Glossary

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  • 51% Attack

    Also known as a Majority Attack. This occurs when a malicious actor has acquired more than 50% of a network's hash rate.

  • A
  • ASIC-resistant

    Achieved by requiring large amounts of memory while mining

  • Absolute Advantage

    An economical concept in which a party has direct efficiency advantage in the production of a certain product in comparison with other parties.

  • Ad Hoc

    When something is only done or created when it is necessary

  • Address

    Used to send and receive cryptocurrencies.

  • Airdrop

    A free distribution of coins or tokens to users, often based on the balance of other coins they own.

  • Algorithm

    A sequence of autonomous instruction with as goal to solve a certain problem.

  • All or None Order (AON)

    An order that is to be conducted in whole or not at all.

  • All-Time High (ATH)

    The highest price a cryptocurrency has reached against a certain quote currency like the US dollar, BTC or ETH.

  • Allocation

    Percentual distribution of funds. A project for example might allocate 40% of tokens to development of the product.

  • Alpha

    A first version of a product launched by the team in order to receive feedback.

  • Alt-coin

    A cryptocurrency that is not Bitcoin.

  • Anti Money Laundering (AML)

    A framework consisting out of legal and regulatory procedures in order to reduce risk of processing illicit funds.

  • Application Programming Interface (API)

    A collection of functions and procedures which enable users to connect to data of a certain application or service.

  • Application-Specific Integrated Circuit (ASIC)

    An Integrated Circuit, customized to achieve maximum for a certain purpose.

  • Arbitrage

    The buying and selling of assets on different markets in order to take advantage on different prices on the same asset.

  • Asking Price

    The lowest price a seller is willing to accept for his asset.

  • Atomic Swap

    Atomic swaps, or atomic cross-chain trading, is the exchange of one cryptocurrency to another cryptocurrency, without the need to trust a third-party.

  • Attack surface

    The amount of points in a software which a malicious actor can attack to extract or change data.

  • B
  • BUIDL

    A term which is derived from term HODL and refers to staying focused and building your product.

  • Bear market

    A negative trend of the prices of a certain market. This term is used in both traditional finance and cryptocurrency.

  • Bid price

    The price an investor is willing to pay for a certain asset.

  • Bitcoin

    A cryptocurrency which is developed by the mysterious developer or developers known online as Satoshi Nakamoto.

  • Bitcoin Dominance

    The ratio of Bitcoin's market capitalization against the combined market capitalization of all cryptocurrencies.

  • Bitcoin Pizza

    The infamous pizza that cost Laszlo Hanyecz 10,000 Bitcoin when offered to pay this to anyone willing to bring him a pizza.

  • Black Swan Event

    An event that occurs completely unexpected and deviates from the expectation.

  • Block

    A file that records transaction data. When these files are organized in a linear sequence a blockchain is formed.

  • Block Explorer

    An online website where users can browse information about blocks, transactions, balances and transaction history.

  • Block Header

    Each block in Bitcoin's blockchain has an 80 byte block header, which contains metadata about the block. This metadata has 6 fields: the block version number, the hash of the previous block header, a hash based on all of the transactions in the current block, a current timestamp, the difficulty target (required for proof of work), and the nonce (required for proof of work).

  • Block Height

    The number of blocks in the blockchain between the first and last block.

  • Block reward

    The amount of coins or tokens given to miners as a reward for every successfully mined block.

  • Blockchain

    A ledger of digital transactions recording relevant information in a chronological manner.

  • Bounty

    A reward posted by an individual or group to stimulate certain work or behavior.

  • Break-even Point

    The point at which the amount of costs equals the value or revenue of a certain activity.

  • Breakeven Multiple

    The multiple of the current price with which it has to increase to reach the previous all-time high.

  • Bull Market

    A positive trend in the prices of a certain market. The term is both used in traditional finance and cryptocurrencies.

  • Byzantine General Problem

    In 1982 Leslie Lamport, Marshall Pease, and Robert Shostack described this agreement protocol and presented an algorithm to solve this problem, which has been implemented in blockchain solutions such as Bitcoin. The problem is described as follows. Reliable computer systems must handle malfunctioning components that give conflicting information to different parts of the system. This situation can be expressed abstractly in terms of a group of generals of the Byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement. It is shown that, using only oral messages, this problem is solvable if and only if more than two-thirds of the generals are loyal; so a single traitor can confound two loyal generals. With unforgeable written messages, the problem is solvable for any number of generals and possible traitors.

  • C
  • Candidate Block

    A temporary block created by mining nodes using transactions from the memory pool. Each mining node tries to add this candidate block to the blockchain.

  • Capitulation

    When an investor gives up on previous gains and decides to close his position during a price decrease.

  • Central Bank

    A financial institution functioning as a monetary authority managing the national currency, interest rate and money supply.

  • Circulating supply

    The number of cryptocurrencies currently in circulation.

  • Cloud

    A shared pool of digital resources which are made available by users through the internet.

  • Clustering

    Cluster analysis or clustering is the task of grouping a set of objects in such a way that objects in the same group (called a cluster) are more similar (in some sense or another) to each other than to those in other groups (clusters). In the context of Bitcoin, address clustering tries to break the privacy of bitcoin users by linking all addresses created by an individual user, based on information available from the blockchain.

  • Coin

    A cryptocurrency or digital currency which is independent of any other platform and can be used as an exchange of value.

  • Cold Storage

    Also known as an offline wallet, “cold storage” is a data storage device that is not directly connected to a computer or alternate processing unit.

  • Collateral

    A commitment to use something of value as collateral in a loan to ensure that the loan is repaid.

  • Credentials

    Personal information. Examples are username, password, email address, first name and surname.

  • Cryptocurrency

    A cryptocurrency is a digital currency that is protected by cryptography. One of its primary functions is to act as a means of exchange within a peer-to-peer (P2P) economic system built on blockchain technology.

  • Cryptography

    Cryptography is a method for storing and sending data in a form that only people with authorization can read and process.

  • Custody

    Ownership of a third party his assets. In the cryptocurrency world, custody means storing the private keys and the responsibility for keeping the assets safe.

  • D
  • Daemon

    A process performed in the background, waiting for a certain event or condition to activate it.

  • Darknet

    A digital overlay network that can only be accessed with specific software, configurations, or authorization, often using non-standard communications protocols and ports. Two typical types of Darknet are friend-to-friend (peer-to-peer) networks and privacy (anonymous) networks, such as The Onion Router (TOR). See also the definition for I2P for further information.

  • Dead cat bounce

    A momentary recovery after a period of price decline, which is again followed by a price reduction.

  • Decentralisation

    Decentralization as organized by blockchain technology cannot be compared to traditional centralized cloud storage methods. With centralized cloud storage, data is not stored on devices but in central servers of third parties. Information within the blockchain is not stored in central databases, but is distributed over many different nodes within a peer-to-peer general ledger.

  • Decentralized Application (dApp)

    An application that works on a P2P network of computers instead of one central computer. This makes it possible to run software on the internet without being controlled by one entity.

  • Decentralized Autonomous Cooperative (DAC)

    An organization which is managed by the collection of shareholders instead of one central authority.

  • Decentralized Autonomous Organization (DAO)

    A system of hard coded rules that define what actions the organization takes. The DAO can also specifically refer to the DAO organization created on the Ethereum blockchain.

  • Decentralized Exchange

    An exchange that does not require users to deposit funds in order to be able to act. Also, it does not control funds of users.

  • Decentralized Finance

    The ecosystem consisting of decentralized financial applications built on blockchain networks.

  • Delisting

    When a trading platform decides to discontinue support for a particular cryptocurrency. This can happen for example when there is not enough demand for a cryptocurrency.

  • Difficulty Bomb

    A significant increase in the mining difficulty of a proof-of-work coin.

  • Digital Signature

    Digital signatures are a way to prove that somebody is who they say they are by using cryptography or math. A digital signature is a way to prove that a message originates from a specific person and no one else. See asymmetric cryptography for how digital signatures operate on a blockchain through users generating key pairs.

  • Divergence

    A divergence occurs when the price of a cryptocurrency and a certain indicator (e.g. RSI) move in the opposite direction.

  • Diversification

    The process in which an investor spreads his funds over multiple assets in order to reduce the exposure to a single asset.

  • Do Your Own Research (DYOR)

    A valuable piece of advice. It is always advisable to do your own research on a coin instead of listening to what others say.

  • Dollar Cost Averaging (DCA)

    Investing fixed amounts over a period of time regardless of the price of the asset.

  • Double Spending

    When a number of coins or tokens have been spent multiple times. This is often is the result of a 51% attack.

  • E
  • ERC-1155

    An Ethereum-based hybrid of both fungible and non-fungible tokens. Used for collectables in games.

  • ERC-20

    A technical standard on the Ethereum blockchain. ERC stands for Ethereum Request for Comments. 20 in this case is the unique proposal identification number.

  • ERC-721

    An Ethereum-based non-fungible token. ERC stands for Ethereum Request for Comments. 721 refers to the unique identification number of the proposal.

  • Eclipse Attack

    When the majority of the peers on a network are malicious and monopolize the network to isolate specific nodes.

  • Encryption

    Conversion of information or data to secure code to prevent unauthorized access to the data or information.

  • Enterprise Ethereum Alliance (EEA)

    The industry's first global organization with an open, standardized architecture to accelerate the adoption of Enterprise Ethereum.

  • Escrow

    Also known as internet escrow, works by placing cryptocurrency in the control of an independent and licensed/unlicensed third party to protect both buyer and seller in a transaction. When both parties verify that the transaction has been completed per terms set, the digital currency is released. This is often a service provided by a Darknet Market Place.

  • Exchange

    A trading platform for cryptocurrencies where users can buy and sell coins.

  • Exchange-Traded Fund (ETF)

    A collection of securities such as stocks or cryptocurrencies that track an underlying index.

  • Exchange-Traded Product (ETP)

    Are a type of securities which track the underlying financial instrument.

  • F
  • Fault Tolerance

    The property that enables a system to continue operating properly even if some of its components fail.

  • Fear Of Missing Out

    The feeling of fear and tension when you believe you are missing out on a potentially profitable opportunity.

  • Fear, Uncertainty and Doubt

    A strategy with the goal of spreading uncertainty, fear and doubt among customers, investors and traders.

  • Fiat

    Money that a government has declared to be legal tender.

  • Finality

    The guarantee that an executed cryptocurrency transaction can no longer be changed or reversed.

  • First-Mover Advantage

    The competitive advantage of a project when it is the first to provide a product or service in a new market.

  • Flippening

    The name given to the event if/when Ethereum takes over Bitcoin in terms of market capitalization.

  • Forced Liquidation

    When a broker is forced to liquidate an investor's position as a result of falling below the minimum margin requirement.

  • Fork

    The creation of an alternative ongoing version of the blockchain, typically because one set of miners begins hashing a different set of transaction blocks from another. It can be caused maliciously by gaining too much control over the network, accidentally, or intentionally when a core development team decides to introduce substantial new features into a new version of a client. A fork is successful if it becomes the longest version of the blockchain.

  • Full Node

    A computer that follows the complete set of rules of an underlying blockchain network as well as validates transactions and blocks.

  • Fundamental Analysis (FA)

    Evaluating the value of an asset based on certain characteristics to calculate an intrinsic value.

  • Fungibility

    The characteristic of an asset which's individual units are indistinguishable from each other in terms of functionality and value.

  • Futures

    A legal contract in which an investor is able to buy or sell an asset at a certain price at a certain time.

  • G
  • Gas

    The pricing mechanism used by the Ethereum blockchain to calculate the costs of interacting with smart contracts and sending transactions.

  • Gas Limit

    The maximum price a cryptocurrency user is willing to pay for a transaction or interaction with a smart contract.

  • Genisis Block

    The block that was first recorded to a particular blockchain. Also called Block 0 or 1.

  • GitHub

    A website where developers and teams can share and store their open source code.

  • H
  • HODL

    Originally born as a result of a typo in the word 'Hold'. Nowadays it can also refer to 'Hold on for Dear Life.

  • Halving

    When the block reward of a particular cryptocurrency is halved. This is done to reduce the speed of issuance.

  • Hard Cap

    The maximum amount of funds that a project aims to raise with, for example, an Initial Coin Offering (ICO).

  • Hard Fork

    A permanent divergence in the blockchain which makes previously invalid transactions valid, and therefore requires all users to upgrade. Occurs when any alternation changes the block structure or difficulty rules

  • Hash Rate

    The speed at which a computer or other type of hardware can calculate new hashes.

  • Honeypot

    A mechanism used in computer security to detect unauthorized access.

  • Hops

    Hops refers to the amount of transactions or hops of a Bitcoin

  • Hybrid

    Refers to blockchains which are both permissioned and permissionless in order to serve multiple purposes.

  • Hyperledger

    Hyperledger is an umbrella project of open source blockchains and related tools, started in December 2015 by the Linux Foundation.

  • I
  • Iceberg Order

    A conditional order to buy or sell large quantities by conducting multiple small orders to hide the total amount.

  • Immutability

    Refers to the extent to which it is impossible to alter or change the previous blocks in a blockchain.

  • Index

    A financial instrument used to track the value of an investment or collection of investments.

  • Initial Coin Offering (ICO)

    A fundraising method whereby new projects sell their cryptocurrencies to investors.

  • Initial Exchange Offering (IEO)

    A fundraising method in which projects list their cryptocurrency and sell it on an exchange.

  • Initial Public Offering (IPO)

    The event during which a private company first offers its shares to public investors.

  • Interoperability

    A concept in which different blockchains can communicate and interact with each other.

  • Issuance

    The creation of cryptocurrencies, this can be done in different ways and depends on certain parameters.

  • K
  • Know Your Customer (KYC)

    A standard procedure in the financial industry where companies take steps to get to know their customers. The goal is to combat the risk of money laundering and terrorist financing.

  • L
  • Latency

    The time between the submission of a transaction and the first confirmation of the transaction by the network.

  • Layer 2

    A secondary framework or protocol built on an existing blockchain to improve scalability.

  • Ledger

    A physical or digital ledger where financial transactions are recorded.

  • Lightning Network

    A second layer solution working on the Bitcoin blockchain to improve scalability.

  • Limit order

    A limit order is an order type in which the investor indicates that he wishes to buy or sell a cryptocurrency at a certain price. For example: the current price of Bitcoin is €10,000, the investor sets a limit order that when the price reaches €9,000, the order is performed.

  • Liquidity

    The ability to buy or sell an asset quickly without causing significant price fluctuations.

  • Listing

    The addition of a cryptocurrency on a trading platform.

  • Long

    A long position—also known as simply long—is the buying of a stock, commodity, or cryptocurrency with the expectation that it will rise in value. Holding a long position is a bullish view.

  • M
  • Mainnet

    A blockchain protocol that has been developed and fully deployed. Transactions are sent, verified and recorded.

  • Mainnet Swap

    When a token migrates from a third party blockchain such as Ethereum to a self-developed blockchain mainnet.

  • Maker

    You are considered a maker when you place an order and it is not immediately executed. Instead, your order ends up in the order book waiting to be filled by another user.

  • Malware

    Any form of software or code intended to infiltrate and damage hardware and networks.

  • Margin Trading

    Trading with borrowed funds. This is considered a very high-risk strategy and is only intended for experienced traders.

  • Market Capitalization

    The total market value of a particular cryptocurrency. This is calculated by multiplying the current supply with the current price.

  • Market Order

    When a taker buys the best possible bid or offer price in the order book for a cryptocurrency.

  • Masternode

    When a taker buys or sells against the best possible bid or offer price in the order book

  • Maximum supply

    The maximum amount of coins or tokens that will ever be created for a particular cryptocurrency.

  • Merkle Tree

    A way of organizing and structuring data to make it more straight forward.

  • Metadata

    Data that contains information about other data, such as information about certain characteristics of a transaction.

  • Mining

    The verification process of transactions in a blockchain network.

  • Mining Farm

    A large collection of miners often found in department stores or data centers.

  • Moon

    A term that refers to the event when a cryptocurrency experiences a strong price increase.

  • Multisignature

    A wallet that requires authentication from a second party to send a transaction to the network.

  • N
  • Node

    A participant in the blockchain network that communicates with other participants to ensure the security and integrity of the network.

  • Nonce

    A single use set of numbers for verification purposes in order to prevent repetition of previously executed transactions.

  • O
  • Off-chain

    A transaction that initially takes place outside the blockchain network but is later sent to the network.

  • Offshore Account

    An account registered in a jurisdiction other than that of the owner's nationality.

  • Oracle

    A third-party data source to determine the outcomes of a smart contract.

  • Orphan Block

    A block that is linked to a chain that is not seen as the mainchain and therefore does not continue.

  • P
  • Paper Wallet

    A piece of paper on which the public and private keys of a cryptocurrency address are printed.

  • Passive Management

    An investment strategy that does not rely on active trading but on existing economic indices.

  • Peer-to-Peer (P2P)

    Stands for "Peer to Peer." In a P2P network, the "peers" are computer systems which are connected to each other via the Internet.

  • Pegged Currency

    A currency whose price is designed to remain the same as a particular commodity. 1 DAI for example is linked to 1 USD.

  • Permissioned

    Refers to blockchains which are only available to interaction by authorized parties. These types of blockchains are often used by a consortium of organizations. Examples of permissioned blockchains are Hyperledger and Corda.

  • Permissionless

    Refers to blockchains which are available to interact with to anyone. Examples of permissionless blockchain are Bitcoin and Ethereum.

  • Phishing

    An attack in which a malicious actor attempts to obtain information about a user in order to gain access to his or her account.

  • Plasma

    An Ethereum off-chain scalability solution that has the potential to significantly increase the scalability of Ethereum.

  • Ponzi Scheme

    A type of scam where funds from new investors are used to pay promises of profit to previous investors. A good example is Bitconnect. Do not invest in these schemes.

  • Portfolio

    The composition of an investor his investments.

  • Private Key

    This digital and encrypted code which is only known by the intended recipient or owner is usually paired with a public key. The private key is used to sign or confirm an outgoing transaction which is used by the network to confirm that the user sending the transaction is the legitimate user of the public key. Whoever controls the private key controls the wallet and if the private key is lost access to the contents of the wallet become inaccessible.

  • Private Sale

    An early investment round for strategic investors with a significant amount of financial resources.

  • Proof of Stake

    A consensus mechanism that rewards block validators according to how many coins they have staked.

  • Proof of Work

    A consensus mechanism that rewards block validators according to how much computing power they provide.

  • Pump and Dump

    Coordinated buying that artificially inflates the price of cryptocurrencies, in the hopes of attracting outside buyers to then sell the currency at a profit.

  • R
  • Race attack

    This takes place when two transactions are sent with the same funds, the purpose of which is to use the same funds twice.

  • Ransomware

    A form of malware that takes over your computer and threatens to delete or publish files when ransom is not paid.

  • Resistance

    A term within Technical Analysis (TA). When an investment encounters resistance during a price increase. Often occurs at previous highs.

  • Return on Investment (ROI)

    A measurement used to determine the effectiveness of an investment. The ratio between net profit and net cost.

  • Roadmap

    A business planning method in which short- and long-term goals are set on a dynamic timeline.

  • Routing Attack

    An attack on Internet service provider level to reduce a particular website's uptime.

  • S
  • Satoshi Nakamoto

    Satoshi Nakamoto is the online identity of the creator or creators of the Bitcoin protocol and related whitepaper.

  • Scalability

    The extent to which a blockchain can scale in order to process large amounts of transactions per second.

  • Security audit

    A systematic evaluation that measures the security of a system, smart contract or blockchain in terms of resilience to cyber-attacks or technical errors.

  • Segregated Witness (SegWit)

    A process in which transaction signatures are separated from Bitcoin transactions. This allows more transactions to fit into one block.

  • Sell Wall

    A very large sell order or collection of sell orders at the same price in an order book.

  • Sharding

    Sharding is the method where using a mathematical scheme, the blockchain is broken into shards were each transaction is assigned to a single shard and any given node is tasked with tracking a single shard of the blockchain. The node tasked with a single shard is accompanied by other nodes tasked with the same shard to maintain security.

  • Short

    A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price.

  • Smart Contract

    Automated contracts which are activated when certain conditions are met.

  • Snapshot

    Recording the current state of the blockchain. This is often done, for example, to distribute airdrops based on coin balances.

  • Soft fork

    A soft fork is a change to the blockchain where only previously valid blocks are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. This kind of fork requires only a majority of the miners upgrading to enforce the new rules.

  • Source Code

    Code which is responsible for the way software works. It's based on a set of rules, instructions and statements.

  • Stablecoin

    A type of cryptocurrency that is designed to maintain a stable value to prevent strong price fluctuations. Examples are DAI, USDT and USDC.

  • Stakingpool

    A group in which stakeholders combine their staking power to increase the chance of validating the next block.

  • State Channel

    A communication channel between two users or nodes on a network.

  • Supercomputer

    A computer or virtual machine that performs at the highest level of currently available computer power.

  • Supply Chain

    A chain of people and companies involved in the production and distribution of a particular product.

  • Support

    A term within Technical Analysis (TA) that is used when a falling price finds support on a particular price.

  • Sybil Attack

    A Sybil attack is an attack where a single malicious actor is controlling multiple nodes on a network. It is unknown to the network that the nodes are controlled by the same actor.

  • T
  • Taker

    The taker is the person who places an order that is directly linked to an existing order in the order book.

  • Ticker

    The trade symbol, also known as the abbreviation that refers to a particular coin. For example: BTC is Bitcoin, ETH is Ethereum, XRP is Ripple.

  • Token

    A cryptocurrency without its own blockchain, it therefor works on the blockchain of a third party. For example, OmiseGO is a token since it is operating on the Ethereum blockchain.

  • Token Sale

    The issue of tokens in exchange for other coins or tokens. Also called an Initial Coin Offering.

  • Total Supply

    The number of coins or tokens that currently exist and are either in circulation or locked.

  • Transaction ID (TXID)

    Also called the transaction hash. The transaction ID is used to refer to transactions on a blockchain.

  • Transactions Per Second (TPS)

    Refers to the maximum number of transactions a blockchain can process per second.

  • Turing Complete

    A machine that with the right amount of time, memory and instructions can solve any mathematical problem, no matter how complex.

  • Two-factor Authentication (2FA)

    Two-factor authentication (2FA), sometimes referred to as two-step verification or dual factor authentication, is a security process in which the user provides two different authentication factors to verify themselves to better protect both the user's credentials and the resources the user can access

  • U
  • User Interface (UI)

    The interface on which users interact with a machine or software.

  • V
  • Verification Code

    Code sent to a second device to confirm the identity of the person trying to log in. Used with 2 Factor Authentication.

  • Virtual Machine

    A simulated computer designed to duplicate the properties and functions of a computer.

  • Volatility

    How fast and how much the price of an investment changes.

  • W
  • Wallet

    Used to send and receive cryptocurrencies. There are different types of wallets including: hardware wallets, paper wallets, software wallets and online wallets.

  • Weak hands

    A term that refers to investors who lose confidence during price declines and sell their cryptocurrencies or deviate from their strategy.

  • Wei

    The denomination of the smallest amount of Ether, the currency used on the Ethereum network.

  • Whale

    An individual or organization that owns large amounts of cryptocurrency and can therefore influence the market.

  • Whitelist

    A list of trusted individuals, software or cryptocurrency addresses related to a particular service or event.

  • Z
  • Zero-Knowledge Proofs

    Evidence to verify that transactions are valid without disclosing information about the transaction, as a result privacy is guaranteed.

  • Zk-Snarks

    Stands for Zero-Knowledge Succint Non-Interactive Argument of Knowledge and is an approach for zero knowledge proofs.