Absolute advantage is an economic principle where one party possesses a distinct efficiency advantage in producing or providing a particular good or service compared to another party.
An account comprises a pair of cryptographic keys, public and private, offering access and control over tokens tied to a specific address. While tokens aren't physically stored in the account, this metaphor simplifies understanding. In Ethereum-compatible blockchains, a Secret Recovery Phrase (SRP) can create countless accounts, each with its keypair, all controllable by the SRP. Similar to your Reddit account having a username and password, your Ethereum account works similarly, with you safeguarding the keys. Enhancing security involves encrypting the private key with an additional password. This connects with concepts like 'keystore file' and 'Secret Recovery Phrase'.
Active management refers to an investment approach adopted by fund managers with the goal of achieving higher returns than a benchmark index or the overall market, often involving frequent buying and selling of assets to generate profits.
Ad hoc is a Latin expression commonly used in English to describe something that is done specifically for a particular purpose or situation, often implying that it's not part of a regular or planned arrangement.
Address functions as a means to initiate and accept transactions within a blockchain network, serving the purpose of user identification; it's alternatively known as a 'public key'. An address takes the form of an alphanumeric string and can also be visually represented as a scannable QR code. Within Ethereum, addresses commence with 0x, such as 0x06A85356DCb5b307096726FB86A78c59D38e08ee.
It is a security approach that isolates computers from the internet and open networks to ensure protection. This technique is commonly employed by hardware wallets to safeguard users' private keys or Secret Recovery Phrase from potential attacks by maintaining them offline, thereby enhancing security.
Airdrop signifies the dispersion of complimentary cryptocurrency tokens, intended to foster the introduction of a fresh project or stimulate the embrace of the community.
An abbreviation for "alternative coin." This phrase is employed to describe any form of cryptocurrency apart from bitcoin.
AML (Anti-Money Laundering)
AML, which stands for Anti-Money Laundering, constitutes a series of global regulations designed to reduce the likelihood of money laundering by criminal entities or individuals. These legal frameworks and guidelines extend to the realm of cryptocurrencies, yielding diverse impacts in distinct jurisdictions.
API, short for Application Programming Interface, refers to a predefined collection of requests that one software application can initiate to another, facilitating the exchange of information between them. When you encounter a scenario where an application is said to be "retrieving data from" an external source, it frequently accomplishes this by utilizing an API.
AppChain pertains to a development emerging from the increasing enthusiasm for employing public blockchains across diverse applications. In response, developers have initiated the formulation of application-specific chains, tailored and fine-tuned to cater to the distinct requisites of their respective applications. These specialized chains, termed appchains, typically do not encompass the entirety of a conventional blockchain but establish an optimized operational environment for the specific application. They inherently rely on a foundational "Layer 1" blockchain for consensus purposes. Occasionally referred to as "Layer 3" or "L3", appchains are associated with concepts such as the "blockchain trilemma", "modular blockchain", and "Layer 2".
Application-Specific Integrated Circuit (ASIC)
An Application-Specific Integrated Circuit (ASIC) is an integrated circuit that is designed and customized to perform specific tasks or functions with optimized performance, as opposed to being used for general-purpose computing.
Arbitrage refers to the practice of buying and selling assets, such as cryptocurrencies or financial instruments, across different markets or exchanges to profit from price disparities for the same asset.
ASIC, which stands for Application-Specific Integrated Circuit, denotes a specialized and high-cost computational apparatus utilized in the process of cryptocurrency mining (refer to 'mining').
Ask price, also known as the "offer price," is the minimum price at which a seller is willing to sell a particular asset, such as a cryptocurrency, on an exchange. It represents the price a buyer would need to pay to purchase the asset from the seller.
Asynchronous refers to events or processes within electronic systems that occur at different times or speeds, often independent of the main program flow. In an asynchronous system, actions can occur independently of a set sequence, making it possible for multiple tasks to operate concurrently.
Atomic swap is a smart contract technology that facilitates the direct exchange of one cryptocurrency for another, without the need for intermediaries like centralized exchanges. This process ensures that both parties involved in the swap receive their desired assets simultaneously or none at all, eliminating counterparty risk and providing a secure means of trading different cryptocurrencies.
An attack surface in computer security refers to the various points or vulnerabilities in a system where malicious actors can potentially exploit to gain unauthorized access. It's a measure of the potential avenues of attack that exist within a software or system. Systems with more complex software tend to have a larger attack surface compared to simpler ones.
Attestation refers to a process within the Proof of Stake mechanism (contrasted with Proof of Work on Ethereum) where all validators, except the one suggesting a new block, express their agreement by voting in favor of a specific block. This collective agreement establishes consensus and affirms both the block and the enclosed transactions. This concept is closely associated with 'Proof of Stake'.
Attributes / Properties
Attributes or properties in the context of NFTs refer to the distinct characteristics, features, or traits that define an individual NFT. These attributes can encompass various aspects such as visual elements, metadata, attributes associated with the underlying digital asset, or any other unique qualities that contribute to the uniqueness and value of the NFT.
An auction is a competitive event where prospective buyers place bids or offers in an attempt to acquire an item, with the highest bid winning the item at the agreed-upon price.
Automated Market Maker (AMM)
An Automated Market Maker (AMM) refers to a set of protocols that facilitate efficient trading of cryptocurrencies by utilizing liquidity pools to determine prices and execute trades without the need for traditional order books or intermediaries.
B-Tokens refer to a series of fully-collateralized wrapped tokens issued by Binance. These tokens are backed by an equivalent amount of underlying assets and are designed to provide users with a way to easily trade and access various cryptocurrencies on the Binance platform.
"Bags" in the cryptocurrency context refers to the collection of coins and tokens that an individual or investor holds in their portfolio. It can also be used to describe a situation where someone is holding onto assets that have decreased in value, often referred to as "holding the bag." This term can imply a decision to hold onto assets that may not be performing well in the hope of their value increasing in the future.
The Beacon Chain serves as Ethereum's proof-of-stake (PoS) layer, responsible for establishing consensus and overseeing the network of Ethereum stakers. These stakers play a role in validating and securing the network while earning staking rewards in return.
A bear market signifies an extended phase characterized by a continuous decline in prices.
A benchmark is a standardized measurement that can be used to evaluate the performance of a specific asset or investment portfolio.
BEP-2 is a technical specification that defines a set of rules for the issuance and management of tokens on the Binance Smart Chain platform. It helps govern the creation and behavior of tokens within the Binance ecosystem.
BEP-20 is a token standard on the Binance Smart Chain (BSC) that is similar to Ethereum's ERC-20 standard. It defines the rules for creating and managing tokens on the BSC platform, including how they can be spent and who can spend them. BEP-20 tokens are compatible with both Binance Smart Chain and Ethereum ecosystems, similar to the interoperability of BEP-20 with Binance Chain's BEP-2 and Ethereum's ERC-20.
BEP-721 is a technical standard within the Binance Smart Chain (BSC) ecosystem that outlines the rules and guidelines for creating and managing non-fungible tokens (NFTs). This standard provides a framework for the issuance of unique digital assets on the BSC platform, allowing developers to create NFTs with specific attributes, ownership mechanisms, and functionalities.
BEP-95 is a Binance Evolution Proposal that introduces a real-time burning mechanism to the Binance Smart Chain (BSC). This proposal aims to enhance the economic model of BSC by implementing a mechanism that automatically burns a portion of the transaction fees in real-time, thereby reducing the circulating supply of the native BNB token and potentially increasing its scarcity and value over time.
Beta coefficient is a financial metric used to measure the volatility of an asset in comparison to the overall volatility of a specific portfolio or market index. It provides insights into how much an asset's price tends to move in relation to the broader market or a particular benchmark. A beta coefficient greater than 1 indicates that the asset is more volatile than the market, while a beta less than 1 suggests the asset is less volatile than the market.
A beta release is an early version of a software program made available for testing and feedback, coming after the alpha stage. It helps gather user input to identify and fix issues before the final release.
Bid-ask spread refers to the price difference between the highest bid and the lowest ask prices listed on the order book for a particular asset.
Bids are actions taken in an auction to express interest in purchasing an NFT at a specific price.
Binance Community Vote
A Binance Community Vote is an event where the Binance cryptocurrency exchange allows its community of users to vote for their preferred project to be listed on the exchange. The winning project gets a free listing on Binance.
Binance Ecosystem Fund (BEF)
The Binance Ecosystem Fund (BEF) is an initiative by Binance, a major cryptocurrency exchange, to collaborate with partners who are dedicated to the growth and development of the blockchain and cryptocurrency ecosystem. It aims to support innovative projects, startups, and initiatives within the industry.
Binance Labs is a social impact fund and incubation initiative created by Binance, a prominent cryptocurrency exchange. It focuses on investing in and supporting blockchain and cryptocurrency entrepreneurs, projects, and communities to foster innovation and growth in the industry.
Bitcoin, the pioneering cryptocurrency built on a Proof of Work (PoW) blockchain, materialized in 2009 via the pseudonymous creator Satoshi Nakamoto. The concept was outlined in the white paper "Bitcoin: A Peer-to-Peer Electronic Cash System." Note the distinction between "Bitcoin" for the network and "bitcoin" for the cryptocurrency. The plural form remains "bitcoin," and its abbreviation is "BTC" (e.g., "I have 250 BTC").
Bitcoin Core is the principal software implementation that allows users to engage with the Bitcoin network. Originally released by the pseudonymous creator Satoshi Nakamoto, Bitcoin Core serves as a foundational tool for interacting with and participating in the Bitcoin blockchain.
Bitcoin Dominance refers to the proportion of Bitcoin's total market capitalization in comparison to the combined market capitalizations of all other cryptocurrencies. It provides insights into Bitcoin's relative significance within the overall cryptocurrency market.
Bitcoin Maximalists are individuals who advocate for the belief that Bitcoin is the only truly valuable and important cryptocurrency, often asserting that it will play a central role in the future of global finance, while downplaying the significance of other cryptocurrencies.
The "Bitcoin Pizza" incident refers to the first documented occasion when Bitcoin was used to purchase a tangible item. In this transaction, Laszlo Hanyecz famously paid 10,000 BTC for the purchase of two pizzas.
Black Swan Event
A "Black Swan Event" refers to an unexpected and rare occurrence that has significant and often far-reaching consequences, deviating from what was generally anticipated. This term is often used in finance and risk management to describe events that have a severe impact on markets or systems.
A "block" serves as a foundational element within the context of a blockchain—a dynamic ledger under constant revision. This ledger's updates are synchronized among diverse nodes, a mechanism sometimes termed "distributed ledger technology." After an accumulation of transactions attains consensus among nodes regarding their legitimacy, they become securely sealed within a cryptographic "block," gaining official recording. Subsequently, each "block" sets the foundation for the subsequent one, establishing a sequential chain, giving rise to the term "blockchain."
A "block header" is a segment within a blockchain block that contains metadata and a concise summary of the block's transactions. This data is used for hashing during the mining process to create a unique identifier for the block. It includes information such as the previous block's hash, a timestamp, a nonce, and more.
Block height refers to the numerical count of interconnected blocks within a blockchain. For instance, a "Height 0" denotes the initial block, also recognized as the Genesis Block.
Block reward signifies the compensation granted to a miner or validator upon the successful hashing of a transaction block. This reward comprises a combination of coins and transaction fees, with its configuration contingent on the cryptocurrency's policy and whether all coins have been mined. The prevailing block reward for the Bitcoin network currently stands at 12.5 bitcoins per block.
Block time alludes to the duration required for a block of transactions (refer to 'block') to receive network confirmation, achieved either through mining in Proof of Work (PoW) or validation by validators in Proof of Stake (PoS). Concepts related to block time include 'Proof of Work' and 'Proof of Stake'.
Blockchain refers to a digital ledger consisting of immutable data recorded in discrete units known as blocks. These blocks are interconnected through cryptographic signatures, forming a continuous sequence. Ethereum exemplifies a public blockchain accessible globally, where its distributed ledger is synchronized across numerous nodes. Prior to encoding a transaction into a block, these nodes collectively validate its legitimacy, along with other valid transactions. For additional insights into blockchain technology, refer here. This term is closely related to 'block'.
Blockchain Charity Foundation
The "Blockchain Charity Foundation" (BCF) is the pioneering decentralized charity platform that promotes the idea of leveraging blockchain technology for social welfare and philanthropic initiatives.
A blockchain explorer refers to an application, frequently a website and its associated API, that presents blockchain-related data in a user-friendly format. Despite a blockchain's permanent and open nature, pinpointing specific information often entails indexing data from the blockchain. This indexing involves categorizing data based on specified criteria (sender address, token type, etc.) into a separate database, enabling users to query and retrieve information efficiently. Blockchain explorers fulfill this pivotal role. Notable instances include etherscan, which extends its exploratory capabilities to multiple networks.
The term "blockchain trilemma" encapsulates a complex dilemma involving three essential factors: decentralization, security, and scalability (or speed). These elements are fundamental or desirable attributes in public distributed networks. Yet, the challenge arises from the fact that optimizing for one of these factors often comes at the expense of the others, necessitating careful trade-offs in system design.
A "Bloom Filter" is a data structure used to indicate whether a specific item belongs to a set or not.
"Blue-Chip Token" refers to cryptocurrencies that have demonstrated longevity and stability in the market, often considered reliable and valuable assets.
BNB (Binance Coin) is a cryptocurrency launched by the Binance exchange after an initial coin offering that concluded on July 3rd, 2017. It serves multiple purposes within the Binance ecosystem, including receiving discounts on trading fees and accessing various features on the platform.
Bollinger Bands are a technical analysis indicator composed of two bands flanking a simple moving average, used to gauge market volatility.
Bonding, also known as self-bonding, involves locking one's digital assets to their validator node, enabling its operation in a blockchain network.
bounty / bug bounty
Bounty, commonly referred to as a bug bounty, denotes a reward extended to individuals who identify vulnerabilities and glitches within computer code.
A brain wallet pertains to a blockchain account created through a user-selected seed phrase, password, or passphrase. However, due to human limitations in generating sufficient entropy or randomness, wallets derived from such phrases are deemed insecure. Brain wallets are susceptible to brute-force attacks by highly powerful computers, rendering them unsafe for use. For more security-conscious alternatives, refer to concepts like 'Seed phrase' or 'Secret Recovery Phrase'.
Breakeven Multiple is the factor by which the current price of an asset must grow to reach its previous all-time high value.
Breakout occurs when the price of an asset breaks out of a predefined range or pattern, usually by surpassing a support or resistance level.
"BUIDL" is a term inspired by "HODL," which emphasizes the importance of concentrating on product development and progress instead of constantly monitoring price fluctuations.
A bull market denotes an extended timeframe marked by a consistent increase in prices.
Buy The Dip
"Buy the dip" embodies the strategy of purchasing cryptocurrencies when their prices have experienced a decline, with the aim of capitalizing on potential gains as their values rebound.
"Buy Wall" refers to a significant buy order, either a large individual order or a collection of multiple substantial buy orders at a specific price level within the order book of a specific market.
A candidate block refers to a provisional block formed by a mining node (miner) in an attempt to add it to the blockchain and earn block rewards. This block is proposed but not yet confirmed as part of the official blockchain.
A candlestick is a graphical representation of price movement that displays the opening, closing, highest, and lowest prices within a specific time period. It is commonly used in technical analysis to visually assess market trends and patterns.
Capitulation refers to a market scenario characterized by intense selling pressure as investors rush to sell their assets, often leading to a significant drop in prices due to the overwhelming sentiment of giving up or surrendering to the prevailing market conditions.
Cardano represents a blockchain platform positioned as an Ethereum alternative. It was crafted via a peer-review mechanism and integrates specific technologies, including proof-of-stake (PoS), to enhance scalability.
Censorship-resistance refers to the characteristic of a cryptocurrency network that prevents any entity from altering or censoring transactions conducted on the network.
A central bank is a financial institution that serves as the monetary authority of a country, responsible for managing its currency, interest rates, and money supply.
Central Processing Unit (CPU)
The Central Processing Unit (CPU) is a crucial component of a computer system that interprets instructions from computer programs and carries out various operations accordingly.
Centralized refers to a system, network, or service that is controlled and managed by a single entity or a small group of entities.
A chargeback refers to the reversal of a payment or money transfer made through a bank, typically initiated by the payer or the payer's financial institution. This process is often used to address disputes, unauthorized transactions, or instances of fraud.
A cipher is a technique used to encode and decode messages, ensuring their confidentiality. There are two main types of ciphers: symmetric, where the same key is used for both encryption and decryption, and asymmetric, where different keys are used for encryption and decryption.
Circulating supply refers to the estimated number of cryptocurrency coins or tokens that are currently in circulation and available for trading in the market.
In computer science, the "cloud" refers to a shared pool of resources that can be accessed by multiple users over the Internet.
Codefi, originating from the fusion of "Commerce & Decentralized Finance," is a branch of ConsenSys that focuses on creating applications tailored for both commerce and financial scenarios.
Coin serves as a casual expression for a cryptocurrency. Also connected with terms like altcoin and memecoin.
Cold wallet designates a physical storage device, such as a flash drive, hard drive, or solid-state drive, utilized for offline storage of cryptocurrency.
Collateral involves using an asset of value as security for a loan, ensuring that the borrower will fulfill their repayment obligations.
Collectibles are items that are part of a collection and hold value within a specific group of people. Examples include baseball cards, rare coins, and other unique objects that enthusiasts find valuable and desirable.
Colocation refers to a dedicated space within a data center owned by stock exchanges, which is shared with other entities like high-frequency traders. This arrangement allows these traders to place their servers and infrastructure physically close to the exchange's systems, reducing latency and gaining an advantage in executing trades quickly.
Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission (CFTC) is a regulatory agency in the United States that oversees and regulates the derivatives markets, including options, swaps, and futures contracts.
Compound interest is the interest earned not only on the initial principal amount but also on the accumulated interest from previous periods. This compounding effect leads to greater earnings on the principal sum over time.
Confirmation refers to the point at which a blockchain transaction gains validation from the network. In Proof of Work (PoW) consensus, this validation process is termed mining, while in Proof of Stake (PoS), it is known as validation. Upon successful confirmation, a transaction theoretically becomes irreversible and immune to double spending. The security against double spending attacks increases as the number of confirmations for a transaction rises.
Confirmations refer to the process of including a transaction in a block on the blockchain. A transaction is considered unconfirmed until it's added to a block, after which it gains one confirmation. Additional blocks further confirm the transaction's validity.
Confluence occurs when various investment approaches, technical indicators, or trading signals are merged to create a more dependable trading strategy.
Consensus refers to the mechanism employed by a network of peers or nodes within a blockchain to reach agreement regarding the legitimacy of submitted transactions. The two primary consensus mechanisms are Proof of Work (PoW) and Proof of Stake (PoS).
ConsenSys, an abbreviation of Consensus Systems, stands as a pioneering force in blockchain software engineering.
The Constantinople fork refers to a notable "hard fork" that took place on the Ethereum network in February 2019. For more comprehensive insights, consult the provided resource; also related to the term "hard fork."
Consumer Price Index (CPI)
The Consumer Price Index (CPI) is a metric employed to monitor the impact of inflation over a specific time frame.
Cosigner refers to an extra individual or entity that possesses partial control over a cryptocurrency wallet.
Counterparty risk is the potential for one participant in a financial transaction to fail in meeting its contractual obligations, leading to potential financial losses for the other party involved.
Credentials encompass personal information such as usernames, passwords, email addresses, qualifications, and various other pieces of identifying data.
Cross-chain bridges establish connections between distinct blockchain networks, facilitating the transfer of digital assets across these networks and promoting interoperability within the cryptocurrency ecosystem.
Cryptography, in its widest interpretation, embodies the skill of 'concealed writing,' involving the utilization of codes to encode text. In contemporary contexts, it frequently pertains to employing this concept within computing, communication, and the exchange of data via computer systems and networks. Cryptography has been safeguarded as a form of free expression in the United States, and it forms the technological basis enabling public blockchain networks. Despite the transparency and accessibility of the ledger to all, cryptographic tools like the Secret Recovery Phrase mediate control over the ledger's status and the capability to transact assets upon it.
The prefix "crypto-" is originally of Greek origin, but its current usage is closely tied to cryptography. Technologies falling under the umbrella of "crypto" encompass underlying cryptographic tools and processes, like public/private key pairs, that facilitate inventive functionality and security. Notably, "cryptocurrency" is often abbreviated as "crypto," contributing to the expansion of this term's applications. The term "Web3" has emerged, potentially distinguishing between "crypto," which pertains to financial applications like DeFi, and "Web3," which signifies the transition of Internet-based activities toward decentralized platforms and practices.
A crypto protocol comprises a set of guidelines and processes that regulate actions within a decentralized network.
"Crypto winter" describes a prolonged phase in the cryptocurrency market characterized by falling or stagnant prices and a pessimistic outlook.
"Crypto-compliance" serves as an encompassing expression denoting the adherence of crypto projects to relevant regulations and legal frameworks.
"Cryptoassets" is a comprehensive term encompassing on-chain assets, spanning cryptocurrencies, NFTs (Non-Fungible Tokens), and other nascent products within this evolving domain.
A virtual form of currency utilising cryptography for security. Transactions are recorded on a decentralised digital ledger, fostering trust through consensus mechanisms like mining. It operates globally, reshaping traditional notions of value and transcending geographical boundaries.
Cryptoeconomics involves the economic examination of decentralized finance systems. An exemplary institution in this field is the MIT Cryptoeconomics Lab.
Cryptography is the systematic exploration and practical application of methods for encoding and decoding data.
Cryptography encompasses a computer science approach employed to safeguard and ensure the confidentiality of information by transforming it into unreadable data through intricate scrambling. Only by employing the requisite key can the information be decrypted and comprehended.
A custodial wallet involves a centralized entity, like an exchange, possessing and managing the private keys associated with the wallet.
A daemon is a background process that remains active, awaiting a particular event or condition to trigger its execution.
DApps is an abbreviation for "decentralized applications." These are self-sustaining applications functioning on distributed networks, utilizing smart contracts, which are programs designed to execute automatically, such as transactions, when predetermined conditions are fulfilled.
Dead Cat Bounce
A "dead cat bounce" refers to a temporary rebound in the price of a declining asset, which is often followed by a resumption of the downtrend.
Decentralized refers to a structure devoid of a central governing entity. Bitcoin and Ethereum illustrate instances of decentralized networks, as they operate without the influence of any organization, government, or individual.
Decentralized Autonomous Cooperative (DAC)
A Decentralized Autonomous Cooperative (DAC) is an organization where control and decision-making are distributed among its shareholders rather than being centralized under a single authority.
Decentralized Autonomous Organization (DAO)
A Decentralized Autonomous Organization (DAO) is an entity that functions according to rules encoded on a blockchain and executed through smart contracts, allowing for decentralized governance and decision-making.
Decentralized Exchange (DEX)
A Decentralized Exchange (DEX) is a platform where users can trade cryptocurrencies directly from their own wallets without the need to deposit funds into a centralized exchange's account. This eliminates the need for users to trust the exchange with their funds and enhances security.
Decentralized indexes are investment tools that monitor the performance of various cryptocurrencies or digital assets traded on decentralized exchanges. These indexes provide a way for investors to gain exposure to a diversified portfolio of tokens without relying on centralized platforms.
A decentralized database, also known as a decentralized ledger, stores data across a network of distributed computers rather than a single centralized server. Consensus among the majority of network computers is necessary to ensure the accuracy of stored information. It can be considered a "shared database," allowing multiple participants to access, input new data, and validate existing data.
Decryption is the process of converting encrypted data (ciphertext) back into its original, readable form (plaintext), making it understandable and usable again.
DeFi stands for "decentralized finance," encompassing a comprehensive category of finance-oriented DApps built on public blockchains.
Delisting involves the elimination of an asset from an exchange. This can occur either due to a request from the project team or as a consequence of the asset or its team no longer meeting the exchange's listing requirements.
"Diamond hands" is a phrase that originated in online investor communities such as Reddit and Twitter. It describes the act of holding onto a financial asset without selling it, even in the face of significant volatility.
Difficulty is a notion that defines the level of complexity associated with validating blocks within a blockchain network during Proof of Work mining. In the Bitcoin network, the mining difficulty undergoes adjustments after every 2016 blocks to maintain a consistent block verification duration of ten minutes.
The difficulty bomb, coupled with the Beacon Chain and other components, constituted a pivotal aspect of Ethereum's transition to Ethereum 2.0, incorporating a Proof of Stake (PoS) consensus mechanism. As implied by its name, the difficulty bomb was a software feature designed to elevate the complexity of block verification, progressively rendering the process more resource-intensive and challenging, ultimately reaching a point where mining new blocks became impracticable. Through a combination of economic incentives and eventual computational constraints, this mechanism compelled the shift to PoS consensus. This relates to terms such as 'Proof of Stake' and 'the Merge'.
Digital currency refers to a form of currency that exists solely in electronic format and is transmitted over the internet through electronic means.
A digital signature is a unique number generated from a private key using ECDSA, proving ownership and authorization. Verifiable by the public key using the same algorithm.
A digital signature is a code produced through public key encryption and affixed to an electronically transmitted document to authenticate the document's contents.
Discord, originally known as a group chat platform popular within the gaming community, has expanded its popularity to encompass a broader audience, including crypto and NFT enthusiasts.
"Distributed" refers to a network structure where there is no central server or entity that participants need to connect to. Instead, network members establish direct connections with one another. This concept is exemplified by networks like Bitcoin and Ethereum, where no central authority is involved, and participants interact peer-to-peer.
Distributed Denial of Service (DDoS) Attack
A Distributed Denial of Service (DDoS) attack is a form of cyber-attack where the attacker persistently inundates a system with an excessive number of requests, leading to the incapacitation of legitimate requests for service.
A distributed ledger is a database that extends across numerous sites, countries, or institutions. Data is sequentially stored in a continual ledger. Distributed ledger data can be categorized as either "permissioned" or "unpermissioned," indicating who has access to view it. Frequently, this term is utilized to generally describe public blockchain technology, since 'crypto' has evolved to primarily represent 'cryptocurrency', 'web3' embodies the collective community, and 'blockchain', in essence, denotes the data structure that underlies the synchronization of the distributed ledger.
Divergence in finance refers to a situation where the market price of an asset moves counter to a specific data point, often indicated by a technical analysis tool. Traders and investors use divergences to assess whether a market trend is losing strength, potentially resulting in a period of consolidation or even a reversal of the trend.
Diversification, within the realm of financial markets, involves distributing capital across various financial instruments both within and across different asset classes.
Do Your Own Research (DYOR)
"Do Your Own Research" (DYOR) is a phrase designed to minimize the presence of uninformed investors within the cryptocurrency realm. It urges individuals to conduct thorough research and gain comprehension about a specific cryptocurrency before committing to an investment. This enables them to articulate a clear rationale for their decision to purchase that particular currency and endorse the associated project.
Dogecoin is the inherent cryptocurrency of the Dogecoin blockchain. This blockchain project gained prominence as it was founded upon a viral internet meme featuring a Shiba Inu dog.
Dollar Cost Averaging (DCA)
Dollar Cost Averaging (DCA) is a investment technique characterized by the consistent allocation of fixed amounts at predetermined intervals. This strategic approach is favored by investors seeking to mitigate the impact of market volatility on their investments and subsequently minimize their vulnerability to risks.
Double Spend refers to spending the same tokens from a wallet multiple times. This can happen when digital currencies lack security measures or consensus rules for verifying transactions before they are confirmed in a database.
Doxxed refers to an individual or entity whose personal information, such as name, picture, wallet address, or location, has been publicly disclosed on the internet.
An eclipse attack occurs when a network is predominantly compromised by malicious peers who seize control, aiming to isolate certain nodes from receiving information shared by honest nodes.
Efficient Market Hypothesis (EMH)
The efficient market hypothesis (EMH) is an economic theory asserting that financial markets incorporate all available information regarding asset prices at any given moment.
EIP (Ethereum Improvement Proposal)
EIP (Ethereum Improvement Proposal) signifies a public and transparent procedure utilized for proposing modifications to enhance the overall functioning of the Ethereum network. The official repository for this process can be accessed here. Each individual EIP is identified by its designated name within the repository, such as EIP-1559. It's important to note that due to its gradual and comprehensive nature, some EIPs may not achieve complete approval, while others do. Many EIPs might find themselves in a state of partial implementation.
Encrypted vs Unencrypted keys
Public and private cryptographic key pairs, as previously mentioned, form the foundational technology supporting cryptocurrencies and the broader "crypto" realm. In the context of MetaMask, an unencrypted private key consists of 64 characters and serves the purpose of unlocking or restoring wallets. Conversely, an encrypted key also consists of 64 characters and represents a standard private key that has undergone an encryption process. Encrypted private keys are generally stored within the extension or device where the encryption occurred, ensuring they remain concealed from the user. This approach aims to provide an additional layer of security to safeguard a user's wallet information.
To illustrate, suppose 'Apple' serves as your private key. If this key were encrypted by shifting each letter three positions down the alphabet, your new encrypted key would be 'Dssoh'. With your knowledge of the encryption method, you could reverse-engineer the original private key by applying the inverse process of encryption.
Encryption involves transforming digital data into a format that thwarts unauthorized access. For instance, when using a password to access a website, the site should employ encryption to render the password useless to hackers in case of theft.
ENS, short for Ethereum Name Service, constitutes a protocol overseen by a Decentralized Autonomous Organization (DAO). Its purpose is to allocate user-friendly and easily memorable addresses to Ethereum assets and addresses, akin to the traditional Domain Name System (DNS) of the internet.
Enterprise Ethereum Alliance (EEA)
The Enterprise Ethereum Alliance (EEA) is the pioneering global standards organization that introduces an open, standards-based framework and specification to expedite the acceptance of Enterprise Ethereum.
In the domain of cryptography, 'entropy' pertains to 'randomness'. Typically, greater randomness, or higher entropy, equates to heightened security.
Epoch, as a general term, denotes a unit of time or blockchain advancement within a specific blockchain context. In Ethereum Proof of Stake, an epoch comprises 32 slots, with each slot spanning 12 seconds, culminating in a total of 6.4 minutes per epoch. The Beacon Chain further leverages the concept of epochs to enhance security and the seamless functioning of the Chain.
ERC, which stands for Ethereum Request for Comment, might be a bit misleading, as it's commonly utilized to denote proposals for changes that have successfully passed through the Ethereum Improvement Proposal (EIP) procedure and have become standardized within Ethereum. In essence, an ERC represents a collection of standards related to specific operations or subjects within the Ethereum network. The comprehensive list of these standards can be accessed here.
ERC-20 Token Standard
The ERC-20 Token Standard employs "ERC," short for Ethereum Request for Comment, followed by a designated standard number. ERC-20 serves as a technical specification for smart contracts and is widely employed for generating a significant portion of tokens, notably cryptocurrency tokens, on the Ethereum platform. This set of guidelines outlines the prerequisites a token must meet to ensure compatibility and effective operation within the Ethereum network.
ERC-721 Token Standard
The ERC-721 Token Standard, also mentioned earlier, presents an additional specification for Ethereum smart contracts, enabling the creation of non-fungible tokens (NFTs). This standard gave rise to the concept of NFTs. Unlike the ERC-20 or equivalent standards, which generate identical, interchangeable tokens, the ERC-721 standard is used to represent distinct digital assets that are non-interchangeable and unique.
Ether, commonly referred to as ETH, comes in various denominations. For a comprehensive understanding, please refer to the original Ethereum Homestead documentation available here.
Ether, commonly denoted as ETH (pronounced with a long "e," like "teeth" without the "t"), is the intrinsic currency of the Ethereum blockchain network. It serves as a vital component of the Ethereum ecosystem, acting as an incentive and payment medium for participants engaging in crucial network activities. Notably, the cryptocurrency's lowercase 'e' distinguishes it. The plural form of ether remains 'ether,' and its abbreviated form is ETH, separated by a space, as exemplified in the statement: "I have 10 ETH." (nice!)
Ethereum is the blockchain underpinning the world's second-largest cryptocurrency by market capitalization. The network itself bears the name Ethereum, while the specific currency associated with it is referred to as ether. Distinguished by the integration of smart contracts, the Ethereum network serves as the foundation for a multitude of other digital currencies and ventures, encompassing decentralized applications (dapps), non-fungible tokens (NFTs), and decentralized finance (DeFi).
Etherscan is a widely used online platform designed for analyzing activities occurring on the Ethereum blockchain. It serves as a prominent example of a "blockchain explorer."
EVM (Ethereum Virtual Machine)
The Ethereum Virtual Machine (EVM) is a virtual computing environment functioning within the Ethereum network. It possesses Turing completeness, enabling individuals worldwide to execute arbitrary EVM bytecode. All Ethereum nodes operate on the EVM, which serves as the foundation for smart contracts built on the Ethereum blockchain.
An exchange is a platform where cryptocurrency trading occurs. Centralized exchanges, managed by entities like Coinbase and Gemini, act as intermediaries in transactions, while decentralized exchanges operate without a central authority.
Fakeout is a technical analysis term describing a scenario in which a trader initiates a position anticipating a certain price movement, but the expected movement doesn't materialize. Often, a fakeout occurs when the price moves in the opposite direction of the trade signal, leading to potential losses for the trader.
"Falling knife," also known as "Catching a Falling Knife" or "Catching the Bottoms," refers to the act of purchasing an asset that is experiencing a rapid and significant decrease in its price.
Fan tokens are digital assets created by sports teams and brands to engage fans and generate revenue. These tokens run on blockchain, allowing fans to interact, buy tickets, and vote on club decisions.
A faucet is a software application, often in the form of a simple website or more intricate system, designed to distribute cryptocurrency. While certain networks, especially those in initial launch phases, offer authentic "Mainnet" tokens through faucets, it is more prevalent for faucets to be available on test networks, or testnets. Developers utilize these testnet faucets to experiment with dapps or smart contracts before deploying them on the Ethereum Mainnet. Users also employ these faucets to practice blockchain actions without any real-world risk. Tokens dispensed by test faucets remain confined to the test networks and cannot be exchanged for their mainnet counterparts.
Fear Of Missing Out (FOMO)
Fear of Missing Out (FOMO) is the anxiety traders and investors experience when they worry about missing out on profitable opportunities, especially when an asset's value rapidly increases.
Fear, Uncertainty and Doubt (FUD)
Fear, Uncertainty, and Doubt (FUD) is the practice of spreading misleading or false information about a business, startup, or cryptocurrency project. It also refers to the negative sentiment that can affect traders and investors when bad news surfaces or the market experiences a significant bearish trend.
"Fiat" denotes any currency issued by a government, like the U.S. dollar or the Chinese yuan.
Fill Or Kill Order (FOK)
A Fill or Kill (FOK) order is employed when a trader requires complete fulfillment of their order and doesn't accept partial execution. This is particularly useful when there's a time-sensitive need to complete orders across separate and independent markets or exchanges.
"Finality" pertains to the point at which a transaction becomes unalterable. Essentially, this occurs when there are adequate confirmations of the transaction, but fundamentally, a transaction achieves finality as soon as the block encompassing it is mined or validated. It's crucial to note that this underscores a fundamental principle of blockchains: unlike conventional financial systems where transactions can be "reversed," blockchain transactions cannot be undone. Once finality is attained, the transaction becomes immutable.
A "finney" is a denomination of ether, as explained in the section about ether denominations.
First-Mover Advantage (FMA)
The concept of first mover advantage pertains to the competitive edge gained by the initial project to introduce a product or service to a new and untapped market or industry.
Fiscal policy refers to the practice of authorities modifying tax rates and expenditure levels within a country. This strategy empowers them to oversee and impact the nation's economy by shaping the collection and utilization of public funds.
Flappening is a casual term introduced by Charlie Lee in 2018, referring to the occasion when Litecoin (LTC) exceeded Bitcoin Cash (BCH) in market capitalization. It playfully plays on the concept of Flippening, which speculates about Ethereum (ETH) surpassing Bitcoin (BTC) in market cap.
The term Flippening emerged informally in 2017 and signifies the potential scenario where Ethereum's (ETH) market capitalization surpasses that of Bitcoin (BTC). It envisions a theoretical future event where Ethereum takes the lead as the largest cryptocurrency by market capitalization.
Floor Difference refers to the percentage variance between the floor price and an offered price.
The floor price represents the lowest "Buy Now" price for an NFT within a specific collection.
Forced liquidation occurs when assets are involuntarily converted into cash or its equivalents, typically stablecoins. In the realm of cryptocurrencies, this situation arises when a trader or investor is unable to meet the margin requirements for a leveraged position. This concept applies to both futures and margin trading.
Forex (FX) is a shortening of the term "foreign exchange," representing the worldwide marketplace where currencies are traded, bought, and sold.
A fork takes place when a community introduces alterations to the governing protocols of its blockchain. This modification signifies a divergence from the previous state of the blockchain, embarking on a new trajectory.
Soft forks entail incremental adjustments to the blockchain's rules, typically akin to an update. Conversely, hard forks involve changes of such magnitude that the new version becomes incompatible with the old version, establishing a distinct separation between the two.
Employing mathematically rigorous proofs to guarantee specific properties of cryptographic algorithms and mechanisms within blockchain systems.
Freezing metadata involves storing details about your NFT (such as name, file type, description, etc.) within a decentralized file storage system like IPFS.
"Fren" within the crypto context signifies an enthusiastic and supportive community member who actively engages in discussions, offers assistance, and shares information about a specific cryptocurrency or project.
A full node is a computer that comprehensively enforces all the rules of an underlying blockchain network and thoroughly validates transactions and blocks on the blockchain.
Fundamental Analysis (FA)
Fundamental analysis (FA) is an approach utilized by investors and traders in financial markets to evaluate the inherent value of an asset or business. This involves analyzing a wide range of qualitative and quantitative factors, including aspects like company management, reputation, industry conditions, market capitalization, and various economic indicators.
Fungible refers to a collection of items or assets that hold identical value, can be subdivided into smaller units, and can be traded on a one-to-one basis.
A futures contract, commonly known as a futures, is a contractual arrangement binding traders to purchase or sell assets on a predetermined future date at a specified price. These financial instruments are utilized by hedgers and speculators to predict potential price fluctuations, enabling risk management or profit-seeking strategies.
GameFi is a growing sector of Web3 that merges traditional gaming with blockchain features like tokens, NFTs, and smart contracts. This creates a gaming experience where users can earn, own, and monetize digital assets within the game.
In the Ethereum network, transactions incur a fee known as "gas." Users are required to pay a certain amount of the native Ethereum currency, ether (ETH), for each transaction. This gas fee serves multiple purposes. It rewards Ethereum "miners" (refer to "mining") for the computational work involved in validating transactions. Additionally, gas acts as a deterrent against malicious users, discouraging actions that could potentially disrupt the network.
Gas fees are payments made to miners to validate transactions on the Ethereum blockchain. These fees ensure that transactions are processed promptly and securely within the Ethereum network.
The gas limit represents the highest amount you are prepared to expend for a specific transaction to be processed on the Ethereum network. Alternatively, it can be seen as a "rough approximation" of the computational resources your transaction will utilize.
The gas price refers to the fee paid to the network for the computational tasks executed during a particular transaction. This cost is denoted in units of ETH termed "gwei." The gas price can fluctuate considerably based on the level of network congestion.
General Public License
GPL, or General Public License, is a free software license that allows users to use, copy, modify, and distribute computer programs or other works while maintaining certain rights and freedoms.
Generated Art refers to artistic creations produced using autonomous systems, such as computer programs, that assemble various unique traits to create pieces like NFT profile pictures. These traits can include elements like headwear, expressions, clothing, and more.
The genesis block signifies the inaugural block of data generated in the historical sequence of a blockchain network.
GitHub is an online platform and hosting service designed for open-source development. Users can upload files, documents, and computer code to their accounts, facilitating collaborative coding and project management.
GM (Good Morning)
The abbreviation "GM" is commonly used in various online platforms, including decentralized autonomous organizations (DAOs), Twitter, Discord, and Telegram groups. It's used as a friendly way to greet and acknowledge the global community, fostering a welcoming atmosphere for discussions related to blockchain technology and projects.
A "golden cross" is a bullish chart pattern in which a shorter-term moving average (MA) crosses above a longer-term moving average, often signaling positive market sentiment.
The term "gossip protocol" pertains to a particular form of peer-to-peer (P2P) communication occurring among digital devices and computers. This term draws its inspiration from the typical manner of gossip observed in social groups.
Graphics cards, commonly employed in PC gaming, possess the necessary processing power to validate transactions on a blockchain. Confirming a transaction involves solving cryptographic challenges, a task demanding substantial computational capacity. Given that solving these challenges necessitates considerable computing power, which consumes substantial energy, high-end graphics cards are well-equipped for this purpose.
"Gwei" is a minute and prevalent subdivision of ETH, serving as the unit for specifying gas prices. For further details, refer to the entry on "ether (denominations)."
In the realm of blockchain and cryptocurrency, a hackathon is a contest aimed at developing a prototype application within a blockchain ecosystem. This event enables participants to gain insight into constructing applications utilizing emerging technologies, covering stages from concept creation to actual implementation.
The term "hacker" can broadly refer to anyone with strong computer skills, including programmers and cybersecurity experts. However, it is often used to describe individuals who exploit vulnerabilities in computer systems or networks, also known as security hackers.
Haha Money Printer Go Brrrrr
"Haha Money Printer Go Brrr" is an image that emerged in early 2020, showing a young man yelling at an older Federal Reserve executive who is depicted printing dollars.
Halving denotes a reduction by 50% in mining block rewards for a specific cryptocurrency. In the context of Bitcoin, halvings are scheduled to happen approximately every four years.
In the context of an Initial Coin Offering (ICO), a hard cap is the maximum limit on the number of tokens that can be sold. It represents the highest amount of funds the project team aims to raise by offering their tokens during the initial funding stage.
A hard fork transpires when a modification in the blockchain is not compatible with older versions, necessitating all participants to update to the new version to sustain participation on the network.
In computing, 'hashing' refers to an operation conducted on lists or sets of data to generate a dependable index for that information. A specific data element or its reference undergoes an algorithmic process that transforms it into a standardized and typically unrecognizable 'hash,' often termed the "digital fingerprint" of the data or file. In a blockchain, each block incorporates the hash value that validated the preceding block, alongside its own hash value, thus establishing the continuity of the 'chain.' Hashes are useful for verifying the completeness and validity of blockchain transactions. References such as "transaction hash" or "tx hash" indicate a unique identifier for a transaction.
Hash rate in the context of Bitcoin and cryptocurrencies refers to the speed at which a computer performs hashing computations. It measures the efficiency and performance of mining machines, indicating how quickly mining hardware can calculate a valid block hash.
Hashed TimeLock Contract (HTLC)
Hashed TimeLock Contract (HTLC) is a specialized feature facilitating the creation of smart contracts that can modify payment channels. It allows the implementation of time-bound transactions between two users within the blockchain ecosystem.
HD wallet stands for Hierarchical Deterministic wallet, originally introduced for Bitcoin. It facilitates the generation of an extensive range of accounts using an initial seed phrase. This approach was subsequently incorporated into Ethereum wallets. For instance, when restoring a MetaMask wallet via the Secret Recovery Phrase, the accounts created will correspond to those previously established from the same phrase—these accounts are derived from it.
High-Frequency Trading (HFT)
High-Frequency Trading (HFT) is an algorithmic trading method where numerous orders are executed within milliseconds. HFT uses rapid financial data and advanced electronic tools to swiftly analyze markets and execute a multitude of orders in brief time intervals.
"HODL" is a deliberate misspelling of "hold" and serves as a prevalent crypto slang term advocating the notion of retaining one's cryptocurrency investments without selling. It has been retrospectively expanded to an acronym: "hold on for dear life."
Honeypot is a cybersecurity technique designed to identify and counter unauthorized access to information systems.
A "hot wallet" pertains to online storage for cryptocurrencies, accessible either through an exchange or a third-party service. Hot wallets, due to their online nature and password-based access, are susceptible to hacking attempts. Nonetheless, the operators of hot wallets can assist users in recovering access to their assets if they lose their access credentials.
Hyperledger refers to a comprehensive collection of open-source tools, libraries, and products formulated to facilitate and endorse enterprise-level blockchain technology. The emphasis of these offerings typically lies in developing solutions for permissioned blockchains, which are non-public blockchains employing consensus mechanisms distinct from Proof of Work (PoW) or Proof of Stake (PoS).While the main focus is on permissioned blockchains, certain scenarios may require integration with public blockchains. To cater to these cases, Hyperledger Besu and Hyperledger Burrow are actively developed projects. The former constitutes a Java-based Ethereum client, while the latter serves as a smart contract platform supporting EVM bytecode.
A conditional order to buy or sell a significant amount of assets in smaller predetermined quantities, aiming to hide the total order quantity.
Identicon / AddressIdenticon / AddressIcon
An Identicon, also known as an AddressIdenticon or AddressIcon, is the distinctive and visually colorful pattern associated with your address in MetaMask. It offers a convenient means of verifying the accuracy of your address. You have the option to select between two types: jazzicons, crafted by the MetaMask team, or blockies.
Immutability refers to the state of being unalterable or unchangeable. This characteristic is pivotal in blockchain networks, where data that is recorded onto the blockchain ledger remains permanent and cannot be modified. This immutability serves as a foundational aspect that enables transactions and commercial activities to transpire securely on blockchain networks.
A comparative system that gauges the worth of an entity relative to its prior values or a specified benchmark. It can also refer to a financial tool employed to symbolize a collection of individual prices or data points.
Infura, a component of ConsenSys, provides backend access to the Ethereum network through established HTTP and WebSockets technology. Before Infura's existence, developers were required to operate their own network nodes to engage with desired networks. Infura simplifies this process by furnishing access via a range of APIs. This empowers dapp and website developers aiming to interact with the Ethereum blockchain, facilitating scalable and efficient interactions.
Initial Coin Offering (ICO)
ICO, short for Initial Coin Offering, corresponds to the cryptocurrency equivalent of an Initial Public Offering (IPO). It extends investors the chance to support a novel cryptocurrency project.
Initial Exchange Offering (IEO)
An Initial Exchange Offering (IEO) is a fundraising event managed by an exchange. Unlike an Initial Coin Offering (ICO) where the project team handles fundraising, an IEO takes place on an exchange's platform, allowing users to buy tokens directly from their exchange wallets using funds.
Initial Public Offering (IPO)
An Initial Public Offering (IPO) is when a private company offers its shares to the public for the first time. The phrase "going public" is also used informally to describe this process.
Integrated Circuit (IC)
An integrated circuit (IC) is a compact chip, often composed of silicon, containing various electronic components like transistors, resistors, or capacitors. These chips are commonly found in electronic devices and serve multiple functions such as calculations, microprocessors, amplification, oscillation, and data storage.
An internal transaction within the Ethereum network involves interactions between smart contracts, rather than individual addresses. These transactions are distinct in that they are not recorded on the blockchain and do not entail gas fees. However, they hold significance in executing specific actions and can be observed on platforms like Etherscan.
Interoperability refers to the idea of enabling different blockchains to work together smoothly and utilize each other's functionalities and applications.
InterPlanetary File System (IPFS)
The InterPlanetary File System (IPFS) is a decentralized system designed for storing and referencing files within the Ethereum blockchain and the broader internet landscape. Operating as an open-source protocol, IPFS facilitates the storage and distribution of hypermedia content, including text, audio, and visual elements, in a decentralized manner, eliminating dependence on a single vulnerable point. This distributed file system enhances application performance, security, and transparency by enabling faster and safer operations.
IOU is short for "I owe you," representing an informal acknowledgment of a debt owed by one party to another. This document acknowledges the owed amount, which can be monetary or involve other goods like physical items or properties.
Isolated Margin refers to the specific margin balance designated for an individual trading position. This mode enables traders to control risk on each position by limiting the margin assigned to it. Traders can adjust the allocated margin for each position independently.
Issuance, at its core, involves creating and making something accessible. In the realm of cryptocurrencies, issuance pertains to the creation of new tokens or coins. This procedure can take various forms, adhering to parameters set by project creators.
Jager is the tiniest unit of the Binance cryptocurrency, representing the smallest denomination.
Joint Venture (JV)
A Joint Venture (JV) in the context of cryptocurrency refers to a cooperative partnership between two or more entities to collaborate on a specific project or initiative within the crypto or blockchain space. JVs involve sharing resources, expertise, and risks to achieve mutual goals, such as developing new technologies, launching products, or entering new markets.
JSON-RPC is a data transmission method employed to facilitate data exchange between computer systems, even before the advent of public blockchain technology. It was adopted as a standard for transferring data between blockchain networks, Internet browsers, and wallets. As a consequence, these networks are often referred to as 'RPC networks,' despite JSON-RPC not being their defining technical characteristic.
Keccak is a cryptographic hash function developed by a team of researchers. It's recognized for its security features and finds applications in areas like blockchain and cryptocurrencies. It won a competition by NIST and became SHA-3, a standard for data transformation and digital signatures.
Key management in crypto involves securing and controlling cryptographic keys for accessing and managing digital assets and blockchain networks, ensuring security and preventing unauthorized access.
A keystore file is a unique encrypted rendition of a private key, often presented in JSON format. It provides an additional layer of security. Refer to 'private key' for related information.
Know Your Customer (KYC)
Under the 'Know Your Customer' (KYC) regulations, exchanges are required to conduct specific identity verifications on their customers.
Latency in computing signifies the delay between input and output. It exists across various computing levels, from user-computer interactions to network delays. In cryptocurrencies, latency relates to time delays in both blockchain networks and exchanges.
Law of Demand
In cryptospace, the Law of Demand states that when the price of a cryptocurrency drops, more people want to buy it, assuming other factors remain unchanged.
Layer 2 (L2) is an overlay network built on top of Layer 1 (L1) blockchains like Bitcoin or Ethereum. L2 networks aim to boost transaction speed and decrease costs. They achieve this by reducing the need for many participants to validate transactions, speeding up consensus.
A ledger is a documented history of transactions, encompassing details such as dates, times, senders, and recipients.
Leveraged tokens are cryptocurrency derivatives enabling traders to access leveraged exposure to specific cryptocurrencies without handling margin demands. They offer a simplified method for trading leveraged positions, allowing users to take leveraged long or short positions without continuous margin management.
In programming, a library is a documented collection of stable resources, including executable files, documentation, code, and message templates. It can also indicate a set of pre-written modules that perform specific actions or generate desired outputs when used.
A light client is a type of software application that interacts with a blockchain network by downloading and maintaining a smaller portion of the blockchain data compared to a full node. This approach enables users with limited computing resources, such as smartphones or laptops, to participate in the network while conserving storage space and processing power. Despite not storing the entire blockchain, light clients maintain a level of security by relying on cryptographic proofs and other techniques to verify transactions and network consensus. This makes them a practical solution for users seeking to access and participate in blockchain networks without the resource-intensive requirements of running a full node.
A second layer operates above a blockchain, enhancing transaction speed among nodes. It's a proposed scaling solution.
Linux is a widely used open-source operating system that acts as a bridge between software and hardware, playing a crucial role in various domains, including computers and automobiles.
Liquid Democracy, also known as Delegative Democracy, is a governance system in which individuals have the option to delegate their voting power to others, such as friends, experts, or representatives. For instance, in a liquid democracy, one person could delegate their voting rights to another, who would then vote on their behalf. This concept allows for flexible participation, as individuals can choose to vote directly on certain matters or delegate their votes to others based on expertise or trust. Liquid democracy is sometimes employed as a governance mechanism in Decentralized Autonomous Organizations (DAOs), where participants can either vote directly or delegate their votes to others, creating a dynamic and adaptable decision-making process.
Liquidity refers to the ease with which an asset can be bought or sold within a specific timeframe, volume, and price range.
Liquidity refers to the ease of trading an asset without significantly affecting its market price. It also reflects how quickly an asset can be converted into fiat currency. Assets that can be readily exchanged are considered liquid, whereas those that are hard to convert are less liquid.
A liquidity crisis occurs when an individual, organization, or market lacks sufficient cash to meet immediate financial obligations. Liquidity refers to available cash or easily convertible assets used to pay debts. Such crises can have widespread effects, causing financial instability and potential economic downturns in the financial sector.
Liquidity Providers (LPs) are entities or individuals that enhance market liquidity by offering buy and sell orders in financial markets. They contribute trading volume, ensuring trades are executed smoothly at desired prices.
Liquidity ratios are financial measures used to assess a company's capacity to meet short-term obligations and evaluate its overall financial well-being. These ratios provide valuable insights for managing financial challenges and aiding investors in making informed choices.
"Listing" on an exchange means making trading pairs available for an asset, similar to how companies' shares are traded on stock exchanges. It signifies the asset's quality and regulatory compliance.
Many protocols have a lockup period, preventing you from selling or transferring your staked crypto. To access your funds, you must unstake them, a process taking hours to weeks, based on the protocol.
M of N
The "M of N" in a multi-signature Bitcoin transaction refers to the number of required cosigners (M) out of the total cosigners (N) needed for the transaction to be approved.
Mainnet refers to the fully deployed and operational state of a blockchain protocol, where cryptocurrency transactions are actively processed, verified, and recorded on a distributed ledger.
A mainnet swap involves transitioning from one blockchain network to another, often when a project shifts from a third-party platform to its own native blockchain. This process replaces existing tokens with new coins and shifts all blockchain activity to the new network.
Becoming a "maker" occurs when you submit an order that doesn't execute immediately. Instead, your order remains in the order book, waiting for another participant to match with it at a later time.
Malware, short for malicious software, is code designed to infiltrate computer systems and networks to cause intentional harm. Various types of malware serve purposes like profit, espionage, control, or spreading misinformation. Unauthorized access and stealth are common traits of malware, which can enter systems unnoticed by users.
Leveraged trading involves using borrowed funds, but it's a high-risk strategy suitable only for experienced investors.
Market capitalization, often referred to as market cap, is a financial metric used to assess the total value of a project, company, or other entity. In the context of cryptocurrencies, market cap is calculated by multiplying the current price of a project's token or coin by the total number of tokens or coins that are in circulation. This metric provides an indication of the overall value and size of a cryptocurrency project within the market.
Market momentum signifies a market's capacity to sustain consistent price increases or decreases within a specified timeframe, forming a trend. It mirrors the prevailing market sentiment driven by fluctuations in asset prices.
A market order involves immediate buying or selling at the best available price, relying on existing limit orders in the order book for execution. This execution hinges on the presence of market liquidity.
Staking nodes that typically demand a minimum coin stake to access rewards.
Maximal Extractable Value (MEV)
Maximal Extractable Value (MEV) is a term that encompasses various strategies used by participants in blockchain networks, such as miners or validators, to maximize their profits by manipulating the order and content of transactions within a block. Originally referred to as Miner Extractable Value, MEV refers to the potential gains that can be achieved by reordering transactions, front-running trades, and engaging in other activities that exploit the predictability of transaction execution.
The maximum amount of a cryptocurrency that will ever exist, after which no new coins will be created.
A memecoin is a type of cryptocurrency that is created based on a popular meme or internet culture reference. It often serves as a lighthearted or satirical alternative to more serious cryptocurrencies. Dogecoin is one of the most well-known examples of a memecoin, as it was initially created as a joke based on the "Doge" meme featuring a Shiba Inu dog. Despite its origins, Dogecoin gained a significant following and became a widely traded cryptocurrency.
A mempool, short for memory pool, is a temporary storage area where pending transactions wait to be included in a blockchain block. Miners or validators select transactions from the mempool based on factors like fees and gas prices for inclusion in the next block. This process can affect transaction confirmation speed and fees.
Merged mining involves simultaneously mining multiple cryptocurrencies using the same computational power, maximizing efficiency through Auxiliary Proof of Work (AuxPoW).
Merkle Patricia trie
A Merkle Patricia trie, commonly known as a "Merkle trie," is a data structure that employs a hash code function to create hierarchical branches. Comparable to a family tree, where parent branches split into child branches, then further into grandchild branches, a Merkle Patricia trie records the lineage and history of each element. This structure facilitates rapid verification on a blockchain network.
A Merkle tree organizes and simplifies large data sets, such as transaction data in blockchain, for more efficient processing and reduced resource demands.
ConsenSys Mesh is a decentralized network of interconnected teams, products, and investments dedicated to advancing the Ethereum ecosystem and the emergence of web3 technology.
Metadata refers to data that provides information about other data, such as details about specific transaction features.
MetaMask is a versatile tool available as a mobile app on iOS and Android, as well as a browser extension. It enables users to engage with blockchains and the decentralized web. Acting as a wallet, dapp permissions manager, and token swap platform, MetaMask empowers users to control their digital identity and permissions. It operates as an open-source project and supports expansion through MetaMask Snaps, encouraging developers to build upon its framework.
Metaverse is a vast virtual universe created using virtual reality, augmented reality, and networking infrastructure. Blockchain technology is essential for the metaverse as it ensures transparent and tamper-proof authentication and ownership of digital assets within virtual environments.
A miner is a person or entity that operates nodes, responsible for adding new transactions to blocks and validating blocks generated by other miners.
Mining is the process of using computer hardware and computational power to validate and verify transactions on a blockchain network. Miners compete to solve complex mathematical puzzles, and the first one to solve the puzzle gets to add a new block of transactions to the blockchain. As a reward for their efforts, miners receive newly minted cryptocurrency coins and transaction fees. Mining plays a crucial role in maintaining the security, integrity, and decentralization of blockchain networks by ensuring consensus and confirming the validity of transactions.
Mining is the procedure by which cryptocurrency transactions are collected, validated, and stored in a digital ledger called a blockchain. Miners' efforts are crucial for upholding network security and also for introducing new coins into circulation.
A mining farm refers to a gathering of numerous miners, frequently situated in a warehouse or extensive data center dedicated to the process of mining cryptocurrencies.
Minting is the procedure of creating and issuing a new NFT on the blockchain, often associated with art, recordings, or other assets.
A mnemonic phrase, also known as a Secret Recovery Phrase or seed phrase, is a sequence of words that corresponds to a lengthy cryptographic key. It serves to generate and manage all the addresses within a cryptocurrency wallet.
A modular blockchain separates various functions of a network into distinct chains optimized for specific tasks. Unlike monolithic blockchains, such as Bitcoin, where all functions are on one chain, modular blockchains split functions across different chains, enhancing efficiency and specialization. Ethereum is transitioning to a modular approach with the Merge, which divides consensus and execution into separate chains, and Layer 2 networks that optimize execution and integrate with Ethereum for consensus.
Monetary policy is a set of measures formulated and implemented by a central bank or currency board to regulate a country's money supply and interest rates.
"Mooning" is a term used to describe a cryptocurrency that is experiencing a significant upward market trend. It's often used as a verb and is also part of the phrase "to the moon," which expresses a strong belief in a cryptocurrency's imminent substantial price increase.
Multi-signature wallet (multisig)
A multi-signature wallet, often called multisig, is a cryptocurrency wallet that necessitates multiple keys for access and transactions. To approve a transaction, a predetermined number of individuals must provide their signatures. This differs from regular wallets that only require a single signature for transaction approval.
An NFT aggregator is a platform that gathers and presents NFTs from various NFT marketplaces. These aggregators provide users with a centralized interface to browse, buy, and sell NFTs from different marketplaces, simplifying the process of exploring and transacting across multiple platforms.
NFT Floor Price
The floor price of an NFT is the lowest price at which an item is listed within a collection. It's a key metric used by collectors to assess a project's appeal, showing the minimum investment needed to acquire an NFT from that project.
NFT Mystery Boxes
NFT mystery boxes are digital collectibles featuring a mix of NFTs. Buyers open them to discover their contents, which can vary from valuable to common NFTs. Sold on NFT marketplaces, these boxes generate excitement due to their hidden nature and thematic connections.
NFTs, or non-fungible tokens, are digital tokens that serve as proof of ownership for distinct tangible and intangible items.
"NGMI" is an acronym meaning "Not Gonna Make It." It's internet slang used to express hopelessness, frustration, or lack of confidence in a situation.
Node refers to a computer or device within a network of computers that holds a copy of a blockchain. These nodes work collectively to support the network by sharing data and verifying transactions.
A nonce is a unique value used only once, often in authentication protocols and cryptographic hash functions. In blockchain, it's a pseudo-random number used as a counter in mining.
In the context of the Ethereum Mainnet, a "nonce" is a unique transaction identification number that increases with each successive transaction. It helps ensure security features such as preventing double-spending. The term "nonce" is also used more broadly in cryptography and may have different meanings in other decentralized projects or sidechains.
An OCO (One Cancels the Other) order lets you place both a limit order and a stop-limit order simultaneously. When one gets executed, the other is automatically canceled, ensuring only one order is active at a time.
Off-chain transactions refer to transactions that take place outside of a specific blockchain network. These transactions are often conducted with less congestion and can be later aggregated or reported before being added to the main blockchain.
A foreign account is an account that is registered in a jurisdiction different from the holder's citizenship.
An "ommer block," also known as an "uncle block," refers to a situation in the Proof of Work (PoW) consensus mechanism where a block is mined almost simultaneously with another block, but is not included in the main blockchain. Instead, it becomes a part of a branch that is not extended further. Miners of these ommer blocks used to receive partial rewards as a compensation for their efforts, but this concept was deprecated with the launch of the Beacon Chain in Ethereum's transition to Proof of Stake (PoS) consensus.
"On-chain" refers to a transaction that is recorded and executed directly on a blockchain, becoming an integral part of the blockchain's immutable ledger.
An "on-ledger currency" is a token that is created and utilized directly on a blockchain, serving as a native or primary form of value within that blockchain's ecosystem. Examples of on-ledger currencies include Bitcoin on the Bitcoin blockchain and Ether on the Ethereum blockchain.
On-ramp and "off-ramp" are terms used in the cryptocurrency space to describe the processes of converting between traditional fiat currency and digital assets on a blockchain:
Open-Source Software (OSS)
Open-source software refers to software with publicly available source code that can be viewed, modified, and shared by anyone. This collaborative approach fosters transparency, community involvement, and rapid development.
Optimistic Rollup is a scaling solution that assumes most transactions are valid, processing them off-chain to reduce computation and fees. It only uses a "fraud proof" if fraud is suspected, improving blockchain scalability while maintaining security.
An oracle in a blockchain context is a trusted source, either human or automated, that provides data to smart contracts, enabling them to verify and execute actions based on real-world events or conditions.
ORC-20 tokens are built on the Bitcoin blockchain and utilize JSON files stored on satoshis with an Ordinal serial number, akin to BRC-20 tokens. Following the BRC-20 standard, ORC-20 seeks to overcome certain limitations by enhancing security and flexibility.
The order book displays active buy and sell orders for an asset, organized by price.
In the context of cryptocurrency, "Ordinals" generally refers to a unique serial number or identifier assigned to transactions, tokens, or data elements to establish their sequential or hierarchical position within a specific context. It helps differentiate and order items within a blockchain network.
An "orphan block" is a block that has been successfully mined or solved by a miner, but is not added to the blockchain because another competing block was added first. As a result, the orphaned block is discarded, and its transactions are not included in the final blockchain.
An orphan block in cryptocurrency is a block that lacks a known or existing parent block. This occurred in older Bitcoin Core software versions when nodes received blocks without information about their lineage
P2P, or peer-to-peer, describes direct interactions between individuals or parties without intermediaries. This term is commonly associated with technology, like public blockchains, where users can directly transact or interact with each other without relying on a central authority.
A paper wallet is a physical document that displays the public and private keys of a cryptocurrency address. This information is usually presented as QR codes and alphanumeric strings.
"Parity" generally refers to equality or similarity in qualities, often used in computer science. Parity Technologies is a blockchain technology company known for its projects, including an Ethereum client named Parity Ethereum (now Open Ethereum).
Passive management, also known as indexing, is an investment strategy that aims to replicate a market index like S&P 500 or DJIA, without relying on active decision-making.
A currency that is designed to maintain a fixed value in relation to a designated asset, such as 1 USDT being pegged to 1 USD. It's also known as a stablecoin.
A permissioned ledger is a blockchain network where access is restricted and controlled by specific individuals or groups, unlike public blockchains. Permissioned ledgers are often used by known entities like banks or government departments, and consensus is achieved among trusted participants. They offer verifiable data sets due to the consensus process generating digital signatures visible to all parties. Permissioned ledgers are more efficient and faster than public blockchains, and examples include Quorum and Hyperledger Besu.
Permissionless blockchains are open networks that enable participation in the consensus process without requiring approval, permission, or authorization from any central entity.
Phishing is a prevalent cyber attack method that involves tricking individuals by posing as a trustworthy entity to collect sensitive information like passwords and credit card details through psychological manipulation.
Plasma is a solution designed to enhance the scalability of the Ethereum network. It operates similarly to optimistic rollups, relying on Ethereum Mainnet for transaction records and arbitration. However, Plasma has distinct technical differences and is currently suitable for basic tasks like swaps and token transfers.
Polkadot Crowdloan is when individuals stake Polkadot (DOT) tokens to support specific projects in the Polkadot Slot Auction. In exchange, participants can receive rewards from the projects. Polkadot is an open-source protocol enabling different blockchains to share data and applications.
Ponzi schemes are fraudulent investment activities that use funds from new investors to pay returns to earlier investors. They masquerade as legitimate investment opportunities, with returns supposedly coming from real investments.
A PoS/PoW hybrid consensus model combines elements of both Proof of Stake (PoS) and Proof of Work (PoW) mechanisms. In this approach, blocks are validated not only by miners using PoW, but also by stakeholders who vote based on their staked coins using PoS. This hybrid system aims to achieve a balanced network governance, leveraging the security benefits of PoW and the energy efficiency and participation incentives of PoS.
Price action is the movement of an asset's price over time, depicted on a chart. It serves as the foundation for technical analysis across various markets, including commodities, stocks, bonds, forex, and cryptocurrencies.
The prisoner's dilemma is a classic game theory scenario where individuals, by pursuing their own interests, lead to a collectively unfavorable outcome. It illustrates the challenges of cooperation and decision-making in such situations.
A privacy coin is a type of cryptocurrency designed to enhance user privacy and anonymity. Transactions and wallet balances in privacy coins are often obfuscated using advanced cryptographic techniques, providing greater confidentiality compared to traditional cryptocurrencies.
A private blockchain is a distributed ledger or blockchain that operates within a closed network, typically controlled by a single entity. This type of blockchain restricts access to participants through a verification process and often limits the individuals who can participate in the consensus process of the network.
A private currency refers to a currency or token created by a private entity, such as an individual or a company. This currency is usually intended for use within a specific network or ecosystem established by the issuer and is not meant to be used as a widely accepted form of payment. It should not be confused with "privacy cryptocurrencies," which focus on enhancing user privacy through features that conceal transaction details and identities.
A private key is a code that provides ownership of a crypto wallet and grants access to the funds stored within it.
A strategic investment round is an initial funding stage aimed at attracting significant investments from strategic investors with substantial available capital.
Progressive Web application (PWA)
A Progressive Web Application (PWA) is a web app built using modern web technologies and standards that offers a user experience similar to native apps.
Proof of Attendance Protocol (POAP)
Proof of Attendance Protocol (POAP) is a blockchain protocol that generates digital badges or collectibles, also referred to as POAPs, to signify attendance at events or activities.
Proof of Authority (PoA) is a consensus mechanism commonly employed in private or permissioned blockchains. In this system, a designated entity or set of entities hold the authority to generate new blocks and validate transactions based on their reputation or identity within the network, often controlled by a single private key. This approach prioritizes efficiency and control, making it suitable for use cases where decentralization is less critical, such as enterprise applications or consortium blockchains.
Proof of Reserves (PoR)
Proof of Reserves (PoR) is a verification process used by cryptocurrency exchanges to demonstrate that they hold sufficient assets in custody to match their users' balances on the platform at a 1:1 ratio. This proof ensures transparency and accountability in the management of users' funds.
Proof of Stake (PoS)
Proof of Stake (PoS) is a consensus mechanism where participants validate transactions by staking a certain amount of coins. Unlike Proof of Work (PoW), which relies on computational effort, PoS selects validators based on their stake, incentivizing honest behavior by linking stakes to potential rewards. This approach is more energy-efficient than PoW, as it doesn't require extensive computations, but it can potentially concentrate power in the hands of those with more coins to stake. Validators risk losing their stakes if they attempt fraudulent actions, maintaining the integrity of the network.
Proof of work (PoW)
Proof of Work (PoW) is a mechanism where participants demonstrate they have completed computational work to correctly guess a 64-character hash required to add a block to the blockchain. Sharing this solution enables other nodes to swiftly verify the accuracy of the hash, confirming that the necessary work has been performed.
Proposer-Builder Separation (PBS)
Proposer-builder separation (PBS) is a concept in Ethereum that enhances scalability and security by splitting block building responsibilities into two distinct roles: block proposers and block builders. This separation helps optimize network performance and maintain the integrity of the blockchain.
In the context of blockchain and web3, a 'protocol' refers to a defined set of rules and procedures that dictate how processes, interactions, and transactions occur within a network. This term is commonly used to describe the standardized rules governing the execution of smart contracts, ensuring consistent behavior across the network. Additionally, the term can extend to encompass the broader ecosystem of products and services built on top of these smart contracts.
The property of a deterministic function capable of generating outcomes that successfully pass statistical tests for randomness.
A public blockchain is a globally accessible and open network that allows anyone to participate in various aspects of the blockchain ecosystem. Individuals can engage in transactions, contribute to the consensus mechanism that validates and adds new blocks to the chain, as well as examine and maintain the records stored on the blockchain. This inclusive nature fosters decentralization and transparency, making it possible for a wide range of participants to interact with the blockchain and its data.
A public key is a code used to generate an address for a crypto wallet, enabling it to receive transactions.
A public ledger is an open, distributed digital record of transactions that is accessible to anyone worldwide.
A digital depiction of a public or private key that can be easily captured by digital cameras.
Quantum resistance refers to the ability of a cryptographic system or protocol to remain secure even in the face of powerful quantum computers. As quantum computers have the potential to break traditional cryptographic methods, quantum-resistant algorithms are designed to withstand quantum-based attacks and ensure the continued security of digital systems.
Quantum computing is a branch of computer science that leverages the principles of quantum physics to process significantly larger data sets at exponentially higher speeds compared to traditional binary-based computing. This emerging technology takes advantage of the unique properties of quantum bits (qubits) to perform complex calculations and solve intricate problems more efficiently than classical computers.
Double spending is a scenario where two transactions are generated simultaneously using the same funds, aiming to use the funds twice. This poses a challenge in ensuring the integrity of transactions in decentralized systems like cryptocurrencies.
The Raiden Network is a second-layer scaling solution for the Ethereum blockchain. It aims to improve the scalability and efficiency of Ethereum by enabling faster and lower-cost off-chain transactions. The network utilizes state channels to facilitate instant and secure transfers of Ethereum-based tokens, reducing congestion on the main blockchain while maintaining the security of on-chain settlements.
Ransomware is a form of malicious software (malware) that seeks to extort victims by encrypting their files or system and demanding a ransom payment, often in cryptocurrencies like Bitcoin, for the decryption key needed to restore access.
"Regulated" refers to a market environment in which participants are required to adhere to specific rules and regulations, often under the oversight of government or regulatory authorities. Non-compliance with these rules can result in penalties, fines, or even the revocation of operating licenses. This framework aims to ensure fairness, transparency, and accountability within the market while protecting the interests of consumers and maintaining the integrity of the industry.
"Rekt" is slang for experiencing major financial losses in blockchain and crypto due to bad trades or investments, often involving high leverage.
Relative Strength Index (RSI)
RSI stands for Relative Strength Index, a momentum oscillator used in technical analysis to measure the strength and speed of price changes.
In the context of Decentralized Finance (DeFi), a relayer refers to an entity or party that operates an off-chain order book. Relayers play a crucial role in facilitating trades by assisting traders in finding counterparties and securely transferring orders between them using cryptographic methods.
Return on Investment (ROI)
Return on Investment, or ROI for short, is a ratio or percentage value that reflects the profitability or efficiency of a certain trade or investment. It is a simple-to-use tool that can generate an absolute ratio or a value in percentage.As such, ROI can also be used when comparing different types of investments or multiple trading operations.
A Roadmap is a business planning technique which lays out the short and long term goals of a particular project within a flexible estimated timeline. For an emerging product or a startup, the roadmap should articulate the goals and vision of the project, while laying out the development milestones with a rough time estimate for achieving these milestones.
Rollups are a key component of Ethereum's scaling solutions, designed to enhance the network's transaction processing capacity. These solutions focus on efficiently executing transactions and smart contracts within their own networks, then bundling and submitting the results to the Ethereum Mainnet for verification. Two common technical approaches are Zero Knowledge (ZK) rollups and Optimistic rollups. Prominent examples of rollup solutions include Arbitrum and Optimism.
An attack targeting Internet Service Providers to disrupt uptime or participation in web-enabled systems, like blockchains.
RPC, or Remote Procedure Call, is a technology that enables the exchange of data between different endpoints. JSON-RPC, the full name for this protocol, is a specific implementation commonly used in blockchain networks to move data between nodes, clients, and other components. For more details, see the entry on 'JSON-RPC'.
A 'rug pull' is a deceptive cryptocurrency scam resembling a pyramid scheme, where the creators artificially inflate the value of a token through strategies like liquidity injection and airdrops. Once investors have driven up the token's price, the scammers abruptly sell off their significant holdings, causing the token's value to crash and leaving other investors with substantial losses.
A Satoshi is the smallest unit of Bitcoin, representing a fraction of the cryptocurrency. Just like a penny is the smallest unit of a pound, a Satoshi is the smallest unit of Bitcoin. One Bitcoin is equal to 100 million Satoshis, making it possible to perform microtransactions with tiny fractions of Bitcoin.
Satoshi Nakamoto is the pseudonymous individual or group credited with creating Bitcoin, the first cryptocurrency. The true identity of Satoshi Nakamoto remains unknown, and the name is used as a placeholder for the creator(s) of the groundbreaking cryptocurrency.
Scalability in the context of blockchain refers to the capacity of a blockchain network to handle increasing numbers of transactions, users, and data while maintaining efficient performance. It addresses the challenge of accommodating growing demand without sacrificing speed, security, or decentralization. Solutions for scalability often involve techniques like sharding, layer 2 solutions, and other optimizations to ensure that the blockchain network can handle higher volumes of activity without becoming congested or slow.
A Schnorr signature is a cryptographic signature scheme that provides security and efficiency advantages, allowing multiple signatures to be aggregated into a single signature. This enhances privacy and scalability in blockchain transactions.
Secure Asset Fund for Users (SAFU)
The Secure Asset Fund for Users (SAFU) is an emergency fund created by Binance in 2018 to protect users' funds. Binance allocates a portion of trading fees to this fund to ensure user safety.
A secure enclave is a hardware-based isolated environment within a computer system that provides a high level of security for storing and processing sensitive data. It's often used to protect cryptographic keys and other critical information from unauthorized access or tampering.
Securities and Exchange Commission (SEC)
SEC stands for the U.S. Securities and Exchange Commission, established on June 6, 1934. As an independent governmental agency, it oversees and regulates financial markets, particularly the U.S. securities markets involving stocks and bonds.
A security audit involves a thorough assessment of an application, system, or database to gauge its robustness and safety. In the realm of blockchains, security audits entail peer reviews of smart contracts or blockchain code to uncover potential bugs or vulnerabilities.
Seed (phrase) / Secret Recovery Phrase
The seed phrase, also known as the Secret Recovery Phrase or mnemonic, is a set of words that serves as a backup for a cryptocurrency wallet. Originally designed for Bitcoin and used in hierarchical deterministic wallets, this ordered sequence of words corresponds to fixed values, allowing consistent wallet creation. Possessing the seed phrase grants full control over the wallet, including the ability to access funds and execute transactions. It must be kept private to ensure the security of the account.
Segregated Witness (SegWit)
Segregated Witness (SegWit) is a blockchain protocol upgrade that separates transaction data and signatures, increasing transaction capacity and enhancing security. It's widely known for its implementation in Bitcoin.
A self-executing process or smart contract operates autonomously, without the need for external control. Such contracts automatically execute their predefined actions based on predetermined conditions, reducing costs and eliminating the reliance on intermediaries or third parties for arbitration. This concept aligns with the broader idea of blockchain protocols that facilitate trustless interactions and automation.
Selfish Mining is a strategy where miners withhold newly mined blocks to gain a competitive edge, potentially disrupting the mining process and centralizing power.
A sell wall is a significant concentration of sell orders at a specific price level on an order book, indicating potential resistance to price increase. It contrasts with a buy wall, representing a concentration of buy orders.
Serenity, initially a term for a comprehensive upgrade plan of the Ethereum network, has evolved to encompass specific technical improvements aimed at significantly enhancing transaction capacity and other functionalities. While the term "Serenity" has somewhat faded, its essence lives on in the detailed descriptions of the individual upgrades that collectively aim to optimize the Ethereum ecosystem.
Serialization involves transforming a data structure into a sequence of bytes, often for storage or transmission purposes. Ethereum uses recursive-length prefix encoding (RLP) to internally represent and store data efficiently on the blockchain. This method allows complex data structures to be compactly encoded as byte sequences.
SHA-256 is a cryptographic hashing algorithm that converts data of any size into a fixed-length alphanumeric string, providing data security and integrity. Developed with the US National Security Agency (NSA), it's employed by Bitcoin and other technologies to ensure secure data validation and confidentiality.
Sharding is the process of dividing a blockchain into multiple interconnected chains, known as "shards." Each shard operates independently and can process transactions and execute smart contracts concurrently. This approach enhances the scalability and efficiency of the network by distributing the computational load across multiple shards.
The Sharpe ratio, developed by William F. Sharpe in 1966, assesses investment potential by comparing returns to risks. It's also called Sharpe measure or index. It helps determine if an investment is worthwhile relative to its risks. It calculates the average return beyond the risk-free rate per unit of asset deviation. When comparing two assets' Sharpe ratios, a higher ratio indicates better potential for profits relative to risks.
A sidechain is a separate blockchain that is linked to another blockchain, often Ethereum, through a bridge. This enables the transfer of assets between the two chains. Unlike Layer 2 networks or rollups, a sidechain operates as a standalone blockchain with its own consensus mechanism, requiring independent evaluation of its security and functionality.
In a Proof of Stake (PoS) consensus mechanism, a slashing condition is a rule that, if violated by a validator, results in the forfeiture or destruction of a portion of their staked tokens as a penalty for misbehavior. This helps ensure the security and integrity of the network by discouraging validators from engaging in malicious activities.
In Ethereum's Proof of Stake consensus, a slot is a 12-second interval during which a new block can potentially be proposed. An epoch consists of a sequence of 32 slots.
A smart contract is a self-executing computer program that automatically executes predefined actions or transactions based on certain conditions being met.
Traditionally, a snapshot records a system's state at a specific time. In cryptocurrencies, a snapshot captures a blockchain's state at a certain block height.
A social recovery wallet, also called a social key recovery wallet, allows users to regain wallet access through a trusted social network. This adds security and convenience to self-custody crypto wallets.
Solidity is a programming language specifically designed for writing smart contracts on the Ethereum network. Developers use Solidity to create self-executing contracts that automatically execute predefined actions when certain conditions are met. Remix is an online development environment that allows developers to write, test, and deploy Solidity smart contracts directly on the Ethereum blockchain.
Source code is a set of computer code lines that define how a software program functions through instructions and statements. It represents the initial form of the software when it's written.
A stablecoin is a type of cryptocurrency, like Tether, that maintains a stable value by being linked to another currency, commodity, or financial asset. This stability makes it suitable for various applications, including as a medium of exchange or a store of value.
In Ethereum's Proof of Stake network, staking means locking up a set amount of cryptocurrency (e.g., 32 ETH) to participate in consensus. Validators secure the network and earn rewards, but face penalties for malicious behavior. The term can also refer to locking up tokens in other apps for rewards or governance.
A staking pool enables multiple stakeholders to combine their resources to enhance their chances of receiving rewards. By pooling their staking power, they increase the likelihood of earning block rewards during the process of validating new blocks.
State refers to the essential data a blockchain network maintains, representing information relevant to its applications at a given time.
State channels are a component of Ethereum's scaling solutions that allow transactions to occur off-chain while leveraging the blockchain's current state. Transactions are conducted within these channels and then eventually settled on the main Ethereum chain. This enhances scalability and reduces the need for on-chain transactions.
Store of Value
"Store of value" refers to an asset's ability to maintain or increase its value over an extended period, avoiding significant depreciation.
A computer or virtual machine operating at the peak of current computing capabilities.
A supply chain is a network of individuals and companies working together to produce and deliver products or services. It encompasses raw material suppliers, processing facilities, assembly, storage, shipping, and retail outlets, all collaborating to meet customer demands.
Support is a level where an asset's price tends to stop declining due to strong buying activity or significant buy orders, preventing further decrease.
In the expanding landscape of blockchain projects and tokens, the process of trading one token for another is commonly referred to as "swapping," and each individual instance of such an exchange is termed a "swap."
Tokenomics refers to the economic model and structure of a cryptocurrency or token. It involves aspects such as token supply, distribution, utility, governance, and incentives within a blockchain ecosystem. Tokenomics plays a crucial role in shaping the value and functionality of a digital asset within its network.
A 'taker' is a user who places an order that immediately matches with an existing order on the order book.
The slang term "tank" is borrowed from traditional finance and describes a significant decline in the value of an asset. When an asset is "tanking," its price is rapidly dropping. The term can also be applied to industries or companies that are performing poorly.
Terahash (per second) refers to the computing speed at which a system can perform one trillion hash calculations per second while engaged in cryptocurrency mining. This measurement is a key indicator of the processing power and efficiency of mining hardware.
A testnet is a simulation of a blockchain network that replicates the conditions of the main network. Developers use testnets to test and debug their smart contracts and other applications before deploying them to the actual blockchain, allowing them to avoid potential issues and costly mistakes.
Kovan is an Ethereum testnet that operates on a Proof of Authority consensus mechanism. It serves as a platform for developers to test and experiment with smart contracts and other blockchain functionalities. Kovan can be accessed using tools like MetaMask and provides a simulated environment that mimics the Ethereum mainnet for testing purposes.
Rinkeby is an Ethereum testnet utilizing the Proof of Authority consensus mechanism, accessible through MetaMask. It offers a faucet for obtaining test Ether to facilitate testing activities. Notably, Rinkeby is set to be deprecated by the end of 2023 as Ethereum transitions to Proof of Stake. This testnet serves as a valuable resource for developers to experiment with smart contracts and other blockchain functionalities.
Ropsten is an Ethereum testnet that initially employed the Proof of Work consensus mechanism. However, with Ethereum's transition to Proof of Stake, Ropsten has been deprecated. This testnet was once essential for developers to test smart contracts and other blockchain functionalities, simulating real-world conditions without using actual Ether on the main Ethereum network.
Tether (USDT) is a stablecoin that is designed to be pegged to the US Dollar, aiming to maintain a 1:1 ratio with the USD in terms of value.
The Merge, completed in September 2022, marked Ethereum's transition from Proof of Work to Proof of Stake consensus, significantly reducing its carbon footprint by over 99.9%. This important upgrade required years of effort to maintain the network's functionality throughout the transition.
A trading "symbol" is a shortened name, usually in capital letters, that represents a specific coin on a trading platform. For instance, BNB is the symbol for Binance Coin.
Tokens are a distinct category within the realm of cryptocurrencies. They represent units of value issued by platforms constructed on existing blockchain networks. These platforms use tokens to facilitate various functions and interactions within their ecosystems.
Token lockup is a period when cryptocurrency tokens are restricted from being traded or transacted. It's often used to prevent sudden mass selling by large holders that could cause rapid price drops, aiming to maintain stable asset value over the long term.
Token sale, also known as an Initial Coin Offering (ICO), involves issuing tokens in exchange for another cryptocurrency. This fundraising method allows projects to raise funds by selling their newly created tokens to investors.
Total supply represents the overall number of coins or tokens in existence, accounting for mined or issued tokens minus those that have been burned or destroyed.
Total Value Locked (TVL)
Total Value Locked (TVL) refers to the aggregate value of assets, typically tokens, that are currently deposited or locked within a specific blockchain protocol, application, or network.
TradFi, an abbreviation for "traditional finance," refers to the conventional financial system that people commonly engage with in their everyday activities. This term is often used in the blockchain and crypto space to contrast with DeFi (decentralized finance) offerings that utilize smart contracts and blockchains.
A transaction block is a group of transactions on a blockchain network that is bundled together, hashed, and added to the blockchain as a single unit.
A transaction fee is a minor charge applied to transactions conducted on a blockchain network. These fees compensate network validators or miners for their role in reaching consensus, ensuring the sustainability of the blockchain ecosystem.
Transaction ID (TXID)
A transaction ID (TXID) or transaction hash is a unique string of characters that serves as an identification number for each transaction on the blockchain. It verifies and records the transaction's details on the blockchain.
A transaction pool, also known as a "txpool," is a queue of transactions awaiting inclusion in a blockchain block. When users submit transactions to networks like Ethereum, these transactions are stored in the transaction pool until they are selected to be included in a block and recorded on the blockchain. The decision of which transactions to include in the next block involves various mechanisms and considerations, and research is ongoing in areas like Miner Extractable Value (MEV). In the context of Bitcoin, the transaction pool is referred to as the "memory pool" or "mempool," and these terms are often used interchangeably.
Transactions Per Second (TPS)
In blockchain context, transactions per second (TPS) indicates the quantity of transactions a network can handle per second.
To transfer a cryptocurrency or NFT from one public key address to another.
TrueUSD (TUSD) is a stablecoin tethered to the U.S. dollar, maintaining a 1:1 value through USD reserves backing each TUSD token.
In decentralized technology, "trustless" means transactions can be verified without relying on a central authority, fostering trust through transparency and consistent blockchain rules.
Turing-complete refers to a system, like Ethereum's Virtual Machine, capable of performing calculations equivalent to a programmable computer, even if distributed across multiple nodes.
Two-Factor Authentication (2FA)
Two-Factor Authentication (2FA) is a security method that adds an extra layer of protection to online accounts. It requires users to provide two different forms of identification to verify their identity before accessing an account. Typically, this involves something the user knows (like a password) and something the user has (like a smartphone or security token).
Uniswap is a decentralized cryptocurrency exchange protocol built on the Ethereum blockchain. It enables users to swap various ERC-20 tokens directly without the need for intermediaries. Uniswap uses an automated market maker (AMM) model, where liquidity is provided by users who contribute to liquidity pools in exchange for earning fees on trades.
Unit of Account
In essence, a unit of account is a measure of value used to compare the worth of various assets, including fiat currency and cryptocurrencies.
Unregulated refers to the absence of strict rules and regulations governing certain financial services, like cryptocurrency, which can lack legal protections for investors.
Unspent Transaction Output (UTXO)
An unspent transaction output (UTXO) is an output from a previous transaction that hasn't been used as input in a new transaction yet. UTXOs are essential building blocks for transactions in Bitcoin and other cryptocurrencies.
User Interface (UI)
The interface that facilitates interactions between humans and machines, determining how users can engage with the machine.
A validator is an individual who participates in a proof of stake blockchain by paying to validate transactions in exchange for earning cryptocurrency rewards.
A validity proof is a cryptographic proof submitted with certain types of rollups to demonstrate the validity of transactions. This helps ensure the accuracy and integrity of the data within the rollup.
Validium is a technology developed to help scale the Ethereum network. It aims to improve scalability by enabling off-chain execution of transactions while maintaining security through cryptographic proofs when necessary.
A vanity address is a customized cryptocurrency address that is intentionally created to have specific characters or patterns, often to make it more recognizable or personalized. Generating a vanity address involves a process of trial and error to find a public key that produces the desired pattern when hashed. While vanity addresses can be visually appealing, they don't impact the security or functionality of the underlying cryptocurrency.
A type of cryptocurrency wallet offered by Coinbase with enhanced security features, including time-lock mechanisms, designed to safeguard your funds.
A code sent to a secondary device to verify the identity of a user logging into an account, commonly used for Two-Factor Authentication (2FA).
A virtual machine (VM) is a software program that mimics a complete computer system, including virtual CPU, memory, and storage. It behaves like a physical machine with identical hardware when viewed externally.
Virtual Real Estate
Virtual lands comprised of digital parcels linked to NFTs, available for purchase and sale within the metaverse.
The "Vladimir Club" emerged on the BitcoinTalk forum in 2012. It stemmed from a suggestion by user Vladimir that owning 1% of 1% of Bitcoin's max supply was wise. This led to coining the term "Vladimir Club." With Bitcoin's max supply at 21,000,000 coins, those holding over 2,100 BTC qualify for this club.
Volatile refers to a market characterized by frequent and unpredictable fluctuations in prices, where values can rapidly rise and fall.
Volume, or trading volume, signifies the quantity of units traded within a market over a specific period. It reflects the number of individual units of an asset exchanged during that timeframe.
"WAGMI" stands for "We're All Gonna Make It," a phrase commonly used in online communities, particularly in the cryptocurrency context. It's used to inspire and support others during market ups and downs, reflecting optimism and the belief in collective success.
A wallet is a tool, either in the form of hardware or software, that securely stores a user's private and public key pair and enables interaction with a blockchain network.
A wallet address is an alphanumeric string used for sending and receiving cryptocurrencies or NFTs.
The practice of a creator artificially increasing trading volume for an NFT by buying and selling it to themselves through different wallet addresses is known as "wash trading."
"Weak hands" refers to traders or investors lacking confidence or resources to hold positions. It's used negatively to describe inexperienced and emotional traders who can be exploited by market professionals.
Weak subjectivity in crypto means a blockchain remains secure even if some participants are unreliable or malicious, maintaining consensus and integrity.
The first version of the web, featuring static web pages and hyperlinks, often referred to as the 'read-only' web.
Web3/ Web 3.0
Web3 or Web 3.0 refers to the decentralized web ecosystem, encompassing blockchain and decentralized technologies and communities. It represents the evolution of the internet towards a more decentralized and user-centric model.
Wei is the smallest unit of Ethereum cryptocurrency, similar to how a penny is the smallest unit of a pound.
"Whale" is a term used to describe individuals or entities that hold significant quantities of certain cryptocurrencies, often with the ability to influence the market due to the large size of their holdings.
"Whisker" refers to the vertical lines, also known as wicks, extending above and below the core boxes or bars on a candlestick chart representing a financial product or asset.
A whitelist is a roster of approved individuals, institutions, programs, or cryptocurrency addresses. It signifies authorized access or participation in a specific service, event, or context. The meaning of whitelists varies based on their particular application.
A whitepaper is a technical document that accompanies new cryptocurrency projects, outlining how the system functions, its goals, and technical details.
A wick on a candlestick chart represents the fluctuation between an asset's opening and closing prices. Also known as whiskers, shadows, or tails, wicks provide this information visually.
In trading, the win rate measures the proportion of successful trades compared to total trades, indicating a trader's profitability and strategy effectiveness.
Wrapped ETH (WETH)
Wrapped ETH (WETH) is Ethereum (ETH) that has been wrapped in a smart contract to function as an ERC-20 token. This allows it to be used within decentralized applications (DApps) on the Ethereum blockchain while maintaining its value equivalence to regular ETH.
XRP is a cryptocurrency token that operates on the Ripple blockchain, designed to facilitate fast and low-cost cross-border payments and transfers.
Yield refers to the return on investment generated by an asset, usually expressed as a percentage of the initial investment. It represents the earnings or profits gained from holding or investing in that asset. In the context of decentralized finance (DeFi), yield often refers to the interest or rewards earned by users who provide liquidity to liquidity pools or engage in yield farming on blockchain platforms.
The Zero Address is an Ethereum network address utilized for a specific transaction that marks the creation of a new smart contract.
Zero confirmation refers to a transaction that has been verified by a network, but hasn't been added to the blockchain yet.
A zero-knowledge proof (zk proof) is a method where a prover proves knowledge of information to a verifier without disclosing the actual information. This enhances privacy and security in cryptographic systems.
zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) are advanced cryptographic tools that enable efficient verification of information without revealing sensitive data. They play a crucial role in enhancing privacy and scalability in blockchain applications. For more details, the Ethereum Foundation offers an in-depth explanation.
zk-STARK, or "zero-knowledge scalable transparent argument of knowledge," is a cryptographic approach developed by Eli Ben-Sasson. Unlike zk-SNARKs, zk-STARKs don't require an initial trusted setup and use collision-resistant hash functions for enhanced security. This eliminates number-theoretic assumptions and reduces vulnerability to quantum computing attacks.