In Depth

Glossary

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A

51% Attack

The theoretical case in which 51% of a blockchain's consensus mechanism is controlled by a single bad actor, allowing them to double spend.

[A] satoshi

The smallest unit of Bitcoin, 0.00000001 BTC,

Altcoin

Any other cryptocurrency besides Bitcoin.

Anonymous

Your name is completely obscured. A case where no one could figure out your identity, no matter what.

ASIC

Short for Application Specific Integrated Circuit. These powerful computers are built for the purpose of mining any cryptocurrency based on a proof of work system, such as Bitcoin. Because they are specifically designed for mining, they are far more efficient than traditional CPU and GPU mining rigs.

Asset

Something of value, often held as a store of value or wealth.

B

Backwards compatible

In accord with previous protocols. In the case of cryptocurrencies, a software update that is backwards compatible will not mess things up by creating a hard fork.

Bearish

A general trend that prices are falling in a market. A market can be bearish, or a person can be bearish if they feel that prices are due to fall.

Bit

The tiniest amount of computer code, defined as a 1 or a 0.

Block reward

Cryptocurrency awarded to a miner or forger if they are the first one to add a new block to the existing chain. The block reward is new crypto that is created as a product of the block being mined.

Brain wallet

Creating a new set of public and private keys and memorizing them. This creates a system where the only place your cryptocurrency is stored is in your mind.

Bubble

A product of speculative investing patterns where the price of an asset will rise sharply only to "burst" as though a bubble and then fall sharply.

Bullish

A trend that prices in a market are rising. A market itself can be bullish or a person can be bullish if they feel prices are due to rise.

C

Charlie Lee

Prominent member of crypto-space and creator of one of the first altcoins, Litecoin.

Client

A program that relies on a server to feed it information or complete its task. For example, web browsers are clients in that they require information from a web server.

Cold wallet

A place to store public and private keys that resides offline. Since keys are not connected to the Internet in any way, they are less succeptible to being hacked.

Collateral

Something pledged when taking on a loan which, if the loan is not repayed, will be sold in order to pay back the loan.

Consensus

Agreement; the necessity for miners to agree on the validity of a blockchain. There are multiple methods by which miners can agree on validity, the most popular of which is called proof of work.

Consortium Blockchain

A blockchain where the consensus process is controlled by a pre-selected set of nodes. Popular among private organizations but not as useful for digital currencies

Crowdsourcing

The process of receiving funding from a large number of people. Instead of having a few investors give a lot of money each, companies look for many investors to put in small amounts.

Cryptoassets

The broadest term for a blockchain-based store of value. Cryptocurrencies, tokens, and ICO's could all be considered under the umbrella of cryptoassets.

Cryptocurrency

A digital store of value that is transferred through a blockchain.

Cryptography

The process of making something secret or hidden.

Cryptotokens

A cryptoasset that is redeemable for something or usable in some way.

Cybersphere

Unnecessarily fancy word for the Internet.

Cypherpunks

A group of digital pioneers first active in the 1980's who sought to defend digital privacy through various cryptographic measures. First spoke of a need for digital currency.

D

DAO

Short for Decentralized, Autonomous Organization. Large mechanisms that can self manage and perform various functions, often including smart contracts as a component. Often built on blockchain platforms such as Ethereum.

Decentralized

Descriptive of something lacking a central authority. Power is distributed to many democratic points as opposed to one ruling point.

Decentralized app (dApp)

An application that has back-end code running on a decentralized network instead of a central server.

Desktop wallet

A piece of software that can be downloaded and used to store public and private keys on one's personal computer.

Digital asset

Any intangible asset that resides on the Internet. Ex. Bitcoin.

Digital signature

A specific series of bits confirming that a transaction is valid and should be accepted by the network.

Distributed

Something split into many pieces and separated out. Mining power in blockchain systems is said to be distributed.

Double spending

A computer science issue preventing the existence of digital currency where someone would be able to spend the same unit of currency twice. This problem was first popularly solved by Bitcoin.

Due diligence

Research conducted before making any kind of investment. Even if someone recommends an investment to you, smart investors will always conduct independent research.

DYOR

Do Your Own Research. A popular hashtag on twitter where, even when recommending a crypto-investment, people ask others to do their own research first. Akin to saying, "If you invest and lose money, I am not liable for recommending the investment."

E

Escrow

A bond kept in the custody of a third party, used to ensure payment. It is possible that many escrow services will be replaced by smart contracts.

Exchange

A place where assets can be traded either between different assets or for currency itself. For example, there are exchanges where you can trade bitcoins for dollars and exchanges where you can trade bitcoins for ether directly.

F

Fiat currency

A currency issued by a government, often a reference to paper money. Examples include the US Dollar, the Euro, the Yen, etc.

Financial Security

An asset is classified as a security if there is an expectation that the asset will increase in value due to work performed by others.

Forging

The process of adding blocks (and validating transactions) in a proof of stake consensus system.

FUD

Fear, Uncertainty, and Doubt. Negative emotions related to anxiety in a marketplace.

H

Hard fork

A hard fork is a protocol change that results in an entirely new blockchain with an entirely new currency. Before the change, all transactions are valid, and after the fork two blockchains will exist with two currencies. Example: Bitcoin and Bitcoin Cash hard fork.

Hash function

A mathematical formula that is designed to take inputs, "hash" them, and return outputs that appear to be completely unrelated to the inputs. The outputs appear to be random.

HODL

Misspelling of the word hold. Meme in crypto-space that has turned into a battle cry for refusing to sell even during dips in the market.

Hot wallet

A wallet that is connected to the Internet in some capacity and thus susceptible to hacks.

G

Genesis block

The first block ever mined on a blockchain.  A genesis block is the first block in the chain.

I

ICO

Initial Coin Offering. A new way of crowdfunding where a company creates a token and sells it. People buy tokens in the hopes that they will rise in value as the company does. Many think ICO's might be classified as securities in the near future.

Immutable

Unable to be changed retroactively. Past blocks in the blockchain are immutable.

Internet of Things

Connection of everyday devices (such as a pen, car, or stove, etc.) to the Internet such that they can send and receive data.

J

Jarod's Hair

Beautiful

K

Key Pair

A public and private key associated with a cryptocurrency address. When an "account" on a blockchain is created, the account consists of a public key and a private key.

L

Ledger

Something used to record transactions, an itemized list of transactions.

Leverage

A measure of how much money is borrowed during margin trading. A ratio of how much money is borrowed compared with how much money is put down as collateral. 1:1 leverage means not borrowing anything. 1:100 leverage means borrowing 100 times more than is offered as collateral.

Light client

Most wallets; accesses only the most recent information on the blockchain that's relevant to your particular account at the time, rather than storing the entirety of the massive file that is the blockchain.

Liquidity

The ease and quickness with which an asset can be bought and sold at the actual market price. Higher market volume often denotes higher liquidity. The most liquid asset is money itself and an example of an illiquid asset might  be real estate.

M

Margin call

When trading with borrowed money, an exchange can margin call you and sell off collateral if your position reaches a critical point where it must be closed. Margin called = you have to pay up.

Margin trade

To trade using a loan. The act of borrowing money in order to make an investment.

Market capitalization

The circulating number of units of an asset multiplied by the current market price. An indicator of the size of a market.

Masternode

A network overlaying a traditional consensus mechanism that allows for additional features. First shown in the Dash system.

Medium of exchange

An instrument used to conduct trade. Currencies are mediums of exchange because they represent consistent value.

Miner

Someone who uses their computing power to verify transactions on a blockchain in return for cryptocurrency.

Mining

The process of performing computational work in order to verify transactions and add blocks to the blockchain in proof of work consensus models. Miners are paid with fees and block rewards.

Mooning

A investment term denoting that something is going to offer investors a massive return on their investment. Something that is mooning is rapidly rising in price, often making investors wealthy.

Multisignature wallet

A wallet that is only accessible using more than one private key. More safe from hacking than a single signature wallet.

N

Nick Szabo

Famous cypherpunk and creator of Bit Gold, a precursor to Bitcoin. Often credited with creating the term "smart contract."

Node

Any computer that is connected to a blockchain network. Full nodes can verify the validity of transactions.

Nonce

A special number added to the end of a block that, when hashed with the entire block as well as the hash of the previous block, produces a new hash with a certain number of leading zeroes. When miners are creating a block, they are racing to find the nonce.

O

Online wallet

An online service that stores private keys on your behalf. Generally not the safest way to store private keys.

Oracle

Something that feeds information to a blockchain. Smart contracts can use oracles to know when the terms of an agreement have been met.

P

Paper wallet

The process of creating a new key pair, transferring crypto-assets to the associated public address, and writing the public and private keys on a piece of paper. The keys are not stored anywhere online.

Peer to peer

A system where individuals can interact directly with each other without having to go through a third party as a mediator.

Private key

A random number belonging to you and only you, used to digitally sign cryptocurrency transfers. Private keys give you access to your funds and should be kept secret.

Proof of stake

A method of determining consensus that determines who is likely to mine the next block by weighting the amount of wealth a person has "staked," or locked away in a special kind of wallet.

Proof of work

The original method of determining consensus. This method gives the right to add a new block to the chain to the computer that is lucky enough to find a particular number, that when fed into a hashing algorithm produces a specific number of leading zeroes.

Protocol

A set of rules, applicable across different operating systems and coding languages.

Pseudoanonymous

Not fully anonymous, only sort of anonymous. If something is only psuedo-anonymous, someone might be able to figure out your identity after all.

Pseudonym

A fake name or identifier. In a pseudonymous system, if a connection is made between the pseudonym and the person it corresponds to its power to hide identity is compromised.

Public address

Given out to others, allowing them to send you funds. The public address is the public key, with a few adjustments made. This makes it two steps removed from your private key.

Public key

One step removed from the private key. Allows your digital signatures to be verified. Part of the key pair necessary for the function of public key cryptography.

Pump and Dump

A scheme in a marketplace where investors buy up an asset so the price rises so that they can immediately sell the asset at the new, higher price and take a profit.

R

Rekt

A state of having lost money on an investment. Losing money = getting rekt.

Remailer

A special kind of email server used by the cypherpunks that could be sent an email, strip away the sender information, and forward the email to a list of people. A way to anonymously send emails.

Q

S

Satoshi Nakamoto

"He's the hero Gotham deserves, but not the one it needs right now. So, we'll hunt him, because he can take it. Because he's not our hero. He's a silent guardian. A watchful protector. A Dark Knight." - Jim Gordon, The Dark Knight

Also, the anonymous figure(s) who invented Bitcoin.

Scaling

The process of expanding a network to properly accommodate an increase in users.

Scrypt

A hashing algorithm, analogous to SHA-256, that helps to remove the advantage ASIC machines have over traditional CPUs and GPUs.

Seed phrase

A string of words associated via an encrypted algorithm to a private key, allowing the retrieval of said key if the words are known.

SHA-256

Secure Hashing Algorithm, 256 bit. Utilized by the entire internet (and Bitcoin!) to maintain security.

Shilling

Talking up a product because you are covertly paid to do so.

Smart contract

A digital agreement that has the power to auto-execute and the ability to transfer funds between parties. The combination of a contract and an escrow account in one piece of code that runs on a blockchain. Digitally signed by all parties involved.

Soft fork

A protocol change that is backwards compatible, allowing unupgraded nodes to interact with upgraded ones normally. A soft fork does not necessitate the creation of an entirely new cryptoasset.

Solidity

The coding language of the Ethereum blockchain.

Store of value

One of the three functions of currency. Refers to the ability of a currency to be saved, stored, and exchanged for goods or services at a later time.

T

Teacup pig

Teeny, tiny, super cute pig. Never gets bigger than piglet size.

Technical Analysis

The use of market and price information to make predictions about future price action of an asset.

The DAO

A decentralized venture fund, built on Ethereum. A major hack of the DAO early on forced Vitalik Buterin to fork Ethereum to return stolen funds.

Ticker

Abbreviation for an asset. For example, Bitcoin's ticker is BTC.

Timestamp

A sequence confirming the exact time at which an event occured. Used for recordkeeping and auditing purposes.

Tokenized

When an asset is split into many small pieces and distributed using a blockchain.

U

Unit of account

One of the three functions of currency. Refers to the use of currency as a concrete measure of how much things are worth, so that they can be compared to each other.

V

Venture capital

Capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.

Virtual machine

A virtual machine is able to run an operating system without the machinery of a host. A method for running a decentralized network where computing power needed to run an operating system is distributed among many machines, creating a computer that only exists virtually, or a virtual machine.

Vitalik Buterin

Founder of Ethereum, blockchain developer, Thiel Fellowship recipient. Read: smart as heck dude, who revolutionized the crypto space.

W

Wallet

Software that allows a user to interface with the blockchain.

Wei Dai

Cypherpunk, inventor of b-money.

Whale

A very wealthy investor.

White paper

A summary of the goals, timelines, policies and niche of a company. Includes the value proposition.

X

Y

Yellow paper

A technical, research style paper explaining the computer science, math, and economics behind a proposed blockchain technology application.

Z

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