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 Information Dispersal Algorithm (Harmony)
Harmony’s Adaptive Information Dispersal Algorithm is used for segmenting shards of data on Harmony’s blockchain to allow for the faster propagation of blocks together with RaptorQ erasure encoding and other technology. The methodology is a critical component of Harmony’s adaptive state sharding solution.
Adaptive State Sharding (Elrond Network)
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.
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.
The Aeternity blockchain is known for its platform-specific Sofia smart contracts, Fate Virtual Machine (VM) framework, state channel scaling technology, as well as its own decentralized oracle and governance structure. Aeternity is designed for decentralized finance (DeFi), document, contract, invoice, and receipt management, payments, loans, blockchain-based identity, Internet of Things (IoT) blockchain identities and hardware, gaming, fungible and non-fungible tokens (NFTs), and other uses. Aeternity was conceptualized in 2016, raised funding through a token offering in 2017, and launched its mainnet in 2018.
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.
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.
The application layer is made up of the user interface (UI) that is responsible for customer interaction, often via a mobile or desktop application. The application layer also consists of business logic, which is responsible for exchanging certain algorithmic data so that applications are able to function optimally and make use of smart contracts and other mechanisms. The application layer is considered the client-layer or front-end of the system, with the opposite end of the system known as the bank-end or data access layer (DAL).
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.
Arm Virtual Machine (Qtum)
ARM is Qtum’s Virtual Machine (VM), which was developed in Intel's x86 machine language. The x86 Virtual Machine allows developers to write smart contracts in a variety of programming languages including C, C++, Rust, and Python. Qtum previously utilized the Ethereum Virtual Machine (EVM), but created the x86 to expand on its capabilities. ARM is fully compatible with Solidity (the language built for, and used on the Ethereum network), allowing Ethereum developers to seamlessly build applications on the Qtum blockchain.
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 Token (Arweave)
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) (VeChain)
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.
Autonomous Economic Agent (AEA) (Fetch.ai)
An autonomous economic agent (AEA) is a software entity capable of performing actions without external control or input. Once created and given a directive, AEAs can operate on their own behalf — possessing a type of agency. On the Fetch.ai platform, AEAs contain a unique identifier as part of each agent’s wallet, which allows the AEA to transact with the network’s native FET tokens. Among other forms, AEAs may exist purely as software, as an application programming interface (API), or be paired to hardware in the real world (like a thermometer or other type of sensor).
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.
BABE Consensus Mechanism (Polkadot)
The Blind Assignment for Blockchain Extension (BABE) is one of 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 its counterpart, GHOST-based Recursive Ancestor Deriving Prefix Agreement (GRANDPA), is a mechanism for finalizing the state of the blockchain.
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 Hat Computer Hacker
A black hat hacker is a computer hacker who works in a malicious manner. Typically, black hat hackers steal data or commit fraud and perform other illegal activity online. Black hat hackers often work for themselves or with other groups of hackers together to accomplish their goals. Black hat attackers are commonplace in the crypto industry and are generally focused on stealing crypto through various means (such as hacking into user exchange accounts and wallets). Black hat hackers are the opposite of white hat hackers, who are normally hired to perform various tasks that prevent unethical behavior online.
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.
Blake-256 is a specific algorithmic hashing function (a mechanism to create and upload new blocks of data onto a blockchain in a secure manner) used by the Decred blockchain. Blake-256 makes use of the hash iterative framework (HAIFA) as well as the local "wide-pipe" structure introduced by the LAKE hash function and other complex cryptographic hashing mechanisms that help the Decred protocol operate.
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) (ICON Network)
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 (Nano)
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.
Initiated in 2019, Bluesky is a project that hopes to develop a transparent and decentralized social media standard that any social media platform can use. While Bluesky is an independent organization, Bluesky was launched and funded by Twitter. According to Twitter CEO Jack Dorsey, one of his goals is to eventually migrate Twitter to Bluesky’s decentralized protocol.
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.
Byron Phase (Cardano)
Named after poet and politician George Gordon Byron, the Byron Phase is the first of five phases in Cardano’s developmental roadmap. After two years of development, the Cardano blockchain mainnet went live in September 2017 and allowed users to buy and sell its native ADA coin.
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.
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 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 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 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.
Jointly launched by financial technology (FinTech) firm Circle and crypto exchange Coinbase, CENTRE is the creator of USD Coin (USDC), a stablecoin backed by dollar-denominated assets held with regulated financial institutions in the U.S.
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 Foundation 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.
Chunk (Near Protocol)
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.
Founded by Jeremy Allaire, Circle is a financial technology (FinTech) firm and the co-creator of USDC, a stablecoin.
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.
Community Node (Crypto.com)
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
Community Representative Node (C-Rep) (ICON Network)
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.
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.
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
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.
C++ Programming Language
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 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.
Crowdloan (Polkadot and Kusama)
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.
CryptoPunks are one of the most well-known and highly valued collections of non-fungible tokens (NFTs) in the crypto industry. CryptoPunks were released in 2017 on the Ethereum blockchain and are characterized by the cyberpunk and London punk genres. After several years of maturation, many CryptoPunks have been auctioned off for millions of dollars. Apart from a highly sought-after reputation, the collection is verifiably limited to 10,000 punks. CryptoPunks were one of the first ever tokenized collections that initiated the ERC-721 standard for NFTs.
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.
Daedalus Wallet (Cardano)
The Daedalus Wallet is an open-source software wallet for Cardano’s ADA and is supported by all major computer operating systems. It is a hierarchical-deterministic (HD) desktop wallet that gives users more control of how they manage and back-up their funds. Daedalus is also a full node wallet, which gives it good security for a software wallet, as this allows the wallet to be trustless. Other notable features include a customizable user interface and an integrated news feed.
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.
dAppChain (Loom Network)
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 (UX) 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 (Akash Network)
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) (ICON Network)
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.
A deposit contract is a smart contract that allows users to deposit cryptocurrency into a blockchain protocol, often via a validator node. While deposit contracts typically allow users to deposit tokens into a validator node to help maintain the operational efficiency of the network, they can also sometimes be used within a decentralized finance (DeFi) protocol that allows for the use of specific financial instruments (such as staking, lending, and borrowing), enabling users to accrue incentivized token rewards.
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.
Dharma is a decentralized finance (DeFi) wallet built to operate on the Ethereum blockchain. According to the Dharma website, the wallet offers the ability for users to purchase nearly 74,000 different tokenized assets with the help of 55 different decentralized exchanges (DEXs). Dharma offers extremely low fees compared to many traditional centralized exchange and wallet competitors. Dharma also facilitates instant connectivity to any bank account in the United States. The platform leverages solid investment backers including Coinbase, Aave, Y Combinator, Polychain Capital, and others, further solidifying its value proposition in the marketplace.
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.
Digital Signature Algorithm (DSA)
The Digital Signature Algorithm (DSA) is a specialized standardization for the creation of digital signatures that are used within public-key cryptography systems such as blockchains or related computing infrastructure. DSA was standardized by the U.S. Federal Information Processing Standard in 1991 in conjunction with the National Institute of Standards and Technology (NIST). Upon its creation, the DSA standard patent was made available for global use, but it is anticipated that an upcoming update to the standardization may render it deprecated and unusable.
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)