The 0x protocol is an open standard for building decentralized exchanges on the Ethereum blockchain. Launched in 2018, 0x enables developers to incorporate peer-to-peer digital asset exchange into platforms and apps. 0x’s native token is ZRX, which allows holders participation rights in 0x platform governance.
3D Model Rendering
3D model rendering is the process of creating a virtual image or animation by using varying digital texture, color, and lighting software. The modeling process uses data points to represent objects in three dimensional space, which is then rendered from 3D models into 2D images through a computationally heavy process.
In the US, a 401k is an employer-sponsored, government-supported pension savings plan for employees. 401k plans allow companies to sponsor eligible employees in saving and investing towards retirement by contributing a portion of their income to the plan on a tax-deferred basis. These contributions are often incentivized by employer matching. 401k plans are typically defined by contribution limits, tax advantages, and early withdrawal penalties.
A 51% attack is a hypothetical scenario in which more than 50% of a blockchain network’s nodes fall under the control of a single group. In such a circumstance, the consensus of a network is no longer sufficiently distributed enough to be viable, leaving the blockchain open to manipulation. Attackers with greater than 50% control of a network would be able to stop, reverse, and duplicate new transactions, a catastrophic condition for any blockchain. Notably, a 51% attack becomes more difficult and expensive as a network grows more sizable, distributed, and valuable.
Aave is a decentralized lending and borrowing platform on Ethereum. Aave users can take out loans by providing collateral in the form of crypto assets. Lenders who provide collateral to Aave receive aTokens in return, which automatically pay interest to the holder with funds earned from platform trading fees. Aave has pioneered the technology of ‘flash loans,’ which allow for the uncollateralized lending of funds, so long as the principal is repaid within the same Ethereum transaction block.
The AAVE token is an Ethereum-based ERC-20 asset used as the governance token of the Aave blockchain protocol. AAVE token holders have the ability to propose changes and vote to approve or deny new proposals to the Aave protocol. With significant enough distribution, AAVE tokens are intended to eventually accommodate the autonomous and decentralized governance of the Aave platform.
Account Abstraction Layer (AAL)
The Account Abstraction Layer (AAL) is the technical infrastructure that makes smart contract development possible on the Qtum blockchain. The foundational layer of Qtum follows the UTXO model used on blockchains such as Bitcoin. The AAL on Qtum allows the accounts model used on Ethereum to be “abstracted” or transferred in order to work on top of the UTXO model. Qtum’s AAL is the computing go-between that allows the UTXO and accounts models to interact.
An account-checker is a script or program that takes a list of usernames and passwords — known as a combolist — and tests them against a set of target websites. Account-checker tools substantially increase the speed and efficiency with which an attacker can test a large volume of credentials on a broad range of websites and service providers. These tools are generally used by malicious actors looking to capitalize and commit fraud or identity theft against the account holders from whom they have stolen access.
The account model is a blockchain architecture that features direct information and value transfer. Smart contract platforms such as Ethereum use the account model as opposed to the UTXO model used by the Bitcoin network, which limits the capabilities of smart contracts. One potential downside of the account model architecture is difficulty in scaling transactions-per-second.
On the Crypto.com blockchain network, Acquirer Nodes facilitate the settlement of transactions between merchant and customer. There are two main types of Acquirer Nodes: Customer and Merchant Acquirer Nodes. The two node types communicate to verify merchant verification, perform settlement for users, and provide an escrow service that enables Crypto.com’s wallet and debit card products.
A blockchain address is a unique combination of numbers and letters that identifies accounts on a blockchain network. To transact in exchange, digital assets are sent to and from different addresses. An example of a Bitcoin address is ‘14qViLJfdGaP4EeHnDyJbEGQysnCpwk3gd’.
An admin key holds special access to make changes to a project’s protocol or smart contract. It is typically held by a project’s founders or core team. Proponents of decentralization argue that holding admin keys goes against decenralized governance practices and poses security risks, while many projects have stated intention to eliminate them from practice.
An airdrop is a token distribution method in which assets are directly transmitted to user wallets for free. Airdrop recipients do not pay for tokens received. Typically used as a marketing tactic to create awareness around a project, airdrops can also result after a chain fork, token upgrade, or as part of a fundraising mechanism.
Algorithmic stablecoins do not use fiat or cryptocurrency as collateral. Instead, price stability results from the use of algorithms and smart contracts that manage the supply of tokens in circulation. In this model, the stablecoin’s algorithm automatically expands or contracts the number of tokens in circulation in order to meet a specific price target.
Algorithmic trading is a modern method of market trading that utilizes computer software coded to follow a particularly defined set of mathematical instructions — an algorithm — to place one or many trades simultaneously. The formulas compute against price, timing, quantity and other mathematical models to follow specific strategies. Algorithmic trading models execute thousands of trades to generate profits at a speed, frequency, and consistency impossible for a human trader. Algorithmic trading technology gives markets more liquidity and higher profitability, while also potentially eliminating the human emotions and error that can negatively impact trading decisions.
Allocated Gold and Unallocated Gold
According to the London Good Delivery set of regulatory and compliance standards, gold can be bought in two distinct forms: allocated or unallocated. When a customer purchases allocated gold, they have ownership over the gold and can choose to store it on their own, or in a vault at a London Bullion Market Association (LBMA) facility. Unallocated gold does not feature direct ownership over specific gold bars, but instead holds entitlement to a certain amount of gold.
An altcoin is an “alternative coin,” or any cryptocurrency launched after Bitcoin. It refers to any cryptocurrency that is not BTC. For example, ETH, XRP, and LTC are all altcoins.
Amortizing refers to the spreading of an initial or overhead cost across time or between parties. On the Orchid network, transaction costs are kept low by amortizing the fees across transactions and users. Transaction fees are slowly paid off or broken into increments that are then shared across a large network to reduce individual user costs.
AMP is the digital collateral token of the Flexa network, a payment system that allows users to spend certain cryptocurrencies with select retailers at their brick and mortar locations. AMP is an ERC-20 token used as collateral to guarantee retail payments while blockchain transactions remain unconfirmed. The AMP token is the replacement for Flexacoin (FXC). Gemini Exchange is the first market to support the AMP token.
Andre Cronje is the founder and lead developer of Yearn Finance. He built most of the original Yearn products, then relinquished personal control of the protocol by launching the YFI governance token in 2020. Cronje remains an active figure and builder in the Yearn community and DeFi ecosystem.
Annual Percentage Rate (APR)
An annual percentage rate (APR) on a loan is the amount of interest a borrower must pay each year. The APR is expressed as an annual percentage of the outstanding loan balance, and represents the annual cost of borrowing.
Annual Percentage Yield (APY)
The annual percentage yield (APY) refers to the rate of return earned on a deposit over one year. APY takes into account compounding interest, which is calculated on a periodic basis and added to the balance.
Anti-malware is a category of software designed to prevent, detect, and remove malware. Malware refers to any type of ‘malicious software’ that is specifically designed to cause damage to computers and computer systems. Examples of malware include viruses, trojan horses, and ransomware among others.
Anti-Money Laundering (AML)
Anti-Money Laundering (AML) is a comprehensive set of processes, regulations, and rules that combat money laundering, terrorism funding, and financial crimes like cyber theft and fraud. AML procedures require financial firms to monitor transactions to ensure that funds are not part of criminal activities, circumventing tax laws, or violating any other regulations. AML is mandatory for users to access financial services in the blockchain industry.
Antivirus is a category of software that is designed to prevent, detect, and remove computer viruses. Computer viruses are malicious computer programs that are designed to replicate themselves and cause damage to computers and computer systems.
Application Binary Interface (ABI)
An application binary interface (ABI) is a standardized method for engaging with smart contracts in a blockchain ecosystem. ABIs allow smart contracts to engage with external data, as well as with other contracts internal to the blockchain platform. ABIs are similar to application programming interfaces (APIs) in that they enable separate software systems to communicate and interact with each other.
Application Programming Interface (API)
An application programming interface (API) is a set of protocols and codes that determine how different software platforms communicate and share information. APIs define different types of requests and calls that can be made, the data types that can be used, and how to make these requests. It serves as an intermediary between different software systems. A developer can use an API to incorporate features of an external application into their own software. By allowing different platforms to communicate, APIs enhance interoperability across the web.
For a wallet, exchange, or blockchain-based financial services platform, approved addresses refers to the list of addresses permissioned for transactions on an account. Addresses not included on the list are prohibited from certain transactions. Approved addresses are typically implemented for security and compliance reasons.
To arbitrage is to exploit the price difference of an asset or security between two markets for profit. For example, if one bitcoin is selling for $10 on exchange ABC and $12 on exchange XYZ, then an arbitrageur can generate a profit of $2 by purchasing one bitcoin from ABC and selling it at XYZ. Arbitraging can be automated by utilizing sophisticated computer systems and software to monitor prices and conduct high-volume trades that take advantage of even slight differences in prices. Arbitrage is a necessary financial mechanism that keeps prices consistent between different exchanges and wider markets.
Advanced Research Projects Agency Network (APRANET) is an early version of the internet. ARPANET was created by the U.S. Department of Defense and used two technical foundations of the modern internet: a packet switching network with distributed control and TCP/IP.
Artificial Intelligence (AI)
Artificial intelligence in a trading context refers to the use of computer software, machine learning, and algorithms to set strategy and execute trades. AI trading systems analyze, process, and calculate vast amounts of data in order to execute optimal investment strategies.
An asset is anything of monetary value that can be owned or purchased. Within the context of investing, assets can refer to a variety of financial and physical instruments, from stocks to real estate to gold to dollars. A bitcoin is a particular form of crypto or digital asset.
Asymmetric encryption is a cryptographic system that uses a public key for encryption and a private key for decryption. The public key can be shared with anyone, while the private key is meant to be kept secret to maintain security. Asymmetric encryption is considered more secure than symmetric encryption, which uses one key for both encryption and decryption. The Bitcoin network uses asymmetric encryption.
Asynchronous Byzantine Fault Tolerance (aBFT)
Asynchronous Byzantine Fault Tolerance (aBFT) is the first layer of the Byzantine Fault Tolerance Delegated Proof-of-Stake (BFT-DPoS) consensus mechanism. aBFT uses a two-stage block confirmation mechanism, wherin a two-thirds supermajority of block producers confirm each block twice. The first stage proposes a block (LIB) while the second stage finalizes the proposed LIB to make the block irreversible.
An aToken is an ERC-20 token serving that represents an ownership claim on an underlying asset in the Aave protocol. When a user deposits assets into Aave liquidity pools, the platform automaticlaly generates an aToken in return. For example, providing DAI to Aave would automatically mint aDAI. Holders of aTokens continuously earn interest on their deposits, the value of which is represented in the aToken.
An atomic swap is a peer-to-peer exchange of crypto assets between two parties without the use of a trusted third party, such as a centralized exchange. Atomic swaps utilize smart contracts to exchange crypto assets between different blockchain networks through a process of locking, verifying, and unlocking.
An auction is a type of market that allows buyers and sellers to engage with each other through bidding. Auctions have the benefits of elevated liquidity and price discovery.
Authentication is a procedure that verifies the identity of a user before access is granted. To gain access — to an account, platform, private space — the user provides login credentials like passwords, SMS codes, and fingerprints. Authentication generally comes before authorization, which is a verification of a user’s level of access.
Authority Masternode (AM)
Authority Masternodes (AMs) maintain network consensus and the security of the VeChainThor blockchain. AMs are responsible for block propagation on the platform, and enable VeChainThor’s Proof-of-Authority consensus methodology. In order to host an AM, the user must hold 25 million VeChain tokens (VET) and go through a rigorous authentication process. AMs are the most powerful nodes in VeChain’s nodal hierarchy, and are very limited in number.
Authorization is a procedure that verifies a user’s degree of access. It determines a user’s permission and access to content or resources. Authorization generally comes after successful authentication, or verification of identity.
Automated Clearing House (ACH)
An automated Clearing House (ACH) is an electronic network that processes financial transactions in the U.S. An ACH payment pulls funds directly from a user’s bank account and deposits them into the recipient’s account. A common type of ACH transaction is a direct deposit payment from an employer.
Automated Market Maker (AMM)
An automated market maker (AMM) is a fully automated decentralized exchange where trades are made against a pool of tokens called a liquidity pool. An algorithm regulates the values and prices of the tokens in the liquidity pool. Since AMMs do not rely on an active market of buyers and sellers, trades can occur at any time. The most popular AMMs are Uniswap, Curve, and Balancer.
Average Directional Index
The average directional index (ADX) is a technical indicator used to quantify the strength of a trend in a market. The ADX is calculated based on the moving averages of prices, and is epresented by a number ranging from 1 to 100, with a higher number indicating a stronger trend.
A backdoor refers to any method that can circumnavigate regular authentication and authorization procedures to gain root or high-level access to a system, computer, application, or network. Backdoors are commonly installed through remote file inclusion (RFI), which identifies a weak component in an application or a network. This type of channel allows direct control over an infected device to manipulate data, deploy more malware, or create a zombie network of infected computers for criminal activity.
Backtesting is the simulation of a trading strategy based on historical data.Traders use backtesting to prove that their trading system works based on historical results. In trading and investing, past performance does not guarantee future results, which means a strategy that performs well in backtesting may not perform as well going forward.
Baiting is a form of social engineering that exploits victims with false promises of financial gain. Malicious actors, bots, or online ads ‘bait’ victims with quick payouts and riches in exchange, while the process to obtain it involves providing personal information or downloading software infected with malware.
On the Tezos network, Bakers are nodes with the responsibility of producing new blocks, and are incentivized return to do so with rewards in XTZ. Bakers are Tezos community members who possess a minimum amount of XTZ, and enough hardware and software expertise to run a baking node within the Tezos Proof-of-Stake network. Through a process of token staked delegation, bakers may also produce blocks and earn rewards on behalf of non-Bakers within the Tezos ecosystem.
Akin to the process of staking in many Proof-of-Stake models, Baking is the process of adding new blocks to the Tezos blockchain. The baking process involves adding, signing, and verifying new blocks, and depositing a specified amount of XTZ as collateral to guarantee honest behavior.
Balance Freeze Functionality
On the Ripple network, balance freeze is the function through which Ripple gateways freeze or halt transactions in order to prevent any abuse of the system for illicit activity. Balance freeze functionality is a powerful security feature that can only be applied to currencies issued on the Ripple network, and not on the XRP token itself.
Balancer is a non-custodial portfolio manager and automated market maker (AMM) built on Ethereum that pools up to eight different tokens for users to trade. These Balancer pools are self-balancing weighted portfolios with specific parameters. The Balancer protocol allows all Ethereum accounts to add tokens to existing public pools or create their own private pools.
The BAL token is the governance token for the Balancer protocol. BAL tokens are earned by liquidity providers who supply tokens to Balancer pools. BAL holders can propose and vote on changes to the protocol.
Bancor Network Token (BNT)
The Bancor Network Token (BNT) is the default reserve currency that powers the Bancor protocol. The Bancor network is a decentralized exchange platform that uses pools of tokens called liquidity pools to facilitate peer-to-peer trading. Bancor liquidity pools must hold BNT, which acts as the intermediary token for every trade. For example: in order to trade DAI for ETH on Bancor, the protocol first exchanges DAI for BNT, then exchanges BNT for ETH. As liquidity on the Bancor network increases, so does the value of BNT.
Bandwidth is the amount of data capacity available for transactional throughput on a network. It is normally measured by the number of megabytes or gigabytes per second. If a network’s bandwidth limit is reached, the flow of data will become inadequate to handle the volume, and connections will slow down.
Bank for International Settlements (BIS)
The Bank for International Settlements (BIS) is an international financial institution based in Basel, Switzerland that is owned by numerous global and central banking stakeholders. Its purpose is to guide international monetary policy and administer financial cooperation, alongside serving as a bank for central banks and other international organizations.
Banking as a Service (BaaS)
Banking as a Service (BaaS) is a type of software platform that provides financial services. BaaS provides infrastructure for legacy banking systems to connect and share data with third party financial service providers to create new products. BaaS can be thought of as the ‘middleware’ between legacy financial institutions and fintech startups.
A base currency is the currency against which an exchange rate is quoted. It is the first currency referenced in a currency pair. In the BTC/ USD currency pair, which references the price of BTC in terms of USD, the base currency would be BTC and the quoted currency would be USD.
Basic Attention Token (BAT)
The Basic Attention Token (BAT) was created to provide a more effective, fair, and transparent mechanism for connecting and rewarding internet users, advertisers, and publishers. In this digital advertising system, users are rewarded with BATs for their attention, publishers receive BATs based on user attention, and advertisers achieve higher ROI and better targeting. BAT was created by the same team behind the Brave Browser and is integrated into the Brave Browser.
The Beacon Chain is the first stage of the launch of Ethereum 2.0, an upgrade to the Ethereum network. The Beacon Chain introduces the Proof-of-Stake consensus mechanism to the network and allows ETH holders to stake their ETH and become validators in Ethereum 2.0. The Beacon Chain was designed to be the primary mechanism for coordinating data, users, and assets across the upgraded Ethereum network. It was launched on December 1, 2020.
A bear market occurs when the market experiences price declines, typically when prices fall 20% or more from recent highs. A bear market is the opposite of a bull market.
Behavior-Based Detection Methods
Behavior-based detection methods are used by advanced malware protection programs to identify suspicious activity. The protection programs analyze and review code for potentially harmful behavior, networks attacks, and the installation of rootkits and malware.
A benchmark index refers to a preeminent index security used as measurie against which to track performance of the wider market. Common benchmark indexes include the S&P 500, Nasdaq Composite, and Russell 3000.
A bid-ask spread is the difference between the bid (buy) and ask (sell) price of a particular asset on an exchange. The bid price can be though of as representing demand, while the ask price represents supply. A large bid-ask spread is a sign of poor liquidity in a market.
Bitcoin Improvement Proposal 32 (BIP 32) established the standard for hierarchical-deterministic (HD) wallets, a technical improvement over earlier wallets that on random key pairs. BIP 32 allowed for the creation of a hierarchical tree-like wallet structure with more advanced cryptographic security mechanisms. HD wallets are defined by a master key pair at the top of the hierarchy that “determines” all the private key and key pair access codes below it in the access hierarchy.
BIP 38 Password
A Bitcoin Improvement Proposal 38 (BIP 38) password enables walletholders to encrypt Bitcoin private keys to offer an extra layer of protection. An encrypted private key requires that a user hold both the private key and the password in order to access wallet funds. This makes private key management a critically important step, which is commonly done on paper wallets and other analog devices for security purposes.
Bitcoin Improvement Proposal 39 (BIP 39) allows for the generation of a human-readable 12-24 word recovery phrase for hierarchical-deterministic (HD) wallets. With the recovery phrase, users can regenerate an HD wallet that has become lost or damaged. Because they hold such access, BIP39-enabled recovery phrases should be kept secret and stored securely.
Bitcoin Improvement Proposal 44 (BIP 44) improves on BIP 32’s HD wallet structure by creating a specific hierarchy that allows for multiple accounts to be held on the same wallet. BIP 44 allowed two or more separate accounts on the same wallet to hold the same cryptocurrencies in different amounts. The separate accounts could be used for different purposes and coexist in a way similar to checking, business, and savings accounts at legacy banks.
Bitcoin is a blockchain network with a native cryptocurrency (bitcoin). It is the first blockchain and cryptocurrency, hence its dominant presence within the broader crypto ecosystem. Bitcoin was established in 2009 and pioneered Proof of Work, a technology for reaching consensus on a decentralized network.
Bitcoin (BTC) is a cryptocurrency that can be directly transmitted between users on the Bitcoin network. It is spelled with a lowercase B, as compared to the Bitcoin network, which is denoted with an upper case B.
Bitcoin Cash (BCH)
Bitcoin Cash is a hard fork of the Bitcoin Network that serves as an electronic cash payment system. Its cryptocurrency, BCH, was designed to be a more practical cryptocurrency for everyday transactions than BTC. Bitcoin Cash’s increased block size encourages use as a payment system rather than as a store of value.
A Bitcoiner is holder of bitcoin and an active proponent of the Bitcoin network. Bitcoiners typically believe that bitcoin is the most important and significant digital asset available.
Bitcoin Genesis Block
The Bitcoin genesis block was the first block mined on the Bitcoin blockchain. It was mined on January 3, 2009.
Bitcoin Improvement Proposal (BIP)
A Bitcoin Improvement Proposal (BIP) is a code change introduced to improve the Bitcoin protocol. A BIP can be submitted by anyone to be evaluated and reviewed. Significant BIPs include BIP 32, BIP 39, and BIP 44.
The Bitcoin network is a peer-to-peer, decentralized network that allows users to send units of value to each other without any intermediary or bank. The term “Bitcoin” with a capital B denotes the network, while the term “bitcoin” with a lower case B denotes the network’s native cryptocurrency.
Bitcointalk is an internet message forum that was launched by pseudonymous Bitcoin creator Satoshi Nakamoto in 2009 to host discussions about Bitcoin, blockchain, and cryptocurrency. It became the meetingpoint for the embryonic blockchain industry, and was the site of the first bitcoin purchase: 10,000 BTC in exchange for two pizzas. Bitcointalk is still in operation today, fostering discussion and community between 450,000+ developers, investors, miners, programmers, and enthusiasts.
The BitLicense is a business license for virtual currency activity that crypto enterprises must obtain before operating in the state of New York. BitLicenses are issued by the New York Department of Financial Services (NYDFS), and primarily regulate the commercial receipt, storage, and transfer of digital assets. Only 25 have been granted as of 2020, while recipients include Circle, Coinbase, Robinhood, and Square. Businesses chartered under New York banking law such as Gemini are not required to hold BitLicenses.
On a blockchain, a block is the data record of all transaction information made during a specific timeframe on its network. Blocks are added sequentially to a network’s chain of data, which in turn make up the public ledger known as blockchain. For example: A Bitcoin block contains information about the date, time, and amount of transactions, as well as signature information regarding the origin and destination of the transfer. Blocks must be confirmed by the network via a process of consensus before a chain can continue transacting and creating new blocks.
A blockchain is a public ledger of transactions that is maintained and verified by a decentralized, peer-to-peer network of computers that adhere to a consensus mechanism to confirm data. Each computer in a blockchain network maintains its own copy of the shared record, making it nearly impossible for a single computer to alter any past transactions or for malicious actors to overwhelm the network. Sufficiently decentralized blockchains do not rely on centralized authorities or intermediaries to transact globally, securely, verifiably, and quickly, making technology like cryptocurrency possible.
Blockchain Transmission Protocol (BTP)
The Blockchain Transmission Protocol (BTP) is ICON network’s proprietary interoperability framework. It allows independent blockchain networks to connect and exchange data. BTP facilitates the transfer of information and tokenized assets between ICON and external blockchain systems.
The blockchain trilemma refers to the challenge in achieving a balance between scalability, decentralization, and security in a blockchain network. While scalability refers to the speed and volume of transactions, decentralization refers to the distribution of network nodes, and security refers to the integrity of the system from compromise. The blockchain trilemma states that an equal prioritization of all three factors at once is impossible — so a trade-off must be made with one. It remains an ambition of blockchain technologists and entrepreneurs to solve for the trilemma with greater effectiveness in the design of any network, update, or application.
Block difficulty refers to the complexity of computation required to mine new blocks in a Proof-of-Work (PoW) blockchain environment. Block difficulty is a configurable aspect of a blockchain protocol, and can be used as a mechanism to stabilize block production times in accomodating challenges like transaction speeds and network capacity.
A block explorer is a software interface that enables users to access realtime blockchain information like transactions, blocks, addresses, nodes, and balances on a particuar network. Operating as web browsers for blockchains, the many free-to-use and open source block explorers are essential in providing for global transparency and democratized access to blockchain network.
On most Proof-of-Stake blockchains, block producers are the individuals or group whose hardware is chosen to validate a block’s transactions and initiate the next block. The term originated within blockchain ecosystems that utilize Delegated Proof of Stake (DPoS), where users elect block producers to validate and add blocks. Other names for block producers are ‘delegates’ or ‘witnesses.’
A block reward is the payment awarded to a blockchain network miner upon successfully validating a new block. Typically paid out in the native asset of its network at a fixed, but regressive rate, block rewards are often the only source of new currency creation on a network. They provide a key element of the incentive structure that keeps blockchain networks operating in a decentralized fashion. In Proof-of-Work blockchains like Bitcoin, block validation and block rewards are the remit of miners. In newer models like Ethereum’s upcoming Proof of Stake, the block reward is paid to the collateral staking validator nodes.
Blockchain network protocols are made up of blocks of data that are processed in a perpetually updating chain-like structure — hence the term “blockchain.” Each block stores transactions sent on the network of a specific size or specific time-period as set by the governance of the particular blockchain.
A block trade is a large purchase or sale of securities executed outside of an open marketplace. Because the size of the transactions are quite large, block trading is typically done by institutions and hedge funds. The private nature of block trading makes them similar to over-the-counter (OTC) trading.
BNB is the native cryptocurrency of the Binance ecosystem and a Top 10 cryptocurrency by market capitalization. On the Binance exchange, users can pay for exchange fees like transactions, withdrawals, and listings in BNB and receive a discounted rate. BNB can also be used to participate in token sales on Binance Launchpad, its platform for hosting third-party Initial Exchange Offerings (IEOs). In September 2020, Binance launched the Binance blockchain, upon which BNB can be staked to verify transactions and recieve block rewards.
Bollinger Bands are a technical analysis device created by trader John Bollinger in 1983 that have become one of the most popular tools used by traders today. Bollinger Bands use moving averages and standard deviation to create a range of price movements. On a trading chart, Bollinger Bands are visually represented by a centerline based on a moving average, with a band below and above the centerline based on standard deviation. Bollinger Bands can help indicate if prices have moved outside of the range of historical deviation, and can be used to identify a number of market scenarios in real time.
A botnet is a collection of internet-connected devices that have been infected by malware, enabling malicious actors to control the devices. Infected devices are oftentimes controlled remotely and without the legitimate device owner’s knowledge. Botnets are often composed of a variety of device types and used by cybercriminals to carry out a broad range of orchestrated online attacks such as credentials leaks, data theft, and DDoS attacks.
A brain wallet refers to a crypto private key or seed phrase that has been memorized by its owner. Although memorized accounts are immune to online hacks and physical theft, they are susceptible to being forgotten, or lost upon the holder’s death. Brain wallets are not recommended as a secure crypto wallet option.
The Brave browser is an open-source, privacy-focused web browser developed by the same team that created the Basic Attention Token (BAT). It is the first web browser to implement the BAT system. The Brave browser, in combination with BAT, rewards users for viewing advertisements in a transparent relationship between advertiser, publisher, and user.
BRD is a cryptocurrency wallet and financial services platform that aims to accelerate mainstream adoption of cryptocurrencies by simplifying the processes of purchase, conversion, and storage. On BRD’s mobile app, users can purchase leading cryptocurrencies, along with BRD tokens (BRD), a native asset that receives rewards and discounts that improve according to a user’s BRD holdings.
The Bread Rewards program provides incentives to Bread platform users for engaging in network-beneficial activity like maintaining a wallet balance above a certain threshold, or posting on social media. Bread Rewards was one of the first customer loyalty programs in the cryptocurrency wallet space.
A breakdown is a trading pattern that follows a downward move in an asset’s price, often through an identifiable level of support and further below. Breakdowns are characterized by heavy volume, a rapid decline, and severe magnitude. Breakdowns can be identified by technical indicators like charting patterns, trendlines, and moving averages.
Bridges allow independent blockchains to communicate with each other. On the Polkadot network, bridges are used to attach parachains and the main Relay Chain to other external blockchain networks such as Bitcoin and Ethereum. Polkadot data transmits from its main Relay Chain to parachains, attached to which collator nodes assemble all the transactions. Collator nodes communicate via a bridge to connect to external blockchain networks.
A brokerage account is a financial service created and managed by a licensed brokerage firm on behalf of an investor to interact with assets and markets. Account holders can either make trades themselves, or the firm can make them on behalf of account holders. In all cases, the assets purchased through the brokerage account belong to the account holder.
Brute Force Attack
In a brute force attack, an attacker attempts to gain access to an account by systematically trying all possible combinations of passwords and passphrases that may apply to the account, with the goal of eventually guessing the correct credentials. While brute force attacks can be computationally intensive, time-consuming, and difficult to pull off, they can correctly guess a weak password within a few seconds. A strong password can deter most brute force attacks.
A bubble occurs when an asset rises to extremely inflated prices and then comes crashing down, settling at a level that’s far less than its original price — typically a drop of 75% or more. It is usually possible to identify a bubble only after it has burst and the price recedes. A speculative bubble is characterized by both the rise and fall occurring within a very short period.
The term “bullish” can be used to describe how positive or optimistic a person feels about a particular asset. Someone who is bullish on bitcoin believes the price of bitcoin will increase. A person who is bullish on bitcoin may also be referred to as a bitcoin “bull.”
A bull market refers to an upward trend in prices for an extended period of time. As of 2020, bitcoin has undergone three bull markets. The opposite of a bull market is a bear market.
Business Logic Layer (BLL)
Within a programming context, the business logic layer (BLL) determines how data a software program interacts with can be created, altered, and stored. The business logic layer coordinates data between the program’s user interface (UI) and data access layer (DAL), although in some programs the UI interacts directly with the DAL.
Buy Side/Sell Side
Buy side and sell side refers to the buyers and sellers in a market who are connected by an order management system (OMS). The buy side is typically fund managers whose job is to pick high-alpha securities for their portfolios. The sell side is typically trading floors at investment banks. Rapid and concurrent trades between the buy side and sell side are facilitated by advanced OMS technology protocols.
Byzantine Fault Tolerance (BFT)
Byzantine Fault Tolerance refers to a blockchain network’s ability to reach consensus and continue operating even if some of the nodes in the network fail to respond or respond with incorrect information. A network that is Byzantine Fault Tolerant solves the Byzantine Generals Problem, a situation in which all parties must agree but one or more parties are unreliable. Most actively used consensus mechanisms are Byzantine Fault Tolerant.
Byzantine Fault Tolerance Delegated Proof of Stake (BFT-DPoS)
Byzantine Fault Tolerance Delegated Proof of Stake (BFT-DPoS) is the primary consensus mechanism that runs the EOS and ICON blockchain ecosystems. BFT-DPoS is a highly-performant consensus mechanism that makes use of data passing between parties without an intermediary. It is composed of the two main layers that work together: Asynchronous Byzantine Fault Tolerance (aBFT) to propagate and validate block production, and Delegated Proof of Stake (DPoS) for block producer voting and scheduling.
C++ is a widely used, general-purpose programming language. An extension of the C programming language, C++ is commonly used as a compiled language (as opposed to an interpreted language) and can be used on many different platforms.
A call option contract gives an investor the right, but not the obligation, to purchase an underlying security at a specified price within a defined period of time. When the option expires, the investor can choose to buy the underlying security or let the options contract become void. Call options are traded on exchanges as a derivative, and can be used for speculation, income, or trading strategies like hedging.
A call provision on a bond or other fixed-income investment product is an option allowing the issuer to repurchase and retire the bond. The call may be triggered by a set price, or may be limited by a specific time period. A bond with a call provision pays a higher interest rate than a noncallable bond.
Cardano is a Proof-of-Stake blockchain platform with smart contract functionality. In particular, Cardano is noted for its focus on academic reserach, high transactions-per-second (TPS) throughput, and an energy-efficient consensus mechanism called Ouroboros. ADA, the native token of the Cardano network, is used to facilitate transactions and smart contract execution.
Casascius Coins were physical bitcoin products sold until 2013. Made of metal, Casascius Coins had a tamper-resistant sticker concealing the private key and could be physically exchanged. The coins came preloaded with fixed amounts of 1, 10, 25, 100, and 1000 bitcoins. Unredeemed versions of Casascius Coins are highly valued on the collector’s market and sell for a large premium.
CashFusion is a privacy tool for concealing Bitcoin Cash transactions. It is an improvement on the CashShuffle tool with enhanced privacy characteristics. Improvements include a higher max amount that can be shuffled, the ability to “shuffle” or “fuse” different amounts than other participants, and more UTXO combinations, thus making transactions much more difficult to trace. Tor is also built into the CashFusion protocol to mask user IP addresses.
CashShuffle is a privacy tool for concealing Bitcoin Cash transactions. The process involves many users combining their funds into one large transaction, which is then sent back to the users in a way that hides their transaction paths. CashShuffle is a version of CoinJoin that works on the Bitcoin Cash protocol.
Caspian (CSP) is a cryptocurrency trading platform designed for institutional traders. The platform provides users with an order and execution management system (OEMS), position management system (PMS), risk management system (RMS), and tools for compliance and reporting requirements. CSP is an ERC-20 token that can be staked to earn discounts on the Caspian platform.
Cboe Options Exchange
The Cboe Options Exchange is the world’s largest exchange for futures and options trading. Established in 1973, Cboe offers derivative options related to several products, including equities, indexes, and funds. Exchange-traded funds (ETFs) and exchange-traded Notes (ETNs) are also traded on the Cboe Options Exchange. Along with the Chicago Mercantile Exchange (CME), the Cboe Options Exchange launched Bitcoin futures trading in 2017.
Celo is a mobile-first blockchain payments platform that makes cryptocurrency and financial services accessible to anyone with a smartphone. Celo intends to build decentralized finance instruments that do not require the technical knowledge of many of today’s leading applications. Launched by Silicon Valley startup cLabs, Celo is a fork of the Ethereum blockchain that is specialized to create and distribute a suite of stablecoins backed by fiat currencies, particular localities, and even natural resources. Celo is governed by the holders of its native asset, CELO.
Censorship resistance refers to a blockchain network’s ability to remain tamper-proof. A sufficiently decentralized blockchain network transparently distributes data across a wide range of computers, which makes censorship extremely difficult. The transparent and decentralized nature of blockchains makes them highly resistant to external modifications.
A central bank controls the monetary policy and currency of a nation-state. Central banks function as the bank of government, and have the power to set interest rates and the money supply. The Federal Reserve is the central bank of the United States.
Central Bank Digital Currency (CBDC)
A central bank digital currency (CBDC) is a digital version of a country’s fiat currency. It is centralized and regulated by a country’s monetary authority.
Centralization refers to the consolidation of control, authority, and access by a person or group. In a blockchain context, centralization refers to the level of privilege and distribution of nodes verifying and managing the network. Blockchains relying on powerful ‘super nodes’ or nodes concentrated in a limited geographical area are considered more centralized.
Centralized Exchange (CEX)
A centralized exchange (CEX) is a centrally controlled platform used to trade crypto assets. Centralized exchanges act as intermediaries between buyers and sellers. These platforms are custodians of user data and funds.
Central Processing Unit (CPU)
A Central Processing Unit (CPU), or main processor, is the most powerful component of the electronic circuitry inside a computerized system. The Central Processing Unit (CPU) processes essential logic, arithmetic, and input and output operations specified by the instructions of the operating system of a computer. In the case of EOS and EOSIO, the CPU is part of the eos.system alongside 4 other core components in the system: NET, RAM, Vote, and Stake.
Cerber ransomware is a type of malware that locks and encrypts a victim’s files until a ransom is paid. Cerber ransomware became notorious for its ransomware-as-a-service model, which enables malware creators to sell their services to other cybercriminals in return for a cut of the profit earned via the attacks.
Certificates of Deposit (CDs)
A Certificates of Deposit (CD) is a type of savings account that holds a fixed amount of money for a fixed period of time in exchange for interest paid by the issuing bank. Common time periods for a CD are six months, one year, or five years.
Chainlink is a decentralized oracle network that provides real-world data to smart contracts on the blockchain. LINK is the digital asset token used to pay for services on the network.
A crypto transaction has an input address, output address, and change output, which represents the information transacted. The change output is the difference between the input or output, or the “change” leftover. The change address is where the change output is sent.
Chicago Mercantile Exchange (CME)
The Chicago Mercantile Exchange (CME) is a marketplace for derivative financial contracts. The Chicago-based exchange was founded in 1898 and is now one of the biggest global derivatives markets in the world. In 2017, the CME launched the trade of bitcoin futures contracts.
A childchain is a scalable blockchain on the OMG Network which is anchored to Ethereum. OMG’s scaling solution optimizes the speed of the Ethereum network by moving transactions off of the Ethereum main chain and onto childchains. The childchain does not hold users’ funds and it relies on the Ethereum blockchain and a decentralized network of watchers for its security. Childchains are different from sidechains in that sidechains have their own security mechanisms and custody users’ funds.
Ciphertext refers to encrypted text that is unreadable without authorized access. Plaintext is transformed into ciphertext via an encryption algorithm. Only those who are authorized to access the data should be able to decrypt the ciphertext back into readable plaintext.
The circulating supply is the total number of tokens of a specific cryptocurrency that are available in the market. The circulating supply includes all tokens locked in decentralized applications and held on crypto exchanges or in user wallets. The circulation supply is different from the total supply, which is the total amount of tokens that will ever be created.
As it relates to the banking and finance industry, clearing is the process of settling a financial trade or purchase of an asset by correctly and efficiently transferring funds to the seller, and in return, by transferring the corresponding asset to the buyer. Typically, a specialized organization acts as an intermediary in the clearing process to both buyer and seller to ensure procedure and finalization. The interrelated processes of clearing and settlement are what make up the post-trade process.
Cleos Command Line Interface (CLI)
The Cleos Command Line Interface (CLI) utilizes lines of text to process commands on the EOSIO blockchain platform. Cleos simplifies the development process for software engineers by giving them access to specific developer tools to interact with EOS blockchains. The CLI is used for reading data from the blockchain, sending new transactions, and to test and deploy smart contracts. Cleos interacts with Keosd, Nodeos and other components of the EOSIO ecosystem.
Closed Loop Payment Network
Closed loop payment networks are those in which a consumer loads money into an account that can only be used with specific merchants, whereas open loop payment networks allow consumers to use money stored in a centralized wallet for multiple merchants. Closed loop networks cut out several middlemen in a payments transaction, reducing transactions fees and speeding up settlement. Flexa utilizes a closed loop payment network architecture.
CoinJoin was originally developed as a privacy tool for concealing a user’s Bitcoin transactions. “CoinJoining” involves many users combining their funds into one large transaction, which is then sent back to them in a way that hides their transaction paths. CoinJoin is a non-custodial solution, which means users never lose control of their funds during the CoinJoining process. Different versions and variations of CoinJoin can now be found on multiple protocols outside of Bitcoin.
A coin mixer is a software or service that mixes the cryptocurrencies of many different users to preserve privacy and anonymity despite the public ledger of blockchain networks. Coin mixing increases the challenge of tracking transactions, and has been found evident in dark web activities and money laundering in addition to its legal uses.
Coin Swap (or Token Swap)
A coin swap or token swap is the process of a platform replacing an existing token with a significantly updated token. The new token is designed to give the protocol significant increased utility needed to further expand the project and distributed to wallet holders, while the pre-existing token is voided.
Cold storage refers to the offline storage of a cryptocurrency wallet. “Offline” means that the wallet is disconnected from the internet, preventing hackers from accessing it. Cold storage is considered to be the most secure way to hold crypto assets.
A cold wallet is a cryptocurrency wallet that is not connected to the internet. Cold wallets most often come in the form of hardware wallets, which are physical devices that store private keys. Cold wallets stand in contrast to hot wallets, which are connected to the internet.
Collateral refers to an asset that is offered as security for repayment of a loan, to be forfeited in the event of a default (a situation in which an individual is unable to pay back a loan). When borrowing money on a DeFi lending platform, collateral in the form of a token must be locked. The collateral is returned upon repayment of the loan. If the loan is not repaid, the collateral remains locked on the platform.
The collateral factor is the amount of collateral required for a given amount of debt. It represents the maximum amount a user can borrow based on collateral provided. The collateral factor, sometimes referred to as the collateral ratio, is commonly used on DeFi lending platforms such as Compound, MakerDAO, and Aave, which rely on over-collateralized loans. When the value of a user’s collateral falls below the collateral factor, the user risks their collateral being liquidated or sold off to repay a portion of the loan.
Collateralization is the use of one asset to back the value of another asset. With crypto, the process requires the storing and locking of the collateralized assets within a blockchain protocol.
Collateralized Debt Position (CDP)
On the Maker platform, a collateralized debt position (CDP) is created when a borrower provides cryptocurrency as collateral in order to mint or borrow the DAI stablecoin. The value of the collateral in a CDP must always remain above a certain minimum requirement or else risk liquidation. In the event of liquidation, the collateral in the CDP is sold in order to repay a portion of the DAI debt. The collateral in the CDP can be returned when the DAI is repaid by the borrower.
Collateralized Mortgage Obligations (CMOs)
Collateralized mortgage obligations (CMOs) are complex debt instruments that consist of many mortgages bundled together and are sold as a single investment. CMOs are organized according to their risk profiles. They are similar to collateralized debt obligations (CDOs) and are believed to be a contributing factor in the 2007-2009 global financial crisis.
Collators are full nodes on the Polkadot Network that are present both on parachains and the main Relay Chain. Their main purpose is to maintain parachains (which are sovereign blockchains or specialized shards) by collecting parachain transactions and producing state transition proofs (essentially machine-driven progress reports) for validators on the Relay Chain. Collators can access all state transition information necessary for authoring new blocks and executing transactions — much like how miners provide value in a Proof-of-Work system. Collators are also used to send and receive messages from other parachains, facilitating communication through Cross-Chain Message Passing (XCMP).
A combolist is a text file which lists out usernames and passwords in a machine-readable format. The file is used as an input for an account-checker tool that can automate authentication requests to a website, online service provider, or API. Combolists are often created following an online data breach and packaged and sold by hackers to other malicious actors.
Command Line Interface (CLI)
A Command Line Interface (CLI) is a system that utilizes lines of text to process commands for a specialized computer program. The interface used to execute command line instructions is called a command-line-processor or command-line-interpreter. Most applications utilize menu-driven or graphical user interfaces but some still use a command line — especially for software development and other technical processes.
Commodities are raw materials that are fungible or interchangeable for like-goods. Commodities range from agricultural goods like wheat and sugar to hard metals like gold, copper, and silicon. Gold is considered a highly fungible commodity because it can be easily exchanged regardless of the source or producer.
Commodity-backed stablecoins are pegged to the value of underlying commodity assets like gold, silver, or real estate. Holders of these stablecoins have a claim to their underlying assets. The most popular commodity-backed stablecoins are backed by gold. For example, each PAX Gold (PAXG) token is pegged on a 1:1 ratio to one troy ounce (t oz) of a 400-ounce London Good Delivery gold bar.
Within the Crypto.com blockchain ecosystem, Community Nodes responsible for sending, verifying, and receiving transactions, as well as reading data on the protocol. Community Nodes can accessed for use by any member of the Crypto.com community.
Community Representatives (C-Reps)
On the ICON Network, Community Representatives (C-Reps) represent one of the two main types of Peer nodes (the other being P-Reps) that are responsible for maintaining network security and consensus. C-Reps represent the community interests of enterprise and governmental constituents like hospitals, government entities, financial markets, and corporate entities.
Compliance is the process of ensuring financial enterprises meet certain regulatory guidelines introduced by government bodies, such as the Securities and Exchange Commission (SEC) in the U.S. These guidelines seek to protect investors, ensure consumer confidence, facilitate the transparency, efficiency, and fairness of markets while reduce financial crime and system risk.
Composability is a design feature that accomodates for infrastructural elements of a system to be easily integrated with and utilized by other systems and third parties. Composable systems are often compared to “Lego blocks” because they are built of various parts that can be fit together to create new platforms.
Compound is a decentralized lending and borrowing platform for digital assets on Ethereum. Borrowers on Compound are required to provide a minimum amount of collateral to access a loan, while interest rates are determined by crowdsourced token supply. Tokens locked in the Compound protocol automatically earn interest as they are lent out to borrowers.
COMP is the governance token of the Compound protocol, a decentralized, blockchain-based protocol that allows you to lend and borrow crypto. A predetermined amount of COMP is distributed to all lenders and borrowers on the Compound protocol every day. Anyone who owns at least 1% of the total COMP supply can submit and vote on proposals to change the protocol.
Computational backlog (or debt) is defined as a set of calculations that must be completed to bring a backlog on the EOSIO blockchain up to date. Computational backlog occurs when a computer system or a blockchain network accumulates too much computational debt. This is a highly undesirable situation for a blockchain, because it can result in deteriorating system performance, including significant transaction time delays. Computational backlog must be managed efficiently to maintain the long-term health of the network. To help prevent computational backlog from happening, EOSIO block producers publish the network’s available capacity for computation, state, and bandwidth.
Concealment is a category of malware that attacks computer systems by evading detection. Common types of concealment malware include Trojans, backdoors, and rootkits.
A consensus mechanism is an algorithm that participants in a blockchain network use to reach an agreement on the state of the blockchain ledger, including the order of transactions. Popular consensus algorithms include Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS).
A consortium blockchain is a private network managed by multiple entities, wherein each retains special privileges. Controlling entities typically participate in the consensus process as a transaction validator and have permissions to view certain types of data. Consortium blockchains are a less decentralized digital ledger technology that maintains some benefits of distributed systems for use cases like enterprise and government.
Constant Product Formula
A constant product formula is an algorithm used to determine the price of tokens on an automated market maker (AMM) platform. The formula maintains that tokens in a liquidity pool must remain at a fixed relative value. The most well-known formula is x * y = k, pioneered by the Uniswap protocol, which maintains that a pair of tokens in a liquidity pool must remain at equal total values. By fixing the relative value of the tokens, the formula is able to automatically determine pricing.
Continuous Order Book
A continuous order book is a listing of parties interested in buying or selling an asset on a market. The list specifies the quantities and prices each buyer or seller is willing to accept for an exchange. A matching engine is concurrently used to pair the buyers and sellers, while the order book is updated in real time.
Contract separation is a key design logic that underpins the Gemini dollar (GUSD) smart contract. Instead of a single unifying smart contract, Gemini dollar contracts are separated into multiple layers, each with a specific function. Contact separation increases the security and robustness of smart contracts within GUSD’s protocol.
A coordinator is a centralized master node on the IOTA DAG network that curates and approves all transactions. Because IOTA relies on centralized master nodes, the network is not considered to be fully decentralized. IOTA’s roadmap has a plan called “Coordicide”, which attempts to minimize the role of the coordinator while still providing a secure network.
A corporate bond is a debt security a company issues in order to raise capital that can be traded on the secondary market. Purchasers of corporate bonds effectively lend money to the issuing company in return for a series of interest payments. Rating agencies like Moody’s, Standard & Poor’s, and Fitch evaluate the creditworthiness of corporate bonds.
Cosmos is a platform designed to connect independent blockchain networks. The platform facilitates data transfer between different blockchains to facilitate what is referred to as the ‘internet of blockchains’. ATOM is the native token of the Cosmos network, and it is used for transaction payments, governance voting, and staking to secure the network.
The Cosmos Hub is the primary blockchain protocol used for connecting with other blockchains as part of the Cosmos Network’s endeavor to facilitate an ‘internet of blockchains’. The Cosmos Hub is a Proof-of-Stake blockchain built by the Tendermint team. Its ATOM token is used to both secure the network through staking and vote on governance decisions.
The Cosmos SDK is a framework that allows developers to build Proof-of-Stake and Proof-of-Authority blockchains. The framework is designed to construct application-specific blockchains rather than more generalized virtual machine-based blockchains. The Cosmos SDK is a scalable, open-source infrastructure, and is used to build blockchain platforms such as the Cosmos Hub.
The cost basis is the reported starting value of a particular asset such as a cryptocurrency that you own. The cost basis can be the price of the asset on either the date of purchase, or the date the asset was received. When the asset is sold, the cost basis is subtracted from the sale price to determine the monetary gain or loss.
Council Nodes are the most powerful and important nodes within the Crypto.com blockchain system. They are responsible for maintaining network consensus and governance of the platform. Council nodes are used for settlement execution, ordering transactions and CRO rewards tracking, along with verifying, receiving, and sending all network transactions. Council Nodes also maintain a whitelist log for Council Node, Acquirer Node, and Community Node Identities.
Counterparty risks refers to the possibility that a party involved in a transaction will fail to meet their obligations. Various measures can be put in place to mitigate counterparty risk. One such measure is a smart contract, which is only automatically executed once certain conditions have been met.
In a corporate bond, a coupon (or coupon payment) is the dollar amount of interest paid to an investor. It is calculated by multiplying the interest rate of the bond by its face value.
A credit rating is an analysis of the credit risks associated with a financial entity. A credit rating may be assigned to any entity that seeks to borrow money — a corporation, individual, state authority, or sovereign government. Credit ratings assess the ability of a borrower to repay a loan — either in general, or for a particular debt or financial obligation.
Credit risk refers to the loss potential of a borrower failing to repay a loan. In a fixed-income investment agreement, interest payments are meant as an incentive for an investor to assume credit risk. Higher interest rates tend to compensate for greater credit risk.
CRO is the foundational utility token that drives Crypto.com’s ecosystem of payment, trading, and financial services. The CRO token is utilized for on-chain transaction settlement, and to ensure the consensus and security of the platform. CRO is also designed to be used as an incentivization mechanism by providing rewards for users who engage with various services within the Crypto.com ecosystem.
Cross-Chain and Cross-Chain Message Passing (XCMP)
Cross-chain describes the transfer of data, tokenized assets, or other types of information from one independent blockchain network to another. On the Polkadot network, XCMP is a specialized mechanism used to send information between different blockchains linked together on Polkadot’s interoperable network. The XCMP system relies on Polkadot’s collator nodes to route messages between blockchains.
The CRV token is the ERC-20 token that governs the Curve protocol. CRV token holders have the ability to propose and vote on changes to the platform. The CRV token can be earned by providing liquidity to designated Curve liquidity pools.
A crypto-backed loan lives on the blockchain and requires borrowers provide cryptocurrency as collateral. When borrowers pay back into the smart contract, they receive their collateral.
Crypto-backed stablecoins are one of four main types of stablecoins. They are pegged to the value of an underlying cryptocurrency asset (rather than a fiat currency, for example). With cryptocurrency as their underlying collateral, crypto-backed stablecoins are issued on-chain. To obtain a crypto-backed stablecoin, a user locks their cryptocurrency in a smart contract to receive tokens of equal representative value to their underlying collateral. Paying the stablecoins back into the same smart contract allows a user to withdraw their original collateral. DAI is the most prominent stablecoin in this category.
Crypto-collateralized loans are a type of loan where the issuer takes an cryptocurrency deposit as collateral to issue a loan in another cryptocurrency or fiat currency. The borrower must typically deposit a higher amount of initial cryptocurrency to provide a buffer against the market volatility common to digital assets. These types of loans are designed so that a borrower can access fiat liquidity while still maintaining ownership of their digital assets in order to avoid taxable events (such as a sale) or missing out on market appreciation. Since these loans are collateralized (often overly so), they are commonly processed extremely quickly (sometimes in minutes) without the need for traditional credit checks.
Crypto.com is a cryptocurrency payments platform that promotes the widespread adoption of cryptocurrency. The site initially ran on a dual-token structure that used two different native tokens, Monaco Coin (MCO) and Crypto.com Chain Token (CRO). However, in late 2020 the platform completed a token swap which consolidated the network under the CRO token, which is now used as the platform’s primary payment token for cross-asset settlements, block transaction fees and validation rewards, and as a staking mechanism to unlock tiered user benefits.
Cryptocurrency is a digital asset that circulates on the internet as a medium of exchange. It employs blockchain technology — a distributed ledger of transactions that is publicly available — and is secured by advanced cryptography. This revolutionary asset architecture allows for certainty that cryptocurrency coins and tokens cannot be double-spent even in the absence of a centralized intermediary. The first cryptocurrency to acheive mainstream success was Bitcoin which paved the way for the proliferation of many other cryptocurrencies.
A cryptocurrency exchange is a type of digital currency exchange where digital assets can be bought, sold, and traded for fiat currency or other digital assets. They are similar to mainstream exchanges where traditional stocks are bought and sold in the type of transactions and orders that users can execute. Cryptocurrency exchanges have evolved significantly from the earliest iterations (which were often unregulated) to provide more security and accessibility and ensure legal compliance in accordance with the jurisdictions in which they operate. As the cryptocurrency space continues to grow, more exchanges have emerged which provide competitive trading fees, exchange rates, and user-friendly features as they vie for more users and trading volume.
Cryptocurrency Mixers and Tumblers
Cryptocurrency mixers and tumblers provide a custodial mixing service where a user deposits cryptocurrency to be mixed for privacy reasons. Although coin mixing doesn’t guarantee complete privacy, it makes tracing transactions more difficult. These services are sometimes used to launder “dirty coins,” which are garnered through criminal activity. This is done by mixing dirty coins with coins from different wallets, then transfering the “cleaned” coins to another wallet. While cryptocurrency mixers are also used for non-criminal purposes, some countries have cracked down on their use altogether. Service providers typically charge a 1-3% fee for this type of service. These services seem to be waning in popularity as newer, non-custodial options have appeared.
A trading pair refers to the matching of a buy order and a sell order for any type of asset. When a trading pair is available for cryptocurrencies, it means that you can view the value of one cryptocurrency asset relative to another cryptocurrency asset. This is most typically available with bitcoin (BTC) and allows you to see how much a given asset is worth in BTC instead of, say, a fiat currency. Cryptocurrency pairs help establish value between cryptocurrencies without referring back to fiat currency.
Cryptocurrency wallets come in a variety of forms, their most basic function is to store a user’s private and public keys and interact with various blockchains enabling users to send and receive digital currency and monitor their cryptocurrency balances. Wallets have a public address that can be given out for people to send you digital assets, and a private key to confirm the transfer of digital assets to others. Wallets can be digital (software) or physical (hardware), hot (connected to the internet) or cold (disconnected from the internet), custodial (a trusted third party has control of a user’s private keys) or non-custodial (only the user controls their private keys).
CryptoDefense in an advanced subset of CryptoLocker Ransomware that appeared around 2014. It used public-key cryptography, and targeted computers running the Windows operating system. The infection was spread through spam emails with infected PDF documents. Victims were often given 72 hours to pay ransom, collected largely in Bitcoin, in order to regain access to their infected files which would otherwise be permanently deleted.
Cryptographic proofs are commonly built into blockchain networks that seek to hide sensitive information. Cryptographic proofs are used to prove and verify certain data without revealing any other details about the data itself. They are designed to conceal details such as ownership and other sensitive data from other parties that participate in the network. zk-SNARKS are one of the most effective and well-known types of cryptographic proofs.
Cryptojacking refers to a type of attack where the victim’s computer, or other hardware, is turned into a cryptocurrency mining device without their knowledge. Victims’ devices and electricity are then used to generate cryptocurrency mining rewards on behalf of the attacker. Cryptojacking can be carried out remotely through malware or by someone with direct physical access to the device.
Cryptokitties is a blockchain game created by Axiom Zen in 2017. The game allows players to purchase, sell, and breed digital collectible cats that are ERC721 tokens, also called non-fungible tokens (NFTs).
CryptoLocker Ransomware is a type of ransomware that first appeared around 2013. It infiltrated computers through spam emails, which included an infected ZIP file as attachment, in its first wave of attacks. Attackers used encryption algorithms to encrypt infected files and systems, which then spread to other devices through network drives. A second version of CryptoLocker was spread through the peer-to-peer botnet Gameover ZeuS, which used a botnet to send spam or fake emails that would lure victims into executing exploit kits.
Cryptocurrency mining is the process of solving equations in a Proof-of-Work consensus mechanism to verify transactions and add new blocks to the blockchain. Computers that support a blockchain network are called nodes, and the process by which they solve complex equations is called mining. Miners are those who operate these computers. For their efforts, they are compensated with a mining reward, typically in the blockchain’s native cryptocurrency.
Crypto ransomware uses encryption to maliciously block access to a user’s data. Victims of a crypto ransomware attack are told to pay a ransom in return for releasing their locked data. In recent years, attackers have demanded ransoms to be paid in cryptocurrencies such as bitcoin.
A crypto token is a blockchain-based unit of value that organizations or projects can customize and develop for use within existing blockchain ecosystems. Crypto tokens can be programmable, transparent, permissionless, and trustless. They can also serve many functions on the platforms for which they are built, including being used as collateral in decentralized financial (DeFi) applications, accessing platform-specific services, voting on DeFi protocols and even taking part in games.
CryptoWall is an advanced subset of CryptoLocker Ransomware that first appeared around 2014. It used a sophisticated encryption algorithm and spread through email attachments, exploit kits, and drive-by downloads. In order for a user to regain access to their infected files, ransom was demanded in Bitcoin and Litecoin.
cTokens are the lending tokens native to the Compound DeFi platform. When users deposit a cryptocurrency using the Compound protocol, they receive cTokens which represent the initial deposit plus accrued interest. For example, lending DAI to Compound gives the lender cDAI, which automatically earns interest for the cDAI holder. At any time, cDAI can be returned to Compound in exchange for the original DAI plus the accumulated interest.
A currency crisis is a type of financial crisis characterized by a nation’s fiat currency losing its value. A currency crisis arises when investors become leery of holding a country’s assets. For example, when investors lost confidence in the Icelandic financial sector, the country faced a currency crisis when the value of Icelandic currency fell by 60% between the end of 2007 and the end of 2008.
Curve is a DeFi cryptocurrency exchange optimized for low slippage and low fee swaps between assets pegged to the same value. Curve is an automated market maker (AMM) that relies on liquidity pools and rewarding those who fund the pools, and deals only in stablecoins. CRV is the governance token of Curve, and is also used to pay liquidity providers.
A custodial wallet is a type of cryptocurrency wallet where a third party holds a user’s private keys and cryptocurrency funds. With a custodial wallet, a user must trust a third party to secure their funds and return them upon request. The most common custodial wallets are web-based exchange wallets.
A custodian is responsible for securely storing assets, such as cryptocurrency, for another institution or individual. Typically, custodial services are targeted at institutional investors who hold large amounts of cryptocurrency. Custodians are often exchanges that host cryptocurrency wallets for their users.
Custody refers to the legal ability for a financial institution to hold and protect financial assets for its customers with the aim of preventing asset theft or loss. Custodians may hold assets in both electronic and physical form. Because they are responsible for safeguarding assets for many customers (potentially worth billions of dollars), custodial firms tend to be extremely large and reputable institutions. With cryptocurrency and blockchain custody solutions, custodianship may also include the management and safekeeping of a customer’s private keys. Cryptocurrency exchanges often custody their customers’ private keys and cryptocurrency holdings.
Customer Due Diligence (CDD)
Customer Due Diligence (CDD) is the process of verifying the identity of potential customers. Typically this process gathers facts about potential customers enabling an organization to assess the extent to which the customer may expose the organization to a range of risks, including money laundering and terrorist financing activities. This process usually entails obtaining a customer’s name, residential address, and official government documentation that includes their photograph and date of birth.
Customer Identification Program (CIP)
Established by the U.S. Patriot Act of 2001 and implemented in 2003, the Customer Identification Program (CIP) prescribes the minimum standards with which financial institutions must confirm the identity of a new customer in connection with opening an account. Each financial institution’s CIP is proportional to the its size and type of business, types of accounts offered, methods of opening accounts, and other factors. The objective of this program is to minimize the degree to which the U.S. financial system is used for money laundering and terrorist financing activities.
A cyber attack is a malicious online data intrusion carried out by criminals against a computer system, network, or related software or hardware device. Cyber attacks are used to disable a target network or computer system, steal or destroy important data, to compromise computers to launch even more complex and damaging attacks.
Cybersecurity — also referred to as computer security or information technology (IT) security — is the practice of protecting computer networks and systems from damage and theft of hardware, software, electronic data, and curtailing disruption of the services they provide. The importance of robust cybersecurity continues to increase as the world becomes more technologically reliant on computers, mobile devices, Wi-Fi, wireless networks, smart devices, the Internet of Things (IoT), and related technologies due to their susceptibility to security breaches and hacks.
A daemon is a computer program that runs as a background process on a computing device rather than being controlled by an interactive user. Daemons are usually initiated upon booting up the computer, rather than being activated manually. They typically control functions like responding to network requests and detecting hardware activity.
DAI is an ERC-20 stablecoin token released by the Ethereum-based MakerDAO protocol that is used to facilitate collateral-backed loans without an intermediary. DAI is pegged to the US dollar in a 1:1 ratio so that each DAI should always be worth $1 USD. DAI is a decentralized crypto-backed stablecoin, and thus maintains its USD peg by using collateral in the form of cryptocurrencies like ETH.
On the Loom Network, a dAppChain is a dApp-specific transaction sidechain built on top of the base Ethereum blockchain to maximize efficiency. A dAppChain can handle complex processing tasks and even host entire dApps, all while minimally interacting with the base layer blockchain to which it is anchored. Applications developed using the Loom Network feature a unique dAppChain to carry out distinct consensus model, protocols, and optimizations.
RenVM is an inter-blockchain liquidity network made up of thousands of independently operated nodes called Darknodes. Anyone can run a Darknode, but each node must run the RenVM software via a Virtual Private Server and deposit 100,000 REN tokens into the Darknode Registry Contract. This mechanism incentivizes the node operators to refrain from malicious behavior at the risk of forfeiting their deposit. Darknodes collectively act as a trustless, decentralized custodian of the digital assets that users lock up on the RenVM platform, and collect fees every time RenVM converts a digital asset into an ERC-20 token.
The dark web is a segment of the internet intentionally hidden from conventional search engines and only accessible by means of special software. The most common web browsers used to access the dark web are Tor and I2P, which use masked IP addresses in order to hide the identity of dark web users and site owners. The dark web is typically associated with cybercrime and illicit activity. The dark web constitutes a small sliver of the larger deep web, which is also hidden from conventional search engines, but is not generally associated with illicit activity.
A data packet is a unit of data that can be transferred over a network. They are usually measured in megabytes (MB) or gigabytes (GB). A live internet connection contains a constant back-and-forth exchange of data packets.
Data scraping, also known as web scraping, refers to methods with which computer programs extract data from websites for use in local databases or other application. Data scraping is most commonly used to gather content, prices, or contact information from online sources. While there are valid legal use cases for data scraping tools, the same software can also be used to download and reappropriate data for unauthorized purposes, such as identifying pseudo-anonymous web service users or plagiarizing branded content.
Data Verification Mechanism (DVM)
The Data Verification Mechanism (DVM) is the oracle process used to resolve disputes on the UMA protocol. When there is a price dispute between two parties a synthetic token derivative contract, the DVM requests UMA token holders vote on the correct price. The DVM then relays the correct price to the requestor and rewards UMA token holders for their vote.
In traditional markets, day traders execute a trading strategy that involves only holding intraday positions and do not hold open positions overnight. Day traders attempt to take advantage of short-term price fluctuations between highly liquid assets. Day trading is generally regarded as a riskier investment than long-term strategies.
Dead coins are cryptocurrencies that have been abandoned by defunct projects. Several criteria are used to designate dead coins: inactive webpages, lack of development updates, lack of active nodes, and less than $1,000 USD trading volume over three months. Over 1,000 dead coins have been documented as of 2020.
A death cross is a bearish technical trading signal in which the 50-day moving average crosses below the 200-day moving average, typically triggering a major sell-off. It is the opposite of a Golden Cross trading signal, and has been evident prior to many of the largest stock market crashes in history.
A debt instrument is a tool that an individual, government, or business entity can use to obtain capital. Credit cards, credit lines, loans, and bonds can all be types of debt instruments. The term debt instrument is used primarily for institutions that are trying to raise capital, usually in the form of a revolving line of credit that is not typically associated with a primary or secondary market. More complex debt instruments involve an advanced contract structure and the involvement of multiple lenders or investors, usually via an organized marketplace.
Decentraland is a virtual world that is integrated with Ethereum. On the Decentraland platform, users can explore a multifaceted, user-generated landscape that incorporates real estate, gaming, and social media elements. MANA, an ERC-20 token, is the digital asset token used to pay for goods and services in Decentraland, while LAND is a a non-fungible ERC-721 token that represents the ownership of virtual land.
Decentralized Applications (dApps)
Decentralized applications — dApps — use blockchain technology to address use cases ranging from investment to lending to gaming and governance. Although dApps may appear similar to web applications in terms of UX, dApp back-end processes eschew centralized servers to transact in a distributed and peer-to-peer fashion. Rather than using the central HTTP protocol to communicate, dApps rely on wallet software to interact with automated smart contracts on networks like Ethereum.
Decentralized Autonomous Organization (DAO)
A decentralized autonomous organization (DAO) is a blockchain-based organization that is democratically managed by members through self-enforcing open source code and typically formalized by smart contracts. DAOs lack centralized management structures. All decisions are voted upon by network stakeholders. DAOs often utilize a native utility token to incentivize network participation, and allocate proportional voting power to stakeholders based on the size of their stake. As DAOs are built on top blockchains — often Ethereum — their transactions are executed transparently on the underlying blockchain.
Decentralized Exchange (DEX)
A decentralized exchange (DEX) is a financial services platform or apparatus for buying, trading, and selling digital assets. on a DEX, users transact directly and peer-to-peer on the blockchain without a centralized intermediary. DEXs do not serve as custodians of users’ funds, and are often democratically managed with decentralized governance organization. Without a central authority charging fees for services, DEXs tend to be cheaper than their centralized counterparts.
Decentralized Finance (DeFi)
Decentralized finance (DeFi) is a major growth sector in blockchain that offers peer-to-peer financial services and technologies built on Ethereum. DeFi exchanges, loans, investments, and tokens are significantly more transparent, permissionless, trustless, and interoperable than traditional financial services, and trend towards decentralized governance organizational methods that foster equitable stakeholder ownership. Platform composabiltiy in DeFi has resulted in unlocking value through interoperability with innovations like yield farming and liquidity tokens.
For blockchain networks and dApps, decentralized governance refers to the processes through which the disintermediated, equitable management of a platform is executed. It involves different methodologies for voting on platform tech, strategy, updates, and rules. Blockchain governance is typically conducted using two distinct systems: on-chain governance and off-chain governance. On-chain governance relies upon blockchain-based systems, typically using automatic cryptographic algorithms through the network’s computational architecture and underlying consensus mechanism. Off-chain governance refers to decision making that is not codified on the blockchain, often on online forums or face-to-face.
Decentralized Identifier (DID)
A decentralized identifier (DID) is a form of digital identification that enables the holder to prove identity without the need for a centralized registry, identity provider, or certificate authority. DIDs are an emergent development, and therefore have yet to be thoroughly vetted. The establishment of a DID standard is a crucial step towards the broad application of true Self-Sovereign Identities (SSI).
A decentralized system is a conglomerate of connected, but separate entities that communicate with one another without a central authority or server. They stand in contrast to centralized systems, which feature a central point of governance. Blockchains are an example of a decentralized system: the data ledger of a blockchain is distributed amongst all the decentralized network participants (nodes), which must achieve consensus on the content of the data for the network to function. Without a single point of authority, decentralized systems like blockchains also lack a single point of failure, which means that a single damaged node cannot incapacitate the blockchain as a whole.
Decentralized Storage Network (DSN)
A Decentralized Storage Network (DSN) is a network that provides peer-to-peer access to users with the capacity to rent out their available hardware storage space. With the help of end-to-end encryption techniques, clients privately transmit files peer-to-peer via DSNs that provide cryptographic proofs for security. The Filecoin protocol is an example of a blockchain-based decentralized storage network, one that reduces the risk of data failures that can occur with a single centralized point of failure. On DSN platforms, smart contracts are used to formalize terms between providers and users.
Delegated Proof of Contribution (DPoC)
Delegated Proof of Contribution (DPoC) is a unique economic governance protocol implemented on the ICON Network that leverages the ICON Incentives Scoring System (IISS). DPoC is a variant of Delegated Proof of Stake (PoS) in that stakers delegate votes towards block validation privileges, but DPoC sees ICX holders delegating tokens towards individuals who have exercised positive participation on the network rather than for particular nodes. The elected entity then validates blocks on a delegate’s behalf, and earns token rewards accordingly.
Delegated Proof of Stake (DPoS)
Much like the more widespread Proof-of-Stake (PoS) system, Delegated Proof of Stake (or DPoS) incentivizes users to confirm network data and ensure system security by staking collateral. However, the distinctive characteristic of DPos is its voting and delegation structure. In contrast to PoS, where nodes are usually awarded the ability to process new blocks based solely on the total amount each node stakes, the DPoS system allows users to delegate their own stake to a node of their choosing — known as a delegate — and vote for the nodes to earn block validation access. Elected validators receive block rewards after verifying the transactions in a block, and those rewards are then shared with users who delegated them as validators.
Delegation refers to the contribution of some amount of a cryptocurrency or token to another user for participation in a network staking mechanism on Delegated Proof-of-Stake (DPoS) blockchain protocols. It is useful for users who want to earn staking rewards and participate in a network, but do not have a large enough stake to meet the minimum requirements on their own. DPoS intend to achieve a higher degree of equitability and democratization through delegation mechanisms
Denial-of-Service (DoS) Attack
A Denial-of-Service (DoS) attack is a type of digital attack on a network that attempts to incapacitate a system by overwhelming it with repeated requests. It is a malicious effort to disrupt normal traffic to a website or other internet property to temporariy crash the underlying network and make it non-functional.
Depth Limited Search (DLS) Algorithm
The Depth Limit Search (DLS) is a specialized consensus algorithm used within the Cosmos Network blockchain. It is designed to solve the specific technical problem of the infinite path challenge as it relates to uninformed search algorithms. While the DLS algorithm is very memory efficient, it suffers from a lack of completeness.
A derivative is a financial contract that derives its value from underlying traits of an asset, index, or interest rate. Futures and options contracts are examples of derivatives. There are a variety of blockchain-enabled cryptocurrency derivatives, including synthetic cryptocurrencies and bitcoin futures, which represent agreements to trade bitcoin at a future date at a predetermined price.
Deshielding transactions are a type of transaction used on the Zcash blockchain that are sent from a private, anonymous sender to a public, transparent receiver wallet. Deshielding transactions employ zk-SNARK cryptographic proof technology to maintain data privacy, despite the differing settings of sender and recipient.
Design Axioms (DAs)
Design axiom (DA) is the term given to the critical elements of the Crypto.com blockchain’s technical architecture. The Crypto.com technical whitepaper notes six design axioms critical to the overall success of the project: state-of-the-art security architecture; a scalable; a fast network with high transaction throughput; decentralization; upgradeability; data privacy; and an inclusive network design.
A desktop wallet is a software wallet for cryptocurrency and digital assets that is downloaded directly onto a computing device. Desktop walets are almost always non-custodial in nature, which means users control their own private keys. Desktop wallets are hot wallets, meaning they are connected to the internet — unless the computing device is turned off or the wallet is installed on an offline secondary computer. Most desktop wallets offer password protection and can generate a recovery phrase as a backup to regenerate keys.
A deterministic module is a section of independent electronic circuits built into a circuit board that provides functions on a computer system that do not feature any degree of randomness. A deterministic module will thus always produce the same output from a given starting condition or initial state. A blockchain-based computerized system is typically deterministic in nature.
Digital asset is the catch-all term for assets that exist digitally. The term covers a wide variety of assets, including cryptocurrencies, utility tokens, security tokens, digital stocks, and digital collectables. All cryptocurrencies are digital assets, while not all digital assets are cryptocurrencies.
Digital Currency Electronic Payment (DCEP)
Digital Currency Electronic Payment, or DCEP, is China’s central bank digital currency (CBDC) initiative. Underway since 2014, DCEP is intended to replace physical cash with a digital edition of China’s RMB that can be exchanged between digital wallets without involving a bank. In contrast to decentralized blockchains, the Chinese government will maintain centralized authority over the platform and currency, which has undergone a number of large-scale public trials.
The ‘digital dollar’ is the commonly used reference of a potential United States central bank digital currency (CBDC). United States government agencies are researching the potential benefits and risks associated with creating a CBDC, but no clear path forward has yet been indicated.
The NEO network establishes a digital identity for each asset and user on its network. An active participant in the network undergoes a thorough identification process linking them to a traceable, real-world identity that is compliant with regulatory requirements. The network creates this digital identity through a combination of facial recognition, biometric data, voice recognition, and other multi-level verification mechanisms. This mechanism helps create accountability and trust in the NEO network as a whole.
A digital signature in cryptocurrency is the process of using a private key to digitally sign a transaction. Through public-key cryptography, a digital signature authenticates the sender and recipient of a transaction. It allows anyone with the sender’s public key to verify the digital signature or the authenticity of the message, transaction, or data.
Dilution is an economic term referring to the issuance of new assets which decrease existing shareholders’ percentage of ownership. Dilution can occur with assets ranging from stocks to cryptocurrencies. In the case of cryptocurrency, dilution refers to the reduction in value of a single unit of currency, or the market capitalization of a cryptocurrency protocol overall, because of the creation of new tokens.
Directed Acyclic Graph (DAG)
A directed acyclic graph (DAG) is a form of Distributed Ledger Technology (DLT). In contrast to a blockchain, which groups transactions into blocks and orders them in a linear fashion, a DAG is a network of individual transactions themselves connected only to other transactions without blocks. While blockchains require block validation, in a DAG, individual transactions provide validation for one another. All network users in a DAG are simultaneously miners and validators, and therefore transaction fees tend to be much lower than those common to blockchain networks.
Directional trading refers to trading strategies in which the sole factor for investment is the future direction of the overall market. It is generally associated with options trading because different directional trading strategies can capitalize on moves both upward and downward.
Discounted Cash Flow Model
The discounted cash flow (DCF) model is a valuation tactic that helps investors determine the present value of an investment by estimating how much money it will make in the future. DCF analysis projects future cash flows by using a series of assumptions about how the company or asset will perform in the future, and then forecasting how this performance translates into the cash flow generated. The future cash flows are discounted back in a net present value (NPV) calculation, which represents the amount an investor should be willing to pay today for receiving an asset’s cash flows in the future.
Distributed Denial-of-Service (DDoS) Attack
Similar to a Denial-of-Service (DoS) attack, a Distributed Denial-of-Service (DDoS) attack is a type of malicious network offensive conducted by a number of systems against a target. In a DDoS attack, perpetrators use traffic from many different sources to flood a connected machine or service with requests in an effort to overwhelm its network and make it unavailable for use. Because multiple traffic sources are more difficult to identify, DDoS attacks are significantly more challenging to combat than DoS attacks.
Distributed Ledger Technology (DLT)
Distributed Ledger Technology (DLT) refers to a shared database upon which transactions and associated details are recorded in multiple places simultaneously . A DLT may be a permissioned network under control by a central authority, or a permissionless network maintained by a decentralized network of nodes lacking a central authority. Blockchains and Directed Acyclic Graphs (DAGs) are both examples of different types of DLT.
Diversification refers to keeping a diverse investment portfolio of assets to protect against market turmoil. Different investments tend to perform differently depending on what’s happening in the market, so owning a variety of diverse assets means that when some lose value, others may gain value. A well-diversified portfolio usually includes a mixture of stocks, fixed income (bonds), and commodities. A diversified portfolio may also include one or more crypto assets, which should also be diversified.
Dividends are regular payments made by a stock issuing company to its company’s shareholders. While not all stocks pay dividends, the exact distribution of stock dividends is determined by a company’s board of directors. Dividends are usually paid in cash, although they are sometimes paid in new shares of additional stock.
Dividend Reinvestment Plan (DRIP)
A dividend reinvestment plan (DRIP) takes dividends earned by investors in a company and automatically reinvests them into more stocks of that company, often at a discounted rate. A DRIP accomodates the potential for exponential earning: Dividends are reinvested in more stock, which in turn generates more dividends, and so on. However, investors are usually given the choice to reinvest their dividends or cash them out befoe the DRIP initiates.
DNV GL is a Norwegian and German accredited registrar and classification company that has about 14,500 employees and 350 offices in more than 100 countries. DNV GL has a direct partnership with VeChain to provide assurance and auditing services for many of the enterprises VeChain works with, and provides data for supply chain management, carbon-neutral vehicles, logistics, natural gas, and more.
DOT is the native cryptocurrency of the Polkadot blockchain protocol. It is used to help maintain the security and consensus of the Polkadot Relay Chain and other parts of the network (parachains, collators, fishermen, and nominators). DOT can be bonded through parachains, staked through validators, and used for other purposes. It is typically rewarded to users who stake DOT to run a validator node. DOT helps the Polkadot ecosystem maintain a fair and transparent governance structure through validator staking and other mechanisms.
Double Spend Problem
The double-spending problem refers to a critical risk with digital currencies where the same funds can be copied and spent more than once. With fiat currency, the spender transfers physical cash to the receiver, unable to spend it again. With digital currency, blockchain systems are devised to prevent a digital token, such as bitcoin, from being sent by more than one address. The risk of double-spending with cryptocurrencies is mitigated by various mechanisms that verify the authenticity of all transactions.
Dow Jones Industrial Average (DJIA)
The DJIA, or the Dow, is a widely-used index and barometer of stock market performance that consists of 30 stocks from multiple sectors. Companies included in the Dow are known as blue chip stocks because of their importance to the overall economy of the United States. The DJIA is calculated by adding the prices of the stocks and dividing the final value by a Dow divisor.
In finance, due diligence refers to an examination of financial records that takes place prior to entering into a proposed transaction with another party. Due diligence broadly refers to an investigation, audit, or review performed to confirm the facts of a matter under consideration. The term originated in the US with the Securities Act of 1933 that made securities dealers and brokers esponsible for fully disclosing material information about the securities they were selling at the risk of criminal prosecution. Now, it is a standard process in business transactions and arrangements.
Dust is a very small fraction of a cryptocurrency or token that can range within one to several hundred Satoshis, which is the smallest divisible unit of a bitcoin. Dust is a residual byproduct of trading and transacting with cryptocurrencies, and represents such small denominations of currency that it retains minimal monetary value.
A dusting attack is an attack in which a trace amount of cryptocurrency, called dust, is sent to thousands — sometimes even hundreds of thousands — of wallet addresses. This attack is deployed in order to track these addresses with the hope of “un-masking” or de-anonymizing them. These mass dustings may also be used as stress tests, where a large amount of dust is sent in a short amount of time to test the throughput, or bandwidth, of a network. Some say these dustings are also a way to spam a network, by sending huge batches of worthless transactions that clog and slow it down considerably.
Any address or unspent transaction output (UTXO) that has a lower balance than the current fee charged to transact on that blockchain is under what is called the dust limit. The dust limit varies by market forces on the network and varies between different cryptocurrency networks, but the funds are rendered without function unless the balance is restored above the transaction fee enough to trade or withdraw.
Dutch East India Company
The Dutch East India Company was a trading megacorporation formed in the early 17th century for trading spices with India and, later, with Southeast Asia. The company is considered the first modern corporation due to it’s sophisticated structure and operations. It was also the first publicly-held company and its shares were traded at the Amsterdam Exchange. At its peak, the company is estimated to have been worth $7.9 trillion when accounting for inflation.
Earnings Per Share (EPS)
Earnings per share (EPS) is a method used in fundamental analyses of a company’s profitability. Fundamental analysis involves evaluating a company’s stock rather than just its earnings. Earnings and shares combined can provide a great deal of insight into a company’s profits. EPS tells us how much of a company’s profit is assigned to each share of stock. EPS is calculated as net income (after dividends on preferred stock) divided by the number of outstanding shares.
Economic X Node (XN) and Economic Node (EN)
Economic X Nodes (XNs) and Economic Nodes (ENs) are two types of nodes created and used by the VeChain Foundation. They incentivize coin holders to run a node in exchange for tokenized VET rewards, and help maintain network consensus alongside Authority Masternodes. There are four different tiers of XNs depending on the amount of VET staked, while ENs have three different tiers. XNs and ENs are managed via VeChainThor Node smart contracts and interact with the entire blockchain system. As of 2020, no new XNs can be created and existing XN operators are considered long-term supporters of the project.
Ecosystem Expansion Project (EEP)
An Ecosystem Expansion Project (EEP) is an ICON-related project or activity that contributes to the overall growth and expansion of the ICON ecosystem. EEPs play a role in determining the ICON Network’s governance system, along with P-Reps and their Decentralized Application Booster Program (DBP). All ICONists can propose and execute EEPs and receive rewards when other ICONists delegate a certain amount of stake to those who proposed EEPs.
EIP-1599 is an Ethereum Improvement Proposal designed to make network transactions more efficient by using a hybrid system of base fees and tips. In the proposal, a base fee is defined as an algorithmically determined price that all Ethereum users would pay to complete transactions. Tips are defined as optional fees that users could include to speed up their transactions. If implemented, EIP-1559 could greatly reduce transaction costs and improve the overall Ethereum user experience.
Electronic Retailing (E-tailing)
E-tailing is the sale of goods and services through the internet. There are numerous types of e-tailing including business-to-business (B2B) and business-to-consumer (B2C) sales of products and services. E-tailing requires companies to tailor their business models to capture internet sales, which can include building out new distribution channels and new technical infrastructure.
Elliptic Curve Digital Signature Algorithm (ECDSA)
The Elliptic Curve Digital Signature Algorithm (ECDSA) is the cryptographic signature algorithm used by Bitcoin and several other highly regarded cryptocurrencies, wallets, and exchanges. Through the use of private keys, public keys, and cryptographic signatures, the algorithm guarantees that only the holders of private keys can send bitcoin transactions. The tBTC system also uses ECDSA cryptography to create tokenized bitcoin.
Email spoofing is the act of creating and sending email messages with a forged sender address, typically with the intent to compromise the recipient. The most common ways this is accomplished include copying an organization’s defining content, such as specific phrases, fonts, logos, or color schemes used by the legitimate website or service provider in order to make the fraudulent message look authentic. Since most core email protocols do not have any authentication mechanisms, email spoofing continues to be a widely used form of online fraud.
Encryption refers to technical processes that secure data and systems, and make it more difficult for hackers to gain unauthorized access to information, or meddle with networks and transactions. In modern cryptography, encryption generally entails the conversion of what is known as “plaintext” into “ciphertext.” Encryption is a means of encoding information so that only authorized parties can understand it.
Enhanced Due Diligence (EDD)
Enhanced Due Diligence (EDD) is a Know Your Customer (KYC) process that provides a greater level of scrutiny of potential business partnerships and highlights risks that cannot be detected via Customer Due Diligence (CDD) alone. It is designed for use with customers who are deemed high-risk via the KYC process. Relevant risk factors can include large transaction amounts, high customer net worth, geographical location, political exposure, and more.
Enjin is a platform that enables developers to create and manage games on the blockchain. Enjin hopes to leverage blockchain technology to reduce the high fees and fraud common with the transfer of virtual goods. ENJ is an ERC-20 token used to pay for digital goods and services on the Enjin platform.
Enterprise adoption refers to the ability for a specific service or type of technology to be used by a large corporation, company, government, NGO, or specific industry. Enterprise adoption of any technology generally means that it is being used widely to solve multiple problems for different use cases in the real-world. It is the hope of the blockchain community that blockchain technology will eventually achieve enterprise adoption.
The EOS Network is a smart contract and decentralized application (dApp) development platform. Unlike many other blockchain networks, EOS does not charge direct transactional fees for operations. Instead, users wishing to transact or run a dApp must obtain sufficient network capacity by holding EOS coins. EOS is the native coin on the EOS network, used for voting and accessing network capacity.
EOS 1.0 and EOS 2.0
EOS 1.0 was the first full version of the EOS blockchain network released on June 1st, 2018. After several upgrades it was replaced by the more advanced EOS 2.0 which launched on January 10th, 2020. EOS 2.0 was designed to enhance performance and security, as well as provide new developer tools to make it easier to build on the platform.
EOSIO Contract Development Toolkit (EOSIO.CDT)
The EOSIO Contract Development Toolkit (EOS.CDT) is a specialized WASM ToolChain and set of tools designed to build, create, modify, and utilize smart contracts within the EOSIO ecosystem.
EOSIO RPC Application Programming Interface (API)
The EOSIO RPC application programming interface (API) is a type of Remote Procedure Call (RPC) API used to connect to the EOSIO blockchain. A RPC occurs when a computer utilizes a program that makes a procedure execute by utilizing a distinct address space on another shared network or computer. This is done by coding and the use of a local procedure call without the developer giving details for the remote interaction via location transparency.
EOSIO Software Development Kits (SDK’s)
EOSIO software development kits (SDKs) provide tools to make application development easier on EOS. These SDKs are built for both Java (Android) and Swift (iOS) programming languages. They allow software developers to create EOS-specific applications that can be built for the Android and iOS operating systems.
EOS Virtual Machine (EOS VM)
The EOS Virtual Machine (EOS VM) is a high-performance blockchain WebAssembly interpreter used by the EOS blockchain. It is an engine that uses three different interpreters to make it possible to compile, debug, and optimize smart contracts. Its main purpose is to improve the functionality and performance of smart contracts.
An epoch is a division of time on the Cardano blockchain protocol. Cardano makes use of a proprietary Proof-of-Stake (PoS) consensus algorithm called Ouroboros Praos, which divides the blockchain into time-frames called epochs that last approximately 5 days. Epochs are in turn subdivided into smaller increments called slots that last about 20 seconds. There are currently a total of 432,000 slots (5 days) in each epoch. In a specific slot, zero or more block producing nodes may be selected to be the slot leader. Typically, one node is nominated every 20 seconds, totalling over 20,000 slot leaders per epoch. When randomly selected for the role, slot leaders produce blocks, of which one will be added to the blockchain, while other block candidates will be discarded.
ERC-1155 is an Ethereum-based token standard that incorporates non-fungible token (NFT) technology. The ERC-1155 standard allows for a single smart contract to manage multiple token types, including both fungible, semi-fungible, and non-fungible tokens. It is purported as the new multi-token standard. Other token standards like ERC-20 and ERC-721 require a separate contract to be deployed for each token type or collection, which results in excessive and redundant code on the Ethereum blockchain.
The ERC-20 standard outlines the common set of criteria and technical specifications an Ethereum token must follow to function optimally and interoperably on the Ethereum blockchain. It enables the creation of tokenized assets that can be bought, sold, and exchanged alongside cryptocurrencies like bitcoin (BTC) and ether (ETH). The ERC-20 standard utilizes smart contracts to issue tokens that can be exchanged on the Ethereum network as well as used interoperably between Ethereum-based dApps. It is the most commonly used Ethereum token standard, and has been used to create many notable digital assets.
ERC-721 is a technical standard for the implementation of non-fungible tokens (NFTs) on the Ethereum blockchain outining provide rules that all NFTs must follow. NFTs that adhere to the ERC-721 standard are interoperable with each other and the wider Ethereum ecosystem. The ERC-721 standard produces provably rare assets, and is widely used for digital collectibles, games, art, and luxury items.
An escrow is a contractual arrangement in which an intermediary receives and disburses funds or assets on behalf of the primary transacting parties based on predetermined conditions agreed to by the transacting parties. Traditionally, the intermediary is a trusted third-party arbitrator, but with the advent of blockchain technology, this escrow service can now be automated using algorithmically-enforced rules based on smart contracts. The automation of escrow holds massive potential implications across a broad range of industries.
An e-signature, or electronic signature, is a signature executed an electronic document or form. Electronic signatures are legally valid in most jurisdictions to replace handwritten signatures.
Ether (ETH) is the native cryptocurrency of the Ethereum blockchain, and plays an integral role in the Ethereum ecosystem. Transactions on the Ethereum blockchain are paid for in micropayments of ETH referred to as gas, while ether also facilitates interactions with and between smart contracts throughout the Ethereum platform and ecosystem.
Ethereum launched in 2015 as a decentralized, blockchain-based global supercomputer to serve as the foundation for an ecosystem of interoperable, decentralized applications (dApps) powered by token economies and automated smart contracts. Assets and applications designed on Ethereum are built with self-executing smart contracts that remove the need for a central authority or intermediary. The network is fueled by its native cryptocurrency ether (ETH), which is used to pay transaction fees on the network. Open-source, programmable, private, and censorship resistant, Ethereum forms the backbone of a decentralized internet, which has already spawned significant innovation like Initial Coin Offerings (ICOs), stablecoins, and decentralized finance (DeFi) applications.
Ethereum 2.0 refers to a significant set of updates to the Ethereum blockchain intended to vastly improve its scalability and broader utility. The multi-phased package of upgrades is officially called Serenity. It features a switch from a Proof-of-Work (PoW) consensus algorithm that relies on computational mining to a Proof-of-Stake (PoS) consensus algorithm that relies on validator staking to keep the network in motion. In utilizing Proof of Stake and implementing the innovation of partitioned shard chains, Ethereum 2.0 is expected to be much more efficient than its prior iteration, achieving the transactional scale required to be the global supercomputer.
Ethereum transactions are code or a set of commands that execute in a single Ethereum block. They cange from simple token transfers to complex zero knowledge proofs and smart contracts. Transactions are permanently recorded onto the data state of the Ethereum blockchain at the cessation of every block.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) is a development interface accessible through a web browser. The EVM enables developers to deploy dApps more effectively by providing a suite of development kits, application templates, and other tools. The EVM improves accessibility by eliminating the need for developers to purchase costly hardware, and allowing developers to launch a dApp regardless of the underlying coding language. The EVM is a primary driver of the trend that decentralized applications (dApps) exist almost exclusively on the Ethereum blockchain thus far.
European Central Bank (ECB)
The European Central Bank (ECB) is the main central bank for the Eurozone, which is the monetary union of 19 European Union (EU) member states that employ the use of the Euro (€) as the region’s main currency. The ECB is one of the most important central banks in the world, and serves as one of the seven institutions that comprise the infrastructure of the EU. The main purpose of the ECB is to maintain price stability, regulatory certainty, fair monetary policy, and a healthy European financial system related to banking, investment, insurance, securities, and the EUs financial sector as a whole. The ECB is responsible for the authorization of Euro issuance in EU member states.
Cryptocurrency exchanges are platforms upon which digital assets can be bought, sold, and traded for fiat currency or other digital assets. While they share many similarities to stock exchanges in legacy finance, the development of decentralized exchanges (DEXs) removes centralized market makers and clearinghouses in favor of peer-to-peer exchanges. Cryptocurrency exchanges have evolved significantly from the earliest, unregulated iterations to provide more robust security, accessibility, and legal compliance in accordance with the jurisdictions in which they operate.
Exchange Coin/Exchange Token
Exchange coins are digital assets launched on a crypto exchange via an Initial Exchange Offering (IEO), a fundraising method for crypto companies that’s similar to an Initial Coin Offering (ICO). There are two different types of exchange coins: those launched by the exchange itself as the native token of the platform, and those launched by other crypto companies using the token launch infrastrucure and services of the exchange. Exchange coins can either be tokens (digital assets enabled by an existing blockchain) or cryptocurrencies (digital assets that run on their own blockchain).
Exchange Traded Fund (ETF)
An exchange-traded fund (ETF) is a financial product that is tied to the price of other financial instruments. This structure gives investors a way to gain exposure to an asset or a bundle of assets without buying or owning the asset(s) directly. ETFs can be composed of all kinds of assets including stocks, commodities, and bonds. A digital asset ETF, for example, would allow investors to invest in the underlying digital asset without needing to manage the asset itself or interact with a cryptocurrency exchange.
Exchange-Traded Product (ETP)
An exchange-traded product (ETP) is a type of security that tracks an underlying security, index, or financial instrument asset, and can be purchased on an exchange. ETPs trade on the National Stock Exchange (NSE) during the day. The first crypto ETPs went to market in 2019.
An execution price is the price at which a buy or sell order for a security is completed, or executed. As prices fluctuate in a dynamic market, what is offered for a trade in as an order price might not always be identical to the price at the execution price of the trade. A strong execution price very little slippage or change in price from an order price and is a sign of a healthy market and asset.
Exploit kits are automated programs that contain code for identifying vulnerabilities and installing malware. They are a type of toolkit that cybercriminals use to attack weaknesses in computing systems. Once they’ve infected a victim machine, they compile device information, search for vulnerabilities, determine the appropriate or most effective exploits, and then deploy those exploits on behalf of the exploit kit user.
Exponential Decay Model
The exponential decay model is a cryptoeconomic minting mechanism used by numerous blockchain projects to mitigate inflation. Blockchains that follow the model produce higher native currency rewards during the launch and early stages of the network, which decrease exponentially over time, along with an increasing difficulty in block mining in propagation. The model has been criticized for enabling a miner incentivization imbalance.
Extended Private Key (XPRIV)
An extended private key (XPRIV) is one half of the master key pair (the other being an extended public key) used in hierarchical-deterministic wallets. A hierarchical-deterministic wallet is a cryptocurrency wallet that generates new cryptographic key pairs or addresses from a master key pair each time funds are received.
Extended Public Key (XPUB)
An extended public key (XPUB) one half of the master key pair (the other being an extended private key) used in hierarchical-deterministic wallets. A hierarchical-deterministic wallet is a cryptocurrency wallet that generates new cryptographic key pairs or addresses from a master key pair each time funds are received.
Fair launch refers to the equitable and transparent initial distribution of coins in a blockchain project. Fair launches stand in contrast to a token distribution in which a small group of founders and early investors receive special or early access to the tokens. They are seen as an effective way to promote decentralization and engagement in the crypto community.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency in the US that insures deposits in financial institutions, acting as a guarantor in the event of an institution failing. The FDIC was created in the 1933 Banking Act to restore faith in banks during the Great Depression. Its ongoing purpose is to foster confidence in financial institutions.
Federated Byzantine Agreement
Federated Byzantine Agreement (FBA) is a consensus method developed and deployed by the Stellar blockchain protocol. It operates by a system of federated voting wherein nodes deem other nodes trustworthy until a quorum is achieved and network consensus is solidified.
Fiat-backed stablecoins are digital assets pegged to the value of an underlying fiat currency in a 1:1 ratio, and are built to reduce the volatility commonly associated with digital assets. Stablecoins not only serve as a store of value and an investment hedge, but simplify engagement in on-chain endeavors like decentralized finance. The fiat currency which serves as collateral to a stablecoin — the most common being USD — is held off-chain, which requires users to trust that the fiat reserves are properly managed and audited.
A fiat currency is any type of government-issued currency that is used as legal tender by a specific nation or region’s citizens and government. Fiat currencies are not backed by a physical commodity (like gold or silver), but instead by the government that issued it. As a government-regulated instrument, it functions as a medium of exchange, store of value, and unit of account. To function as fiat, money must be durable, portable, divisible, uniform, acceptable, and limited in supply. Most modern paper currencies are fiat currencies, like the EU euro, Japanese yen, and US Dollar.
A fiat on-ramp is an exchange or similar service that allows for digital assets like securities and cryptocurrencies to be exchanged for fiat currency like the US dollar. On-ramps are a software-based service built by a financial service provider, usually with a banking license to legally operate in their specific jurisdiction. A fiat on-ramp is the first step in exchanging or trading cryptocurrencies for many users who first purchase digital assets with fiat currency.
The Fibonacci ratio (also called the “golden ratio”) describes predictable balancing patterns in elements found throughout nature, including atoms. It is named after Leonardo Fibonacci who lived around 1200 AD and is credited with discovering the ratio. In the Fibonacci sequence, each number is the sum of the two preceding numbers (1, 1, 2, 3, 5, 8, 13, etc.). Four main techniques are used to apply the Fibonacci sequence to finance: retracements, arcs, fans, and time zones.
The Filecoin (FIL) base of 2,000,000,000 FIL coins is the maximum number that will ever exist and is known as FIL_BASE. 55% of the FIL_BASE is allocated to storage mining, 15% is allocated to a mining reserve, and the remaining 30% is allocated to various other developmental projects. Filecoin’s coin allocation methodology intends to ensure the growth of both long-term and short-term network participation, while applying counter-pressure to mitigate FIL supply shocks.
Filecoin is an open-source, cloud-based Decentralized Storage Network (DSN) built to maximize data storage and retrieval. The Filecoin network leverages a mining, storage, and retrieval mechanism that connects storage miners (providers) and retrieval miners (servers) with clients who pay to store and retrieve data. Network participants receive and send tokenized rewards in the form of Filecoin coins (FIL) for providing services on the network.
Finality is a blockchain state (or status) that occurs after a blockchain transaction has been confirmed and can no longer be canceled, reversed, or altered by any of the network participants. The finality rate is the amount of time it takes to reach a finality state after a transaction is executed. This rate can be measured in seconds or blocks, depending on the blockchain in question, as well as on the context in which this term is applied.
Financial inclusion refers to the accessibility and equality of financial services like banking, loans, equity, and insurance services. Successful financial inclusion is measured by the availability of affordable and timely access to these types of services.
Financial Industry Regulatory Authority (FINRA)
The Financial Industry Regulatory Authority (FINRA) is a private corporation that acts as a self-regulatory organization. It is responsible for writing rules governing brokers and broker-dealer firms in the US. Although it has regulatory powers, it is not officially part of the US government, and exists as an independent NGO. The Securities and Exchange Commission (SEC) oversees FINRA.
Financial Information eXchange (FIX)
The Financial Information eXchange (FIX) is a communication protocol for the real-time exchange of securities transaction information that provides direct market access (DMA) data to financial service entities. The FIX serves approximately 300 financial institutions, including all major investment banks. It has become the de-facto standard for pre-trade, trade, and post-trade communications.
A security is a fungible investment instrument that is offered with some kind of financial value. A security can be a physical or digital asset, while examples include stocks, bonds, and options. The defintion and subsequent regulation of some cryptocurrencies as a security is an emerging legilative factor in many jurisdictions.
Financial Technology (FinTech)
Financial technology (FinTech) is an emerging industry that improves the existing structure of conventional financial services by leveraging new technological developments. FinTech generally aims to lower costs, improve transaction times, remove minimum thresholds, bolster financial inclusion, and offer more flexible terms on financial products among other initiatives. Blockchain and cryptocurrency can be considered a category within the FinTech sphere.
A finite-state machine is a computational system that can only exist in exactly one state — out of a finite number of states — at any given time. Finite-state machines operate by reading a series of inputs and then switching to a new state, one that corresponds with a function of its most recent input and current state. All conventional computing devices are physical representations of finite-state machines.
FINRA Rule 3310
FINRA Rule 3310 established minimum standards for broker-dealers’ Anti-Money Laundering (AML) compliance programs. It requires firms to develop and implement a written AML compliance program which must then be approved by the FINRA. Firms must also provide for annual (on a calendar-year basis) independent testing for compliance to be conducted by member personnel or by a qualified outside party.
A fiscal crisis results when a state or government experiences a deficit between its expenditures and revenues. Fiscal crises tend to entail an economic dimension as well as a political dimension. They are often referred to as a budget deficit.
Fishermen is a technical term used within the Polkadot blockchain protocol to refer to full nodes that are responsible maintaining the integrity of the network and nodes. The job of fishermen is to monitor the Relay Chain and other parts of the protocol to pinpoint and report unwanted behavior to validator nodes. Rather than packaging state transitions and producing the next parachain blocks like Polkadot collators, fishermen monitor the process to make sure that no invalid state transactions are included. Fishermen typically stake a small amount of DOT initially, and are rewarded upon identifying unwanted behavior on the network.
Flash loans are a type of DeFi loan that is rapidly executed — borrowed and paid back in quick succession — without the need for collateral. An experimental technology offered by the Aave platform, flash loans are made possible because of how data is recorded on the Ethereum network. If the principal and interest are not repaid within one Ethereum transaction, the flash loan is effectively reversed.
Flexa is a New York City-based company that manages a blockchain-based payment network, the Flex Network Protocol, which allows users to spend crypto at brick and mortar retailers through its Spedn app. The app generates a QR code at checkout, which retailers scan to instantly receive their preferred fiat for the transaction, while the equivalent amount of crypto is deducted from users’ wallets within the app. Instant payments are made possible through the use of the network’s native token AMP.
Forex is a portmanteau that combines the terms “foreign currency” and “exchange’ that is used to define the entire foreign currency exchange market. The Forex currency trading market is a global and largely over-the-counter (OTC) market that determines currency foreign exchange rates and facilitates all aspects of buying, selling, and exchanging currencies at spot or agreed upon prices.
Forging refers to the creation or minting of new blocks in blockchain protocols using the Proof-of-Stake (PoS) consensus algorithm. When a new block is forged, there is an opportunity to receive a reward from the fees associated with each transaction included in the block. Blocks are forged after the transactions are validated and the block is signed. Different PoS networks have varying rules regarding their respective requirements to take part in the validation and forging process.
A fork occurs when one blockchain is divided into two blockchains. This type of split in a blockchain network happens when an update is made to the blockchain protocol, but not all of the network participant nodes agree to adopt it. Blockchains can experience two main types of forks: a soft fork or a hard fork. Soft forks result in an update that is “backwards compatible.” This means that nodes which accept the update are still capable of interacting with nodes which do not. In a hard fork, the update significantly alters the original blockchain protocol such that the two versions are no longer compatible with one another. The result of a hard fork is two unique blockchains that diverge after the hard fork event.
Form 10-K is a financial report that publicly traded companies are required to file annually by the U.S. Securities and Exchange Commission (SEC). The report provides a comprehensive summary of a company’s financial performance over the course of the past year.
Form 10-K and 10-Q
Form 10-Q is a financial report that publicly traded companies are required to file quarterly by the U.S. Securities and Exchange Commission (SEC). It contains similar information to the annual 10-K form, although generally less detailed and unaudited. Information regarding the prior fiscal quarter is included in the end-of-year 10-K form, so only three 10-Q forms are required to be submitted for the year.
Formal verification refers to mathematically proving and verifying a smart contract to ensure that it will function as intended. The use of mathematical functions to build the software allows for the mathematical verification of new code before it is added. Formal verification is a cornerstone of cryptography.
A fraud proof is a technical mechanism that operates as a bond when employed in dApp ecosystems that make use of Optimistic Roll-ups (ORs), which are Ethereum sidechains that seek to decrease the fees and latency dApps might experience on the Ethereum platform. A sequencer, which is responsible for processing ORs, must include a fraud prood along with their work to incentivize good performance. Sequencers are financially rewarded for processing roll-ups according to consensus rules, and financially punished by forfeiting their fraud proof when they break them.
Functional Programming Languages
Functional programming languages are programming languages that employ mathematical functions to determine the behavior of a program. They stand in contrast to imperative programming languages, in which software coding is executed as a set of stepwise instructions. Some advantages of functional programming languages include the mathematical precision and verifiability of the code, as well as the resulting security and speed.
A fund is a pool of money that is set aside for a specific purpose and usually invested. Funds are often managed by professional financiers. Common funds include pension funds, insurance funds, foundations, and endowments.
Fungibility is the attribute of being mutually interchangeable. Fungibility occurs when a good, asset, or units of an asset are indistinguishable from each other, and so can be interchanged with each other. For instance, one US dollar is equivalent to any other US dollar, and is therefore fungible. Fungibility makes an asset useful as a currency or payment method.
Futures are derivative contracts for the purchase or sale of a security or commodity at a future date and at a preset price. The buyer has the obligation to buy the underlying asset at the expiration date, while the seller has the obligation to sell the underlying at the expiration date. The value of the contract is based on an agreed upon underlying trait of assets like commodities, currencies, indexes, or stocks. Futures contracts are traded on exchanges and they serve a variety of purposes, from income generation to hedging to speculation. There are a variety cryptucrrency applications, including bitcoin futures, which represent agreements to trade bitcoin at a future date at a predetermined price.
The fees associated with transacting and executing smart contracts on the Ethereum blockchain are referred to as gas. Decentralized applications (dApps) on the Ethereum blockchain run using smart contracts that lay out rules for execution of events. The execution of events happens through transactions, which come with a cost to the network. These costs are figured based on the computational power required for each action and how long each action operates. Gas costs are denoted in gwei, a denomination of ether (ETH), equal to 0.000000001 ETH. Gas was built into the system to allocate resources to the network of miners who validate transactions and create new blocks. Gas also acts as a spam mitigation tool. By adding a cost to each transaction, nefarious actors who might try to disrupt the system by sending a large number of tiny transactions are deterred from doing so.
Gas & NEO Coins
Not to be confused with the gas fees native to the Ethereum network, GAS and NEO are the two native cryptocurrencies of the NEO blockchain protocol. NEO acts as the primary currency for transactions and gives holders the right to vote on network proposals. Users can also earn GAS through staking their NEO. GAS is also used to pay for network usage: transaction fees, storage fees, and fees associated with executing smart contracts. All NEO coins were minted at the establishment of the protocol, and GAS coins are minted with every new block.
A genesis block refers to the first block of any blockchain network. It is almost always hardcoded into the protocol software. It is the only block of a blockchain network that does not reference a previous block.
GitHub, a subsidiary of Microsoft, provides online hosting services for collaborative software development using Git, a distributed version-tracking system. With a variety of advanced collaborative tools, security features, and version control, GitHub has become the de-facto standard for collaborative, online software development. GitHub offers free personal accounts in addition to enterprise accounts. It is commonly used to host open-source projects, although it offers private repositories as well.
Global Industry Classification Standard (GICS)
The Global Industry Classification Standard (GICS) is a financial taxonomy system that has been adopted by most of the global financial system. It is an agreed-upon “language” for understanding into which industries and sectors certain companies are categorized. The GICS structure consists of 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries. The GICS system classifies public companies only.
Go is an open-source computer programming language designed by Google. Go is sometimes referred to as ‘Golang’ because of its domain name (golang.org). Go is a statically typed and compiled programming language that is similar in syntactic structure to C, but includes advanced features for improved productivity when dealing with large networks and codebases. Go has become a preferred programming language for decentralized blockchain networks, and is used with many dApps and other decentralized tools.
A golden cross is a bullish technical trading signal in which the 50-day moving average crosses above the 200-day moving average, typically triggering a price rally. It is the opposite of a death cross trading signal, which is a bearish trading signal. Golden cross formations can also be detected within shorter time frames, such as the 5-day and 15-day averages, although longer periods typically offer stronger signals.
Golem Network is a platform for democratizing access to censorship-resistant computing power. It allows users to supply and lease idle hardware in a peer-to-peer manner. Golem currently operates as a decentralized alternative to centralized cloud computing solutions provided by Amazon, Microsoft, and IBM. The settlement layer of the protocol allows for the creation of a shared and alternative economy, where users earn passive income by leasing their hardware. The network is fueled by the Golem Network Token (GLM), which was previously identified by the ticker symbol GNT before a token swap in November 2020.
A governance token provides holders with a degree of influence over a platform’s protocol, products, and future functionality. Governance tokens are often issued via decentralized protocols that aim to encourage community-led growth and self-sustainability. Holders of governance tokens are typically able to propose changes to the protocol as well as use their tokens to vote on those changes. Governance tokens are used to democratically manage a protocol in a fair and decentralized manner.
GRANDPA and BABE Consensus Mechanisms
GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) and BABE (Blind Assignment for Blockchain Extension) are the two central components of the hybrid consensus mechanism that Polkadot utilizes to secure and maintain its network. BABE is a mechanism for producing blocks while GRANDPA is mechanism for finalizing the state of the blockchain.
Graphical User Interface (GUI)
A Graphical User Interface (GUI) is a means of interacting with a computer program in a visual way. GUIs are intended to make computer programs easier to use and employ icons, windows, and menus. GUIs stand in contrast to text-based user interfaces which require users to interact with computer programs through text-based commands.
The Greenlist is a list of cryptocurrencies provided by the New York Department of Financial Services (NYDFS). NYDFS-licensed virtual currency businesses are permitted to use the coins on the list for approved purposes.
Gwei is the smallest unit of ether, the native cryptocurrency of the Ethereum blockchain. 1 gwei is equal to 0.000000001 ETH. Gas fees, which are fees charged on every Ethereum transaction, are denominated in Gwei.
A halving is when the reward allocated to miners for mining new blocks is reduced by 50%. Halving events usually occur at fixed intervals. For example, Bitcoin’s block reward is halved every 210,000 blocks, and happens about every four years.
A hard fork is a software update that is not backwards compatible. In the context of blockchain technology, a hard fork happens when new rules have been introduced into the blockchain code that are not compatible with the rules of the blockchain’s previous code. If network nodes do not update their software, they are unable to communicate with nodes that have updated their software. This sometimes results in the blockchain splitting into two networks — one which operates with the old rules and one which operates with the new, updated rules. For example, Bitcoin Cash emerged after a hard fork of the Bitcoin blockchain.
A hardware wallet is a secure, physical, hardware device which stores a user’s private keys.
Hash functions are algorithms that take data of any size and convert it into a fixed-length hexadecimal number, or hash. Hash functions are one-way functions and cannot be inverted to reveal the data input to create the hash. The Bitcoin blockchain utilizes the SHA-256 hash algorithm in its transaction validation process.
The hash rate is the unit of measure for the computing power of a Proof-of-Work consensus mechanism. The hash rate is valued in terahashes per second (TH/s), and increases or decreases according the the number of miners operating on the network.
Haskell is a programming language suitable for a variety of applications in financial services and hardware design. Cardano is programmed in Haskell.
“Gossip” is the protocol utilized by Hedera Hashgraph to broadcast information amongst network nodes and to reach consensus on transaction validation.
A hedge is when an investment in a security or asset is made with the intention of offsetting potential risks or losses elsewhere in an investment portfolio.
Hierarchical-Deterministic (HD) Wallet
A hierarchical-deterministic wallet is a cryptocurrency wallet that generates new cryptographic key pairs or addresses from a master key pair each time funds are received. This technique is intended to enhance the privacy of the wallet by distributing the total balance of a user’s cryptocurrency holdings across several addresses. This feature also increases the security of the wallet by distributing private keys, while all previously used addresses remain usable and within the user’s control.
High-frequency trading is an automated market trading method that utilizes algorithms to rapidly buy and sell a large quantity of orders.
High-Net-Worth Individual (HNWI)
A high-net-worth individual (HNWI) is an individual that possesses liquid assets above a certain amount, generally at least $1 million. These assets could include stocks, bonds, and commodities, among others.
High-Yield (Junk) Bonds
A junk bond is a bond that holds a high risk of default. Junk bonds are also referred to as ‘high-yield,’ because investors receive high interest rates in return for taking on increased risk.
“Hodl” is a slang expression that refers to the holding of cryptocurrency assets, as opposed to liquidation. The term was derived from a post on Bitcointalk in which the poster mispelled ‘hold,’ and subsequently became a meme.
Horizontal scalability is a means of increasing the transactional capacity of a blockchain network by adding more nodes to the network or optimizing systems, rather than altering the protocol via code.
A hostage byte attack is a theoretical vulnerability in the STORJ network in which malicious storage nodes extort payment from users by refusing to transfer pieces of data.
Hot (Online) Wallet
The term hot wallet refers to a cryptocurrency wallet that is connected to the internet. The wallet’s assets are therefore held online, as opposed to a cold wallet, which is held in an offline environment.
Hybrid Exponential Minting
Hybrid exponential minting is a method for minting coins utilized by the Filecoin network. In this model, 30% of rewards are distributed according to an exponential decay model, in which block rewards are greatest at the protocol’s inception and decrease over time. 70% of rewards are distributed in proportion with the growth of the total storage capacity of the network. This model was developed to ensure the long-term viability of the Filecoin network because it rewards miners throughout the entire lifecycle of the network, in proportion to the utility they provide to the network.
A hybrid blockchain network combines elements of both private and public blockchains. The hybrid aspect of the network’s architecture most often includes a main public chain, in addition to private side-chains of various purposes that link back to the main chain and public access.
Hyperinflation describes severe, and often rapid price increases in an economy resulting from surplus money supply. Political instability, a weak economy, and loss of confidence in the financial system can cause hyperinflation, which can be highly destabilizing to a national currency and economy.
ICON Incentives Scoring System (IISS)
The ICON Incentives Scoring System (IISS) is the method used by ICON for measuring, incentivizing, and rewarding contributions to the network. Examples of contributions include running a node in ICON’s Delegated Proof-of-Stake (DPoS) network architecture, or developing a decentralized application (dApp). Rewards are denominated in the ICON Exchange Token (ICX).
ICX, or the ICON Exchange Token, is the native asset of the ICON blockchain. The token is minted each time a block is created, and serves various purposes. As a governance token, ICX holders can vote on changes to the ICON blockchain. The ICX token is used as a reward for nodes that maintain the network, to pay for fees and smart contract usage, and as a medium of exchange in the wider ICON ecosystem.
Immutability is the characteristic of data becoming irreversibly codified in the shared data ledger of a blockchain network after transaction execution. Most non-blockchain computer networks are mutable, meaning that the information inside them can be modified, censored, or controlled by a central party. Immutability allows a blockchain network to ensure the overall trust and integrity of data for a dApp, platform, or cryptocurrency.
Impermanent loss occurs when the value of tokens held in an algorithmically balanced liquidity pool lose value relative to like assets in the open market due to price volatility. The loss is ‘impermanent’ because the original value of the tokens can be restored if the liquidity pool restores balance.
An index fund is an investment product made up of a collection of investments designed to track an industry segment of the financial market, or a basket of investments accumulated for a particular stragery or risk profile.
Individual Retirement Account (IRA)
In the U.S., many financial institutions offer individual retirement accounts that provide tax advantages for retirement savings. Anyone can sign up for an IRA and save money in one. In short: one advantage of a traditional IRA is that your contributions are tax-deductible in the year that they are made.
Inflation refers to the gradual rising of prices in an economy relative to actual value, which can decreases the purchasing power of a currency if not managed. Most cryptocurrencies follow a fixed inflationary policy the decreases token circulation over time.
Initial Coin Offering (ICO)
Initial Coin Offerings or token sales are a fundraising mechanism made possible by blockchain and Ethereum that incorporates the creation and sale of a token to raise funds for a project—usually a new blockchain platform, decentralized application (Dapp), or digital asset product. Instead of providing buyers with equity or shares, an ICO sells tokens that usually claim future utility in the products they are sold to fund. Despite this, ICO-launched tokens may still be considered securities, and are subject to jurisdictional regulation.
Initial Exchange Offering (IEO)
An IEO or Initial Exchange Offering is a token distribution event that is specifically conducted on a cryptocurrency exchange platform. Similar to Initial Coin Offerings (ICOs), IEOs are a fundraising method for many blockchain and crypto oriented companies. The SEC has released guidance recommending caution when investing in an IEO and warning that IEOs may be conducted in violation of the federal securities laws and may lack many of the investor protections of registered and exempt securities offerings.
Initial Public Offering (IPO)
An Initial Public Offering (IPO) is a sale of shares of a private company to the public — particularly institutional and retail investors. This process, which takes place on a stock exchange, transforms the private company into a publicly-traded company by selling securities that represent an fraction of ownership. Companies that intend to conduct an IPO must adhere to rules and regulations as set out by the US Securities and Exchange Commission (SEC).
Insider trading is an illegal activity in which a person who has access to non-public, material information about a company utilizes that information to make advantageous trades of the company’s stock.
The term institutional-grade generally refers to infrastructures or products which have features that make them suitable for use by large enterprises.
Institutional investors are firms that invest in various asset classes on behalf of other people. Examples of institutional investors include pension funds, hedge funds, and commercial banks among others.
Institutional Trading Software
Institutional trading software is software that provides an online interface or exchange platform for institutional trading and portfolio management.
Insurance provides compensation for losses in exchange for the payment of a fee, referred to as a premium. Some digital asset exchanges have insurance for the assets they hold in the event of theft or other circumstances leading to losses.
Inter-Blockchain Communication (IBC) Protocol
The Inter-Blockchain Communication Protocol is a protocol that facilitates interoperability between different blockchain networks by enabling cross-chain interaction and value exchange. It was designed by technologists from Tendermint, Agoric, and Interchain Foundation.
Interest is the amount of money that a lender charges for borrowing money. Interest rates are expressed as a percentage of the amount lended and are typically calculated on an annual basis known as the annual percentage rate (APR).
A meme is an image, video or piece of text, often intended for humor, that is rapidly reproduced and circulated by internet users through a variety of social media platforms, often with minor changes over time in engagement with wider meme culture.
Internet of Things (IoT)
The Internet of Things (IoT) refers to physical objects that are connected to the internet to enable features. IoT devices include appliances, home media systems, and security systems among a rapidly increasing list of others. IoT products offer increased functionality, share data, and interact with each other.
In the context of the blockchain industry, interoperability refers to the ability of different blockchain protocols to interact and exchange value with each other.
InterPlanetary File System (IPFS)
The InterPlanetary File System (IPFS) is a network for storing files and transferring verifiable data peer-to-peer. Developed by Protocol Labs, the IPFS is complementary to Filecoin, which is a blockchain designed to incentivize persistent data storage. Both protocols, while complementary, can be used separately.
In the money’ refers to an option that has a market price that is higher than its ‘strike’ price, which is the set price at which the option owner can buy or sell the security or commodity that underlies the option. ‘Out of the money’ refers to an option that has a market price lower than the strike price.
In finance, intrinsic value refers to an estimation of the value of an asset or company that has been calculated through financial modeling. The intrinsic value of an asset is not always the same as its market value.
Inverse Synthetic Cryptocurrencies
Inverse synthetic cryptocurrencies are synthetic assets offered on the Synthetix protocol that inversely track the price of the cryptocurrency they represent, and are represented with an ‘i’ prefix, as in the case of iBTC. If the price of bitcoin increases, the price of iBTC decreases.
Invisible Internet Project (I2P)
The Invisible Internet Project (I2P) is a distributed, encrypted private network layer that exists on top of the internet. I2P anonymizes user traffic on the network and enables communication resistant to censorship and third-party monitoring. I2P is integrated with the privacy-centric Monero cryptocurrency to optimize anonymity on the its network.
IOTA is a distributed ledger system that focuses on transactions serving the Internet-of-Things (IoT). IOTA utilizes a Tangle, which is a directed acyclic graph (DAG) data structure instead of a blockchain for its architecture. Its DAG structure places transaction confirmation on IoT nodes tather than the block-based system of blockchain. IOTA offers zero-fee transactions and claims to high a high transaction throughput.
An issuer is a legal entity, such as a corporation or government, that sells securities to investors to fund its operations.
Java Programming Language
Java is a popular general purpose programming language often utilized for client-server web applications.
Keep Network (KEEP)
Keep Network provides a privacy layer for public blockchains that enables users and apps to privately transfer and store data in off-chain containers called ‘keeps.’ KEEP is the network’s native token. Participants can earn fees denominated in KEEP for participating in the maintenance of keep containers.
KEEP is the native token of the Keep Network, a protocol that allows public blockchain users and apps to privately transfer and store data in off-chain containers called ‘keeps.’ Users can stake KEEP tokens to be randomly selected to earn fees by performing services on the network such as encryption or data storage.
Keosd is a key manager daemon used within the EOSIO blockchain system for storing private keys and signing digital messages.
Key Management Interoperability Protocol (KMIP)
The Key Management Interoperability Protocol (KMIP) facilitates the exchange of data between cryptographic key management servers and clients. It plays a key connective role in the function of crypto wallets an other decentralized products. KMIP was established by the Organization for the Advancement of Structured Information Standards (OASIS), a nonprofit consortium focused on the development and adoption of open, global information-sharing standards.
A cryptographic key is a string of bits that is used by an encryption algorithm to convert encrypted ciphertext into plaintext and vice versa as part of a paired key access mechanism. Keys are usually randomly generated and, unlike a password, are not intended to be memorized by users.
Know Your Customer (KYC)
Know Your Customer (KYC) is the compliance process instituted by regulators for businesses to verify the identity and level of risk of their customers. This process normally requires users to provide official identity verification using a passport, driver’s license, or similar documents. KYC regulation requires financial firms to collect personal data on their customers and ensure the legitimacy of the person or client to whom they may provide services.
Kyber Network (KNC)
The Kyber Network is a blockchain protocol that aggregates token liquidity from across the Ethereum ecosystem and facilitates the exchange of tokens without an intermediary.
Last Irreversible Block (LIB)
Within the EOSIO protocol, the block confirmation process is twofold. First, block producers propose what’s called an irreversible block with a record of transactions. Then, if two-thirds of block producers acknowledge the proposed block, it achieves irreversible status and the transactions are considered validated. The ‘last irreversible block is the most recent block to have been validated.
In trading, latency refers to the time elapsed between the placement of an order and the execution of that order. High latency presents an undesirable delay between actions, while low latency incurs minimal lag that often amounting to just milliseconds. High latency can signifcantly and negatively affect trading strategies, particularly for dynamic assets, as market prices may fluctuate in the time elapsed between placement and execution.
Layer-two solutions are protocols that integrate into blockchains like Bitcoin and Ethereum as separate, secondary layers built to increase transaction throughput and reduce transaction costs. Examples of layer-two solutions include Bitcoin’s Lightning Network and Ethereum’s Plasma.
On the Solana network, a leader is the transaction validator that adds entries to the blockchain ledger. To ensure equitability and decentralization, a ‘leader schedule’ determines which validator becomes a leader at a given time.
Leakware or Doxware
Doxware is a type of ransomware that first infects a computer, then threatens to leak sensitive or proprietary information held on the machine unless a ransom is paid.
A ledger is a record-keeping system for tracking financial transactions. Blockchains are often referred to as distributed ledgers.
A leg is one element of a multi-step derivatives trading strategy in which the trader combines several options contracts, futures contracts, or a mixture of the two, in order to profit from arbitrage or a spread, or to hedge a trading position.
In the context of investing, leverage is the use of borrowed money to fund an investment. If a position, individual, or organization is ‘highly leveraged,’ it means they are utilizing a large percentage of borrowed money.
In computer science, a library is a collection of specialized resources that are utilized by computer programs for software development. These resources can include documentation, messaging templates, configuration data, and pre-written code among other things.
A light client, or light node, is software that connects to full nodes in a blockchain network. Unlike full nodes, light nodes do not keep a full copy of the blockchain, or communicate directly with the blockchain. Instead, light clients rely on full nodes as intermediaries. Light clients can be used to send some transactions and to verify the balances of accounts, but are significantly less functional than full nodes.
The Lightning Network is a layer-two scaling technology that operates on top of blockchains like Bitcoin. It creates a private, two-way channel between users that enables multiple transactions to take place off the main blockchain. These transactions are subsequently recorded as one single transaction on the main blockchain. This process extrapolated over many transactions reduces network congestion and increase scalability.
Limited Purpose Trust Charter
A limited purpose trust charter is a specialized license issued by a U.S. state government which enables the receiving company to perform a specific set of functions, such as acting as a depositor or safekeeper for specific types of securities. A company which legally operates in accordance with the policies laid out in a limited purpose trust charter is called a “limited purpose trust company.”
Common on exchange trading interfaces, a limit order is a function to buy or sell an asset at a specific price. When a trader sets a buy limit order, they typically set the purchase of the asset to be executed lower than current market price in anticipation of a downward move towards a more favorable price. In contrast, when a trader sets a sell limit order, it is typically set higher than the current market price, in anticipation of the asset going up in value. Specified limit orders can remain unfilled if asset price does not behave in the way anticipated by the trader. By contrast, market orders are always filled at the current trading price of a specified asset without a threshold limit price being set.
LINK is an ERC-677 token that is the native token of Chainlink’s decentralized network of oracles. It is used to reward node operators for providing external data to smart contracts. Additionally, smart contract creators can require nodes to deposit LINK as a penalty fee to ensure that they fulfill requests for external information.
A liquidity aggregator accumulates liquidity from centralized and decentralized sources into one location to increase liquidity, reduce price slippage, and facilitate more efficient trading activity — particuary on decentralized exchanges (DEXs).
A liquidity pool is a crowdsourced pool of cryptocurrencies or tokens locked in a smart contract that is used to facilitate trades between those assets on a decentralized exchange.
Liquidity Provider (LP) Tokens
Liquidity provider tokens (LP tokens) are created and awared to a user that deposits assets into a liquidity pool. LP tokens represent the share of the liquidity pool that the liquidity provider owns. LP tokens are ERC-20 tokens that can be transferred, exchanged, and staked.
A liquidity provider is a user who deposits tokens into a liquidity pool. In return for supplying liquidity, users are typically awarded liquidity provider (LP) tokens that represent the share of the liquidity pool user owns.
In regards to an asset, liquidity refers to the ability to exchange an asset without substantially shifting its price in the process, and the ease with which an asset can be converted to cash. The easier it is to convert the asset to cash, the more liquid the asset. With regard to markets, liquidity refers to the amount of trading activity in a market. The higher the trading volume in the market, the more liquid the market. Liquid markets tend to increase the liquidity of assets.
A market that is liquid has a large number of buyers and sellers, and low transaction costs.
Liquid Proof of Stake
Liquid Proof of Stake (LPoS) is a consensus mechanism modeled after the concept of liquid democracy. Liquid democracy is a system that allows individuals to both vote directly on issues, or to elect delegates to vote on their behalf. Delegates can also transfer the voting responsibilities given to them to another delegate—a process which is referred to as transitivity. If the individual who delegated their vote does not agree with the way their delegate voted, the individual can rescind their vote and vote directly. In LPoS systems, users stake their tokens to earn the right to participate in the blockchain’s consensus process, and participate either directly or via a delegate.
Litecoin (LTC) is a cryptocurrency that was introduced in 2011 by Charlie Lee. Litecoin was created by forking Bitcoin’s code and retains many characteristics of Bitcoin, while being optimized for lower cost transactions. It is considered to be the first altcoin, and was the second cryptocurrency to be widely accomodated on digital currency exchanges and accepted in the wider economy.
Locker Ransomware is a type of ransomware that locks victims out of their devices until a ransom fee is paid.
Locky ransomware is a type of ransomware that emerged in 2016 that spread through phishing emails and locked victims out of their devices until they paid a ransom.
London Bullion Market Association (LBMA)
The London Bullion Market Association (LBMA) is an international trade association that represents the world’s Over-the-Counter (OTC) gold bullion market. The LBMA has over 150 member firms which trade, refine, produce, buy, sell, store, and transport precious metals.
London Good Delivery
Set by the London Bullion Market Association (LBMA), the London Good Delivery is a specification of the required attributes of the gold and silver that is used for settlement in the London Bullion Market. The specification also defines the ways in which gold and silver bars should be weighed, packed, and delivered, while also delineates requirement and standards for approved refineries.
Loom is an Ethereum-based platform that was initially focused on providing scalability for decentralized applications. It later pivoted to focus on enterprise blockchain applications for industries such as healthcare.
A lump sum is an amount of capital that pays an outstanding fee in one installment.
Machine Learning (ML)
Machine Learning (ML) is a subset of artificial intelligence (AI) and is the study of algorithms which optimize through experience without being programmed to do so. Machine learning algorithms find patterns in large data sets in order to make data-based claims and predictions.
Machine Learning Prediction
A machine learning (ML) prediction is the result of a machine learning algorithm analyzing a historical data set. The ML prediction can then subsequently be applied to new data sets, where it can be used to forecast outcomes like the future price movement of a stock.
The term machine-to-machine (or M2M) refers to communication between devices that occurs without human input. In the blockchain industry, this frequently relates to automated payments facilitated through smart contracts. Automation eliminates the role of gatekepers or intermediaris, which significantly reduces costs.
A mainnet is a fully developed and released version of a blockchain network. This stands in contrast with a testnet, which is generally used to perform tests and experiments on a blockchain either before a mainnet is released. Testnets are used while a blockchain is live for experimentation and development as to not distrupt the main chain.
Maker (MKR) is the governance token of MakerDAO, an Ethereum-based protocol that issues the Dai stablecoin and facilitates collateral-backed loans without an intermediary. MKR is a governance token that allows holders to vote on changes to the protocol, like the addition of new collateral assets and protocol updates.
MakerDAO is the Ethereum-based protocol that issues Dai, a stablecoin that tracks the value of the US dollar. MakerDAO also facilitates collateral-backed loans without an intermediary. The platform is governed by the holders of its native Maker (MKR) tokens.
Malware refers to any type of ‘malicious software,’ software that is specifically designed to cause damage to computers and computer systems. Examples of malware include viruses, trojan horses, and ransomware among others.
A margin call occurs when the value of an investor’s margin account—a type of account that lets investors purchase securities with borrowed money—falls below the broker’s required mininum amount. Specifically, a margin call is a broker’s demand that an investor deposit additional money or securities into the account to restore it to the minimum value or face liquidation.
Margin trading refers to leveraging borrowed funds to trade an asset.
In the blockchain industry, market capitalization, or market cap, refers to the value of the entire supply of a cryptocurrency or token. Market capitalization is calculated by taking the market price of one coin or token and multiplying it by the total number of coins or tokens in circulation.
In finance, a market maker is a company or individual that buys and sells large amounts of an asset in order to ensure that the market for that asset remains liquid. In the 0x protocol, a market maker is a special category of trader who makes it possible to have liquidity, tight spreads between the bid and ask prices for the assets being traded, and low slippage.
The most common type of trade made by retail investors, a market order is used to purchase or sell an asset at the current market price. Market orders are the fastest and most efficient way to purchase an asset when trading, and are typically filled instantaneously when strong liquidity and trading volume is present. Market orders are placed within an online order book on an exchange trading interface, usually either on a computer or mobile device.
A market signal, also known as a trading signal, is an indication to buy or sell assets that is based on some form of technical or fundamental analysis. Traders can generate market signals using a variety of criteria, such as earnings reports, trade volume analysis, or through myriad technical indicators based on market metrics.
Mark-to-market, also known as fair value accounting or marked-to-market, is an accounting practice that values assets in terms of current market price, as opposed to a static book value.
Medium of Exchange
A medium of exchange is an asset that is widely accepted in exchange for goods and services. Fiat currency is an example of a medium of exchange today, but historically has included everything from shells to precious metals.
Memorandum of Understanding (MOU)
A Memorandum of Understanding (MOU) is a document that outlines an agreement reached between two or more parties. MOUs are not legally binding, but often indicate that the parties will likely sign a binding contract in the future.
A Merkel Tree is a data structure composed of data-converting hashes that is utilized by blockchains for the secure verification of information. A Merkle tree summarizes all the transactions in a block by producing a digital fingerprint (i.e., a single hash) of the entire set of transactions.
Metadata is a form of data that is made up of other data. For example, the metadata of a file might describe when the file was created and what type of file it is.
Metamask is a web browser-based blockchain wallet that allows users to connect to Ethereum decentralized applications (dApps) without running an Ethereum full node. Metamask is also used to integrate to numerous decentralized exchange (DEX) platforms like Uniswap. Currently (December 2020) a mobile-based version of Metamask is undergoing extensive development and will be fully launched in 2021.
A metaverse is a shared virtual reality world.
A micropayment is a transaction, typically online, that involves a small sum of money—sometimes as small as a fraction of a cent.
Mimblewimble is a privacy-focused blockchain design first proposed in 2019 by the pseudonymous Tom Elvis Jedusor. Mimblewimble’s novel design proposes a way to maintain transaction data privacy while executing transaction verification that does not require network nodes to store the entire history of the blockchain. Grin and Beam are open source implementations of Mimblewimble tech.
Miners are an essential component of every Proof-of-Work (PoW) blockchain consensus protocol, and are responsible for validating new transactions and recording them on the blockchain ledger. Miners validate these transactions by solving complex math problems, which results in the minting of new tokens while reinforcing the network’s security and trustworthiness. In order to incentivize users to allocate processing power to mine new blocks, miners are typically rewarded a fraction of a network’s native currency with every successfully mined block.
Minimum Viable Product (MVP)
A Minimum Viable Product (MVP) is an early version of a product that has enough features such that a company is able to trial the product and collect data on how customers or clients may use it.
Mining is the process of using computing power to verify and record blockchain transactions. Mining also results in the creation of new coins, which miners earn as a reward for their efforts. Mining is utilized in Proof-of-Work (PoW) blockchains.
A mining pool is a group of miners who combine their individual computing power in order to increase their chances of successfully mining a block of transactions. When successful, block rewards are split amongst the members of the mining pool.
Mining rewards, also referred to as block rewards, are native assets of a network that miners receive for successfully mining blocks of transactions. Mining rewards can vary over time. Bitcoin’s block rewards, for example, decrease by 50% every 210,000 blocks.
A mining rig is a system used to mine cryptocurrency tokens. This rig can either be a device that is specifically designed and built for mining, or a personal computer that is only used to mine cryptocurrency on a part-time basis.
A mobile wallet is a cryptocurrency wallet that is installed on a smartphone. Mobile wallets are typically ‘hot’ wallets, meaning they are connected to the internet.
Monero is a privacy-focused Proof-of-Work blockchain that was created in 2014. Its privacy features include anonymizing transaction amounts and the addresses of transacting parties. Its native asset is XMR.
Monetary Authority of Singapore (MAS)
The Monetary Authority of Singapore (MAS) is the central bank and main financial regulatory authority of Singapore. The MAS is responsible for ensuring the regulatory compliance, stability, and efficiency of the Singapore’s economic system pertaining to banking, investment, monetary policy, insurance, securities, and the financial sector in general — as well as for the issuance of the Singapore dollar (SGD).
Moore’s Law is an assertion made by Gordon Moore in 1965 stating that due to technological advances in microchips, the power and speed of computers would double every two years, along with a correlational decrease in cost.
More Viable Plasma
More Viable Plasma (MoreVP) is a variation of Plasma, a layer-two Ethereum scaling technology introduced by Vitalik Buterin and Joseph Poon. MoreVP bundles transactions together and verifies them off of the blockchain before returning them in a batch to be verified by Ethereum. OMG Network utilizes MoreVP.
Moving Average Convergence Divergence (MACD)
The moving average convergence divergence (MACD) is a trading indicator used in technical analysis that utilizes moving averages to analyze the momentum of an asset.
A moving average is a stock indicator used in technical analysis to determine the support and resistance levels of an asset, as well as the trend direction of an asset’s price. Moving averages are calculated based on past prices, and is thus considered a ‘lagging’ indicator.
Mt. Gox was a centralized cryptocurrency exchange that lost more than 700,000 bitcoin in a 2014 hack. Created by Jed McCaleb in 2010, Mt. Gox was sold to Mark Karpeles in 2011 who operated it from Japan. Mt.Gox filed for bankruptcy and liquidation proceedings after the 2014 hack. Creditors are still awaiting compensation for their lost funds.
Multifactor authentication is a security mechanism that requires users to provide more than one form of verification when logging into systems. For example, when logging into an email account, a user may be required to enter both a password and a verification code sent to their smartphone.
In the context of the Orchid protocol, ‘hops’ refer to the way data is routed, specifically the encryption and masking of web traffic by a virtual private network (VPN). Multi-hop routing refers to the routing of traffic through multiple VPNs.
Multi-Signature (Multi-Sig) Wallet
A multisignature (multisig) wallet is a wallet which requires multiple keys to sign a transaction before it can be executed. Non-multisig wallets require only one signature to authorize transactions.
Mutual Insurance Company
A mutual insurance company is an insurance company that is entirely owned by its members. The primary objective of a mutual insurance company is to provide coverage for its members, who also play infuential role in company governance.
Mutualized Proof of Stake (MPoS)
Mutualized Proof of Stake (MPoS) is a consensus mechanism that is used by the Qtum blockchain. Unlike Proof of Stake, MPoS divides each block reward between the block producer and the nine previous block producers. A block’s producer receives 10% of the block reward immediately, and the remaining 90% is distributed after waiting for 500 blocks. This is done to disincentivize malicious attacks on the network.
My Story™ is a blockchain-based digital assurance solution created by VeChain and DNV GL. My Story™ enables consumers to scan a QR code on a product to learn about the product’s lifecycle and information related to quality, social, environmental and ethical issues.
Near-Field Communication (NFC)
Near-Field Communication (NFC) is a protocol that enables devices to communicate wirelessly when they are no more than 4cm apart. NFC devices can be used as keycards and to facilitate contactless payments. VeChain utlizes NFC to track products in supply chains.
The NEM Foundation was established in Singapore in 2016 to promote the growth of the NEM ecosystem. The foundation markets NEM technology and pursues projects in support of its development.
NEM N1S1 is the official name of the original NEM blockhain protocol. NEM plans to release Symbol, a new and separate blockchain protocol intended to build upon the strengths of the original NEM chain while incorporating new features. The two blockchains will not be compatible.
NET is the amount of network bandwith a user is allowed to utilize on the EOS network. NET is calculated in bytes of transactions, and users must stake EOS tokens to use it.
Network Baseline Model
The Network Baseline Model is Filecoin’s schedule for minting tokens, which is tied to growth in the protocol’s storage capacity. While tokens are only minted via block rewards, 70% of rewards are distributed in proportion with the growth of the total storage capacity of the network. The remaining 30% of rewards are distributed according to an exponential decay model, in which block rewards are greatest at the protocol’s inception and diminish over time.
Network congestion occurs when the speed or quality of a network’s service is reduced due to an overwhelming volume of transactions. Congestion can occur when a network experiences an unusual spike in activity that surpasses the volume the network was designed to handle, or in the event of certain malicious attacks such as a Distributed Denial-of-Service (DDoS) attack.
New York Stock Exchange (NYSE)
The New York Stock Exchange (NYSE) is an American stock exchange. It is the world’s largest stock exchange by market capitalization of listed companies.
Nifty Gateway is a platform that provides users with an easy way to buy, exchange, and manage non-fungible tokens (NFTs). The platform offers a broad array of digital art and collectible NFTs, and provides a fiat onramp, therefore enabling users to obtain NFTs with fiat as well as cryptocurrencies. Gemini acquired Nifty Gateway in November 2019.
In blockchain tech, a node is a computer that is connected to a blockchain network that serves a number of purposes essential to the maintenance of a distributed system. Some nodes validate transactions, while others observe activity on the blockchain. Nodal network structure is also a key aspect of maintaining security on a blockchain network.
Nodeos is the core service daemon that runs in the background of every EOSIO node on the EOS network. A nodeos can be utilized to validate transactions, process smart contracts, produce and confirm blocks, and to record transactions onto the EOS blockchain network protocol.
Nominated Proof of Stake (NPoS)
Nominated Proof of Stake (NPoS) is a variation of the Proof-of-Stake (PoS) consensus mechanism employed by the Polkadot blockchain network’s main Relay Chain and Polkadot-based parachains (independent blockchains or specialized shards). Instead of using the traditional PoS methodology, NPoS is used to select validators through Polkadot network nominators. Nominators typically only choose validator nodes they trust but they can lose DOT, Polkadot’s native cryptocurrency, if they choose malicious validator nodes through a process called slashing.
Nominators are nodes that are used to secure Polkadot’s main Relay Chain by selecting trustworthy validator nodes and staking DOT, Polkadot’s native cryptocurrency. In this process nominators algorithmically choose network validators by bonding their DOT assets to produce blocks on the Polkadot network and in exchange receive a portion of validator node rewards. However, nominators are also susceptible to slashing (losing some of their DOT) if the validator nodes they select behave in a malicious manner.
A nonce (which stands for “number only used once”) is a number that is added to all the data in a block prior to the hashing of that block in the Proof-of-Work mining process.
Non-custodial and custodial are classifications that are used to classify the services that a financial institution provides to their customers to manage securities or other assets, including crypto. In the blockchain industry, non-custodial means that the user has full control over their crypto and is required to manage their own private keys (specialized algorithmic passwords needed to generate transactions and manage assets). This typically means that no external entity is responsible for the management, insurance, and transaction of the assets held.
Non-custodial wallets are cryptocurrency wallets that are controlled only by the person who created the wallet, meaning, the creator of the wallet has full control of their private keys (a specialized algorithmic password used to effect crypto transactions).
Non-Deterministic (ND) Wallet
A Non-Deterministic (ND) wallet is a type of non-custodial cryptocurrency wallet that is made to generate, store, and manage numerous private keys that are independent from each other. Non-Deterministic wallets often store their private keys in pairs (because they utilize randomness) and were developed shortly after the Bitcoin blockchain network went live for the first time. The main problem with Non-Deterministic (ND) wallets is that their backup keys must be created each time a new wallet is created, This problem was later mitigated by wallets that made use of BIP 32 technology (a deterministic key generator).
Non-fungibility means that a specific asset is distinguishable or unique from another asset that is similar in nature. A non-fungible token (NFT) is a specialized type of cryptographic token that operates within a blockchain platform and is not interchangeable with any related asset. NFT’s are typically indivisible and cannot be divided or altered in any way.
Non-Fungible Token (NFT)
A non-fungible token (NFT) is a specialized type of cryptographic token that represents a unique digital asset that cannot be exchanged for another type of digital asset. This characteristic is in contrast to cryptocurrencies and blockchain utility tokens (like Bitcoin and Ethereum) that are fungible in nature. NFT’s are created via smart contract technology and are classified within the ERC-721 token standard.
Notional volume is a distinct measurement of trading volume in a particular time frame and is often considered in context with market value, which is the current price of a security that can be purchased or sold through a brokerage or exchange service. As an example, let’s say a call option representing 100 shares of a specific stock with a strike price of $30 may actually trade on the market for $1.50 per contract (100 x $1.50 = $150 market value) but its notional value is $3,000 (100 x $30). This as an example of the classification of notional volume.
Numeraire is a blockchain-based protocol that was designed to be an algorithmic institutional trading platform. Numeraire utilizes a crowdsourced predictive-trading analysis platform to host weekly trading competitions and is designed to allow users to make better trading and investment decisions. The project’s underlying cryptographic asset NMR contributes to the widescale implementation of the Numeraire blockchain ecosystem.
Off-chain is a classification that refers to any type of transaction or mechanism (including governance, tokenized asset creation, consensus design etc.) that occurs outside of a blockchain network protocol. An off-chain mechanism is typically executed outside of the actual blockchain network through other mechanisms that compliment on-chain methodologies. For example, voting by a governnce council or a steering committee to determine the governance structure of a blockchain ecosystem and its underlying protocol is conducted off-chain.
Off-chain governance is a blockchain-based mechanism that generally takes place externally to the underlying blockchain network protocol, typically in a face-to face fashion by several interrelated parties. This procedure often refers to a means of establishing rules for the on-chain protocol and overall blockchain ecosystem, oftentimes through a voting process by different constituents working to determine the overall direction of the project. Off-chain governance also takes into consideration the underlying global blockchain community and several on-chain parameters to realize a stronger overall governance system. Blockchain governance evolves and changes over time with the goal of improving the system as time goes on.
The OMG Network (previously known as OmiseGo) is a non-custodial, layer-2 scaling solution that is built to compliment the Ethereum network by drastically decreasing transaction times and increasing overall network scalability. This is realized by enhancing Ethereum’s ability to send and receive the Ethereum network’s underlying asset (ETH) and Ethereum-based ERC-20 tokenized assets. OMG Network makes use of a specialized layer-2 scaling technology called More Viable Plasma (MoreVP) to make this functionality possible. As well, the OMG Network leverages the network’s utility asset (OMG) to drive the blockchain platform and its overall ecosystem.
On-chain is a classification that refers to any type of transaction or mechanism (including governance, tokenized asset creation, consensus design etc.) that occurs within a blockchain network protocol. An on-chain mechanism is typically executed automatically through the use of cryptographic and algorithmic computerized code underlying blockchain platform.
On-chain governance is a blockchain-based mechanism that takes place inside the computational architecture of a blockchain network protocol. This procedure often refers to a means of establishing rules for the on-chain aspects of the protocol and the overall blockchain ecosystem, typically through the use of automatic cryptographic algorithms. On-chain governance also takes into consideration the global blockchain community and several off-chain parameters to realize a stronger overall governance structure. Both on-chain and off-chain governance systems work together to improve the blockchain ecosystem (and its underlying protocol) as it matures over time.
Ontology Trust Anchors
Ontology Trust Anchors are qualified third-party trustors which provide authentication services on the Ontology blockchain by using a three-tiered mechanism. This structure includes: (1) “verifiers” that verify and make use of trust from the (2) “trustee” which is entrusted by the (3) trustor (or trust anchor). Each of the three processes work together to verify data cryptographically and algorithmically in a transparent manner on the Ontology blockchain. Examples of trust anchors can be government agencies, universities, banks, third-party authentication service providers, or biometric technology companies, and constitute a portion of Ontology’s multifaceted trust network — much of which consists of decentralized multi-source authentication protocols.
Ontorand Consensus Engine
The Ontology blockchain protocol makes use of the OCE (Ontorand Consensus Engine) consensus mechanism. OCE is an upgraded version of the standardized Delegated Byzantine Fault Tolerance (dBFT) consensus protocol that also makes use of Verifiable Random Function (VRF) and Proof-of-Stake technology. OCE is based on Onchain’s Distributed Networks Architecture (DNA) which was designed by the creators of NEO. OCE can theoretically achieve near-infinite scalability and requires a relatively low hashing rate, with block-creation speeds limited only by a user’s internet speed.
Open finance refers to the integration of bank and third-party blockchain-based technological applications that are designed to transform the traditional finance sector. Open finance aims to enable financial institutions, large enterprises, and central banks to conduct their business practices in a more transparent, efficient, automated, and data-driven manner. There are three main parameters that must be implemented to facilitate the creation of a resilient and transparent open finance ecosystem. Firstly, to establish a settlement layer consisting of different stable coins; second, to onboard enterprises and construct a data layer to help enable the technology; and lastly, to allow financial institutions to create financial products using trusted enterprise data.
Optimistic Roll-Up (OR)
An Optimistic Rollup (OR) is a type of roll-up (roll-ups are a specialized blockchain-based settlement process that makes use of smart contracts off-chain) used to lower transaction fees on a blockchain network that processes dApp transactions off-chain before settling the final state on-chain. A sequencer (also called an aggregator) utilizes a fraud proof (essentially a bond) to ensure that the roll-up is processing according to the correct parameters. For this reason, ORs are considered “optimistic,” because they expect sequencers to act in an ethical manner. The fallback mechanism used in this process is the fraud proof, which is used to financially disincentivize malicious actors.
An options contract is a derivatives contract that facilitates an agreement between two parties to carry out a potential transaction for an underlying security at a predetermined price (referred to as the strike price) on or prior to the expiry date of the contract. Options contracts are typically categorized into either a put option or a call option, both of which are bought to speculate on the direction of a stock or stock indices, or sold to generate income. Typically, a call option is purchased as a leveraged bet on the potential appreciation of a stock or index, while a put option is purchased to potentially profit from future price declines.
Oracles are third-party information service providers that send external real-world data to a blockchain protocol (often to a smart contract or numerous smart contracts). Oracles give blockchain network protocol’s significantly more power because they are able to exponentially secure, verify, and strengthen the validity of data that a blockchain network receives and makes use of (because blockchains and smart contracts are often closed systems). Oracles can be decentralized and rely on numerous data sets, or centralized and controlled by a single entity. Currently, one of the main uses of blockchain-based oracles is to provide price and data feeds needed for the trustless execution of smart contracts used by financial mechanisms in the DeFi sector.
Orchid Blockchain Protocol
Orchid is a peer-to-peer marketplace for virtual private networking (VPN) providers and users that allows any user of the network to purchase bandwidth (off-chain and without gas fees and the congestion of the Ethereum network) from a participating VPN service provider. The Orchid network utilizes a payment mechanism called a probabilistic nanopayment for users to purchase bandwidth by paying in Orchid’s native utility token (OXT).
Order and Execution Management System (OEMS)
Caspian’s Order and Execution Management System (OEMS) is a software platform, exchange aggregator, and suite of tools for advanced trading and portfolio management designed for institutional investors.
An order book is an electronic list of buy and sell orders for a specific security, asset, or financial instrument (or in the blockchain industry, a specific cryptocurrency asset) organized by price level. Order books are typically accessed through an exchange service provider’s online interface — such as a computer or mobile device — and help traders and investors improve market transparency by providing critical trading and investment data. An order book is composed of the number of shares or financial assets (or tokens) being bought and sold at specific prices in a sequential order (with the green portion of the interface being the buy list, and the red portion, the sell list).
Order slicing is a strategy used by institutional investors with large amounts of capital to make large purchases or trades (generally via an order book and online exchange interface) of a specific asset in smaller, more spaced out increments. Order slicing is done to prevent huge price fluctuations in the market and to maintain privacy. Order slicing is also used to gain a better overall average entry price, and to protect investment capital.
Orphaned blocks (generally referred to as stale blocks) are blocks that have not been accepted within a blockchain network due to the lag time when two blocks are mined simultaneously. Theoretically, a soft fork is created when two blocks are mined at the same time, but this is only a practicality because orphaned blocks typically only create four blocks in a row outside of the main network they originated from. Orphaned blocks are valid and verified blocks that exist in isolation form the initial blockchain and serve no purpose after they are rejected.
Ouroboros Praos is a Proof-of-Stake consensus mechanism designed by the IOHK team building the Cardano blockchain. Its novel approach provides security against fully-adaptive corruption in a semi-synchronous setting. A malicious actor is able to corrupt any participant from an evolving population of stakeholders at any time provided that stakeholder distribution keeps an honest majority of stake — and this approach helps safeguard against such concerns. Ouroboros Praos is considered a highly scalable, innovative, and a secure methodology to construct a Proof-of-Stake blockchain-based system.
Over-optimization is a process that occurs when traders create a trading algorithm (often using excessive curve-fitting) on a computerized system that looks great in theory but when it is actually used in a real-time market trading scenario does not perform as desired. This occurs when the algorithmic trading system is too complex for the computer too handle and results in an overloaded computational system.
Over the Counter (OTC) Trading
Over-the-Counter (OTC) trading is typically a process where an agreement to purchase a specific asset is completed between two parties without the need for a centralized exchange. OTC desks are usually used to purchase large quantities of an asset in order to improve transparency, save time and fees, and to maintain security of the asset purchased. Usually OTC trading involves a third-party custody solution. Also, OTC desks often trade assets or securities that are unlisted on regular crypto exchanges, because smaller exchanges do not meet the regulatory requirements to list the specific asset.
OXT is Orchid’s native utility crypto asset that helps facilitate Orchid’s VPN-based blockchain network infrastructure and community. The Orchid network utilizes a payment mechanism called a probabilistic nanopayment for users to purchase bandwidth by paying in OXT. OXT is also used by VPN providers to stake to the Orchid network. Orchid is a peer-to-peer marketplace for virtual private networking (VPN) providers and users that allows any user of the network to purchase bandwidth from a participating VPN service provider.
A paper wallet is an offline method (a piece of paper) that includes a user’s private key, public key, and wallet address that are used to store and transact cryptocurrencies (when connected online to an exchange or blockchain node). Paper wallets were primarily used around the time Bitcoin was first created but presently they are quite rare and have been replaced by more efficient hardware and software wallets.
Parachains are Polkadot-based independent blockchains that connect to and run off of the Polkadot network’s main Relay Chain. Parachains can also be considered shards (with entire blockchains inside them). Parachains run in parallel to the Relay Chan and process transactions through parallelization by using sharding and exhibit extremely fast transaction times. Parachains are able to host their own blockchain-based tokenized assets within their independent network and control their own governance processes by paying to use a parachain slot by attaching to the main Relay Chain.
Passive yield is any type of income that is generated from an investment; however this term usually refers to investments that are held on a medium to long-term basis. Specifically in relation to blockchain technology and crypto investing, a passive yield is typically realized when an investor purchases a cryptocurrency with a specific amount of investment capital (for example, by buying ETH or BTC with a fiat currency like the U.S. dollar) and earns interest on that crypto over time.
A passphrase is a specialized type of password which is structured as a specificially ordered sequence of words, which is used to access a particular account, device or system. Since passphrases are typically composed of individual coherent words rather than an abstract string of letters, numbersm and symbols, they are often easier to remember than random passwords, although passphrases offer a similar—and at times even higher—level of security when properly applied. Within the blockchain industry, passphrases are commonly used as a security mechanism which helps users protect their cryptocurrency assets by mitigating the risk of an account hack and/or unauthorized third-party access.
A password manager is an online program that stores and manages a user’s passwords. It can also generate and retrieve complex passwords.
Within the Stellar blockchain’s technical framework, a path payment refers to a payment that is sent in one currency and received in another (for example a payment sent in USD and received in EUR). Path payment’s are processed via Stellar’s decentralized exchange (DEX), are atomic in nature, and are processed as a single transaction to mitigate the risk of the end user receiving a type of asset that they do no not want. Remember, a path is a specialized type of trade, or chain of trades, that exists on Stellar’s SDEX order book (an order book is a list of buy and sell orders for a particular asset).
Pattern Day Trading
A pattern day trader (PDT) is a regulatory classification for a trader who executes more than four margin trades per day during five consecutive business days. The PDT designation places specific limits (to limit excessive risk and detrimental habit-based trading) on trading for a trader and can result in an exchange banning a trader for up to 90 days in order to remain compliant with NYSE (New York Stock Exchange) regulations.
PAX Gold (PAXG)
PAX Gold (PAXG) is an ERC-20 stablecoin created to help investors maintain the benefits of purchasing gold without the drawbacks of the traditional gold investment process. Each PAX Gold asset is pegged on a 1:1 ratio to one troy ounce (t oz) of a 400-ounce London Good Delivery gold bar that is stored in Brinks Security vaults in London. PAX Gold is backed by proven London Bullion Market Association-accredited (LBMA) gold bars and fully redeemable for actual, physical gold.
Paxos Standard (PAX)
PAX Standard (PAX) is an ERC-20 stablecoin that is pegged at a 1:1 ratio to the US dollar. Created by Paxos Standard — which also issues the Binance USD and Paxos Gold stablecoins — every PAX is backed by proven reserves of US dollars. While available on many exchanges, PAX allows users to further utilize Paxos Standard’s own financial services like enterprise brokerage and settlement for institutions. Parent company Paxos Trust is a New York Trust Chartered company that adheres to regulations required for financial businesses operating in the United States.
Peer to Peer (P2P)
A peer-to-peer (P2P) network structure as it relates to blockchain technology is generally considered decentralized and is designed to operate in the best interest of all parties involved, as opposed to benefitting mainly a single centralized entity. A peer-to-peer blockchain network works by connecting different computers (or nodes) together so they are able to work in unison. This process creates a censorship resistant, open, public computing network that allows important data and other functionalities to be shared across the network.
Peer-to-Peer (P2P) Lending
Peer-to-peer (P2P) lending is a process of lending money (or crypto, and other assets) to an individual or business enterprise (usually without a centralized intermediary) through a decentralized online service provider that matches lenders with borrowers. Peer-to-peer lending service providers typically offer their services in a cheaper and more transparent way with less operational overhead, when compared to a traditional financial institution. This generally results in lenders and burrowers getting better rates and better service overall. Recently, P2P lending has become more commonplace in the blockchain industry with the exponential rise of the DeFi sector.
Peer-to-Peer (P2P) Marketplace
A peer-to-peer (P2P) blockchain-based marketplace is a marketplace that is typically more decentralized and transparent than many of its traditional competitors. Peer-to-peer marketplaces are designed to operate in the best interest of all parties involved, as opposed to mainly benefitting a single centralized entity. A peer-to-peer blockchain marketplace works by connecting buyers and sellers together to create an open, global, computational marketplace that can used fairly by all parties involved. Many blockchain platforms have built P2P marketplaces that run within their blockchain networks’ protocols.
Peer-to-Peer (P2P) Network
A peer-to-peer (P2P) network structure as it relates to blockchain technology is generally considered decentralized and is designed to operate in the best interest of all parties involved, as opposed to mainly benefitting a single centralized entity. A peer-to-peer blockchain network works by connecting different computers (or nodes) together so they are able to work in unison. This process creates a censorship resistant, open, public computing network that allows important data and other functionalities to be shared across the network.
Peer-to-Peer (P2P) Trading
Peer-to-peer trading takes place directly between two or more network participants in a decentralized, low-risk manner; often on a blockchain-based decentralized exchange (DEX) or crypto wallet. This process removes the centralized middleman allowing the users of the platform to pay minimal or zero fees to use the service. At this time, many crypto wallets are developing instant exchange within a single wallet interface that allows a user to switch instantaneously between different types of cryptocurrencies and fiat currencies. However, a lack of liquidity (for both mobile wallets and DEXs), and a small overall user-base are significant barriers for the widespread implementation of this technology.
Permissionless innovation is a classification that references the decentralized nature of blockchain-based network protocols and blockchain technology. Permissionless, as the name suggests, means that the users and developers of the network do not need permission from anyone to transact and use network services. Theoretically, anyone can use a permissionless network without access being granted by a centralized authority. Open public blockchains are generally permissionless in nature, while closed private blockchain systems are the permissioned.
A phishing attack is a common computer-based attack method that is used to obtain sensitive information like email addresses, private key addresses, mobile phone numbers, and credit card details from an unknowing victim. Phishing attacks are carried out by malicious third parties posing as a trustworthy entities like co-workers or institutions of authority to gain access to accounts. While phishing attacks are a common form of technological crime, they are confidence tricks more than they are hacks.
Physical bitcoins are typically imitation physical metal coins (that are designed to look like Bitcoin) that have a private key hidden under a tamper-proof sticker or hologram. They can be purchased pre-loaded with a specific cryptocurrency value or without any digital value at all. The enterprise Casascius Coins released the first popular physical coin that represented Bitcoin that was sold widely to the global blockchain community. Presently, it is possible to purchase other physical coins that represent and support other cryptocurrency assets (such as Litecoin, Ethereum, and Bitcoin Cash). The physical possession of these assets should also be considered a blockchain transaction because the recipient is now in possession of the private key under the tamper-proof sticker on the coin. Generally, physical coins that represent different types of cryptocurrency assets are single-use, and once redeemed, cannot be re-used.
Plaintext is an information format refers to unformatted text in a computer envirnment that can be understood or deciphered by an individual or computer-based software system. In regards to security, plaintext processed over the internet must be equipped with added layer of security to remain confidential. The process of encryption through the use of an encryption algorithm or cipher converts plaintext into ciphertext, which is encrypted data that is unreadable.
The Plutus platform is a smart contract development platform designed by IOHK and the Cardano blockchain ecosystem. Plutus smart contracts consist of both on-chain computerized code that runs on the blockchain, as well as off-chain or client code that run on a user’s machine. Plutus smart contracts are written is the programming language Haskell.
Point of Sale (POS)
Point of sale (POS) can refer to the physical or virtual location of a customer’s purchase of an item, or the actual physical point-of-sale device (typically a special handheld or stationary electronic device present in a storefront). POS systems, location, and configuration enable marketers to target customers for new products and service offerings and gain a wealth of information about customers and prospects.
Polkadot is a decentralized blockchain network protocol designed to allow independent blockchain networks to connect and transfer data between one another through cross-chain interoperable technology. Polkadot was founded by former Ethereum co-founder and CTO Dr. Gavin Wood. Polkadot makes use of the GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) and BABE (Blind Assignment for Blockchain Extension) mechanisms to form a hybridized Nominated Proof-of-Stake (NPoS) consensus methodology. Polkadot employs DOT as the network’s native asset, which is used to sign, send, and receive transactions, employ governance parameters, and to conduct other processes within the Polkadot blockchain ecosystem.
Position Management System (PMS)
Caspian’s Position Management System (PMS) is an algorithmic portfolio and trading position management system that allows users to manage their trading positions across multiple exchanges and wallets, monitor real-time and historical P&L data, and access other advanced metrics that simplify and improve the trading and investment process.
Position trading is an investment strategy that prioritizes long-term investments in assets. Instead of actively trading daily short-term market fluctuations like a day trader, position traders hold an asset for many months and years and value sustained growth. Amongst cryptocurrency investors, position trading is referred to as holding, or “HODL” in crypto-colloquial terms.
Predictive algorithm analytics is a software-based methodology that uses data mining, machine learning, and predictive modeling technology to analyze the impact of current data on future outcomes. Today, predictive algorithms are used by large corporations like Amazon and Facebook to algorithmically determine the most effective way to increase sales on products and services. Predictive algorithms are also increasingly being used to create more personalized digital experiences and targeted strategies in a growing number of sectors.
Pre-mining refers to the mining of a cryptocurrency asset (by the project’s creators and core software developers) before a project is introduced to the public and its underlying blockchain network protocol goes live for the first time. Pre-mining allows the founders of a project to possess a pre-designated pool of funds, which is often used to ensure the longevity of the project. However, pre-mining can sometimes be seen as a controversial practice because the creators of the project are able to own the assets before a market price is set.
Pretexting is a social engineering technique used in cybercrime in which an attacker typically poses as a trusted figure such as a bank official, head of a company, or law enforcement officer through communication channels with the intention of defrauding a victim. By posing as a trusted figure, the attackers manipulate victims into sharing sensitive data or capital, often through digital channels.
Price discovery is the process of determining the accurate price of an asset in the marketplace. This process is often used in the options and futures markets, or when an asset or class is new. When an event takes place that may have an affect on the price of an asset — like a major product release or executive shake-up at a publicly traded company — the short term price will fluctuate until the even has been factored in to the price. The reaciton of the market represents the period of price discovery. For investors and traders, this phenomenon typically benefits individuals with more experience, knowledge, and access to changing market data.
Price movement, or price action, is the occurrence of a change in price over time for a specific security, cryptocurrency or asset in the market. Price action forms the foundational basis for market trading and charting interfaces.
Price-to-Earnings Ratio (P/E Ratio)
The price-earnings ratio (also known as the P/E ratio, P/E, or PER) is the ratio of a company’s share price relative to the company’s per-share earnings. The ratio is used to determine the relative value of a company’s shares, and whether the share price is currently overvalued or undervalued. The price-earnings ratio can also be used to compare a company’s current value to its historical value, or to compare different aggregated markets against each other over a period of time. The P/E ratio is a key tool for fundamental analysts determining an asset’s intrinsic value.
The prime rate (prime) is the interest rate central and often commercial banks charge borrowers with the strongest credit ratings, typically large corporate entities. In the United States, the federal funds rate, the overnight rate banks utilize to lend to each other, is determined by the Federal Reserve. The federal funds rate serves as the basis for the prime rate, while the prime rate serves as the starting point for most retail bank interest rates, including for mortgages, personal loans, and small business loans.
The term principal can have multiple meanings in the financial industry, but typically refers to the original sum of money borrowed in a loan agreement. For example: If a borrower takes out a $500,000 mortgage, the principal is $500,000. The fee for providing the loan service is often a percentage based interest calculated atop the remaining principal.
The principal-agent dilemma is a conflict in priorities found between a person, entity, or group (principal) and a party who has been authorized to act on their behalf (agent). The dilemma is a result of misaligned incentives when an agent is incentivized to act towards their own benefit over the benefit of the principal, or those they are enacted to represent. The principal-agent dilemma is evident throughout business, finance, and markets, and often requires changing a system’s reward structure to balance the priorities of both sides — which is the principal endeavor of incentive alignment.
Public-key cryptography (asymmetric cryptography) is a specialized cryptographic system that utilizes pairs of lengthy alphanumeric keys that only function when used in tandem. Public keys represent a wallet address that can be distributed to others. Private keys are to be known only by their owner and grant access to funds. The generation of these keys is made possible by the usage of cryptographic algorithms based on mathematical problems to produce a one-way function.
Private (Permissioned) Blockchain
A private blockchain system is a distributed network that operates with key differences to an open public blockchain protocol like Ethereum or Bitcoin. Private blockchains are often governed by a single entity and used by large organizations — enterprise and government, for example — that require access management, ensorship rights, and priveleged privacy models. While private blockchains are built with speed and scalablity in mind to serve the needs of the client organization, they are not decentralized or secured by a distributed network.
A probabilistic nanopayment is a specialized payment mechanism utilized on the Orchid blockchain platform, a blockchain-based VPN provider. Orchid users purchase network bandwidth by paying rapid-paced microtransactions in Orchid’s native utility token (OXT). Probabilistic nanopayments are used as representative placeholder transactions until OXT payments are consolidated and resolved. Probabilistic nanopayments play a definitive role in Orchid’s internal transaction management system by lowering costs and increasing network speed and transparency.
Profit and Loss (P&L)
Profit and Loss (P&L) is a macro-level measurement of how much capital has been gained or lost through trading for an individual or institution. P&L is an important datapoint for institutional investment firms. Unrealized P&L represents the amount of profit or loss that a trader has taken since opening a particular position, and is a useful metric for trading derivatives.
Proof of Authority (PoA)
Proof of Authority (PoA) is a consensus mechanism utilized by many blockchain networks. PoA was originally created by Gavin Wood, co-founder of Ethereum and former CTO of Ethereum. PoA is a consensus mechanism that leverages the value of identity and reputation instead of cryptographic assets or computational power. PoA relies on a limited number of nodes to verify transactions, and is often criticized for being too centralized. This trade-offis offset by remarkable scalability and transaction speeds.
Proof of Goods and Services Delivered
In Crypto.com blockchain network architecture, Proof of Goods and Services Delivered is a status that is cryptographically verified to prove that a payment was sent and recieved correctly between via its Visa card and mobile wallet products into merchant accounts. This mechanism is used by payment merchants and customers to confirm the legitimacy of the payment process and ensure transparency.
Proof of History (PoH)
Proof of History (PoH) is a consensus methodology on the Solana blockchain that incorporates the measurement of time into a blockchain ledger with the intent of scaling and streamlining transactional throughput. While most blockchains operate without a timestamp, PoH functions like a decentralized clock that enables nodes on the Solana network to process transactions without devoting processing power to solving for discrepancies in minuscule differentiations in time and order.
Proof of Importance (PoI)
Proof of Importance is an innovative consensus algorithm developed by the NEM blockchain protocol and is a variation of Proof of Stake. The system allows a wide pool of users to participate in the addition of new blocks in exchange for receiving tokenized rewards. The rewards are determined in proportion to a score that quantifies the user’s contribution to the network. Additionally, PoI encourages healthy activity of the ecosystem by preventing users from hoarding the XEM asset.
Proof of Replication (PoRep)
Proof of Replication is one of the consensus mechanisms used by the Filecoin network. Specifically, it is a process through which a storage miner proves to the blockchain protocol that it has created a distinct copy of a specific piece of data on the network’s behalf. This process is verified by the network through zk-SNARK cryptographic proof technology.
Proof of Service
The DASH blockchain features a masternode system referred to as Proof of Service (PoSe) on account of the critical services that masternodes provide to the DASH network. Proof of Service is the mechanism on the DASH blockchain network used to determine if a stake-bearing masternode is providing the correct services in good faith to users who have contributed tokens to it.
Proof of Spacetime (PoSpacetime)
Proof of Spacetime (PoSpacetime) is a consensus mechanism utilized by the Filecoin network. It allows the blockchain to prove its capacity, and in doing so, it can cryptographically verify that the entire file is being stored in an unaltered fashion for an agreed-upon time frame. Proof of Spacetime is made up of two distinct subsets: 1.) Window Proof of Spacetime (WindowPoSpacetime) and 2.) Winning Proof of Spacetime (WinningPoSpacetime).
Proof of Stake
Proof of Stake (PoS) is emerging as one of the most widely used blockchain consensus mechanisms in existence today. PoS networks incentivize participants to stake native tokens in a a network of validator nodes. Upon the close of a transaction block, validator nodes are eligible to be randomly chosen to validate block data, thus generating the subsequent block, and earning native tokens as reward. A robust nodal network offers increased network security, resiliency, and computational power. Proof-of-Stake systems also generally enabe validator nodes to contribute democratically in decentralized platform governance through voting on key updates and decisions. While still a recent innovation, PoS networks are already proving faster and more scalable than Proof-of-Work blockchains, in addition to being more energy efficient.
Proof of Storage (PoStorage)
Proof of Storage (PoStorage) is a consensus algorithm used by the Filecoin network to prove that network participants are indeed providing the specified amount of storage that they claim to be. This storage space is verified by the network through zk-SNARK cryptographic proof technology.
Proof of Work (PoW)
Proof of Work (PoW) is a blockchain consensus mechanism first popularized by the Bitcoin blockchain network. Proof-of-Work systems rely on a process of mining to maintain the network. Miners provide computer hardware that competes to solve the complex cryptographic puzzles required to confirm data transacted on the network, and are rewarded for doing so with the network’s underlying cryptographic token for doing so. Proof-of-Work blockchain systems are decentralized and secure as compared to other network consensus methodologies, but typically struggle to achieve the network scalability needed for widespread global enterprise adoption. Proof of Work is also criticized for its high energy intensivity.
A prospectus, as it relates to finance, is a formal disclosure document that describes an investment offering to potential buyers. It typically provides investors with details about a specific stock, mutual fund, bond, or another type of investment describing the company’s business model, financial statements, a list of material properties, and other important information. A prospectus is generally distributed by underwriters and brokerages to potential buyers who may purchase a security through an Initial Public Offering (IPO).
Protocol Buffers, or Protobuf, is a Google-based methodology developed for serializing structured data. The system allows interface description language to describe the structure of different data types. This ensures that different distributed database networks — such as blockchain systems — are able to incorporate the use of more software programming languages to be more adaptable as their capabilities expand.
Provenance is the historical record of ownership of any tangible or intangible asset. Open public blockchain systems employ an optimal structure for tracking the provenance of assets because of their permissionless, immutable, and censorship resistant features.
A public address is a shortened version of a user’s public cryptographic key. Public addresses are used to receive transactions through a blockchain network protocol and are commonly used in place of a public key.
Public and Private Keys
Public-key cryptography (asymmetric cryptography) is a specialized cryptographic system that utilizes pairs of long alphanumeric keys that work together in a pair: public keys, which can be distributed to others, and private keys, which are known only by their owner. Public keys are used to store cryptocurrencies on the blockchain. They are also used to send cryptocurrencies in conjunction with the use of the public key’s corresponding private key. The generation of these keys is made possible by the usage of cryptographic algorithms based on mathematical problems to produce a one-way function.
Public-key cryptography (asymmetric cryptography) is a specialized cryptographic system that utilizes pairs of long alphanumeric keys that work together in a pair: public keys, which can be distributed to others, and private keys, which are known only by their owner. Public keys are used to store cryptocurrencies on the blockchain. They are also used to send cryptocurrencies in conjunction with the use of the public key’s corresponding private key. The generation of these keys is made possible by the usage of cryptographic algorithms based on mathematical problems to produce a one-way function.
Public-key infrastructure (PKI) is a set of policies, procedures, and hardware-software combinations needed to authenticate users and devices online. In practice, this involves one or more trusted parties digitally signing a digital document or decentralized ledger in order to certify that a particular cryptographic key belongs to a particular user or device. PKIs play a pivotal role in creating, managing, distributing, using, and storing digital certificates, and managing public-key encryption.
Public Representative Nodes (P-Reps)
Public Representative Nodes (P-Reps) are the most powerful nodes that exist within the ICON Network. P-Reps are responsible for network validation and the creation of blocks and other important processes. There are 100 P-Reps that are responsible for the governance of the ICON Network (with 22 main P-Reps and 78 secondary P-Reps). P-Rep standings are always changing and are determined by the voting power of staked ICX by global ICON Network community members (known as ICONists).
Pump and Dump (P&D)
A pump and dump is a scheme that occurs when a trader or investment firm buys a large amount of an asset — sometimes illegally — and later promotes, or “pumps” up the underlying company with misleading information to draw unsuspecting investors to buy in, thus further increasing its value. Shortly afterwards, the trader or investment firm “dumps” by selling the asset at a much higher price, which results in losses to investors who bought in at a later time. In crypto markets, this often occurs when a whale buys a large quantity of a specific crypto asset with a large sum of money to drastically increase the price before selling after a substantial profit.
A put option contract (the opposite of a call option) is a specialized contract that is sometimes used in derivatives trading. It gives an investor the right, but not the obligation, to sell an underlying security (or cryptocurrency, or other type of asset) at a specified price within a defined time period. When the option contract expires, the investor can choose to sell the underlying security or let the option contract’s value depreciate to zero. Put options can sometimes be used in combination with call options to form unique trading strategies.
Qtum is public Proof-of-Stake blockchain protocol based on Bitcoin’s code but modified to allow smart contracts to run on top of its UTXO (Unspent Transaction Output) model. With Qtum Neutron, the blockchain is able to connect to several Virtual Machines (VMs) simultaneously. This allows Qtum to make use of the Ethereum VM and its own state-of-the-art x86 VM while leveraging the capabilities of its 1,000-node blockchain network.
Qualitative analysis uses subjective judgment to analyze an enterprise’s value or potential long-term growth based on non-quantifiable information such as management expertise, research and development, industry cycles, and other complex data. Qualitative analysis is the opposite of quantitative analysis, which focuses primarily on numerical data reporting and balance sheets. Both metrics are important to evaluate in order to gain a better perspective on a potential investment opportunity.
Quick Response Code (QR Code)
A quick response code (QR code) is a type of matrix barcode that uses a machine-readable optical label (typically scanned with a mobile phone) containing sensitive information about the item it is attached to. QR codes often contain data for a tracker, locator, or identifier that points to a mobile application or website. QR codes use four standardized encoding methods (byte/binary, alphanumeric, numeric, kanji) to store data.
A quorum is defined as the minimum number of members required to conduct business within a specific group. As it pertains to blockchain technology, quorum biasing denotes that if many voters participate, the vote is more legitimate than if, in turn, very few participate. This mechanism can be used to determine the fairness of specific proposed blockchain-based governance parameters, such as the minimum amount of participating tokens required for a vote to be valid. Typically, if a vote fails to reach the quorum, then it is automatically cancelled.
Radio Frequency Identification (RFID)
Radio-Frequency Identification (RFID) uses electromagnetic fields to identify and track tags which are attached to objects. A RFID tag is made up of a very small radio transponder as well as a radio transmitter and receiver. RFID tags can be triggered with an electromagnetic pulse from a nearby RFID device reader to transmit digital data often underlying an inventory number back to the reader. This specialized number can be utilized to monitor products that have RFID tags attached to them, so the items can be authenticated, tracked, and located at any time (in this case through the VeChainThor blockchain platform).
Random-Access Memory (RAM)
Random-access memory (RAM) is a type of computer memory that can be read or changed in any order to store specific working data and machine code. RAM can be read or written in nearly the same amount of time regardless of the physical location of the data within the memory.
Random Beacon (Keep Network)
A Random Beacon is a specialized blockchain-based random number generator used by the Keep Network blockchain protocol to help employ its containerization private data model. The Random Beacon uses threshold signatures with digital signature relays to randomly select groups of KEEP token holders to be network transaction signers. Signers are responsible for creating new bitcoin key pairs that are used to create tBTC tokens. Randomness is an integral component in creating secure and hack-resistant technical blockchain architecture.
Ransomware is a type of malware or malicious software that blocks access to a user’s computer system or threatens to leak sensitive or personal data. The goal of most ransomware attacks is to extort a ransom payment in exchange for restoring access to sensitive encrypted data. Ransomware has become a powerful tool for bad actors targeting users that could potentially lose their all-important data. Ransomware attacks can pose a heightened threat to cryptocurrency users because demands are often sought in bitcoin or other digital currencies to avoid unwanted detection.
Ransomware-as-a-service (RaaS) is typically a software-based program developed by malicious online cybersecurity experts that is sold to less knowledgeable cybercriminals in order to attack unsuspecting users with the goal of stealing sensitive data. Hackers often advertise their “service” on online marketplaces within the dark web and ask to be paid in cryptocurrency for their products and services.
Real Estate Investment Trust (REIT)
A real estate investment trust (REIT) is defined as a company that owns, operates, or finances income-generating real estate. REITs are generally modeled after mutual funds and pool the capital of numerous investors together, so a purchaser is not required to individually own property to potentially receive financial rewards.
Reciprocally Analogous Virtual Machine (VM)
A reciprocally analogous Virtual Machine (VM) is a type of VM that is designed to communicate in a beneficial manner with another VM or blockchain/computer system. A VM is a cloud-based imitation of a computer system that is based on different types of computer architecture to provide the functionality of a physical computer system. VM’s may be made to emulate types of specialized hardware, software, or a combination of the two. Additionally, some VM’s are built to mimic different computer architectures and software applications and/or operating systems written for another type of computer or architecture.
A recovery phrase, also referred to as a “seed phrase” or “recovery seed phrase,” is a 12, 18, or 24-word code that is used as a backup access mechanism when a user loses acess to a cryptocurrency wallet or associated private key. The seed phrase matches information stored inside the a corresponding wallet that can unlock the private key needed to regain access.
Recovery shares are a security mechanism that allow a user to designate how many shares are created, and what percentage are required to regenerate a wallet and its pubic and private keys. For example, a user could potentially designate a 5-of-7 share threshold to determine the number of recovery shares needed to open their wallet. Compared to a solitary recovery phrase, the recovery shares mechanism makes theft more difficult and simplifies the wallet regeneration process.
A recurring buy is a practice whereby an investor sets aside a specific sum of capital to buy a target asset at recurring intervals. This process occurs when an investor leverages a stockbroker or exchange to set a specific time to purchase an asset or multiple assets on a recurring basis.
Regulation T (Reg T)
Regulation T, sometimes referred to as Reg T, is a set of rules that was first implemented by the Federal Reserve Board in 1974 to reduce risk in securities transactions. Regulation T enables securities dealers to extend credit to their clients, while its main functionality is to control the margin requirements and stocks bought on margin by investors. According to Reg T, traders are able to receive up to 50% of a trade’s value via margin from their broker. This mechanism was put into place to control leverage trading risk and limit the total buying power of investors.
Regulatory compliance is the process of making sure specific enterprises meet certain guidelines introduced by government bodies — such as the Securities and Exchange Commission (SEC) in the US. These guidelines seek to protect investors, ensure consumer confidence, facilitate the transparency, efficiency, and fairness of markets, and reduce financial crime and system risk. Financial services organizations are further subject to regulations governing customer communications, advertising, management of client assets, customer understanding and suitability, conflicts of interest, customer dealings, capital regulations, and more.
Rehypothecation is a process that occurs when banks, brokers, exchanges, and other financial service providers use client assets for their own purposes to benefit both sides. For example, several blockchain enterprises use a portion of their clients’ cryptocurrency holdings as collateral to be lent to institutional investors. In exchange, users receive incentivized rewards for holding their assets on the platform. Companies in the blockchain industry that make use of this process include Binance, Huobi, Crypto.com, Celsius Network, and BlockFi.
Relative Strength Index (RSI)
The relative strength index (RSI), in technical analysis, is a momentum indicator that’s used to measure the impact of recent price changes to calculate overbought or oversold conditions of a specific stock, cryptocurrency or any type of investment asset. The RSI is displayed as an oscillator, or line graph that moves up and down, and is measured between the 0 and 100. In the investment industry it is commonly accepted that an RSI rating over 70 is overbought or overvalued, while an RSI rating under 30 is oversold or undervalued. The RSI investment metric like all technical indicators should only be used as one data point to better analyze current market conditions.
The Relay Chain is the main protocol and most powerful component of the Polkadot network. It is responsible for maintaining network consensus with the help of the hybrid GRANDPA and BABE Nominated Proof-of-Stake (NPoS) consensus mechanism. The Relay Chain utilizes validators, parachains, collators, fishermen, and nominators to ensure the network works correctly at all times and is used as a main control center to interact with external blockchains through bridges and internal Polkadot-based blockchain protocols (parachains). The Relay Chain also utilizes the DOT asset to allow various nodes in the ecosystem to work correctly and for other uses.
Relayers are 0x decentralized exchange (DEX) users who host off-chain order books, list buy and sell orders, and charge transaction fees. Relayers do not act as a trusted intermediary on the 0x platform, nor do they execute trades, however, their main purpose is to host order books externally to the 0x platform. Relayers help traders find counter-parties (other participants that transact within the network) and cryptographically move orders between them.
A remittance is a payment from one place to another, and in most cases involves an individual transferring capital to an overseas contact. Typically, these payments are made via an online service provider, cryptocurrency wallet, or other tech-enabled financial conduit, and completing a cross-border money transer using a blockchain-based transfer mechanism is oftentimes quicker and more cost-effective than sending a remittance through the traditional banking system. With the advent of blockchain technology and mobile cryptocurrency wallets, individuals can now transfer substantial amounts of capital essentially anywhere in the world within seconds while incurring minimal fees.
A remittance network is a fintech service provider that allows enables remittance payments to be sent both domestically and abroad. Examples of large-scale remittance service providers include PayPal, Western Union, and Revolut. As a third-party processor and validator of remittance payments, remittance networks act as a financial intermediary between customers and their contacts and often charge substantial service fees. Blockchain-enabled payment networks have been designed in part to help alleviate current cost and efficiency issues inherent in traditional remittance networks and avoid the need for third-party validators.
Remote Procedure Call (RPC)
A Remote Procedure Call (RPC) is when a computer utilizes a computer program that causes a procedure to execute via a distinct address space on another shared network or computer. This is done through coding and by using a local procedure call where the software engineer leverages a location transparency so they don’t have to provide details on the remote interaction.
The Ren Network is a decentralized protocol of virtual devices called Ren dark nodes that provide network interoperability in order to enable cross-chain lending, exchanges, and other services between different DeFi protocols. To make this a reality, Ren makes use of a multi-party computation algorithm as a consensus protocol while using the Ren Virtual Machine (RenVM) to directly enhance liquidity on the Ethereum Network. This functionality enables the platform to lock assets on-chain and mint them individually. The Ren Network utilizes its own native token (REN), which primarily functions as a payment token to place orders within the network.
Repair miners are a proposed (as of June 6th, 2020) type of mining node within the Filecoin network that is presently in development. Repair miners, once enabled, will be able to facilitate self healing of the Filecoin protocol. At this time, the network is fully functional without the full implementation of repair miners and other types of miners that will be added in the future.
Replace by Fee
Replace by Fee (RBF) is a Bitcoin protocol tool developed by famous blockchain developer Peter Todd that allows one version of an unconfirmed transaction to be replaced with another transaction that pays a higher transaction fee. Via RBF, unconfirmed transaction are stored in the mempool, which is where valid transactions wait to be confirmed by the Bitcoin network. From there, these stored transactions can then be replaced with another transaction if the sender of that transaction offers to pay a higher transaction fee. As a resut, while RBF can help reduce network congestion and help prioritize transactions in accordance with senders’ willingness to pay, the mechanism is somewhat controversial because it alters the immutability of the involved transactions.
Reporting as it relates to institutional investment is a process by which analysis tools are used to create reports and compile other data to monitor different aspects of a portfolio’s profitability. Reporting mechanisms can be used for long-term and short-term (trading) analysis. Specialized reporting tools allow institutional investment firms to analyze profit and loss (P&L) data, execution data, position size, entry type, exposure, and much more.
A retail investor is a non-professional investor that buys and sells securities, mutual funds, cryptocurrencies, or other investment assets through a traditional or online brokerage firm, exchange, or other type of investment account. Retail investors typically buy securities or other assets for their own personal use and generally trade (or hold long-term) in much smaller increments compared to institutional investors.
Retrieval miners, along with storage miners, are the two key components that make up Filecoin’s decentralized market structure. The Filecoin network benefits three main groups of users: (1) Retrieval Miners who receive tokens by serving data, (2) Storage Miners, who receive tokens by providing storage, and (3) clients who pay to store and retrieve data. The retrieval market is built off-chain, and is powered by retrieval miners who help transmit data back and forth.
Return on Assets (ROA)
Return on Assets (ROA) is an indicator that is used to determine how profitable a company is relative to its total assets. This metric allows companies and other organizations to determine how efficiently their assets are being leveraged to generate earnings. ROA is displayed as a percentage and is calculated by dividing the enterprise’s net income by its total asset amount. The higher the ROA, the higher the relevant organization’s asset efficiency. ROA is often used to compare similar companies or to benchmark a company’s current operations against its past performance. The ROA indicator also takes into account a company’s debt level unlike other common metrics such as Return on Equity (ROE).
RingCT (Confidential Transactions)
Ring Confidential Transactions (RingCTs) are a mechanism used within the Monero blockchain platform which allows the amount in a transaction to be hidden, similar to now the system’s ring signature mechanism obfuscates the details of sending and receiving addresses. RingCTs drastically improve the unlinkability and untraceability of transactions within the Monero network by allowing for ring outputs of various transaction sizes, without compromising the anonymity of the transaction. This function was added to Monero in January of 2017 and made mandatory on the network in September 2017.
A ring signature is a mechanism that is used to conceal the details of a digital signature in order to hide the specific details of the relevant network transaction. This unique digital signature format can be used by any member of a group of users that is in possession of the correct cryptographic keys. Therefore, it is nearly impossible to determine which group member’s keys were used to produce the signature, which essentially allows the sender of a transaction to remain anonymous and untraceable. The name ‘ring signature’ is denoted by the ring-like structure of the signature algorithm, and Monero was the first blockchain network protocol to implement ring signatures in 2015.
Ripple Gateways are businesses that allow their customers to deposit their funds in exchange for Ripple IOUs, thereby providing an entry point into the Ripple network. Ripple Gateways allow their customers to transfer both traditional and cryptocurrency funds across the network, and are also used to transfer customer-owned Ripple IOUs to another address or withdrawal their funds by redeeming their Ripple IOUs. Each Ripple Gateway is designed with specific features which ensure the security of the underlying organization’s network and the capital their institutional clients deploy within the network.
Risk Management System (RMS)
Caspian’s Risk Management System (RMS) is used to monitor trading and investment decisions to help ensure greater profitability (by taking into considerations specific risk-based parameters). RMS can also be used to generate detailed risk metrics that allow traders to see the overall market more clearly. This functionality allows users to make better trading and investment decisions.
Roll-ups are an off-chain aggregation of transactions inside an Ethereum smart contract. Roll-ups are used to combine and process smart contract transactions off-chain before settling the final state on-chain. This is done to lower transaction fees given that the rising popularity of decentralized finance (DeFi) offerings on Ethereum has caused gas fees to increase substantially. Roll-ups are considered a throughput solution, not a scaling solution, as they usually require additional hardware to settle transactions on-chain.
A Rootkit is a specific type of Trojan malware designed to gain unauthorized root or administrative access to a target device or network. Many rootkits are specifically designed to subvert security software and contain a variety of tools that enable hackers to steal personal information, damage, or completely hijack an infected device. As a result, rootkits are notoriously difficult to detect and remove, and in some cases the only way to remove a rootkit from a device is to reinstall the device’s entire operating system.
A Roth IRA is a U.S. individual retirement account that offers tax-free growth on funds vested in the account and tax-free withdrawals from the account after the account holder meets certain criteria. More specifically, Roth IRA account holders that are at least 59.5 years old or older and have had their account open for at least five years are eligible to withdrawal the funds within their account any time they want without paying federal taxes.
Ruby is a high-level, interpreted, general-purpose computer programming language designed by Yukihiro “Matz” Matsumoto. Ruby supports a diverse range of other programming languages and can be utilized for many different situations in software development.
Ryuk ransomware attacks are a type of ransomware attack in which a malicious actor aims to render a target device/network’s essential files inaccessible to its legitimate users so that the attacker can levy a ransom against the target. Once the essential files are corrupted, encrypted, or otherwise compromised, the victim is typically unable to regain access to these files on their own and are pressured to pay the demanded ransom amount, which is oftentimes hundreds of thousands of dollars per attack. Ryuk attacks are relatively common and these attacks regularly account for tens of millions of dollars’ worth of damages each year.
Safety Module (Aave)
Within the Aave economic framework, the Safety Module is a specialized security feature designed to mitigate the potential effects of an unexpected drop-off in liquidity, which might otherwise substantially reduce the AAVE token’s overall value. The Safety Module is built using the Balancer liquidity pool and allows for AAVE and ETH tokens to be staked at a 4:1 ratio in order to earn rewards and vote on protocol changes. If necessary, up to 30% of the AAVE tokens staked in the Safety Module can be sold in order to provide liquidity to Aave.
Within a cybersecurity context, a sandbox is a security mechanism that is designed to mitigate the potential impact of system failures and/or software vulnerabilities by allowing programs to run independently of and separately from the device/network’s primary operating system. Sandboxes are often used to test out new implementations and code bases or audit untested programs to ensure that they behave as planned prior to deployment. Sandboxes are also commonly deployed while testing the performance and features of a Virtual Machine (VM).
Satellites are an essential part of Storj’s decentralized data storage network framework which audits Storj storage nodes to ensure that they are storing their assigned data and acting in an honest manner. Satellites receive payments for securing the network and periodically distribute payments to storage nodes for providing data storage. Additionally, Satellites also store the metadata of the network’s segmented files, which enables client to receive their files upon request.
Satoshi Nakamoto is the pseudonymous individual or group responsible for creating the Bitcoin protocol. Satoshi Nakamoto famously published the Bitcoin whitepaper in October 2008 and mined the first ‘genesis’ block on the Bitcoin network in January 2009. In April 2011, Satoshi Nakamoto posted on an online forum saying that he had “moved on to other things” and disappeared completely from the blockchain community. Since then, the true identity of Nakamoto has remained unknown, although there are a variety of unproven theories which claim to have unraveled the mystery of this individual/group.
Named after the pseudonymous individual or group that created Bitcoin, Satoshis, or “sats,” are the smallest divisible unit of the Bitcoin cryptocurrency. Like all cryptocurrencies, Bitcoin are fully divisible and there are 100 million satoshis in one Bitcoin token (BTC). Many crypto enthusiasts track the price fluctuations of their respective cryptocurrencies in terms of sats rather than fiat currencies, which reflects their skepticism/rejection of the traditional financial system.
Within the context of blockchain technology, scalability is the capacity of a blockchain network to increase the transactional finality speed and throughput needed to improve processing times for transactions that are being sent and received via network protocol. The higher a network’s scalability, the more efficiently it can send transactions and process different types of data. Scalability is one of the three main characteristics of a mature blockchain network, with the other two being decentralization and security.
A scalp trader, or scalper, is a type of investor that typically enters and exits financial positions very quickly—usually within the span of minutes or second— with the goal of generating consistent profits from incremental movements in an asset’s price. To acomplish this, scalpers often use high-leveraged trading positions in a derivatives trading environment. Scalpers are often employed by large institutional investment firms, equipped with a suite of tools to help automate many of their trading decisions, and allocated a significant amount of investment capital in order to make their trades worthwhile.
Scareware is a type of malware that utilizes social engineering to invoke fear, anxiety, and/or shock in a target in order to persuade to purchase unwanted software. Scareware commonly takes the form of rogue security software, ransomware, or some other type of software that misleads a user into thinking that their device has been infected with a virus. If a user is sufficiently convinced by the scarware’s urgent and dire warnings, they may be compelled to purchase additional software to eliminate the alleged “threat”. Oftentimes this program a user downloads to fix the purposed issue is actually a malignant virus or a useless, resource-draining subscription-based service.
SCORE (Smart Contract on Reliable Environment)
Screen-locking ransomware is a type of software that blocks a target user’s access to their device’s operating system. This type of ransomware typically works by locking the user’s device and displaying a message prompting the user to pay a specific ransom unlock their device, or run the risk of forever losing the contents of their device.
Scrypt is the hash function that converts an input of letters and numbers into an encrypted output that is used by the cryptocurrency Litecoin. It differs from the SHA-256 hash function that is used by Bitcoin, but it also functions within a similar Proof-of-Work (PoW) consensus mechanism. The Scrypt hash function was originally designed to limit mining to only CPUs and GPUs, although scrypt-capable ASICs have since been developed.
Secure Sockets Layer (SSL) & Transport Layer Security (TLS) Certificates
A Secure Sockets Layer (SSL) Certificate is a technological standard used to enable a secure connection between a Web server and client on the internet. SSL certificates are installed on a Web server and scramble transmitted data through encryption algorithms in order to prevent malicious actors from being able to access data as it moves from one system to another. Transport Layer Security (TLS) Certificates represent a recent, updated version of SSL with further enhanced security.
Securities and Exchange Commission (SEC)
The U.S. Securities and Exchange Commission (SEC) is a large independent body of the U.S. federal government that is responsible for proposing securities rules, enforcing federal securities laws, and regulating the U.S. investment industry. The SEC is responsible for protecting investors, maintaining fair and smooth functioning of U.S. securities markets, and facilitating capital formation.
Security tokens are a tokenized stake in the ownership of any asset that has value, such as a business or a piece of real estate, which is recorded in a blockchain ledger. Within the context of corporate ownership, security tokens are analagous to corporate stocks, or fractions/multiples of a stock, and therefore represent an equity stake in a company, along with whatever future returns a partial ownership of that business entails, such as dividend payouts. As a result, security tokens offer a more flexible yet secure way of transferring, exchanging, and storing value.
Security Token Offering (STO)
Security Token Offerings (STOs) are a method of distributing security tokens and exist somewhere between Initial Coin Offerings (ICOs) and Initial Public Offerings (IPOs). To better understand this, it’s important to note that security tokens are equity tokens that represent an equity stake in a company or asset, in addition to whatever future returns are associated with partial ownership of that entity, such as dividend payouts. STOs are generally considered superior to ICOs due to the fact that STOs offer instant settlement times, clearer regulatory guidelines, higher liquidity, and a lower barrier to entry in many instances, among other benefits. Since enterprises that create registered securities must adhere to specific compliance and regulatory requirements, STOs avoid a lot of the market ambiguity which ultimately turned many investors off to ICOs, while continuing to offer a straightforward, investor-friendly method of issuing, trading, and storing tokenized equity shares.
A seed phrase, also referred to as a “recovery phrase’ is a 12, 18, or 24-word code that is used as a backup access mechanism when a user loses acess to a cryptocurrency wallet or associated private key. The seed phrase matches information stored inside the a corresponding wallet that can unlock the private key needed to regain access.
Segregated Witness (SegWit) is the name of a soft fork that was carried out on the Bitcoin network which changed the transaction format of the protocol. Segwit separates signature data from transaction data within the blockchain to increase the total amount of data within a specific block. By rearranging the data contained in each block more efficiently, more space is freed up which allows for the inclusion of additional data. SegWit is capable of increasing Bitcoin’s block size limit from 1MB to 2MB and was designed to mitigate the blockchain size limitation issues that periodically slow down transaction speeds on the Bitcoin network. This is accomplished by “segregating” the transaction into two segments by removing the unlocking signature’s “witness” data from the original portion and appending it as a separate structure at the end of the block.
Self-Regulatory Organization (SRO)
A self-regulatory organization (SRO) is an entity that has the power to independently create and enforce accepted professional regulations and standards without the need for external oversight or intervention.
Self-Sovereign Identity (SSI)
Self-sovereign Identity (SSI) is a general concept that describes a user’s ability to own their own identifying data without the need for third-party assignment or validation. While there are multiple technical approaches to actualizing SSI from a practical standpoint, none have yet to emerge as a broadly recognized global standard.
A sell-off is a sudden, high-volume sale of a security or other asset which typically reduces the price of the relevant asset, at least in the short term. While there are a variety of reasons for why a sell-off may occur, in most instances sell-offs take place as a result of widespread market panic, either due to negative news or a black swan event, or coordinated market manipulation initiated by institutional investors or “whales”.
A separate account is an investment portfolio owned by an investor that is managed by an investment firm—typically a registered investment advisor (RIA). Separate accounts provide their owners with real-time visibility into all their holdings and transactions as they occur, as opposed to retroactively, as is the case with mutual funds. While most separate accounts are opened through a financial advisor or investment brokerage, they can also be managed through an insurance company or bank. Separate accounts are also commonly referred to as separately managed accounts (SMAs) or individually managed accounts.
As part of the optimistic roll-up layer two scaling solution proposed for the Ethereum network, sequencers — or aggregators — process transactions off-chain before sending them on-chain to be finalized. While sequencers are financially rewarded for their role in optimistic roll-up models, they must put up a bond — known as a fraud proof — as collateral to disincentivize malicious action. Executed at scale, this methodology could save both capital and offers a boon to Ethereum throughput capacity.
Serenity is the multi-phased Ethereum upgrade currently underway that is transitioning the Ethereum blockchain from a Proof-of-Work consensus mechanism to Proof of Stake, while segmenting the network into specialized shard chains that are optimized for scale. Both updgrades are groundbreaking technological endeavors that will increase speed, efficiency, and network scalability on Ethereum. Because of the complexity required in launching Ethereum 2.0, Serenity is designed to launch in a total of four phases over the next five to 10 years. Phase 0 was successfully deployed in December 2020 with the launch of a beacon chain.
Settlement is the process of determining when a transaction is completely confirmed, or settled, by all interested parties. Until settlement provides confirmation of a completed exchange, the transaction remains pending and unresolved. The speed of settlement finality has major economic repercussions for businesses. Longer settlement times may lead to costly and time-consuming delays, and add up throughout a marketplace to significantly slow the process of conducting business throughout many industries. Shorter settlement times speed up business operations, save money, and remove uncertainty.
Settlement Agent Node
On the Crypto.com blockchain, Settlement Agents are network nodes that take the role of enabling settlement between the platform’s native CRO token and other stable cryptocurrencies like stablecoins. Settlement agents are relied on by buyers and sellers to exchange tokens and accurately settle a transaction. Settlement Nodes are eligible to earn a profit from charging a .5% fee for payouts made in fiat.
Settlement finality is the process whereby a transaction is absolute and confirmed by a blockchain network protocol. Before settlement finality is achieved, the transaction remains pending and may not be considered completed. Rapid and broad settlement finality is necessary to achieve high throughpot scalability on a blockchain, the achievement of which remains pivotal to the widespread applicability of decentralized tech for global enterprise use.
SHA-256 is a member of the SHA-2 cryptographic hash function family that was designed by the National Security Agency (NSA) and later made famous for being a foundational aspect of the Bitcoin blockchain network. SHA-256 is a Secure Hash Algorithm (SHA) that to secures data by utilizing a cryptographic mathematical operation to generate a unique 256-bit, 64-character random sequence of letters and numbers (called a hash) out of an input. These functions are generally designed to serve as a one-way function that is virtually impossible to reverse once a piece of underlying data has been amended into its hash value.
Shard chains are created by partitioning a blockchain into smaller, more manageable pieces. This process decreases the workoad on validator nodes, which are only required to store and manage one shard instead of the entire blockchain system. Alongside other optimizations, shard chains are expected to drasticallly increase netwoek throughput and speed as opposed to monolithic consensus mechanisms. The Ethereum 2.0 blockchain will be separated into 64 shards that will operate as smaller blockchains tied to a main Beacon Chain. Ethereum 1.0 is intended to make up just one of those shards.
Sharding is a mechanism that is used to partition a blockchain network orother type of computer network or database. Its purpose it to distribute the network’s computational and storage workload across a broader set of devices, or nodes, in order to increase the throughput and transaction speed of the entire system. Each node only maintains information related to its specific shard or partition, and since each node is only responsible for processing a fraction of the overall network’s transactional load, the network’s overall processing capabilities and resilience can be vastly improved. As a result, the increased transaction speeds made possible through sharding have allowed many blockchain-based networks to be exponentially faster, more secure, and better suited for widespread enterprise use.
Sharding is a mechanism that is used to partition a blockchain network, or any other type of computer network or database. Its purpose it to spread out the computational and storage workload across a larger set of computers to increase the throughput and transaction speed of the entire system. Sharding works by increasing the overall capability of the network so that each node isn’t responsible for processing the entire network’s transactional load. Instead, each node only maintains information related to its specific shard or partition. Increased transaction speeds through sharding allow blockchain-based networks to be exponentially faster and better suited for widespread enterprise use.
The sharing economy is a socioeconomic system built around the concept of mutually sharing resources within a network to benefit all its members. This process is typically enabled through peer-to-peer (P2P) networks which allow for the purchase and/or exchange of goods and services in a way that differs substantially from traditional company-to-customer business models. In recent years, the sharing economy model has given rise to a variety of innovative business models, ranging from ride-sharing to decentralized content platforms. Open public blockchain networks help realize the potential of the sharing economy by virtue of their decentralized, transparent, and censorship-resistant nature.
Shielded transactions are a unique transaction type that conceals specific data about a transaction, such as the amount being transferred or the involved account addresses, in a way which is still verifiable on the blockchain. While different blockchain projects deploy different methods to enable the use of shielded transactions, many of these methods involve zk-SNARK cryptography to obfuscate transaction data prior to the transaction being recorded in a blockchain.
Shielding transactions take place on the Zcash protocol when data is sent from a public sender to a private receiver. Zcash employs the usage of zk-SNARK cryptographic proof technology to keep sheild the data and keep it private, immutable, and secure, despite the differing privacy requirements of the transactors.
A sidechain is an external secondary blockchain protocol that is connected to a primary blockchain network (mainchain). Sidechains are typically designed to allow for the transfer of data and value between themselves and the mainchain, and oftentimes use a different consensus mechanism than the mainchain. As a result, sidechains can allow for a higher degree of flexibility and scalability, given that systems with a significant sidechain interoperability component are often designed to cater to a broader range of enterprise and individual users.
Signature-Based Security Programs
Signature-based security programs are a type of security software that identifies malware using well-known, pre-recorded digital signatures or identifiers. These programs identify malware by cross-referencing a supicious program’s digital signatures with the digital signatures of existing malware software which have been stored in a database specifically designed to archive and help identify a wide array of documented malwares.
A cryptographic signature is a mathematical mechanism that is used to verify the authenticity of a digital message or digital document within a digital network. Cryptographic signatures are commonly used for financial transactions, digital contract management, software distribution, and a broad array of other use cases that prioritize the accurate detection and prevention of forgery and data-tampering. In regards to blockchain technology, cryptographic signatures are typically used to prove that the correct private key was used to initiate and send a transaction through a complex authentication process that involves the use of both a private and public key.
SIM Swap Attack
A SIM swap attack is an attack that involves taking control of a victim’s SIM card, which stores private user data and a broad range of user access credentials. Attackers executing a SIM swap attack will oftentimes deploy a variety of social engineering techniques, such as calling a cellphone provider and impersonating the victim, with the goal of obtaining sensitive personal information about the victim. If successful, the attacker will typically use the information they acquired to request a new SIM card, which will allow them to gain control over the victim’s phone number and whatever potentially sensitive data is linked to that number.
Within a financial context, slippage refers to the difference between the expected price of a trade relative to the actual price at which the trade is executed. Slippage generally occurs when an investor buys or sells an asset on a platform with poor liquidity and low trading volume. If there is a large gap between the bid-ask price on an exchange’s order book, the asset purchaser may end up paying more for an asset or receive less of the asset than expected once the trade has been executed.
The Cardano blockchain utilizes a protocol called the Ouroboros Praos protocol. This unique consensus mechanism functions by breaking down time into epochs that last approximately 5 days, which are then broken down into 432,000 slots. Nodes are selected at random to be slot leader, which in turn are selected to produce blocks.
Smart contracts are computer programs that run within a blockchain protocol that automatically execute based on preset conditions. They execute a predefined set of terms automatically in a trackable and irreversible manner without the need for a third party. Smart contracts are written in various types of computer programming languages, or even in a combination of languages. Smart contracts are designed to solve real-world problems utilizing computerized systems, and are currently being developed for nearly any industry imaginable.
A smart home is a tech-enabled home setup in which various functions such as heating, lighting, and appliance configurations are automated or remotely managed via network-connected device such as a mobile phone or tablet. Smart home setups usually involve the use of both hardware and software solutions to improve occupants’ convenience and efficiency, and are one of the most widely recognized applications of Internet of Things (IoT) technology. For instance, an occupant’s sleep tracker wearable may be synced to a room’s temperature control system, which will then automatically adjust the room’s temperature in accordance with the occupant’s sleep patterns and personal preferences.
Smart Order Router (SOR)
Smart order routing (SOR) is an automated online trading method which detects and executes the best available trading opportunity throughout a given range of financial markets and trading venues. In essence, when implementing SOR an investor feeds a pre-established set of conditions to a set of bots or algorithms which then scan multiple markets using their given criteria in order to find the optimal environment to execute a given order. Investors typically program the algorithms used to run SOR to differentiate various trading venues in accordance with common parameters such as latency levels, fee structures, and available liquidity, as well as more complex parameters specific to that investor’s unique trading strategy. As a result, running SOR requires robust API integrations across different platforms in order to effectively utilize this data-intensive, multiplatform trading strategy.
Smart Pools (Balancer)
On the Balancer platform, Smart Pools are liquidity pools with adjustable parameters that can be managed via a smart contract. These pools can be made of two-to-eight different token constants, and can be customized with configurable weights in order to represent the desired ratio of each token within a given pool. In addition to customizing token mix and weight, Smart Pool managers can also change swap fees, select/restrict liquidity providers, set max deposit value limits, and start/stop trading tied to their pool. These variable parameters allow for a hitherto unprecedented level of flexibility for liquidity providers on Balancer.
Smart tokens are cryptocurrencies that can be programmed with a near-infinite range of parameters. The purpose of a smart token depends on the specific parameters it was programmed with, with some smart tokens used to help reduce liquidity risk, improve security measures, or shape consumer behavior. For instance, a smart token can be programmed to dynamically adjust its value in accordance with a Constant Reserve Rate (CRR) pegged to a different base currency, programmed to work only with certain vendors or when purchasing certain items, or designed to expire after a set amount of time. The Bancor Network’s Bancor token, released in June 2017, is widely recognized as the world’s first smart token.
Smishing is a variant of a phishing attack which involves the use of misleading SMS or text messages to misdirect a target into sharing sensitive information or access. The text messages involved in a smishing attack often contain malicious links or a fradulent customer support or authoritative phone intended for the target to click on or call. If a target responds to this call to action (CTA), it will typically go on to trigger some form of compromising activity, resulting in the divulging of sensitive information such as one’s Social Security Number or Credit Card details, or losing access to one’s devices.
Social engineering is a broad term that encapsulates a wide array of techniques that exploit psychological factors – such as fear, trust, panic, lack of information, and confusion – to compromise a target. Rather than directly hacking a system or identifying technical weakness in a target’s devices or digital accounts, social engineering focuses on the manipulation of individuals to perform acts which may not be in their best interest, such as divulging sensitive data or inadvertently transferring funds to a malicious actor. Social engineering tactics can also be used to gain access to networks and devices, in which case a malicious actor can wrest control away from the legitimate owner to install malware in the system.
A soft fork is a software update of a blockchain network that is backward compatible, meaning that a piece of software which has undergone a soft fork remains interoperable with its older legacy system. This means that nodes can continue to communicate with nodes that have not upgraded. By contrast, if a blockchain undergoes a hard fork, only new blocks generated afterwards are recognized as valid. As a result, soft forks generally entail less drastic protocol changes than hard forks.
Software Development Kit (SDK)
A software development kit (SDK) is a specialized suite of software development tools created in order to enable software engineers create digital applications and perform other useful functions. Most SDKs include common software development tools such as compilers, debuggers, and software frameworks, which make it easier for developers to design and build new software. There are a wide array of available SDKs catering to different platforms and use cases within the blockchain development scene and beyond.
A software wallet is a digital wallet which stores a user’s public and/or private keys, thereby securing the user’s digital assets. Since software wallets are essentially computer programs, they are typically locally stored in a user’s desktop or mobile phone and are remotely connected to the internet. Software wallets are oftentimes more convenient than hardware wallets, but are also generally more susceptible to hacks. Common types of software wallets include desktop wallets and mobile wallets. When using a software wallet it is important for users to keep devices and software up to date in order to minimize the risk of a cybersecurity breach.
Solana is a smart contract-enabled blockchain that aims to natively solve many of the scaling and throughput issues faced by other layer-1 blockchain networks. SOL is the native token of the Solana network, and is burned to pay for fees on the Solana network. Solana’s users can also stake SOL in order to become a blockchain node, and the platform intends to enable SOL to be used in Solana platform governance in the future.
Solidity is the software development programming language designed specifically for Ethereum’s blockchain framework. Solidity is an object-oriented programming language designed for building smart contracts that work in unison with the Ethereum Virtual Machine (EVM) and the Ethereum network.
Solvency is the ability of an organization to meet its financial obligations from a regulatory and compliance standpoint. For GUSD, this means that the amount of USD maintained in a holding account is equivalent to or greater than the tokens in circulation. This solvency measure affirms that the Gemini Dollar tokens maintain their value for both the short term and the long term.
Spear Phishing is a variant of phishing which targets a specific individual, organization or business. As is the case with most phishing attacks, spear phishing typically entails the use of misleading emails or other forms of electronic communications. Attackers may tailor these fraudulent communications with the target’s position within an organization in mind, or include other contextual information to more effectively mislead the victim. As a result, spear phishing requires more background research on a target than most other forms of phishing attacks.
A speculative investment entails a considerable degree of risk of financial loss, both in terms of principal and potential unrealized gains. However, speculative investments are usually those with a high potential upside, making them attractive opportunitties for investors with a high tolerance for risk. Many blockchain skeptics consider cryptocurrencies a speculative investment, while more traditional speculative investments include investment in early-stage startups, trading options, and certain commodities.
The spot market is a public financial market in which the trade of financial instruments or commodities are immediately settled and delivered. While the delivery of physical goods purchased may be slightly delayed due to real-world logistical considerations or business protocols. However, spot market purchases are settled at the price fixed at the point of purchase rather than the price at the time of distribution. This contrasts with futures markets, in which delivery is due at a later date, and prices may fluctuate in accordance to market movements which occur after an exchange has been made.
A stablecoin is a digital currency created with the intent of holding a stable value. The value of most existing stablecoins is tied directly to a predetermined fiat currency or tangible commodity, like Gemini dollar (GUSD), which is pegged 1:1 to the US dollar. However, stablecoins can also achieve price-stability through collateralization against other cryptocurrencies or algorithmic token supply management. Since stablecoins do not fluctuate significantly in price, they are designed to be used rather than an as an investment.
On the EOS system, when software developers deploy and interact with smart contracts through introduced actions, they are backed up via other types of resources: RAM, CPU and NET. Developers are able to stake NET and CPU, and purchase RAM with EOS coins.
Staking is the process through which a blockchain network user ‘stakes’ or locks their cryptocurrency assets on a network as part of the consensus mechanism, thus ensuring the security and functionality of the chain. Staked assets are usually held in a validator node or crypto wallet, and in order to encourage staking most projects reward the holders of staked tokens with annualized financial returns, which are typically paid out on a regular basis. Staking is a core feature of Proof-of-Stake (PoS) blockchain protocols, and each blockchain project which incorporates a staking feature has its own policies for staking requirements and withdrawal restrictions.
On a Proof-of-Stake network, staking pools allow multiple cryptocurrency stakeholders to combine tokens in a collective pool in order to secure the benefits held by a larger, collectivized network stake. By combining computational resources, the individual stakeholders who choose to participate in a staking pool aggregate their staking power to more effectively verify and validate new blocks, which consequently increases their chances of earning a portion of the resulting block rewards.
A stalling delay is a coded, time-based technique that certain types of malware use to bypass a network’s cybersecurity defenses. After infecting a target system, malware with a stalling delay mechanism typically executes a series of useless, innocuous CPU cycles in order to delay the execution of its actual malicious code until the target network is no longer on alert. If the malware successfully bypasses the security’s defenses, it can then go on to execute its malicious code with full effect.
Standard deviation is a measure of how far each observed value in a data set is from the mean value. This measurement indicates how spread out the data is within a data set, and how far specific data is from the general norm. Within the context of investing, standard deviation can be used to compute a current rate of return on an investment relative to its historical mean in order to determine the investment’s historical volatility. In general, volatile investments a characterized by a high standard deviation, while more stable investments usually have low standard deviations.
State Machine Replication (SMR)
State Machine Replication (SMR) is a general approach in distributed computing for building fault-tolerant systems. This is achieved through the replication of servers (states or state machines) and organization of client exchanges with server replicas. SMR accomplishes this by deploying copies of a web service across a set of servers rather than just one. This approach can potentially increase a system’s performance and capacity since the replicas provide more resources to the service, while achieving operational fault tolerance through the elimination of a single point of failure.
Status Network Token (SNT)
The Status Network Token is the native ERC-20 utility token of Status Network, an open-source messaging platform. SNT plays a key role in Status’ decentralized platform governance, as any Status community stakeholder can use SNT to vote on network proposals. With each vote the SNT committed is cloned into a separate decision token that is counted. As a result, while the amount of SNT tokens a user holds at that time of the vote represents that user’s voting power for that decision, it does not cost any SNT to participate.
Stellar is an open-source, decentralized payment protocol that enables seamless, cross-border transactions between all forms of currency. The project’s native token, Stellar Lumens (XLM), is used to pay the network’s transaction fees, prevent network spam, and provide liquidity via the Stellar Distributed Exchange (SDEX).
Stock Keeping Unit (SKU)
Stock Keeping Units (SKUs) are used in inventory management to classify a distinct type of item for sale. Different SKU classifications include color, size, packing material, manufacturer, description, and warranty terms. SKUs are used by brands, manufacturers, warehouse staff, and retailers to identify items as the move through a supply chain, and to provide data points for enterprise management systems.
The Filecoin protocol relies on storage miners to furnish its marketplace of decentralized cloud storage. Storage miners are essentially nodes that solve cryptographic proofs in order to verify storage across time. These nodes must use Filecoin tokens (FIL) as collateral to ensure that they uphold their contractual obligations, and in return earn additional FIL by storing data for clients on the network. Due to the design constraints imposed by Filecoin’s Proof-of-Replication (PoRep) and Proof-of-Spacetime (PoSpacetime) mechanisms, storage mining requires fairly powerful hardware to meet the network’s storage and algorithmic proof requirements.
Storage Node (STORJ)
The Storj network utilizes storage nodes to provide bandwidth to the network and store clients’ data in a secure, decentralized format. Anyone individual or entity with a stable internet connection and excess hard drive space and bandwidth can set up a storage node. Each month, node operators are compensated via STORJ tokens valued in USD based on current market rates.
Store of Value
A store of value is an asset that is expected to maintain its value/purchasing power over time and can be reliably retrieved and exchanged at a later date. Assets that have historically been considered reliable stores of value include fiat, real estate, and rare metals such as gold and silver. With blockchain technology growing increasingly mainstream, an increasing number of people now also consider certain cryptocurrency tokens, particularly Bitcoin (BTC), as effective stores of value.
Storj is a blockchain-enabled data storage network that allows users to access remote, decentralized data storage and retrieval services, or offer storage services by using excess hard drive space and bandwidth. While users’ files are not stored on the blockchain, Storj uses hashing, Proof of Work (PoW), key pair cryptography, and other blockchain features to offer data storage services and rates which are similar to, and in some cases superior to, what is offered by larger centralized cloud storage services.
STRIDE is a threat modeling methodology used by Crypto.com and other enterprises in order to identify and deter potential cybersecurity threats. The word ‘STRIDE’ is an acronym that stands for “Spoofing, Tampering, Repudiation, Information Disclosure, Denial of Service, and Elevation of Privilege.” Each of these concepts is a common cybersecurity threat category, and security experts typically use STRIDE as a conceptual framework in order to methodically explore various ways in which a system must be protected to avoid being compromised.
A strike price is the price at which an investor can exercise the right to buy or sell an underlying security in an options contract. The value of the strike price is set by financial exchanges, and may be a function of the underlying security’s spot price, which is the market price of the security on the day the option is taken out. For example, suppose an investor purchases a $2 monthly call option to purchase Bitcoin at $1,000. As a result, the strike price of this contract is $1,000, meaning the investor can choose to exercise their option to purchase the cryptocurrency at this price before the month is up and the contract expires.
Substrate is a blockchain integration platform and application development framework that was designed by Parity Technologies, the creator of blockchain interoperability pioneer Polkadot. The purpose of Substrate is to help simplify the process of building dApps or independent blockchains that run on the Polkadot network. Substrate accomplishes this by offering a fully adaptable blockchain design framework that features software development in numerous languages, forkless upgradability, light-client architecture, and multifaceted development tools. As a result, Substrate is one of the most powerful components of the Polkadot ecosystem. However, blockchains on the Polkadot network do not need to be built with Substrate.
Swing trading is a market trading strategy that attempts to capture short- to medium-term gains based off of fluctuations in the value of stocks, commodities, and/or currencies over a few days or weeks. In order to be effective, swing traders must actively monitor their positions and time trades meticulously. Their risk/reward ratio sits on the spectrum between that of day traders and trend traders. In most cases, swing traders typically rely on charted technical indicators to identify viable trading opportunities, although technical analysis is regarded by many as an imperfect science.
Switcheo is a decentralized cryptocurrency exchange on the NEO blockchain with a product focus on transparency and convenience that allows for the cross-chain swapping and trading of EOS, Ethereum, and NEO coins. The project’s native token, Switcheo Token (SWTH), is a NEP-5 standard digital currency that can be used on the Switcheo network for trading discounts, as well as for access to several exclusive offerings and services. SWTH was upgraded in October 2020 under a revised monetary policy smart contract.
Symmetric encryption is a form of encryption which uses the same key to both encrypt and decrypt electronic information. Both entities communicating via symmetric encryption must have identical copies of this key, which should be kept secret and not shared with anyone in order to preserve the security of their interactions. By contrast, asymmetric encryption utilizes two keys—a public key to encrypt information, and a private key to decrypt information.
A synthetic asset is a financial instrument that derives its value from another asset, thereby achieving the same financial effect as the ownership of that asset. Because the value of a synthetic asset is a function of another asset, synthetic assets are considered derivatives, and synthetic assets have been created to mimic a broad range of securities, commodities, and assets in global financial markets, the cryptocurrency sector, and beyond. Synthetic assets typically allow traders to take a position in an asset without actually needing to expend the capital to directly buy or sell that asset, which has led to the global proliferation of derivative markets for trading synthetic assets.
Synthetix is a token trading platform built on Ethereum that allows users to exchange tokenized representations and derivatives of cryptocurrencies, stocks, currencies, precious metals, and other assets in the form of ERC-20 tokens. This is accomplished through Synthetix’ dual-token model, whereby users stake the platform’s main token, Synthetix Network Tokens (SNX), as collateral in order to create new synthetic assets. These ‘Synths’ are designed to track a metric, usually price, of a real-world asset, thereby allowing users to invest in the asset without actually holding it, much like derivatives. Synthetix preceded Universal Market Access (UMA), which is also built on Ethereum and was launched to achieve a similar purpose.
On the Zcash blockchain, t-addresses are public addresses that offer similar transparency levels as a standard Bitcoin (BTC) address. By contrast, z-addresses are fully private addressess that utilize zero-knowledge proof systems to shield address transactions and balances. Zcash’s dual-address setup was designed in order to empower users to decide whether to opt for anonymized or publicy viewable transactions, while transactions can be sent freely across the different address types.
Tailgating (or Piggybacking)
Tailgating attacks, also known as ‘piggybacking’, is a form of rudimentary data breach that typically entails an unauthorized individual following an authorized individual into a secured building or area. In most instances, the perpetrator of a tailgating attack is attempting to access sensitive information or carry out some other malicious act once on the premises. While this attack is low-tech and seemingly straightforward, it is nonetheless a widespread security breach with potentially catastrophic consequences.
Storj approaches its decentralized data storage ecosystem by bifurcating its product into the supply and demand sides of the market. Tardigrade is a division powered by Storj Labs which focuses on the demand side of the business. In order to make it as easy as possible for anyone to buy decentralized storage on Storj, Tardigrade was formed to handle all issues relating to the platform’s customers, developers, and partnerships. Storj itself, on the other hand, is tasked with managing the platform’s storage node operators, tokenomics, and community.
tBTC is a decentralized and trustless system for wrapping Bitcoin on the Ethereum network developed by the Cross-Chain Group. Each tBTC token is an ERC-20 token redeemable for bitcoin (BTC) at a 1:1 ratio, with a total supply that is also pegged to the total supply of BTC. tBTC allows users to deposit and mint Bitcoin tokens on the Ethereum network without a middleman, thereby enabling users to incorporate Bitcoin into the decentralized finance ecosystem.
TBTC Deposit Token (TDT)
The TBTC Deposit Token (TDT) is a non-fungible token used in the tBTC mechanism as the medium of exchange between tBTC and BTC tokens as the wrapping takes place. New TDT is minted whenever a user requests a deposit to convert BTC to tBTC, and burned whenever tBTC is exchanged for tBTC.
A technical indicator is a specific mathematical heuristic or pattern-based signal based on the historic price, volume, and/or open interest of a security or contract. Technical indicators are commonly used by traders to predict future price movements, and constitute a fundamental component of technical analysis.
Technical Resistance Level
Within the context of technical analysis, a resistance level is a specific price point at which a stock or other security has exhibited difficulty maintaining or surpassing in the past. As a result, once the price of a security reaches or nears an established resistance level once again, price movement can often stall or reverse. Different traders use different forms of technical analysis and different time frames to determine specific resistance levels. In many cases, commonly recognized technical indicators that suggest that a stock has neared its resistance level can trigger a self-fulfilling prophecy whereby traders attempt to front-run the market by selling the security in anticipation of a trend reversal.
Tendermint Core BFT Consensus
Tendermint Core BFT Consensus is a language-agnostic consensus method designed by the Tendermint team to be a more scalable, secure, and decentralized version of the PBFT, SMR and DLS algorithms. As a result, Tendermint Core supports state machines written in any programming language, enables fast finality rates, and can tolerate up to a third of its constituent nodes failing abritrarily before the network’s performance is significantly affected. This consensus engine was used to construct numerous noteworthy blockchains, including the Crypto.com blockchain platform and the protocol for Binance DEX.
A testnet is a sandbox or testing environment for a blockchain network typically made available for development purposes prior to a mainnet launch. Testnets are commonly used to ensure that the blockchain system is adequately secure and functional in accordance with its intended design. Once the testnet has been audited and pressure-tested, developers often fix bugs or add new features to the project’s mainnet prior to launch. Testnets are generally not meant to be directly converted into mainnets, so they are usually unable to broadcast or verify network transactions in the same way that a mainnet system is able.
Tezos is a Proof-of-Stake blockchain platform that provides a decentralized, global computer on which developers can build decentralized applications (DApps). XTZ is the native token of the Tezos network, used for paying transaction fees on the network, staking, and earning rewards.
The DAO was a decentralized autonomous organization that was launched in 2016 on the Ethereum blockchain. The DAO was designed to be an investor-directed cryptocurrency venture capital fund, but after raising $150 million worth of ETH through an initial token sale, the project was hacked, resulting in the loss of millions of dollars’ worth of ether. The incident hack is notable in the crypto space as it led to a schism within the Ethereum community that resulted in a hard fork of Ethereum into Ethereum (ETH) and Ethereum Classic (ETC).
The Gold Standard
Money linked to the value of physical commodities like gold and silver utilizes the gold standard. The gold standard formed the basis of the international currency market until the 20th century. But in 1971, the system came to an end when the U.S. halted the direct conversion of US dollars into gold.
Third-party storage refers to a physical or digital storage solution provided and managed by an outside entity such as a bank, centralized cryptocurrency exchange, or Amazon Web Services.
A timestamp is a digital record or log used to identify the moment in time that a transaction occurred. Timestamps recorded onto a blockchain’s ledger are immutable and unique to the specific transaction the timestamp is recording.
Time-Weighted Average Price (TWAP)
Time-weighted average price (TWAP) is a trading algorithm that is based on the weighted average price of a financial asset over a specified time frame. High-volume traders often use a financial asset’s TWAP to spread a large order across numerous smaller orders valued at the TWAP price. This is done in order to avoid abrupty increasing the value of the financial asset due to a sudden, single high-volume order.
Timing-based evasion is a tactic some variants of malware use to avoid detection within a target system. Malware coded with a timing-based evasion tactic will only execute its malicious code at certain moments, like when detection levels are deemed low or in response to pre-defined actions taken by the system user, like exiting a program or pressing a certain key.
Within the context of blockchain technology, a token generally refers to a unit of value for a programmable asset that is managed by a smart contract and an underlying distributed ledger. Tokens are the primary means of transfering and storing value on a blockchain network—most often Ethereum. Tokens can also be designed to be either fungible or non-fungible, depending on a network’s specific needs. And while many tokens are primarily used for simple transactions, an increasing number of blockchain projects are designing tokens encoded with a variety of wide-ranging use cases, primarily in regards to on-chain governance and network maintenance.
Tokenization is the act of converting the value of a tangible or intangible asset into a token. The token itself is a piece of code made up of a distinctive asset reference, unique properties, and/or specific legal rights in accordance with the smart contract through which the token was generated. Once tokenized, an asset can be freely transferred, exchanged, or stored away in accordance with whatever digital platform(s) or marketplace(s) the asset’s token was designed to be compatible with. Through tokenization, nearly any asset can be seamlessly integrated into the rapidly expanding ecosystem of blockchain networks and digital finance writ large.
Tokenization standard refers to the specific technical architecture of a network’s blockchain protocol, which in turn determines the nature of the tokens that are compatible with that network. In the years since blockchain technology was first introduced, several token standards have gained prominence, with ERC-20 tokens on theEthereum network leading the pack in terms of ubiquity and adoption. Tokenization standards can also be spun off to create new standards which exist within the same token standard family. For instance, security tokens (ERC-1400) and NFTs (ERC-721) are two distinct tokenization standards based on Ethereum.
Tokenized representation takes place when a digital asset is locked up with a custodian, who then mints a one-to-one representation of that token on another chain. Within the context of the Ren Virtual Machine, the custodian involved in this process is a decentralized “Darknode” instead of a centralized authority. By locking an asset up in a Darknode until a user wishes to redeem it, Ren users are able to complete this asset converstion process in a trustless yet secure fashion.
Tokenomics, a portmanteau of “token” and “economics,” refers to the underlying attributes of a cryptocurrency token that incentivize users to adopt the token’s project ecosystem. Among cryptocurrency investors, the term is commonly referred to in terms of how the token is utilized within the project ecosystem, or how the token will follow a monetary policy as the project develops. Therefore, the term tokenomics encapsulates a variety of processes and concepts, some of which are hard-coded into a blockchain’s protocol, and others which are more speculative in nature.
A ToolChain is a set of software programming tools designed to simplify complex software development tasks, or to help create specific types of software programs and applications. This general term should not be confused with Vechain’s ToolChain, which is a Blockchain-as-a-Service (BaaS) offering tailored for enterprise use.
Total Value Locked
Total Value Locked (TVL) refers to the aggregate value of all the assets locked in the smart contracts of a particular decentralized blockchain protocol.
Traceability refers to the degree to which a third party is able to track the details of a transaction, such as the transaction amount or the identities of the involved parties. Blockchain-based project approach traceabilty in different ways. For example, non-fungible tokens following the ERC-721 standard are created to maximize traceability, while projects like Monero have designed systems that obfuscate user accounts and transactions from external viewers in an attempt to remain completely untraceable.
Trading bots are applications that execute trades automatically within pre-configured parameters and environments. Trading bots are widely used by quantitative traders, market speculators, and other financial market participants. The specific parameters each trading bot is set to can be configured in accordance with its operator’s personal trading strategy and proclivities.
Within the context of capital markets, trading volume refers to the amount of a security traded over a given time frame. Trading volume is typically reported as the number of shares that changed hands during a given trading session or other period of time. The trading volume for every openly tradeable asset is constantly changing, and the direction and magnitude of these shifts are important variables which most investors factor into their analysis.
Transaction Cost Analysis (TCA)
Transaction Cost Analysis (TCA) is a system used by institutional investors to study price trends in order to determine favorable trading windows. This metric is calculated in accordance with a specified time period and with respect to various benchmarks.
Transaction fees are the fees charged to execute a transaction on a blockchain, and are typically charged to the sender. Transaction fees are required to pay for the computational power a network must exert to broadcast and send a transaction. Transaction fees, which can be paid out through various mechanisms to entities that furnish a blockchain network’s transactional capacity, are a key aspect of incentive models for most networks, including Bitcoin and the current iteration of Ethereum (1.0), upon which the fee is called “gas.” Transaction fees are charged every time a person participating in the network sends a cryptocurrency or specific type of data from one recipient to another. Transaction fees vary with each blockchain and often fluctuate according to the total transaction volume currently taking place on a network.
A transaction ID, or transaction hash, is an immutable record of a digital transaction that’s been recorded onto a blockchain ledger. Users are able to look up any past transactions using its corresponding transaction ID, typically with the help of a blockchain explorer. In some instances, a cryptocurrency recipient may request the transaction ID from the alleged sender in order to verify that the transaction’s origination point.
Transaction Settlement Time
A transaction’s settlement time refers to the elapsed time between when a transaction is initiated and when assets are deposited in the recipient’s account after all relevant financial institutions and/or algorithmic protocols confirm the transaction as valid. The length of settlement times vary widely depending on the structure of the different networks and organizations that process the transaction.
Transactions Per Second
Transactions per second (TPS) refers to the number of data transactions that a computer network can exact within a second. The TPS measurement used for sending data on a blockchain network is often an indicator of the protocol’s overall network speed and scalability, and measures how quickly a specific platform can send data like cryptocurrency transactions and the execution of smart contract functions. Highly scalable networks with high transaction speeds are a requirement for the widespread adoption of blockchain technology.
Transmission Control Protocol/Internet Protocol (TCP/IP)
The Transmission Control Protocol/Internet Protocol (TCP/IP) is an organized suite of communication protocols that is used to connect network devices over the internet and transmit data through these connections. The Internet as we know it was largely designed and built upon TCP/IP, although this set of protocols can also be similarly used as a communications protocol within a private computer network.
Within the field of cryprography, a trapdoor function, also known as a “one-way function”, is an algorithmic puzzle that is simple to compute in one direction, but extremely difficult to solve when taking the inverse approach. This unique feature makes trapdoor functions an invaluable design component that is embedded into a broad range of encrypted messages and cryptographic transactions.
TRC-20 is a smart contract standard for creating tokens using the TRON Virtual Machine. TRC-20 tokens are fully compatible with Ethereum’s ERC-20 standard.
Treasury Bills (T-Bills)
Treasury bills (T-bills) are a short-term financial instrument issued by the U.S. government. These fixed-income securities generally have a maturity period lasting four weeks up to a year. Due to their short duration, T-bills do not compensate investors via regular interest payments. Instead, T-bills are sold at a discount to their face value at the point of purchase, and investors recieve the full face value amount once the T-bill reaches maturity.
Treasury Bonds (T-Bonds)
Treasury bonds (T-bonds) are securities that the U.S. government typically issues as a debt instrument to fund various government operations and commitments. These securities typically have maturities of more than 20-30 years, and pay a fixed return every six months. Generally speaking, the longer the maturity period of a T-bond, the higher its annual yield. Once a T-bond has been sold by the government in a initial auction, it can be freely traded in the secondary markets.
Tribute to Talk
Tribute to Talk is a feature that blockchain-enabled messaging platform Status created in order to prevent malicious activity and spam from cluttering its network. Status users can set a Tribute-to-Talk requirement, which is the minimum amount of Status Network Token (SNT) a non-whitelisted user needs to stake in order to send them a message. If the message recipient responds to the sender’s message, the sender’s staked SNT is sent to the recipient. If the sender’s message is ignored or rejected, the sender’s staked SNT is returned to them and they will be unable to attempt to contact the recipient for a period of time.
Within the context of cybersecurity, a Trojan describes any type of malware which disguises its true intent in order to gain unauthorized access to a target device or network. In most cases, trojans are designed to look like an innocuous program or are discretely attached to another piece of software a target is likely to install. Once a trojan has infiltrated its target it is free to execute its malicious code, which in most cases will damage, steal from, or otherwise disrupt the target device or network.
A Banker Trojan is a specific type of Trojan malware that is designed to gain unauthorized access to confidential information or assets stored in online banking systems.
A Trojan Downloader is a specific type of Trojan malware that lays dormant inside an infected device until an Internet connection becomes available. From there, the trojan downloader will connect to a remote server or website and download additional unwanted programs onto the infected device.
Ransomware Trojans are a specific type of Trojan malware designed to extort a victim after compromising the victim’s device. In most cases, ransomware trojans will demand a payment in exchange for undoing the damage the Trojan has inflicted to the victim’s device. However, some forms of ransomware trojans may demand other forms of payment, like sensitive information or performing specific acts.
Tron is a blockchain project dedicated to building the infrastructure for a decentralized Internet. While the project initially started as a decentralized entertainment platform with distributed storage technology, the project’s ambitions have grown to closely resemble those of Ethereum. The Tron network’s native token, TRONix (TRX), is used as a payment method across Tron’s evolving service ecosystem.
TRONix (TRX) is the native token of the Tron blockchain protocol. While the token was initially used only to pay content creators for digital content on the Tron platform, TRX has evolved into a more broadly accepted payment method across Tron’s evolving service ecosystem.
TRON Virtual Machine (TVM)
The TRON Virtual Machine (TVM) is a Turing complete virtual machine that provides a feature-rich and user-friendly environment for developers to build and test decentralized applications (dApps) and other web services within the Tron ecosystem. TVM is Tron’s equivalent of the Ethereum Virtual Machine (EVM), and all software projects created through TVM are fully compatible with EVM.
TRONZ is a smart contract privacy protocol that was introduced with TRON 4.0 in July 2020. TRONZ is built upon the zk-SNARK methodology, the core privacy technology of Zcash (ZEC). TRONZA gives users more flexible transaction privacy settings, which can be adjusted in accordance to the user’s situational needs.
The troy ounce is the global standard for measuring the weight and implied purity of precious metals. One troy ounce is equal to approximately 31.1 grams, in contrast to the standard ounce which is 28.35 grams, and this unit of measure is commonly abbreviated as either “t oz” or “oz t”.
A Trust Company is a legal entity that acts as a fiduciary, agent, or trustee on behalf of an individual or organization. These companies are typically charged with holding assets that it does not own on behalf of a client, and responsibly managing those assets until they are required by law to be transferred to a specified beneficiary party. Since trust companies are fiduciaries, they have a legally binding responsibility to act on behalf of their clients’ financial interests.
Trusted Execution Environment (TEE)
A Trusted Execution Environment (TEE) is an isolated environment within a device’s main processor that allows for the secure and private execution of code without the risk of interference from the rest of the device or system. Only properly authorized code can be executed within a TEE, which utilize use both hardware and software to protect data and code from the external environment. Furthermore, the different trusted applications within a TEE are protected from each other via software and cryptographic solutions, and these trusted applications have full access to the device’s main processor and memory. TEEs are generally used to improve the overall security of a device or network and ensure that certain core processes can operate with full reliability and integrity without the risk of being compromised.
When a system is trustless within a peer-to-peer (P2P) blockchain network, it means that all participants in the network do not need to know or rely upon verification from one another or a third party. This means that the system is run autonomously by the underlying technical architecture and consensus mechanism of the blockchain protocol itself. Transacting on a shared, trustless network is not beholden to a central organization to ensure trust, and is a key value proposition of blockchain technology. A number of innovations underlay the trustless nature of blockchain networks, including immutability, decentralization, transparency, censorship resistance, and neutrality.
A turnkey is a product or service that can be sold to any applicable buyer as a complete, ready-for-use product without the need for user customization. Turnkey solutions therefore differ from a built-to-order products, which are designed in accordance to a customer’s unique specifications.
Two-Factor Authentication (2FA)
Two-factor authentication (2FA) is an extra layer of security for user accounts. In its most common form, 2FA requires a user to further verify identity after entering the account password. This additional verification is typically achieved by inputting a randomized code generated through a secondary device or program. As a result, 2FA mitigates a variety of cybersecurity risks stemming from both device hacks and human error.
UMA Improvement Proposal (UMIP)
UMA Improvement Proposal (UMIP) refers to the document used to propose changes to the UMA ecosystem. UMA token holders can use UMIPs to propose and approve new financial contract templates, new price identifiers, and other governance changes to UMA’s data verification mechanism.
The UMA token is the native governance token of the UMA network. UMA users are able to use UMA tokens to vote on how to resolve price disputes that occur on the network as part of its data verification mechanism, and make changes to the mechanism via the UMA Improvement Proposal (UMIP) governance process.
The ‘unbanked’ refers to individuals without access to the traditional banking system and modern-day financial services. Most individuals who are considered ‘unbanked’ lack a stable internet connection and/or reside in an underserved community or developing country. As a result, these individuals are effectively excluded from participating in the global economy. It is a primary goal of sectors like finTech, DeFi, and blockchain to support the unbanked by achieving equitable financial inclusion globally.
Uniswap is a decentralized exchange (DEX) that uses liquidity pools (LPs) to make markets without the need for order books or central facilitators. Uniswap is underpinned by smart contracts that facilitate token swaps and provide the incentive structure for liquidity providers to participate in the system. As one of the first automated market makers (AMMs) to go live on the Ethereum network, Uniswap has made significant strides in proving that AMMs can be an effective tool for trading digital assets in a decentralized and permissionless way.
Unit of Account
A unit of account is a standard unit of measurement of the value of a good or service. By attributing a specific measurement unit to a good or service, the monetary value of that offering can be clearly understood in abstract terms without the need to resort to bartering. The need for units of account to optimize market transactions is one of the three fundamental functions of money, the other two being usability as a store of value and a medium of exchange.
UNI token (UNI) is the native governance token of the Uniswap Protocol, a decentralized cryprocurrency exchange (DEX). The token was initally released on September 2020, when Uniswap airdropped 400 tokens into each unique cryptocurrency address that had ever interacted with Uniswap Protocol prior to September 1, 2020. This first round distribution reached ~50,000 Ethereum addresses, immediately making UNI one of the most widely distributed tokens within the cryptocurrency space. In total, 60% of UNI’s genesis supply is intended to go to the community, while the remaining 40% have been allocated to Uniswap team members, investors, and advisors.
Universal Market Access (UMA)
Universal Market Access (UMA) is a specialized protocol built on Ethereum that allows users to create custom synthetic cryptocurrency tokens. Synthetic tokens are collateralized by another asset, while reflecting that asset’s price in real time. Essentially any type of asset, both physical and digital, can be tokenized via UMA and integrated into the rapidly evolving ecosystem of blockchain-enabled decentralized finance (DeFi).
Unspent Transaction Output (UTXO)
A Unspent Transaction Output (UTXO) is the amount of cryptocurrency that remains after a transaction is executed. Each UTXO represents a chain of ownership, which is represented as a chain of digital signatures in which a transaction originator signs a message transferring ownership of their UTXO to the recipient’s public key. As a result, UTXOs are responsible for beginning and ending each cryptocurrency transaction.
U.S. Financial Crimes Enforcement Network
The Financial Crimes Enforcement Network is a division of the U.S. Department of the Treasury that is tasked with gathering and assessing information about financial transactions. The goal of the U.S. Financial Crimes Enforcement Network is to prevent and solve financial crimes.
A utility token is a tokenized digital asset designed to grant its holder access to the products or services of a blockchain protocol. As a result, utility tokens are intended to be used within the blockchain’s network, rather than serve as an investment. However, given that most utility tokens fluctuate in value in accordance with its network’s perceived popularity and adoption, many traders and crypto enthusiasts nonetheless purchase certain utility tokens as speculative investments.
Within the context of blockchain technology, a validator is an entity responsible for verifying and approving transactions submitted by users and/or blockchain clients. Each blockchain protocol has its own parameters for what constitutes an acceptable validator and how these validators operate. Most decentralized blockchain networks rely on some form of validator node to process on-chain transactions in a permissionless and distributed manner.
Value investing is an investment strategy that involves identifying stocks and other securities that appear to be trading for less than their intrinsic value. Value investors typically conduct thorough due diligence on the securities they are interested in tracking and adhere to longer investment holding periods. As a result, these investors tend to ignore price movements that do not appear to correspond with a company’s long-term fundamentals, such as sudden reactions to wider industry news or short-term market events
VeChain Improvement Proposals (VIPs)
VeChain Improvement Proposals (VIPs) are the design documents VeChain ecosystem participants and community members use to propose changes to VeChain’s protocol and development trajectory. There are four main types of VIPs: application, interface, information, and core. Once a VIP is proposed, the VIP’s author is responsible for building consensus within the community and documenting dissenting opinions.
VeChain Token (VET)
VeChain Token (VET) is the native governance and utility token that underpins the VeChainThor blockchain network and overall VeChain ecosystem. VET holders can contribute to the security and consensus of the network by holding VET within different nodes within the VeChainThor blockchain (AM’s, XN’s, EN’s).
Verifiable Random Function (VRF)
A Verifiable Random Function is a cryptographic primitive that was conceived of in 1999 and has many useful applications including deterministic precommitments and having output that is resistant to preimage attacks. In implementation a VRF consists of three related algorithms that do the following:
- Key Generation: A mathematical function that when given a random input produces a verification key / secret key pair
- Evaluation: This function takes a message and the generated secret key to produce a pseudorandom output, and an associated proof
- Verification: This function uses the verification key and other values to guarantee that the output of the Evaluation function could only have been produced by someone who had the associated secret key – all without that secret key ever having to be revealed
VRFs have a wide range of use cases across various cryptographic schemes, protocols, and systems.
Vertical scalability refers to a network or device’s ability to increase its existing hardware or software capacities by adding supplementary resources. The most common forms of vertical scalability entail adding more RAM or processing power to a device. However, vertical scalability can be accomplished in a variety of ways, depending on the configuration of the network/device and the nature of the intended upgrade.
Within the context of blockchain technology, vesting is the process of releasing tokens that have been set aside for a specified period of time. These tokens are typically designated for a blockchain project’s team, partners, and other contributors who are actively helping develop the project. Funds that have been set aside for this purpose are usually locked a certain period of time by smart contracts, which effectively seal off access to the tokens until pre-set conditions are met.
VeThor (VTHO) coins are used to power the Vechain network. New VTHO coins are continuously generated for VET coin holders each time a new block is created. A new block is typically added to Vechain’s ledger once every 10 seconds, and each VET generates 0.00000005 VTHO per new block, which translates to approximately 0.000432 VTHO generated per VET per day. VET holders can increase the VTHO generation rate of their VET coins by placing their coins in different nodes, which are tiered in accordance with their staking requirements. VeChain’s economic model is designed to prevent transaction fees from fluctuating in relation to the price of VET, thus ensuring transaction fee consistency and predictability.
Virtual Commodities Association (VCA)
Founded in 2018, the Virtual Commodities Association (VCA) is a non-profit organization working towards the goal of establishing an industry-sponsored, self-regulatory organization for the U.S. virtual currency industry. The organization began as a committee to explore ways of ensuring consumer protection and market integrity in virtual commodity marketplaces, and has since evolved into a more formalized organization spread across six committees and overseen by a Board of Directors.
Virtual Machine (VM)
A Virtual Machine (VM) is a cloud-based emulation of a computer system that provides the functionality of a physical computer system. VMs may be made to emulate types of specialized hardware, software, or a combination of the two, and provide the framework for data transactions and transactional execution on blockchain networks. The most well-known VM in the blockchain industry is the Ethereum Virtual Machine (EVM).
Vishing is a variant of phishing attack that relies on fraudulent phone calls or voice messages to mislead a target into divulging personal information, like account passwords or credit card details. In most instances, a malicious actor using vishing will pretend to be from a reputable company or a trusted authority, and their message will often either involve the offer of a “free prize” or a fictional crisis that the target must tend to immediately.
Vitalik Buterin is a Russian-Canadian programmer and writer most famously known for co-founding Ethereum. In 2013, Buterin published a whitepaper proposing Ethereum as a world computer capable of hosting a wide range of decentralized applications (dApps). In contrat to Bitcoin (BTC) — which is more geared towards payments and serving as store of value — Ethereum was intended to serve as a “Swiss-army knife protocol,” with more flexible and wide-ranging applications. Buterin went on to collaborate with several other co-founders to develop Ethereum, which was launched in 2015. To date, Buterin is regarded by many crypto enthusiasts as the de facto figurehead of Ethereum.
Within a marketplace context, volatility refers to the degree of variation an asset’s trading prices undergo relative to its mean price over a certain period of time. The more volatile the price of an asset is, the greater the frequency and number of its price changes. This volatility is usually measured using standard deviations of logarithmic returns. Many investors track an asset’s volatility in order to identity and capitalize on trading opportunities based on perceived price trends. However, excessive and unpredictable price volatility often deters investors who have a lower risk tolerance.
Volume Weighted Average Price (VWAP)
In technical analysis, volume weighted average price (VWAP) is a benchmark that calculates the average price at which a security has traded throughout the day, based on both volume and price. By automatically averaging the intraday closing prices of a security ove time, VWAP is able to serve as a guide for identifying various support and resistance levels. This makes VWAP an important intraday indicator for traders who rely on technical indicators to more effectively time when to enter and exit their positions.
WabiSabi is an anonymous credential scheme that will be introduced in the Wasabi Wallet 2.0 upgrade of CoinJoin. WabiSabi is designed help facilitate faster, more cost-efficient collaborative transactions, establish a more automated, frictionless payment framework within CoinJoins, and potentially enable Wasabi Wallet to more seamlessly integrate with other technologies.
A cryptocurrency wallet is a device or service that stores users’ public and private keys, allowing them to interact with various blockchains and to send and receive crypto assets. Wallets can be digital (software) or physical (hardware), hot (connected to the internet) or cold (disconnected from the internet), custodial (a trusted third party has control of a user’s private keys) or non-custodial (only the user controls their private keys).
WannaCry (also referred to as WCry, WanaCrypt0r, and Wana Decrypt0r 2.0.) was a ransomware worm deployed in 2017 that targeted vulnerabilities in the Windows operating system, encrypted files on infected devices’ hard drives, and demanded a ransom payment in Bitcoin (BTC) in order to decrypt the files. The malware rapidly spread through multiple computer networks and impacted users in over 150 countries, resulting in billions of dollars worth of damages and ransom payments.
A watchdog organization is an entity, often non-profit, that monitors the activities of a government or industry with the goal of ensuring that the government or industry does not behave illegally or unethically. Watchdogs alert the public when they have uncovered such behavior.
Within the OMG Network, a watcher is a computer that monitors the network for unusual and malicious activity and ensures that data submitted to the Ethereum blockchain for finalization is correct. OMG Network’s network of watchers is decentralized and any OMG Network user can operate a watcher.
The term Web 3.0 refers to a vision of the third generation of computing, which anticipates that technologies like blockchain will decentralize the internet and disintermediate web 2.0 companies like Facebook, enable the online exchange of value, and allow users to own their data.
The Web3 Foundation is a Switzerland-based foundation dedicated to the advancement of Web3 technologies. Web3 is envisioned as the next era in computing which will be focused on the decentralization of the web, the online exchange of value, and users owning their data. Founded by Gavin Wood, the former CTO and co-founder of Ethereum, Web3 publishes research on cryptography and other blockchain-related fields and provides grants for web3-focused startups and blockchain projects. The Polkadot blockchain is one such project.
A web application is is an application software or program that runs on a web server rather than a device’s operating system. Web applications are accessible through a web browser with an internet connection and play a central role in defining online user experiences.
Web Application Firewall (WAF)
A web application firewall (WAF) is a specific type of application firewall that filters, monitors, and blocks HTTP traffic to and from a specified web service. A WAF sits between external users and web applications and plays a crucial role in securing business-critical web applications and web servers from application-layer attacks. WAFs different from network firewalls, which provide a barrier between external and internal network traffic and are therefore designed to protect a secured local-area network (LAN) from unauthorized access.
WebAssembly (WASM) is a format for computer programs which allows for high-performance applications in web browsers.
Web of Trust
Within the Status Network, the Web of Trust is an decentralized reputation system in which users deposit tokens against usernames to indicate that they trust the user.
WebSocket is a computer communications protocol which enables two-way, interactive communication between a web browser or other client and a server.
A web wallet is a cryptocurrency wallet that is accessed via a web browser. Many web wallets are custodial services run by cryptocurrency exchanges. Web wallets are considered ‘hot wallets’ because they are connected to the internet.
In the context of the blockchain industry, a whale is an investor who possesses a large enough quantity of a cryptocurrency to influence its price.
A whitelabel product is a product or service which is produced by one entity but rebranded by another entity to make it appear as if they had made it.
A whitepaper is a document produced by blockchain projects which outlines the purpose of the technology they propose to create or have created, and describes how the technology will be implemented, typically in technical terms. Whitepapers are often released when projects are in their early stages and are seeking funding, though they may be updated as the projects progress.
Window Proof of Spacetime (WindowPoSpacetime)
Within the Filecoin network, Window Proof of Spacetime (WindowPoSpacetime) is a specialized type of cryptographic proof which plays a central role in verifying data on the Filecoin network under the Proof-of-Spacetime (PoSpacetime) consensus algorithm. Via WindowPoSpacetime, commitments made by storage miners are audited in 24-hour period increments, which results in a zk-SNARK-compressed proof being published to the Filecoin blockchain.
Withdrawal allowlists are an optional layer of security in cryptocurrency exchange accounts which allow users to establish a list of approved cryptocurrency addresses and to restrict withdrawals to those addresses only.
Worldwide Asset eXchange (WAX)
The Worldwide Asset eXchange (WAX) is a blockchain-based marketplace for physical and virtual items, including non-fungible tokens (NFTs) and video games.
World Wide Web Consortium (W3C)
The World Wide Web Consortium (W3C) is an international standards organization for the World Wide Web. W3C has over 400 members which collectively develop web standards in tandem with the public and W3C’s full-time staff. Additionally, W3C builds software, educational tools, and other services to facilitate an open forum for discussion about the internet.
Wrapped Bitcoin (wBTC)
Wrapped Bitcoin (wBTC) is an ERC-20 token which represents Bitcoin (BTC) at a 1:1 ratio. wBTC was jointly created by Bitgo, Kyber Network, and Ren, and was intended to bring more liquidity to the Ethereum ecosystem, particularly to decentralized finance (DeFi) applications.
Wrapped Nexus Mutual (wNXM)
Wrapped Nexus Mutual (wNXM) is a one-to-one ERC-20 representation of the Nexus Mutual token (NXM), which is the native token of the Nexus Mutual platform, a decentralized alternative to insurance. While NXM can only be held by members of Nexus Mutual, wNXM can be owned by anyone with an Ethereum address.
x86 is Qtum’s virtual machine which was developed in Intel’s x86 machine language. x86 allows developers to write smart contracts in a variety of languages including C, C++, Rust, and Python. Qtum previously utilized the Ethereum Virtual Machine (EVM) and the Solidity programming language.
XBT is an alternative ticker symbol for BTC used by some exchanges. Its format is derived from a currency code standard created by the International Organization for Standardization (ISO) which stipulates that supranational currency codes should begin with ‘X’.
XEM is the native token of the NEM blockchain and is used for payments on the network. Additionally, users most hold XEM to participate in NEM’s consensus process. NEM utilizes a Proof-of-Importance (POI) algorithm for consensus, which determines who may produce a block through a calculation of a user’s relative importance to the network. Users’ relative importance score is based on the number XEM tokens they hold, in addition to the number of transactions that have been made to and from the user’s NEM wallet. Users with high importance scores are more likely to produce blocks.
XRP is the native coin of the Ripple Ledger Network. It is designed to be a medium of exchange and value transfer, and is intended to be used as a low cost bridge between fiat currencies for a broad range of global transactions.
XYM is the native cryptocurrency of the Symbol blockchain and is due to be launched in January 2021. XYM will be used to pay for transactions on the network. In order to obtain XYM, qualifying XEM holders—holders of the native token of the NEM blockchain, which was created by the same team and preceeded Symbol—can claim an equivalent number of XYM once the new token has been released.
Yearn.Finance is a decentralized community focused on creating a suite of automated, decentralized finance (DeFi) products on Ethereum. Referring to themselves as a ‘collective of contributors,’ the Yearn community is an experiment in decentralization, crowd-sourced investing, and product development.
Yearn Improvement Proposal (YIP)
Yearn Improvement Proposals (YIPs) are proposals to change the Yearn protocol. Proposals are submitted by Yearn.Finance community members and voted on by YFI token holders.
YFI is the governance token of the Yearn.Finance protocol.YFI holders can submit, discuss, and vote on proposals to change the protocol via the Yearn Improvement Proposal (YIP) process. The total supply of YFI is 30,000, though more tokens can be minted if approved through the governance process.
Yield farming is the practice of staking or locking up cryptocurrencies in order to generate rewards. Many decentralized finance (DeFi) projects rely on yield farming to incentivize users to contribute to the network’s liquidity and stability, since these projects do not rely on a centralized market facilitator.
yTokens are cryptocurrency derivatives tokens which are awarded to Yearn.Finance liquidity providers (LPs) when they deposit assets into the protocol. Examples of yTokens include yCRV, a derivative of Curve (CRV) and yaLINK, a derivative of Aave’s aLINK, which is itself a derivative of the LINK token.
yVaults are a feature of the Yearn.Finance protocol which automate the process of yield farming. Users deposit tokens into a yVault, then Yearn borrows stablecoins against the user’s asset. The stablecoins are then used for yield farming in various protocols, with the vault shifting strategies as opportunities change. As gains are realized on the stablecoins, Yearn converts the gains back into the user’s original asset and the user’s rewards are paid in that asset. Each yVault has a different annual percentage yield (APY).
z-addresses are ‘shielded,’ or privacy enhanced Zcash addresses. Transactions between z-addresses do not reveal the parties’ addresses, the transaction amount, or the contents of the transaction’s memo field on the blockchain. z-addresses utilize zero-knowledge proofs to achieve these features. z-addresses are interoperable with transparent z-cash addresses, which reveal the transacting parties’ addresses, transaction amount, and the contents of the transaction’s memo field. Users can therefore send transactions from private address to private address (two z-addresses), from transparent address (t-address) to private address (z-address), or from private address (z-address) to transparent address (t-address).
Zcash is a privacy-focused cryptocurrency project which aims to provide efficient, private transactions for its users via its shielded addresses feature. The Zcash protocol utilizes its native token, ZEC, to facilitate these transactions.
Zero-Knowledge Proofs are a cryptographic method that provides users with a higher degree of privacy when engaging in digital transactions. In essence, zero-knowledge proofs enable one party to prove to another party that they know a specific value, without conveying any other information apart from the fact that they know that value. In short, these proofs allow for information to be accurately verified without sharing any details about the underlying information and the identities of the transaction participants.
Zero Knowledge Proof Roll-Up (ZKR)
Roll-ups bundle and process smart contract transactions off of the main chain on sidechains before sending them back to the main chain for finalization. A Zero-Knowledge proof Rollup (ZKR) is a type of roll-up which bundles transactions, compresses them, and then attaches a zero-knowledge proof to attest to the state of the sidechain before sending the transactions back to the main chain. While ZKRs are trustless, they require specialized hardware.
Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) is a type of cryptographic proof used to ensure privacy on blockchain-based distributed ledger systems. It works by proving that one party is in possession of specific data without actually revealing the data to the network by using a secret key before the transaction is broadcasted. zk-SNARKS became prominent with Zcash, Monero, and other privacy-based blockchain protocols.