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51% attack - One of the ways to disrupt a cryptocurrencies blockchain is to control more than 51% of the network. This requires massive computing power and while possible on paper, the resources, coordination and finances required to do this would make it almost impossible to achieve. In this case, a 51% attack is only theoretical.
Address – a string of alphanumeric characters that represent a destination or origin from when and to cryptocurrencies are sent – all addresses are unique.
Algorithm - a set of mathematical instructions or rules that need to be followed in problem solving. For example, there exists various algorithms to solve a rubix cube. If the algorithm is applied correctly, the outcome is that the cube is solved.
Altcoin - (Alternative coin) - A collective name given to all other cryptocurrencies that are not bitcoin. These include Ethereum, Golem, MOnero, Ripple, Dash, Litecoin, Dogecoin, Reddcoin, StratisCoin, Blackcoin, yocoin and MANY MANY others. There are over 700 recognized cryptocurrencies, tokens and assets today.
ASIC - A computer processing chip that is designed to perform 1 function and 1 function only. Most modern computers have multi-thread CPU’s that allow the computer to complete a range of tasks all at the same time, whereas an ASIC computer focuses only on 1 function. In the crypto space, an ASIC computer is used to mine Bitcoin.
ASIC Miner - A computer that contains an Application Specific Integrated Circuit chip that are used to mine for bitcoins. They may connect directly to a computer or network wirelessly or with the use of an Ethernet cable.
Bear Trap - This is a manipulation of a stock or commodity by investors. Traders who “set” the bear trap do so by selling stock until it fools other investors into thinking its upward trend in value has stopped, or is dropping. Those who fall into the bear trap will often sell at that time, fearing a further drop in value. At that point, the investors who set the trap will buy at the low price and will release the trap—which is essentially a false bear market. Once the bear trap is released, the value will even out, or even climb.
Bear market - A market that is in a downtrend (prices are going down) The term relates to the direction that a bear attacks. (Bears attack by swiping downwards with their claws.)
Bit - A unit of information expressed as either a 0 or 1 in binary notation. Bit is also used regarding Bitcoin as a common unit used to designate a sub-unit of a bitcoin - 1,000,000 bits is equal to 1 bitcoin. This unit is more convenient for pricing tips, goods and services.
Bitcoin - Bitcoin was founded in 2009 and is the most widely used crypto currency. The mysterious Satoshi Nakamoto, whose true identity is unknown and has yet to be verified, supposedly created it. A centralized government or agency does not control Bitcoin. The Bitcoin network is designed to mathematically generate no more than 21 million Bitcoins and was designed regulate itself to deal with inflation.
Block - Blocks are digital files where data pertaining to a cryptocurrency network is permanently recorded. A block records some or all of the most recent transactions that have not yet entered any prior blocks. Thus a block is like a page of a ledger or record book. Each time a block is ‘completed’, it gives way to the next block in the blockchain. A block is thus a permanent store of records, which, once written, cannot be altered or removed.
Blockchain - A series of linked databases, which form the backbone of the Bitcoin backbone. It is a digital ledger in which transactions made in bitcoin are recorded chronologically and publicly.
Block explorer – a search engine for a cryptocurrency, block explorers allow you to query transactions, addresses and other information.
Block height – the number of completed blocks in the blockchain.
Block reward - The coins that are paid to the computer (or pool of computers that finds a working hash to complete a block in the mining process of cryptocurrencies.
Bollinger Bands - Bands that use historical data in a market to indicate possibly volatility.
BTC - BTC is a common unit used to designate one bitcoin.
Bull Market - A market that is in an uptrend. (Prices are going up) The term relates to the direction in which a bull attacks (horns low to the ground, a bull strikes upwards)
Confirmation – All transactions on the blockchain need to be verified by all nodes – each verification of the transaction is called a confirmation.
Consensus - Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that databases are exact copies of each other.
Crypto Currency - A cryptocurrency is a digital or virtual currency that uses advanced cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; any central authority, rendering it theoretically immune to government interference or manipulation, does not issue it.
Cryptography - The process of using codes and ciphers to encrypt and decrypt sensitive information, messages or data.
Dapp – decentralized application that exists on a blockchain. Dapps are renowned for having proven 100% uptime.
DAO - Decentralized Autonomous Organizations – A blockchain technology inspires organization or corporation that exists and operates without human intervention.
DDoS - Abbreviation for Distributed Denial of Service. A DDoS is a cyber attack utilizing many different computers to tie up the resources of a website or web service. Some Bitcoin exchanges have come under DDoS attacks.
Double Spending - The act of spending the same bitcoins twice. The blockchain plus bitcoin mining exist to confirm all transactions and to prevent such fraud.
Exchange - A central platform for exchanging different forms of cryptocurrencies and. Typically, bitcoin exchanges are used to exchange cryptocurrency for traditional monetary units.
Fiat Currency - Fiat currency is money that a government has declared legal tender by fiat (order or decree). It is not backed up by any physical or tangle commodity (something that can be bought or sold). It’s value is strictly established by supply and demand. The US Dollar, British Pound, Euro, etc. are fiat currencies, which became so after the abolishment of the gold standard.
FOMO - Fear Of Missing Out - A mindset that causes people to purchase a stock based on the premise that they may miss out on a good thing.
Fork – a split resulting in a new (updated) version of the original cryptocurrency. Happens when there is a major update that requires a new version of software to be implemented.
FUD - Fear, Uncertainty and Doubt - Rumors and misinformation that can have an affect on a stock or a crypto that causes people to sell their holdings. Sometimes distributed deliberately to cause confusion and lend an advantage to those who start the spread of information.
Genesis Block - The first block in the blockchain.
Halving - Every 4 years, the “reward” for successfully mining a block of bitcoin is reduced by half. This is referred to as “Halving”. For instance, the initial reward for mining a Bitcoin Block was 50 Bitcoins, which was reduced to 25 in 2012 after the first “halving” and half again to 12.25 bitcoins after the next halving. This mechanism ensures a finite amount of coins are created for a crypto currency. The actual time span is not 4 years, but rather the amount of time taken to mine 210 000 blocks.
Hard Fork - A complete change to the protocol used for a particular cryptocurrency. It is a complete divergence from the previous software version of the Blockchain for a cryptocurrency, and nodes running previous versions will no longer be accepted by the newest version.
Hash - A hash is a mathematical process that converts inputted data into a fixed length string, usually 32 characters. In the world of bitcoin, a hash must follow certain rules and formats and is formulated using very specific information, and must contain the previous hash and block information within itself together with some “dummy data” (a nonce) to produce a randomized hash. Not all hashes will be accepted. Even the slightest modification of the original input data would result in a completely different hash. A hash is “rehashed” thousands of times over per second until a suitable hash is found. The computers trying to find a suitable hash out of hundreds of thousands create the hash. Once a hash is created, it is then stored at the end of the blockchain. The computer that is responsible for submitting a working hash is allocated a reward in the form of bitcoin.
Hash Rate - This is the measuring unit of the processing power of the whole Bitcoin network. The network must make difficult mathematical operations for the purpose of security. For example, when we speak about a hash rate of 1 Th/s, it means you are producing 1 trillion calculations per second.
mBTC - A bitcoin metric of 1 thousandth of a bitcoin (0.001 BTC).
Mining - Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle or algorithm. The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards. The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin. (Source: Investopedia.com)
Node - A computer that connects to a cryptocurrency network and helps to verify the Blockchain’s accuracy.
Private Key - A secret series of letters and numbers kept by the owner of the crypto currency that allows it to be spent by the owner. This should be kept secret at all times.
Proof of Work, Proof of Stake - Proof of work and proof of stake are 2 algorithms for reaching consensus across a blockchain - To ensure the safety, security, incorruptibility and anonymity of cryptocurrencies being traded without the need for a centralized database or bank, there needs to be a way prove your work (PoW) or prove that you have a stake (PoS)
Public Key - A unique address consisting of numbers and letters that you give out to receive crypto currencies.
Satoshi - The smallest unit of a bitcoin currently available (0.00000001BTC).
Segwit (Segregated Witness) - an improvement to the core way Bitcoin handles transactions in order to make the Bitcoin network approve more transactions with each block.
Soft Fork - A change to the operating protocol for a cryptocurrency that is backward compatible, so older nodes that don’t upgrade will still function.
Wallet - A storage facility for cryptocurrencies. There are a number of different kinds of wallets; web wallets, desktop wallets, hardware wallets, mobile wallets, paper wallets and brain wallets.