Crypto Dictionary

Abstract
A summary of a larger written written document. Abstracts are common in the beginning of cryptocurrency whitepapers and technical documents to briefly describe the entire document.

Anti-Money Laundering or AML
A set of laws designed to prevent converting illegally earned money into what appears to be legally earned money. Laundering just means cleaning something that is dirty. Money laundering is the process of making illegally earned money (dirty money) appear to be legally earned (clean money). Anti-money laundering rules and laws are designed to make it difficult for criminals to launder their money.

Airdrop
Is the process of freely distributing a new cryptocurrency to people hopefully creating more demand.When a new cryptocurrency is created, it needs to gain users. One way of doing this through an airdrop. The group issuing the airdrop hopes new users will begin researching and sharing the coin creating more demand.

Altcoin
Any cryptocurrency except for Bitcoin. “Altcoin” is a combination of two words: “alternative Bitcoin” or “alternative coin”

Algorithm
A series of steps that will solve a problem. In cryptocurrencies, algorithms are used to hide and reveal information.

Blockchain
a system (ledger) in which a record of transactions made in cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.

Block Height
The number of blocks in the chain between any given block and the very first block in the blockchain.

Block Reward
Reward for maintaining the blockchain. Maintaining the blockchain requires computer power and electricity or risking a large amount of cryptocurrency as a guarantee that you are trustworthy. Anyone doing this work is eligible to earn a reward in digital money and sometimes brand new, virgin cryptocurrency.

Crypto
Short for cryptography or cryptocurrency. Crypto comes from the Greek word meaning “hidden”.

Cold storage
A type of digital data storage that takes longer to access and quite often is not connected to the Internet. Also known as a “cold wallet”.

Confirmation
A type of proof that a transaction was recorded and verified on the blockchain. The higher number of confirmations, the more trusted that transaction is.

Decentralized
A type of system where elements are spread out by some means, with decisions made from many points, and independence is preserved across the network. Decentralization is actually a combination of 3 parts making up a triangle.
Structure: A system located in multiple places across a space, is a decentralized structure.
Management: A system managed by my many equally powerful units, with no single ruling unit is a decentralized management.
Independence: A system made up of independent units working together for a common purpose is a decentralized independence.

Decentralized Application or dApp
A software application that has its technology running publicly on a network of computers.

Distributed ledger
A system of independent computers that are simultaneously recording data. With distributed ledger technology, identical copies of the recording are kept by each computer.

Double-spending
A form of deceit using digital money where the same money is promised to two parties but only delivered to one. If completed successfully, one of the two recipients will not be paid.

ERC-20
A proposed set of rules and standards for creating new cryptocurrency using Ethereum as the foundation. ERC-20 describes crypto made with Ethereum technology that follow these rules and standards.

Gas price
A very small amount of ethereum and it is multiplied by an amount known as gas limit to pay people to record transactions and do other software actions.

Genesis Block
A blockchain is a digital book of records where each new page made in that book is what is known as a “block”. Those blocks are connected in one group known as the blockchain. The first block in a blockchain is known as the genesis block.

Hard Fork
Hard fork is defined as a decision to make a permanent change to the technology used by a cryptocurrency.

Hash Rate
The speed at which a computer can take any set of information and turn it into letters and numbers of a certain length, known as a “hash”. Hash rate is also the combined hash speed of every computer in the network. Hash rate is calculated at hashes per second (h/s).

Initial Coin Offering or ICO
A time-sensitive process when a new cryptocurrency or token generally becomes available for the public to invest in.

Know Your Customer [KYC]
A customer identification process required by law for financial organizations.

Node
Any computing device (computer, phone, etc.) that is participating in a network by way of receiving and sending data. Cryptocurrencies are supported by a network of computers each keeping a digital record of the data known as a blockchain. A computer, a phone, or any other computing device that can receive, transmit, and/or contribute to the blockchain is a node.

Peer to peer or P2P
A connection between two or more computers that allows them to directly share information, files, or other data.

Private key
A string of letters and numbers known only by the owner that allows them to spend their cryptocurrency. NEVER SHARE your private key unless you want someone else to be able to take all of your money!

Proof of Work or PoW
A process for achieving consensus and building on a digital record known as a blockchain. With PoW, users compete with each other via their computers to solve a puzzle.

Proof of Stake or PoS
A process for achieving consensus and building on a digital record known as a blockchain. With PoS, users put up a collateral of tokens (or a “stake”) and use a process that is more energy and cost-efficient than previous solutions.

Satoshi Nakamoto
The founder and creator of bitcoin, the most popular cryptocurrency. The smallest amount of bitcoin (0.00000001) was also named after him, it is called a Satoshi.

Smart contract
An agreement to exchange goods, services, or money that will automatically execute, without third party oversight, so long as established criteria are met.

Transaction Fee [TX Fee]
Transaction fee is defined as payment made to people who do the work of keeping an accurate, up-to-date blockchain ledger, by verifying the correctness of transactions.

Whitepaper
A collection of marketing documents that are designed to explain a complex product or service and persuade investors into believing in its benefits. The purpose of a white paper is to create interest, educate, and sell a concept to potential buyers. With crypto, white papers are created as one of the very first documents to explain what it is, what makes it unique, describe the technology behind it, and the philosophy or mission. Unlike typical sales material, a white paper is more conservative. It is less about sounding special, and more about providing facts, statistics, and explanations. They are often 6+ pages long and include a title, table of contents, introduction, pages describing the problem and solution, and a conclusion.A good white paper builds trust in potential buyers.

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