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
Algorithm - a
set of mathematical instructions or rules that need to be followed
in problem solving. For example, there exist 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
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
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
Bollinger Bands - Bands
that use historical data in a market to indicate possibly
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; it is not issued by any central authority, rendering
it theoretically immune to government interference or manipulation.
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
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
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). Its value
is strictly established by supply and demand. The US Dollar, British
Pound, Euro, etc. are fiat currencies that 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
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 hash is created by the computers trying to find a suitable hash
out of hundreds of thousands. 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
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
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.