If more than half the computer power or mining hash rate on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means that this entity has full control of the network and can negatively affect a cryptocurrency by taking over mining operations, stopping or changing transactions, and double-spending (reusing) coins.
A place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. A cryptocurrency address can be shared publicly in the form of text or QR code to those who want to send you cryptocurrency.
AED is the currency abbreviation for the United Arab Emirates Dirham.
An airdrop is a marketing ploy in which new virtual currency is sent to the wallets of active members of a blockchain community to promote the new token. Sometimes they are sent for free, and at other times they are sent in return for a small service, such as posting about the new currency on social media.
All-Time High (ATH)
A cryptocurrency’s all-time high is the highest value it has ever reached, usually expressed in USD or GBP terms.
All-Time Low (ATL)
This is the lowest price that a cryptocurrency or digital asset has ever reached.
An altcoin – or alternative coin – refers to any other cryptocurrency launched after Bitcoin. As of early 2020, it was estimated that there were more than 5,000 cryptocurrencies in circulation, and all of them are collectively called altcoins, although some of the more popular altcoins such as Ether and XRP tend to be referred to by name rather than by the ‘altcoin’ tag.
Short for ‘Application Programming Interface’, an API is what allows users to connect with an exchange, make trades or access real-time data. In a nutshell, an API is the set of rules which explain how a pair of applications ‘talk’ to each other.
Arbitrage takes advantage of price differences between exchanges, buying something in one market and selling it on another for profit.
The ask price is the offer price of a token, asset, or currency on the market and is the price at which you want to sell a unit of your holdings.
An atomic swap is a smart contract technology that allows you to exchange one cryptocurrency for another without using centralized intermediaries, such as exchanges.
Authority Masternode Operator
An Authority Masternode is a blockchain’s only node, and must possess a full copy of it. Block producers on the network are selected at random to operate VeChain’s Masternode, and operators are rewarded by the network for validating and producing blocks on the blockchain.
A significant quantity of a specific cryptocurrency is considered a “bag.” How many depends on the definition of the person using the expression. *see Bagholder.
Bearish markets are markets that have negative price movements. Whenever traders say that they are ‘bearish’ about the market, they mean that they expect the prices of crypto to decrease.
A technique played by a group of traders, aimed at manipulating the price of a cryptocurrency. The bear trap is set by selling a large amount of the same cryptocurrency at the same time, fooling the market into thinking there is an upcoming price decline. In response, other traders sell their assets, further driving the price down. Those who set the trap then release it, buying back their assets at a lower price. The price then rebounds, allowing them to make a profit.
This is the price at which you can sell a currency pair. The bid price is always lower than the ask price. In other words, it is the price at which your broker will buy a specific currency pair from you.
Blocks are files in which cryptocurrency data is permanently stored. Blocks are like ledgers or records in a book of transactions. In blockchain, blocks are connected in sequence – in a chain – using mathematical code to ensure the integrity of the chain and to secure the contents of individual blocks from being changed or tampered with.
A blockchain is a list of records (blocks) which are connected with cryptography. Because every block includes data from the block before it, a blockchain is almost impossible to alter.
Blockchain Agnostic Approach
An agnostic approach to blockchain means considering all the various technologies and blockchain capabilities available, rather than focusing on just one. Some blockchains only work with a specific computer language or with specific crypto tokens, currencies, or assets, and anyone who wants to use such a blockchain would have to use the tokens or assets that work with that blockchain and/or learn how to code in the language or languages that the blockchain supports. Blockchain agnostic projects are those that work with different projects, tokens, and assets irrespective of the language or currencies used on that blockchain.
Blockchain-as-a-service (also known as BaaS) refers to third-parties creating and managing networks for blockchain-application-building companies. It allows businesses access to cloud-based software for building, hosting and operating their own blockchain apps.
A block explorer is a blockchain-specific search engine that allows you to search for a particular piece of information on a given blockchain.
Bullish markets are markets that have positive price movements. For instance, the cryptocurrency market in 2017 leading up to the all-time high price of $19,000 for Bitcoin was a bull market. Bullish, on the other hand, is a term used to express expectations that the prices of cryptocurrencies are going to rise.
In Ardor’s ‘parent-child’ architecture, a single chain connects to multiple transactional ones and groups transactions together in a process called bundling.
Burning means removing coins or tokens from circulation as a means to control currency inflation. Coin burns are recorded as transactions on a blockchain, which makes the action immutable.
Canonical Transaction Ordering
Canonical Transaction Ordering (CTOR) is a system for organising transactions in a block based on their transaction IDs. CTOR was implemented on Bitcoin Cash as part of its scheduled hardfork in 2018.
Central Bank Digital Currency (CBDC)
These are the digital version of fiat currency. Known as CBDCs, they use a blockchain-based token to represent the digital form of a fiat currency of a particular nation. Unlike cryptocurrency, a CBDC is centralised; it is issued and regulated by the monetary authority of the country it is issued from.
The amount of a token or digital asset available in the market.
Cloud mining allows a miner to participate in mining remotely, instead of installing and running hardware or software locally. Doing this makes it easier for people or businesses to mine irrespective of location and it can substantially reduce your equipment and energy costs.
A coinbase is a generation transaction’s ‘input’. Because a generation transaction (the first transaction in any block, and the reward a miner gets for mining it) has no parent transaction to incorporate, it can contain any data at all.
Cold storage refers to keeping user assets offline to make them less vulnerable to hacks.
To collateralise an asset, it needs to be backed by another. Whether it’s a private client with currency in an account or a bank proving funds to match those they’re loaning, collateral is a way of adding security to borrowers.
In computing, concurrency means the ability to run more than one task or program at once.
Consensus describes the ‘agreement’ on a given value or network state by different nodes or agents in a blockchain system.
A semi-private blockchain network controlled by a group that works across different organizations.
These are digital assets that use cryptography to create tokens, assets, or cryptocurrencies that can be used for transactions or as securities.
Exchanges are marketplaces where traders can make digital currency transactions. When someone wants to buy or sell a cryptocurrency, an exchange is the fastest way to do it.
A cryptocurrency loan is similar to a traditional loan, except that a borrower uses their cryptocurrency as collateral instead of a physical asset to receive fiat currency (e.g. pound sterling or US dollars) as a loan. The lender provides the assets required for the loan at an agreed-upon interest rate.
A place to store cryptocurrency. Cryptocurrency does not exist in a physical shape or form, so a wallet stores the public address and private keys that allow you access to the currency’s blockchain to make transactions. Most cryptocurrency coins have an official wallet associated with them that is needed to see your balance and move funds. You can think of a cryptocurrency wallet like a bank account that can hold either a single currency or multiple currencies, depending on the type of account you have. Just like some bank accounts can only hold GBP or USD, some crypto wallets can only hold BTC (Bitcoin) or ETH (Ether) or ETH- compliant tokens.
This is the malicious and unconsented use of another entity’s computing power to mine cryptocurrencies. In other words, it involves hijacking another person or entity’s computing to mine cryptocurrency.
DApp is short for Decentralised Application. Built onto a blockchain, DApps function automatically which means developers can use them to make new assets like uncensorable webpages or decentralised autonomous organisations.
A dark pool is a hidden order book which allows users of a currency to remain anonymous.
Decentralised is the opposite of centralised and it refers to systems that do not operate under the control of any single entity or group.
Decentralised Autonomous Organisation (DAO)
The Decentralised Autonomous Organisation (DAO) was an organisation which acted like a fund for venture capital, based on open-source code and without a central governing board. Unaffiliated with any nation state but built on Ethereum, DAO sought to allow users to send money anonymously and anywhere in the world. In exchange, investors got DAO tokens and voting rights. The protocols voted in by DAO’s community (Decentralised Government Protocols) would be automated to skirt human error and ensure fairness. Following a huge hack in the summer of 2016, many exchanges stopped listing DAO tokens. While the DAO doesn’t exist as it was envisioned, the core idea lives on in other projects such as digital currency Dash.
A portmanteau of “Decentralised” and “Finance” which is loosely used to refer to decentralised financial transactions, applications, or investment techniques.
Something is deflationary if it tends – or intends – to cause currency deflation.
Delegated (proof of stake)
By delegating their stake to another user of a cryptocurrency, that second user can vote on the first’s behalf in systems based on Proof of stake consensus.
As a contract signed by two or more parties, derivatives are based on projected future prices of an underlying asset. Depending on whether that asset rises or falls in value, the contract will represent a gain or a loss.
DEX is short for decentralised exchange, which is an exchange without a centralised governing body.
Difficulty adjustment refers to changing the amount of computing power it takes to successfully mine a block in a blockchain. Bitcoin’s difficulty is adjusted every 2016 blocks to keep the time between them equal.
Directed acyclic graph (DAG)
A DAG protocol is an alternative to traditional blockchain technology. DAG transactions are linked directly, which means the protocol can reference multiple blocks at the same time resulting in more transactions per second.
Distributed Denial of Service (DDoS) Attacks
A distributed denial of service or DDoS attack is an attack meant to shut down a network or machine to make it inaccessible for its users. The attack involves flooding the network or machine with traffic or sending it information overload that forces it to crash.
Distributed Ledger Technology (DLT)
Distributed Ledger Technology shares many features with blockchain. As a decentralised database, a DLT is managed by multiple participants and holds records of transactions. However, blockchain’s very structure (cryptographically linked blocks of data) makes decentralisation part of the idea; meanwhile, the company behind a DLT might be highly centralised even if the database isn’t.
Someone who owns a moderate amount of cryptocurrency, in contrast to a whale who owns a lot of cryptocurrency and fish or minnows who own very little cryptocurrency.
With digital currency, there exists the theoretical possibility that someone could copy a token and use it while maintaining the original. Most currencies use technology like blockchain to keep a record of every transaction and thereby avoid the risk of double spending.
This is when a malicious agent sends small amounts of cryptocurrency into either a random or a specific target’s wallet to track crypto movements from that wallet.
Very small transactions that are often executed to flood a network.
Encryption can be thought of as locking up the details of something with a code. Metadata is information recorded alongside a record itself, such as when an action was taken or by whom. Encrypting that data means it can only be accessed by someone with the key – a password, algorithm or equivalent.
EOS is a blockchain-based and decentralised infrastructure for DApps. Users can develop, host and execute DApps on the platform.
ERC-20 is a token on the Ethereum blockchain. It has emerged as a ‘standard’ in many other currencies, and tokens like Maker, Basic Attention Token and Augur are based on it.
Fiat money is declared ‘legal tender’, issued by governments and not backed by any commodity which means it has no intrinsic value (unlike, say, gold). It is in general circulation in a given country or region.
Fiat currencies are traditional currencies, often in the form of money, that are government-issued or backed by a central authority. Fiat currencies have value because the governments that issue them maintain their value and because the people using them agree on their value.
A financial stack is a way of describing the total capital investment in a project, and the way in which its layers depend on each other. Taking 0x as an example, the bottom layer is the blockchain which defines which transactions are true. The second is the exchange layer, which is the basis for economic activity. Above that are ‘financial primitives’, suites of smart contracts. Above that are DApps which allow people to access financial services on the blockchain.
The owner of a small amount of cryptocurrency.
FOMO is cryptocurrency slang that stands for ‘Fear of Missing Out.’ It is often associated with irrational behavior from traders who are concerned that they will miss out on an opportunity and therefore jump hastily into any investment opportunity.
Fork (soft, hard)
Forks occur in blockchain when developers decide that a new protocol is preferable to an old one. When this happens, the blockchain splits in different directions; a hard fork means that both the old code blockchain and one based on new code exist at the same time, with different names and groups of users. A soft fork describes something more like a update, and is adopted by existing users without creating a new blockchain.
Frontend describes the part of a program, website or other digital tool with which the end user interacts.
This stands for fear, uncertainty, and doubt, three conditions that often cloud cryptocurrency markets.
A full-node is so called because it fully validates transactions and blocks. Most full-nodes also accept blocks and transactions from other full nodes before validating them and relaying them to other full nodes in turn.
Before investing in a project or an initiative, you must conduct some research into the project team, the strengths and weaknesses of the proposed solution, growth prospects, and similar indicators. This is known as fundamental analysis.
This term is specifically used with Ethereum, and it is the fee you must pay to successfully conduct a transaction or execute a contract on the Ethereum blockchain. The exact price of gas needed to confirm a transaction is determined by the network's miners. Paying a higher gas fee will help you verify your transaction more quickly and you can therefore send or receive your funds more quickly. Paying a lower gas fee means you will have to wait in the queue for longer before your transaction is verified and approved.
Going long – or taking a long or extended position – is what cryptocurrency traders do when they expect the prices of a crypto asset to rise.
Going short – or taking a short position – is what cryptocurrency traders do when they expect the prices of a crypto asset to decrease.
Having refers to when mining rewards are reduced as more and more blocks of a blockchain are mined.
A hard cap refers to the upper limit of tokens which can be sold during an Initial Coin Offering. It’s therefore directly related to the maximum amount of funding a development team will exchange for their token at that early stage of development. Sometimes, a hard cap can also refer to the maximum number of coins or tokens to ever be issued, a quantity which is decided before the launch.
Hashing is the process of taking a data string of any length and producing an output of a fixed length. Hashing is a one-way function because it’s practically impossible to reverse.
A term used by traders who hold onto their cryptocurrency assets.
Immutability in blockchain refers to the unchangeable nature of its records.
To incentivise something is to make it appealing to undertake. For instance, a crypto exchange might incentivise trading a particular pair by offering lower fees.
Initial Coin Offering (ICO)
Initial Coin Offerings are events wherein new currency developers offer investors the opportunity to purchase coins or tokens before a currency is launched, thereby raising capital for the project.
Initial Exchange Offering (IEO)
This is like an ICO but occurs when an exchange raises funds on its own platform instead of soliciting funds from the outside or on another platform.
Input endorsers are individuals or nodes designated to verify a transaction’s validity in Proof of stake mining.
Interledger Protocol (ILP)
The interledger protocol (ILP) is designed to facilitate payments across multiple payment networks, including blockchains. It is an open-source protocol that connects different global payment systems. The concept was founded by Ripple, with the technology aimed at helping any payer send funds to any payee at speed, at little or no cost, and without the need for both parties to create accounts on the same global payment system.
Know Your Customer (KYC)
KYC is a regulatory obligation for exchanges and other money service businesses that requires them to verify certain pieces of information regarding their users. Generally, KYC has four requirements, which are the acceptance policy, identification procedures, transaction monitoring, and risk management. KYC was initially devised to combat money-laundering.
This is a payments layer on top of the Bitcoin network that is believed to increase transaction speeds and solve the Bitcoin network congestion and scalability issues.
Limit orders only execute once a preset price has been reached, which gives users control by waiting until the market is in their favour before making a transaction.
How much of a token, asset, currency, or cryptocurrency is available on an exchange. The higher the liquidity, the more trades are being conducted, and the more easily you can trade without affecting the market price.
Margin trading (leverage)
Margin trading means borrowing assets from peers or an exchange to increase buying or selling power. As such, the margin is used to create ‘leverage’ in trading.
This is the total value of a cryptocurrency. The value of a coin, asset, or token’s market cap is calculated by multiplying the current price of one unit of the coin, token, or asset by its total supply.
Market makers and takers
Market makers are traders who create orders to be filled on an exchange. Takers are traders who fill those orders.
A market order is an order made at a market’s current price.
Nodes are systems that maintain a network, and master nodes are terminals that can perform special operations such as anonymizing transactions and voting.
Mining is the process of creating new units of a digital currency by verifying transactions. The individuals or businesses that verify and confirm transactions for inclusion in the blockchain are called miners. There are different types of mining. In Proof-of-Work mining, which is what is currently used with Bitcoin and Ethereum mining, miners use computers and special software to solve complex mathematical problems, adding confirmed transactions to the blockchain. They are rewarded for this work with a certain amount of the cryptocurrency they are mining or confirming transactions for.
Mining is the process of verifying transactions and adding them to the blockchain’s digital ledger. Miners are often rewarded in the currency they’re working to verify.
A mining pool is when cryptocurrency miners club together to combine their resources to enhance their processing power. Doing this can enable them to mine faster and they split mining rewards or profits between all participants.
Multi-signature refers to a transaction which requires more than one key to verify, offering added layers of security.
Cryptocurrencies that are not under the restrictions of a single jurisdiction or government are deemed a neutral asset. Coins such as Ripple (XRP) are becoming increasingly attractive as a neutral asset, helping to level the playing field in the payment system for global trade.
Nodes Nodes are computers which make up a blockchain network. They communicate data with each other, and keep a blockchain decentralised by guaranteeing the integrity of the system across multiple locations.
Non-Fungible Token (NFTs)
Fungible means exchangeable. As such, non-fungible tokens are tokens that typically cannot be broken down into smaller denominations and have limits on how they can be transferred or traded. A token representing a custom in-game item can be an example of a non-fungible token.
These are currencies that are mined on one blockchain but work on others, such as different tokens that share interoperability.
These are currencies that are mined on and used on a specific blockchain.
Open-source software is software for which the original code is freely available to share or modify.
Blockchain oracles are third-party software which connect a blockchain to the outside world by feeding information into it.
A platform can be a service, an application, or an exchange.
A privacy coin provides a user with total anonymity when they are making blockchain transactions. There are many privacy coins such as Monero (XMR) that were designed using code that ensures user anonymity at the protocol level.
A private key is a piece of cryptographic information in the form of a string of numbers and letters that you use to access cryptocurrency stored within a wallet. You should always keep your private key private. Anyone with access to your private key can access – and transfer – your cryptocurrency holdings in that wallet to another wallet.
Proof of authority
Proof of authority is a consensus algorithm based on identity as a stake. Instead of staking coins to prove trustworthiness, validators stake their reputations; this makes Proof of authority highly scalable.
Proof of contribution
Proof of contribution is a modification of Proof of work consensus, where mining rewards are scaled up and down depending on a block’s difficulty.
Proof of importance
Proof of importance is a consensus mechanism which works by evaluating nodes via various metrics such as net transfers or vested currency.
This is how a miner on a blockchain network can prove to the network that they have a non-replicable and unique dataset.
Proof of stake
Proof of stake consensus adjusts mining power in accordance with how much of the currency in question a miner holds. It’s thought to be less risky in terms of networks being hacked, as rewards for malicious interference are lower.
Proof of work
Proof of work is the original Bitcoin consensus mechanism. It distributes rewards according to the volume of transactions verified by a miner, making it intrinsically fair. However, it requires huge amounts of computing power which means Proof of work mining is inaccessible to many.
The term pseudo-cryptocurrency can refer to either a cryptocurrency that isn’t decentralised enough to be considered a genuine cryptocurrency, or something that appears to be a cryptocurrency because it has many of the same traits as one but isn’t actually a currency. A pseudo-cryptocurrency can also refer to a token that has an unclear value proposition or use case that may indicate a fraudulent or scam project.
Pump and dump
A pump and dump is when cryptocurrency prices are artificially inflated to create demand from traders, allowing those behind the pump to dump their holdings at a profit.
A ring signature is a type of digital signature to which members of a particular group (a ring) have access. As such, it allows for some degree of anonymity because the validation could have come from anyone in the ring which holds the signature’s key.
A sandbox is a fully operational (but isolated) environment for developers to test new software without real-world regulation or consequences.
These are solutions or add-ons built on or in blockchain networks designed to improve the original, underlying network. The Lightning Network is an example of a second-layer solution for Bitcoin.
Sharding means dividing transactions on the blockchain into smaller groups, which miners can verify in parallel to reach consensus more quickly.
A smart contract is a computer program that is designed to automatically control, record, or perform a transaction according to the terms of the contract. In cryptocurrency, smart contracts are used to reduce fraud, operating costs, and the need for multiple parties to oversee, perform, or approve transactions.
Spot trading is a transaction for immediate delivery of the asset purchased at the current market rate.
Spot trading is a transaction for immediate delivery of the asset purchased at the current market rate.
The difference between a currency pair’s ask price and bid price. Fixed spreads are typically not affected by market changes, but variable spreads can fluctuate based on the market’s liquidity.
Stablecoins are cryptocurrency tokens which peg their value to an external marker such as fiat currency or gold.
A stop order automatically creates an order once an asset’s pre-set price has been reached.
A crypto token is a digital asset which may have wider functionality than a crypto coin. Like coins, tokens reside on their particular blockchain; however, they can represent an asset or utility as well as a store of value.
Trading pairs describe the combinations of currencies or coins which can be directly exchanged.
Unique Node List (UNL)
Most commonly used with Ripple, a unique node list is essential to guard against malicious attacks of its blockchain. A UNL is a list of legitimate transaction validators that seek to process and verify transactions on the Ripple network and not attempt to defraud users. All Ripple transactions require approval from at least 80% of validators on the UNL for them to be verified and placed in the next block.
This is simply a public blockchain.
A validator is a node on a network that validates and/or approves ledger entries and/or block data and transactions.
A whale is a trader or organization that owns or controls a large amount of cryptocurrency, large enough to create unilaterally affect market price.
A zero-knowledge proof describes the idea that someone can prove they know something by sharing its result rather than the calculations behind it. In blockchain, zero-knowledge proofs verify transactions without revealing other details like someone’s identity.