Crypto Vocabulary Expanded

If you have ever looked into cryptocurrency (aside from just googling the word Bitcoin) you are likely to have been met with an onslaught of phrases and expressions that took you for a ride. From advanced technological developments to misspellings to memes to the moon and back, the crypto-verse has truly offered itself to all extremes of language. It does, however, seem only natural that with the invention and introduction of something entirely new into everyday life that a linguistic expansion follows suit. But come on, how can anything less be expected from the first global decentralized infrastructure?

51% Attack – A brute force attack on a crypto network. Conducted by directing more computational power than half (%51) of what the network currently uses, with the intention of manipulating the consensus mechanism (typically for gains made through double spending). Imagine this as a democratic voting procedure – majority always wins consensus.

Address – an alphanumeric string of characters that represent a reservoir/destination where crypto can be sent to and from

AirDrop – A method of distributing cryptocurrency in which market participants do not need to exchange their existing assets for a new one; but rather receive it based on some prerequisite factors (such as holding a parallel cryptocurrency)

Algorithm – Coded instructions or rules that are executed by a computer to -solve problems.

AltCoin – The umbrella term used to define all crypto assets that are not Bitcoin. The Alt simply stands for Alternative.

AML – the acronym for Anti — Money — Laundering. A legal framework that is intended to subvert criminal financial activity.

API – Application Program Interface. A software that basically tells other software’s how they should interact with each other.

Arbitrage – the act of “risk-free” profiteering by trading an asset between multiple different markets.

ASIC – Application Specific Integrated Circuit.

ASIC Miner – mining equipment that is dedicated entirely for the purpose of mining. (think unfair monopolization of the POW systems in crypto-verse)

Atomic Swap– A method employed within crypto networks that allows users to exchange assets directly into other assets directly from their wallets without

BIP – Bitcoin Improvement Protocol.

Bit – a unit of measurement that is computationally represented as a 0 or 1 in binary code. Moreover, it is a unit of account for fractions of a Bitcoin; 1,000,000 Bits is equal to 1 Bitcoin.

BitCoin – founded & released in January 2009, Bitcoin is the first digital currency of its kind & ground 0 for the entire crypto world as we know it. Not to mention, the most widely adopted and famous crypto.

Block – A immutable digital file which stores information regarding any and all activity on the network. Each block has its own timestamp, Merkle Tree hash, digital signatures, and transactions. This structure helps to maintain a chronological sequencing. (Just picture a block is an equivalent to a page in a book).

Blockchain – The software that allows for a decentralized fabric of trust exists. A chronological series of “blocks” that are linked together and act as the spine or backbone of the digital ecosystem.

Block Height – The numeric representation, showing what is the current number of the block being hashed.

Block Reward – The compensation that is paid out by the internal mechanism to keep nodes/ miners incentivized to operate.

Centralized – Owned by and benefited off of by one party. A structure in which the involvement of is guaranteed by subjection to another party which explicitly owns the said object of interest. Think money(politically owned), data (owned by big tech companies), and so on.

Confirmation – validation of a transaction / series of transactions. In the Bitcoin blockchain, each individual transaction must be validated by 6 independent nodes in order to be considered as a true act.

Consensus – a brief, recurring state of the network that constitutes a widespread agreement on a subject. The term used to describe how a network conjugates in order to maintain a distributed anonymous method of guaranteeing the integrity of itself.

CryptoCurrency – A digital/virtual asset that is secured by advanced cryptography and by its nature not owned by any ONE entity

Cryptography – A technique using codes and ciphers to encrypt and decrypt sensitive information, messages or data. The art of privatizing and ousting unwanted actors from information.

DAO – Decentralized Autonomous Organization. A collective of entities that converge on some unified concept and operate as one organism.

DAPP – Decentralized APPlication; the main benefits of decentralized applications are immutability, accountability, anonymity, and enormous bandwidth (not to mention control over personal data).

DDoS – the abbreviation for Distributed Denial Of Service. A cyber attack, in which the malicious actor(s) bombard a server with traffic from multiple devices.

Decentralized – Owned by no one entity. Ownership is spread out to whoever wants to join. Previously only thought to be objects classified as commodities (nobody actually owns gold [once you possess gold you owe nobody nothing for owning it] — {as opposed to a phone which no matter what you attempt to do some part will be monopolized on your needs, including but not limited to: charging it-electricity, using it-service providers, and so on}) and now is possible on a digital layer.

Deep/ Dark Web – the un-indexed outskirts of the internet. Typically accessed through a virtual proxy network, this is the home to the infamous Silk Road.

Deflation – the economic side effect of value accrual; when something is deflationary it is limited in supply and highly demanded, directly cascading into a self-fulfilling prophecy of Price Hike.

Demurrage – a form of penalization implemented into certain cryptocurrency protocols that taxes the wallets of unused assets. Say you hodl 10,000 EOS and don’t want to touch them for 5 years, well too bad for you because your balance will begin to deplete.

DEX – a Decentralized EXchange; the terminology used to quickly address and exchange that is decentralized.

Difficulty – a measure of the computational resources required to solve the hash of the next block. This is the methodology which helps the network maintain a 10 minute block time (adjusted automatically every 2016 blocks).

DLT – Distributed Ledger Technology.

Double Spending – the malicious act of spending the same currency twice by subverting the networks hashrate and mining off-ledger. The entity that has to bear the price of such activities tend to be cryptocurrency exchanges.

Escrow – A practice of recruiting some outside force to help mediate in any transaction; to guarantee compliance on all involved parties ends.

Faucet- typically a website that gives away a minute amount of cryptocurrency for visiting or completing captcha’s.

FIAT Currency – what we know as the political denomination of money(s). Money that is backed by political positioning and global influential strength.

FOMO – Fear Of Missing Out. Commonly regarded as the driving force behind enormous bull rallies in times of bull markets — the huge parabolic explosions we so love (and profit from).

Fork – A network split. Usually happens when there is some necessary software code update that requires ditching the previous copy of the code (Hard & Soft)

FUD – Fear Uncertainty and Doubt. An abbreviation for the terminology used to refer to very dark and unsettling times regarding the future of something. An example would be: fake media propaganda saying that Bitcoin is dead because the Chinese government will ban its mining operations. What happened shortly after? Price went up. What is true today? It has been banned and partially unbanned in China.

Genesis Block – The very first block of the Bitcoin network. Block 1. The Baby block which began the infinite future of finance, Bitcoin. 👶

GPU – Graphics Processing Unit. The hardware device that is needed in order to compute the mathematical hashing process underlying the mining on the Bitcoin Blockchain.

Halving – The procedure of reducing the mining rewards on a blockchain. For the Bitcoin network, this occurs once every 4 years or approximately the time it takes to mine 210,000 blocks. Starting at 50, the Bitcoin reward Halved to 25 in 2012, then halved again to 12.5 in 2016. Coming up, a halving to 6.25! (live countdown timer)

Hard Fork – A complete change to a cryptocurrency’s protocol. Usually a change in some very fundamental aspect of the code (such as the privacy protocol or consensus mechanism).

Hash – a fixed length string representing some mind of input data. In Bitcoin’s case, a hash is created from following a very specific set of instructions and points to previous data.

Hash Rate – The unit of measurement of a network’s processing power.

HODL- a misspelled version of HOLD. Once upon a time, in a forum a cryptocurrency enthusiast

Inflation – An increase in the price level of good relative to its economic standing. For example: if all products in the local deli went up by 20% (milk from 2–2.40, eggs from 1–1.20, bread 1.50–1.80) then that is a likely representation that commodities remain stable and the currency is suffering from severe depreciation.

Inputs – A Reference to the outputs in a transaction that when added up reflect the leftover spendable balance of the correlating address.

KYC – Acronym for “Know Your Customer”. A set of rules laid out by the government for companies to obtain a certain amount of information from their participants.

Laundry – Otherwise known as “mixing services”. A method of enhancing privacy and anonymity. Done by pooling transactions together and shuffling them around with the help of certain ciphering algorithms.

Merged Mining – A form of mining in which one miner is able to spread his computational resources and participate in the mining and discovery of multiple cryptos at the same time.

MicroTransaction- a transaction that is so small it begins to teeter on being unprofitable to be hosted. Historically, it would be a sum which falls under the $1.00 reference point.

mBTC – the bitcoin metric used to reveal balances to the 0.001 (thousandth).

Mining – the process in which nodes compete with each other to verify and publish transactions. For Bitcoin, mining would include compiling all previous block metrics with current ones and trying to solve a super complex computationally demanding puzzle.

Miner – the node/ node operator which chooses to participate in the gamefied/incentivized process of extracting bitcoin and securing its network.

Mining Pool – A group of miners that have unified their computing resources in order to distribute the mining rewards more consistently between its participants.

Minting – rewarding users with newly created coins for their participation in securing the network. More common with Proof-of-Stake cryptocurrencies.

Money Laundering – The illegal act of trying to hide criminally obtained funds through means that cannot be traced. (Politicians favorite buzzword regarding crypto)

Mt. Gox – A Japanese Bitcoin exchange that collapsed due to poor security and fund management in the year 2014.

NFC – Acronym for “Near Field Communication”. A new method of short-range wireless communication which requires minimal power. Just think apple pay tapping of the phone & credit cards)

Node – A computer/device that connects to a cryptocurrency network and helps strengthen the network’s resilience.

Nonce – A (pseudo)random number, generated in order to satisfy the parameters required by the mining and hashing algorithms.

OffChain Transactions – transactions that are not made on the native crypto chains themselves in order to avoid bloating/ congestion.

Orphaned Block – a valid block that has been abandoned by the network due to a fork. Later on, it is adopted back onto the chain to which it originally belonged.

Open Source – Software that available to the public at no cost, typically found on github.

Output – the part of a transaction which contains instructions for sending crypto.

Paper Wallet – a form of cold storage of cryptocurrency, where the private keys and the receiving address is printed out.

P2P – Peer-to-Peer. A structure of data distribution and information sharing where there exists no point of failure outside of the participant.

PreMining- A term used to describe a metric of a new blockchain related to the genesis formation. Bitcoin was not premised, rather it began its operations at 1; other chains such as BTCP was only available after 5% of the total supply was already extracted into the private hands of the organizers.

Private Key – one of the two Keys involved with all public cryptographic interactions. The private key is the key which proves ownership of an address, do not share this with anyone!

Public key – the key that is used in order to represent the counterpart of ownership of an address. This is the key that is shared with the public in order to receive funds at an address as well as backtrack the correlating addresses history.

QR code – Quick response code. A pictographic depiction of some API that can be machine scanner read.

Remittance – A sum of money that is sent over borders as gift or payment.

Satoshi – the most micro unit of splitting a bitcoin, representing 0.00000001 of a Bitcoin.

Satoshi Nakomoto – The pseudonym/ entity that created and release Bitcoin + Blockchain + Distributed Ledger technology to the masses 🤘

Scamcoin/Shitcoin – the terminology created by the decentralized crypto community to refer to projects that are (as the name would have it) garbage/ dead end fakes.

Script – a hashing process that can be implemented into proof-of-work cryptocurrencies in order to modify the protocols consensus parameters.

Seed – The private key used in deterministic systems. The birth of randomness on a digital scale. The reason bitcoin can only be touted as being pseudo-random is that the seed from which the blockchain’s genesis block was birthed can actually be mathematically identified (with advanced enough

Smart Contract/Self Executing Contract – algorithms that facilitate and enforce obligations without any outside intervention. Stored on the blockchain itself, a smart contract is an unalterable agreement that has specific logic operations akin to a real-world contract. Once signed, it can never be altered.

SegWit – Segregated Witness. a soft fork improvement to the Bitcoin code which helps the network handle more transactions.

Side Chains – Blockchain ecosystems that are designed to function in a 2-way feed. Essentially children chains pegged to the “Motherchain” for on and off-ramping. (Think Ethereum Tokens which are then converted as collateral to obtain DAI stablecoins)

Signature (Digital Signature) – a mathematical process that is utilized in order to prove digital ownership. Designed to be collision resistant, the methods currently employed are as effective as a regular biological fingerprint.

Silk Road – while just a distant memory now, the silk road was a permission-less marketplace hosted in the depth of the Deep/Dark Web. Notoriously used to facilitate drug transactions, credit must be given in its role to jump start and perpetuate the role and need for something like Bitcoin.

SPV – Simplified Payment Verification. Typically to utilize the blockchain for payments, the using client would need an entire copy of the chain. This allows mobile clients to make payments without the needing to have a copy of the entire blockchain.

Stale Block – A block that has already been solved. Usually a term more popular among the techie side of crypto enthusiasts, it simply refers to a block that can no longer reward miners.

Soft Fork- A change network protocol that is backward compatible; so nodes are not by any means forced to upgrade and still benefit from its implementation.

Taint – The measure of correlation between two addresses. While this is a term likely not to be commonly encountered, it is just an attempt to track a coin’s history.

TCP/IP – Transmission Control Protocol / Internet Protocol. The standard the devices today use to interact with internet communication.

Testnet – an ecosystem where developers can freely interact with the code of a blockchain to experiment around with it.

Timestamp – the time metric data merely serves the function of proving when something has happened.

TOR- The Onion Router. An anonymized web surfing tool that is commonly used to access the deep/dark web — It helps circumvent any censorship that browsers / service providers may hang on us.

Total Supply – The absolute maximum amount of a cryptocurrency that can be produced.

Transaction Fee – the fee that a user decides to pay(not necessary) in order to have their transaction tended to. This hierarchical structure is used in order to boost the ecosystems inner competitive gears and incentivize more actors to strengthen the network’s integrity.

Vanity Address – An address on a crypto network that is formatted with the desired content. The equivalent of a license plate.

Virgin Bitcoin – also a lesser popular term, used to address a bitcoin that has been mined but not spent.

Wallet – a storage faculty for cryptocurrencies. A software that allows users to store their cryptocurrencies in a UI/UX friendly way. Abundant in formats; paper wallet, web wallet, desktop wallet, hardware, and mobile wallets.

White-Paper – a report or guide that is used to inform the public of a project’s specifications. The equivalent of a business prospectus or plan.

ZeroCoin – a project initially aimed at Bitcoin to help guarantee its network’s privacy feature.

Zero Confirmation transaction/ Unconfirmed transaction – A transaction that has been relayed to nodes in the network, but has not yet been incorporated into a block.