The 0x protocol is an open standard for building decentralized exchanges (DEXs) 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.
1inch Liquidity Protocol
The 1inch Liquidity Protocol is an automated market maker (AMM) that is designed to increase liquidity on the protocol and to make use of virtual balances in order to decrease impermanent loss. Users can benefit from providing tokens as liquidity on the 1inch platform through a process that’s called “liquidity mining” — whereby traders provide assets like ETH to a specific pool, lock it in, and earn 1INCH, the native token of the 1inch platform, as interest. This model is similar to native DEX tokens like Uniswap’s UNI, and incentivizes community-based liquidity provision.
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.
Acala USD Stablecoin (aUSD)
The Acala USD stablecoin (aUSD) is a stablecoin that is pegged to the U.S. dollar on a 1:1 ratio that operates on the Acala Network blockchain. aUSD facilitates the Acala Network's operation and is essential to the Acala decentralized finance (DeFi) platform. Users can borrow aUSD after they deposit cryptocurrency assets such as bitcoin (BTC), ether (ETH), or polkadot (DOT) through a Collateralized Debt Position (CDP) from the Honzon stablecoin protocol.
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.
An accredited investor is an investor who meets specific criteria pertaining to income, net worth, and qualifications. While such requirements can vary from country to country, generally accredited investors can include high-net-worth individuals (HNWIs), financial institutions, banks, and large corporations. Accredited investors are often able to access complex investments that other investors might not have access to — including venture capital firms, hedge funds, and angel investment enterprises. Accredited investors can also benefit from high returns and increased diversification, although the types of investments that are limited to accredited investors can also be subject to higher risk, high minimum investment amounts, low liquidity, and higher fees.
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.
Adaptive State Sharding
Adaptive State Sharding technology allows the Elrond Network to make use of parallel processing by combining three standardized sharding types (state, network, and transaction sharding) into one balanced high-performance system. The result is a secure blockchain with blazing fast scalability and transaction times. This enables shard merging and shard splitting to allow the network to operate more efficiently, thus improving overall network performance.
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’.
Address (Cryptocurrency Address)
A cryptocurrency address is a string of alphanumeric characters that represents a wallet, exchange, or similar blockchain-specific address. All wallet and exchange addresses are unique and denote the location of the sender and receiver on the blockchain network. Blockchain addresses can be evaluated publicly on a blockchain explorer (a web service that records all transactions that have ever taken place on the network), but are also pseudonymous, because they are not necessarily linked to their user’s real-world identity.
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 decentralized 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.
An airnode is an oracle node designed to be easily deployable by application programming interface (API) providers that want to participate in the API3 blockchain protocol and bring their data feeds on-chain. Airnode enables API providers to run their own node with little-to-no maintenance, allowing them to interface their API data feeds with smart contract platforms. When an API provider uses an airnode, they become a first-party oracle that directly provides data to the blockchain without the involvement of intermediary nodes.
When an Alpha Lending Protocol user deposits an asset (like BNB), they in turn mint an alALPHA token (like alBNB) which is an interest-bearing asset that represents their initial deposit. The initial deposit is transferred into a smart contract that aggregates the total liquidity of each asset into a pooled fund that is available for borrowing. Then the interest borrowers pay is divided proportionally amongst liquidity providers.
Founded in 2017, Alameda Research is a quantitative trading firm that was founded by Sam Bankman-Fried. Alameda Research is one of the top liquidity providers in the cryptocurrency space.
Algorand Smart Contract (ASC1)
Algorand Smart Contracts (ASC1s) are smart contracts that operate on Layer 1 of the Algorand protocol. ASC1s generally represent relatively small smart contracts, with larger smart contracts being reserved for Layer 2. ASC1s are written in an Assembly-like programming language called Transaction Execution Approval Language (TEAL), which is then interpreted by Algorand nodes.
Algorand Standard Asset (ASA)
Algorand Standard Assets (ASAs) are on-chain assets native to the Algorand blockchain protocol. As on-chain assets, ASAs enjoy the same speed and security as Algorand’s consensus protocol itself. ASAs can be fungible or non-fungible, representing items as varied as stablecoins, in-game points, or a deed to a house. ASAs must essentially adhere to several parameters determined by Algorand, though they also allow developers some customizability.
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 (also known as algo 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 human emotion 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 allocation is an allotment of tokens or equity that is purchased, earned, or reserved for a specific investor, team, organization, or corresponding entity. Blockchain startups must determine their initial token allocation to facilitate the long-term viability of their business model, with various allocations for marketing, software development, and operational costs. Many blockchain projects also have their own treasuries and foundations which typically possess a specific token allocation as well. It is also common for blockchain startups to give early team members a specific token allocation, with the stipulation that they cannot sell their tokens for several years.
All-Time High (ATH)
All-time high (ATH) is a term that denotes the highest price of an asset ever recorded on an exchange or market. ATH is the opposite of the all-time low (ATL), which conversely represents the lowest price at which an asset has ever traded. ATHs are generally set by assets during bull market uptrends in the blockchain and cryptocurrency market, when assets may experience periods of extreme growth in value.
All-Time Low (ATL)
All-time low (ATL) is a term that denotes the lowest price of an asset ever recorded on an exchange or market. ATL is the opposite of the all-time high (ATH), which conversely represents the highest price at which an asset has ever traded. ATLs are generally set by assets during harsh bear market downturns in the blockchain and cryptocurrency market, when assets have historically dropped more than 95% from previous prices in a bull market.
In a traditional financial context, alpha is a measure of the active return on an investment compared to a market index. For example, an alpha of 10% signifies that an investment’s return over a specific time frame performed 10% better than the average market return during the same period, while a negative alpha denotes that the investment underperformed the market. In contrast, beta measures the volatility of an investment and is an indication of its relative risk. Alpha and beta are two key coefficients that make up the capital pricing model that is utilized in modern portfolio theory.
Alpha Homora is a service-based protocol built by Alpha Finance Labs designed to allow users to earn interest on their crypto deposits through standardized yield farming and leveraged derivative yield farming. Initially, Alpha Homora V1 is built for Ethereum and Binance Smart Chain (BSC) and allows users to participate as yield farmers, liquidity providers, ether (ETH) and Binance Coin (BNB) lenders, bounty hunters, and liquidators. Alpha Homora V2, which will be built initially for Ethereum, hopes to expand these capabilities by allowing for leveraged yield farming and the simultaneous use of multiple assets.
Alpha Lending is a decentralized, permissionless pool-based lending and borrowing protocol that makes use of algorithmic autonomous interest rates. Designed to run on Binance Smart Chain and Ethereum, Alpha Lending is designed to facilitate the use of cross-chain assets and to help maximize the return of investment for lenders and borrowers. The platform makes use of interest-bearing alTokens that represent the user’s share of their deposit (such as alBNB if BNB is deposited). Lending Pool Contracts on Alpha help facilitate the use of deposits, withdrawals, repayments, liquidations, and assets that are borrowed by users on the platform.
Alpha Version (Software Release)
The alpha version is one of many stages in the software release lifecycle needed to ultimately become a finalized production version. The cycle usually begins with the release of the pre-alpha, then the alpha, beta, release candidate (gamma and delta), release to manufacturing (RTM), general availability (GA) and finally the production or live release, in that order. An alpha version, like a beta version, represents an early version of a software implementation or blockchain network that must undergo several further stages of development to become a production version.
AlphaX is a decentralized, non-orderbook perpetual swap trading marketplace that brings to decentralized finance (DeFi), a new trading product that was previously unavailable on-chain. AlphaX will also allow Alpha Homora users to hedge leveraged yield farming/liquidity providing positions and make use of a market-neutral leveraged position. AlphaX is specifically designed to minimize downside risk and makes use of three unique features that help set it apart from competitors, including: a funding rate that is baked into the price, the use of tokenized leveraged long and short positions, and minimized slippage through the dynamic k algorithmic model.
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.
The synthetic protocol token alUSD is used on the Alchemix decentralized finance (DeFi) lending platform. Alchemix users can deposit DAI in order to mint alUSD — a stablecoin that tokenizes a user’s future yield in Yearn.Finance vaults. In doing so, alUSD is the mechanism by which Alchemix offers automatically repaying stablecoin-backed loans.
Amazon Simple Storage Service (S3) is a proprietary service offered by Amazon Web Services (AWS) that was launched in 2006 with the purpose of giving customers access to object storage via a specialized web interface. Amazon S3 utilizes the same storage architecture as its global e-commerce enterprise, and can be leveraged to store nearly any type of object like internet applications, data archives, backup and recovery, disaster recovery, analytics, hybrid cloud storage, and more.
Amazon Web Services (AWS)
Amazon Web Services (AWS) is a subsidiary of American ecommerce giant Amazon. AWS has become well known for providing on-demand cloud computing services to enterprises, individuals, and governments through a pay-as-you-go model. AWS also provides cloud server configuration and hosting, data storage and transfer, content delivery, networking, analytics, application services, and various distributed computing building blocks and tools. AWS offers its clients Amazon Elastic Compute Cloud (EC2) which allows users to make use of a virtual cluster of computers that emulates the attributes of a real computer and complex cloud computing systems all-in-one service.
Amazon Web Services (AWS) Lambda
Amazon Web Services (AWS) Lambda is a serverless computing service designed to let you run programs without having to run your own servers or do any code administration. By uploading your code as an image or ZIP file, AWS Lambda will automatically dedicate the amount of computational power necessary to run the code request. You can trigger the code to run automatically over hundreds of AWS and Software-as-a-Service (SaaS) applications, or control its execution directly from an online app. Lambda applications can scale to meet a program’s associated traffic and can be written in numerous programming languages.
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.
Anchor Protocol is a savings protocol built to run directly on top of the Terra stablecoin ecommerce payment platform. It allows users to earn yield powered block rewards by lending out Terra deposits to borrowers who allocate liquid-stake Proof-of-Stake (PoS) assets from PoS blockchain protocols as collateral, in the form of bonded assets (bAssets). Anchor Savings employs no minimum deposits, account freezes, or sign-up requirements, and can be used by practically anyone in the world with access to the Internet. The Anchor ecosystem makes use of its main utility token (ANC) and other asset types designed specifically for use within Terra’s decentralized finance (DeFi) ecosystem.
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 decentralized finance (DeFi) ecosystem.
An angel investor, also known as a seed investor or private investor, is an individual who looks for new opportunities to fund start-ups with potential for growth. Angel investors typically lend new companies capital, sometimes in exchange for a certain percentage of ownership in the company. Angel investing can also include mentoring, business advice, marketing and advertising strategies, and connection facilitation to further the chances of the startup's success. Within the blockchain space, angel investors often participate in private sales or pre-sales that precede public funding rounds like Initial Coin Offerings (ICOs).
Ankr ETH (aETH)
Ankr ETH (aETH) is a synthetic asset that can be staked on the Ankr Network in place of staking ether (ETH). When a user deposits ETH in an Ankr deposit contract they receive aETH in return, thus lowering the barrier to entry for investors who wish to stake ETH without owning the minimum 32 ETH tokens needed to stake on Ethereum 2.0 to receive a yearly APY. When a user deposits ETH and receives aETH in return, their investment remains locked in for as long as the time required by users who stake 32 ETH on the Ethereum 2.0 network.
Anyone who holds ANKR in a private, supported wallet is considered part of the platform's governance. These users can vote on proposals that influence where the project is heading.
Ankr providers provide the computing power that supports Ankr ”sidecars" running on an Ethereum 2.0 node, each of which holds up to 32 ETH 2.0 stake. Providers can use their hardware or deploy a node on Ankr. Providers also submit insurance, in ANKR or ETH, thereby helping to protect the network against poor node performance or unexpected fund withdrawals. If ANKR is the insurance, the equivalent of 2 ETH worth of ANKR is necessary to submit insurance. Rewards for an ANKR-funded node are issued in ANKR at the end of the staking period. The purpose of this guaranteed amount is to mitigate potential losses that stakers might incur.
Ankr Staking (previously Stkr)
Ankr staking is a system that employs assets such as aETH — Ankr’s version of the Ethereum token, ETH, or ether — to address the current liquidity and accessibility hurdles associated with staking tokens on Ethereum 2.0. Normally, would-be validators must stake a minimum of 32 ETH to earn yearly staking rewards on Ethereum 2.0. In response, Ankr developed a unique model that improves the accessibility and liquidity of staking on Ethereum 2.0 by allowing stakers to stake a smaller fractional amount of ETH via Ankr’s aETH (essentially creating a staking pool).
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 Blockchain Interface (ABCI)
The Application Blockchain Interface (ABCI) is a specialized application programming interface (API) built by Tendermint, the company that created the Cosmos blockchain. The ABCI is designed to operate as a middle layer that allows blockchain-based replication engines present on several computers and a deterministic state machine (the application) present on a single computer to communicate. In simpler terms, the ABCI allows a blockchain protocol to communicate with an application to enable application development and other related purposes.
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, an approved address refers to a list of addresses permissioned for transactions on an account. Addresses not included on the list are prohibited from certain transactions. An approved address is typically implemented for security and compliance reasons.
The Aragon client is a decentralized application (dApp) designed for Aragon One, and is used for creating and managing decentralized autonomous (DAOs) built on the Aragon network. This process works by running Aragon apps inside the client, instantly giving Aragon application developers the capability to perform sandboxing, transaction pathing, application listing, and human readable transactions. Further, it allows notifications to be sent to a system's users. Basically, the Aragon client allows the complex DAO creation process to become simpler for application developers so they can focus on creating and managing new and existing DAOs.
Aragon Court is a mechanism that allows organizations built on Aragon to solve disputes that they are unable to resolve themselves. When an organization escalates a dispute to the court system, they must first deposit collateral and pay fees. Then, jurors are randomly selected to review and rule on the dispute. After the jurors deliver their verdict by a majority vote, the parties involved can choose to appeal the decision, sending it to a larger pool of jurors for review. For the appeal to move forward, both parties in the dispute must deposit additional ANT as collateral.
Aragon Network Agreement
Holding ANT enables you to participate in the governance of the Aragon Network DAO and Aragon Court. More specifically, ANT holders can amend the Aragon Network Agreement, an agreement that contains the human-readable rules of the Aragon Network and is used to guide rulings in Aragon Court; alter the Aragon Network DAO and Aragon Court and their parameters; and govern a common funding pool.
Aragon Network DAO
The Aragon Network DAO is an organization that provides infrastructure and services to the Aragon Network and its users for the creation of DAOs, dApps, and other blockchain infrastructure. In doing so, the Aragon Network DAO interacts with Aragon’s ANT token, Aragon Court, Aragon Client, aragonOS, Aragon Network Agreements, and other related technologies.
The aragonOS (Aragon Operating System) is a smart contract system designed to manage Aragon organizations and entities. AragonOS is used to help define stakeholders of the organization and outline their rights. Through aragonOS, organizations can also install apps, which allow them to integrate functions such as fundraising, voting, and payments. Anyone can develop an app, use it within their organization, and make it available for the Aragon ecosystem.
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 (ARPANET) 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.
AR is the native token of the Arweave protocol. It allows users to pay for storage and is used to reward miners for storing data.
ASIC Miner (ASIC Mining)
An application-specific integrated circuit (ASIC) miner is a specialized type of computerized mining rig that is used to mine bitcoin (BTC) and other types of cryptocurrency. Originally, crypto mining rigs were designed to mine cryptocurrency using a central processing unit (CPU) on a laptop or personal computer, but eventually graphical processing unit (GPU) miners — and subsequently ASIC miners — surpassed the capabilities of this traditional model. ASIC miners are built specifically to complete the mining process much faster and efficiently than traditional computers and are quite expensive to design and manufacture.
ASIC-resistance is a design feature that has been implemented on some Proof-of-Work (PoW) blockchains to prevent them from being dominated by application-specific integrated circuit (ASIC) miners. The purpose is to help the mining on a chain be more equitable for retail miners while maintaining mining decentralization. This is generally done by using a bespoke mining algorithm or periodically changing the algorithm to prevent profitable ASIC miners from being developed. Despite some blockchains being designed to be ASIC-resistant, many have since become dominated by ASIC miners that have overcome the various ASIC-resistant designs and countermeasures.
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.
ASSETS (The Sandbox)
In The Sandbox game, ASSETS are tokens created by players who build user-generated content. ASSETS utilize the ERC-1155 standard.
Assets Under Management (AUM)
Assets under management (AUM) is a measurement used to signify the total market value of all assets being managed by a financial fund, institution, or portfolio manager. However, the exact definition of what AUM constitutes is ambiguous because not all institutions classify different types of assets in the same manner. Assets under management fluctuate in value due to regular market movements and because of money inflows and outflows to and from the fund. Normally, a fund's fee structure is determined by the percentage of the total AUM on a yearly basis.
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 a consensus mechanism that improves on typical Byzantine Fault Tolerance (BFT) consensus by solving the Byzantine General’s Fault problem in a unique way. Through aBFT, nodes are able to reach consensus independently by making use of a two-stage block confirmation process using a two-thirds supermajority. The first stage proposes a last irreversible block (LIB), while the second stage finalizes the proposed LIB to make the block irreversible. ABFT consensus is considered leaderless, with no independent leading node responsible for block creation and finalization, resulting in a faster and more secure network. The Fantom and Hedera Hashgraph protocols and other networks employ different variations of aBFT.
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 automatically 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.
Audit (Blockchain or Smart Contract)
An audit is a process that involves the thorough analysis of a blockchain's codebase, or a particular application’s smart contracts, in order to identify errors in code, incorrect design, security issues, and other related inefficiencies. It is essential for blockchain protocols and applications to audit their entire codebase to ensure that the blockchain, and its interrelated applications and smart contracts, are not susceptible to attackers or other challenges. A typical audit often involves agreeing on certain audit specifications, executing tests, running symbolic execution tools, extensive code analysis, and the creation of a report to show the results.
Augmented Reality (AR)
Augmented Reality (AR) is an interactive experience that enhances objects from the real world through computer-generated perceptual information, via various sensory mechanisms including sound, touch, smell, and sight. AR is typically defined as a system that makes use of three distinct features: the combination of the real and virtual worlds, real-time interaction, and accurate 3D registration of virtual and real objects. Augmented reality is different compared to virtual reality (VR) because instead of replacing the user’s real-world environment with a virtual one, it alters an individual's perception of the world by enhancing or changing how it interacts with the individual.
Augur Decentralized Oracle System
The Augur Decentralized Oracle System is Augur’s proprietary oracle system, which was built to help data from the physical world and the blockchain world to communicate. Augur’s oracle system helps the prediction market platform reach a consensus regarding outcomes by aggregating continuous real-time price feed data from the Internet (through sources like CoinMarketCap, CoinGecko, and Binance) to achieve the most accurate live price data on an ongoing basis. Typically, market outcomes rely strongly on market price feed validation. The Augur Decentralized Oracle System works by using a Designated Reporter who stakes REP tokens to report on the outcome of events across different markets.
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 (PoA) 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.
Ava Labs is the blockchain development company responsible for the creation and design of the Avalanche blockchain protocol and ecosystem. Ava Labs was founded in New York state by Cornell professor and Avalanche CEO, Emin Gün Sirer, and several other founders. Ava Labs is also responsible for the creation of other projects, including Ryval.
Avalanche Virtual Machine (AVM)
The Avalanche Virtual Machine (AVM) is the native virtual machine that helps developers establish and deploy new blockchains that run on the Avalanche platform. To help facilitate this process, the system makes a copy of the AVM and deploys it to operate on a new blockchain or subnetwork within the Avalanche ecosystem. The main AVM is also designed to help the system create various smart contracts and decentralized applications (dApps) for decentralized finance (DeFi) use, enterprise use, and other uses.
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 represented by a number ranging from 1 to 100, with a higher number indicating a stronger trend.
A blockchain-based gaming metaverse in which players collect and breed digital pets called Axies that can be used to compete in a turn-based card game. Axies can also be bred and sold.
Axie Infinity Shards (AXS)
Axie Infinity Shards (AXS) is the governance token of Axie Infinity. It is an ERC-20 token that was sold in public and private sales in 2020. The token can be used to vote on changes to Axie Infinity and can be staked to earn rewards.
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.
Back-End (Computing Architecture)
Back-End Software Development
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.
Bag is a slang term that refers to particular crypto asset holding — typically referring to a higher-than-average quantity of the asset. While there is no specific universal threshold of exactly how many tokens or coins constitutes a bag, the expression generally distinguishes the different types of tokens or coins that are present in an investor’s portfolio. An investor may also refer to a relatively large holding of a cryptocurrency as a 'heavy bag.'
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 for their work 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.
BandChain is the name of the main network that allows the Band Protocol oracle system to operate. The BandChain allows entities to request data from application programming interfaces (APIs) or other traditional web services, facilitating the transfer of real-world data to a blockchain system’s online environment. BandChain is built to be compatible with most blockchain and smart contract development frameworks. BandChain pulls data from external sources, aggregates their data, and packages them into a format that can be used and verified efficiently across a multitude of blockchain types.
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 start-ups.
BarnBridge is a decentralized finance (DeFi) platform for tokenizing risks. By tokenizing risk exposure, BarnBridge can increase volatility for traders, or decrease it for more conservative investors. BarnBridge seeks to lessen the risk involved with joining the DeFi industry by supplying more predictability, thereby attracting a wider range of participants.
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.
Basket of Currencies
A basket of currencies (as they relate to blockchain) is typically a pool of tokenized real-world assets such as commodities, bonds, securities, and stablecoins that represent fiat currencies. Additionally, in the blockchain space a basket of currencies usually consists of Bitcoin, Ethereum and other large cap cryptocurrencies. In traditional finance a basket of currencies is simply a collection of multiple stocks or securities that are often from the same or similar asset classes. These baskets can be used for derivatives trading and for the function of financial instruments, and they are often managed by institutional investment funds, hedge funds, mutual funds, and exchange-traded funds (ETFs).
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.
Bear Flag (Technical Formation)
A bear flag is a technical charting pattern shaped like a flag that often signals bearish momentum and a decrease in price. Bear flags mimic the structure of a bull flag, only inverted. With a bear flag, the flagpole is formed during a significant drop in price that traders are often not expecting, while the flag itself is formed during a brief period of consolidation that usually signals a downward continuation in price. Bear flags, like all technical formations, can sometimes be negated and fail to produce the results they may have originally indicated.
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.
A bear trap is a form of market manipulation that can be carried out by wealthy investors working together to manipulate the price of an asset. By arranging to sell a large amount of an asset, like a cryptocurrency, at roughly the same time, a significant price drop occurs. This is intended to persuade other market participants to sell the same asset, resulting in a further price decline. Shortly afterwards, the initial sellers buy back in at a lower price, boosting the price upwards, only to then potentially sell the asset once again for more profit.
Behavior-Based Detection Method
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, network attacks, and the installation of rootkits and malware.
A benchmark index refers to a preeminent index security used as a measure, or benchmark, against which one can track performance of the wider market. Common benchmark indexes include the S&P 500, Nasdaq Composite, and Russell 3000.
BEP-20 (Binance Smart Chain Tokenization Standard)
BEP-20 is the tokenization standard used to facilitate transfer of ownership for Binance Smart Chain (BSC) assets operating on the Binance Smart Chain. All BSC addresses are identical to their Ethereum ERC-20 address counterparts, meaning that Binance Smart Chain assets are interoperable with the Ethereum network. This is an important feature that allows for the transfer of tokenized assets and other data between Ethereum, Binance Smart Chain, Binance Chain (BC), and eventually between other blockchain protocols like Cardano and Polkadot, furthering the blockchain industry's goal of interchain interoperability.
BEP-2 (Binance Chain Tokenization Standard)
BEP-2 is the tokenization standard which is used to facilitate the transfer of ownership for Binance Chain (BC) assets operating on the Binance Chain. All Binance Chain addresses begin with the first three letters as bnb paying tribute to the token symbol for Binance’s main asset, Binance Coin (BNB). Binance Chain is one of two main blockchain networks built and designed by Binance — the other being Binance Smart Chain (BSC).
In a traditional financial context, beta measures the volatility of an investment and is an indication of its relative risk. In contrast, alpha is a measure of the active return on an investment compared to a market index. Alpha and beta are two key coefficients that make up the capital pricing model that is utilized in modern portfolio theory.
Beta Version (Software Release)
A beta version is a test version of a software product that is still undergoing development. A beta version is typically released to a select number of public users outside the company to undergo beta testing. Feedback from this testing allows developers to see how to fix product issues and improve the product’s user experience (UX). A blockchain network beta version — such as a testnet or devnet — is typically an early version that must go through several stages of development and improvement prior to the public release of the final blockchain protocol.
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 thought of as representing demand, while the ask price represents supply. A large bid-ask spread is a sign of poor liquidity in a market.
Big Tech is the name given to the five largest companies in the information technology (IT) industry in the United States, and includes Facebook, Amazon, Apple, Google, and Microsoft. The members of Big Tech have become among the most valuable publicly traded companies in the world, with each having a market capitalization between 500 billion and two trillion USD. Because Big Tech has so much power and international influence, concerns have repeatedly been raised that their monopolistic business practices are too centralized and focused on excessive profit, mass surveillance, poor security and privacy, unreasonable advertising, and widespread data theft.
Binance Chain (BC)
Binance Chain (BC) was the first blockchain created by the world’s largest crypto exchange, Binance. Binance Chain supports the BEP-2 tokenization standard, helping to transfer BEP-2 assets between Binance Chain addresses. Binance Chain is one of the two main blockchain network protocols built by Binance, with the other being Binance Smart Chain (BSC). Both protocols are designed to interoperate with each other, ensuring the transfer of assets between chains, as well as facilitating the operation of many Binance products and services.
Binance Coin (BNB)
Binance Coin (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 receive block rewards.
Binance (Cryptocurrency Exchange)
Founded in 2017, Binance is a cryptocurrency exchange that offers spot trading, staking, lending, borrowing, a non-fungible token (NFT) marketplace, and numerous types of derivative trading solutions, among many other services. Binance also built and operates two distinct blockchains: Binance Smart Chain (BSC) and Binance Chain (BC).
Binance Decentralized Exchange (DEX)
The Binance Decentralized Exchange (DEX) is a DEX built by Binance and designed to give traders and investors control of their private keys and investments without the need for a centralized intermediary. Binance DEX has very limited trading volume and available cryptocurrencies compared to the traditional Binance exchange, and operates using the Binance Chain (BC) blockchain. Binance Coin (BNB) is often required to make use of the Binance DEX because most of the trading pairs on the exchange are paired with BNB.
Binance Labs is a social impact fund and initiative built to incubate, invest in, and facilitate the widespread adoption of various blockchain and cryptocurrency start-ups, projects, and entrepreneurs. The mission of Binance Labs is to contribute to social impact causes around the globe and help grow the blockchain space by developing the knowledge base and skill sets of existing experts in the industry. It also intends to increase the number of developers and technologists involved in the blockchain and crypto industry to further the adoption of blockchain technology.
Binance Launchpad is a token launch platform owned by the Binance crypto exchange. The platform helps blockchain projects raise funds by selling their tokens to Binance’s users.
Binance Smart Chain (BSC)
Binance Smart Chain (BSC) is a dynamic blockchain network built by Binance. It runs parallel to Binance’s other protocol, Binance Chain (BC), and makes use of the Proof of Staked Authority (PoSA) consensus mechanism similar to NEO's Delegated Byzantine Fault Tolerance (dBFT) consensus. The Binance Smart Chain is designed to transfer and exchange value with assets that use the BEP-20 BSC tokenization standard, instead of the BEP-2 tokenization standard that operates on Binance Chain. BSC is interoperable with other major blockchain networks and is characterized as being extremely fast and secure.
Binary code is a representation of text, computer processor instructions, or any other type of data using a two-symbol system, usually “0” and “1” from the binary number system. Binary code is used to assign a pattern of binary digits, or bits, to each character or instructional format, such as a binary string of eight bits which can denote any of the 256 possible values to represent a far-ranging variety of diverse items. Binary codes are typically used for different ways of encoding data from one format to another, such as from character strings to bit strings.
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 uppercase 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.
Bitcoin Core is the main implementation of the software that allows users to interact with the Bitcoin blockchain network. Bitcoin Core was initially created by Satoshi Nakamoto, but is not owned by any single entity, business, or organization. Nevertheless, it is updated, maintained, and reviewed by a global community of software engineers and computer scientists. By running the Bitcoin Core code, a user acts as a node on the network that can independently verify the validity of block creation on the network and transactions sent by the network’s users.
Bitcoin Dominance (BTCD)
Bitcoin dominance (BTCD) is a metric that measures the market cap of bitcoin (BTC) — the world's largest cryptocurrency — in relation to the total market cap of all other cryptocurrencies combined. BTCD is often perceived to have a correlation to the performance of Ethereum and all other alternative cryptocurrencies, or altcoins. Generally, when BTCD decreases, the value of other cryptocurrencies increases in what is sometimes referred to as an "alt season." However, when BTCD increases, BTC tends to outpace other cryptocurrencies.
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 first block mined on the Bitcoin blockchain, called the genesis block, was mined on January 3, 2009 by Satoshi Nakomoto, the creator of Bitcoin. Satoshi also encoded a message in the genesis block that read, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This is a reference to the global financial crisis of 2007 – 2009. It is hypothesized that Bitcoin was created to avoid the exploitation of the global banking system.
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.
Bitcoin Improvement Proposal (BIP) 32
Bitcoin Improvement Proposal (BIP) 32 established the standard for hierarchical-deterministic (HD) wallets, a technical improvement over earlier wallets that only had 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.
Bitcoin Improvement Proposal (BIP) 38
Bitcoin Improvement Proposal (BIP) 38 enabled wallet holders to encrypt Bitcoin private keys with a password 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, where BIP 38 is commonly used for paper wallets and other analog devices for security purposes.
Bitcoin Improvement Proposal (BIP) 39
Bitcoin Improvement Proposal (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, BIP 39-enabled recovery phrases should be kept secret and stored securely.
Bitcoin Improvement Proposal (BIP) 44
Bitcoin Improvement Proposal (BIP) 44 improves on BIP 32’s hierarchical-deterministic (HD) wallet structure by creating a specific hierarchy that allows for multiple accounts to be held on the same wallet. BIP 44 allows two or more separate accounts on the same wallet to hold the same cryptocurrencies in different amounts. These separate accounts can be used for different purposes and coexist in a way similar to checking, business, and savings accounts at legacy banks.
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 lowercase B denotes the network's native cryptocurrency.
Bitcoin Next Generation (Bitcoin-NG)
Bitcoin Next Generation (Bitcoin-NG) is a Byzantine Fault Tolerant (BFT) blockchain protocol proposed and built by the founder of Ava Labs, Emin Gün Sirer, and several other leading computer scientists in an attempt to combat the perceived scalability and block size inefficiencies of the original Bitcoin network. Distinct versions of Bitcoin-NG have been implemented into the Waves and Aeternity blockchain protocols, but the Bitcoin-NG network has not released its own 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 meeting point 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.
A bitstream is a stream of data (bits). A bitstream may refer to the transmission — or storage — of this data. The term bitstream is commonly used to describe the data loaded on a field-programmable gate array (FPGA). A bitstream for an FPGA miner configures the FPGA to mine the coin or algorithm it was designed to mine. By downloading a different bitstream, it’s possible to reconfigure the coin or algorithm the FPGA miner is optimized for.
BitTorrent is a peer-to-peer (P2P) file-sharing protocol that enables users to freely share data and large files over the internet, such as movies, programs, and audio files.
BitTorrent Token (BTT)
BitTorrent Token (BTT) is a TRC-10 token that is used to incentivize file seeding in the BitTorrent Speed client of the BitTorrent protocol, a peer-to-peer (P2P) file-sharing protocol that enables users to freely share data and large files over the internet.
Black Swan Event
A black swan event is a large-scale global event that cannot be predicted, occurs suddenly, and typically has a drastic negative impact on the global economy. Examples of black swan events include the attack on the World Trade Center on September 11th, 2001, as well as the COVID-19 pandemic. When markets are affected by black swan events, it can take a significant amount of time for them to recover.
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 number 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 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 accommodating challenges like transaction speeds and network capacity.
A block explorer is a software interface that enables users to access real-time blockchain information like transactions, blocks, addresses, nodes, and balances on a particular 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 networks.
A block header is a mechanism that is used to identify individual blocks that have been created within a blockchain network, with each block having its own individualized header to help keep track of changes in the protocol. Blocks are layered in sequential order beginning with the genesis block and each block header contains three sets of block metadata and other individualized components.
Block height is a measurement of the number of blocks that came before a particular block in a blockchain network. Every block possesses a unique block height value — essentially a number that marks its chronological order in the blockchain. The genesis block (the very first block ever created on a blockchain network) has a block height of zero, meaning that no blocks were created before it. Block height is a critical measurement of the rate that new blocks are added to a blockchain and also acts as an identifier for each individual block in the network.
Block lattice is the Directed Acyclic Graph (DAG)-based data structure and consensus mechanism that the Nano protocol makes use of. Nano’s block lattice structure allows individual accounts on the Nano protocol to control their own blockchain and for blocks to be added very quickly to help enable extremely fast, feeless network confirmations.
On most Proof-of-Stake (PoS) blockchains, a block producer is an individual 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.
Block time refers to the amount of time it takes for a new block to be added to a blockchain. In theory, each blockchain network defines its own expected block time, which can vary from several seconds to minutes. Bitcoin, for example, aims to have a block time of 10 minutes. In reality, block times can vary from their predetermined goals. If a network is producing blocks faster or slower than its expected block rate, the block difficulty can be adjusted in an effort to recalibrate the system.
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.
Created by the team behind Arweave, the blockweave is a blockchain-like data structure. Each block in a blockchain is linked to the block that preceded it. In a blockweave, each block is linked to both the block that preceded it and a recall block — a block from the earlier history of the blockweave.
Bloomberg L.P., which is headquartered in New York City, is one of the largest financial services enterprises in the United States. Bloomberg offers numerous products and services to its customers in a variety of industries including financial markets, politics, radio, news, television, tax, law, data and analytics, and more. Bloomberg was founded in 1981 by businessman and former New York City mayor Michael Bloomberg and three of his associates. The company has offices in more than 160 countries worldwide and has about 19,000 employees globally.
Bloomberg Tradebook, which is a division of the globally known U.S.-based financial firm Bloomberg L.P., is a trading and investment platform that makes use of analytics, an order management system, and quantitative data to optimize trading execution and trading fees. The system is directly affiliated with U.S. banking giant Goldman Sachs and their related trading products and services, and is typically used only by large institutional investment firms with large amounts of capital.
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.
Bonding is a process nearly identical to staking on a Proof-of-Stake (PoS) network where a user locks a predefined amount of the network’s underlying token into a node to help the network maintain consensus. By bonding, users signify to the network that they are trusted participants that accepts the rules and regulations of the network. Some consider the only difference between bonding and staking to be that ”staked” tokens are susceptible to penalization from the network should they act in a malicious manner, while others consider the processes to be exactly identical.
Bonding curve smart contracts represent a method for nurturing balanced supply and demand for a token. A bonding curve is a mathematical concept used to explain the relationship between the price and supply of an asset. Bonding-curve smart contracts allow tokens to be sold to investors by calculating the token price in an asset (such as BTC) and issuing the asset after payment, while also allowing investors to retain the ability to buy the asset back and pay with bitcoin. In both cases, the smart contract determines the average price and bases the rate off the data. Through a bonding curve contract, when a user purchases an asset that is limited in quantity (for example, BTC), each subsequent buyer must pay slightly more for the asset. As time passes, the total available asset units decrease, thus increasing the price of each individual asset.
Boneh–Lynn–Shacham (BLS) Signature
A Boneh–Lynn–Shacham or BLS signature is a cryptographic signature mechanism that allows a user to verify that a signer is in fact legitimate. BLS makes use of a bilinear pairing for verification, and its elliptic curve group properties help defend against specific attack types such as index calculus attacks, thus allowing for shorter signatures than Full Domain Hash (FDH) signatures with a comparable level of security. Elrond makes use of BLS technology to allow the system’s Secure Proof of Stake (SPoS) consensus mechanism to randomly select nodes within shards to achieve validator selection finalization within 0.1 seconds.
Bootstrapping generally refers to how some startups build their business from the ground up, often with a small amount of capital supplied by the company’s founder. Most startups face challenges related to funding, manpower, and resources — any and all of which can make it extremely hard to be profitable early on. In a blockchain context, bootstrapping often entails the process of building the blockchain protocol, creating the ecosystem’s tokenomic and governance structure, as well as planning the token sale and future funding to ensure ongoing growth. The term bootstrapping comes from an early 19th-century expression "pulling up by one’s own bootstraps," implying an impossible feat. It later became a metaphor for achieving success without outside assistance.
The term borderless in a blockchain context refers to the industry and its underlying blockchain protocols being designed to provide services to an international global user base. This means that no matter an individual's location, the services provided by blockchain networks are always available. Borderless blockchain technology provides users the freedom, accessibility, security, and privacy to transact from any geographical location.
Bor Nodes are used to facilitate block production on side chains while simultaneously maintaining connection to the Ethereum Virtual Machine (EVM). They have the capability to eventually increase transactional throughput to 65,000 transactions per second (TPS). Bor Nodes are also periodically shuffled via committee selection using Heimdall Nodes (a large group of Ethereum validator nodes) in segments known as spans. Spans are specifically defined sets of blocks that have been chosen as a validator out of many potential validators. Each validator in a specific span contains voting power. The strength of that power determines block producer selection, with the more powerful spans having a higher probability of being chosen.
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 bounty is a reward or series of rewards advertised by a blockchain project to incentivize community participation to promote the project. Bounties are marketing strategies that give community participants tokens in exchange for fulfilling specific predetermined tasks, like sharing the project on social media. Most commonly carried out during a start-up's Initial Coin Offering (ICO), bounties can occur at any time of a project's development. Crypto bounties are used to reward social media promotion campaigns, content creation campaigns, translation campaigns, as well as bug auditing, among other tasks.
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. A breakdown is characterized by heavy volume, a rapid decline, and severe magnitude. Breakdowns can be identified by technical indicators like charting patterns, trendlines, and moving averages.
In technical analysis (TA), a breakout is a technical pattern that forms on a chart when an asset moves above a resistance level or below a support level. The price of an asset will often continue trending in the direction of the breakout. When a breakout is accompanied by high trading volume, it signifies a higher chance the asset will continue trending in the same direction, as opposed to a breakout with low trading volume. A price breakout sometimes occurs as a result of a channel, range, or pattern such as a flag, wedge, triangle, or head and shoulders.
A bridge allows independent blockchains to communicate with each other. On the Polkadot network, a bridge is 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.
On the Livepeer network, Broadcasters are nodes that send video streams to the network for transcoding.
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.
A bug bounty, sometimes called a vulnerability rewards program (VRP), is an initiative that blockchain or software development enterprises may offer to external developers to incentivize the proper reporting of potential problems in the computer code that makes up their network protocol or platform. Bug bounties typically offer financial rewards to successful auditors of computer code. In the blockchain field, these rewards often come in the form of the network’s underlying cryptocurrency asset or token.
BUIDL is a slang term for 'build,' that was derived similarly to the slang word for 'hold,' HODL. BUIDL is a call to arms to members of the blockchain and crypto community to help improve widespread adoption of the technology by contributing to the long-term construction of blockchain infrastructure. BUIDLing can be in the form of protocol or application development, writing blockchain related content, sharing blockchain info on social media, using smart contracts, trading on exchanges, making use of wallets, playing blockchain games, or any activity that contributes to the expansion of blockchain over the long term.
Bull Flag (Technical Formation)
A bull flag is a technical charting pattern shaped like a flag that often signals further bullish momentum and an increase in price. With a bull flag, the flagpole is formed during a significant rise in price where buyers significantly outperform sellers, while the flag itself is formed during a consolidation period that usually signals a continued price increase. Bull flags, like all technical formations, can sometimes be negated and fail to produce the results they may have originally indicated.
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.
A bull run is a specific time period in a financial market cycle during which asset prices can experience a significant upward trend. A bull run is similar to a bull market, while the opposite of a bull market is a bear market, during which assets can experience a substantial drop in price.
A bull trap is a market signal that signifies an initial recovery in the price of a declining asset, followed by a further decline. Bull traps are sometimes carried out by investors with substantial amounts of capital who open a short position prior to selling a large amount of the asset so it drops in price on purpose, thus giving the investors a substantial profit as a result. This scenario could be an example of a type of market manipulation.
The process of “burning” tokens is employed by many blockchain networks to incentivize network users to buy and invest in protocol-specific tokens. Usually intended as a counter-inflationary mechanism, burning tokens decreases the overall total token supply, theoretically increasing the value of the underlying asset.
Binance U.S. dollar (BUSD) is the main digital stablecoin developed and employed by the world’s largest exchange platform, Binance. BUSD is pegged at a 1:1 ratio to the U.S. dollar and was initially deployed on the Binance Smart Chain (BSC) and Binance Chain (BC) blockchain protocols. However, BUSD is also interoperable with other blockchains such as Ethereum, and can be used for various decentralized finance (DeFi) applications and to transfer value between blockchains. As of May 2021, BUSD is the 3rd largest USD-pegged stablecoin in the world with a market cap of approximately $7 billion USD.
Business as a Service (BaaS)
Business-as-a-Service (BaaS) is defined as the third-party creation and management of cloud-based network infrastructure for enterprises that want to create and run customized cloud-based business applications. Business-as-a-Service in the blockchain space is sometimes called Blockchain-as-a-Service (BaaS), meaning that the customized software and computing structure of the business is specifically designed for enterprises building numerous types of blockchain applications. Blockchain-as-a-Service functions similar to a web host running the back-end operations for a blockchain-based application or platform. For example, VeChain’s ToolChain platform could be classified as either of the solutions discussed above.
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.
Business-to-business (B2B) is a business model which is employed by enterprises that do business between one another, often in the form of value or information exchange. The B2B model can be leveraged in a traditional brick and mortar context, but is often used on the internet for the purposes of e-commerce or e-business. B2B, whether carried out online or traditionally, is one of four main business models alongside business-to-consumer (B2C), consumer-to-business (C2B), and consumer-to-consumer (C2C).
Business-to-consumer (B2C) is a business model utilized by enterprises to provide products and services directly to their customers. The B2C model can be leveraged in a traditional brick and mortar context, but is often used on the internet for the purposes of e-commerce or e-business. B2C, whether carried out online or traditionally, is one of four main business models alongside business-to-business (B2B), consumer-to-business (C2B), and consumer-to-consumer (C2C).
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.
Buy the Dip
‘Buy the dip’ or ‘buying the dip’ is an expression that is used in the cryptocurrency space to signify that a price dip is occurring or about to occur, and that it represents a buying opportunity. In this sense, a dip is seen as a short-lived flash sale or discounted price that should be taken advantage of. Buying the dip is often regarded as a strong strategy for investors who are holding an asset over the long term with the hopes of reducing their average entry price through a dollar cost averaging (DCA) investment strategy.
A buy wall occurs when a large limit order is placed at a specific price level to buy a large amount of an asset. When a buy wall is placed, the result is often a strongly maintained price equilibrium that doesn't drop below the targeted price. Buy walls, like sell walls, can be used to manipulate the price of markets. Buy walls can be implemented to prop up the price of an asset to make it appear more healthier it actually is, with the purpose often focused on manipulating the behavior of retail investors.
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.
Byzantine Generals' Problem
The Byzantine Generals' Problem is a term used in computing to describe a situation in which all parties or components within a system must agree on a single consensus-based strategy in order to avoid complete network failure. Failure can be caused when one of the nodes or other architectural components within the network are unreliable. A network that is able to solve the Byzantine General's Problem is considered Byzantine Fault Tolerant (BFT). Most actively used blockchain consensus mechanisms are Byzantine Fault Tolerant.
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.
Candlesticks are part of a charting methodology employed by stock and cryptocurrency investors that shows historical and real-time prices of a specific asset. Candlesticks are designed to display the open, high, low, and closing (OHLC) prices of an asset for specific time periods (usually by the minute, hour, day, week, and month). Typically, green candlesticks denote a bullish increase in price, while red candlesticks signify a bearish decrease in price. Candlesticks are generally thought of as the most well known technical indicator that investors use.
A candlestick body, or real body, is the widest portion of a Japanese candlestick that covers the area between the opening price and the closing price during a specific time frame, usually the minute, hour, day, week, month, or year. Generally, if the candlestick is red, the closing price is below the opening price, while a green candlestick signifies that the closing price is above the opening price. The candlestick also has a thin line-like portion called the candlestick wick (which appears above or below the body), that, like the body, is used to gauge price action and market sentiment.
A candlestick wick, or shadow, is the line on a Japanese candlestick that is used to indicate where the price of an asset has changed compared to its opening and closing prices. Wicks indicate the highest and lowest prices that an asset has traded over a specific time frame, usually by the minute, hour, day, week, month, or year. The candlestick also has a wide portion called the candlestick body that, like the wick, is used to gauge price action and market sentiment, along with several technical and fundamental indicators.
In DFINITY’s Internet Computer, a software canister is an evolved smart contract that features enhanced scalability and includes computational units. A software canister is comparable to a container used by other blockchain systems, because both are deployed as a software unit that is made up of compiled code and a mechanism for an application or service. Containerization allows applications to be separated from the main blockchain environment, enabling simple and reliable deployment. However, a canister is different from a container because it also stores data about the current software state with a record of numerous previous events and user interactions.
Capitulation refers to a drastic market downturn characterized by a period of strong selling activity, whereby investors might sell their holdings at an unprecedented rate to avoid further financial losses. Capitulation is sometimes referred to as panic selling. An example of capitulation on a longer time-frame in the crypto market is selling that took place after the price of bitcoin (BTC) reached an all-time high (ATH) of $20,000 USD in December of 2017 and subsequently crashed to $6,500 three months later. Shorter capitulations may be followed by an uptrend reversal in value.
CAP Theorem (CAP)
As it relates to theoretical computer science, CAP theorem is a theory that was developed by computer scientist Eric Brewer that states that it is impossible for a distributed data network to at the same time provide more than 2 out of 3 guarantees: consistency, availability, and partition tolerance (which stands for the acronym CAP). The theory was used as the basis for the Blockchain Trilemma theory which states that it is impossible to build and operate a blockchain protocol that is: decentralized, scalable, and secure.
Cardano is a Proof-of-Stake blockchain platform with smart contract functionality. In particular, Cardano is noted for its focus on academic research, 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.
Casper is the name of the new Ethereum consensus mechanism that will transform the existing Ethereum network — based on a Proof of Work (PoW) consensus mechanism, and known as Ethereum 1.0 since its release in 2015 — into a Proof of Stake (PoS) system called Ethereum 2.0. Casper is slowly being rolled out as part of Ethereum’s 2.0 Beacon Chain beginning in December 2020, and will consist of several upgrades. As of March 2021, Casper has been co-developed with two main implementations for the Ethereum 2.0 network, Casper CBC (Correct-by-Construction) and Casper FFG (Friendly Finality Gadget).
Casper Correct by Construction (CBC)
Casper Correct by Construction (CBC) is the consensus mechanism employed by the Casper Network. Casper CBC was initially developed by Vlad Zamfir, a well-known software engineer and technologist who helped create Ethereum. The Casper Network’s current consensus protocol, the Highway Protocol, is based on the original Casper CBC specification, with several improvements relating to block finality and network flexibility.
Casper Friendly Finality Gadget (CFFG)
Casper Friendly Finality Gadget (CFFG) is the hybrid Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocol that is enabling Ethereum 2.0 to transition to a PoS system. Through the CFFG, Ethereum’s blocks will still be mined using PoW, and only ~2% of blocks will be finalized by network validators using this system. CFFG is part of Ethereum’s multi-step transition to a full PoS system, and Ethereum’s final 3.0 version will likely run on something more akin to Casper CBC.
CasperLabs is the blockchain software development company responsible for the creation and development of the Casper Network blockchain protocol. The Casper Network is built to be decentralized, future-proof, fully upgradeable, scalable, and designed with an emphasis on enterprise blockchain use. According to CasperLabs CEO Mrinal Manohar, the CasperLabs team is focused on “decentralization above all else. It doesn’t just describe our platform, it’s the guiding ethos for what we build, and everything we do as an organization.”
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.
Catalysts (The Sandbox)
In The Sandbox game, Catalysts are ERC-20 tokens that define the ‘tier’ and scarcity of assets created by users. Catalysts add ‘sockets’ to assets which can be filled with Gems, another ERC-20 token that defines the attributes of assets.
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 governments, 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. Regulated by a country’s monetary authority, CBDCs are designed to replace traditional fiat and increase ease of use for those that deploy them. CBDCs can increase the speed and transaction costs of fiat and cross-border settlement, potentially increasing financial inclusion for many. Yet, unlike blockchains, CBDCs aren’t decentralized and don’t have a supply cap. Critics contend that CBDCs won’t limit inflationary money printing — and that government control of a nation’s money supply through a CBDC could have serious repercussions concerning financial privacy and censorship.
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.
Centralization refers to the concentration of power in the hands of too few. Centralization can lead businesses to a lack of transparency, efficiency, and balance and sometimes even result in the limited effectiveness of products and services. Centralized blockchains may distribute profits to a select few rather than allowing all potential users of the system to participate. A centralized blockchain structure may also stifle equitable governance and decision-making processes and promotes censorship and control of data, which are not favourable to the value a system should provide.
Centralized Decentralized Finance (CeDeFi)
Centralized decentralized finance (CeDeFi) is a blockchain-based system that is a hybrid between decentralized finance (DeFi) and centralized finance (CeFi) meant to leverage the best of both models. CeDeFi was created to allow large CeFi organizations to make use of various DeFi financial instruments. CeDeFi was also designed to offer numerous types of financial products and services that are not normally available through traditional DeFi. CeDeFi blockchain protocols also help large enterprises better adhere to strict regulatory and compliance issues, allowing them to operate more smoothly.
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.
Centralized Finance (CeFi)
Centralized Finance (CeFi) is often thought of as a bridge between traditional finance (TradFi) and modern financial applications like blockchain and financial technology (FinTech). CeFi enterprises generally operate using a centralized governing body that controls users' funds. Although numerous interpretations of what CeFi encompasses exist, centralized exchanges (CEXs), cryptocurrency asset custodians, and numerous FinTech applications like payment service providers are typically considered to be CeFi. CeFi service providers are often characterized as easy-to-use and heavily regulated with low fees. However, because they are centralized, they are potentially susceptible to a single points of failure.
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 CPU processes essential logic, arithmetic, and input and output operations specified by the instructions of the operating system of a computer.
Central Processing Unit (CPU) Miner
A central processing unit (CPU) miner is simply a CPU that is being used to mine cryptocurrency. A CPU is an electronic circuit that can process or run multiple tasks or programs on a device. Although being flexible and multi-purpose in nature, CPUs are generally not as efficient or cost-effective at mining cryptocurrency as purpose-built crypto miners. However, there are a variety of CPUs with differing price points and mining performance characteristics. Some coins/blockchains have been purposefully designed and optimized for CPU mining.
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.
Certificate Authority (CA)
A certificate authority (CA) is a third-party entity that issues certificates and manages the public keys required to cryptographically verify digital certificates online. CAs play a critical role in securing much of the information that is exchanged on the internet, and they can be government-based or large multinational corporations. Digital certificates are often used to encrypt digital transactions and identity data to enable the secure exchange of information online. Certificates based on the Transport Layer Security (TLS) protocol and the Secure Sockets Layer (SSL) protocol allow users to securely send instant messages and emails.
Certificate of Deposit (CD)
A Certificate 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.
Chain Key Technology (DFINITY)
DFINITY’s chain key technology is a 48-byte public chain key that allows DFINITY’s Internet Computer to finalize transactions. The mechanism is used to render old blocks within the system unnecessary, and enables the Internet Computer Protocol to operate at web-speed by finalizing transactions needed to update smart contract states within 1 to 2 seconds. Chain key technology is also responsible for the communication of different components within the Internet Computer (such as subnets, canisters, and the Network Nervous System (NNS)) and the network's consensus mechanism.
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.
Chain Migration (Blockchain Development)
A chain migration occurrs when a blockchain project decides to operate on a different blockchain protocol. At this time, most decentralized finance (DeFi) projects are built on the Ethereum blockchain. An example of a chain migration would be if the DeFi protocol Aave left the Ethereum blockchain and migrated its protocol — complete with all its product and service offerings — over to the Binance Smart Chain. Chain migrations occur for various reasons including, for example, changes in company direction, or desired changes in tokenization standards (e.g., from ERC-20 to BEP-20).
Chain reorganizations occur when blockchain network nodes broadcast two different blocks simultaneously. Since both cannot be accepted to become a finalized block, then two versions of the blockchain proceed in parallel until one eventually becomes longer than the other, and is chosen to become the sole path forward. In order to ensure that network nodes all agree on the same version of the blockchain, chain reorganization takes place. If a node receives blocks that are part of a new longest chain, then it will essentially abandon the blocks in its old chain in favor of the new.
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.
Changpeng Zhao (CZ)
Changpeng Zhao (CZ) is the founder and CEO of Binance, the world’s largest cryptocurrency exchange. Zhao was raised in China and Vancouver, Canada, and later studied computer science at McGill University in Montreal. After graduating, CZ began working for the Tokyo Stock Exchange as a software developer and later worked for Bloomberg Tradebook in a similar role. Prior to founding Binance in 2017, CZ held several positions for blockchain-enterprises such as the Chief Technology Officer (CTO) at OKCoin.
Channel (Technical Formation)
A channel is a charting pattern in technical analysis (TA) that is classified as an area where an asset is trading between two price trendlines (an upper and lower trendline). Channels generally form when an asset's price stays between a resistance level that it won’t break above, and a support level it won’t drop below. There are several types of channels that can form, including ascending channels and descending channels. Channels can be used by traders, in combination with several other TA metrics, to initiate opportunities to buy and sell an asset at certain price levels.
Charles Hoskinson is the founder of the Cardano blockchain project, as well as one of the former founders of Ethereum, among other blockchain-focused businesses. Hoskinson left Ethereum in mid-2014 and began developing Cardano during 2015, which was initially released when the network officially went live in 2017. Hoskinson maintains large roles in the ongoing development of Cardano and the Cardano Foundation, as well as serving as the CEO of tech company IOHK.
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.
In the NEAR protocol, a chunk is an aggregation of transactions from a shard.
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.
A circular economy is an economic system that values a healthy economic structure with enhanced environmental sustainability. Circular economies prioritize the elimination of waste and the use of resources in a responsible manner — employing reuse, repair, recycling, repair, reimbursement, and sharing to create a closed-loop system that minimizes the creation of waste, pollution, and carbon emissions. The circular economy is designed to keep products, infrastructure, and equipment in use longer, to improve the productivity of all-import natural resources. The circular economic approach stands in contrast to a linear economy that employs an unsustainable "take, make, dispose" model of production.
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.
The client-server model is the main architectural computing model that most of the internet is based off of, with the “client” being the front-end of the system, and the “server” being the back-end of the system. The client side of a computing system is the portion of the platform that the user interacts with directly through their screen or graphical user interface (GUI), and the server side is the portion that the user doesn't see that is responsible for the majority of the system’s operational efficiency. Client-server models in computing have been implemented since the beginning of the internet.
The close, or closing price, is one of four main data points used for day trading on the stock market. The other three are called low, high, and open — and all four are collectively known as OHLC. Traditionally, stock market trading was carried out during regular market hours, often only between 9am and 4pm local time, with markets closed on weekends. Cryptocurrency markets are open 24/7, so even though there is theoretically no closing price for crypto assets, the OHLC is still included on most charting platforms to signify the closing time of the regular stock market each day.
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 payment's transaction, reducing transaction fees and speeding up settlement. Flexa utilizes a closed loop payment network architecture.
Cloud computing is the on-demand availability of specialized computer network resources — specifically of data storage and computing power that is not managed by a single entity. The term cloud computing generally describes a data center that is readily available to users around the world via the internet. Large, centralized cloud computing enterprises are predominantly available today, and often have their network infrastructure distributed over multiple locations. There are several different types of cloud computing models, including enterprise clouds, public clouds, hybrid clouds, and more. More recently, through blockchain technology, decentralized cloud computing infrastructure has become more readily available.
Cloud mining is the process of mining cryptocurrency through the use of a third-party provider by purchasing a cloud mining contract. It doesn’t require owning the associated hardware. You typically purchase a fixed amount of cloud computing power (measured in hashes per second) for a set period of time and receive the associated mining rewards associated with your contract. You can also lease the mining rigs themselves — usually application specific integrated circuit (ASIC) miners — which can give you more flexibility but generally includes setup and maintenance fees.
Coinbase (Cryptocurrency Exchange)
Coinbase is one of the largest cryptocurrency exchanges in the world. Based in the U.S.A., it provides spot trading to retail U.S. investors and custody services to hold large amounts of crypto for institutional investment firms. Coinbase was founded by CEO Brian Armstrong in 2012 and completed an Initial Public Offering (IPO) via NASDAQ in April 2021.
Coinbase Transaction (Generation Transaction)
A generation transaction, or a coinbase transaction as it is commonly known, is the first transaction data contained in a block on the Bitcoin blockchain. The generation transaction is responsible for clearly delineating the recipient(s) of a particular block’s block reward. As opposed to traditional transactions which contain input and output data, generation transactions mint new bitcoin (BTC) from the protocol itself and therefore do not require input data.
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 to mint another asset or collateralize a loan. It sets the maximum borrowing amount. Also called the collateral ratio, it’s commonly used on over-collateralized decentralized finance (DeFi) loans. Although they vary, a typical collateral factor would be 1:2 (or 50%), meaning you could borrow $500 USD if the deposited collateral is worth $1000. When the value of a user’s collateral falls below the collateral factor (for example with a volatile asset), they must add more collateral or risk their collateral being liquidated 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 Obligation (CDO)
A collateralized debt obligation (CDO) is a complex financial product that is typically backed by a pool of loans and different types of assets that are sold to institutional investors. CDOs are a specific type of derivative whose value is derived from other underlying assets, which become collateral if the initial loan defaults. CDOs can be risky in their own right, but are a practical tool for freeing up capital and reducing risk for investors.
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 Loan Obligation (CLO)
Collateralized loan obligations (CLOs) are complex debt instruments that consist of many loans bundled together and sold as a single investment. CLOs are organized according to their risk profiles. They are similar to collateralized debt obligations (CDOs) and collateralized mortgage obligations (CMOs).
Collateralized Mortgage Obligation (CMO)
A collateralized mortgage obligation (CMO) is a complex debt instrument that consists of many mortgages bundled together that 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.
Collateral tokens are tokens employed for various blockchain use cases, acting as a collateralization method for users of the financial services provided by a blockchain network. This can include yield farming, borrowing, staking, lending, and other decentralized finance (DeFi) mechanisms. For example, stablecoins, bitcoin (BTC), ether (ETH), and other crypto assets are often used to maintain the stability of a specific asset type. As they relate to the Reserve Protocol specifically, collateral tokens are used to maintain the stability of the RSV stablecoin's peg at a 1:1 ratio with the U.S. dollar.
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).
Developed in 2013, Colored Coins was a proposal that aimed to use the Bitcoin blockchain to issue “colored bitcoins” that could represent various “colors” (i.e., varieties) of assets — including currencies, stocks, and more. The project was an early attempt to create what we now refer to as tokens.
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 application programming interface (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.
Commit chain is a generic term for Layer-2 scaling solutions built for the Ethereum blockchain or other blockchain protocols. Commit chains are also sometimes called non-custodial side chains and don’t utilize their own consensus mechanism, instead making use of their parent chain’s consensus framework. With commit chains, non-custodial third-parties often allow for the communication between transacting parties that share and verify user account balances via regular updates to the parent blockchain.
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 titanium. 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.
Commodity Exchange Act (CEA)
The Commodity Exchange Act (CEA) is a law and statutory framework that regulates commodity futures trading and investing in the United States. Commodities include metals, agricultural products, energy and technology instruments, and other global markets. The CEA was originally passed in 1936 and has been modified several times since then and has been upheld by the United States' Commodity Futures Trading Commission (CFTC) since 1974. The CEA was created to maintain the integrity of futures markets in the U.S. and to protect against market manipulation and fraudulent investing practices.
Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission (CFTC) is a United States-based regulatory body responsible for regulating the U.S. derivatives market to foster open, transparent, competitive, financially sound markets. The CFTC aims to expand on practices first laid out in 1936 by the Commodity Exchange Act (CEA) to protect market participants from fraud, market manipulation, and other unethical practices. The CFTC works together with the Securities and Exchange Commission (SEC) and other regulatory bodies in the U.S. to achieve these common goals.
Within the Crypto.com blockchain ecosystem, Community Nodes are responsible for sending, verifying, and receiving transactions, as well as reading data on the protocol. Community Nodes can be accessed for use by any member of the Crypto.com community.
Community Representative Node (C-Rep)
On the ICON Network, a Community Representative (C-Rep) represents one of the two main types of Peer nodes (the other being a P-Rep) that are responsible for maintaining network security and consensus. A C-Rep represents the community interests of enterprise and governmental constituents like hospitals, government entities, financial markets, and corporate entities.
A compiler is a software implementation that translates, or compiles, computer code written in one software development language into another so that it can be used with different types of computing infrastructure. Among other functions, compilers are commonly used to translate computerized code from high-level programming languages into simpler assembly languages that are able to decipher machine-readable instructions.
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 reducing financial crime and system risk.
Composability is a design feature that accommodates 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.
Compound Annual Growth Rate (CAGR)
The Compound Annual Growth Rate (CAGR) is the rate of return of an investment over a specified period of time as denoted by using an annual percentage. The CAGR is expressed by using this formula: CAGR = (EB/BB)^(1/N) - 1
where: EB = Ending balance BB = Beginning balance N = Number of years
COMP is the governance token of the Compound protocol, a decentralized, blockchain-based protocol that allows users 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 a computer system, network, or related system 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.
Computer-Aided Design (CAD) Software
Computer-aided design (CAD) software is any type of software program that is built for creating digital designs of objects. CAD software has virtually unlimited use cases including manufacturing and product design, architecture and infrastructure design, vehicle design, electronics design, and much more. CAD software allows users to test objects in numerous distinct mediums using various real-world simulations to develop products that actually have utility. CAD programs are typically used on a tablet or computer to create three-dimensional objects in various mediums.
Compute-to-data is a relatively new and popular method of training artificial intelligence (AI) models characterized by running an algorithm where a set of data exists, rather than the traditional method of sending the data to where the algorithm runs. This model exists to preserve data security — by keeping data securely onsite — while still allowing third parties to use and benefit from the data. Compute-to-data is especially useful with data-intensive workloads, the likes of which are common with cutting-edge industries like AI.
Concealment is a category of malware that attacks computer systems by evading detection. Common types of concealment malware include Trojans, backdoors, and rootkits.
Confirmation (or "Confirmation Time")
As it relates to blockchain and crypto, a confirmation is a measurement of how many blocks have been finalized since a transaction was sent from one address to another. As more confirmations take place, the security of the transaction increases until all block confirmations have been finalized and permanently become part of the ledger. The number of confirmations needed to successfully finalize a transaction varies depending on the network because all protocols operate differently. The time it takes for a confirmation to be finalized also varies based on the particular blockchain network.
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).
ConsenSys is a large blockchain company based in New York City with a presence in more than 30 countries around the world. It was founded in 2015 by Joseph Lubin — a pivotal voice in the blockchain industry since his early work with the development of the Ethereum network and the Ethereum Foundation. ConsenSys is a decentralized blockchain production studio with more than 500 employees globally which develops software and related solutions primarily for the Ethereum blockchain ecosystem. The company also provides enterprise and government consulting, as well as software development services for large companies across the world.
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.
Constant Reserve Rate (CRR)
The constant reserve rate (CRR) or constant reserve ratio, is the amount of cash that commercial banks must hold to protect their long-term viability in case a bank run occurs and customers rush to withdraw all their funds out of their accounts. The CRR takes into consideration the total amount of assets (including stocks, bonds, equities, derivatives, and other investment types) held by the bank. Commercial banks in the U.S. are regularly audited by the Federal Reserve to ensure their CRR is accurate and that they are operating in a fully compliant manner.
Consumer Price Index (CPI)
The Consumer Price Index (CPI) is a measurement designed to track the weighted average of a basket of consumer goods and services including transportation, food, medical care, and associated costs of living in a specific area. It is determined by aggregating the average prices of a basket of items, and is generally used to identify periods of inflation or deflation and the overall efficiency of a government's economic policies. The CPI typically involves statistics that cover those who are employed, self-employed, unemployed, retired, incarcerated, impoverished, and more.
Consumer-to-business (C2B) is a business model that is used by a consumer or end user to provide a product or service that benefits a company or related organization. With a C2B business model, a customer is often incentivized to market a product or service via a website, blog, podcast, video, or social media account. In a C2B model, the business benefits from the marketing of the product, while the consumer often benefits from free or discounted products, payment, or other benefits. C2B is one of four main business models alongside business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C).
Consumer-to-consumer (C2C) is a business model that involves the sharing or sale of products and services between consumers. The C2C model is often facilitated by a third-party service provider or company and is usually conducted on the internet. Examples of C2C platforms include online auction platforms (e.g., eBay), exchange of goods and services platforms (e.g., Craigslist), and digital payment platforms (e.g., PayPal and Venmo). Amazon’s online marketplace also operates using both a business-to-consumer (B2C) and C2C model. C2C is one of four main business models alongside B2C, business-to-business (B2B), and consumer-to-business (C2B).
Content Delivery Network (CDN)
A Content Delivery Network allows specific decentralized applications (dApps) to enable the sharing of internet content such as web objects (like text, graphics, and scripts), downloadable objects (such as software, media files, and documents), streaming media, and social media websites.
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 for Difference (CFD)
A Contract for Difference (CFD) is a derivatives trading agreement that settles the difference between the open and closing prices of an asset in cash with no rewards in physical goods or other compensatory value. A CFD allows traders to bet against the anticipated direction of an asset price by using advanced trading techniques over a very short time period, often with extremely high leverage. CFDs are typically used by investors to trade forex (fx), crypto, commodities, and other markets.
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.
In an investment context, convergence refers to the confluence of two data points, such as when the current price of an asset and its relative strength index (RSI) both increase. The opposite of convergence is divergence, where two technical indicators go in opposite directions. Convergence can also be classified as a process whereby the price of a futures contract gets closer to the spot price of an underlying commodity — thus converging — as the delivery date of the contract expires.
Cookie (Data Packet)
A cookie, sometimes called an internet cookie or HTTP cookie, is a packet of data that a computer receives (and sends back when needed) from a website while a user is browsing the internet. Cookies have various purposes including tracking and storing browsing history, keeping track of online purchases, and for user authentication of login credentials, among other tasks. Cookies are very important in facilitating the proper functionality of the internet as user and networking architecture would not functionally operate without them.
Coordinated Universal Time (UTC)
Coordinated Universal Time (UTC) is the primary time standard that the world uses to correctly regulate time and clocks. UTC makes use of extremely precise atomic clocks in conjunction with the Earth’s rotation, and is always within one second of mean solar time at 0° longitude and is not adjusted for daylight savings time. UTC, which was implemented on January 1, 1960, is the successor to Greenwich Mean Time (GMT). UTC time is a critical data point used by investors as a universal indicator of the times that different stock markets open and close across the globe.
The coordinator is a centralized master node on the IOTA Directed Acyclic Graph (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.
Copy trading, sometimes called mirror trading, is the process of utilizing algorithmic software to mimic the trading strategies and habits of another trader or group of traders. Many users pay for services that allow them to copy the trades that a real trader makes, with the hopes of obtaining higher levels of profitability. Copy trading can be utilized for most market types to trade any number of assets, and can be used via a mobile device, computer, or through more complex, expensive combinations of computing hardware and software (e.g., by an institutional investment firm).
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.
A correction, in a stock trading and crypto investing context, is an occurrence that signifies that the market, or a specific asset has just had a large drop in price from its recent higher price. The process usually results in the price returning to a level more established over the long-term. Corrections are often followed by a recovery in price and a continued uptrend, but can sometimes indicate a prolonged long-term market downturn called a bear market.
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.
Cosmos Gravity Bridge
The Cosmos Gravity Bridge is a specialized type of blockchain architecture that is designed to act as a bridge between the Cosmos Hub blockchain and the Ethereum network. Its main purpose is to facilitate the transfer of ERC-20 assets originating on Ethereum over to various Cosmos-based blockchains — and then back again to Ethereum if needed.
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.
Cosmos Software Development Kit (SDK)
The Cosmos software development kit (SDK) is a framework that allows developers to build Proof-of-Stake (PoS) and Proof-of-Authority (PoA) 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.
CosmWasm is a blockchain, decentralized application (dApp), and smart contract development framework created by Cosmos for developers building on the Cosmos Network. Leading blockchain ecosystems employing the use of CosmWasm include: Terra (LUNA), Iris Network (IRIS), OKExChain (OKT), Persistence (XPRT), and others. CosmWasm is a WebAssembly-based (WASM) iteration designed to allow software engineers to easily build smart contracts in Rust, Go, or AssemblyScript on multiple chains through the Cosmos Inter-Blockchain Communication (IBC) Protocol interoperability solution. CosmWasm is built for easy integration with Cosmos SDK and as a mature tooling system for smart contract deployment and testing.
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.
A Council Node is the most powerful and important node type 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 (Blockchain Protocol)
Counterparty is a protocol that is designed to allow the issuance of tokens on the Bitcoin blockchain.
Counterparty risk 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.
Cross-Chain communication is a process that allows for communication between different blockchain networks by enabling mutual interaction and value exchange — for example, in the form of token exchange and the sharing of multiple data types. Cross chain communication is central to the concept of blockchain interoperability. There are many inefficiencies related to cross-chain communication, but as blockchain technology continues to advance, many experts predict that it will become increasingly more efficient to exchange data in more ways, such that one day full data sharing capabilities between hundreds and even thousands of networks may be possible.
Cross Margin (Derivatives Trading)
Cross margin, or spread margin, is a form of margin trading that uses the full amount of a user’s available account balance to avoid liquidations. By using cross margin trading, any realized profit and loss (PNL) helps add margin on a losing position. Cross margin trading is helpful for users that are hedging existing positions and also for arbitrageurs that want to limit their exposure to the losing side of a trade in the event of a liquidation. Cross margin trading is the opposite of isolated margin trading, which only uses isolated portions of the account balance for each trade.
A crowdloan is a process through which parachain teams building on Polkadot or Kusama enable outside investors to stake their DOT or KSM tokens within a parachain slot, for the purpose of increasing their allocated number of tokens — thereby strengthening the chances of winning a parachain slot auction. If successful, the project will be able to operate their parachain in the Polkadot Relay Chain or the Kusama Rococo Relay Chain for a period of 6 months to 2 years, with the possibility of extension prior to expiration. Winning teams are able to structure their crowdloan in numerous ways, rewarding their various contributors how they want.
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.
Cryptoart is native to the blockchain and has its own particular aesthetic. It can be defined as rare digital artworks — sometimes called “digital trading cards” or “rares” — which are associated with unique and provably rare tokens that exist on the blockchain.
A crypto-backed loan lives on the blockchain and requires borrowers to 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 accepts a 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 achieve 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.
A cryptocurrency faucet is a website or mobile application that distributes small amounts of crypto to users in exchange for completing tasks to help grow a project’s reach, such as sharing posts on social media, viewing ads, and watching videos, among others. Not to be confused with airdrops, which typically present bigger rewards, faucets are aptly named because their rewards are small and analagous to drops of water leaking from a faucet. The first Bitcoin faucet was created by Gavin Anderson in 2010 to give new users access to bitcoin (BTC) and to help raise awareness and involvement.
Cryptocurrency Pair (Trading Pair)
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 is 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.
Blockchain networks employ specialized on-chain mechanisms — often called cryptographic proofs — that allow data transferred on a network protocol to be verifiable and unalterable. The process is facilitated through complex algorithmic cryptography that is immutable and helps prevent the falsification and modification of data, so that network users and outside participants know with increased certainty that the value, data or tokens they are sending or receiving is in fact legitimate. These characteristics make it possible for users to place considerably less trust in another party, instead relying on the underlying blockchain protocol, its smart contract mechanisms, and its informatic code.
A cryptographic proof is a special type of technology that is commonly built into a blockchain network to hide sensitive information. Cryptographic proofs are generally 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 Mining Processor (CMP)
A crypto mining processor (CMP) is a graphics processing unit (GPU) designed specifically for crypto mining. These crypto-specific graphics cards typically include better hashing performance over comparable GPUs since they are optimized to mine cryptocurrencies. In addition, these cards usually can’t be used for other purposes (like gaming or video rendering) as they lack the external connections needed for streaming video to a monitor.
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.
CSS (Cascading Style Sheets)
A cToken is a lending token 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.
Cumulus is an extension of the Polkadot Substrate development framework that allows Substrate-built runtimes to be compatible with Polkadot parachains through Polkadot’s Relay Chain. A fundamental component of Cumulus is the Cumulus consensus engine, which is used to run a Polkadot node. This consensus engine is internally used to dictate to the node and synchronization algorithms which chain to follow, finalize, and treat as legitimate. Cumulus also makes use of Cumulus Runtimes to help enable validator nodes to work via Substrate and the system’s block validator application programming interface (API). Finally, Polkadot Collators are also implemented via the Cumulus repository.
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 the Curve protocol, and is also used to pay liquidity providers on the platform.
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 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, or to compromise computers to launch 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.
In DFINITY’s Internet Computer, cycles power smart contract computations (referred to as software canister computations) to execute actions on the Internet Computer Protocol (ICP). The cost of computations is expressed in units of cycles that are equivalent to gas within the Ethereum network. Cycles represent the actual cost of operations such as physical hardware, energy storage devices, and network bandwidth.
The cypherpunk movement includes individuals (cypherpunks) and entities who generally advocate the widespread use of cryptography, blockchain, and related privacy-preserving technologies as a means for engendering social and political change. The movement began through communication on a mailing list in the late 1980s, which discussed cryptography, encryption, privacy, and security as means of empowering society on a far-reaching scale. The cypherpunk community represented some of the earliest adopters of Bitcoin in the late 2000s and early 2010s.
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 models, protocols, and optimizations.
Dapper Labs is a Canadian blockchain development firm owned by Axiom Zen. Dapper Labs is known for the creation of Crypto Kitties in 2017, and later for the development of several other notable blockchain projects. Dapper labs is focused on the creation of blockchain systems that are generally used for decentralized finance (DeFi), gaming and eSports, and non-fungible tokens (NFTs). Flow Blockchain — built by Dapper Labs — helped create NBA Top Shot (a platform for trading, collecting, buying, and selling of NBA NFT collectables) in 2020, and is expected to release similar platforms and products in the coming years.
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. They allow users to collect fees every time the 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.
Data Access Layer (DAL)
A data access layer (DAL) is generally considered the main component of the back-end of a computer system or network. It is a layer within a computer program that allows programs to access data and persistent storage. DALs allow running programs to access data anytime it is needed to operate correctly. Applications that make use of DALs leverage a database server, or can operate without one. DALs support several database formats, but must be able to communicate with different data requests within a system.
On the Klaytn blockchain platform, the process of data anchoring connects data from the auxiliary service chain to the mainchain. Data anchoring periodically stores block hashes from the faster, more customizable service chain onto the more secure mainchain. The technique is meant to increase the security of service chains, which can be less secure than the mainchain due to their smaller number of nodes.
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 Science (DS)
Data science (DS) is the interdisciplinary study of data to create actionable insights into the growing amount of data the world uses in many sectors. DS generally combines the use of analytics, artificial intelligence (AI), and scientific methodologies to compile, store, interpret, and process large amounts of data. DS can be employed in nearly any industry imaginable, and helps organizations, businesses, and other constituents learn from the data they use, often to help ensure greater technological innovation and higher rates of profitability.
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 applications. 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.
Datatoken (Ocean Protocol)
Datatokens are ERC-20 tokens that represent tokenized datasets and data services on the Ocean Protocol. By purchasing a particular datatoken on Ocean's data marketplace, users gain access to particular datasets and data services that the datatokens represent. Datatokens serve as both an on-ramp and off-ramp for data to enter the decentralized finance (DeFi) space and become monetized on the Ocean Protocol.
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 over 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.
The NEO blockchain uses a highly advanced framework (dBFT 2.0) similar to Proof-of-Stake (PoS) called Delegated Byzantine Fault Tolerance or dBFT. NEO’s dBFT 2.0 solves several inefficiencies that the first version of dBFT struggled with. DBFT 1.0 was sometimes susceptible to a single block fork, meaning that messaging problems between system nodes could often occur, resulting in network inefficiencies. To fix this problem, dBFT 2.0 changed the messaging request system that allows nodes to communicate with each other, adding the Recovery Message option. This option helps the network’s main Consensus Nodes to recover faster in the event of messaging problems, and to thus maintain consensus more effectively.
Dead Cat Bounce
A dead cat bounce is a technical analysis charting pattern that refers to a temporary recovery in the price of an asset that is experiencing a prolonged decline, followed by a continued downtrend. A dead cat bounce is essentially a fake out in the recovery of the price of an asset. This term is derived from a Wall Street adage that "even a dead cat will bounce if it falls from a great height."
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.
A debugger is a specialized software implementation that is designed to identify and remove errors — a process called debugging — in a software system, computer network, or related infrastructure. Debuggers audit computer systems by testing for correct performance. When a system exhibits a large number of bugs, or it crashes all together, it is critical to halt the operation of the system temporarily to repair it. Debuggers are often used to target the exact location of problems by using different mechanisms like instruction-set simulators, step-by-step code analysis, and computerized state modification, among others.
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 non-fungible ERC-721 token that represents the ownership of virtual land.
Decentralized Application (dApp)
Decentralized Application Programming Interface (dAPI)
Decentralized application programming interfaces (dAPIs) — an innovation of the API3 protocol — are API services that are inherently compatible with blockchain technology. While dAPIs function very similarly to legacy APIs, legacy APIs are centralized and not natively compatible with blockchain technology. On the API3 protocol, API providers are able to leverage a serverless oracle node, called the Airnode, to sell their data feeds on the blockchain.
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.
Decentralization is in many ways the central and defining characteristic of blockchain technology. Applying decentralized processes and tech can reduce or even eliminate the role of intermediaries across industries and use cases. For example, by removing banking institutions from financial instruments, decentralized finance (DeFi) platforms can distribute profits and governance to users and the wider community rather than a centralized intermediary. On an even more foundational level, decentralized networks crowdsource consensus, making it much harder for any one entity to control or censor the data that transacts through that network. However, many experts believe that achieving optimal decentralization can tend to decrease network throughput.
Decentralized Exchange (DEX)
A decentralized exchange (DEX) is a financial services platform 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 Exchange (DEX) Aggregator
A Decentralized Exchange (DEX) aggregator is a system that makes use of a DEX to give traders the ability to buy, sell, and trade different tokens and coins from numerous exchanges via a single streamlined interface. 1inch is an example of a DEX aggregator that is designed to find users the best asset price from DEX protocols like Uniswap, Balancer, SushiSwap, Bancor, KyberSwap, and others — all in one place. This type of specialized automated market maker (AMM) system gives users more options and a better overall user experience (UI) when using a DEX.
Decentralized Exchange Protocol
A decentralized exchange protocol defines the specific mechanisms that govern order book functionality, how trades transact once a match is found, and the deployment of potential rewards that incentivize buyers and sellers.
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 composability 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 identity (DID) is a type of digital identification that is typically used on public blockchain networks. Once established, DIDs allow their users to verify and use their identities without a centralized authority, identity provider, or related third party. This is accomplished through the use of an identity wallet that uses key-pair cryptography to verify a person’s identity. One interesting application of DIDs is the ability to create separate DIDs that share specific data with specific online entities. For example, you could verify your nationality without revealing your name or date of birth (DOB).
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 Oracle Network (DON)
Generally, a decentralized oracle network (DON) refers to a network of decentralized blockchain oracles that provide external data to blockchains or requesting smart contracts. With many different data sources and an oracle system that isn’t controlled by a single entity, DONs provide increased security and transparency to drastically improve smart contract functionality. Chainlink is an example of a popular DON.
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. Sia, Filecoin, and Storj are examples of blockchain-based decentralized storage networks that aim to reduce 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.
DeCloud is Akash Network’s decentralized cloud that is designed specifically to allow users to make use of various decentralized finance (DeFi) and cloud computing services using the Akash Network cloud storage and computing protocol. DeCloud is designed to be serverless, interoperable, self-sovereign, censorship resistant, fast, flexible, and affordable. DeCloud is a permissionless cloud service provider for DeFi, decentralized projects, and high growth companies that are compatible with major cloud service providers and cloud-based applications.
As it relates to blockchain and cryptography, decryption is the process of utilizing encoded or encrypted text (ciphertext) or data and converting back into plaintext that can easily be read by the computer system that created it. Decryption in blockchain often relates to methods of unencrypting data manually, through a unique identifier code, or using specialized cryptographic keys.
The deep web is the portion of the World Wide Web (WWW) that is relatively hidden and much harder to access than the surface web. The deep web contains web pages that are not indexed by traditional web search engines like Google. The deep web is said to make up over 99% of the internet, and is comprised of web mail, social media accounts, online banking, and other websites that sometimes require a password to access. The deep web is also made up of private databases and statistics from global government agencies, Non-Governmental Organizations (NGOs), large enterprises, and other constituents.
DeFi Pulse Index (DPI)
The DeFi Pulse Index (DPI) is an asset management index created by DeFi Pulse using Set Protocol. Originally created in 2020, the DPI represents a basket of various DeFi-focused ERC-20 tokens. The DPI is designed to track the most successful and relevant DeFi tokens, providing DPI holders with exposure to the DeFi market at large with one single token.
Deflation is the opposite of inflation and refers to the gradual reduction of prices in an economy relative to actual value, which increases the purchasing power of a currency over time. Deflation usually accompanies the contraction in monetary supply in a given economy, while inflation is often the result of increased money printing. For example, Bitcoin owes its value, at least in part, to its deflationary nature, which is integrated into the network’s code which reduces the circulating supply of bitcoin over time.
Delegated Byzantine Fault Tolerance (dBFT)
Delegated Byzantine Fault Tolerance (dBFT) is the consensus method that was created by Neo to be a more advanced version of Proof of Stake. The consensus mechanism is similar to regular Byzantine Fault Tolerance (BFT) except it employs a methodology whereby anyone can become a delegate that meets specific requirements. In this case, delegates are allowed to share and compare the proposals from other potential delegates. The system possesses extremely fast finality times and transaction speeds, but some argue that it is highly centralized because Neo only employs 7 main Consensus Nodes to maintain network consensus.
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 intends to achieve a higher degree of equitability and democratization through delegation mechanisms.
A delegator is a type of node that is often employed by Proof-of-Stake (PoS) blockchain networks. Delegators have a diverse range of purposes depending on the specific blockchain protocol they operate on, but they are generally used to help full nodes or validator nodes, which are the primary nodes responsible for carrying out network consensus. Those who wish to participate in consensus, but don't wish to operate a full node, may become a delegator node and stake their tokens with a public validator node — through a process called delegation — to share in a portion of block rewards.
Delisting is the removal of a crypto asset from an exchange. Delisting may occur when the project no longer fulfills the listing requirements initially set out by the exchange. Common reasons for delisting include lack of regular trading volume, poor network and/or smart contract stability, evidence of fraudulent or risky behavior, lack of protocol development, non-existent business-to-customer communication, as well as several other factors. After an asset is delisted from an exchange, it can no longer be bought and sold on the platform. A delisting is usually permanent, but in rare cases a project’s asset can be relisted.
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. A DoS attack is a malicious effort to disrupt normal traffic to a website or other internet property to temporarily crash the underlying network and make it non-functional.
Deposit (Cryptocurrency Transaction)
A deposit transaction is the process whereby a user deposits their funds (usually in the form of cryptocurrency or fiat) from one platform to another. Deposits are generally conducted from a cryptocurrency exchange, cryptocurrency wallet, custodial provider, or from a fiat-to-crypto on-ramp. Deposits are a type of blockchain transaction, and often come with a transaction fee that is charged by the underlying blockchain network being used to carry out the transaction. Deposits, along with withdrawals, are generally used to move assets between wallets and exchanges, and to exchange fiat currency between a bank account and fiat on-ramp service provider.
Depository Trust & Clearing Corporation (DTCC)
The Depository Trust & Clearing Corporation (DTCC), along with the National Securities Clearing Corporation (NSCC) and other subsidiaries, is a U.S. corporation that provides institutional U.S. investors with post-trade clearing and settlement and other services. DTCC also provides asset custody for securities issuers from the U.S. and more than 60 countries globally. The company also offers services related to municipal and corporate debt, mutual funds, equities, derivatives, unit investment trusts, insurance offerings, and U.S. depository receipts. The DTCC is the largest financial processor in the world and is responsible for settling most of the securities transactions in the United States.
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 the 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.
A deshielding transaction is a type of transaction used on the Zcash blockchain that is 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 Axiom (DA)
A design axiom (DA) is a 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 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 wallets 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.
Similar to a testnet, the development network or devnet operates independently of the mainnet. Some differentiate these environments based on their intended uses. Although not every blockchain protocol utilizes a devnet or testnet, many use them as an experimental playground to try new features and as a way to stress-test blockchain updates for speed, reliability, and security metrics prior to their mainnet release.
Digital art can be described as the art that you create on your computer with programs like Adobe Illustrator, Photoshop, or MS Paint. You can also use more sophisticated tools to create animated or interactive digital art. The most common digital artwork files are .tiff, .gif, .jpg, .pdf, and .mp4 files. Digital art is one of the most popular subgenres of contemporary art. Once it’s on the blockchain, however, it’s cryptoart.
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.
A digital currency is a currency that exists purely in a digital form, without a physical manifestation. Digital currencies possess multiple advantages over their traditional counterparts, including lowered transaction costs, greater transparency, increased transaction speeds, as well as decentralization. Various forms of digital currencies have existed since the late 1980s, but it was not until 2009 that the double-spend problem was solved through the Bitcoin blockchain protocol and the bitcoin (BTC) cryptocurrency.
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.
A digital identity is data that is used to represent an individual, organization, or device. For individuals, digital identities can be digital versions of government documents that verify one’s date of birth (DOB), nationality, sex, and other important information. It also refers to an individual’s social media profiles, email, and internet usage history. The concerns with digital identity — particularly for individuals — typically revolve around security and personal privacy. Often in blockchain, a digital identity is directly linked to a Decentralized Identity (DID), which once established, allows for a blockchain-based ID that can be verified through key-pair cryptography.
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.
Direct Market Access (DMA)
Direct market access (DMA) refers to the ability for investment institutions to make trades and investments — for securities and other asset types — through the order book of an exchange or investment platform they don’t normally have access to. This direct access is usually only available to companies, or buy side firms, that fulfill certain criteria and is realized through third-parties such as investment banks, or sell side firms. DMA is generally fulfilled by making use of algorithmic electronic trading software to fulfill certain order types and investment strategies.
Direct Public Offering (DPO)
A Direct Public Offering (DPO) — sometimes known as a Direct Listing or Direct Placement — is a method of offering shares directly to the public, without an intermediary such as an investment bank, broker-dealer, or underwriter. One potential benefit of this approach is that it can ultimately help cut many of the costs that are typical during the much more common and traditional Initial Public Offering (IPO). DPOs are often used by smaller companies with a loyal client base and are meant to give the firm offering the shares more flexibility for capital allocation. Prior to a DPO, the enterprise must present compliance documents to regulators from each region where it plans to offer shares, but the enterprise often does not need to register with the Securities and Exchange Commission (SEC).
Discord is an instant messaging (IM), voice over internet protocol (VOIP), and digital distribution platform for creating online communities. Discord enables users to communicate via voice calls, video calls, and instant messaging, and to share media and files in private chat environments organized into "servers." Discord has become well known in the blockchain industry (along with Telegram) as a hosting community where blockchain projects give regular updates and allow fans, investors, and users to ask questions and keep in touch with founding team members.
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.
Disk Operating System (DOS)
A disk operating system, or DOS, is a text-based user interface (TUI) that operates via a disk drive. DOSs are no longer widely used because the technology was replaced by more advanced operating systems as computing evolved, but are considered a foundational computating architecture. DOSs were generally used by hard disk drives (HDDs) and optical and floppy disks, and are characterized by a basic file system that is used to read, write, and organize files on its storage architecture. The most well-known disk operating system is called MS-DOS, which was initially developed in 1981 by Microsoft for IBM.
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 Hash Table (DHT)
A Distributed hash table (DHT) is a type of distributed database that is capable of storing and retrieving data associated with a network of peer nodes that can join and leave the network at any time. DHTs are typically designed to scale in a way that accommodates a large number of participating nodes that are organized in a structured and algorithm-dependent network topology. These network nodes coordinate amongst themselves to verify and store data in the DHT network without relying on a centralized coordinator.
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. An example of DLT could be in the form of 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.
Distributed Randomness Generation (DRG)
Distributed Randomness Generation (DRG) is a validation protocol used on several Proof-of-Stake (PoS) blockchains as a security measure. Using both a verifiable random function (VRF) and a verifiable delay function (VDF), DRG prevents the designated validator from altering the randomness or not submitting the last random number generated. This is because the preimage of randomness (pRnd), which is used to validate the current block on DRG-enabled blockchains, has already been written to the previous block and thus is unalterable. DRG is designed to be scalable, verifiable, unchangeable, and unpredictable (i.e. random).
In an investment context, divergence is when two data points go in opposite directions when charting technical analysis, such as when the current price of an asset rises, and its relative strength index (RSI) drops. The opposite of divergence is convergence, where two technical indicators rise or drop in the same direction. Divergence can also refer to a process whereby the price of a futures contract drifts farther away from the spot price of an underlying commodity as the delivery date of the contract expires. This type of divergence can result in the contract being liquidated.
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 accommodates 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 before the DRIP initiates.
DNV (Accredited Registrar Enterprise)
DNV (formerly DNV GL) is a Norwegian accredited registrar and classification company that has about 14,500 employees and 350 offices in more than 100 countries. DNV 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.
Docking is the process of merging two protocols — for example from Ethereum 1.0 to Ethereum 2.0 — to become better and stronger over time. The docking process generally involves the transfer of data and information from the older and less technologically advanced protocol to the newer and more state-of-the-art version. Docking is a very complex process and can take weeks to complete because of the steps associated with sharing similar data types between network infrastructures that are often very different from one another (due to various formatting programming language differences and structural variations).
Dollar-Cost Averaging (DCA)
Dollar-cost averaging (DCA) is an investment strategy where an investor divides up their investment capital to make periodic purchases of an asset to gain a better overall average entry price. DCA is often considered one of the most prudent investment strategies for crypto due to the industry's inherent volatility. DCA helps investors avoid poorly timed large lump sum purchases. An example of DCA would be an investor buying $100 USD of bitcoin (BTC) every week for a long period of time, no matter what the price of BTC happened to be at the time of purchase.
Domain Name Service (DNS)
A Domain Name Service (DNS) is a decentralized, hierarchical naming system for network infrastructure, computers, and other similar resources that are connected to the Internet or a private network. A DNS is generally used to translate more common domain names to the numerical IP addresses used to locate and identify specific devices and computer services within their underlying network protocols. By providing a global distributed directory for domain names, the Domain Name system has been a pivotal component of the Internet's infrastructure since 1985.
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 awarded 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.
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.
Do Your Own Research (DYOR)
Do Your Own Research (DYOR) is a term that is used in the blockchain investing space to encourage potential investors to study, analyze, and perform thorough due diligence on a project they are considering investing capital into. As with any investment opportunity, there is always risk involved. Failure to research or understand a project in its entirety can often lead to loss of capital and a negative investment result.
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 responsible 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 its 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.
Dynamically Typed Programming Language
Dynamically typed programming languages are languages that only check the code after successful program deployment. Dynamically typed languages are generally considered slower and more complex to write compared to statically typed languages. The syntax (how code is formed and combined to form larger sequences) of languages is usually classified as either dynamically typed or statically typed. Type checking for dynamically typed languages normally occurs during the running phase (run-time) of the program, in contrast to statically typed languages which are checked during the compilation phase (compile-time).
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.
E-business, or electronic business, is any business model that provides products and services to its customers over the internet. E-business is conducted by large corporations, governments, non-profit organizations, individual citizens, and many other constituents. E-commerce is one of the most well-known types of electronic business, but should not be confused with the general classification of e-business. E-commerce is characterised by buying and selling products and services online through an electronic platform such as Amazon, but it is only a small portion of the true value of goods, services, and information exchanged on the internet.
E-commerce, or electronic commerce, is a business model that allows users to buy and sell products and services on the internet. E-commerce is usually classified into four main segments: business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), and consumer-to-business (C2B). Nearly any imaginable product or service is available through an e-commerce website including books, music, electronics, financial services, and more. E-commerce is often used as a substitute to traditional brick and mortar stores because costs are lower, and the potential customer reach is much greater. Amazon, eBay, and Alibaba are some of the most well-known and widely used ecommerce platforms.
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.
Edgecast is Theta Network’s decentralized application (dApp) for content transcription and distribution. It allows Theta users to earn Theta coin rewards for sharing videos with other users. As a result, Theta has established a user-driven method of powering its growing ecosystem of entertainment-focused services — most of which are focused on esports, music, TV, film, education, and enterprise conferencing.
Theta Network Edge Nodes are hosted by Theta community members. Introduced in Theta’s 2.0 mainnet launch, Edge Nodes allow users to transcode and relay video content as well as share excess bandwidth/processing power across the network without the need for centralized servers. This Edge Node network forms the community-driven core of Theta’s Edgecast platform, which underpins the network's peer-to-peer streaming dApps. As of early 2021, there were more than 7,000 Edge Nodes around the world. Edge Node operators receive THETA token rewards in exchange for contributing to Theta’s global content-sharing ecosystem.
Effective Proof of Stake (EPoS)
Effective Proof of Stake (EPoS) is Harmony’s proprietary Proof-of-Stake (PoS) staking mechanism designed to increase network security and decentralization. EPoS allows thousands of validators to stake in a fair and equitable manner, reducing the possibility of staking centralization. Harmony's EPoS staking framework supports reward delegation and reward compounding and ensures 100% network uptime by both slashing validators who double-sign transactions and penalizing elected but unavailable nodes.
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.
Elrond eGold (EGLD)
The EGLD coin is the cryptographic asset native to the Elrond Network. It helps allow the Elrond ecosystem to function optimally through its staking, governance, and developer payment mechanisms.
Elrond Standard Digital Token (ESDT)
An Elrond Standard Digital Token (ESDT) is similar to the ERC-20 tokenization standard employed by the Ethereum network. ESDTs enable true asset ownership and programmability with minimal transfer fees, allowing Elrond’s infrastructure to build a robust variety of DeFi products. Elrond Standard Digital Tokens are designed to facilitate inexpensive token transfers that allow tokens to be moved from one account to another without utilizing a smart contract. Because of their native in-protocol support, transactions sent or received with ESDTs don't require use of the Elrond Virtual Machine (EVM) — enabling a user-friendly, fast, and scalable token transaction ecosystem that functions similarly to that of Elrond eGold (eGLD).
Elrond Virtual Machine
The Elrond Virtual Machine (VM) or Arwen WASM Virtual Machine is the state-based VM engine that is designed to facilitate the operational efficiency and creation of smart contracts on the Elrond blockchain and on external blockchains that interact with the Elrond Network.
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, Non-Governmental Organization (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.
Enterprise blockchain is a term used to describe blockchain systems that are typically used by large corporations for record keeping, data storage, and numerous other transaction and business types. Viable long-term enterprise blockchain systems must consist of three main characteristics — scalability, decentralization, and security — in order to be sustainable for most real-world enterprise uses. Enterprise blockchains are typically systems capable of the extreme scalability needed to process transactions very quickly because of the large amount of data that is regularly sent and received by large corporations. Enterprise blockchain systems can be either private, public, or hybrid systems.
Enterprise Ethereum Alliance (EEA)
Formed in 2017, the Enterprise Ethereum Alliance (EEA) is a member-led industry organization that was built to enable the collaboration of numerous enterprises, academics, Fortune 500 companies, and technologists to further the construction and widespread adoption of Ethereum as an enterprise-grade technology platform. The EEA helps facilitate the implementation of the Ethereum blockchain for enterprises by using its scalable, private, and interoperable infrastructure for multiple real-world uses. The Ethereum Enterprise Alliance also regularly hosts member-based meetings to share access to educational material, technical resources, and media creating a mutually beneficial environment for Ethereum 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 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 launched on January 10th, 2020. It is designed to enhance the performance and security of its predecessor (EOS 1.0), as well as provide new developer tools to make it easier to build on the EOS.IO 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 Kit (SDK)
The EOSIO software development kit (SDK) is an SDK built to provide tools to make application development easier on EOS. The EOSIO SDK is 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 (WASM) 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.
Equihash is an architecturally sound Proof-of-Work (PoW) cryptocurrency mining — or hashing — algorithm. The framework is designed to be application-specific integrated circuit (ASIC)-resistant and highly scalable. It is also designed to remove the centralization of large corporations operating cryptocurrency mining hardware. The algorithm was created by Alex Biryukov, Dmitry Khovratovich, and other cryptographers at the University of Luxembourg prior to its mainstream introduction in 2016.
Equity Stake (Equity)
An equity stake is classified as the percentage of a business owned by a specific individual or entity — for example as shares of stock in a company. In the blockchain industry, equity is commonly held by the founder of a company or blockchain project, in exchange for helping create, design, fund, and build the project since its inception.
Erasure encoding is used in computer science to separate data into encoded fragments (data blocks) so they can be sent securely to another location in the system. Erasure encoding often allows data to be expanded and encoded along with unwanted data so it can be stored in different locations to preserve the most important information. In the event that a database is damaged or corrupted, erasure encoding can help allow encoded fragments of data to be saved so they are not permanently lost.
ERC-1155 Tokenization Standard
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.
ERC-20 Tokenization Standard
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 as a framework to create many notable digital assets.
ERC-223 Tokenization Standard
ERC-223 is a tokenization standard that was proposed in 2017. It was designed to address some of the inefficiencies attributed to the ERC-20 Ethereum tokenization standard by developers building the Ethereum Classic blockchain, but for various reasons has not been implemented on a far-reaching scale. Notable for ERC-223 is a feature set designed to help prevent token losses that can occur with transfers of ERC-20 tokens.
ERC-721 Tokenization Standard
ERC-721 is a technical standard for the implementation of non-fungible tokens (NFTs) on the Ethereum blockchain which outlines and provides 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.
ERC-777 Tokenization Standard
Similar to ERC-20, ERC-777 is a tokenization standard for fungible tokens, and is designed to enable more complex interactions for token trading. It helps remove confusion around decimals, minting, and burning — and it employs a distinctly powerful feature known as a hook. A hook is a function in an informatic computer-based contract that is initiated when tokens are sent to it, and which simplifies how accounts and contracts interact while receiving tokens. Furthermore, because of this fact, ERC-777 tokens are much less likely to get ‘stuck’ in a contract (which has historically been an issue with ERC-20 tokens).
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 in an electronic document or form. Electronic signatures are legally valid in most jurisdictions to replace handwritten signatures.
Electronic sports, or Esports, is a type of competition using video games. Esports is often made up of organized multiplayer video game competitions, often between professional Esports participants competing on an individual or team-based format. Regular multiplayer mode has been present in console-based gaming for decades, but not until the late 2000s did the birth of competitive live streaming tournaments become well known. The most common video game Esports genres are multiplayer online battle arena (MOBA), first-person shooter (FPS), card, fighting, battle royal, and real-time strategy (RTS) games.
Ethash is a specialized Proof-of-Work (PoW) hashing algorithm employed by the Ethereum blockchain. Ethash is the newest version of Ethereum’s Dagger-Hashimoto mining algorithm, and is characterized as a faster rendition that is application-specific integrated circuit (ASIC)-resistant, while at the same time bring graphics processing unit (GPU) mining-friendly and light client-friendly unlike its predecessor. Because Ethash is PoW-based, there is a good chance it will no longer be used once Ethereum 2.0 launches with its Proof-of-Stake (PoS) consensus framework.
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 Deposit Contract
A deposit contract as relates it to the transition from Ethereum 1.0 to Ethereum 2.0 is a smart contract on Ethereum 1.0 that allows a user to create a validator node on the Ethereum network — a node that contributes to network consensus and block creation/validation — by depositing 32 ether (ETH) into the node. The deposit contract for Ethereum 2.0 went live on November 4th, 2020 as users from across the world rushed in to stake their 32 ETH before the November 24th deadline ahead of the proposed Ethereum 2.0 launch on December 1st, 2020. This launch required at least 16,384 individual users to fulfill the 32 ETH obligation.
Ethereum Dominance (ETHD)
Ethereum dominance (ETHD) is a metric that measures the market cap of ether (ETH) — the world's second largest cryptocurrency — in relation to the total market cap of all other cryptocurrencies combined. ETHD is often perceived to have a correlation to the performance of bitcoin (BTC) and alternative cryptocurrencies, or altcoins. Generally, when ETHD increases, the value of most other cryptocurrencies increases in what is sometimes referred to as an "alt season."
Ethereum Improvement Proposal (EIP)
An Ethereum Improvement Proposal (EIP) is a mechanism used by the Ethereum network to propose new features and processes that help determine the direction of the Ethereum network. EIPs are an important part of Ethereum’s governance system and act as a source of truth for the Ethereum community. They are typically used to amend technical specifications of the Ethereum network, and consist of upgrades and standards that are discussed by the Ethereum development community and the Ethereum Foundation. EIPs go through a rigorous finalization and auditing process to determine if they are in the best interest of the Ethereum project long-term.
Ethereum transactions are code or a set of commands that execute in a single Ethereum block. They change 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 decentralized applications (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 dApps exist almost exclusively on the Ethereum blockchain thus far.
Ethermint is a scalable, high-throughput Proof-of-Stake (PoS) blockchain that exhibits extensive interoperability and compatibility with the Ethereum network. The platform is built using the Cosmos software development kit (SDK), which runs on top of the Tendermint Core consensus engine. The Ethermint system is designed to help developers build Ethereum-compatible applications within a Tendermint-based environment. Through the Cosmos SDK, the platform makes use of the Inter Blockchain Communication (IBC) protocol to facilitate the exchange of tokenized assets and other data types between the Cosmos and Ethereum ecosystems.
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.
European Economic Area (EEA)
The European Economic Area (EEA), established in January 1994, is an area in Europe that acts as an extension of the European Union (EU)'s financial market. The EEA is composed of the EU member states as well as three of the four nations that make up the European Free Trade Association (EFTA) — Norway, Iceland, and Liechtenstein, with Switzerland denying entry. The EEA was founded to create an open framework to implement laws across all participating countries relating to the movement of goods, services, capital, and citizens (known universally as the four freedoms).
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.
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 coin or token of the platform, and those launched by other crypto companies using the token launch infrastructure and services of the exchange. These exchange assets can either be tokens (digital assets enabled by an existing blockchain) or coins (digital assets that run on their own blockchain).
Exchange-Traded Commodity (ETC)
An Exchange-Traded Commodity (ETC) is typically backed by an underwritten note that is collateralized by an underlying asset purchased using the capital invested into the ETC. As a result, Exchange-Traded Commodities are often considered a cross between an Exchange-Traded Fund (ETF) and an Exchange-Traded Note (ETN). This means ETCs have some of the potential tax and cost-saving advantages of ETNs, while also providing a degree of risk reduction in the event an underwriter defaults.
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 Note (ETN)
An Exchange-Traded Note (ETN) is a structured financial product that is issued as a senior debt note, and stands in contrast to Exchange-Traded Funds (ETFs) which represent a direct stake in an underlying asset. In other words, ETNs are unsecured and similar to bonds. ETNs were developed in 2006 by Barclays Bank in order to make it easier for normal investors to invest in traditionally illiquid, hard-to-access assets. Because ETNs don’t involve the direct buying and selling of assets like an ETF, investor taxes are not triggered until the fund is sold, which can be advantageous for long-term investors.
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 has very little slippage or change in price from an order price and is a sign of a healthy market and asset.
In the context of blockchain, an exit scam is a process whereby a company creates a fake business model, whitepaper, website, and other information to pose as a credible blockchain enterprise, then offers investors a means to participate in various funding rounds where it sells tokens that represent equity in the project, and ultimately executes a large inside-job market sell-off orchestrated by the founding members of the project who proceed to steal investors' capital and go on the run.
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's 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.
Fair Sequencing Service (FSS) (Chainlink)
The Fair Sequencing Service (FSS) is a mechanism developed by the Chainlink data oracle platform that allows decentralized finance (DeFi) systems to reduce transaction ordering problems and costs. FSS streamlines the use of smart contracts on Layer-1 blockchains by allowing the Chainlink oracle network to order transactions — by using several oracle nodes to carry out the process instead of one — to a specific smart contract made up of user transactions and oracle reports. Chainlink's FSS stands to potentially further decentralize mining and transaction ordering in blockchain networks.
Fan Token (Chiliz)
A Fan Token is a specialized token that runs on the Chiliz protocol that represents specific sports teams. Fan Tokens were created in unison with Chiliz' all-in-one rewards-based mobile application, Socios. Fan Tokens give Socios users the ability to vote on the proposals involving particular sports teams, such as design changes to uniforms, team matchups, and more. Socios voting is enabled via smart contracts that execute on the Chiliz blockchain. To obtain Fan Tokens, users must first purchase Chiliz (CHZ) tokens which can be exchanged to and from different Fan Tokens.
Fan Token Offering (FTO)
A Fan Token Offering (FTO) is a public sale of an organization’s Fan Tokens on Chiliz’ Socios platform. Prior to an FTO, the issuing organization — typically a popular sports team — decides the total fixed supply of their Fan Tokens and the token’s initial token sale price, denominated in Chiliz Tokens (CHZ). Prior to launching an FTO, Socios will publicly disclose all the essential information relevant to the token release, including the FTO’s start and end dates, the Fan Token’s opening price, and the fully diluted market cap. This helps users on the platform to make more informed investment decisions.
Fantom Virtual Machine
The Fantom Virtual Machine (FVM) is the Virtual Machine (VM) designed and built by the Fantom network that makes use of the Asynchronous Byzantine Fault Tolerant (aBFT) consensus mechanism and the Fantom Opera chain to connect with the Ethereum Virtual Machine (EVM). This is possible as a result of its capability to create smart contracts through Ethereum’s Solidity programming language.
Fast Byzantine Fault Tolerance (FBFT)
Fast Byzantine Fault Tolerance (FBFT) is a consensus mechanism used on some Proof-of-Stake (PoS) blockchains. A variation of Practical Byzantine Fault Tolerance (pBFT), FBFT has the block leader collect votes from validators using a multi-signature signing process in lieu of asking all validators to broadcast their vote (as done on pBFT chains). This allows FBFT to be “faster” and more scalable than pBFT consensus-based chains. While pBFT works well with distributed networks, many consider FBFT more robust for decentralized networks like blockchains as it allows nodes to sync using a local clock and the last block’s timestamp.
Fast Exit Problem
The fast exit problem is an issue that banking, blockchain, and other computing networks may encounter when users attempt to withdraw their funds, resulting in a multi-day waiting period for funds to exit. This issue can result in substantial loss of time, capital, and business efficiency for governments, large enterprises, and other constituents. Retail investors and institutional investment firms also face numerous financial and investment challenges related to the same issue. At this time, there are several blockchain systems and other types of computing infrastructure building new frameworks to attempt to eliminate this problem.
These web-based services generally supply testnet coins or devnet coins from people or organizations who own surpluses that they’re willing to part with — usually for free. Some faucets may even release coins from a main blockchain protocol that have real-world monetary value.
Fear of Missing Out (FOMO)
Fear of Missing Out (FOMO), in the context of blockchain or general finance, is an acronym that refers to the feeling of regret or apprehension for missing out on a specific investment opportunity after the price of a stock, cryptocurrency, or other asset substantially rises in price during a short time period. FOMO can also have a general meaning that stems from a person’s belief that they may miss out on an activity they really wanted to participate in while their friends or loved ones are enjoying themselves without them being present.
Fear Uncertainty and Doubt (FUD)
Fear, uncertainty, and doubt (FUD) is a term commonly used in the context of blockchain or general finance. It signifies that overall market sentiment is fearful, uncertain, and doubtful. FUD generally increases among market participants when a large drop in a number of stocks or an entire stock market takes place. In relation to blockchain, FUD is typically very high when the price of bitcoin (BTC) drops significantly during a very short period of time, which typically brings the rest of the cryptocurrency market down in price with it.
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.
A federated blockchain, commonly known as a consortium blockchain, is a private blockchain network managed by multiple entities wherein each participant retains special privileges. Controlling entities typically participate in the consensus process as a transaction validator (by hosting a node or several nodes) and have permissions to view certain types of data, often via specialized authentication systems. Consortium blockchains are a less decentralized digital ledger technology (DLT) that maintains some benefits of distributed systems for use cases like enterprise and government.
Federated Byzantine Agreement (FBA)
Federated Byzantine Agreement (FBA) is a consensus method developed and deployed by the Stellar blockchain protocol. It operates through 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 at 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 off-ramp is an exchange or similar service that allows for digital assets like securities and cryptocurrencies to be exchanged for fiat currency like the U.S. dollar. Off-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 off-ramp enables users who have purchased cryptocurrencies to convert their digital assets back into fiat currencies.
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.
Field-Programmable Gate Array (FPGA) Miner
A field-programmable gate array (FPGA) miner is a crypto miner that uses an FPGA to mine cryptocurrency. It’s “field-programmable” in the sense that it can be customized by the customer upon delivery by setting up its gate array (a set of logic gates) and installing or designing bespoke software. Once configured, FPGA miners tend to be more powerful and efficient than graphics processor unit (GPU) miners — and are more flexible than the mining algorithm-specific and unalterable application-specific integrated circuit (ASIC) miners. However, FPGA miners tend to require more technical know-how than other mining rig options.
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.
Finality (Settlement Finality)
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 throughput scalability on a blockchain, the achievement of which remains pivotal to the widespread applicability of decentralized tech for global enterprise use.
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 Industry Regulatory Authority (FINRA) Rule 3310
Financial Industry Regulatory Authority (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 FINRA. Firms must also provide annual (on a calendar-year basis) independent testing for compliance that is conducted by member personnel or by a qualified outside party.
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 financial instrument is any type of financial asset or contract that can be traded and exchanged between different types of network participants. Normally, financial instruments include derivatives (such as futures and options contracts), securities (stocks and equities), cryptocurrencies, commodities (such as gold and silver), fiat currencies (via forex trading), and debt instruments such as bonds or loans, among other asset types. Financial instruments are typically traded on a stock exchange, through a stock broker, or via an asset exchange.
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 definition and subsequent regulation of some cryptocurrencies as a security is an emerging legislative 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.
Art began to be distinguished as “fine” or “high” during the Italian Renaissance. The adjective “fine” has nothing to do with the quality of an art object, but rather reflects the aesthetics of the Renaissance. Fine art exists for the sake of itself and its beauty, not its utility. Prior to this period, art was generally decorative, and applied to household objects.
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.
A Finney attack is an attack where a miner pre-mines a transaction into a block from one wallet to another. Then, they use the first wallet to make a second transaction and broadcast the pre-mined block which has the first transaction. This requires a very specific sequence to work. This is only possible if the receiver of the transaction accepts an unconfirmed transaction.
A firewall is a computer-based network security system that filters and monitors incoming and outgoing network traffic based on predefined security parameters. A firewall is a security mechanism that establishes a barrier between a trusted network and an untrusted network like the Internet. Firewalls can be very elementary, or very complex and expensive to construct, depending on the needs of the use case in question.
First-Mover Advantage (FMA)
First-mover advantage (FMA) is a classification given to a company that provides a product or service prior to any of its future competitors. Being a first-mover generally allows a company to establish and maintain a strong brand, customer loyalty, and large market share before other potential competitors. First-movers tend to benefit from additional time to perfect their business model, product and service offerings, and much more. Amazon and eBay are examples of large enterprises that benefited greatly from becoming first-movers in their respective industries.
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.
A fiscal policy is a financial policy implemented by a government to adjust its spending and tax rates to monitor and influence a nation’s economy. Fiscal policies usually work hand-in-hand with monetary policies and a central bank to adjust a nation’s money supply. Both of these strategies work together to provide the necessary means to shape a nation's economy in the short, medium, and long term.
Fishermen is a technical term used within the Polkadot blockchain protocol to refer to full nodes that are responsible for 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.
Fixed Supply (Price Elasticity)
Fixed supply means that the supply, or total quantity of an asset, is constant and does not change. When an asset has a fixed supply — like the fixed supply of 21 million bitcoin (BTC), for example — then the only factor involved in fluctuating its price is demand. The supply of an asset is related to the price elasticity of an asset, or the responsiveness of the amount of goods or services needed to change its price. When an asset has a fixed supply, then the elasticity of an asset is said to be zero.
Flag (Technical Formation)
In technical analysis, a flag pattern is a formation that is defined by a strong countertrend (the flag) following the short-lived price trend (the flag pole). Flags typically move in the opposite direction of the prevailing price trend, meaning that if the chart is bullish, a bear flag may occur. In contrast, if the chart initially is bearish, a bull flag formation can occur. Flags generally signify a trend reversal or breakout after a period of sideways price consolidation, and are often accompanied by price action and related volume indicators.
A Flash Loan is 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 blockchain. 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.
A payment network that allows users to spend crypto at brick-and-mortar retail stores. Flexacoin (FXC) is the digital asset token used to collateralize payments on the Flexa Network, helping to enhance transaction speed and security.
The flippening refers to the hypothetical moment in time when the total market cap of Ethereum might surpass the total market cap of Bitcoin. The flippening has been hypothesized for many years, and may or may not come to fruition, however, many experts believe the flippening could occur in the mid 2020s because of Ethereum's far-reaching smart contract, decentralized finance (DeFi), and yield farming applications.
Flipping is an investment strategy that denotes buying an investment product like an asset, stock, or cryptocurrency that is then sold shortly afterwards to generate a quick profit. The general term “flipping” can be used in many contexts, such as buying and selling a home to make a substantial profit in a short amount of time. As it relates to Initial Coin Offerings (ICOs), flipping typically refers to the strategy of buying tokens prior to an exchange listing and selling them shortly after they are first listed for a substantial profit.
Flow (Blockchain Platform)
Built by Dapper Labs — the company behind non-fungible-token-based digital consumer collectible phenomena such as CryptoKitties and NBA Top Shot — Flow is a blockchain designed to support consumer collectible ecosystems for collectibles, games, and related consumer applications.
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-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 generally 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.
The fractional ownership of assets refers to owning a portion of an asset represented through the process of tokenization. Tokens are fully divisible, meaning they can be multiplied or divided into very large or small amounts. This characteristic allows a user to potentially purchase a very large or very small amount of a specific asset like bitcoin (BTC) or ether (ETH). For example, it is possible for an investor to purchase a few cents' worth of a tokenized asset (such as a house, car, or painting), or millions of dollars worth of the same asset. The value of tokenized assets can be classified in several ways, most commonly in the equivalent value of the asset in a fiat currency.
Framework for Runtime Aggregation of Modularized Entities (FRAME)
Framework for Runtime Aggregation of Modularized Entities (FRAME) is a runtime framework used by the Substrate application and blockchain development paradigm, which was created and designed by Polkadot. FRAME is a set of modules and software libraries that simplify runtime development. Within Substrate, these modules are called pallets and they host the domain-specific logic needed to allow a blockchain’s runtime system to operate.
A fraud proof is a technical mechanism that operates as a bond when employed in decentralized application (dApp) ecosystems that make use of Optimistic Rollups (ORs), which are sidechains that seek to decrease the fees and latency dApps might experience on a blockchain platform. A sequencer, which is responsible for processing ORs, must include a fraud proof along with their work to incentivize good performance. Sequencers are financially rewarded for processing rollups according to consensus rules, and financially punished by forfeiting their fraud proof when they break them.
Front-End (Computing Architecture)
Front-End Software Development
Frontier (July 2015)
Frontier was the name given to the first version of the Ethereum mainnet, which launched in July of 2015 and made use of a Proof-of-Work (PoW) consensus mechanism. Frontier was a fairly bare-bones structure that got the network off the ground. It provided a command line interface to mine ether (ETH), and upload and execute smart contracts — nothing more. The initial launch of Frontier and the Ethereum network took place between the initial founding of Ethereum in 2013 and its subsequent mainnet launch in 2015.
A process prohibited by many platforms and jurisdictions, frontrunning is when an investor enters into an equity trade, derivative, option, futures contract, or security-based swap in order to profit in advance of the trade by obtaining non-public knowledge of a large pending order to in turn purchase a substantial amount of an asset — dramatically impacting the asset’s price. Frontrunning, also known as tailgating, is usually considered a form of insider trading or market manipulation that is illegal in many jurisdictions.
FTX (Cryptocurrency Exchange)
FTX is a cryptocurrency exchange that was founded in 2017 by CEO Sam Bankman-Fried and CTO Gary Wang. FTX is designed for both retail and institutional investors, and offers many unique derivatives trading and investment opportunities.
Full Domain Hash (FDH) Signature
A full domain hash (FDH) signature is a cryptographic signature mechanism that makes use of the hash-and-sign paradigm. FDH signatures leverage Rivest–Shamir–Adleman (RSA) public key cryptography and are provably secure using the random oracle model. FDH signatures are part of a group of standardized signatures that are widely used in public key cryptography.
Full Stack Software Engineer
Full stack software engineer is a term used to describe the capabilities and skill set of a software developer. A full stack developer is a computer scientist who is able to program all of the different components of a software implementation (e.g., database, server, operating system, application, and middleware). Full stack developers are able to build both the back-end (the innermost working components of the system) and front-end (the components that make up what the user sees on their screen) of a computer or software system using different programming languages and other tools.
Fully Homomorphic Encryption (FHE)
Fully Homomorphic Encryption (FHE) is a form of encryption used in computer science that allows users to perform computations on data without first decrypting it. Decrypting sensitive data makes it susceptible to potential privacy and confidentiality breaches that could result in data theft and misuse by malicious third-party actors. FHE mitigates this problem and can be used for many purposes in the blockchain ecosystem, including the preservation of sensitive healthcare data, privacy-preserving outsourced storage and computation via cloud computing environments, and related technology. FHE often works in unison with Secure Multi-Party Computation (SMC) and other privacy-preserving cryptographic primitives.
Functional Programming Language
A functional programming language is a programming language that employs 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.
Fundamental Analysis (FA)
Fundamental analysis (FA) is an investment analysis method employed by traders and investors to evaluate the intrinsic value of an asset — and then determine if it is currently undervalued or overvalued. FA can include the examination of microeconomic factors such as current economic conditions, market trends, or industry comparison, as well as analysis of the team behind a company or asset itself. Fundamental analysis contrasts with the other major method of market analysis, technical analysis (TA), which examines price, volume, and other technical indicators.
Fund of Funds (FOF)
A Fund of Funds (FOF) – or multi-manager investment — is a pooled investment fund (made up of several mutual funds, hedge funds, private equities, and investment trusts) that is used to achieve wide diversification and proper asset allocation of investments in numerous fund categories within a single portfolio. These holdings can replace direct investing in stocks, bonds, or other security or investment types. FOF are generally classified as either “fettered,” meaning that they can invest only in funds managed by the same investment firm, or “unfettered,” meaning that they are able to invest in external funds run by other asset management firms.
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 pre-set 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 of cryptocurrency applications, including bitcoin futures, which represent agreements to trade bitcoin at a future date at a predetermined price.
Gartner is an American research and advisory company that provides data and metrics to their global executive customer base across industries like technology, finance, communications, legal and regulatory compliance, customer service, human resources, and supply chain. The company provides numerous services — often to executives leading large international enterprises — including webinars, written research, financial and industry-specific data, and more. Gartner also hosts conferences, executive trainings, and other workshops for various enterprise and government clients around the world.
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 fees are payments made by users to cover transaction or smart contract execution costs on the Ethereum blockchain network, in compensation for the computing energy that such executions require. Gas fees are generally priced in a small amount of the cryptocurrency ether (ETH). The sender of a transaction can decide if they want the transaction to be sent slowly or quickly. The faster the transaction is processed, the more gas fees it will require.
GAS (not to be confused with the gas fees native to the Ethereum network) 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.
Ethereum charges a fee, called gas, for the computational exertion needed to send a transaction on the network — and the gas limit is the highest fee that the Ethereum network can charge a user. The gas limit depends on the complexity of the transaction, the chosen sending speed, and the current level of network congestion at the time the transaction is initialized. Because the Ethereum network is so large, thousands of transactions are often queued and awaiting confirmation, which results in network miners prioritizing transactions for users that pay more to send their transaction.
Gateways are devices that make use of Internet of Things (IoT) technology to connect to a blockchain system or related network infrastructure. Most IoT network devices are generally inhibited by poor battery life, limited computing power, restricted communication bandwidth, and other criteria that affect performance. Gateways were designed to help combat these inefficiencies and can be made up of any number of devices that possess the capability to run a network themselves. Examples of gateways include a mobile phone connected to various wearable devices, a smart car linked by multiple in-car devices, or a 5G base station connected to a multitude of IoT devices.
Gavin Wood is a British computer scientist best known for founding Polkadot, Kusama, Parity Technologies, and the Web3 Foundation. Wood became one of the original founders of Ethereum in 2013 and the project's Chief Technology Officer (CTO). Wood also notably created the Solidity programming language that Ethereum uses to program smart contracts. In 2019, Wood developed the Kusama blockchain network and continues to build Polkadot and Kusama, along with other related entities.
Gems (The Sandbox)
In The Sandbox game, Gems are ERC-20 tokens that define the attributes of the assets created by users. They are burned upon usage.
General Availability (GA) Version
General Availability (GA) version refers to the version of a software program or application that has been released for sale to the general public. The GA version is usually released after the release to manufacturing (RTM) version and several other preceding versions (including the alpha and beta releases). The GA version has normally undergone all testing and finalization to be ready for commercialized purchase, including regulatory and security testing and more.
General Data Protection Regulation (GDPR)
The General Data Protection Regulation (GDPR) is a European data and privacy protection regulatory framework for the European Union (EU) and the European Economic Area (EEA).The GDPR is also responsible for the transfer of personal data outside of the European Union (EU). The main goal of the GDPR is to protect and control the rights of personal data and to streamline the regulatory environment for international business inside and outside the EU.
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.
Geographic Information Systems (GIS)
A geographic information system (GIS) is a computer-based system used to map, share, analyze, manage, and interpret numerous types of geographic and location data. It is quite common to use GIS technology to apply certain data types to maps to carry out research, data analysis, and other processes for engineering, planning, design, environmental monitoring and disaster relief, search and rescue, telecommunications, and many other uses. GIS also utilizes location data and coordinates such as longitude (x-axis), latitude (y-axis), and elevation (z-value) to fulfill various purposes related to geospatial mapping and data compilation for many different disciplines.
A gigabyte (GB) is a unit of measurement for digital data storage that is made up of 1,000,000,000 bytes of data. A GB is 1,000 times larger than the megabyte (MB) and is measured using the International System of Units (SI) measurement scale. Bytes are the basic unit of data storage, but have since grown to include many larger measurements including kilobytes (KBs), megabytes, and terabytes (TBs). GBs, like MBs, are normally used to measure data storage on a computer or computer network, or for external USB storage devices or hard drives, and other related software or hardware.
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.
Google Authenticator is a mobile-based authentication application that makes use of two-factor authentication (2FA) services by using a Time-based One-Time Password Algorithm (TOTP) and HMAC-based One-Time Password (HOTP) algorithm for authenticating a user’s identity for use with software applications. The application generates a one-time six-digit password (which changes every 30 seconds) that must be entered in conjunction with a user's usual login credentials. Google Authenticator serves as a security measure to mitigate malicious actors from hacking into applications on a user’s mobile device or web browser, and is used by the majority of cryptocurrency exchanges as an added security measure.
Gossip Protocol (Hedera Hashgraph)
Gossip Protocol is utilized by Hedera Hashgraph to broadcast information amongst network nodes and to reach consensus on transaction validation.
Blockchain governance refers to the formal structure that a blockchain ecosystem maintains to ensure the long-term integrity, transparency, and technical innovation of the project. An equitable governance structure involves different methodologies for voting on platform technology, strategy, updates, and rules. Blockchain governance typically includes both on-chain governance (like cryptographic algorithms that govern the network's computational architecture and consensus mechanism) and off-chain governance (like interpersonal decision-making that is not written in computer code).
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. On Proof-of-Stake (PoS) blockchains, governance tokens may be staked within network validator nodes to secure the platform’s security and operational efficiency in exchange for regular staking rewards.
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 a 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.
Graphics Processor Unit (GPU) Mining
Graphics Processor Unit (GPU) mining is a cryptocurrency mining mechanism that makes use of GPUs instead of the Central Processing Units (CPUs) that had been used in the early days of the blockchain industry. For example, the Radeon HD 5970 GPU-miner is able to execute 3,200 32-bit instructions per clock. Compared to the 4 32-bit instructions per clock of a CPU, this represents an 800-fold increase in efficiency. Because of such drastically expanded processing capabilities, GPU mining is much more efficient for performing the types of repetitive computations needed for cryptocurrency mining.
Graph Node (The Graph)
The Graph blockchain protocol is designed to index and query data from blockchains, and Graph Node is the tool that enables this function. Graph Node is a Rust-based framework that acts as a master server to event source the Ethereum blockchain (the only blockchain currently supported) and the system’s corresponding subgraphs. It deterministically updates a data store that can be queried and searched via the GraphQL endpoint. In essence, Graph Node is the main server that carries out the processes needed to obtain the answers to complex queries from blockchain databases.
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.
Griefing occurs when a user acting in bad faith deliberately harasses or trolls other users within an online environment to disrupt their concentration and strategy to cause a loss for those involved (other than for the griefer). For example, griefing can take place in an online video game community. Griefing is not generally classified as cheating because it is caused by allowed using aspects within the game (albeit for unintended purposes). Examples include destroying something that other players built or created. Basically, griefing is intentionally interrupting the in-game immersion of another player during their gameplay to cause a losing result.
Gross Domestic Product (GDP)
Gross domestic product (GDP) is the total market value of all finished goods and services produced within a country during a specific time period. GDP is one of the most widely accepted metrics for measuring the overall economic strength of a country, and is used to broadly measure a country’s annual growth rate, domestic production, and overall total economic value. Gross domestic product is generally calculated in three ways (using production, incomes, or expenditures) and can be adjusted for inflation and other population metrics to provide more tailored data insights. Though GDP has its limitations, it has historically served as a key tool to help guide policymakers, businesses, and investors towards more informed and more strategic decision-making.
Gross Merchandise Value (GMV)
Gross Merchandise Value (GMV) — also known as Gross Merchandise Volume — is a classification used within the online retailing industry to indicate the total volume of sales in monetary value (usually in US dollars, Euros, or another fiat currency) for merchandise sold within a specific marketplace during a specified time period. GMV also includes all fees and deductions that are calculated independently, such as site revenue, which is derived from fees and is not the same as the monetary value of items sold. The GMV for ecommerce retailers is denoted by the average sale price per item, multiplied by the number of individual items sold (which is also considered gross revenue in this example).
Gwei is a denomination 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 hack, or hacking, is the process whereby a malicious third-party cybercriminal breaks into a computer system or network that they do not legally have access to. Hacks can be carried out to steal sensitive data, for monetary gain, or for other malicious intentions. The process of hacking can also be used for legitimate purposes by various enterprise, private, or government entities to stop cybercriminals from carrying out online criminal activity.
A hackathon is a competitive and time-sensitive event held by a firm, consortium, or related entity (for example in the technology, FinTech, or blockchain industries). In these events, software engineers compete to produce working applications, software programs, or even entire computer networks. Hackathons often provide several distinct prize categories for winning participants, and tend to have a specific focus — such as on programming languages used, operating system type serviced, or the specific demographic of programmers involved. The name Hackathon is a portmanteau of hacking and marathon.
Computer hackers are often malicious actors who use their programming skills and technical expertise to break into computer systems or networks to steal, destroy, or modify data. Hackers are often employed by governments, large enterprises, or other organizations for varying purposes such as law enforcement agencies in order to retrieve information that could lead to the arrest and conviction of criminals.
Hal Finney was a famous cryptographer and programmer who was employed by PGP Corporation for many years and eventually became known as one of the early pioneers responsible for the creation of the Bitcoin network. Finney was the recipient of the first Bitcoin transaction that was allegedly sent by Bitcoin creator Satoshi Nakomoto. Many have hypothesized that Finney himself was Satoshi Nakomoto, however during an interview shortly before his death in 2014, Finney stated that he was not Nakamoto. To this day he is considered one of the most influential and iconic software developers of our time.
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.
Decentralized applications (dApps) which are built on the Holochain blockchain platform are referred to as hApps. Holochain is a completely distributed open-source network that allows anyone to create hApps. Many hApps are developed to help users better manage their personal data by employing strong privacy and security parameters. Elemental Chat (a secure P2P messaging hApp) and HoloVault (an integrated dashboard that allows users to manage how their data is being used) are two examples of hApps.
Hard cap has two separate definitions related to blockchain. Firstly, a hard cap indicates the absolute maximum supply of a cryptocurrency that can ever be created. For example, Bitcoin has a hard-capped supply of 21 million bitcoin (BTC). The second meaning indicates the maximum amount of a currency that will be offered to investors during an Initial Coin Offering (ICO) or funding round. For example, a new blockchain project raising funds may impose a hard cap of 100 million tokens to be initially sold, meaning that only 100 million tokens can be sold during the ICO.
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 hard peg is a specific type of exchange rate model that is applied to a currency in order to maintain its value relative to a reserve currency or basket of currencies. As they relate to blockchain, a hard peg is usually applied to stablecoins to maintain their peg to a fiat currency like the U.S. dollar, and typically do not allow for much flexibility to deal with economic shocks and fluctuations.
A hardware wallet is a non-custodial wallet and is considered a secure way to personally store crypto. Typically looking like a USB stick, a hardware wallet is usually offline but connects via USB or bluetooth to an online device when making transactions. Although technically connected to the internet at times, it’s still considered a cold — or offline — wallet as transactions are signed “in-device.” This means the transaction has been signed offline prior to being broadcast to the blockchain via the internet. Due to this security feature, malware is unable to sign these transactions — or view your keys.
Hashed Timeclock Contracts (HTLCs)
Hashed Timelock Contracts (HTCL) are smart contracts that facilitate atomic swap transactions. These smart contracts function as a "virtual lockbox" that requires a HashLock and TimeLock Key to unlock funds during an exchange.
Hashes per Second (H/S)
Hashes per second (h/s) is the measurement used to determine the hash rate on a blockchain network. This measurement calculates the number of double SHA-256 computations performed on the Bitcoin blockchain network per second to facilitate cryptocurrency mining. The hash rate is integral to determining how fast a blockchain can carry out mining and transactions on the network.
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.
Hashing is the process of taking an input of any size and using a mathematical function called a hash function to create an output of fixed size. Hash functions are considered one-way functions. Unlike encryption, which is intended to conceal data as it moves over a network or is stored on a device, hashing is primarily used to verify the authenticity of data. Hashing also serves an important security function in protecting network components such as passwords and sensitive information that can be stored as hashes — the outputs of hash functions.
During an atomic swap, the HashLock Key will only distribute exchanged cryptocurrency when both parties have signed off on their respective transactions.
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 to 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.
Head and Shoulders (Technical Formation)
Head and shoulders technical formations visually consist of a left shoulder, a head, a right shoulder, as well as a neckline (which is drawn across the bottom of the formation). These formations are created by rising and dropping prices that form two smaller "shoulders" surrounding a larger "head" in the center. Head and shoulders typically occur when an asset is close to a reversal in price. With an inverse head and shoulders formation, the opposite occurs once the pattern has been defined, with the end result often being an increase in price.
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.
Hedge Contract (Hegic)
Hedge contracts are specialized smart contracts utilized by the Hegic protocol that enable the on-chain trading and execution of options contracts. Like traditional options contracts, hedge contracts come in the form of both call and put options.
A hedge fund is a pooled investment fund that uses complex combinations of investment strategies and techniques to increase its performance. Hedge funds have a relatively low barrier for entry compared to other types of funds, but are still typically reserved for accredited institutional investors and high net-worth individuals (HNWIs). Hedge funds can be expensive to gain entry to compared to traditional investments, but tend to exhibit higher returns than market averages globally.
A Heimdall Node is a PoS validator node that is integrated with Polygon’s staking contract system on Ethereum to enable Polygon’s Proof of Stake (PoS) consensus mechanism. This capability was realized by building on top of the Tendermint consensus engine with modifications to the signature scheme and specific data structures. Heimdall Nodes oversee block validation, block producer committee selection, and checkpointing of Polygon’s sidechain blocks to the Ethereum network. The Heimdall layer aggregates blocks produced by Bor Nodes into a Merkle tree and publishes the Merkle root sequentially to the Polygon root chain (one of any number of side chains that Polygon creates).
Within the fields of mathematics and computing, the hexadecimal numerical system or “hex” system is a positional numerical system that represents numbers utilizing a radix base of 16. Instead of using the common methodology of representing numbers using 10 symbols, hexadecimal makes use of 16. Typically, the symbols “0”-“9” represent values 0-9, while “A”-“F” represent the values 10-15. Hexadecimal numerals are generally used by computer system designers and software engineers to provide a human-friendly representation of binary-coded values to allow for simple readability.
A hidden cap is a blockchain-focused fundraising strategy where the fundraising goal’s upper limit is kept secret and known only to the blockchain team. Used on some Initial Coin Offerings (ICOs) and similar equity offerings, proponents claim that hidden caps benefit smaller investors. This is because bigger investors generally want the transparency of knowing the total amount or supply of an asset before they are willing to make a substantial capital investment. This typically discourages large investments as a hidden cap affects investment allocation decision-making. Critics counter that hidden caps go against the blockchain ethos of transparency, verifiability, and trustlessness.
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.
The high, or highest price, is one of four main data points used for day trading on the stock market. The other three are called opening price, low, and close — and all four are collectively known as OHLC. The high is generally classified as the highest price obtained during the last 24-hour trading period since the markets opened. Cryptocurrency markets are open 24 hours a day, every day of the year unlike the traditional stock market, which is closed for trading on weekends.
High-frequency trading is an automated market trading method that utilizes algorithms to rapidly buy and sell a large quantity of orders.
High-Level Programming Language
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.
HMAC-Based One-Time Password (HOTP)
A HMAC-based One-Time Password (HOTP) is a password that makes use of a one-time password (OTP) algorithm leveraging Hash-Based Message Authentication Code (HMAC). HOTPs, like Time-based One-Time Passwords (TOTPs), are used as a security measure for specialized authentication methods such as two-factor authentication (2FA). The HOTP mechanism uses a hash-generated one-time password that allows users to securely log in to various websites often through their mobile phone using an authentication application.
"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 misspelled 'hold,' and subsequently became a meme.
Homestead (March 2016)
Homestead was an upgrade of the Ethereum network that took place during March 2016, after the initial Frontier phase of the Ethereum network was determined to be stable enough for the launch of Homestead. Homestead provided much of the same beta testing-level experience as Frontier, alongside a command line interface, more stability, and a few additional features.
Honest Geppetto Attack
An Honest Geppetto attack refers to a computer network attack in which a hacker runs a large number of nodes for a long period of time in order to gain trust of the other nodes in a given network. When this has been achieved, the attacker abruptly takes the nodes offline with the goal of disrupting the entire network. The best way to prevent an Honest Geppetto attack is to build a large network that makes the attack ineffective.
HoneyBadger BFT (HBBFT)
HoneyBadger BFT (HBBFT) is an asynchronous Byzantine Fault Tolerant (aBFT) network consensus mechanism that is designed to handle potentially thousands of transactions per second (TPS) and scale over a wide area network. As an asynchronous method of BFT consensus, HBBFT does not rely on assumptions about time to achieve network consensus, which is beneficial in an environment where network nodes are operating under widely different conditions and connection speeds.
Horizontal Relay-Routed Message Passing (HRMP)
Horizontal Relay-Routed Message Passing (HRMP) is a solution built for the Kusama and Polkadot networks that helps parachains communicate and share data with each other. HRMP is eventually slated to be replaced by the more advanced — but (as of early 2021) not yet complete — Cross-Chain Message Passing (XCMP) technology. HRMP is more computationally demanding compared to XCMP because it stores all messages in Polkadot’s Relay Chain. HRMP and XCMP are designed to help facilitate cross-chain communication and the transfer of assets and other data from one blockchain protocol to another.
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.
Hostage Byte Attack
A hostage byte attack is a theoretical vulnerability in the STORJ network in which malicious storage nodes might 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.
Hotspots are devices that operate on the Helium Network both as specialized network nodes and as wireless internet hotspots. Helium Hotspots are manufactured by multiple vendors and are designed to be easily deployable solutions to participate in the Helium Network and earn rewards for providing internet coverage to various devices on the network.
The Howey Test is a series of four conditions that the U.S. Securities and Exchange Commission (SEC) uses to determine whether a financial transaction is considered to have involved the purchase of a security. The conditions are:
- The transaction involves an investment of money
- There is an expectation of profits from the investment
- The investment of money is in a common enterprise
- Any profit comes from the efforts of a promoter or third party
If a transaction passes all four conditions of the Howey Test, it is legally considered to involve the purchase of a security.
Human-readable agreements are agreements that are written in human-interpretable language (i.e. English) instead of code. This mechanism is important because it helps allow the technical architecture of a computerized system to be better understood by humans.
Huobi BTC (hBTC)
A version of wrapped bitcoin launched by Huobi Global, the hBTC (or HBTC) crypto protocol generates an ERC-20 representation of bitcoin (BTC). Backed 1:1 by BTC, hBTC is custodied by Huobi.
Huobi (Cryptocurrency Exchange)
Huobi is a cryptocurrency exchange that was founded in 2013 by CEO Leon Li. Huobi provides services for both retail and institutional investors. It has a version of wrapped Bitcoin called Huobi BTC (hBTC), and has also built its own blockchain called the Huobi Eco Chain.
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.
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.
Hybrid Smart Contract (Chainlink)
Hybrid smart contract is a term employed by the Chainlink protocol, referring to augmented smart contracts that combine both on-chain and off-chain elements. An example of a hybrid smart contract could be a decentralized finance (DeFi) application that relies on external Chainlink price feeds — combining off-chain data into the structure of the on-chain smart contract. Hybrid smart contracts are envisioned to expand the applicability of smart contract technology to broader real-world use cases.
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.
The Hyperledger project is an open-source umbrella project for blockchain that first came to fruition in December of 2015 via the Linux Foundation. Hyperledger has received considerable contributions from large-scale global enterprises such as IBM, Intel, and JP Morgan to support the collaborative development and ongoing research of distributed ledger technology and blockchain. The mission of the project is to develop multi-industry collaboration for the development of blockchain to improve the performance and reliability of distributed ledger systems to support global business transactions. The Hyperledger project consists of four main blockchain network protocols — Hyperledger Fabric, Hyperledger Sawtooth, Hyperledger Besu, and Hyperledger Iroha.
Hypertext Transfer Protocol (HTTP)
An iceberg order is an automated purchasing strategy — usually carried out by large institutional investment firms — that relies on software to divide a large purchase of an asset into several smaller limit orders. The objective of an iceberg order is to buy a large amount of an asset in smaller increments without disrupting the price of the asset with one large order. Iceberg orders are usually purchased in both visible and hidden increments. The name “iceberg” is denoted by the fact that the visible purchases are “just the tip of the iceberg.”
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 (ICON Network Token)
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.
Identity data refers to data that might be used to personally identify a user or party on the internet. Types of identity data might include social security numbers, personal addresses, or other private information. Identity data can encompass many types of private information that might disclose financial details, such as bank account and credit card information.
iExec is a blockchain project that serves as a decentralized marketplace for blockchain-based cloud computing resources. It is one of only a few projects in the blockchain industry that uses a distinct version of the Proof-of-Contribution (PoC) consensus mechanism.
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 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 strategy or risk profile.
An Indexing Server is a specialized computer operating system/database used for indexing (i.e. organizing and measuring) different types of data. Indexing can be used to track and group different data sets from a large number of topics. Theoretically, the most powerful indexing servers have the capability to categorize and access all of the data in the world. This all-important data can then be used for numerous uses in practically any industry imaginable. Indexing servers allow users to type in a search query (or question) that they would like answered, thereby helping them solve a specific problem.
Individual Retirement Account (IRA)
In the U.S., many financial institutions offer individual retirement accounts (IRAs) 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 decrease the purchasing power of a currency if not managed correctly. Most cryptocurrencies follow a fixed inflationary policy that decreases token circulation over time.
Information Technology (IT)
Information Technology (IT) refers to the use of technology to solve business or organizational problems. IT can also be considered the use of computers, computer networking infrastructure, data storage, cloud computing, software, hardware, and numerous other types of technology to provide services and solve problems for customers. IT intersects with most industries and is used to solve many complex technological challenges by increasing transparency, improving efficiency, enhancing security and privacy, and by giving customers a better user experience (UE).
Initial Coin Offering (ICO)
Initial Coin Offerings (ICOs) 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 Data Offering (IDO) (Ocean Protocol)
Similar to an Initial Coin Offering (ICO) or an Initial Public Offering (IPO), an Initial Data Offering (IDO) refers to the initial public listing of a datatoken asset on the Ocean Protocol blockchain. Instead of providing buyers with equity or shares, an IDO sells datatokens that represent datasets and data services on the Ocean Protocol platform.
Initial DEX Offering (IDO)
An Initial DEX Offering (IDO) is the process whereby a blockchain project initially launches their token through a token sale hosted on a decentralized exchange (DEX). IDOs are sometimes chosen by the teams launching them because they can offer businesses a means to engage potential investors and build their brand through a reputable company (i.e. an established DEX) in a more transparent environment. Initial DEX Offerings are similar to Initial Exchange Offerings (IEOs), which are typically hosted on larger and more centralized exchange platforms. IDOs are sometimes preferred to IEOs and Initial Coin Offerings (ICOs) because they often offer more immediate liquidity, a faster trajectory to trading, and lower listing costs.
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 Farm Offering (IFO)
Initial Farm Offerings (IFOs) help new projects get their tokens into the hands of users through yield farming. In exchange for committing their liquidity provider (LP) tokens to the decentralized exchange (DEX) protocol, traders receive access to the new token sale.
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 a 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).
Input-Output Hong Kong (IOHK)
Input-Output Hong Kong (IOHK) is a software development enterprise that is one of the main contributors (along with EMURGO and the Cardano Foundation) to building the Cardano blockchain ecosystem. IOHK builds blockchain solutions for enterprise, government, and private sector clients as well as the Cardano smart contract platform. The company was founded in 2015 by Cardano CEO Charles Hoskinson and co-founder Jeremy Wood. As of Q3 2021, IOHK employs over 400 employees in more than 50 countries.
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 Investment Fund
An institutional investment fund is an investment fund that is accessible only to large institutional investors. Institutional investment funds build comprehensive portfolios for their clients that have a variety of purposes and investment objectives. These often include investment allocation towards non-profit foundations, retirement plans, and educational endowments. Typical contributors to insitutional investment funds include governments, large enterprises, charities, and other constituents. Institutional investment fund offerings can include mutual funds, commingled institutional funds, institutional shares, and separate institutional accounts.
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.
An intangible asset is any asset that cannot be physically touched. Examples of intangible assets include intellectual property rights, computer software, design patents, medical data, and contractual agreements such as a land title transfer or mortgage, among others. As they relate to blockchain, intangible assets include decentralized identities (DIDs), smart contracts, decentralized oracles, databases, application programming interfaces (APIs), software development kits (SDKs), and more. The classification of cryptocurrencies and non-fungible tokens (NFTs) is ambiguous because they can be stored in a digital wallet or crypto exchange and have characteristics that are both tangible and intangible.
Integrated Development Environment (IDE)
An Integrated Development Environment (IDE) is a software program that provides developers with developer tools to design applications in a single, easy-to-use graphical user interface (GUI). IDEs usually consist of a source code editor, code debugger, and build automation tools. Sometimes IDEs consist of an interpreter, class browser, object browser, class hierarchy diagram, and compiler as well as other tools to simplify software development.
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 the Interchain Foundation.
Inter-chain communication, which is most commonly called cross-chain communication, is a process that facilitates communication between different blockchain networks to enable mutual interaction and value exchange, often in the form of token and cryptocurrency asset exchange. Cross-chain and inter-chain communication are one of the main technologies that enable blockchain network interoperability. There are many inefficiencies related to inter-chain communication, but as blockchain proliferation grows, many experts believe that it will become increasingly more efficient to exchange data in new ways, such that one day full data sharing capabilities between hundreds and even thousands of blockchains may be possible.
Intercontinental Exchange (ICE)
The Intercontinental Exchange (ICE) is an American Fortune 500 company formed in 2000 that helps facilitate the operation of global exchanges and clearing houses to provide financial, mortgage, and technology data and listings services. The ICE operates and owns asset exchanges for financial, derivatives, and commodity marketplaces around the world, operating under 12 specific regulated exchanges and marketplaces including ICE futures exchanges in the US, Canada, and Europe. The Intercontinental Exchange was built to help facilitate the trading of derivatives and various asset class types on the New York Stock Exchange (NYSE) and the former London International Financial Futures and Options Exchange (LIFFE), subsequently renamed as ICE Futures Europe.
Interest Bearing Asset
Traditionally, an interest-bearing asset, is any asset that earns interest for its holder. Interest-bearing assets typically consist of liquid assets (mainly cash and balances, interest due from banks, trading and available-for-sale securities), non-liquid assets (various financial assets designated at fair value, held-to-maturity investments, and gross loans), and other interest-bearing components of assets. Interest-bearing assets in the blockchain and crypto industry are quite common, and can include any cryptocurrency or crypto-related financial instrument that earns interest for their holder. Interest bearing assets are often utilized through blockchain’s advancing financial paradigm, decentralized finance (DeFi).
Interest is the amount of money that a lender charges for borrowing money. Interest rates are expressed as a percentage of the amount lent and are typically calculated on an annual basis known as the annual percentage rate (APR).
International Monetary Fund (IMF)
The International Monetary Fund (IMF) is an international financial institution and a non-governmental organization (NGO) based in Washington D.C. It is made up of 190 representative countries from around the world. The IMF is built to foster global monetary cooperation, secure financial stability, facilitate international trade, promote sustainable levels of economic growth, and reduce global poverty. The IMF periodically depends on the World Bank and other international resources to help make this vision a reality. The idea for the organization was formed in 1944 at the Bretton Woods Conference, and the IMF became operational in 1945.
International System of Units (SI)
The International System of Units (SI) is the international standardization for measurement, commonly known as the metric system. The SI is made up of seven base units including length (meter-m), time (second-s), amount of a substance (mole-mole), electric current (ampere-A), temperature (kelvin-K), luminous intensity (candela-cd), and mass (kilogram-kg). The system is used by nearly every country in the world and was officially signed into existence in Paris during 1875.
Internet Assigned Numbers Authority (IANA)
The Internet Assigned Numbers Authority (IANA) is an international body that keeps track of the IP addresses, domain names, Domain Name Systems (DNSs), and protocol parameter identifiers used on the internet. IANA also keeps track of specific numbers, symbols, and different types of media (video, audio, text, etc.) on the internet. The Internet Corporation for Assigned Names and Numbers (ICANN) is responsible for upholding many of IANA’s standards for websites in the United States and around the world.
Internet Computer Protocol (ICP)
The Internet Computer Protocol (ICP) is the name of the underlying blockchain system of the DFINITY project. ICP is an Ethereum, Polkadot, and Cardano competitor that claims it is capable of running at web speed while possessing the potential to become infinitely scalable with the ability to reduce computational costs to less than a millionth of the current industry standard. The Internet Computer Protocol is designed to host decentralized finance (DeFi) platforms, enterprise IT systems, websites, and a multitude of other types of Internet infrastructure. The ICP consists of a network of sub-blockchains governed by an ownerless master blockchain called the Network Nervous System (NNS).
Internet Corporation for Assigned Names and Numbers (ICANN)
The Internet Corporation for Assigned Names and Numbers (ICANN) is an international body based in the U.S. that is in charge of maintaining many of the internet’s databases and their relationships with names and numbers on websites, often through domain name service (DNS) providers. ICANN is made up of many international partnership organizations and contributors from around the world that help maintain the operational efficiency and integrity of the internet. It is also largely focused on maintaining international policies that help uphold the transparency, utility, privacy, and security of the internet.
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.
Internet Service Provider
An Internet Service Provider (ISP) is a term for a company or organization that provides users with access to the Internet. The services they provide range from simple internet access to domain name registration, web hosting, and other more advanced services. ISPs are typically private companies, but in many countries, they can also be nationalized services.
As initially designed, many early blockchains couldn’t communicate with each other. Interoperability is the ability of various blockchain protocols to work and interact with each other (Bitcoin and Ethereum for example). The ability to send crypto (coins, tokens) and data between chains is a primary goal of interoperability systems that will expand the reach and network effects of the blockchains that can interact with each other. Other features that increase interoperability include wrapped cryptocurrencies, Layer-2 solutions and sidechains, and the ability of smart contracts and decentralized applications (dApps) to communicate between chains.
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
'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. Conversely, '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.
An investment trust, or closed-end trust, is a financial enterprise that pools shareholder funds for investment in certain asset types that make up a diversified larger portfolio. Investment trusts differ from mutual funds or unit trusts because they represent real shares in a company itself, rather than units in each individual stock within the portfolio. The demand for investment trusts is often quite high because of the limited number of shares offered by the company providing the service. Most investment trusts have full control over the portfolio they invest in, which is subject to change through certain legal amendments.
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 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-based architecture. Its DAG structure places transaction confirmation on IoT nodes rather than the block-based system of blockchain. IOTA offers zero-fee transactions and claims to have a high transaction throughput.
An Internet Protocol (IP) address is a numerical identification that is assigned to all devices connected to a computer network that make use of the Internet for online communication. Generally, an IP address has two main purposes: to provide a host or network interface identification tag and also to identify the device’s current location. IP addresses are always calculated algorithmically and allocated to devices by the Internet Assigned Numbers Authority (IANA), a division of the Internet Corporation for Assigned Names and Numbers (ICANN).
Isolated Margin (Derivatives Trading)
Isolated margin is a form of margin trading that allows the trader to limit their losses to the initial margin set, thus limiting the amount of margin being allocated to each position. Because highly leveraged positions are much more likely to be liquidated in volatile markets, traders are able to limit their risk for individual positions by using isolated margin. For example, if a trader’s position is liquidated using isolated margin mode, only the isolated margin balance is liquidated, instead of the entire available account balance. The opposite of isolated margin trading is cross margin trading.
Java Programming Language
Java is a popular general purpose programming language often utilized for client-server web applications.
Java Virtual Machine (JVM)
A type of virtual machine (VM), the Java Virtual Machine (JVM) converts Java programming language bytecode files into machine code so they can be processed by the operating system (OS). The JVM’s primary functions are to manage program memory and allow Java programs to run on any device or OS. An integral part of Java programs, the JVM works in conjunction with the Java Development Kit (JDK), which is the development platform, and the Java Runtime Environment (JRE), which executes and runs the program.
John Bollinger is an author, financial analyst, and technical and fundamental analysis expert best known as the creator of the Bollinger Bands technical charting indicator. The Bollinger Bands technical indicator is represented by a high and low line on a chart (used to track an asset’s volatility and whether it is overbought or oversold) with a mid line equally between the two. Bollinger has always been an advocate of the relationship between both technical and fundamental analysis instead of focusing on their differences.
Kademlia Routing (Harmony)
Kademlia routing is a routing mechanism used to carry out cross-shard messages in the Harmony blockchain's adaptive state sharding system. Information about all the Harmony network nodes across different shards is stored in a routing table. By using Kademlia-based routing, messages between nodes on different shards travel much faster than normal gossip broadcasting to reach the destination shard. Through this process, the Kademlia routing mechanism significantly reduces the overall network load, resulting in a blockchain that is quite efficient at carrying out cross-shard messaging.
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.
The most important part of an operating system (OS), the kernel controls most of the components and functions of a computer, smartphone, or related hardware device. Every OS has a kernel inside it that connects the hardware to the software and processes of the device. The kernel determines how the central processing unit (CPU) operates, monitors and manages storage memory, handles software requests, and handles other key functions and tasks necessary for a device to function optimally and reliably.
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.
A keylogger is a software program that copies or records the keystrokes that a user inputs through a keyboard to a mobile device, computer, or related system. Keyloggers are typically employed with the intent of stealing sensitive information such as passwords, pin numbers, or other confidential data — often with the intent of financial gain, or to steal personal information needed to hack into a website, bank account, crypto wallet, computer network, or hardware or software system.
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 and other decentralized products. KMIP was established by the Organization for the Advancement of Structured Information Standards (OASIS), a non-profit consortium focused on the development and adoption of open, global information-sharing standards.
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.
Kraken (Cryptocurrency Exchange)
Kraken is a major U.S. crypto exchange founded by CEO Jesse Powell in 2011. It offers derivatives trading, spot trading, and other related 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.
Lachesis is the consensus mechanism employed by the Fantom blockchain network. Lachesis is an asynchronous Byzantine Fault Tolerant (aBFT) consensus mechanism that uses a leaderless Proof-of-Stake (PoS) structure. It provides speed and security to the Fantom protocol.
LAND (The Sandbox)
In The Sandbox game, LAND is a digital piece of real estate in the metaverse measuring 96x96 meters. LAND is an ERC-721 token. When a player combines multiple LANDS into one property, it is called an Estate.
In the blockchain space, "large cap coin" refers to a cryptocurrency asset that has a large market capitalization. The market capitalization, or total value of a cryptocurrency asset and its underlying blockchain enterprise, is determined by the number of circulating coins that are accessible to the public, multiplied by the price per coin. As a subjective term, there is no specific market cap threshold that signifies that an asset is a large cap coin.
Last Irreversible Block (LIB)
The last irreversible block (LIB) is the last block to have been validated on-chain and cannot be modified or altered. Found on blockchain protocols that utilize an Asynchronous Byzantine Fault Tolerant (aBFT) consensus mechanism, the block confirmation process is two-fold. First, block producers propose what's called an irreversible block with a record of transactions. Then, if a majority of block producers acknowledge the proposed block, it achieves irreversible status, and the transactions are considered validated.
Last Mile Delivery
Last mile delivery is the final movement of a product from a transportation hub to the final delivery destination. In most instances, this is the most complicated and resource-intensive step of the product’s delivery lifecycle.
In trading, latency (not to be confused with network 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 amounts to just milliseconds. High latency can significantly and negatively affect trading strategies, particularly for dynamic assets, as market prices may fluctuate in the time elapsed between placement and execution.
Law of Excellerating Returns
The “Law of Accelerating Returns” theory developed by Ray Kurzweil in 1999 states that the technological advancement of the 21st century will be 20,000 times that of the previous century. This theory signifies that technological innovation is accelerating at a rate that is unprecedented in human history. The Law of Accelerating Returns has in many ways changed the public's perception of Moore’s Law which states that the number of transistors in an integrated circuit (IC) doubles every year, representing a doubling in technical innovation.
Law of Supply and Demand
The law of supply and demand is among the most foundational laws of economics used to explain how market economies allocate resources and establish the prices of goods and services. Usually, increased availability of a specific resource means that a lower price will be paid for it. Conversely, if it is difficult to acquire a product or service, its demand will result in an increased price, but if there is a similar product or service that is readily available, its cost will go down. Products and services should ultimately reach a price equilibrium in relation to their supply and demand.
A Layer-1 blockchain is typically a name used to describe a main blockchain network protocol such as Ethereum or Bitcoin. The name Layer 1 comes from its relationship with Layer-2 scaling solutions such as state channels, rollups, nested blockchains, and plasma side chains. Layer-1 blockchains are simply the main network that a Layer-2 scaling solution attaches to in order to improve the scalability and transaction throughput of the main chain, or Layer 1. Layer-1 blockchains can also be known as the parent chain or root chain, among other classifications.
Layer-2 Scaling Solution
Layer-2 scaling 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-2 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.
Leaf nodes are found at the base layer of a Merkle tree. Leaf nodes represent crypto transactions in the form of transaction hashes — more commonly referred to as transaction IDs (TXIDS).
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.
Leased Proof of Stake (LPoS)
Leased Proof of Stake (LPoS) is a modified version of Proof of Stake (PoS) that allows network participants to lease out their stake to miners making use of the protocol. In return, miners share a certain percentage of their earnings with the leaser, allowing users to profit from mining without actually having to participate in mining themselves. Leased Proof of Stake (LPoS) is the consensus method that the Waves platform makes use of. It combines with the Waves-NG protocol to facilitate scalability and transaction throughput.
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.
A legacy system in computing is defined as an outdated system or technology that is still in use but that badly needs replacement or upgrades in order to remain relevant in the marketplace. In blockchain, legacy systems may be systems that need to be heavily modified to create lasting value and use for many different purposes. The ongoing upgradability of blockchain systems is critical to the widespread adoption and long-term utility of the technology.
Lending pools are a type of liquidity pool designed to facilitate peer-to-peer (P2P) lending. When borrowing from a lending pool, users must provide ample asset collateralization. For example, if the collateralization ratio to borrow against USDC is 200%, and the user supplies $1,000 USDC, the user would be unable to borrow more than $500 USD. In turn, users who lend their assets are rewarded with a certain percentage of the total amount they lent. Smart contracts automate the lending and borrowing process with different predefined lending rates depending on the assets and protocols involved.
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. Leverage generally refers to a loan offered through a broker on an exchange that is used to increase the availability of funds for margin trading. It is often used to increase purchasing power for derivatives trading — essentially trading with borrowed funds. While there are potential benefits to using leverage, there is also an increased risk for loss of capital. For example, if a trade is opened with 10x leverage, this means that purchasing power is multiplied by a factor of 10, and that if the price of the asset fluctuates, the investor will lose or gain 10x the normal amount.
Leveraged Token (FTX Exchange)
Leveraged tokens on the FTX crypto exchange allow traders to put leveraged positions without trading on margin. By purchasing leveraged tokens with USD, traders can get more market exposure without having to micromanage their margin or collateral. Leveraged tokens essentially have leverage built into the tokens themselves. BULL tokens track an underlying asset with approximately triple the returns and BEAR tokens can do the same with approximately triple the returns when the asset’s value moves downward.
Library (Software Library)
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-2 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 increases 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.
Linear Processing is a way of processing data in a straight line on a computer infrastructure or a distributed blockchain network. Linear processing typically processes one computation at a time in succession using a single core processor, while parallel processing is able to simultaneously complete multiple computations at the same time to increase transactional throughput and total processing power. This could be compared to having one horse pull your chariot vs. four horses pulling your chariot.
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.
Linux is an operating system which was originally built and designed by Finnish computer scientist Linus Torvalds in 1991. Linux is famous in technological circles because of its robust security, overall speed, efficiency, free distribution, platform compatibility, diverse hardware configurations, and more. As well, Linux has become well known for excelling in multi-user network environments. Linux is based on the Linux Kernel and is designed in a similar manner to Unix. Linux has a very different user interface compared to traditional operating systems like Microsoft Windows and macOS, but can use both.
The Linux Foundation is a non-profit consortium based in San Francisco that is dedicated to facilitating the growth of the Linux operating system and open-source software development in general. The consortium allows for widespread collaboration and education between members, and hosts numerous events and conferences each year. The Linux Foundation consists of over 1,000 members across the globe, including some of the largest technology companies in the world such as Facebook, Microsoft, and Google.
The term Liquidation refers to the process whereby a trader has an open leveraged position – often via a futures contract – that goes against their intended goal, resulting in the loss of the entire initial position. For example, let’s say a trader opens a position to buy $1,000 USD worth of ether (ETH) at a current price of $2,000 USD per ETH with a leverage of 10X, betting the price will go up, but the market takes an unexpected turn and drops significantly below their $1,500 USD ETH liquidation point — resulting in the loss of their initial $1,000 USD investment.
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 liquidity aggregator accumulates liquidity from centralized and decentralized sources into one location to increase liquidity, reduce price slippage, and facilitate more efficient trading activity — particularly 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.
A liquidity premium is compensation that is given to investors to encourage investment in assets with poor liquidity. Conversely, a highly liquid asset has high trading volume and is easily converted into cash without affecting the asset's price. For example, long-term bonds may typically have poor liquidity, and therefore usually carry a higher interest rate when compared to more liquid short-term bonds. The higher return on the long-term bond is the liquidity premium given to the investor because it has a higher investment risk. As a rule, the poorer the liquidity of an investment, the higher the liquidity premium.
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 the user owns.
Liquidity Provider (LP) Token
A liquidity provider token (LP token) is a token that is created and awarded 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 liquid market is a market that possesses strong liquidity. Liquidity refers to the ability to buy or sell an asset at the current market price without affecting it. Orders on liquid markets should execute immediately — or shortly — after an order is placed. Examples of liquid markets would include stock, commodity, and fiat currency trading — as well as most large-cap cryptocurrencies. In general, less liquid markets would include fine art and real estate, which typically don’t have as many participants and can’t be sold without waiting (weeks or more) or altering the asset price.
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.
Liquid Staking is a feature that allows stakers to mint the sFTM coin on a 1:1 ratio to their staked FTM coins, in order to provide collateral in Fantom Finance, which is a suite of Fantom DeFi apps. This functionality allows users to get more use out of their staked FTM. Collateralized Liquid Staking services through the Fantom network help users participate in Fantom Finance by making use of:
- fUSD: a Fantom-based stablecoin that’s pegged to the U.S. dollar
- fSwap: a synthetic asset decentralized trading platform
- fLend: a liquidity pool from which users can lend or borrow
An exchange listing is when an exchange initially chooses to offer trading pairs for a specific crypto asset. When an asset is listed on a large, reputable crypto exchange and given major trading pairs such as BTC or ETH, it signifies trust in the project and its founders. A major exchange listing also usually signifies that the newly listed asset possesses a sufficient amount of liquidity. Crypto exchange listings are similar to when a traditional company's shares are first listed for trading on a specific stock exchange which similarly signifies that the company is trusted by the exchange.
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 accommodated on digital currency exchanges and accepted in the wider economy.
As it relates to concurrent computing, liveness refers to an application's ability to execute in a timely manner, so that a distributed system is able to continually execute computations. This property allows a system to make progress despite the fact that its computational processes may need to take turns to be completed correctly instead of being carried out in a simultaneous manner. The opposite of liveness is idle, meaning that a system is unable to perform computations quick enough for the system to operate optimally.
Livepeer Token (LPT)
Livepeer Token (LPT) is the native token of the Livepeer network. Users who wish to carry out the work of transcoding and distributing videos on the network must hold LPT.
Loan-To-Value (LTV) Ratio
The Loan-To-Value (LTV) ratio is a financial term expressing the ratio of a loan (often in US dollars) to the total value of collateral — usually in the form of a percentage. In other words, the LTV is a balance of the loan when compared to the value of the collateral asset. In a traditional financial context, lenders assess a borrower’s credit score to determine their creditworthiness. In a blockchain-specific context, a similar process is executed algorithmically via a blockchain protocol, and usually no credit assessment is completed — lowering the barrier for entry for prospective users. The LTV ratio is determined as LTV = LA ÷ CA, where LA = the Loan Amount and CA = Collateral Amount.
Locker Ransomware is a type of ransomware that locks victims out of their devices until a ransom fee is paid.
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 requirements and standards for approved refineries.
London Stock Exchange Group (LSEG)
The London Stock Exchange Group (LSEG) is one of the world’s largest financial companies and the largest stock exchange service provider in the United Kingdom and Europe. LSEG is made up of several subsidies, major stock exchanges, and related entities in Europe and the United States, which includes acquisitions and mergers with Deutsche Börse, FTSE Russell, and others. The corporation was founded in 2007 and offers products and services to customers around the world in several disciplines including clearing and settlement, infrastructure, data and analytics, custody, and more.
Long Position (Longing)
Going long (also known as "longing") is an investment process whereby an investor purchases a security, derivative, cryptocurrency, or other asset type that they believe will increase in value (especially over the long term), as opposed to shorting where the investor expects the price of a specific asset to drop in value.
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.
LoRaWAN is a Low Power, Wide Area (LPWA) networking protocol that enables Internet of Things (IoT) devices to connect to the internet. LoRaWAN relies on patented LoRa technology, which uses radio frequency to provide long-range connectivity. LoRa stands for long range, and the network serves as a wireless platform for widely distributed IoT devices.
The low, or lowest price, is one of four main data points used for day trading on the stock market. The other three are called opening price, high, and close — and all four are collectively known as OHLC. The low is generally classified as the lowest price obtained during the last 24-hour trading period since the markets opened. Cryptocurrency markets are open 24 hours a day, every day of the year unlike the traditional stock market, which is closed for trading on weekends.
Low-Level Programming Language
Low-level programming languages are programming languages that have very little abstraction of programming concepts, which means they tend to be more complex and less efficient than high-level programming languages. They are written using a structure similar to machine code or assembly language. They are written similarly to a processor’s instructions and often take much longer to execute when compared to high-level programming systems because of their complexity. Other characteristics of low-level programming languages include memory efficiency, lack of portability (the ability to be used with different computing systems), and higher difficulty for debugging and maintenance.
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.
Machine to Machine (M2M)
The term machine to machine (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 gatekeepers and intermediaries, which significantly reduces costs.
A main chain is a term used to describe the main, Layer-1 network of a blockchain network protocol such as Bitcoin or Ethereum. The name ‘main chain’ generally means it is the most powerful blockchain and most important blockchain network within a specific blockchain ecosystem. Generally, other blockchain protocols and decentralized applications are built ‘on top of’ the main chain. As an example, many of the most prominent decentralized finance (DeFi) projects are constructed to run on top of the Ethereum network's main chain.
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 before a mainnet is released. Testnets are used while a blockchain is live for experimentation and development as to not disrupt 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.
Management Information Systems (MIS)
A Management Information System (MIS) is a computer-based system that leverages both hardware and software components to manage a company or organization's internal and external operations. MISs are used to manage, organize, analyze, and compile information needed to make better overall business decisions with the purpose of obtaining higher levels of business profitability. Management Information Systems utilize manpower, technology, and other means to allow for better short-term and long-term decision-making processes.
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 minimum 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 (Margin)
Margin trading refers to the process of using borrowed funds from a broker or exchange to trade a financial asset through a leveraged position. This leverage can vary widely, from 2 – 150 times your collateral. The higher the leverage used, the higher the margin trading liquidation risk. If a trade goes against a trader (i.e. the wrong direction), it can result in the permanent loss of the entire initial position as the trader’s collateral is liquidated. Margin trading is not recommended for inexperienced traders due to its higher risk profile and potential for large financial losses.
Market Capitalization (Market Cap)
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.
Market depth generally refers to a specific market’s adeptness at absorbing large market orders without changing the price of the underlying security. An assessment of market depth takes into consideration the overall number and breadth of open orders, bids, and offers for a specific asset. If the market depth of an asset is deep (with a large amount of liquidity) it means that a very large order is often needed to change the price significantly. Market depth should also be considered the same as liquidity depth.
In finance, a market maker — or liquidity provider — is a company or individual that buys and sells large amounts of assets in order to ensure that the market remains liquid. While not always necessary when organic trading volume is high, many exchanges — both stock and crypto — utilize market makers to ensure liquid markets. Market making gives traders ample trading liquidity, low slippage, and higher trade execution speeds — particularly for larger orders. Market makers “create a market” to earn income, taking a cut of the bid-ask spread of the assets they provide liquidity for.
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.
Used in financial markets, market sentiment refers to the general attitude of investors and market participants towards overall market conditions (or those of a specific asset) and where they see them moving pricewise. A sustained uptrend with increasing prices typically indicates a bullish market sentiment, while a sustained downtrend with decreasing prices indicates a bearish market sentiment. Normally, the overall market sentiment is derived by compiling multiple data points which could include metrics from fundamental analysis (FA), technical analysis (TA) indicators, and market history price charts of various time frames.
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.
Markets Integrity Committee (MIC)
The Polymarket Markets Integrity Committee (MIC) is a body whose members help ensure the legitimacy, trust, and operational efficiency of the Polymarket platform.
Mark to Market
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.
Rebranded as Omni in 2015, Mastercoin was designed to enable the issuance of new currencies, assets, and tokens on top of the Bitcoin blockchain.
Maximum supply refers to the maximum number of coins or tokens that will ever exist in the lifetime of a specific crypto asset, such as the maximum number of bitcoin (BTC) or ether (ETH). This classification is analogous to the number of fully diluted shares of an asset that is traded in a traditional stock market. The maximum supply is different than the circulating supply (which represents the number of tokens circulating in the market publicly) and the total supply (which represents the number of tokens that have already been created, minus any burned tokens).
Launched in 2012, Medium is a blogging platform that hosts articles written by a combination of amateur and professional writers. Medium has an in-house staff of paid writers and also incentivizes independent writers through a compensation program based on reader engagement. While some articles are free, some are behind a paywall and require a paid membership to access them. In the blockchain industry, Medium has become a popular place for blockchain teams to reach their communities, post technical updates, and share project-related news.
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.
A megabyte (MB) is a unit of measurement for digital data storage that is made up of 1,000,000 bytes of data. Bytes are the original basic unit of data storage, but have since grown to include many larger measurements including kilobytes (KBs), gigabytes (GBs), and terabytes (TBs) — making use of the International System of Units (SI) measurement scale. MBs are normally used to measure data storage on a computer or computer network, or for external USB storage devices or hard drives, and other related software or hardware.
Membership Service Provider (MSP)
A Membership service provider (MSP) is a component within a blockchain network that is used to manage memberships for different users, or nodes, and their digital identities. MSPs are used to verify, authenticate, and identify different users and give them permission to make use of a blockchain network. MSPs are customized to fulfill specific customer requirements determined by the creator of the network, and also provide interoperability between various membership standards and architectures. Hyperledger Fabric is one of the most well-known blockchains that makes use of a MSP.
A memecoin is a cryptocurrency or crypto token based on a viral joke or cultural reference. Projects built around memecoins rely heavily on social media hype to attract new users/investors. This means that while certain memecoins may have purported use cases and sound cryptoeconomics, these projects can be strongly hype-driven and often lean heavily on the strength of their marketing efforts and community initiatives to drive adoption.
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 mempool is where an unconfirmed transaction waits after being verified by a node and before being included in a block. The mempool makes use of the Replace by Fee (RBF) mechanism, which allows transactions with higher transaction fees to supersede earlier transactions with lower fees paid. When many transactions are pending in the mempool, network traffic becomes more congested and the average confirmation time increases. Network nodes must check to ensure that transactions within the mempool are valid by verifying correct signature schemes, that outputs do not exceed inputs, and that funds have not been double spent.
A Merkle root is found at the top of a Merkle tree and represents the transaction hashes located at the bottom of its associated Merkle tree. These transaction hashes are then repeatedly hashed in pairs until a singular Merkle root is left. The resulting Merkle root can then be used to validate every transaction hash located in its Merkle tree.
A Merkle 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.
A mesh network is a network topology that makes use of a decentralized network architecture characterized by a non-hierarchical, dynamic, and direct connection to a high number of nodes. The intention is for all nodes within the network to cooperate with each other in order to increase the performance of the entire system. Mesh networks are generally autonomous, self-configuring, and self-organizing, encouraging a dynamic distribution of computational workload that can help the network remain stable even if several of the nodes in the system fail. This can in turn result in a more secure and more fault-tolerant network structure with lower operational costs.
Metachain (Elrond Network)
The Metachain operates like a control center for Elrond and is designed to run within its own specialized shard to allow communication with other shards and carry out cross-shard operations within the Elrond Network. The Metachain’s main purpose is not to process transactions, but instead to notarize and finalize shard block headers, store and maintain the network’s validator registry, trigger new epochs, and process various tasks for fishermen.
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.
Metropolis (October 2017)
Metropolis was an upgrade to the Ethereum network that took place in October of 2017. It succeeded Homestead, and was the final phase of Ethereum before the Serenity phase was initiated in 2020. Metropolis delivered a more full-featured user interface by opening the doors for dApp development and tokenization, which in turn fostered the 2017 ICO boom. Throughout Ethereum’s history, it has been clear that the continued development of an increasingly scalable, secure blockchain network has been a constant goal — as has an open-source, community-based commitment to governance around the proposal and development processes.
In the blockchain space, "micro cap coin" refers to a cryptocurrency asset that has an extremely small market capitalization. The market capitalization, or total value of a cryptocurrency asset and its underlying blockchain enterprise, is determined by the number of circulating coins that are accessible to the public, multiplied by the price per coin. As a subjective term, there is no specific market cap threshold that signifies that an asset is a large cap coin.
A micropayment is a transaction, typically online, that involves a small sum of money—sometimes as small as a fraction of a cent.
A Microtransaction (often abbreviated as MTX) is a transaction type that allows users to purchase virtual goods via micropayments, often in a custom store interface within apps where in-game items are being sold. As an example, within Apple's App Store this process is called an "in-app purchase," while Google refers to the same use as "in-app billing." While microtransactions are particularly common within the mobile gaming sector, they are also employed in a number of other environments, including console gaming and PC digital software distribution platforms. Microtransactions are also very similar to micropayments (a term more commonly used outside of the gaming context). Both terms denote small purchases by a customer in an online environment.
In the blockchain space, "mid cap coin" refers to a cryptocurrency asset that has a medium-sized market capitalization. The market capitalization, or total value of a cryptocurrency asset and its underlying blockchain enterprise, is determined by the number of circulating coins that are accessible to the public, multiplied by the price per coin. As a subjective term, there is no specific market cap threshold that signifies that an asset is a mid cap coin.
Middleware is a component of a computer system or network that exists in the middle of the system, often to add to the functionality of the entire platform. Middleware can also be considered the service layer. In a blockchain context, middleware is made up of various systems that help decentralized applications (dApps) expand their utility. In blockchain, examples of middleware include smart contracts, oracles, databases, digital identities, file storage, and various connectivity devices. The service layer is also made up of application programming interfaces (APIs), multi-signature technology, digital assets, blockchain governance systems, and other components.
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 Collateralization Ratio (MCR)
The minimum collateralization ratio (MCR) is the minimum ratio of debt to collateral that will not trigger liquidations, which can occur when the price of an asset rises such that the collateral no longer exceeds the set MCR. For example, imagine a user initially deposited $2,000 USD to create an asset worth $1,000 USD (a collateralization ratio of 200%). If the price of the asset then rose above $1.50, the collateralization ratio would decrease below 150% and the position would be liquidated.
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 algorithm is a component of a Proof-of-Work (PoW) blockchain. A mining algorithm is typically a cryptographic puzzle that requires significant computational power to solve. This secures the network while financially incentivizing the miners that secure it (through mining rewards). Popular blockchain mining algorithms include secure hash algorithms (SHAs) SHA-256 and SHA-3 — as well as Ethash, Scrypt, and Equihash.
Mining as a Service (MaaS)
Mining as a Service (MaaS) is a cloud product that allows you to purchase mining power (or hash rate) from a cloud mining provider, typically measured in megahashes per second (mh/s) and purchased in time intervals, which can vary from a week to several years. Also referred to as cloud mining, MaaS tends to refer to the selling of hash rate from the cloud mining provider’s point of view — as a way to monetize their existing hash rate and mining hardware.
A mining farm is a physical location, often quite large, that stores many specialized computers that are designed to mine specific cryptocurrencies. The most commonly mined cryptocurrency is bitcoin (BTC), but mining farms for other crypto assets also exist. Mining farms are typically very expensive to launch because of the costs of their exorbitant electricity requirements, the ongoing maintenance of mining rigs, and extensive cooling systems. However, it is becoming more common for forms of renewable energy to power crypto mining farms to combat these inefficiencies.
A mining pool combines — or “pools” — the hash rate of the crypto miners that join it to mine blocks and distribute the associated block rewards. This is done so miners can have a more reliable rate of return on their mining and allows smaller mining operations to compete with larger mining farms. Mining pools are specific to a blockchain and typically charge a fee of 0 – 2% of all block rewards.
A mining reward, also referred to as a block reward, are native assets of a network that miners receive for successfully mining blocks of transactions. A mining reward can vary over time. For example, a Bitcoin block reward decreases 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.
Minting is a process that is used to create new tokens for a blockchain network. Minting requires no resources and is used to increase the circulating supply. It is often carried out by validator nodes (in systems that contain these types of nodes). Cryptocurrencies that are minted often have no upper supply limit and tend to rely on the constant growth of the project’s economic system in order to remain valuable. Crypto minting is similar to the minting of fiat money within the traditional finance and banking process, in that there is in theory no limit to the amount of money that can be printed, except that the printing must be controlled to prevent excessive inflation/devaluation.
Mirror Asset (mAsset)
Short for “Mirror Assets,” mAssets are synthetic assets issued by the Mirror Protocol that mimic the price behavior of real-world assets from leading enterprises around the world.
Mirror Protocol is a separate blockchain protocol operating on top of the Terra blockchain network. It enables the creation of fungible synthetic assets called mirror assets, or mAssets. mAssets "mirror" the ongoing real-time value of share prices from leading enterprises around the world such as Tesla (mTSLA), Apple (mAAPL), Microsoft (mMSFT) and a host of others. Mirror Protocol makes use of its utility token MIR and can be used to create mirror assets and for numerous other decentralized finance (DeFi) uses within the Terra ecosystem.
Mirror Token (MIR)
Mirror token (MIR) is the native token of the Mirror Protocol. It functions as a governance token, allowing its holders to vote on changes to the protocol. Additionally, MIR is distributed as a reward to users who provide Mirror Asset (mAsset) liquidity on automated market makers (AMMs).
Mixer (Crypto Mixer)
Cryptocurrency mixers (also known as 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 transferring 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 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.
Modern Portfolio Theory (MPT)
Modern Portfolio Theory (MPT) is a mathematical framework used to construct a portfolio of assets to maximize the expected return based on a specific level of risk. MPT is considered a formalized extension of investment diversification (owning a wide variety of assets within a portfolio). Its framework states that an asset’s risk and return should not be evaluated on its own, but instead by how it contributes to the entire portfolio’s overall risk and return potential. Renowned economist Harry Markowitz ideated MPT in a 1952 essay that later resulted in him winning the Nobel Memorial Prize in economics.
Moment (NBA Top Shot)
Moments are tradable non-fungible tokens (NFTs) developed for the Dapper Labs NBA Top Shot collectable platform that contain a video clip of a specific game highlight and other relevant information, such as statistics about a specific game and the player featured in the video clip. Each NBA Moment has a unique serial number and a provably fixed total supply cap, and makes use of the Flow blockchain. Moments vary in terms of scarcity and value. As of spring 2021, there are five tiers of Top Shot Moments NFTs including Genesis Ultimate, Platinum Ultimate, Legendary, Rare, and Common.
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 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).
Monetary policy refers to the economic policies a government makes to ensure the sustainable economic growth and macroeconomic prosperity of a nation. Monetary policy is typically carried out by a nation's central bank to control the money supply, interest rates, the ebb and flow of money through a country's economy, and other parameters that shape a country's economy. Monetary policy can also be tied to larger geographical regions like the European Union, which makes use of the European Central Bank (ECB) and other constituents to ensure the long-term economic prosperity of the European Union.
Money Service Business (MSB)
Money Service Business (MSB) is a legal term used to describe any company that transmits or converts money, cashes checks, carries out foreign currency exchange, facilitates payments and remittance services, and other related services. Larger global MSBs include PayPal, Western Union, MoneyGram, Revolut, and TransferWise, among others. MSBs have strict regulatory and compliance guidelines they must adhere to, including Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to avoid potential fraud, theft, and misuse of funds by malicious actors. MSBs provide services similar to banks and must hold a valid money transfer license.
Money Transfer License
A money transfer license is a licensing certification that online global payment service providers or money service businesses (MSBs) must obtain through different regional, international, and national regulatory bodies which allow users in various jurisdictions to send and receive different types of fiat currencies. In the United States, the Money Transfer Regulators Association (MTRA) and other important regulatory bodies oversee the legal framework that MSBs must adhere to.
Money Transfer Regulators Association (MTRA)
The Money Transfer Regulators Association (MTRA) is one of the main regulatory bodies that oversees the standards — like strict licensing, Know Your Customer (KYC), and Anti-Money Laundering (AML) guidelines — that Money Service Businesses (MSBs) in the United States must adhere to in order to operate. The MTRA works on an international, national, and state level to provide a transparent system for the exchange of money for users in the United States and around the world, though much of its focus is on the United States.
When an asset dramatically increases in price during a relatively short period of time, the asset is often said to have mooned. The term is particularly common in cryptocurrency markets, where many crypto assets have displayed volatile behavior, and where some assets have been known to not only dump in price (losing a large percentage of their initial value) but also moon in price (increasing in value substantially within a relatively short period of time).
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 (MoreVP)
More Viable Plasma (MoreVP) is a variation of Plasma, a Layer-2 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.
Motoko Programming Language
Created by the DFINITY Foundation, the Motoko programming language was designed to build blockchains (subnets), decentralized applications (dApps), and other tools on the Internet Computer (ICP) protocol. While based on the WebAssembly (WASM) programming language, Motoko was designed to be more adaptable, secure, and efficient than the traditional WASM language. Motoko also compiles down to WASM because of its backwards-compatible web versatility and browser functionality. This also allows any language that can compile to WASM the ability to deploy code on the ICP protocol.
MOVE Contract (FTX Exchange)
MOVE Contracts on the FTX crypto exchange track how much an underlying asset moves, up or down, by the end of a determined period. In other words, a trader is betting on the volatility of an underlying asset. MOVE Contracts are available with daily, weekly, or quarterly expirations. MOVE Contracts function like futures contracts, except they expire to the amount an asset’s price moved, rather than the price of the asset itself.
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.
Moving Average (MA)
A moving average (MA) is a specialized method used to measure different data points by producing a series of averages of different data subsets related to the full data set. In a financial context, an MA is a stock indicator that is usually used for technical analysis (TA) to help predict the trends and direction of markets, asset prices, investment returns, and other data types. A moving average has many variations, including the Simple Moving Average (SMA), Cumulative Moving Average (CMA), and Weighted Moving Average (WMA), which are used to measure different types of data in a predetermined format.
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.
Multi-Factor Authentication (MFA)
Multi-factor authentication (MFA) — which includes two-factor authentication (2FA) and several other related mechanisms — is an electronic authentication method through which a device user is given access to a website or application only once they successfully present two or more data types (or factors) as an authentication mechanism. MFA often requires a user to further verify their identity after entering an account password (for example, by inputting a randomized code generated through a secondary device or application). The purpose of MFA is to mitigate the possibility of various cybersecurity risks to the authentication process that can stem from hacks or human error.
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-Level Byzantine Fault Tolerance
Multi-Level Byzantine Fault Tolerance is Theta’s consensus mechanism that utilizes a small subset of nodes to speed up approvals and is therefore faster and more resource-efficient than traditional Proof-of-Work (PoW) networks. The configuration relies on a smaller subset of 10-20 nodes, called the “Validator Committee,” to give the initial approval of a transaction before passing it on to the “Guardian Pool” — a much larger group of nodes responsible for fully validating transactions and adding them to Theta’s blockchain ledger. This design helps achieve a balance between transaction throughput, consistency, and decentralization.
Multiplayer Online Battle Arena (MOBA)
Multiplayer online battle arena (MOBA) is a video game genre that is very similar to real time strategy (RTS) gaming. MOBA often involves groups of teams competing against each other in a large battle arena setting with computer-assisted units supporting each side. The goal of competing teams is to protect their terrain and to overthrow their adversaries by eliminating opposing team members and taking possession of their territory. The World of Warcraft franchise is often considered a distinct subset of RTS or MOBA gaming.
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.
A mutual fund is an investment fund that is made up of a large pool of capital collected from many investors in order to invest in a large number of asset types including stocks, bonds, and derivatives instruments. Mutual funds are managed by investment management experts whose job is to allocate the fund’s assets to produce strong investment returns for the fund’s investors. Mutual funds enable individual investors to access a professionally managed portfolio of various assets that allow each shareholder to proportionally contribute to the gains or losses of the entire fund.
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 an influential 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 (formerly 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.
A naked, or “uncovered,” call is an options strategy in which an investor sells a call option for a stock or security without actually owning the underlying security. Since the investor is selling the right to something that they do not own, it requires less collateral to sell a naked call than a covered call, in which an investor fully backs the call option with holdings of the underlying asset. As a result, naked call trading strategies are riskier than covered calls, because the investor must have sufficient funds to buy shares of the underlying asset to sell to the counterparty at the agreed on price in the event the counterparty buying the naked call chooses to execute the option agreement.
NASDAQ, based in New York City, is the second largest stock exchange in the world by market capitalization, second only to the New York Stock Exchange (NYSE). The stock exchange is a global electronic marketplace for buying, selling, and trading securities that was launched in 1971. NASDAQ was created by the National Association of Securities Dealers (NASD) which later became the Financial Industry Regulatory Authority (FINRA). Most of the largest tech stocks in the world, including Amazon, Apple, Google, Tesla, and Facebook are listed on NASDAQ, which makes its influence nearly immeasurable globally.
NASDAQ Composite Index
The NASDAQ Composite Index is a stock index made up of more than 2,500 commodities listed on the NASDAQ stock exchange. Almost half of the index is made of stocks that represent technology enterprises. In order to be listed on the NASDAQ Composite Index, the asset must be a stock from a traditional company, meaning that preferred stocks, exchange traded funds (ETFs), and most other securities are not included. The NASDAQ 100 (the top 100 non-financial NASDAQ stocks by market capitalization) makes up over 90% of the NASDAQ Composite Index.
National Securities Clearing Corporation (NSCC)
The National Securities Clearing Corporation (NSCC) was established in 1976 as a registered clearing corporation regulated by the U.S. Securities and Exchange Commission (SEC). The NSCC is a subsidiary of the Depository Trust & Clearing Corporation (DTCC), which provides clearing, settlement, and risk management for the US financial industry. The NSCC also provides multilateral netting so that registered brokers can offset buy and sell positions into a single payment obligation to reduce their exposure and financial capital requirements.
National Stock Exchange (NSE)
The National Stock Exchange (NSE) is the largest and most reputable stock exchange in India. Launched in 1992, the NSE became the first stock exchange to offer clients automated electronic trading and various investment products on a country-wide scale. One of the most well-known products that the NSE offers is its NIFTY 50 stock index which was launched in 1996. The NIFTY 50 index allows investors to invest in the 50 largest stocks that make up the vast portion of India’s economy. As of May 2021, the NSE had a market capitalization of approximately $3.1 trillion USD.
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 utilizes 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 blockchain 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.
Neo File Storage (NeoFS)
NeoFS, or Neo File Storage, is a distributed, decentralized object storage network designed to allow decentralized applications (dApps) to store files in a similar fashion to file storage protocols like Storj and Filecoin. The NeoFS platform allows users to rent out storage in exchange for Neo GAS coins or use GAS to store files on the network.
NeoID is NEO's digital identity solution. It allows various assets and node holders to be evaluated through a blockchain-based identification system. This means that Consensus Node ownership can be pegged to real organizations or individuals to ensure their validity. NeoID’s integration helps ensure the validity of network Consensus Nodes and their constituents. NeoID also helps facilitate the registration and usage of compliant financial assets on the NEO network. This functionality has great potential for use with stablecoins, synthetic assets, security tokens, non-fungible tokens (NFTs), and other decentralized finance (DeFi) applications.
NEO and GAS (not to be confused with the gas fees native to the Ethereum network) 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 nested blockchain is a type of decentralized network infrastructure that utilizes a main blockchain to set parameters for the broader network, while executions are undertaken on an interconnected web of secondary chains. Multiple blockchain levels are built on this main chain, with these levels using a parent-child connection. The parent chain delegates work to child chains that send it back to the parent after completion. The underlying base blockchain does not take part in network functions unless dispute resolution is necessary. The OMG Network plasma project is an example of Layer-2 nested blockchain infrastructure that is utilized atop Layer 1 Ethereum to facilitate faster and cheaper transactions. The distribution of work under this model reduces the processing burden on the mainchain to improve scalability exponentially.
NET is the amount of network bandwidth 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.
Net Interest Income (NII)
Net interest income (NII) is a financial metric used to measure the difference between revenue generated and interest paid on different types of assets such as securities, loans, mortgages, and other financial instruments. NII is dependent on several factors including the interest rate and whether the interest rate is fixed or variable. Banks and other financial institutions typically utilize the net interest rate to determine the difference between liabilities and interest-bearing assets so they know the income they have generated on a particular investment or loan.
Net Present Value (NPV)
Net present value (NPV) is a measurement of cash flows over a specific time period that is often used to determine profitable budgeting strategies and capital allocations for different investment types. NPV is calculated by comparing variations between cash inflows and cash outflows. NPV takes into consideration the time needed to create money, comparing an initial amount of cash spent to the present value of return. Further, NPV often makes use of four main metrics including time, present value, future value, and discount rate to determine if an investment return is positive or negative.
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.
A network effect occurs when a network grows from an initial small reach to having an extremely large network, thus increasing the utility of the goods and services it provides. The internet itself is probably the greatest example of a network effect. When the internet was first created it had very few users, but as it grew, its overall power and usefulness increased remarkably. In a blockchain context, blockchain protocols such as Bitcoin and Ethereum have the greatest network effect because of their size, trustworthiness, and the utility they provide to a very large number of users.
Network latency, or network lag, is the time it takes for data to be transferred from its source to its destination. Low network latency (meaning very fast data transmission times) is a critical characteristic of a high-performance blockchain or computer network because the faster the network is able to process data, the more suitable it is for large-scale enterprise use. Network latency has a direct relationship to transaction throughput and the number of transactions per second (TPS) a computer network can perform.
Network Nervous System (NNS)
The Network Nervous System (NNS) is an autonomous software system from DFINITY that helps facilitate the capabilities of the Internet Computer Protocol (ICP) by managing its overall economic and network structure. NNS is hosted within the ICP network itself and is an integral part of the system of protocols that securely interweaves the compute capacity of node machines to enable the operation of the Internet Computer in a self-governing and adaptable manner. The Network Nervous System operates as an autonomous “master” blockchain that makes use of a specialized public key to validate all transactions that take place on the Internet Computer Protocol.
Network pruning is a process whereby developers modify a computer network — in this case specifically a blockchain network — to make it more lightweight and resource efficient. This process is typically carried out by training a complex, over-burdened network to be more efficient, then "pruned down" based on specific criteria, and finally fine-tuned to achieve comparable performance to its original version. Network pruning is generally realized when a blockchain network’s full nodes become pruned nodes or light nodes (which are sometimes called light-clients).
A neuron is a mechanism within the Internet Computer Protocol (ICP) by which network participants can time-lock their ICP utility tokens in exchange for voting power, which can be leveraged to vote on community governance proposals and earn voting rewards. Neurons can also be programmed to follow and copy the voting patterns of other trusted neurons, to automate the voting process. As neurons grow older, their voting power and voting rewards increase. To withdraw deposited ICP tokens, neurons must be "dissolved," at which point the released ICP tokens can be used for other purposes.
New York Department of Financial Services (NYDFS)
The New York Department of Financial Services (NYDFS) is a New York state government department responsible for regulating financial services and product offerings. The NYDFS's purpose is to facilitate the growth and health of the financial industry in New York, spur economic development in a justly regulated and compliant fashion, and ensure the honesty, safety, and soundness of financial products and services in the region. The NYDFS works to ensure that financial products and services are offered in an honest and transparent manner through equitable business practices that eliminate financial fraud, unethical conduct, and other types of criminal behavior.
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.
Nick Szabo is a famous and well-respected cryptographer and software engineer who is known for the creation of Bit Gold (a predecessor to Bitcoin) and for the creation and development of smart contracts. Szabo’s initial goal for smart contracts was to bring what he refers to as the “highly evolved" practices of contract law to the design of e-commerce protocols between strangers on the internet. Nick Szabo is also considered by some to be one of the potential individuals that created Bitcoin, but he has denied on several occasions allegations that he is Satoshi Nakomoto.
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.
Nightfall Blockchain (Ernst and Young)
Nightfall is a series of blockchain protocols developed by major global accounting firm Ernst and Young (EY), with the latest rendition being Nightfall 3. The Nightfall blockchain is meant to operate as a hybrid network because it makes use of a semi-public architecture and is meant to be employed as a distinct version of the Ethereum network. Nightfall is characterized as being extremely fast and cheap as it is designed to help eliminate Ethereum’s high gas fees. It also allows for state-of-the-art private transactions via zero-knowledge proof cryptography.
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.
A nominator is a node that is 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.
Noninteractive Distributed Key Generation (NIDKG)
A bespoke cryptography protocol released by the Dfinity Foundation, Noninteractive Distributed Key Generation (NIDKG) uses forward secrecy, Zero-Knowledge Proofs (ZKPs), and other advanced cryptography features to secure the Internet Computer Protocol (ICP). ICP has nodes that migrate between its subnets; the NIDKG protocol allows nodes to securely join new subnets by making it possible to publicly and secretly reshare private keys and acquire their share of the subnet signing key.
Non-leaf nodes are found in the body of a Merkle tree. They are located above the leaf-node layer (which is at the bottom of a Merkle tree) and below the Merkle root (found at the top of a Merkle tree). Through hashing functions, these nodes connect the leaf nodes and the Merkle root of a Merkle tree.
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 is an example of the classification of notional volume.
Numeraire is a blockchain-based protocol that is 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.
Observers are specialized network nodes that are designed to read and relay interface information. Observer nodes can be classified as Full, meaning they possess the entire history of the blockchain, or Light, meaning they store only the last 2 epochs of the network’s history. It should be noted that Observers are not obligated to stake EGLD coins to participate in the network and are not rewarded for their services.
OceanDAO (Ocean Protocol)
OceanDAO is a community-led grants proposal system that exists as part of the Ocean Protocol platform. As a decentralized autonomous organization (DAO), OceanDAO enables community governance by allowing OCEAN token holders to vote on funding grants for community projects and ongoing ecosystem development. One of OceanDAO's primary objectives is to help the Ocean Protocol ecosystem become fully decentralized over time, a goal the Ocean team has been striving for since the project’s inception.
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 governance 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.
An offshore account is a bank account or related service that is located outside of the account holder’s home country, often to secure favorable regulations as they relate to tax avoidance and asset protection. Offshore banking locations are usually island nations that are used by entities or high-net-worth individuals (HNWIs) to set up companies, investments, and other business types with the goal of saving money on operating costs by paying less taxes. Offshore banking and financial service providers, though theoretically legal, can often be used for illicit purposes like money laundering, criminal activity, and tax evasion.
OKEx Chain is the proprietary blockchain designed by the OKEx cryptocurrency exchange for building blockchain-based trading architecture. The OKEx Chain is designed to increase the speed, security, and privacy of the decentralized finance (DeFi) framework needed to build a decentralized exchange (DEX) — one that makes use of transparent trading rules and community-based operations that allow users to control their own assets. OKEx Chain employs the Cosmos SDK and the Cosmos Tendermint consensus mechanism, as well as the Cosmos Inter-Blockchain Communication (IBC) protocol to carry out cross-chain asset and data transfers needed to realize full chain-to-chain interoperability.
OKEx (Cryptocurrency Exchange)
OKEx is a cryptocurrency exchange that was founded in 2017 by CEO Jay Hao. The China-based exchange offers services to both institutional and retail investors in the form of features such as spot trading, derivatives trading, and staking. OKEx launched its own blockchain, the OKExChain, in the first half of 2021. This chain is built using a modified version of the Cosmos Tendermint consensus mechanism, Cosmos SDK, and the Cosmos Inter-Blockchain Communication (IBC) protocol.
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 a blockchain platform.
On-Chain Data Availability (OCDA)
On-chain data availability (OCDA) is a hybrid approach to data storage that allows users to choose if their data is stored on-chain or off-chain. OCDA was launched as one of the newly developed features with the release of Loopring 3.0. While this feature is off, and data is stored on-chain, the network achieves 2,025 transactions per second (TPS). However, if OCDA is on and data is stored off-chain (by using Validium mode), throughput can reach 16,400 TPS. However, at that speed, network security is that of a consortium blockchain and not always ideal. These dynamic scalability solutions are known as volitions. In short, OCDA and zk-Rollup technology work together to allow Loopring 3.0 to become comparable to non-custodial exchanges by matching their centralized, custodial competitors' performance by facilitating very fast asset exchange and transaction times.
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.
One-Time Password (OTP)
A one-time password (OTP) is a special authentication code used to log into a specific server, network, or service often through a mobile device. OTPs are typically time sensitive and only last until the next code is generated (usually every 30 seconds). OTPs are often used through a mobile phone authentication application such as Google Authenticator. Although OTPs are more secure than a password alone, the technology will need to be continually enhanced over time in order to keep up with new technological innovations and security threats.
Ontology Trust Anchor
An Trust Anchor is a qualified third-party trustor which provides authentication services on the Ontology blockchain via a three-tiered mechanism that 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 types of constituents 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 Ontorand Consensus Engine (OCE) 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 PoS) 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.
Opcode is short for operation code and refers to low-level human readable programming instructions. On Ethereum, opcode refers to the 140 unique commands that can be executed by the Ethereum Virtual Machine (EVM), the environment and rule-set in which Ethereum smart contracts and accounts exist. Writing programs in a low-level language like opcode is possible, though much more difficult than using a high-level language like Solidity. Basic examples of opcode commands are ‘PUSH’ and ‘POP’, which respectively add and remove data from the EVM.
The open, or opening price, is one of four main data points used for day trading on the stock market. The other three are called low, high, and close — and all four are collectively known as OHLC. Traditionally, stock market trading was carried out during regular market hours, often only between 9am and 4pm local time, with markets closed on weekends. Cryptocurrency markets are open 24/7, so even though there is theoretically no opening price for crypto assets, the OHLC is still included on most charting platforms to signify the opening time of the regular stock market each day.
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.
Open Representative Voting
Open Representative Voting (ORV) is the consensus mechanism of the Nano network. Nano users elect representatives by delegating the balance of their accounts to the representative of their choice. Representatives vote on the validity of transactions, and blocks are confirmed when a quorum is reached.
OpenSea is one of the world’s foremost peer-to-peer marketplaces for buying, selling, and auctioning digital non-fungible tokens (NFTs). OpenSea, like many of its competitors, allows users to buy, sell, and discover different types of digital art, ranging from collectible digital versions of Nike basketball shoes, to paintings of famous crypto entrepreneurs like Vitalik Buterin, and anything in between. The OpenSea marketplace, like most NFT marketplaces in the industry, accepts payment for NFTs in Ethereum’s token, ether (ETH).
Open source refers to the public availability of computer software source code under a license that the copyright holder grants users the right to use, analyze, modify, and distribute to anyone, at any time, for any purpose. Open-source software is often developed by various software engineers in a collaborative public manner, and can be augmented from its original intended application to suit other use cases. Open-source software development frameworks are prominent in the development of blockchain-based network protocols because open source represents similar trustless, public, borderless, neutral, open, and censorship-resistance attributes that blockchain systems and cryptocurrencies have become known for.
Opera is the Asynchronous Byzantine Fault Tolerant (aBFT)-powered mainnet that makes use of the Fantom Lachesis protocol. Opera is a permissionless and open-source development framework designed specifically for the construction of decentralized applications (dApps) on the Fantom network. The Opera mainnet is made up of a wide range of smart contract capabilities that can interact with the Ethereum network due to both systems' support of the Solidity programming language and integration with the Ethereum Virtual Machine (EVM).
Operating System (OS)
An operating system (OS) is a computer system’s software that is responsible for fulfilling various tasks that allow the device to operate. An OS is responsible for managing computer hardware and software and provides common services for computer programs. Operating systems are responsible for tasks such as memory management, disk management, loading and execution, booting of the device, process management, data security and privacy, external device control, as well as providing a good user interface (UI). The most well-known computer operating systems are Microsoft’s Windows and Apple’s MacOS, alongside mobile phone operating systems like Google’s Android and Apple’s iOS.
Optimism (Ethereum Scalability Stack)
Optimism is an application designed to operate inside of the Ethereum network to increase Ethereum’s scaling and transaction throughput via optimistic rollup (OR) technology. ORs are a specialized scaling solution designed to make transactions on the Ethereum network more efficient, faster, and cheaper. Optimism makes use of the Optimistic Virtual Machine (OVM) to facilitate Ethereum Virtual Machine (EVM) integration to allow developers to write scalable smart contracts on Ethereum. Not to be confused with a sidechain, Optimism lives inside the Ethereum network as a series of smart contracts that have the ability to execute Ethereum transactions.
Optimistic Rollup (OR)
An Optimistic Rollup (OR) is a type of Layer-2 scaling solution that runs on top of the Ethereum network. Optimistic Rollups are similar to the Plasma scaling implementations used for Ethereum, but in contrast to Plasma, Optimistic Rollups allow for the operation of an Ethereum Virtual Machine (EVM) compatible Optimistic Virtual Machine (OVM), which enables increased functionalities for Optimistic Rollup technology. The name ‘Optimistic Rollup’ refers to how ‘optimistic’ aggregators tend to run without committing fraud and instead provide proofs in case of fraud, while ‘rollup’ is from the process of implementing transaction bundles that are ‘rolled up’ and that thus allow network transaction speeds to increase exponentially.
Optimistic Virtual Machine (OVM)
The Optimistic Virtual Machine (OVM) is a virtual machine (VM) created by the Optimism blockchain team to help scale Ethereum through Optimistic Rollup (OR) technology. The OVM was designed to make Ethereum transactions faster and cheaper; it also provides a framework for developers to scale smart contracts with its Ethereum Virtual Machine (EVM) Layer-2 compatibility. This technology has been implemented on the Uniswap decentralized exchange (DEX) in partnership with Optimism.
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.
An options market is an investment marketplace for options derivatives contracts which facilitate an agreement between two parties to carry out a potential transaction for an underlying security at a predetermined price on or prior to the expiry date of the contract. Options markets allow investors to bet on the potential direction of an asset, which are categorized as either a put option — a leveraged bet on the potential increase in price of a stock or index — or a call option, with the hope of profiting from future price depreciation.
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.
The oracle problem refers to innefficiencies regarding the introduction of external data to isolated blockchain systems. By default, on-chain network protocols are unable to obtain external data. Isolation makes blockchains very secure and reliable, but also makes it difficult to obtain and share outside data used by smart contracts. Data oracles exist to bring reliable, off-chain data to internal, on-chain environments. When a blockchain network is unable to receive this data to allow it to operate correctly, it is known as the oracle problem.
On the Livepeer network, an Orchestrator is a user who supplies computing resources to the network, sends video to Transcoders, and ensures that videos are transcoded correctly.
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).
An order ring is a process whereby a ring miner completes an order by using a Loopring smart contract to determine how to best fill the order. If the ring miner can execute the order on either side of the trade, the smart contract will execute an atomic swap — a direct transfer from the smart contract to the user's wallet. Order rings also facilitate ring-matching, which is the process of fulfilling orders by stringing them together. Order rings differentiate the Loopring protocol from other decentralized exchanges like Waves, IDEX, and Bancor. Order sharing is also made possible by order rings. When the Loopring smart contract cannot execute an order in a single trade, order sharing will split orders into partial components until the full original order amount is fulfilled.
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.
Organization for the Advancement of Structured Information Standards (OASIS)
The Organization for the Advancement of Structured Information Standards (OASIS) is a multi-partnered international non-profit body that helps facilitate the standardized development of open-source software, blockchain, Internet of Things (IoT), artificial intelligence (AI), and other related technologies. OASIS works with several hundred technology partners around the world to create a regulatory and compliant framework for global software development and collaboration. OASIS was founded in 1993 and its main headquarters are located outside of Boston, Massachusetts.
An orphan block (generally referred to as a stale block) is a block that has 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 from the initial blockchain and serve no purpose after they are rejected.
Ouroboros Praos is a Proof-of-Stake (PoS) 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 secure methodology to construct a Proof-of-Stake blockchain-based system.
Overbought is a subjective term that refers to an asset that has recently traded at an increased price relative to its perceived intrinsic or fair value, and may be expected to drop in price in the near term. However, an overbought price condition can last for a substantial amount of time, meaning that an immediate price decrease is not always the result in the short-term. Technical indicators are one of the main methodologies used to identify oversold or overbought assets by using data from many metrics such as relative strength index (RSI), Bollinger Bands, trading volume, and other metrics.
Overledger Network (Quant)
Overledger is the Quant Network's interoperability blockchain platform. The system uses an application programming interface (API) designed for financial services for banks including stablecoin minting, CBDCs, supply chain management, payments and micropayments, marketplace creation, and invoice financing, among others. Overledger also allows developers to create applications on Bitcoin, Ethereum, and Ripple as well as for enterprise uses such as on R3’s Coida, and Hyperledger’s Besu and Fabric platforms.
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 to handle it, resulting in an overloaded computational system.
Oversold is a subjective term that refers to an asset that has recently traded at a reduced price relative to its perceived potential for a near-term bounce or price increase. However, an oversold price condition can last for a substantial amount of time, meaning that an immediate price increase is not always the result in the short-term. Technical indicators are one of the main methodologies used to identify oversold or overbought assets by using data from many metrics such as relative strength index (RSI), Bollinger Bands, trading volume, and other metrics.
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 (CEX). 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. Parachains also run on the Rococo Relay Chain on the Kusama network (both the Polkadot and Kusama networks have the capacity to operate 100 parachains via their corresponding Relay Chain).
A parachain slot is a docking-like section of the Polkadot Relay Chain (or Rococo Relay Chain on Kusama) designed specifically so that a parachain can connect to the main control center of the network. In both the Polkadot and Kusama networks, there are 100 parachain slots available, but they are a scarce resource because there are hundreds of blockchains competing to acquire one. A team is awarded a parachain slot through the successful outcome of a parachain slot auction. As a result, the winner can become a member of the 100-parachain master Polkadot network (or Kusama network), which allows all blockchains within the network to communicate with each other instantaneously.
Parachain Slot Auction
A Parachain Slot Auction is a process that allows potential parachain blockchains to compete with each other in the hopes of securing a parachain slot on the Polkadot Relay Chain or the Kusama Rococo Relay Chain, for lease periods between 6 months and 2 years in length. These lease periods can also be extended for longer via re-election. In order to secure a parachain slot, potential parachains must bond or stake KSM or DOT coins within a validator node on either the Polkadot or Kusama networks. For Polkadot, parachain slot auctions take place on Polkadot’s main Relay Chain, while for Kusama, they take place on the Rococo Relay Chain.
Parallel Augur (ParaAug)
Parallel Augur (ParaAug) is the system that was designed to enable the use of two separate user interfaces (UIs) — two different Augurs — to allow for various DeFi and prediction market use cases on the Augur platform. More specifically, there is one Augur for ETH (AugurETH) and one for DAI (Aug v2). AugurETH is a parallel deployment of Augur v2 that supports trading functions and holds its own order books. The ParaAug infrastructure will also support upcoming deployments of an Augur Automated Market Maker (AugurAMM), Betting Exchange UI, and Layer-2 or off-chain trading.
Parallel Processing or Parallelization
Parallel processing is a way of processing data in a parallel or side-by-side format on a blockchain network (or via other types of computer network infrastructure) in order to execute multiple calculations simultaneously. Parallel processing is often used in sharding and other methods to increase transaction processing times and scalability on a computer network. Parallelization is another name for parallel processing, and is becoming an increasingly dominant paradigm for computer architecture design. Parallelization is often performed using a multi-core processing system that makes use of several core processor units at the same time to increase system performance.
Parent chain is a classification used to describe the relationship between the main chain and various subnetworks or sidechains in a blockchain network ecosystem. Parent chains are typically Layer-1 main blockchain networks that are responsible for not only maintaining the consensus of the network, but also for running smaller blockchains on top of them.
Parity Technologies is a blockchain development firm that focuses on building distributed computing platforms and applications that are designed to empower the next generation of decentralized services for Non-Governmental Organizations (NGOs), large enterprises, consortiums, governments, start-ups, and more. Parity’s main focus is on creating solutions that make use of cutting-edge cryptography and decentralized consensus architectures that are designed to provide enhanced scalability, security, upgradeability, and interoperability. Parity Technologies is directly affiliated with (and partially owned by) the Web3 Foundation, Polkadot, and Kusama.
Participation Nodes are the most powerful nodes that make up the Algorand blockchain network and are responsible for running Algorand’s Pure Proof of Stake (PPoS) consensus mechanism. Any network participant can participate in the proposing and voting procedure by staking ALGO and generating a valid participation key in order to become a Participation Node. Algorand’s PPoS consensus mechanism utilizes a two-phase block production process consisting of proposing and voting. Participation Nodes are coordinated by another type of Algorand network nodes — Relay Nodes — which facilitate communication among participation nodes and do not directly participate in proposing and voting.
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 specifically 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, numbers, 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 payments 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.
Pattern (Technical Formation)
In charting technical analysis (TA), a pattern is a measurement of an asset’s price that acts in a distinctive manner. Technical patterns are as varied as traded assets themselves and make use of various support and resistance levels, trend lines, and technical formations such as flags, triangles, wedges, channels, and more. By studying and identifying patterns, traders use several data points to predict the potential price movements of an asset, with hopes of maximizing profitability. Patterns are also used to identify certain trends for technical indicators that make up a large part of technical analysis.
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.
A payment rail is a form of digital infrastructure designed to transfer money from one individual or business to another without using a bank account (though payment rails can be linked to a bank account). There are many different types of FinTech-based payment rails, including:
- Credit cards like Visa or Mastercard
- Payment service providers such as PayPal or Venmo
- Blockchain network protocols
The concept references the proximity of the user and the payment being sent or received. The "far side" of the transaction is the “hidden” portion of the transaction, while the “the near side” is made up of whoever is sending the transaction.
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 borrowers 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 be 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.
Pegs are a mechanism that ties the value of one cryptocurrency to another at a 1:1 equivalent basis. Pegs primarily exist to facilitate the trading of non-similar assets, which is currently hindered because of the reliance on distinct blockchain protocols. Pegging also allows users to buy and sell specific assets that are pegged on a 1:1 ratio to their native asset (for example, the BEP2 Binance Chain version of bitcoin is pegged to the original version of bitcoin from the Bitcoin network) without having to wait for long confirmation times or pay high transaction fees to transfer assets between blockchains.
A peg is a predetermined price used to establish the exchange rate between two assets. Normally, most assets fluctuate with market forces, but stablecoins are pegged to assets like the U.S. dollar to maintain price stability and to safeguard investors against market volatility. Generally, stablecoins are given a hard peg or a soft peg. Stablecoins typically maintain their peg through the contraction (burning) or dilution (minting) of the total supply of the asset which is often the result of larger macro-economic factors.
A peg-zone is a mechanism employed by the Cosmos ecosystem to allow blockchain protocols — such as Bitcoin and Ethereum — which can lack settlement finality (for example because they employ probabilistic finality), to interoperate with the Cosmos Network. Normally, Cosmos makes use of the Inter-Blockchain Communication protocol (IBC) to interoperate with other chains. However, IBC can only be used correctly if both the starting and destination chains are able to achieve settlement finality. To solve this problem, peg-zones were built to serve as a translator zone or “finality gadget.” Peg-zones generally employ a 2-way peg, meaning that assets can be sent between chains in both directions.
Pension (Individual Retirement Plan)
A pension, individual retirement plan, or individual pension plan, is an amount of money that is recurringly deposited into an individual's account — often via an individual retirement account (IRA) — through their employer, often over many years for their retirement savings. Pension plans vary greatly in nature, but are typically made in the form of regular, equal monthly payments and begin at a specific age (usually 65) after the individual chooses to stop working indefinitely.
The permaweb is a human-readable layer built on top of the Arweave protocol. The permaweb allows you to view the collection of websites and decentralized applications (dApps) hosted by Arweave. The permaweb is intended to be visually similar to the traditional web and can be accessed via traditional web browsers.
Permissioned Ledger (Permissioned Blockchain)
A permissioned ledger or permissioned blockchain is a blockchain system that employs an additional security system that consists of an access control layer that allows only certain parties to make use of the network. This means that accessing the network is often prohibited unless the user possesses a specialized security key or password, meaning that certain tasks can be carried out only by specific network participants with pre-determined access. Because of this structure, permissioned ledgers are very different from public blockchain systems like the Bitcoin and Ethereum networks.
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 permissioned.
Permissionless Ledger (Permissionless Blockchain)
A permissionless ledger or permissionless blockchain is a blockchain system that can be used by a network participant without obtaining permission from a centralized authority or any other entity. Permissionless ledgers are typically constructed in an open and decentralized manner employing the use of their own cryptocurrency. Permissionless networks operate in a peer-to-peer (P2P) manner and are generally considered open, public, borderless, neutral, censorship-resistant, transparent, and immutable. Permissionless blockchains are the opposite permissioned blockchains whereby users must have special permission to use the network.
A perpetual swap, or a perpetual futures contract, is a derivative trading instrument that allows an investor to buy or sell an asset at an unspecified time period in the future. Perpetual swaps are typically cash-settled with no expiry date when an investor opens a position. When opening a position, payments are sometimes exchanged between holders of both sides of the contract (for both longs and shorts) meaning that the direction and amount of the settlement is based on the difference in the underlying asset and the contract price, and also, if relevant, the difference in leverage between both sides.
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 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 that refers to unformatted text in a computer environment 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 an 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.
A plasma chain is an off-chain, Layer-2 scaling solution. A plasma chain is simply a specific type of non-custodial sidechain through which users may withdraw their funds and revert back to the mainchain in the case of errors or security breaches.
A blockchain platform usually refers to any type of distributed blockchain network that can be used to develop, create, and run applications or other related technology on top of it. "Platform" is one of many terms that can also be used to refer to a blockchain network protocol in its own right, but often the term refers to a network's capability of hosting other network services that are built and constructed to run as an extension of the network itself.
Platform-as-a-Service (PaaS) or Application-Platform-as-a-Service (aPaaS) is a specific category of cloud computing infrastructure similar to Software-as-a-Service (SaaS) that allows customers to create, manage, and run a cloud computing platform and host applications. PaaS provides a simple and effective way to launch cloud-based applications without the need for software engineers to develop and launch the applications individually. Platform-as-a-Service (PaaS) cloud computing can be designed for different types of computer network systems, including for use with distributed blockchain cloud computing solutions.
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 runs on a user’s machine. Plutus smart contracts are written in 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.
Politeia is an off-chain, structured governance system implemented by Decred with the goal of fostering an environment of open communication. Politeia is designed to encourage users to share ideas and provide a framework for voting on implementing them.
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 Chief Technology Officer (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.
Polkadot Relay Chain
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.
A Ponzi scheme is a type of fraudulent investment or scam, often characterized by promising dramatically high rates of return and minimal risk to investors. Ponzi schemes generally function by offering profits to earlier investors with funds obtained by later investors. They often seek to make victims believe profits are coming from legitimate business, when in fact the alleged ‘profits’ are funds taken from later investors to create a perception of profitability among earlier investors. A Ponzi scheme and a pyramid scheme are related concepts. Ponzi schemes tend to eventually bottom out when the flood of investment capital from new investors starts to die off.
PoolTogether is a decentralized open-source blockchain protocol that makes use of “no-loss prize pools.” The system works by allowing users to deposit their crypto into a specific pool and receive prize-redeemable tickets in exchange. If a user has tokens deposited into the liquidity pool, they have a chance to win prizes. PoolTogether built this model to incentive token holders to increase the overall liquidity of the protocol, as well as to allow the developers of the project to passively earn income for lending out users' assets while facilitating the prize redemption model.
An investment portfolio is a collection of potentially diverse financial investments like cryptocurrencies, stocks, commodities, cash, exchange traded funds (ETFs), and other assets. Traditionally, stocks and bonds are likely to comprise a large portion of an investment portfolio, but the exact allocation of different assets in any given portfolio is subject to individual preference. Diversification, risk tolerance, and time parameters are all crucial factors when assembling and adjusting an investment portfolio. Portfolios can be managed by their owner or by a financial advisor, investment enterprise, or another financial entity.
A portfolio manager is a person or group of people that are responsible for managing investments for a client. Portfolio managers work to mitigate risk, implement investment strategies, and manage day-to-day trading for different types of investments. These can include cryptocurrencies, stocks, bonds, derivatives, and mutual, exchange-traded, or closed-end funds, or any other forms of investments. Portfolio managers often are employed by banks, investment and trading institutions, or other related businesses and work directly or indirectly with their clients.
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.
Post-mining is a practice that creates new coins after the initial launch of a blockchain project, but before public mining is possible. Post-mining often occurs between the tokenization snapshot date — when token balances are tallied so newly minted tokens can be airdropped or traded on exchanges — but before the platform’s code has been implemented and outsiders are able to mine tokens. The post-mining procedure, like its pre-mining counterpart, has occasionally come under criticism for allowing founding teams to have too much impact on the price of the asset and its tokenization metrics.
Post-quantum cryptography, also referred to as quantum-restistant or quantum-proof cryptography, is a specific type of cryptographic computing architecture that utilizes public-key cryptography (PKC) and is characterized by the ability to prevent quantum computing attacks. At this time, most experts in the field believe that existing computing systems are quantum-resistant, however, the potential for quantum computing attacks designed to exploit current computing infrastructure remains a real possibility. For this reason, the ongoing research and development of quantum-proof computing systems remains a high priority for cryptographers and computer scientists across the globe.
Post-trade is the classification of processes that are carried out after the buying and selling of assets through a stock market, online exchange, or related investment service provider. Post-trade typically involves the clearing and settlement of investment assets, the provision of custodial investment services, and other related processes that allow the value chain to operate optimally. Post-trade services are often quite complex and require market participants to adhere to strict regulatory, compliance, and legal guidelines.
Practical Byzantine Fault Tolerance (pBFT)
Practical Byzantine Fault Tolerance (pBFT) is a consensus mechanism designed to improve upon the Byzantine Fault Tolerant (BFT) consensus mechanism in order to more fully protect against Byzantine faults which occur in distributed networks. pBFT was originally created in the early 1990s by Barbara Liskov and Miguel Castro, and is used to maintain consensus on a wide variety of distributed computer systems and blockchain platforms. pBFT is designed to work in asynchronous systems, optimized for low overhead, and geared to solve many of the problems associated with typical Byzantine Fault Tolerance consensus methods.
Prediction markets — sometimes called predictive markets, ideas futures, event derivatives, virtual markets, or information markets — are exchange traded markets created solely to bet on the outcome of specific real-world events coming to fruition. Prediction market prices generally trade between 0 and 100%. Basically, a prediction market is a way for speculators to bet on the resolution they expect for a specific data set, event, or desired outcome in the real world. Prediction markets can also facilitate betting on the outcome of future events through derivatives trading utilizing extremely high leverage, and other complex financial instruments.
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 is a practice that creates a specific number of coins for a blockchain project before a public sale occurs, often awarding them to the developers and founders of the project. Pre-mining is similar to selling a stake in a company to existing founders and employees prior to the company going public. Without a pre-mine, a project's first coins usually go to investors who participate in the public Initial Coin Offering (ICO). Pre-mining has sometimes been criticized for allowing founding teams to have too much impact on the price of an asset prior to exchange listings and initial release.
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.
A pre-sale is held by some blockchain enterprises after the private sale has been completed, but before the public sale, whereby a specific allocation of coins is sold to prospective investors. This pre-sale is often held to give institutional investors, and smaller investment funds that missed out on the private sale, a chance to contribute. Often family members and close friends of project founders, as well as high net worth individuals (HNWIs), are given this early funding round investment opportunity prior to the Initial Coin Offering (ICO) or similar public offering, such as an Initial Exchange Offering (IEO).
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 effect 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 event has been factored into the price. The reaction 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 (Price Action)
Price movement, or price action, is the occurrence of a change in price over time for a specific 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 primary market is the portion of the capital market that is responsible for the issuance and sale of equity-based securities directly by the issuer for the first time. Primary market stock issuances usually take place through Initial Public Offerings (IPOs), private placements, preferred allotments, and rights issuances. Primary markets are usually the initial source of a new security which is typically sold to enterprises, governments, and other parties to obtain financing through debt-based or equity-based securities. In contrast, the secondary market is usually made up of traditional stock markets such as the New York Stock Exchange (NYSE) or NASDAQ.
Primary Network (Avalanche)
The Primary Network is a special subnetwork (subnet) within the Avalanche blockchain ecosystem. All members of custom subnets — or blockchains that are created on the Avalanche platform — must also be a member of the Primary Network which requires them to stake 2000 AVAX coins. The Primary Network’s main purpose is to validate, secure, and facilitate the different uses of the Exchange Chain (X-Chain), Platform Chain (P-Chain), and Contract Chain (C-Chain) of the Avalanche network — which are three independent networks responsible for different tasks on Avalanche.
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.
A privacy coin is a cryptocurrency that is mainly designed to help preserve the privacy of its users and its underlying network protocol — usually by concealing identity and transaction data during exchange of information and tokenized assets. Typically, blockchain networks that are focused on privacy make use of zero-knowledge proofs (often zk-SNARKs) — a type of cryptographic proof used for concealing information in a cryptographically verifiable fashion that is essentially immutable and tamper-proof. Monero and Zcash are two of the most well-known blockchain systems that are privacy-focused and that make use of such cryptographic proofs.
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 — enterprises and government, for example — that require access management, censorship rights, and privileged privacy models. While private blockchains are built with speed and scalability in mind to serve the needs of the client organization, they are not decentralized or secured by a distributed network.
Private Investment in Public Equity (PIPE)
Private Investment in Public Equity (PIPE) is an investment type that doesn't involve capital allocation in publicly traded companies, opting instead for private company investment. Private equity investing is typically carried out by investment funds that directly buy, sell, and invest in companies that are not publicly traded on a stock exchange. Private equity investing is usually dominated by large institutional investors, pension funds, venture capitalists, and other accredited investors because of their ability to influence the direction of the companies they invest in — and the potential to generate greater returns than with publicly traded companies.
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.
A private sale is generally the first round of funding that is allocated to a blockchain startup prior to the pre-sale and public sale, or Initial Coin Offering (ICO). The purpose of a private sale is to give large institutional investors the opportunity to invest large amounts of capital to fund the development of projects early on. While this practice may be criticized because of its arguably centralized approach, it is often a viable way for startups to acquire the capital they need to realize their ongoing development goals.
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.
Production Version (Stable Release)
The production version of a software release, which is sometimes also called the stable release, is the last release candidate (RC) version that has passed all testing to bring it to the release to manufacturing (RTM) phase. The production version may still have some bugs and inefficiencies which need to be addressed and modified prior to the final release to the public. The production version precedes the RTM phase, the general availability (GA) phase, and the golden master build (GM) phase. It is also quite common for the production version to have two distinct versions.
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.
Profit and Loss (P&L) Statement
A profit and loss (P&L) statement is a financial statement that summarizes revenue, expenses, and costs for a specific time period. A P&L statement is one of three main financial statements that a company issues on a regular basis (the other two are a balance sheet and cash flow statement). A P&L statement provides data about an enterprise’s ability to generate profit by increasing revenue, reducing costs, analyzing research and development (R&D) expenditures, and other means. A P&L statement is not to be confused with the P&L metric which may be displayed on exchange platforms to evaluate investment performance.
Programmability is the ability for a computerized system to be created through the process of software development (utilizing various types of programming languages) by writing informatic code to create computer or mobile-based applications, network infrastructure, and even entire blockchain network protocols. By being programmable, a blockchain network allows for the creation and automation of various mechanisms via smart contract technology and other similar methodologies. Often, programmable blockchain networks can offer much lower operational costs, better ease of use, more robust security, and enhanced openness — which can in turn lead to significant savings in time, money, and manpower when compared to other database solutions.
Proof of Access (PoA)
PoA is the consensus mechanism of the Arweave Protocol. In order to mine or verify a new block, miners must provide cryptographic proof that they have access to a recall block, which is a block from earlier in the blockweave’s history. For this reason, Arweave’s consensus algorithm is called Proof of Access (PoA), and is a variation of a Proof-of-Work (PoW) algorithm. PoA is intended to incentivize long-term data storage because miners must access older, random blocks from the blockweave’s history in order to mine new blocks and receive mining rewards.
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 Chief Technology Officer (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-off is offset by remarkable scalability and transaction speeds.
Proof of Burn (PoB)
Through the Proof-of-Burn (PoB) consensus mechanism, miners intentionally destroy, or “burn”, tokens to obtain a proportional right to mine new blocks and verify transactions. The more tokens a miner burns, the higher the chance that miner will be selected as the next block validator. By demonstrating their dedication to the network via intentional token destruction rather than expending computational resources and leveraging powerful mining hardware, miners within a PoB setup are able to operate using far less energy than classic PoW systems. The PoB consensus mechanism is utilized by Counterparty, Slimcoin, Factom and several other blockchain systems.
Proof of Capacity (PoC)
Proof of Capacity (PoC) is a consensus mechanism that makes use of the available hard drive space in a miner’s device to decide its mining rights and validate transactions rather than expending computational power. Through the PoC mechanism, a list of possible cryptographic mining solutions is stored in the mining device’s hard drive even before the mining activity begins, with larger hard drives being capable of storing more potential solution values. PoC was designed in order to mitigate both the energy inefficiencies of classic Proof-of-Work (PoW) mechanisms and the token-hoarding that can sometimes arise from implementing many Proof-of-Stake (PoS) configurations.
Proof of Contribution (PoC/PoCo)
Proof of Contribution (PoC) is a consensus mechanism that is based on user contributions to the network. This process works by using specialized algorithms that monitor contributions of all the network’s nodes during each consensus round. The node that has the highest contribution value in each round is given the right to generate the next block. Proof of Contribution is considered to be a quite decentralized consensus model. Proponents maintain that it is extremely resistant to hard forks and can enhance the security and transparency of networks that implement it.
Proof of Coverage (PoC)
Proof of Coverage (PoC) is a consensus mechanism employed by the Helium Network. As a variation of Proof of Work (PoW), PoC relies on mining to achieve network consensus. However, miners on the Helium Network — known as Hotspots — double as wireless internet access points for Internet of Things (IoT) devices. As such, PoC incorporates nuanced mechanisms to track the participation of nodes — or Hotspots — and their continued provision of services.
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 received 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 (PoRep) 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 (Holochain)
Proof of Service is a relatively rare consensus mechanism that is used on certain blockchain protocols such as Holochain. In the case of Holochain, Proof of Service does not function like a traditional blockchain consensus mechanism, because the distributed hash table (DHT) plays the primary role in achieving network consensus. In this scenario, the Proof-of-Service protocol is merely designed to ensure that once a peer-to-peer transaction is completed, then the agent providing the service automatically issues an invoice and receives payment.
Proof of Service (PoSe)
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 coins 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 (PoS)
Proof of Stake (PoS) is emerging as one of the most widely used blockchain consensus mechanisms in existence. PoS networks incentivize participants to stake native coins in 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 coins as a reward. A robust nodal network offers increased network security, resiliency, and computational power. Proof-of-Stake systems also generally enable 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 they can be faster and more scalable than Proof-of-Work (PoW) 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 Validation (PoV)
Proof of Validation (PoV) is a unique Proof-of-Stake consensus mechanism that works to achieve consensus by evaluating the stake of validator nodes. Typically, each node within the system keeps a copy of the sequence of transactions in blocks that are integrated into the blockchain as well as a copy of user accounts that are identifiable by a specific user’s public key or address. Accounts within the protocol bond or hold coins inside validator nodes. The number of coins bonded with the validator is proportional to the number of votes that a specific validator possesses, and can only be reduced when the coins are unlocked at a later date.
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.
Blockchain protocol is a term that refers to a particular blockchain platform or blockchain network, such as the Bitcoin protocol. A protocol can also refer to a set of rules that defines interactions on a blockchain network that involve consensus, network participation, and transaction validation.
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.
Pseudo-anonymity is a classification used to denote a user in the blockchain space that has no visible identifier or information that can be directly linked to their real identity. The difference between anonymity and pseudonymity is that someone who is anonymous cannot be identified at all while a person that is pseudonymous means that they use a false name to conceal their true identity.
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.
A public blockchain is a decentralized system that is designed for public use and that is permissionless, meaning that it is possible for a wide variety of people and entities to join, make use of or contribute to the construction of the network. Public blockchain protocols generally employ cryptocurrencies, and most are generally considered to encourage censorship resistant, borderless, open, neutral, and public uses. Public blockchain systems stand in contrast to private blockchain networks that are generally centralized and closed, and where network participants typically need special access to use the underlying platform.
A public key allows you to receive cryptocurrency transactions. It’s a cryptographic code that’s paired to a private key. While anyone can send transactions to a public key, you need the private key to “unlock” them and prove that you are the owner of the cryptocurrency received in the transaction. You can therefore share this key with the public, while your private key should be kept a secret. The public key that can receive transactions is usually an address, which is simply a shortened form of your public key.
Public-Key Cryptography (PKC)
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.
A public ledger refers to a shared database upon which transactions and associated details are recorded in multiple places simultaneously to facilitate the exchange of specific information and other data. In the blockchain space, a public ledger is generally a permissionless, decentralized protocol maintained by a network of nodes lacking a central authority. The name ‘public ledger’ comes from an old record-keeping system that was often used to record public information like agricultural commodity prices, news, and analysis.
Public Representative Node (P-Rep)
A Public Representative Node (P-Reps) is the most powerful node that exists 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).
A public sale, or Initial Coin Offering (ICO), is typically the third and final funding round that a blockchain startup offers after the private sale and pre-sale rounds. Public sales are generally open to retail investors, large investors, and the general public with the only prerequisite to participation being registration and the provision of valid Know Your Customer (KYC) identification documentation. ICOs gained widespread popularity in 2017 — corresponding with the 2017 crypto bull market — and while they still exist, ICOs have more recently evolved into other funding models including Initial Exchange Offerings (IEOs) and Initial DEX Offerings (IDO).
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.
Pure Proof of Stake (PPoS)
Pure Proof of Stake (PPoS) is Algorand’s variation on the traditional Proof-of-Stake (PoS) consensus mechanism. It is a decentralized Byzantine Agreement protocol that is characterized by a low barrier to entry, requiring as little as 1 ALGO to become a participating node. PPoS strives for quick transaction processing and finality. It leverages a verifiable random function to coordinate its participation nodes.
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 (PoS) 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 Virtual Machine (EVM) 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.
Quantitative analysis (QA) is a methodology that makes use of mathematical and statistical modeling and research in order to understand behavior. QA is used to express a given reality using numerical value and can be applied to measurement, performance, and valuation of different financial instruments. In finance, QA is used primarily to help predict the price of different financial instruments like derivatives, stocks, assets, and even entire economies. QA is also often used to predict changes in gross domestic product (GDP) for specific countries and to compile different financial data sets for certain regions around the world.
Quantum computing is an advanced theoretical computing paradigm that may prove to be orders of magnitude more advanced and efficient than traditional computing. Quantum computing takes advantage of numerous quantum states such as superposition and entanglement to perform computation. Quantum computers are thought to be able to quickly solve certain types of problems that no traditional computer could solve in any feasible amount of time — an accomplishment called “quantum supremacy.” As of 2021, quantum computing is in its infancy, but the field is advancing quickly.
Quant Zone is a tool on the FTX crypto exchange for designing programmatic rules to execute automatic trading strategies on the FTX platform. Traders can create Quant Zone rules and share them with other users as well. Quant Zone rules require a trigger condition and an antecedent response; following “if, then” logic.
In computing, a query is a specific request for information retrieval using a database or computer system. Queries can be entered into many types of computing platforms or databases, and are used both publicly and privately by retail users, enterprises, governments, and other constituents. As they relate to blockchain systems and computing, queries are often carried out through decentralized indexing and querying platforms that make use of a graph. Graphs are an abstract data type that is designed to make use of undirected graphs and directed graphs through the mathematical field of graph theory.
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.
Quorum Blockchain (ConsenSys)
The Quorum blockchain is an enterprise blockchain system built by JP Morgan and several other main contributors. The platform was purchased by ConsenSys in 2021 in a deal that still allows JP Morgan to utilize the platform through collaborative efforts. Quorum is a modified version of the Ethereum network that is specifically tailored for business applications and other services. Though the classification of the Quorum blockchain is somewhat ambiguous, it is thought to be a consortium or hybrid blockchain platform because it possesses characteristics that are both public (open) and private (closed).
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.
A race attack is a double-spend attack where two transactions are sent in quick succession and only one is confirmed to the blockchain. The goal is to purchase something with the unconfirmed transaction and then invalidate it before it’s confirmed. This enables you to get “something for nothing.” This is only possible if the receiver or merchant accepts an unconfirmed transaction.
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.
Range-bound is a classification in technical analysis (TA) where an asset’s price remains in a specific range. Assets that are range-bound typically bounce between a high resistance price that they cannot break above and a low support price that they won't drop below, often in a channel-like formation. Assets can also be said to be range-bound within other technical analysis parameters such as the relative strength index (RSI).
Range (Technical Formation)
Range, as it relates to technical charting and analysis, refers to a specific area where an asset’s price oscillates between points of technical support and resistance during a certain period of time. Range-bound assets typically bounce between the high resistance price that they won’t break above, and the low support price that they won't drop below. Certain technical analysis indicators such as the relative strength index (RSI) can also move up and down within a specific range.
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)
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 may ask to be paid in cryptocurrency for their products and services.
Sometimes used on blockchains, RaptorQ is a form of erasure encoding used in computer science to separate data into encoded fragments (data blocks) so it can be securely sent to another location. RaptorQ’s encoding and decoding processes allow data to move in a more efficient manner than most alternatives. In the event that data is lost or corrupted during transmission, RaptorQ’s forward error correction (FEC) technology will enable you to recover and reconstruct it with a high probability of success.
As the ERC-20 governance token of the Rarible platform, RARI allows its holders to vote on changes to the platform and submit their own proposals to influence its development.
Rarible is one of the most well-known peer-to-peer marketplaces for buying and selling non-fungible tokens (NFTs). Rarible allows users to buy, sell, and trade all different types of digital art, from digital versions of Nike basketball shoes, to paintings of famous crypto entrepreneurs like Vitalik Buterin, and anything in between. The Rarible marketplace, like most NFT marketplaces in the industry, accepts payments for NFTs in ether (ETH).
Ravencoin is a Proof-of-Work blockchain designed to allow anyone to issue tokens. Its native cryptocurrency is RVN. Ravencoin is a source code fork of Bitcoin.
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.
Real-Time Strategy (RTS)
Real-time strategy (RTS) gaming is a video game genre that is synonymous with multiplayer online battle arena (MOBA) gaming. RTS often involves groups of teams competing against each other in a large battle arena setting with computer-assisted units supporting each side. The goal of competing teams is to protect their terrain and to overthrow their adversaries by eliminating opposing team members and taking possession of their territory. The World of Warcraft franchise is often considered a distinct subset of RTS or MOBA gaming.
Rebase Currency (Price-Elastic Currency)
In cryptocurrency, a rebase currency, or price-elastic currency, is constructed in a way that allows its circulating supply to increase or decrease automatically according to the coin’s price fluctuations. This contraction and expansion in price is called a rebase mechanism. Rebase currencies are similar to stablecoins in the sense that both have a rebalancing mechanism, although they function differently. One of the most prominent examples of a rebase currency in the crypto space is Ampleforth (AMPL).
In the Arweave protocol, the recall block is the block from the earlier history of the blockweave. In Arweave’s blockweave data structure, each block is linked to both the recall block and the previous block in the chain. Additionally, miners must prove that they have access to the recall block in order to add new blocks to the blockweave.
Recapitalization is the process of restructuring a company or related organization’s economic structure to make it more economically viable. This is often carried out by modifying the enterprise’s debt-to-equity ratio, or by other means. Recapitalization sometimes occurrs after a substantial drop in a company’s share price in order to minimize taxes, prevent bankruptcy, or to allow investors to sell their shares and exit the investment.
A receipt paradigm is a specialized receipt-focused transaction structure built for use with shard chains on the Ethereum 2.0 Beacon Chain. The paradigm's intended function is to help enable increased utility and usability of decentralized finance (DeFi) applications on the Ethereum network. As of early 2021, Ethereum plans to implement a “receipt paradigm” in which each shard chain will generate receipts for its respective internal transactions. Receipts will then be stored in the Beacon Chain’s shared memory — available for all other shards to view, but not to tamper with.
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.
Recovery Phrase (Mnemonic Phrase)
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 access to a cryptocurrency wallet or associated private key. The seed phrase matches information stored inside a corresponding wallet that can unlock the private key needed to regain access.
A recovery share is a security mechanism that allows a user to designate how many shares are created, and what percentage are required to regenerate a wallet and its public 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.
In relation to data storage, redundancy refers to either the intentional or accidental practice of storing multiple copies of a particular piece of data, often in multiple different locations. Data redundancy is considered a best practice to ensure that data is safely kept, and will not be permanently lost should one host or one single copy of the data disappear.
Registered Investment Advisor (RIA)
A registered investment advisor (RIA) is an individual or investment company in the United States that is responsible for advising clients on their investment decisions and the composition of their portfolios. RIAs must be registered on a state level and with the Securities and Exchange Commission (SEC) in order to prove their qualifications and expertise. More importantly, RIAs have a legal responsibility to give their clients investment advice that is in their best interest. RIAs normally earn their revenue through a predetermined agreement based on a certain percentage of the client’s assets under management (AUM) each year.
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.
REKT is a slang term used to denote that a person is “wrecked,” meaning ruined, destroyed, or severely damaged. In the blockchain and crypto space, the term usually signifies that an investor has lost a large amount of capital from a trade or recent investment in a short period of time.
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 an 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.
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.
In the case of the Algorand platform, Relay Nodes are used primarily to help maintain connections between other node types. This is accomplished by accumulating protocol messages from Participation Nodes and other Relay Nodes used to perform deduplication, signature checks and other validation checks to then re-propagate valid messages on the system. Relay Nodes are generally located on internet exchange points to decrease propagation time and can be run by anyone who uses the Algorand network.
Release to Manufacturing (RTM) Version
The Release to Manufacturing (RTM) version, also called the golden master build (GM) version, refers to the version of software which is ready to be delivered for final release. The RTM version is typically released after the pre-alpha, alpha, beta, and release candidate versions. RTM is usually released before the general availability (GA) version is released to the public. As an example, when Apple releases an operating system, they use the RTM version to make all future copies of the operating system.
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 transfer 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 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.
Remix is an integrated development environment (IDE) for writing Ethereum smart contracts using the Solidity programming language. Remix utilizes graphic user interfaces and other productivity tools to allow developers to quickly and easily write or test code. Remix is a web-based IDE, which means users can write and deploy code directly from their web browsers.
Remote File Inclusion (RFI)
Remote File Inclusion (RFI) is an attack used to target vulnerabilities in web applications that make use of malicious reference scripts or external files. In an RFI attack, the attacker's goal is to take advantage of the referencing function in an application to upload malware from a remote location using a different domain instead of accessing a file on a local web server. The end goal is often to steal information, compromise servers, and take over an application to modify its content.
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 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 transactions 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 result, 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.
Research and Development (R&D)
Research and development (R&D) is the process of modifying and improving a product or service during its initial developmental stage. R&D is often the first step in the development of innovative technological solutions that enterprises use to improve their business model, and is particularly critical for industries that involve complex design, engineering, software development, and technological applications. R&D is not only used to create and deploy products and services, but also to improve existing ones, meaning that R&D practices must be carried out in a detail-oriented, meticulous, step-by-step manner.
Reserve Rights (RSR) Token
Reserve Rights (RSR) is the governance and utility token that contributes to the operational efficiency of the Reserve Protocol. RSR fluctuates in value — unlike its stablecoin counterpart, RSV — and is typically used by investors to speculate on the overall value of the Reserve Protocol by way of its asset price. Additionally, the RSR token also plays a large role in preserving the integrity of the Reserve Protocol.
Reserve (RSV) Stablecoin
Reserve (RSV) is one of three tokenized assets that help ensure the operational efficiency of the Reserve Protocol. RSV is a stablecoin that acts as a digital representation of a fiat currency or other asset. It operates using verifiable cryptography while running smart contracts on a blockchain network protocol. RSV is pegged at a 1:1 ratio with the U.S. dollar.
Sharding — also called horizontal partitioning — is a way to separate a network into multiple databases or networks. Resharding is the process of adjusting the number of shards in a data stream, typically done to adjust to network demands or increase data transaction throughput. While resharding has data transmission benefits, it can be challenging to reshard a network while retaining data availability and integrity. While found on shard-implementing decentralized blockchains, resharding is also utilized on centralized and distributed networks.
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).
Return on Equity (ROE)
Return on equity (ROE) is a system used to determine profitability versus stockholder equity. ROE is generally determined by dividing net income by the total amount of equity. When ROE is calculated, it is sometimes called the return on net assets because it involves the subtraction of all debt and is based on net income instead of gross income. ROE is calculated to determine how much profit is generated for each dollar of equity invested and helps institutional investors gauge how well their company is performing.
Return on Investment (ROI)
Return on investment (ROI) is a measurement that is used to gauge the performance and profitability of an investment by comparing its current value to its initial cost. ROI is often displayed as a percentage and is calculated using the formula: ROI = (Current Value of Investment - Cost of Investment) / Cost of Investment. For example, if you invested $100 which grew to be worth $140, then the ROI would be represented as the net profits ($140 - $100 = $40) divided by the cost of investment ($100) which yields an ROI of $40/$100, or 40%.
RingCT (Confidential Transaction)
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.
In the Loopring network, ring miners are a type of network mining participant that are responsible for filling orders before they're executed or canceled by using a process that circumvents traditional order books and the AMM mechanisms governing liquidity pools. Those who operate as ring miners receive a service fee in LRC tokens or split the margin on the order amount. This system ensures that miners receive fair compensation for their efforts while incentivizing them to get the best rate for traders since their margin is higher if the exchange rate is. Ring miners also reduce arbitrage opportunities because the underlying protocol should always have the best trade value.
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.
Rinkeby is Ethereum’s testnet as of 2021, and is built for testing smart contracts, network architecture and other new Ethereum technology before it goes live on Ethereum’s 2.0 Beacon Chain. Rinkeby employs a Proof-of-Authority (PoA) consensus mechanism that allows only a small number of nodes to mine blocks on the network as opposed to Ethereum 1.0’s Proof-of-Work (PoW) architecture that allows any node with enough computational power to participate.
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.
A risk curve is a visual depiction of the trade-off between the risk and return for an investment on a graph. Generally, the horizontal x-axis is a measurement of the risk level, while the vertical y-axis is a measurement of the expected return. The curve implies that lower-risk investments plotted to the left might generate a lesser expected return, and that riskier investments plotted to the right might generate a greater expected return. Risk curves can contain multiple data points that represent different asset types or individual investments.
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 consideration specific risk-based parameters). The 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.
In the blockchain industry, a roadmap is a predetermined plan to carry out the short- and long-term goals of a blockchain project using a flexible estimated timeline. For a developing blockchain project, a roadmap should explain the overall goal and long-term vision for the project, while also describing the developmental milestones with a rough timeline to achieve them as the project progresses. The roadmap is also an important metric to potential investors to consider when evaluating a project.
Rococo Relay Chain
The Rococo Relay Chain is the main blockchain built to run Kusama, and is designed to act as the control center behind the Kusama ecosystem. Rococo was built to facilitate the transfer of independent parachains to the Polkadot Relay Chain, as well as to aid in the operation of distinct parachains that might choose to build on Kusama long-term. Rococo’s main objectives are to provide cross-chain interoperability and communication among both internal parachains and external blockchain networks, and to serve as a testing ground for parachain optimization and deployment.
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.
Developed by Sky Mavis, the Ronin sidechain is an Ethereum-linked sidechain on which Axie Infinity operates. Ronin is a scaling solution intended to address issues that occur during times of high network congestion, such as slow transaction confirmations and high transaction fees. Sky Mavis also operates the Ronin bridge, which allows users to move their assets from Ethereum to Ronin.
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.
RSA Public-Key Cryptography
The Rivest-Shamir-Adleman (RSA) encryption algorithm is a public key cryptography, or asymmetric encryption, model that is used for numerous types of data transmission on computer networks and blockchains. Like all asymmetric cryptography models, RSA makes use of a public and private key pair system to encrypt and decrypt the transmission of data. The RSA encryption framework makes use of the factorization of two prime numbers and an auxiliary value to obtain a desired result. RSA cryptography was first developed in 1977 and is named after its three main developers Ron Rivest, Adi Shamir, and Leonard Adleman.
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.
A rug pull is a type of scam whereby a dubious blockchain project is "launched," only for the founding team to run away with investors' funds. Rug pulls typically occur in the decentralized finance (DeFi) ecosystem often via a decentralized exchange (DEX) which enables malicious actors to create a cryptocurrency, list it on a DEX, and pair it with an asset like bitcoin (BTC) or ether (ETH). Then, after a substantial number of unsuspecting investors exchange their ETH or BTC for the listed token, the founders withdraw funds from the liquidity pool, leaving investors holding essentially worthless assets.
Runtime, or execution time, is the final phase of a computer program's lifecycle when the code is being executed through the computer’s central processing unit (CPU). Runtime can also refer to the period of time when a program is running, beginning when the program is executed (or opened) and ending when the program is closed. Generally, when a program is operating in the runtime phase, the application is utilizing Random Access Memory (RAM). Blockchains and computer networks are often designed with a pre-built runtime environment that implements portions of an execution model when needed.
Russell 3000 Index
The Russell 3000 Index is a market-capitalization weighted equity index. The index was founded in and based in Britain but it is used to track the performance of the 3,000 largest publicly held U.S. stocks that make up 98% of the U.S. stock market. The Russell 3000 Index is made up of the large-cap Russell 1000 Index and the small-cap Russell 2000 index. The index launched on January 1st, 1984, and is maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG).
RVN is the native cryptocurrency of the Ravencoin blockchain.
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 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. A sandbox is 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 clients 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 is 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 scaling solution is any mechanism that is designed improve the efficiency and computational output of a Layer-1 blockchain network. Scaling solutions are typically composed of Layer-2 protocols — such as sidechains and off-chain layers — that are designed to increase network transaction throughput and overall speed. There are many different types of scaling solutions including roll-ups, state channels, sharding, network interoperability tools, and more. Two of the most well-known Layer-2 scaling solutions in the blockchain space are OMG Network and Polygon, which are designed to increase transaction speeds on the Ethereum blockchain.
Scalp Trader (Scalper)
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 accomplish 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 them 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 proposed issue is actually a malignant virus or a useless, resource-draining subscription-based service.
Schelling Point (Focal Point)
As it relates to game theory, a focal point or Schelling point is a solution or specific outcome that people automatically choose by default in relation to their surrounding environment. For example, the landscape design of a property is built around select focal points such as a water fountain, statue, and other points of contact that tend to draw attention from the human eye by default. In a blockchain structure this could mean that the attention of the user or designer is naturally directed towards a specific point or several focal points that make up the overall structure.
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 to unlock their device, or run the risk of forever losing the contents inside.
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.
The secondary market refers to the traditional stock market. It is known as the secondary market because before bonds, stocks, derivatives, and other financial instruments are sold on the stock market, they are sold on the primary market. In a secondary market investors exchange assets they already own with each other instead of with an issuing entity like on the primary market. In a broader context, the secondary market is any marketplace that is used to exchange goods or assets that are not used for their main purpose (such as corn for ethanol instead of food production or livestock feed).
Secure Hash Algorithm (SHA)
Secure Hash Algorithms (SHAs) are a family of cryptographic hash functions designed to keep data secure on different types of computer networks and computer infrastructure. SHAs work by transitioning the original data to a hash function algorithm that consists of several unique compression functions and modular additions. There are several SHAs in existence, and many of them were initially designed and built by the National Security Agency (NSA). The Bitcoin network makes use of the SHA-256 hash algorithm that allows Bitcoin miners and the network's underlying consensus mechanism to operate correctly.
Secure Multi-Party Computation (SMPC)
Secure Multi-Party Computation (SMPC) is a subset of cryptography that enables functions to compute in a distributed system across multiple parties, without sharing data among other network participants. SMPC allows nodes within a network to jointly compute a function while keeping the inputs private from other nodes within the network. The process is one of many methods in distributed computing that allows for privacy and security in a blockchain environment.
Secure Proof of Stake (SPoS)
Secure Proof of Stake (SPoS) is Elrond Network’s enhanced version of Proof of Stake (PoS). It enables advanced security and distributed fairness while eliminating computational waste that Proof-of-Work (PoW) systems typically struggle with. The SPoS consensus system achieves high security through a Byzantine Fault Tolerant (BFT)-like consensus methodology that utilizes instantaneous randomized validator selection through the reshuffling of nodes into other shards. To accomplish this, SPoS makes use of Boneh–Lynn–Shacham (BLS) multi-signature technology to randomly select nodes within each shard to achieve validator selection finalization in 100 milliseconds, or 0.1 seconds.
Secure Sockets Layer (SSL) & Transport Layer Security (TLS) Certificate
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. A Transport Layer Security (TLS) Certificate represents 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.
Securitization is the process of pooling an asset or group of assets — typically types of contractual debt — into a security. These can include residential and commercial mortgages, car loans, credit card debt, and other forms of debt, which are packaged, bought, securitized, and sold to prospective investors. Typically, investors are repaid by the principal and interest cash flows from the underlying debt, which are then redistributed as part of the new financing terms. Securitization often comes in the form of mortgage-backed securities (MBS) and asset-backed securities (ABS), among others.
Security as it relates to computing network infrastructure can be an ongoing concern which companies usually seek to address via numerous policies, practices, and procedures that help detect, prevent, and monitor unauthorized access, modification, misuse, or denial of computer network resources. Adhering to strong security guidelines is often critical to maintaining a well-functioning system with reduced susceptibility to data theft by malicious third-party attackers aiming to disrupt, destroy, or modify a computer system.
Security (Financial Asset)
A security in its purest form is any tradeable financial asset like a stock, bond, commodity, or derivative. However, the term varies by geographical location because different jurisdictions use different legal classifications to determine what constitutes a security. The Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and other regional and global regulatory bodies help define securities in their respective jurisdictions. Even some cryptocurrencies are considered securities in different regions. More generally, securities are classified into three types: equity, debt, and a hybrid between the two.
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 analogous 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.
Seed funding, sometimes called seed capital, is a form of funding where an investor invests in a startup in exchange for an equity stake, convertible note stake, or tokenized asset stake in the company. Seed funding is generally considered to be a very early investment to help support a startup until it gets off the ground and starts generating cash flow, or is in a position to obtain further investment capital. Seed funding is often completed by friends and family, seed venture capital (VC) funds, and angel investors, among other funders.
As it relates to peer-to-peer (P2P) file sharing, seeding is the act of uploading previously downloaded content for others to download. A computer connected to a P2P network generally becomes a seed after it has a desired file; multiple seeds with the same file allow a user to download the file much faster than they would be able to from a single party. P2P file sharing via seeding first came to prominence with the sharing of mp3 music files in the late 1990’s — and has since expanded to include the sharing of video files, video games, and computer programs.
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 access to a cryptocurrency wallet or associated private key. The seed phrase matches information stored inside the corresponding wallet that can unlock the private key needed to regain access.
Segregated Witness (SegWit)
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 sell wall is said to occur when a large limit order is placed at a specific price level to sell a large amount of a certain asset. Sell walls can result in a substantial drop in price of the asset, especially if a large amount is sold by a whale or high net-worth individual (HNWI). Sell walls can sometimes be considered a form of market manipulation, when a trader creates a large limit sell order at a certain price, then also submits a large leveraged short position betting that the price of the asset will go down in price.
Semantics (Computer Science)
In computer science, semantics is the mathematical study of the meaning of different programming languages. One of the ideas in programming semantics is that linguistic representations (symbols) depict logical outcomes, while phrases and sets of words interpret different instructional formats for both humans and machines. More simply, semantics describes how different programming languages are interpreted and used by different types of developers or machine-readable systems. In contrast, programming syntax is used to describe the arrangement of words and phrases within a programming language.
The semantic web is a long-awaited version of the World Wide Web that expands on the parameters set by the World Wide Web Consortium (W3C). The semantic web is designed to allow Internet data to become machine-readable, leading to a much richer experience for transacting, data usage, and the sharing of information. For decades, many believed this vision would never be realized. However, the semantic web appears to be gradually emerging — powered by an array of ever-expanding developments in artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), blockchain, and other related technologies.
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-2 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 upgrades 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.
In a computer network context, a service chain — or service chaining as it is often referred to — denotes a specific sequence of actions that are applied to automating traffic and data flow between services in a virtual network. Service chains are also used to optimize the usage of network resources to improve application performance by selecting the best routing path. Service chaining typically makes use of several distinct elements including a service template, virtual network, service instance, and service policy.
Service Layer (Tooling Layer)
The service layer, sometimes known as middleware or the tooling layer, is the portion of the software stack that computing systems utilize to support the functionality of the application layer. In blockchain specifically, the service layer is generally made up of smart contracts, application programming interfaces (APIs), software development kits (SDKs), decentralized oracles, databases, digital identities, and more. Without the service layer, the application layer and the network layer would be unable to interact with each other, rendering the system useless.
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.
The settlement layer on a blockchain network is the portion of the protocol used to settle financial transactions through smart contracts. Settlement via smart contract technology is designed to remove or reduce the role of third-party intermediaries, and thus facilitate a direct trustless exchange between the user and the protocol itself. Automated clearing and settlement on a blockchain network typically take place via an automated market maker (AMM). Specifically, with the increased popularity of derivatives and futures markets lately, investing in blockchain-based derivatives is greatly aided by the ability to execute various types of financial transactions using a settlement layer.
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 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 workload 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 drastically increase network 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 or other type of computer network or database. Its purpose is 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.
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.
ShibaSwap is a decentralized exchange (DEX) currently in development by the Shiba Inu blockchain project. ShibaSwap is designed to create a safe and user-friendly environment to trade cryptocurrencies in a fully decentralized manner. As of early 2021, little has been publicized about how the DEX would differ from platforms already on the market, yet ShibaSwap is currently undergoing security tests, audits, and final updates before an anticipated launch later in 2021.
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.
Short Position (Shorting)
Short selling (also known as "going short" or "shorting") is the practice of seeking to profit from the decrease in an asset’s price (for example, short selling a stock). A short seller sells shares borrowed from a broker. If the price of the share goes down, they can be purchased at a discount and returned to the broker. The short seller can then pocket the difference between the purchase price and the price the stock was initially shorted — or sold — at. However, if the price of a shorted stock rises, the short seller is responsible for the difference and may incur financial losses.
A short squeeze is triggered when a shorted stock is rising in value. This rise in value may be caused by positive financial news or buyers purchasing shares with the knowledge that short sellers must cover their positions. If short sellers don’t close out their positions before the stock price rises too high, they could incur financial losses or even have their positions closed out entirely for a complete loss.
Sidechain (Side Chain)
A sidechain (or side chain) 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. For example, some sidechain solutions allow for the transfer of assets back and forth between multiple protocols like Ethereum and Bitcoin. Other examples of sidechain capabilities include enhancements used for Layer-2 scaling solutions to increase the transaction speeds of the main chain.
Signature-Based Security Program
A signature-based security program is 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 suspicious 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 malware types.
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.
Silk Road was a former online black market that was launched in February 2011, and subsequently shut down in October 2013 by the FBI. Silk Road served as a platform for selling illegal drugs, weapons, and other sensitive commodities and data. The platform relied on the Tor web browser that allowed users to remain anonymous. At its height, the website provided services to over 100,000 buyers, and often accepted payments in bitcoin (BTC). The founder, Ross Ulbricht, received a double life sentence without the possibility of parole for 40 years, though some human rights activists oppose his sentencing.
Simplified Payment Verification (SPV)
Simplified payment verification (SPV) allows for the running of a light node (or light-client node), more commonly referred to as a crypto wallet. SPV allows a crypto wallet user to verify crypto transactions without needing to download an entire copy of a blockchain or even an entire copy of the block containing the transaction the user wants to verify.
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 cell phone provider and impersonating the victim, with the goal of obtaining sensitive personal information about the victim. If successful, the attacker will typically use