public evidence of ownership.
A node is the simplest and most important component of a blockchain infrastructure, as it stores data and allows all communication (transactions) to pass through it.
Network refers to all nodes involved in the operation of a blockchain.
Nominators are one of two main players who are involved in a blockchain network that uses the nominated proof-of-stake consensus algorithm.
Nonce, an abbreviation for “number only used once” is used in cryptographic communication. A nonce refers to a number added to an encrypted block in a blockchain which is hashed and, when rehashed, meets the difficulty level restrictions. More simply, a nonce is the number that crypto miners are solving for in order to be rewarded with cryptocurrency.
Not Going To Make It (NGMI)
Not Going To Make It (NGMI) is a slang term meaning missing out on a trade’s gains. “GMI,” or Going to Make It, is the antonym.
Nocoiner is a sceptic who believes cryptocurrency has little to no value and believes it is a Ponzi scheme that will fail.
Offline storage is the act of storing cryptocurrencies in devices or systems not connected to the internet.
On-chain transactions refer to cryptocurrency transactions that occur on the blockchain and remain dependent on the state of the blockchain for their validity.
An on-ledger currency refers to a currency residing on a blockchain. This is the basis of all cryptocurrencies, which must utilize a distributed ledger (a single copy of the same database) shared among all participants
OpenSea is a decentralized peer-to-peer marketplace for buying, selling and trading rare digital goods, from gaming items to collectables to art, which are built on non-fungible token (NFT) technology and run on the Ethereum blockchain
An order book is an electronic documentation of an asset’s buy and sell activity on a trading platform such as a cryptocurrency exchange. Generally, an order book shows a sleek view of a particular asset by recording buy and sell orders.
Over-The-Counter or OTC Trading
Over-The-Counter or OTC Trading is a private deal for buying or selling crypto. Thus, once buyers or sellers place their orders, the OTC trader endeavors to purchase the assets needed to carry out a requested transaction.
Oversold is a term used to indicate that an asset such as Bitcoin is trading at a price lower than its true value. Oversold is the opposite of overbought. However, technical indicators measure a cryptocurrency asset’s oversold status
Paper wallet is a printed piece of paper that contains keys and QR codes that are used to facilitate cryptocurrency transactions. Because they are removed from the Internet, at one point paper wallets were considered to be more secure than other forms of cryptocurrency storage.
Peer-to-peer refers to the direct exchange of some asset, such as a digital currency, between individual parties without the involvement of a central authority. Strictly peer-to-peer exchange of currency was the primary goal driving the creation of Bitcoin, the most widely used cryptocurrency.
Public key is a cryptographic code used to facilitate transactions between parties, allowing users to receive cryptocurrencies in their accounts. Users are issued a private key and a public key when first initiating a transaction.
Private key is a sophisticated form of cryptography that allows a user to access their cryptocurrency. A private key is an integral aspect of bitcoin and altcoins, and its security makeup helps to protect a user from theft and unauthorized access to funds.
Originally known as the Matic Network, Polygon was created to scale Ethereum and improve the infrastructure. It is an India-based currency aiming to make transactions cheaper and quicker on the Ethereum blockchain
Paper trade is a simulated trade that allows an investor to practice buying and selling without risking real money. The term dates back to a time when (before the proliferation of online trading platforms) aspiring traders would practice on paper before risking money in live markets.
Prediction market is a speculative market where participants trade not on options or cryptocurrencies, but instead on the information. Specifically, investors in prediction markets bet on the outcomes of future events.
Private cryptocurrency, also known as privacy coins, is a class of cryptocurrencies that offer anonymous blockchain transactions.
Protocols are a basic set of rules that allow data to be shared between computers. For cryptocurrencies, they establish the structure of the blockchain, the distributed database that allows digital money to be securely exchanged on the internet.
Pump and dump ( P & D)
Pump and dump ( P & D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements,
Quantum computing is the study of how to harness quantum physics phenomena to generate novel computing methods. Qubits are the building blocks of quantum computing. A qubit, unlike a regular computer bit, can be either 0 or 1, or a superposition of both 0 and 1.
Raiden Network: An off-chain scaling solution aiming to enable near-instant, low-fee, and scalable payments on the Ethereum blockchain, similar to Bitcoin’s proposed Lightning Network.
The recovery seed, also known as a recovery phrase, backup phrase, or word seed, is a list of 12, 18, or 24 words that contain all of the information required to recover your wallet. The most critical aspect of using a hardware wallet is writing down and safeguarding the recovery seed.
With a literal translation that points to pulling the rug under someone’s feet, a rug pull is a deceptive move where decentralized software developers create a token, artificially inflate its prices through appeal, then abandon the project and make away with the money.
In more detail, rug pulls have become a phenomenon in decentralized finance and cryptocurrency, especially. A developer creates a token, often based on something with mass appeal. Then the token is listed on a DEX (decentralized exchange platform) and the developers are wise to attach it to a leading cryptocurrency like Bitcoin or Ether, to make it appear credible.
When investors swap their cryptocurrencies for the tokens, their value increase. At a certain point in this value increase, the developers withdraw everything from the liquidity pool, forcing the value of the token to zero.
A recent and popular example is the crash of the Squid token, modelled after the famous Squid Game series.
This is the name of the individual or group of individuals that created Bitcoin, the premier cryptocurrency. Also the name attached to the publication of Bitcoin Whitepaper, the name is presumed to be a pseudonym. This individual was also part of the deployment of Bitcoin’s original reference implementation and through this, devised the first blockchain database.
A scamcoin, exactly as the name suggests, is a cryptocurrency that is created by developers to dupe investors and supporters of the digital currency, while making a ton of money for the creators. Scamcoins are the get-rich-quick version of the crypto world and it usually has certain features. The most prominent is that scamcoins are usually an imitation of an already existing coin or token. Also, they are usually created around the hype of an external event, like a TV show, movie, or even meme. In the end, they usually become worthless after the developers have made away with the money.
A secondary market is simply a place where cryptocurrency traders and investors can buy and sell their portfolio of different digital assets with others.
A secondary market is quite different from a primary market. A secondary market allows regular investors and traders to have access to financial instruments and tools that would otherwise not be available to them on the primary market. A primary market is reserved for elite investors and large financial institutions. The difference between a secondary market and a primary market is the same as the difference between a retail store and a wholesale facility.
Smart contract is a self-executing contract in which the conditions of the buyer-seller agreement are put directly into lines of code. The code, as well as the agreements it contains, are disseminated throughout a decentralized blockchain network. Transactions are trackable and irreversible, and the programming regulates their execution.
Stablecoins are cryptocurrencies whose value is tied to another cryptocurrency, fiat currency, or exchange-traded commodities (such as precious metals or industrial metals)
A shielded transaction is simply a transaction that occurs between two shielded addresses. In broader terms, this type of transaction keeps the addresses, memo field, and the amount of the transaction from the public.
People who send data to a shielded address may or may not include an encrypted memo, which is a secure and convenient way to store notes. However, receivers of shielded transactions cannot have access to the information or address of the sender through the transaction receipt in their wallet, only the transaction value and possibly an encrypted memo included by the sender. This is, in some way, similar to what the incognito function in a browser does.
This type of transaction promises more privacy and tighter security as opposed to transparent addresses.
Tokenomics involves understanding the supply and demand characteristics of cryptocurrency.
Tokens are digital units of cryptocurrency that are used to represent a certain asset or usage on the blockchain. Tokens can be used for a variety of purposes, the most prevalent of which are security, utility, and governance tokens.
Ticker symbol is a unique collection of characters (and sometimes digits) that is used to shorten a stock or cryptocurrency’s name.
Unpermissioned ledger also known as permissionless or public: is a ledger that anyone can access and download. Users can submit messages for processes and even be involved in processes of authentication, verification, and consensus protocol for blockchain transactions.
Vitalik Buterin is a Russian-Canadian programmer and writer best known as one of the co-founders of Ethereum which was launched in 2015. But his journey in the cryptocurrency world dates back to 2011 before Ethereum when he also co-founded Bitcoin Magazine. Dropping out of school (University of Waterloo) in 2014 to work on Ethereum full-time, he now has an estimated fortune of $1 billion dollars in ETH.
Virtual Reality (VR) is a computer-generated environment with realistic-looking images and objects that gives the user the feeling of being completely immersed in their surroundings. This world is viewed through the use of a Virtual Reality headset or helmet.
Volatility is a measure of how much the price of an asset has moved up or down over time, the more volatile an asset is, the riskier it’s considered to be as an investment — and the more potential it has to offer either higher returns or higher losses over shorter periods of time than comparatively less volatile assets.
Wash trade is an illegal type of trading in which a broker and trader collude to make profits by feeding misleading information to the market.
A watchlist is a feature of the website where users can create their own lists of cryptocurrencies to follow
Web 3.0, commonly referred to as the “Semantic Web,” is the next version of the internet. It is based on the usage of artificial intelligence (AI) and machine learning (ML) (AL). Its goal is to make more open, connected, and intelligent websites and online apps that rely on machine learning to analyze data.
The goal is to make the web accessible to machines as well as people.
This is a term that refers to an investor that owns a large amount of crypto or digital assets. Usually, this type of investor may have the pull to manipulate the market. A single tweet or message from them about a digital asset could send the value of such an asset skyrocketing or, on the contrary, plummeting.
Considering the support that Elon Musk has shown about Dogecoin, a cryptocurrency which was started as a joke and is referred to as the first “Meme coin”, ‘Dogecoiners’ now refer to Musk as “dogefather”. This is especially because many speculate that he is the whale who has bought $22 billion dollars of Dogecoin.
Token and NFT owners are also referred to as whales if they have a large amount of it. Recently, celebrities such as Snoop Dogg, Jake Paul, Jordan Belfort (the Wolf of Wall Street), et cetera, have identified themselves as NFT whales.
This is a humorous phrase which refers to when crypto holders or investors would be rich enough (having gained the rewards of holding or investing) to afford to buy a Lamborghini, a symbol of success.
This is a phrase often used by impatient crypto traders and investors when they want to find out when the price or value of a cryptocurrency would increase dramatically.
The moon is a common metaphor or indication of massive growth in the value of a crypto asset. This is why it is common to hear crypto investors saying, “Bitcoin/Ether has gone to the moon.” A crypto investor, excited about the prospect of his newly-acquired crypto, could say, “I have bought 28 DOGE, when moon?”
The process of white labelling allows a company (company A) to adopt or customise an existing product structure and framework introduced by another company (Company B) and rebrand and market it as its own.
In the world of blockchain technology, products that have been white-labelled are often those that have been designed, developed, and tested by a company and then is customised by another company for deployment to users. While it may seem illegal or unethical, white labelling is actually generally accepted and provides a simple solution to what may otherwise be a complex problem where a company starts a whole new product or service when a similar one has already been developed. It takes a lot of time, effort, and trial-and-errors for a new product to be launched, especially on the blockchain.
One of the notable advantages of a white label product is in streamlining user experience across different platforms that have been created with a similar outlook. This is why many blockchain infrastructural products like coin/token launchers, wallets, and even exchanges look similar. So, someone using a particular type of wallet would know how to use another type of wallet, since both work in the same way; they have just been customised.
While the concept of whitelist has a number of meanings in cryptocurrency, the general meaning refers to a list of interested participants who show interest in taking part or purchasing in the sale of an initial coin offering.
A whitelist could also mean a situation where users who sign up to the mailing list of a cryptocurrency company are asked to add the company to their whitelist, so that emails from the company don’t go to the user’s spam folder.
A whitelist is also used in the context of withdrawal addresses. A whitelist refers to withdrawal addresses that are deemed trustworthy. Therefore, it is only from these addresses that have been whitelisted that funds can be withdrawn in exchange accounts.
A whitepaper is a document that is released by the pioneer(s) of a crypto project, explaining to potential investors the technical information about the concept behind the project, as well as a step-by-step plan on how to grow and increase the chances of the success of the project.
A whitepaper is usually seen as the element that attracts and convinces investors that the crypto project (which would herald a new cryptocurrency) is both legitimate and professional and can therefore be trusted. In a whitepaper, statistics and diagrams are usually provided to adequately inform the investors in the hope that it would convince them to purchase the cryptocurrency.
A popular example is the Bitcoin whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”, published by Satoshi Nakamoto in 2008.
Winding down is a DeFi term that refers to the process of unwrapping tokens that have been converted many times back to their original form. This would typically involve a number of platforms and different tokens.
Because the present token has gone through multiple stages of conversion, unwrapping or winding it down to its original state would involve a complex process where the owner of the token would need to visit the original exchange from which they got the present token and visit another platform that is capable of changing the token to an earlier form. This might need to be repeated until the token is returned to its original state.
In DeFi, winding up essentially means wrapping crypto tokens through various projects in order to find the best yield.
Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency.
YTD (Year to Date)
YTD, which means Year to Date, is a measuring scale that examines how well a digital asset has performed from the beginning of a specific year to the present time. This is usually measured from January 1 to the present time.
This metric can be used to judge the profitability of, for example, Bitcoin. The digital currency began the year with a value of $29,032 and is currently at $47,046. This means that the world’s leading cryptocurrency has secured year-to-date gains of 62.05%.
A zero confirmation, also called a zero-confirmation transaction, is a transaction that is yet to be confirmed on the blockchain and, as such, is not yet part of the blockchain and cannot be verified by the distributed ledger.
This is one of the major strengths of the blockchain and its decentralised functionality. Usually, when a person initiates a transaction and it has not yet been confirmed by the network’s miners and participants, the transaction is said to have zero confirmation. In this case, only the person who initiated the transaction is aware of it, but it would not be confirmed until other network participants approve it.
Zero-knowledge proof, also referred to as a ZK protocol, is a mathematical approach for verifying the validity of transactions without disclosing or revealing the underlying data. The verification is usually done between a prover and a verifier.
The prover is able to prove to the verifier that they have knowledge of a particular piece of information without revealing the information itself.