Definitions
This page lists short definitions for many of the terms that you'll frequently come across in everything from social media communities to technical whitepapers. If you'd like to learn more about any of these in greater depth, you can google them or read Steve's book.
Accidental Fork - This happens when two or more blocks are "simultaneously" mined with the same block height, forking the block chain unintentionally. This typically occurs when two or more miners find blocks at nearly the exact same time, although it can also happen as part of an attack. When an accidental fork occurs, one of the forks will almost immediately become dominant through consensus support from network participants, and the non-dominant fork(s) or orphans will fade from use. Although it is common for more than one block to be found "simultaneously" to create such a fork, and network latency can possibly exacerbate the problem, the situation usually resolves almost immediately, with the one being heard first by the network ending up as the "winning" fork.
Airdrop - Occurs when some amount of a coin/token is distributed to the community at no cost, usually to encourage wide distribution and perhaps generate interest in the coin/token. Sometimes a crypto project will airdrop to its own holders, and other times a project will airdrop to holders of a different token. For example, if ExampleCoin wants to raise attention and gain a diverse userbase, it could decide to airdrop 500 ExampleCoin tokens to every person who holds at least 10.0 Ethereum tokens on a certain time/date. The Ethereum blockchain would be analyzed (a snapshot taken) at that exact time, then the developers at ExampleCoin could give 500 ExampleCoins directly to each valid Ethereum holder, by depositing the ExampleCoins directly into their Ethereum wallets (this assumes that ExampleCoin is an ERC-based token that can share a wallet with ETH). Airdrops don't happen too frequently, and when they do, their dollar values usually aren't very significant.
Altcoins - This slang (often shortened to "alts") originally referred to any cryptocurrency or cryptoasset that was not Bitcoin. As the market matures, it is possible that larger projects will start to be referred to as large-cap and mid-cap cryptos (referring to the size of each project's market capitalization), and the term "altcoin" may start to be used more exclusively with lesser-known projects that have smaller market caps. For example, Ethereum is a major and notable project, and may not deserve to be called an altcoin anymore. For now though, most people refer to all cryptos other than Bitcoin as altcoins. An "altcoiner" is someone who invests in or uses crypto, but who prefers to avoid Bitcoin.
Air-Gapped - A computer or other device which is not connected to the internet, making it much less prone to hacking attempts.
Anti Money Laundering (AML) - Regulations that have been put into place by governments to help detect and report suspicious activity relating to any number of financial activities that might include money laundering, terrorist financing, securities fraud, and market manipulation.
API Call - This happens when an API (a software routine) is sent a request to fetch data from another application.
Application Programming Interface - A software intermediary that allows two applications or programs or websites to talk to each other. It is a set of routines, protocols, and tools for building software applications. It is a set of clearly defined methods of communication between various software components.
Application Specific Integrated Circuit (ASIC) - A type of integrated circuit that is designed and created for a specific application or purpose. Compared to a general-purpose integrated circuit, an ASIC can improve processing speed because it is specifically designed to do one thing as efficiently as possible. An ASIC is usually smaller and more efficient than a general purpose integrated circuit, and uses less electricity. The disadvantage of an ASIC is that it can be very expensive to design and manufacture, particularly if only a few units are needed. ASIC's can be designed for everything from portable audio recording units to image processors in digital cameras, but the common use in the cryptoasset ecosystem is for mining certain types of cryptocurrency, especially Bitcoin and Litecoin. Because ASIC's are all custom-made and thus only available to the company that designed them, they are considered to be proprietary technology. Using ASIC's to mine crypto is much more efficient than using CPU's or even GPU's. This has led to some criticism because ASIC miners have come to dominate the mining industry for certain types of crypto. Other types of crypto (such as Vertcoin) have advertised that they are ASIC resistant, by virtue of planning to immediately change mining algorithms if an ASIC is developed for that coin (the intent is to allow users with "just" a GPU to be able to participate in mining for the project). A big risk of owning an ASIC (beside the high cost) is that if the mining algorithm is changed, the ASIC will probably become useless.
Arbitrage - Buying a security in one market and simultaneously selling it in another market at a higher price, profiting from a temporary difference in prices. This is considered riskless profit for the investor/trader. For example, if ExampleCoin can be bought on Bittrex for $7.25 per coin, and people are buying ExampleCoin on Bithumb for $7.80 per coin, it would be possible to almost simultaneously buy on Bittrex and sell on Bithumb for a profit of $0.55 per coin. Of course, other traders around the world usually notice when there is an easy opportunity for arbitrage, so prices start to balance out as the market slowly reacts and eliminates the arbitrage opportunity.
Arise Chikun - A meme (from the Aqua Teen Hunger Force cartoon) that supporters of a crypto (especially Litecoin) like to share when their crypto is trading listlessly and they want it to rise in value. See the meme page on our website for more background information.
Astroturfing - Masking the sponsors of a message (or organization) to make it appear as though it originates from and is supported by a members of a grassroots community.
Atomic Swap - The exchange of one cryptocurrency for another cryptocurrency, without the need to trust a third-party. The objective of atomic swaps (also known as atomic cross-chain trading) is to create interoperability between coins/tokens relating to various cryptoasset projects. Atomic swaps are still a technology in development, however, several simple atomic swaps have been performed, such as between Vertcoin and Litecoin. One group of cryptoassets which should all be able to cross-participate in atomic swaps would include Bitcoin, Bitcoin Cash, Decred, Litecoin, Monacoin, Particl, Vertcoin, and Viacoin, due to their very similar coding frameworks.
Automated Clearing House (ACH) - An electronic network for financial transactions (based in the United States), which processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll payments, and vendor payments. They frequently tend to be part of a long-term series of transactions between related parties (as opposed to wire transfers, which are usually for infrequent, one-time transfers).
Average Down - To buy additional shares of a security (one which the purchaser already holds) when the price is lower than the purchase price of the earlier securities. This lowers the overall average purchase price per unit.
Bad Actor - A hacker, swindler or some sort of con artist, or any person who has malicious intentions. Also commonly referred to as a malicious actor.
Base Reserve - See "Minimum Balance."
Bear - Someone who is pessimistic about the direction of the markets, ie. anyone who thinks that asset values and/or trading prices will decrease.
Bearish Sentiment - When investors or analysts believe that the price of a security will decrease over time.
Black Swan - An event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict. Black swan events are typically random, infrequent, and unexpected. Some examples of geopolitical black swans would include the falling of the World Trade Towers on 9/11, and the falling of the Berlin Wall in 1989. Some examples of financial black swans would include the Black Monday crash in October of 1987, or the stock market crash of 1929.
Block - One record within a blockchain. A block will usually contain a hash pointer link to the previous block in the chain, a time stamp, and transaction data (if there were any transactions included in that block). Depending on how the blockchain is set up, blocks can contain additional fields of data such as spurious messages, random numbers, or many other types of information.
Blockchain - A list of records (called blocks) which are linked and secured using cryptography. Each block typically contains a hash pointer (a link to the previous chronological block), a timestamp, and transaction data. Many blockchains grow continuously, regardless of whether or not new information is added (transactions being processed on the chain), so it is possible to have blocks which don't contain any transactions. By design, blockchains are inherently resistant to modification of the data. A blockchain is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way." For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network which collectively adheres to a protocol for validating new blocks. The inability to edit/modify/delete information that has been included in the blockchain means that the blockchain is immutable (unchangeable). Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which would be almost impossible because it would require collusion of the majority of network participants.
Breach - A security incident that results in unauthorized access of data, applications, services, networks and/or devices, by getting past their security mechanisms or defenses. A data breach can refer simply to unauthorized access, or also to outright theft and redistribution.
Bulletproof - This is a feature in Monero.
Bull - Someone who is optimistic about the direction of the markets, ie. anyone who thinks that asset values and/or prices will increase.
Bull Run - When prices remain in a general rising trend for a period of days, weeks, or months.
Bullish Sentiment - When investors or analysts believe that the price of a security will increase over time.
Burn - A coin burn (or token burn) occurs when coins are sent to an address or wallet from which nobody is able to retrieve them at the current time, and from which the coins can never be recovered in the future. The coins are therefore lost permanently. This is accomplished by having a deposit address that either has no private key, or that had a private key which was somehow destroyed in a manner that nobody can ever retrieve it. The most common reason to burn existing coins is to increase the value of the remainder of that type of coin. This assumes that the implicit market value of a project (not the approximate market cap based on current trading price of the coin/security) will remain unchanged when a coin burn happens, therefore, the total value of the project will be distributed among a lower number of assets, and each asset will therefore be worth more per unit. If a coin burn happens, it is usually a publicized event initiated by the developers of the project, and a large number of coins/tokens are slated for "destruction" (being made inaccessible) at a specific time and date. Burning of coins also takes place commonly on a much smaller scale in the "Proof of Burn" systems being used by a handful of cryptoassets.
Buy Wall - A buy wall on an exchange is a large order(s) at a certain price that acts as an obstacle, in order to try to restrict the trading price from going down too far. If the buy wall is large enough, there may not be enough sellers to overcome it and push the market price lower. For instance, if a certain large holder wants to support the market value of ExampleCoin at $1 because it has been dropping lately, they might put in a buy order for ten million units of ExampleCoin at $1. It would then take a very large number of disillusioned sellers to eat through the buy offer at that level. This technique, intended to support the security's price for a period of time, can be useful to avoid a psychological/pricing rout which might cause even more damage to a large holder's portfolio in the long term.
Candlesticks - A style of financial chart used to describe price movements of a security, derivative, or currency. Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter or exit a trade. The study of candlestick charting is complex, as there are dozens of patterns that can be identified, and not all patterns give clear signals about market direction. It would be possible to spend months studying candlestick analysis.
Casper - Casper is a Proof of Stake system which is designed as one possible long-term solution for scalability in Ethereum. There would be other advantages to using Casper on Ethereum (as opposed to the current Proof of Work algorithms): Casper would help improve decentralization, enhance economic security, and most importantly, it would be energy efficient.
Central Processing Unit (CPU) - The electronic circuitry within a computer that carries out the instructions of a computer program by performing the basic arithmetic, logical, control and input/output operations specified by the instructions. The CPU is basically the brain of a computer.
Centralization - The opposite of decentralization. Centralization is the concentration of control of an activity or organization under a single authority. Centralized platforms require all data to pass through a singular point. Information can't be sent or received without it going through that single point (which is often a server or hub).
Chain - Short for Blockchain.
Changelly - A trading service which facilitates exchanges between digital currencies. The service offers a wide range of digital currencies to buy and sell but does not provide conversion to or from traditional (fiat) currencies. Changelly aggregates and suggests the best currency rates among the largest crypto trading platforms. Do extensive research before attempting to use Changelly. Many users have reported alleged unresolved problems with this service. We feel that buying and selling crypto on a major licensed exchange is always the safest way to trade. Always avoid gimmick sites, eBay, Craigslist, and other similar methods of purchasing cryptocurrencies. Your money will be safest if you use the top ten globally ranked exchanges.
Churn - In traditional marketing, the churn rate (also known as the rate of attrition) is the percentage of subscribers to a service who discontinue their subscriptions to that service within a given time period. For a company to expand its clientele, its growth rate (as measured by the number of new customers) must exceed its churn rate. When it comes to securities, churn is sometimes be used as a reference to the general turnover in ownership of securities or coins. For example, let's say that going into June of 2018, there are a total of 37,000 Vertcoin holders worldwide. Then there is a period of consolation for two months. During those two months, two thousand Vertcoin holders sell all their holdings and exit the Vertcoin market, but three thousand other people enter the market by buying Vertcoin. That "turnover" in ownership is the churn during the consolidation period. Churning also has a separate technical meaning in terms of securities trading, namely, excessive trading by a broker in a client's account, done principally to generate commissions. This type of churning is an illegal and unethical practice that violates SEC rules and securities laws.
Cipher - A method of hiding words or text with encryption by replacing original letters with other letters, numbers and symbols.
Ciphertext - Text or written information that has been encrypted.
Cloud Mining - Setting up a virtual computer online, using services such as Amazon's AWS, and tasking it to mine cryptocurrencies.
Coblee - Refers to Charlie Lee, the lead developer of the litecoin project.
Coin Burn - See "Burn."
Cold Wallet - A wallet of any type (be it physical, software, or paper) that is not connected to the internet.
Collar - In traditional stock markets, a collar is an options trading strategy that is constructed by holding shares of the underlying stock while simultaneously buying protective puts and selling call options against that holding. The puts and the calls are both out-of-the-money options having the same expiration month and must be equal in number of contracts. However, in more colloquial terms, a collar can sometimes refer to a tight pricing range that a stock is temporarily trading in due to the presence of large buy and sell walls on either side of the range. For example, if ExampleCoin is trading on an exchange that has a huge buy wall at $5.50 per coin, and another huge sell wall at $6.00 per coin, some people will say that there is a price collar in place between $5.50 and $6.00. The market price won't likely drop below $5.50 because someone is willing to buy a lot, and probably won't rise above $6.00 because someone (possibly the same entity trying to "make a market") is willing to sell a lot. See also the definition of Market Maker.
Colored Coins - A class of methods for associating real world assets with addresses on the Bitcoin network. Examples could be deeds, stocks, bonds or futures. The technology could also be used to track and register intellectual property assets. Although Bitcoin was originally designed to be a currency, its scripting language allows it to store small amounts of metadata on the blockchain, which can be used to represent asset manipulation instructions. The advantage of using Bitcoin's blockchain as the backbone leverages Bitcoin's strengths, such as immutability, non-counterfeitability, ease of transfer, robustness and transparency, thus allowing asset manipulation with unprecedented security and ease. In principle, one can represent asset manipulation data on other blockchains (such as Litecoin), or could use other types of cryptoassets with smart contracts to perform the same function. The term "Colored Coins" is usually associated with implementations that specifically use the Bitcoin blockchain, and which don't issue an auxiliary coin.
Command Line Interface (CLI) - A means of interacting with a computer program where the user (client) issues commands or requests to the software by entering lines of text (command lines). The program which handles the interface is called a command language interpreter, or shell. The text-based interface of a CLI was the traditional means of data entry into a computer for decades after punch-cards stopped being used. Nowadays, it is not common to see a CLI used for interacting with software (unless you're talking to coders and IT specialists who are very comfortable with their machines). Graphical user interfaces (GUI's) are more commonly used in the latest modern operating systems.
Commit - A term used in coding and data management, which means to make a set of tentative changes permanent. After new code is tested and audited, if the developers think it is ready to be introduced into the mainstream product, it gets a commit to become part of the official code for the project.
Consolidation - Describes the movement of a security's price within a well-defined pattern of trading levels. Consolidation is generally regarded as a period of indecision, which ends when the price of the asset moves above or below the prices in the trading pattern. During a consolidation phase, a security is neither continuing nor reversing a larger price trend. Consolidated securities typically trade within limited price ranges and offer relatively few trading opportunities until another pattern emerges. As an example, a crypto may slowly rise from $1 to $5 during August and September, then during October through December it might trade during a tight range of between $5 and $6 for the entire three months. Suddenly, in January it starts moving up (or down) significantly from that range. In this example, the trading during October-December, when it floated between $5 and $6, was the consolidation phase. During the consolidation phase, it is common for a number of holders of the security to sell to new entrants. In that case, the consolidation phase begins to create a new "base" price (average cost base) at which a large part of the market invested. The consolidation phase may also called the congestion phase in some markets. A consolidation phase after a period of rapid increases often allows the market to "catch its breath" and evaluate whether the security is priced fairly.
Crowdsale - See "Initial Coin Offering."
Crypto - Slang shorthand for cryptoasset or cryptocurrency. Most people use it as shorthand for cryptocurrency, but since that's a bit of a misleading term in itself, based on the way it is currently used, you should probably think of the word "crypto" as being shorthand for cryptoassets of any type.
Cryptoasset - The term cryptocurrency frequently gets misused to encompass all types of "coin-like" or "token-like" digital assets. However, a more appropriate term for this would be cryptoasset. Cryptoassets can be broken down into several subcategories, including cryptocurrencies (the pure currencies such as Bitcoin and Litecoin and Ripple), crypto platforms (such as Ethereum, Ark, and Neo), and crypto projects, which often use utility tokens (such as Golem, Siacoin, and OmiseGo). There are also some additional categories for grouping cryptoassets, such as StableCoins.
Cryptography - Cryptography is a method of storing and transmitting data in a particular form so that only those for whom it is intended can read and process it. Cryptography originally related to creating and breaking codes in written form and in radio transmissions, but in today's world, cryptography is most often associated with scrambling plaintext (ordinary text, sometimes referred to as cleartext) into ciphertext (a process called encryption), then back again (known as decryption).
Cryptojacking - Occurs when a website has an embedded cryptocurrency mining code that makes use of visitor resources without informing them. The process makes the user's machine run more slowly as it ties up system resources (especially CPU cycles and memory).
Cryptosphere - The overall ecosystem that encompasses all activities that take place in the various types of cryptocurrencies, crypto platforms, and other crypto projects. You could call it the cryptoasset "industry" or the cryptoasset "field" or the cryptoasset "market," but in reality, the cryptosphere is a slang term that encompasses all those and more.
Cryptocurrency - This term frequently gets used incorrectly. Technically, a cryptocurrency is a type of cryptoasset that specifically acts or is intended to act purely (or almost purely) as a type of digital currency, rather than as a smart contract or development platform, or as a security token for a project. Some examples of cryptocurrencies include Bitcoin, Litecoin, Vertcoin, Dash, and Ripple.
Daemon - A computer program that runs as a background process, rather than being under the direct control of an interactive user. It typically waits to be activated by the occurrence of a specific event or condition.
Dark Net Market (DNM) - A commercial website on the web that operates via darknets (anonymous or hidden networks) such as Tor or I2P. They function primarily as black markets, selling or brokering transactions involving drugs, cyber-arms, weapons, counterfeit currency, stolen credit card details, forged documents, unlicensed pharmaceuticals, steroids, and other illicit goods, in addition to the normal sale of legal products.
Death Spiral - A theoretical catch-22 situation for a PoW cryptocurrency whereby the current difficulty level is set to be fairly high (due to significant historical hashing power devoted to the network), but due to a recent significant drop-off of hash power committed to the network, new blocks become very slow/difficult to mine. This condition can create a negative feedback loop of sorts: Because new blocks are difficult to mine, more hashing power leaves the network, which means that new blocks are mined even more slowly. The system might grind to a halt entirely if the death spiral is not stopped somehow (such as by an adjustment to the difficulty level, to make it easier to mine again).
Decentralization - The opposite of centralization. Decentralization allows the transfer of decision making power and assignment of accountability away from a single administrative center(s) to other locations. The value of decentralization in cryptoassets is that if an asset is not under a centralized authority, then it becomes harder for any specific entities (especially governments or hostile actors) to control the project. With a decentralized project, change can only be effected through consensus.
Decentralized Autonomous Organization (DAO) - The DAO was a digital decentralized autonomous organization and a form of investor-directed venture capital fund, which became notorious due to an Ethereum hack in 2016. The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises. It was instantiated on the Ethereum blockchain, and had no conventional management structure or board of directors. The DAO was crowdfunded via a token sale in early 2016, setting a record for the largest crowdfunding campaign in history. In June 2016, users exploited a vulnerability in the DAO code to enable them to siphon off one third of The DAO's funds to a subsidiary account. On July 20th, 2016, the Ethereum community decided to hard-fork the Ethereum blockchain to restore virtually all funds to the original contract. This was controversial, and led to a fork in Ethereum, where the original unforked blockchain was maintained as Ethereum Classic, thus breaking Ethereum into two separate active blockchains (each with its own cryptocurrency). The DAO was delisted from trading on major exchanges such as Poloniex and Kraken in late 2016. Many people were critical of the hard fork as they pointed out that it did not conform to the tenets underlying a truly decentralized platform. Other people supported the fork as a necessary action to preserve the reputation of the Ethereum project.
Decentralized App (DAPP) - A DApp is any software or application that has its backend code running on a decentralized peer-to-peer network, instead of running on one specific computer or server. This eliminates a point-of-failure risk. Even if some of the network peers go down, many other peers are still able to provide the code for the app to keep functioning.
Decentralized Exchange (DEX) - A crypto exchange in which control of the exchange is decentralized, rather than being maintained by a single entity. A properly created decentralized exchange significantly reduces the chance of users being scammed by malicious actors. The drawback of decentralized exchanges is that they do not offer the ability to trade between fiat currencies and crypto, which means that they cannot act as gateway exchanges.
Delegated Byzantine Fault Tolerance (dBFT) - A type of consensus protocol used in certain Proof of Stake projects such as the Ark platform. The consensus part of the Delegated Byzantine Fault Tolerance protocol occurs through a "gamified" form of block verification among professional node operators. All of these professional nodes are appointed by ordinary nodes through a delegated voting process (in Ark's case, there are 51 nodes or delegates). Each professional node broadcasts its own version of the blockchain to the network. If 66% of the other nodes agree with the information, consensus is achieved. Should this threshold not be met, a different professional node is appointed to broadcast its blockchain version until consensus can be established. This type of system is not a completely decentralized system, but it is not completely centralized either.
Delegated Proof Of Stake (DPOS) - Delegated Proof-of-Stake (DPOS) is the fastest, most flexible, most efficient, and most decentralized consensus model available. This method implements a layer of technological democracy to offset the negative effects of centralization. Basically, everyone who holds tokens on a network gets to vote for delegates, with one vote for each token held. A number of delegates (sometimes called Witnesses) are thus elected to act as representatives for the network, similar to a house of parliament acting on behalf of citizens. The key point is that voting is an ongoing process, and since there are only a certain specific number of top delegates that get to participate in governance of the system, it is possible at any point for voters with enough influence to move a delegate out of the key top ranking group. Delegates are therefore incentivized to act on behalf of the community and their voters. Some crypto projects that use DPOS include Ark, Lisk, EOS, Steem, and BitShares.
Digital Currency Initiative (DCI) - A group at MIT that focuses its research and development upon cryptocurrency and its underlying technologies.
Directed Acyclic Graph (DAG) - A mathematics and computer science construct, which is a finite directed graph with no directed cycles. It consists of finitely many vertices and edges, with each edge directed from one vertex to another, such that there is no way to start at any vertex "v" and follow a consistently-directed sequence of edges that eventually loops back to "v" again. Equivalently, a DAG is a directed graph that has a topological ordering, characterized by a sequence of vertices such that every edge is directed from earlier to later in the sequence. DAG's can model many different kinds of information. The most well-known DAG in the current cryptoasset space is "The Tangle," a DAG used by the Iota project.
Distributed Ledger - A collection of replicated, shared, and synchronized digital information which is spread across multiple sites, countries, or institutions. There is no central administrator or centralised data storage. It is basically a database or collection of records, all of which have been verified as accurate by group consensus, which are stored on a peer-to-peer network that can extend around the globe.
Distributed Ledger Technology (DLT) - Another name for distributed ledgers and blockchain technology.
Distributed Network Architecture (DNA) - The types of systems used in non-centralized computing networks. Cloud computing is a type of distributed network. The internet is a type of distributed network. Telecommunications networks and grid computing networks are types of distributed networks.
Distro - Computer science slang for a "distribution," ie. a version of a program, app, or software package. It frequently refers to different versions of the Linux operating system, but can also refer to other software.
Dollar Cost Averaging (DCA) - An investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the price of the security. The investor purchases more securities when prices are low and fewer securities when prices are high.
Doxxing - To search for and publish private or identifying information about a particular individual on the Internet, typically with malicious intent. A very good common sense security protocol is not to Dox yourself on a public forum, ie. don't provide personal information which makes it easier for bad actors to identify who you are in real life.
Dread Pirate Roberts (DPR) - A character from a book/movie called "The Princess Bride". This name was used as a pseudonym by Ross Ulbricht, an American former drug trafficker and darknet market operator, who was best known for creating and running the Silk Road website from 2011 until his arrest in 2013.
Dry Powder - Funds (in fiat) which are kept "on the sidelines" in an exchange, so if a particular security drops significantly in price, you have the ability to take advantage of that dip immediately without needing to go through the process of adding funds to the exchange.
Due Diligence (DD) - Comprehensive research and analysis of a business/project/product, which should be undertaken by a prospective buyer, especially to establish the value, risks, and potential profit of purchasing that asset. Crypto investors should always do their due diligence before investing into a project, so they understand exactly what they're getting themselves into, and to ensure that they don't put funds at risk without knowing risk factors involved. Reading comments from anonymous users on 4chan and Reddit does not qualify as professional due diligence. Be prepared to read whitepapers, review websites, read articles and blogs, enter into debate on social media, and study technology/coding (if possible) to ensure that your due diligence and research is of the highest possible standard. It's your money that you're putting at risk.
Dust - Tiny fractions of coins sitting on exchanges (or in wallets) that are too insignificant to be used, either because there isn't enough value there to cover the transaction fee, or because the exchange has minimum value requirements for trades. For example, if you have 0.00002346 ExampleCoin remaining after a specific trade, and that amount is worth the equivalent of 1.6 cents, the exchange probably won't let you do anything with it. Unfortunately, there aren't a lot of ways to sweep up this dust, so it tends to clutter up some peoples' accounts on certain exchanges.
Encoded Listener - An application built using the Ark platform, to aid in SmartBridge communication. An Encoded Listener node is a hub for listening to SmartBridge transactions. Any trading entity (such as Changelly, Shapeshift, Coinbase) can set up an Encoded Listener node, in order to help the network. In fact, anyone at all who wants to help the network may be able to set one up. In exchange for providing this service, they will be able to collect transaction fees for passing data or exchanging currencies via SmartBridge.
Encryption - The process of converting information or data into a code, especially to prevent unauthorized access.
Escrow - A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction. The intent of escrow is that the third party be an independent and unbiased facilitator to the transaction, to ensure that neither of the two main parties to the transaction are cheated. For example, in an online sale, a buyer and seller may not trust each other, but they may trust a specific third party such as a public escrow agency. The buyer gives the funds to the escrow agency, and the escrow agency doesn't release the funds to the seller until the buyer notifies the escrow service that they received the goods/services relating to the transaction. This way, there is no risk to the buyer that the seller will failure to deliver the goods/services (because the seller won't receive money until they've done so), and there is no risk to the seller that the buyer won't pay for the goods/services (because the funding is already sitting with the escrow agent who is ready to pay the seller once the seller's obligations have been fulfilled). An escrow situation is still not absolutely bulletproof. There have occasionally been scams with escrow agents colluding with one of the parties in the transaction. However, escrow almost always allows a buyer and seller who don't trust each other to complete a contract with very little risk that either side will be cheated.
Exchange - A business/entity/institution/organization that allows people to buy and sell various types of assets or securities (such as stocks, bonds, foreign exchange currencies, crypto assets, etc.). Traditionally, exchanges were real-world bricks & mortar institutions, although in modern times, all traditional exchanges also have online extensions. Aside from informal person-to-person meet-ups and gatherings to exchange cryptoassets, the vast majority of crypto trading is facilitated by online systems.
Explain Like I'm Five (ELI5) - To put something into layman's terms, or to "dumb down" the explanation so someone who is very unfamiliar with the topic can still understand the concept.
Exploit - Any software, data, or a sequence of commands (code) that takes advantage of a bug or vulnerability, in order to cause unintended or unanticipated behavior to occur on any type of computerized software or hardware.
Extended Verification Module (EVM) - A security interface feature for some Linux computers that can help to secure the kernal against tampering/hacking.
Faucet - The name given to any website or app which gives away free cryptocurrencies (usually in very tiny amounts). Although these faucets aren't intended as a way for visitors to become rich for free, they can serve a useful function to give users very small amounts of cryptos to play with while experimenting with setting up wallets, etc. Some faucets are sponsored by holders of cryptocurrencies who got into that particular crypto very early in the game, when that particular crypto was very inexpensive. Other faucets are supported by the advertising on their pages.
Fear Of Missing Out (FOMO) - A feeling of apprehension that arises from a belief that others might be having rewarding experiences from which oneself has been excluded, either inadvertently or by choice. In cryptoasset investing, an investor will sometimes see that a particular project is suddenly appreciating in value for some reason. Due to a "fear of missing out" on a chance to make some money, they impulsively invest in the project (often with less research than they should have performed). FOMO often causes an impulsive investor to invest at a "less-than-optimal" point on a pricing curve. If you are going to invest in cryptocurrencies, your best chance for success is to remain disciplined and rational, and make sure that you do a large amount of research before ever investing in any project.
Fear, Uncertainty, & Doubt (FUD) - This acronym/phrase refers to a disinformation strategy used in sales, marketing, public relations, talk radio, politics, religious organizations, and propaganda. FUD is generally a strategy to influence perception by disseminating negative and dubious or false information, in an attempt to discredit something or to foster uncertainty and disbelief. In the traditional stock market world, "bashers" are people who attempt to discredit companies or stocks through a campaign of negative statements and opinion. Fudders or Fudsters take the same approach, especially within the world of crypto. This is not new slang that is particular to crypto. The term originated more than a century ago.
Fiat - Traditional money, ie. nationalized currencies such as the US Dollar, the Canadian dollar, the Euro, the British pound sterling, the Japanese Yen, the Chinese Renminbi (Yuan), and so on.
Fill - To have an exchange order met and completed by an opposing buyer/seller. Market orders almost always get a fill immediately, but for limit orders, the person who placed the order generally has to wait until an opposing trader meets his/her financial terms.
Flappening - A theoretical future point in time at which Litecoin switches places with Bitcoin, taking over the largest position in the cryptocurrency world in terms of market cap. Bitcoin currently has a very large dominance within the cryptocurrency markets, so it is possible that it will always retain its dominance, and the flappening may never happen. This is a play on words for "flippening" which relates to the "Arise Chikun" meme for Litecoin.
Flippening - The theoretical future point in time at which some type of cryptocurrency (perhaps Ethereum) switches places with Bitcoin, taking on the largest position in the cryptocurrency world in terms of market cap. Bitcoin currently has a very large dominance within the cryptocurrency markets, so it is possible that it will always retain its dominance, and that the flippening may never happen.
Forging - Forging is a process that is fairly similar to mining. However, forging is what happens in a Proof of Stake system, and Mining is what happens in a Proof of Work system. In Proof of Stake, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e. the stake). Once the creator of that next block is chosen, the creator is the one who "forges" or creates the block. Mining is a "random probability" process, with people competing to find the next block, but the process of forging means that once the creator is chosen, there is no competition anymore because the creator is the only entity allowed to make the block.
Fork - A software fork occurs when there is a change in the underlying programming protocol, resulting in the "forking" or split of the original blockchain. This usually results in the creation of a new coin. There are different types of forks such as hard forks, soft forks and accidental forks.
Fundamentals Analysis (FA) - A method of evaluating a security in an attempt to measure its basic intrinsic value, by examining related economic, financial and other qualitative and quantitative factors. This analysis relates to the strength of the security and company or project that it represents. In traditional markets, close examinations of income statements and balance sheets would come into play, along with other factors such as cash flow analysis, predicted payback periods on projects and ROI, etc.
Funding - To process of adding funds to an exchange, ie. to deposit traditional fiat currencies (such as $USD or Euros) into an exchange, so you can subsequently use that money to buy cryptocurrencies. Technically speaking, you can also fund an account with crypto, although most people think of funding in terms of fiat.
Fungibility - The property of a good or a commodity whose individual units are essentially interchangeable. For example, gold is fungible since one kilogram of pure gold is equivalent to any other kilogram of pure gold, regardless of whether it is in the form of coins, ingots, or in other states. Gold can be melted down, and if that happens, nobody can tell one specific ounce from any other ounce. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and traditional fiat currencies. Fungibility refers only to the equivalence of each unit of a commodity with other units of the same commodity. One important characteristic of money is that it be fungible. This is one weakness shared by almost all cryptocurrencies. Because the blockchains for various cryptocurrencies contain an immutable (unchangable) public ledger of all transactions in the currency's history, then cryptocurrencies are not perfectly fungible. For example, if the government discovered that certain Bitcoins were used in connection with a crime, then those particular Bitcoins could become "tainted." The government could take efforts to find the holder of those particular coins, and there could be negative ramifications for someone who was discovered as being the person who holds them. It is not possible to just swap your tainted Bitcoins for other Bitcoins, because there is still a permanent public record. Therefore, blockchain currencies with public ledgers are NOT completely fungible.
Game Theory Optimized (GTO) - Game theory is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. Originally, it addressed zero-sum games, in which one person's gains result in losses for the other participants. Today, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals, and computers. Optimization is the action of making the best or most effective use of a situation or resource.
Gas - Any usage token associated with a blockchain-based smart contract development platform. Two good examples of platforms that use gas are Ethereum and Neo. For Ethereum, the network uses very small amounts of the Ether token itself (symbol ETH) as a gas token. For the Neo project, there is a separate gas token which is appropriately called Gas (symbol GAS). In terms of the gas token on the Neo platform, GAS is the token used to pay for all the service fees on the blockchain (service fees are different than transaction fees, and transaction fees on Neo are free). Any company that desires to register or change assets on the blockchain will have to acquire GAS to pay for the service fees. The service fee for registering or changing assets will be distributed proportionally to all NEO holders, so GAS is never destroyed.
Gateway - A specific category of exchange that allows a person to deposit traditional fiat money into the exchange in order to purchase crypto assets. Some exchanges do not allow the deposit of fiat, and on those exchanges, you have to deposit Bitcoin or other cryptocurrencies into the exchange to be able to start trading. Within the US market, Coinbase and Gemini have traditionally been known as the main gateway exchanges, and Bittrex was an example of a non-gateway exchange that did not accept traditional fiat US dollars for the first several years that it was in operation. You would think that every exchange would want to be able to accept fiat for trading, but accepting fiat usually involves dealing with a huge number of government and banking regulations, which is why some exchanges like to keep things more simple and avoid trades with fiat currencies.
Genesis Block - The first block in a blockchain.
GitHub - A web-based collaboration platform that lets developers all around the world work on projects simultaneously. Watch this video for a demonstration.
Golden Nonce - Any nonce in a proof-of-work system which results in a hash that "solves" the current block.
Gox'd - To become the victim of a hack, particularly one in which your cryptocurrency gets stolen. This is in reference to the large hack that shut down the Mt. Gox Bitcoin exchange in 2014. Another similar sounding but completely unrelated hack is when a person get dox'd, which refers to their identity and personal private information (addresses, phone numbers, social security numbers, banking info, etc.) getting shared on the internet or with other hackers.
Graphical Processing Unit (GPU) - A computer chip or processor that is designed to specialize in display functions. Graphical Processing Units render images, animations and video for the computer's screen. GPUs are often located on separate cards which can be plugged into the motherboard on a computer. Some GPU's are chips that are embedded right into the motherboard at the factory, or coupled with the CPU of the computer. Because GPU's are very good at performing incredible amounts of fast transactions (measured in terms of their hash rate), they are often tasked to perform complex mathematical tasks that a computer is asked to do. The mining of cryptoassets in any Proof of Work system is usually a complex mathematical task that is ideal for GPU's. GPU's can often "mine" cryptocurrencies much faster than a CPU can. The most popular GPU's on the market today are Nvidia's line of "GeForce" GPU's. A less common brand, but one which still has a significant market share, is AMD's "Ratheon" line.
Graphical User Interface (GUI) - A type of user interface that allows users to interact with electronic devices or apps or software through graphical icons and visual indicators, instead of having to use text-based user interfaces or typed commands in a command-line interface (CLI). A GUI is usually significantly more user-friendly than command-line interfaces, especially for people who are less familiar with computer technology.
Green Coins - Coins which do not use energy-consumptive Proof-of-Work algorithms as a means of mining or maintaining the security of their network.
Halvening (or Halving) - This event only occurs with certain cryptocurrencies. Some examples include the Bitcoin family, Litecoin, and Vertcoin. The halvening for those projects occurs approximately every four years and signifies a reduction in the rate in which new coins are released. When a halvening happens, there is a decrease in the number of coins given to a miner as a reward for mining a block. Bitcoin underwent a halvening in 2016, and at that time, the block reward dropped from 50 coins per block to 25 coins per block. When a halvening happens, there is no effect upon the current supply of the currency, however, going forward, the inflation rate (generation of new coins) is cut in half, which in theory makes the currency slightly more valuable (or to be more precise, inflation does not reduce the value as quickly). When a halvening happens, miners suddenly realize that their long-term mining revenues are cut in half, which means that their profits (revenues less expenses) are cut even more (on a percentage basis). This has the effect of driving hash power out of the network to other, more profitable coins to mine. Block difficulty algorithms will also start adjusting for the lower hash rate, making it easier for the remaining miners to mine blocks. The mining power on the network will eventually come to a new equilibrium.
Hard Fork - A radical change to a blockchain protocol that makes previously invalid blocks/transactions valid, or vice-versa. It requires all nodes or users to upgrade to the latest version of the protocol software. A hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version. This essentially creates a fork in the blockchain, with one path which follows the new, upgraded blockchain, and another path which continues along the old path. Generally, after a short period of time, those on the old chain will realize that their version of the blockchain is outdated or irrelevant and quickly upgrade to the latest version. A hard fork can be implemented to correct important security risks found in older versions of the software, to add new functionality, or occasionally to reverse a large group of transactions (this happened once after an Ethereum hack with the DAO project).
Hash - A term used commonly in computing. A hash (noun) is the output of a computation or calculations on a computer. Hash can also be used as a verb, where "to hash" means the same as "hashing" or "performing the hash function." When you consider a hash to be an object, it is usually a specific type of data on a computer, such as an alphanumeric string or an integer or a real number. A hash can have a defined size, length, or range. For example, a hash in one particular computing environment may be mandated to be a 27 character long alphanumic string where all letters must be lowercase. Another option could be that a particular hash could be required to be a 16-bit integer, which means an integer between the values of 0 and 65535.
Hash Function - A computing process which analyzes input(s), and then outputs a string or number which is based specifically upon rules or mathematical formulas that were applied to the input(s). The input objects are usually members of basic data types like strings, integers, or bigger ones composed of other objects like user defined structures. The output (regardless of the exact type) is called the "hash." Some examples of hash functions used in various cryptoasset mining protocols include CryptoNight, Equihash, Lyra2REv2, SHA256, and NeoScrypt.
Hash Rate - The number of times a specific hash function can be computed per second. The hash rate is typically expressed in hashes per second, or h/s. Remember that various prefixes can qualify the hash rate: "k" stands for kilo (thousand), "M" stands for mega (million), "G" stands for giga (billion), and the prefix "T" stands for tera (trillion). So a computer performing 2.73 Mh/s is performing 2,730,000 hashes per second, or taking 2.73 million different inputs and calculating the appropriate corresponding outputs, every second. Be aware that different hash functions can result in different hash rates, depending upon the complexity of the calculations in the hash function. For example, a given computer and GPU might be able to return 14.7Mh/s of the Lyra2REv2 function, but only 2.19Mh/s of the CryptoNight function, because the functions are of different complexity.
Hodl - A meme that means "hold" or "to hold" cryptocurrency for the long term. "I'm hodling" means that you're not selling your crypto, often proclaimed when the market price is dipping or in a correction. Visit the memes page on our website for a link to see where this particular spelling originated. Interestingly, it is also a good acronym for "Hang On for Dear Life."
Honey Pot - In traditional InfoSec terminology, a honey pot is a decoy computer system that is set up in order to trap hackers, or to track unconventional/new hacking methods. Honey pots are designed to purposely engage and deceive hackers and identify malicious activities performed over the Internet. Multiple honey pots can be set on a network to form a honey net. With respect to cryptocurrencies, the term has often become perverted to also refer to any sites used by scammers to lure investors in an attempt to defraud them. In such a case, a better term would [sometimes] be "watering hole."
Hot Wallet - A wallet of any type (be it physical or software) that is connected to the internet.
Immutability - This happens when an object is characterized as being impossible to change. It is desirable for a blockchain to have immutable records/blocks, so that everybody knows that nobody has ever had the ability to go into blockchain records to edit, change, or falsify the information contained therein.
Independent Management Architecture - Provides a framework for server communications. By this, we mean how servers talk to other electronic technology. This is heady computer stuff, move right along.
InfoSec - The field of study/practice relating to information security, or the protection of digital assets.
Initial Coin Offering (ICO) - An unregulated and controversial means of crowd-funding via use of cryptocurrency, which can be a source of capital for start-up companies. In an ICO, a percentage of the newly issued cryptocurrency is sold to investors in exchange for legal tender fiat or other cryptocurrencies (Bitcoin, Ethereum, etc.). The term may be analogous with 'token sale' or crowd-sale, which refers to a method of selling opportunities for participation in an economy, giving investors access to the features of a particular project starting at a later date. ICO's may sell a right of ownership or royalties to a project, in contrast to an initial public offering (IPO) in traditional markets, which sells a share in the ownership of the company itself. The coin in an ICO can be considered to be a symbol of ownership interest in an enterprise. ICO's can be used for a wide range of activities, ranging from corporate finance to charitable fundraising to outright fraud. The US Securities and Exchange Commission (SEC) has warned investors to beware of scammers using ICOs to execute "pump and dump" schemes, in which the scammer talks up the value of an ICO in order to generate interest and drive up the value of the coins, and then quickly "dumps" the coins for a profit. However, the SEC has also acknowledged that ICO's, "may provide fair and lawful investment opportunities." The UK Financial Conduct Authority has also warned that ICO's are very high risk and speculative investments, are scams in some cases, and often offer no protections for investors. Even in the case of legitimate ICO's, funded projects are typically in an early and therefore high-risk stage of development.
Internet of Things (IoT) - The network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and network connectivity, which enables these objects to connect and exchange data. Each thing is uniquely identifiable through its embedded computing system, but is able to inter-operate within the existing Internet infrastructure. Experts estimate that the Internet of Things will consist of about 30 billion devices by 2020.
Invisible Internet Project (I2P) - A network layer that allows for censorship-resistant, peer to peer communication. It is a decentralized anonymizing network built on similar principles to Tor, but which was designed from the ground up as a self-contained darknet. I2P was built with open source tools and is designed to run traditional internet services including email, IRC and web hosting.
Jinn Processor - A type of general purpose ternary processor, which uses a three-state architecture rather than the traditional two-state binary that most processors have always used.
Key Logger - A type of malware that is secretly installed on your computer, then discretely records all your key strokes and sends them all to a bad actor. The hacker can therefore see everything you type, which includes all the website URLs you enter, the emails you write, and most importantly, private keys to crypto wallets that you might be typing (or cutting/pasting) into your computer.
Know Your Customer (KYC) - The process whereby a business identifies and verifies the identity of its clients. The term is also used to refer to banking and anti-money laundering regulations which govern these activities. This phrase/acronym is often used simultaneously with anti-money laundering, for example, "The Bittrex Exchange just shut down several thousand accounts worldwide because the exchange was trying to ensure compliance with KYC and AML regulations."
Lambo - Short for Lamborghini. It is the dream of some crypto investors to be able to make enough money to be able to ostentatiously flaunt their new wealth by spending it on one of the world's most expensive supercars.
Ledger - In general terms, a ledger is a collection of financial accounts of a particular type. Within the cryptosphere, the public ledger is also known as the block chain. It is a public record of transactions in chronological order. Its structure is time-stamped such that transactions can be proven to have been carried out by the owner of the coins/tokens at that time, and ownership of any particular coins/tokens (or fractions thereof) can always be tracked back through a series of transactions to the original creation of the asset being utilized on the ledger. Many blockchain ledgers are publicly viewable, although there are some (such as for a privacy coin like Monero, or for private blockchains created by a corporation for confidential internal use) which cannot be seen/explored by the general public (or in the case of Monero, by anyone). Note that there is also a professional scientific journal called The Ledger, which is a peer-reviewed scholarly journal that publishes full-length original research articles on the subjects of cryptocurrency and blockchain technology.
Lightning Network (LN) - A proposed implementation of Hashed Timelock Contracts (HTLC's) with bi-directional payment channels, which allows payments to be securely routed across multiple peer-to-peer payment channels. This allows the formation of a network where any peer on the network can pay any other peer even if they don't directly have a channel open between each other. The Lightning Network is a proposed long-term solution to Bitcoin's current transaction-processing bottleneck, although there is widespread disagreement over whether or not the Lightning Network can ultimately be implemented successfully as anything other than a niche or specialty feature.
Liquidity - Describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. Market liquidity refers to the extent to which a market, such as a cryptocurrency exchange, allows coins/securities to be bought and sold at stable prices.
Limit Order - An order on an exchange in which you need to specify an exact "worst case scenario" price at which you are willing to trade. Note that if there is a better price available to you, the exchange is supposed to try to ensure that you get the better price. For example, let's say that there are 50 ExampleCoins offered for sale for $7.00 each, and 200 ExampleCoins offered for sale for $7.20 each, but that's it. You put in a Limit buy order for up to 150 ExampleCoins with a Limit price of $7.10. The exchange will immediately match the offer of 50 ExampleCoins at $7.00 each, because that volume doesn't exceed your limit (and the coins are cheaper than the maximum price that you are willing to pay per unit). But that's all that you'll end up buying, since the rest of the ExampleCoins are being offered at a price higher than you said you'd be willing to pay. The remainder (100 more ExampleCoins) of your order will sit unfilled until someone else is willing to place a Limit sell of $7.10 (or less) for their ExampleCoins, OR places a Market sell (which sells their securities immediately at the best price people are willing to buy). An unfilled Limit order may sit on the exchange for minutes or hours or days, or may never be filled. Exchanges sometimes impose arbitrary maximum time limits for Limit orders, perhaps only allowing a month or sixty days into the future from the time the order was placed.
Mainnet - The official working public platform or blockchain for a project. After a project has been vetted using a testnet, and the developers feel that it is ready for public launch, they release the mainnet.
Man In The Middle (MITM) - IIn hacking, this is an attack where the attacker secretly relays and possibly alters the communication between two parties who believe they are directly communicating with each other. Also known as a Janus attack.
Margin Call - Occurs when the value of margined securities in your account drops below a certain point. Depending on the brokerage/exchange, your securities may be sold instantly, regardless of market price, in order to preserve capital (to be able to repay the margin). In other cases, with traditional stock exchanges and traditional non-discount brokers, your broker may actually phone you and let you know that you have 24 hours to fund your account with a certain amount of money (either by depositing cash, or by selling shares of other securities) and if you fail to comply by the deadline, then the broker will arbitrarily unload your position. See also the Margin Trading definition.
Margin Trading - Buying on margin means that you are borrowing money from a broker or exchange to purchase securities. You can think of it as a loan from your brokerage/exchange. Margin trading allows you to buy more securities than you'd normally be able to. To trade on margin, you specifically need a "margin account." Of course, brokerages/exchanges don't just loan out money freely. You'll need to secure your margin against some kind of collateral, which is usually other securities/value in your account. In the traditional stock markets, only certain securities (medium-risk and low-risk) are marginable. The entity loaning the money to you will put certain rules in place to ensure that they get it back. For example, if the value of your securities drops below a certain predetermined point, your securities may automatically be sold (at a loss) by the brokerage/exchange so they can ensure that they get their original loan back. A sudden margin call can really wipe out an investor.
Market Capitalization - The temporary market value of a company's outstanding shares/securities. This amount is determined by taking the stock price and multiplying it by the total number of shares outstanding. This is a very arbitrary and sometimes misleading figure, as the "market value" of the shares is usually determined by the trade price on the last share traded. So for example, let's say that we're talking about a huge company that has a billion shares outstanding, and the price per share usually trades in the range of several hundred dollars. If the last trade of the day was a computer-generated downtick of $2 placed intentionally in the last millisecond of trading, then that single trade would instantly knock two billion dollars off the market cap of the company. Did the value of the company actually change by two billion dollars in that fraction of a second? It's hard to say. There are a lot of diverse ways to value a company. In terms of crypto, it could be possible for someone with deep pockets to do a lot of wash trading (from themselves right back to themselves) in order to artificially set a high trade range for their cryptoasset, and fool the market into thinking that the project is much more valuable than it would be without this devious manipulation. In most cases, the market capitalization of a project is a fairly accurate way to gauge the relative performance of the project within the marketplace. Sometimes, when someone is talking about market capitalization, they are referring to the total cumulative value of the entire cryptoasset ecosphere, rather than of one specific project. Be aware that (at the moment) the overall crypto market capitalization moves very much in lockstep with the price of Bitcoin, since Bitcoin makes up such a large proportion (greater than half) of the perceived financial value of the cryptosphere as a whole.
Market Order - An order (buy or sell) placed with no price restrictions in place. If there are enough shares offered by other market participants on the opposing side of the bid/ask, then the market order will get filled at the best available price(s). For example, if the order book on an exchange currently lists ExampleCoin for sale with 10 coins on the ask at $10.50 and 70 coins on the ask at $10.60 and 720 coins on the ask at $10.70, and buyer John Smith places a market buy order for 100 coins, then he will pay $10.50 each for his first 10 coins, $10.60 each for his next 70 coins, and $10.70 each for his last 20 coins. The disadvantage of market orders is the lack of price control (you have to accept what is on the current order books), so the price is not usually as competitive as placing a Limit order. The advantage of a market order is speed, which can be important if you're in a rush and if a possible minor disadvantage in pricing doesn't matter to you. A market order will almost always get filled immediately, within a second or so of being placed, whereas with a limit order you have to wait for someone to meet your price, which could be minutes or hours or days or never.
Market Sentiment - The feeling or tone of a market, or its crowd psychology, as revealed through the activity and price movement of the securities traded in that market. Basic categories for market sentiment can include bearish (negative), neutral, or bullish (positive). Uncertainty is also another factor to consider.
Market Maker (MM) - A dealer in traditional securities or other assets who undertakes to buy or sell at specified prices at all times, by simultaneously having large open bid and ask orders on the security. In some cases, the market maker (also known as liquidity provider) is a company or an individual hoping to make a profit on the bid-offer spread, or turn/churn. There are almost always people buying and selling any given security, so if the market marker is always prepared to buy securities that are offered at a specific price, and simultaneously sell the same securities at a slightly higher price, they are constantly accumulating money. Some market makers are not actually doing it for the profits on the spread; in some cases, a promotions firm or issuer of the security could hire a market maker to create an artificial trading range for the security. Be aware that in traditional finance, this practice is not legal in many jurisdictions.
Mechanical Turk - A person who is hired to perform repetitive, intelligence-based tasks. Amazon Mechanical Turk is a crowdsourcing internet marketplace which enables individuals and businesses (known as Requesters) to coordinate the use of human intelligence to perform tasks that computers are currently unable to do. Some examples of such human intelligence tasks (HIT's) might include classifying the color of birds in a series of photos, or listening for specific audio cues in a series of audio files.
Mempool - Any cryptoasset project's network holding area for transactions that have been initiated but not yet confirmed. A transaction is not confirmed until it is included in a block.
Meta Coins - Meta coins are extensions of the Bitcoin protocol that use either a new blockchain or tie into Bitcoin's blockchain (while adding more features). Meta coins that are built using Bitcoin's blockchain are said to be on-chain, and those with their own blockchain are said to be off-chain. The basic idea of meta coins is to offer additional functionality to Bitcoin, such as distributed exchanges, CFD's, digital assets and various forms of contracts.
Miner - Can refer to different things. A miner can be a single person engaged in mining on a small scale, or it can be a large entity (corporation, foundation, server farm) that engages in mining on a large scale. It can also refer to a software package or app used for mining, or to a physical machine/device used for mining.
Minimum Balance - Some types of cryptoasset wallets (especially those designed by the developers of the crypto projects themselves) require a certain minimum amount of the asset to open a new wallet, and require the user to always maintain that same amount as a minimum balance. For example, Ripple at one point had a minimum balance of 125 XRP. If you had 200 XRP in your wallet and tried to withdraw all of it, you'd only be able to withdraw 75 XRP, because the other 125 XRP would remain locked in the wallet (the minimum balance number has since changed a few times). This is a smart idea on the part of the developers, because it ensures that a small portion of the trading assets are locked up, and it encourages users to hold some assets. It also discourages people from setting up a ton of empty wallets, although there is no real cost to that practice for most cryptoassets.
Mining - The process by which some cryptocurrency transactions are verified and added to the public ledger (the blockchain), and also the means through which new coins may be released. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle. The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards. The rewards, which incentivize mining, are both the transaction fees associated with any transactions compiled in the block as well as newly released Bitcoins. Not every cryptoasset project uses mining to process transactions and to create new coins, but it is a common approach. A project that is referred to as a "Proof of Work" system relies on mining. In theory, anyone with access to the internet and suitable hardware can participate in mining. In practice, however, mining for some cryptocurrencies has become so challenging that only large-scale mining farms using specialized equipment (referred to as ASIC's) are now able to mine profitably.
Mining Rig - A computer designed and built specifically with cryptocurrency mining in mind. Chances are high that it was a fairly powerful computer when it was first built, and probably includes one or more high-end video cards (GPU's) to help process mining algorithms efficiently. It may also be used for additional purposes (internet, work, gaming) but in many cases, a crypto enthusiast may design a rig specifically to be used for mining and will use a different computer for all other applications.
Mixing - See "Tumbling."
Moon - Slang for that fantasy world where crypto investors will live once the value of their portfolio has grown to unbelievable wealth. To say that a cryptoasset is going to "moon" means that one believes the trading value of the coin is going to skyrocket and increase in value by many times the current trading price. There is no specific multiplier that qualifies as mooning; that's up to the personal preference of the investor. Some investors may see a 10x return on investment (a ten-bagger in the traditional stock investment community) as qualifying as mooning. Others expect gains of 100x or more. In the traditional stock markets, gains of this nature are almost unheard of. Thanks to huge gains in Bitcoin and many other cryptoassets between 2012 and 2017, a lot of participants seem to think that gains of 100x and more are "normal." They aren't. As the cryptoasset industry continues to mature, there will be a flight to quality, and many projects will decrease in value or collapse. To be sure, some excellent individual projects will probably see gains similar to what Bitcoin experienced, but in most cases, more rational trading and valuations will eventually become the norm. Enjoy the volatility while it lasts.
Mt. Gox - A Bitcoin exchange that was based in Shibuya, Japan. In 2013, it was handling over two-thirds of global Bitcoin transactions. However, in February of 2014, it suspended trading and shut down its website and exchange service, and filed for bankruptcy protection from creditors. At that time, Gox announced that approximately 850,000 Bitcoins belonging to customers and the company were missing and likely stolen. The reason(s) for the disappearance (possibly theft, fraud, mismanagement, or a combination of these) were initially unclear. More recent evidence suggests that most or all of the missing Bitcoins were stolen straight out of the Mt. Gox hot wallet over an extended period of time, beginning in late 2011. Claims are still being processed by the courts, although it is doubtful that most investors will get more than a fraction of their holdings back, at best. Even if they recover their initial investments (in terms of fiat value), they probably will not recover capital gains to that point, nor would they likely be able to realize any opportunity costs that might have accrued to them had they held Bitcoin assets past the time of the suspension of trading.
Multisig - Short for multi-signature. A digital signature scheme which allows a group of users to sign a single document, or to authorize a specific transaction. Usually, a multi-signature algorithm produces a joint signature that is more compact than a collection of distinct signatures from all users. Multisig allows for a form of escrow (see also the Escrow definition). For example, a contract can be set up on a blockchain or for a cryptocurrency transaction whereby any two of three possible users must authorize the transaction (by signing, ie. providing a private key) before the transaction is allowed to be processed on the blockchain. Other multisig sizes are also possible, ie. a contract can specify that any three of seven users must sign. A good example of a situation (besides escrow) where multisig is possible or useful would be a situation whereby a board of directors all has access to a pool of funds for a project, and three of seven members of the group must all sign for a transaction to be processed. This way, a single member of the board can't send funds to someone without other members of the board being complicit in facilitating the transaction.
Nash Equilibrium - Occurs when every player in a non-competitive game has nothing to gain by deviating from his own current strategy.
Near-Field Communication (NFC) - A set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within approximately 4 cm (1.6 in) of each other. NFC devices are used in contactless payment systems, similar to those used in credit cards and electronic ticket smartcards and allow mobile payment to replace/supplement these systems. NFC is used for social networking, and for sharing contacts, photos, videos or files. NFC enabled devices can act as electronic identity documents and keycards.
Nonce - A random or semi-random number generated in a cryptographic hashing function. It is believed to stand for the phrase "number used once." In proof-of-work (mining) systems, a nonce is used to create a cryptographic hash, with the hope of "solving" the mining equation for the current block.
Normie - A "normal" person who has not yet gotten involved in the world of using and investing in cryptoassets.
Nvidia - An American technology company based in Santa Clara, California. It designs graphics processing units (GPUs) for the gaming, cryptocurrency, and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market. These graphic cards are usually the most sought-after in terms of conventional GPU-based mining rigs which are affordable to many people within traditional consumer markets. Nvidia's main graphic card line at the moment is the GeForce line. Nvidia's main competitor is AMD with their "Radeon" GPU line. Nvidia is typically ranked as the leader in the market, in terms of price/performance analysis, and best capabilities.
Obfuscation - The action of making something obscure, unclear, or unintelligible. Sometimes, when a crypto project is being criticized on social media, defenders of that project resort to obfuscation to try to deflect criticism, by pointing out alleged solutions in a manner that lay users may not understand.
Open Source - Computer software that has its source code made available with a license whereby the copyright holder(s) provide the rights to study, change, and distribute the software to anyone and for any purpose. Open-source software may be developed in a collaborative public manner, and in fact, quite a few cryptoasset projects have been developed in such a collaborative manner. Diverse groups of developers from around the world often donate their time on a volunteer basis to their project(s), simply because they know they are making contributions which will benefit people from around the world.
Oracle - A computing mechanism for determining whether a test has passed or failed. The use of oracles involves comparing the output(s) of the system under test, for a given test-case input, to the output(s) that the oracle determines that product should have. Oracles often operate separately from the system being tested.
Order Book - The list of orders that an exchange uses to record the interest of buyers and sellers in a particular security. A "matching engine" uses the order book to determine which new orders can be fulfilled.
Order Completion - See "Fill."
Overclocking - Setting up a CPU or GPU to run at a rate faster than the manufacturer's specifications. Overclocking allows a user to increase performance, but comes at a risk of possibly damaging the component (usually through overheating).
Patch - A "fix" or revision to computer code, to make it more secure and/or efficient. Most patches are issued to resolve security vulnerabilities.
Permissioned Blockchain - A private blockchain, which the general public can't examine or use. This type of blockchain requires a user to possess certain credentials to gain access, and to interact with it.
Plaintext - Text or written information that has not been encrypted. Sometimes referred to as cleartext.
Plasma - A protocol that allows for a tree of blockchains on Ethereum in order to hyper-scale transaction capacity. Designed as a mid-term solution for scalability in Ethereum.
Platform - The environment in which a piece of software or code is executed. Some cryptoassets can be best defined as platforms. Common examples include Neo, Ark, and Ethereum. All crypto platforms share the ability for users to develop smart contracts on the platform, and also to develop entire new crypto projects that are based upon the framework of the platform. By using a platform such as Neo, Ark, or Ethereum as the basic framework for a project, developers of that new project are able to build upon the coding achievements of previous developers, so they aren't building their new project completely from the ground up. An analogy could be this: Rather than building a house on an undeveloped property, where trees have to be cut and the ground has to be leveled and heavy equipment needs to excavate and prepare a foundation, the developer is able to start working on a site where the foundation is already set in place and the house just needs to be built on top.
Polo - Slang shorthand for the Poloniex exchange.
Post Only Order - A limit order where the bid or ask is for a price that is currently not on the order book, thus adding liquidity and being considered a "maker" order. On traditional stock exchanges such as NASDAQ, Post Only orders usually also have to be displayed orders (not hidden or non-displayed).
Proof of Authority (PoA) - A system that can act as a replacement for POW, and which can be used effectively for some private chain setups. Proof of Authority is suitable for centralized blockchain projects. POA does not depend on nodes solving arbitrarily difficult mathematical problems, but instead uses a set of "authorities," which are nodes that are explicitly allowed to create new blocks and secure the blockchain. The chain has to be signed off by the majority of authorities, at which point it becomes a part of the permanent record. This makes it easier to maintain a private chain and keep the block issuers accountable. In an enterprise/consortium setting, there are no disadvantages to a POA network as compared to POW. It is more secure, less computationally intensive, and since blocks are released at specific time intervals, it is more predictable.
Proof of Brain (PoB) - This consensus reward algorithm encourages people to create and curate content. It is used on platforms such as Steem. It enables tokens to be distributed by "upvote" and "like"-based algorithms, and can be integrated with websites to align incentives between application owners and community members to spur growth.
Proof of Burn (PoB) - A method for distributed consensus which is not as common as protocols including Proof of Stake, Proof of Work, etc. In Proof of Burn, miners show proof that they burned some coins or tokens by sending them to a verifiably unspendable address. This is expensive from their individual point of view (just like proof of work) but it consumes no resources other than the burned underlying asset. To date, all PoB cryptocurrencies work by burning separate PoW cryptocurrencies, so the ultimate source of scarcity remains the proof-of-work efforts in those other cryptocurrencies. For example, SlimCoin uses a PoB system, and Bitcoin is the currency burned in that system.
Proof of Concept (PoC) - This is not a type of consensus system, despite the similarity in name. Proof of concept refers to evidence, typically derived from an experiment or pilot project, which demonstrates that a design concept, business proposal, or network build-out is feasible.
Proof of Devotion (Pod) - This consensus mechanism gives an "influential" user on the blockchain network an opportunity to become a bookkeeper and receive block rewards and transaction fee as revenue, which will encourage them to contribute to the stability and security of the blockchain on a continuous basis. Users with high ratings take part in the bookkeeper selection procedure by paying a security deposit. Through virtual mining, each bookkeeper candidate competes to earn bookkeeping rights. Users with bookkeeping right are responsible for block generation, and in return receive block reward and transaction fee as revenue. If any user behaves in an inappropriate fashion, the user's security deposit will be confiscated and reassigned to other bookkeeper candidates.
Proof of Research (PoR) - In this system, each participant contributes to research by performing computations in the network, somewhat similar to a PoW system. Gridcoin, which is associated with the BOINC network, is a good example of this type of system. The network average in a PoR system is similar to the "difficulty" in PoW mining. As the network average hashrate rises, it becomes harder to get the same "magnitude" (share of the overall hashrate), so to keep getting the same reward you would need to increase your computing contribution. If the price rose significantly and more computing power came on board (raising the overall network hashrate), it would become harder for a single entity with a constant rate of research contributions to get the same reward.
Proof of Stake (PoS) - Proof of Stake is a form of distributed consensus system which validates transactions in order to achieve the distributed consensus. It is still an algorithm, and the purpose is the same as PoW, but the process to reach the goal is quite different. In a Proof of Stake system, the creator of a new block is chosen in a deterministic way, depending on the creator's wealth (also defined as stake). PoS systems have no block reward, and instead the creators of blocks only receive the transaction fees in those blocks. This is why the creators of blocks in a PoS system are called Forgers instead of Miners.
Proof of Work (PoW) - A system that requires some work from the service requester (or miner), usually meaning processing time or CPU cycles on a computer. The specific work that must be performed has to be hard enough to make it challenging to complete, yet also easy enough to be feasible. Complex mathematical calculations of slowly increasing difficulty are the norm. More importantly, it must be easy for the service provider to validate the veracity of the provided answer. This idea is also known as a CPU cost function. There is a specific cost for computers to perform large numbers of calculations, which can be calculated in terms of electricity consumed, cost of hardware and components, and other incidentals. Although some miners in certain jurisdictions may have some advantages due to things like lower costs of power, or specialized computers (ASIC's) that are extremely efficient at performing calculations, the basic tenet is that the consumption of computing resources acts as a barrier to ensure that other miners have to pledge similar resources to the system in order to gain mining power. Therefore, if a PoW network grows to a point where very large numbers of computers are devoting their resources to mining, those computers can also be thought of as providing security to the network, because the costs for someone to expend a greater number of resources to overcome or "attack" the existing network would be prohibitive. Therefore, although PoW systems on major cryptocurrencies are criticized for consuming enormous amounts of electricity, it can also be pointed out that this consumption of resources is exactly what provides security to the system and maintains the integrity of the underlying asset. If Bitcoin were to suddenly become the central global currency of choice, it would be a fatal problem if someone were to be able to spend a few million dollars to game the system, therefore, there must be a significant economic outlay required to obtain power (mining hashrate) in the system.
Public Key Infrastructure (PKI) - Digital identities are based on a system called the PKI X.509 standard. This is an internationally agreed-upon standard for what constitutes a digital identity.
Public Ledger - See "Ledger."
Pull Request - A method of submitting contributions to an open development project. It is often the preferred way of submitting contributions to a project using a distributed version control system. A pull request occurs when a developer asks for changes committed to an external repository to be considered for inclusion in a project's main repository. It is important to note that "pull requests" are a workflow method, and are not a feature of the version control system itself.
Pwn - The act of dominating an opponent, originating from a typo on a World of Warcraft map from many years ago. In context, if a hacker manages to compromise your system and steal your assets, then you have been pwned.
Quantum Computing (QC) - Quantum computers are incredibly powerful machines that take a new approach to processing information. Built on the principles of quantum mechanics, they make direct use of quantum-mechanical phenomena, such as superposition and entanglement, to perform operations on data. Quantum computers are different from binary digital electronic computers (which are based on transistors). Whereas common digital computing requires that the data be encoded into binary digits (bits), each of which is always in one of two definite states (0 or 1), quantum computation uses quantum bits, which can be in superpositions of states. Although Quantum Computing is still in its infancy today, the possibility exists in a few years that quantum computers will be unbelievably more complex than even the best computers that exist today, and will be able to solve problems that scientists simply didn't think were solvable. There is also some concern in the cryptocurrency community that quantum computers will eventually be able to break the encryption standards used in various projects, which basically means that someone with a quantum computer could empty everybody's wallets. While that is a definite concern, that sort of a situation is probably at least a decade away, and there should be adequate time in the interim for any developers to create new quantum-resistant or quantum-proof cryptography.
Quantum Supremacy (QS) - The ability to tackle a problem too complex to solve on any standard supercomputer.
Quick Response (QR) Code - A type of barcode that contains a matrix of dots. It can be scanned using a QR scanner, or a smartphone with built-in camera. Once scanned, software on the device converts the dots within the code into numbers or a string of characters. For example, scanning a QR code with your phone might open a URL in your phone's web browser. All QR codes have a square shape and include three square outlines in the bottom-left, top-left, and top-right corners. These square outlines define the orientation of the code. The dots within the QR code contain format and version information as well as the content itself. QR codes also include a certain level of error correction. QR codes have two significant benefits over traditional UPCs (the barcodes commonly used in retail packaging). First, since QR codes are two-dimensional, they can contain significantly more data than a one-dimensional UPC. Another advantage of QR codes is that they can be scanned from a screen (like a smartphone) regardless of orientation. Public and private keys can both be encoded as QR codes, which makes it very easy for someone to quickly share a public key with others via screen scan, and not have to worry about cutting and pasting or retyping a long and complex set of alphanumeric characters.
Raiden - The Raiden Network is an off-chain Ethereum scaling solution, enabling near-instant, low-fee and scalable payments. It is complementary to the Ethereum blockchain and works with any ERC20 compatible token. The Raiden project is a work in progress. Its goal is to research state channel technology, define protocols, and develop reference implementations. It is designed as a near-term solution for scalability in Ethereum. Raidan scales linearly with the number of participants. Transfers can be confirmed in less than a second. It is somewhat more private, in that individual transfers don't show up in the global shared ledger. It works with any token that follows Ethereum's ERC20 protocol. Transfer fees can be orders of magnitude lower than on the blockchain, which allows for micropayments (the transfer of very tiny values).
Rekt - Slang for "wrecked." Someone can get rekt financially (suffer large losses) or get rekt in an argument or game/contest (destroyed by an opponent).
Repo - Short for Repository. This is a location where coders and developers store code/apps/software on a server for public or private access. GitHub is probably the most well-known. Some cryptoasset projects which are open source and publicly shared will store all code on a repository, for anyone to download and examine. If you see that there is a lot of activity in the repository, you can see what kind of code changes are happening and determine if the project has a lot of active developer support. Be aware though that for some projects, most of the development activity takes place on private repos, so you may not be able to see much happening even though there may still be a lot of active development happening in the background.
Rig - See "Mining Rig."
Rich List - A list of the most valuable wallets or public addresses (usually the top 100) for a particular cryptocurrency. The blockchain explorers for most cryptocurrencies have an option to display the rich list, or perhaps even all addresses ranked by the size of holdings. Some explorers also give a great deal of additional statistical information, such as the percentage of the total float being held in the top 10 wallets, top 100 wallets, top 500 wallets, etc.
Ring Signature - A type of digital signature that can be performed by any member of a group of users that each have keys. Therefore, a message signed with a ring signature is endorsed by someone in a particular group of people. However, it is important that the identity of the specific individual member who signed the transaction must remain hidden.
Ring Confidential Transactions (RingCT) - Coded transactions which have been designed to hide the amount of Monero sent in any specific transaction. Ring Confidential Transactions are one of the three key ways that Monero ensures privacy of transactions (hiding the sender, hiding the receiver, and hiding the amount transferred).
Scalable Transparent Argument of Knowledge (STARK) - A theorum proofing system that features perfect witness indistinguishability, is publicly verifiable, has no trusted setup, is universal, and has succinct verification. It is scalable and post-quantum secure. It's a feature used in privacy situations for certain cryptographic projects.
Scaleability - The capability of a system, network, process, or blockchain to handle a growing amount of work, throughput, or transactions, or its potential to be enlarged to accommodate that growth.
Second Layer Solution - The use of alternative and interconnected blockchain networks to complement an existing blockchain project. Large cryptocurrencies and platforms such as Bitcoin and Ethereum began to experiment with research and development of second layer solutions in 2017 in order to start trying to solve scalability issues. For many projects, once the scale of the projects reaches a point where transactional bottlenecks begin to occur, it becomes evident that true scalability can only be reached if users do not have to verify every transaction sent to the main blockchain. In fact, it is highly impractical and inefficient to handle every single piece of information that is sent to the main blockchain. Some potential second layer solutions that are being considered include Plasma or Raidan (for Ethereum), and the Lightning Network (for the Bitcoin family).
Segregated Witness (SegWit) - The process by which the block size limit on a blockchain is increased by removing signature data from blockchain transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain. Segregated Witness has been activated on several blockchains including Bitcoin, Litecoin, and Vertcoin. Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness means to separate transaction signatures.
Seed - A seed phrase is a specific collection of common words, in a particular order, which acts like a complex password. Seed phrases can have a varying number of words, but 12 word seeds and 24 word seeds are both common, and different numbers of words are also possible. Unlike a pass phrase that might be used to get into a wallet or website, a seed phrase actually generates a specific public and private key.
Sell Wall - A sell wall on an exchange is a large order(s) at a certain price that acts as an obstacle to restrict the trading price from rising. If the sell wall is large enough, there may not be enough buyers to overcome it and push the market price higher. For instance, if certain whales don't want the price of Ethereum to go above $1000, because they think that would be a psychological barrier and prices could skyrocket if that price is breached, then they may want to put up a large sell wall of tens of thousands of Ethereum at $985 or some value in that area. It would then take a lot of buyers to eat through all of the coins offered at that level and bring the market trading price up into four digits.
Sentiment Analysis (SA) - The process of identifying and categorizing opinions expressed in the news, articles, or on social media, especially in order to determine whether the market's attitude towards a particular project or security is positive, negative, or neutral.
Shapeshift - An instant digital asset exchange, supporting dozens of blockchain tokens including Bitcoin, Ethereum, Monero, Zcash, Dash, and dozens of other cryptoassets. It performs the same function as traditional exchanges (Bithumb, Bitfinex, Binance, etc.) but you don't need to sign up for accounts, or deal with placing orders on both the buy and sell sides. It's a very convenient and simple way to convert one type of cryptoasset into another, with a very simple interface.
Sharding - Designed as one possible long-term solution for scalability in Ethereum. Sharding is a type of database partitioning that separates very large databases into smaller, faster, more easily managed parts called data shards. The governing concept behind sharding is based on the idea that as the size of a database and the number of transactions made on the database per unit of time increase linearly, the response time for querying the database increases exponentially. Vitalek Buterin hopes to potentially apply sharding to the Ethereum blockchain as a means of increasing speed, scalability, and storage.
Shill - A person engaged in covert advertising. The shill attempts to spread buzz by personally endorsing the product or cryptoasset in public forums with the pretense of sincerity, when in fact he/she is being paid directly for their services (a paid shill), or has a vested financial interest in promoting the product or cryptoasset (ie. holding a significant amount of that specific asset in their portfolio). Some aggressive shills cross the line from covert to overt, open promotion. Some people who are well-intentioned but overly-enthusiastic can end up acting like shills, even if they didn't originally intend to. In Scotland, they're usually called schills.
Shitcoin - A project which is underperforming the general crypto market, either due to lack of market interest, or due to lack of fundamentals relating to valuation.
Short Selling (Shorting) - A type of trade whereby a purchaser bets that a financial instrument (stock, crypto, bond, forex) will go down in price. The "shorter" (short seller) borrows a security from someone and then sells it at the current market price, while entering into a promissary contract to buy that security in the future to return it from the entity that you borrowed it from. The hope of the shorter is that the security will eventually go down in price, so it will cost less money to buy and return to the lender than received from selling when the short trade was set up. For example, if you could short Bitconnect at $300, you would be selling shares of Bitconnect that you don't own (but have just borrowed from someone willing to lend them). If the price of Bitconnect then went down to $10 at some point a few months later, you could buy shares on the open market for $10 each to return to the entity you borrowed them from. In the process, you would have made $290 per share. It's a "buy low then sell high" profit that works in reverse chronological order because someone is willing to loan you the security temporarily (you often have to pledge collateral). Some exchanges will allow you to short certain stocks or cryptos as long as you hold a certain amount of funds or crypto on the exchange to act as collateral. The risk to shorting is that if the securities go up in price instead of down, and you have to buy them back at a higher price, then you've lost money on the trade. Shorting is not a good trading strategy for inexperienced traders/investors, or for those without deep pockets.
Should Have Used Monero (SHUM) - This slogan is commonly used when referring to articles that talk about people getting into trouble for doing immoral or criminal acts, and then getting caught because their activities were caught on public blockchain ledgers. At the moment, it appears that Monero may be the only truly private and untraceable cryptocurrency in usage today (although Z-Cash may be another). Many people assume that Bitcoin and other cryptocurrencies are anonymous, but that is not correct. Remember the phrase, "Public Ledger." In some cases, privacy may be desirable.
Sidechain - A separate, subordinate blockchain on a network, which is attached to the parent chain through the use of a two-way peg which allows for assets to be interchangeable and moved across the chain at a fixed deterministic exchange rate. Sidechains are complex and require a lot of coding to integrate properly with their parent chains, but they have a lot of potential as second-layer solutions that may be able to significantly increase the transaction capability of popular parent blockchains (such as Bitcoin).
Silk Road - A "dark net market" website, administered by Ross Ulbricht, which allowed users to transact discretely in various types of contraband and illegal services. The Silk Road was one of the first and most notorious of online black markets, until the FBI shut it down in 2013. Many buyers and sellers used Bitcoin as a way of facilitating transactions, in an attempt to avoid having their transactions tracked through traditional financial systems.
Sleeping Giant - A project that an investor feels is going to become very popular and valuable in the future, but which is currently flying under the radar of the investment community.
Smart Contract - A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code on a blockchain. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. They render transactions traceable, transparent, and irreversible. The aim of smart contracts is to provide security that is superior to traditional contract law and to reduce other transaction costs associated with contracting. Smart contracts are especially well-suited for use in certain blockchain networks such as Ethereum or Neo, but it should be noted that not every cryptoasset has smart contract capabilities.
SmartBridge - SmartBridge is a functionality built upon the Ark platform, providing the ability to connect and communicate between blockchains. If you want to trigger an event on a blockchain via a different blockchain, and that chain is SmartBridge compatible, then you can issue a SmartBridge transaction to any compatible blockchain via the Ark wallet. For example, you could write a smart contract on Neo, or enter data into a record on Factom, without actually holding any NEO or FCT crypto.
Sock Puppet - An online identity used for purposes of deception.
Soft Fork - A soft fork is a change to a blockchain protocol wherein only previously valid blocks/transactions are made invalid. Since old nodes will recognise the new blocks as valid, a soft fork is backward-compatible. This kind of fork requires only a majority of the miners to upgrade to enforce the new rules. Let's try to make this easier to understand. A soft fork is any change that's backward compatible. As an example, instead of blocks with a maximum size of 2MB being valid, a new rule might only allow 1MB blocks. Nodes that have not been upgraded to the new protocol will still see the new transactions as valid (because 1MB is less than 2MB, so the new blocks will still pass the "old" test). However, if non-upgraded nodes continue to mine blocks, the blocks they mine will be rejected by the upgraded nodes. This is why soft forks need a majority of hash power in the network. Soft forks have been the most commonly used option to upgrade the Bitcoin blockchain so far, because it is argued that they present a lower risk of splitting the network.
Staking - Staking is what occurs in a Proof of Stake system to earn additional coins. If you already hold some coins in that system, staking is equivalent to earning interest on your holdings. In a staking system, you may receive new coins that are being created slowly, and/or you may receive transaction fees from growth of the blockchain. The growth of new coins is a form of inflation, and if the staking payouts (interest) are not equivalent to the inflation of the supply of coins, you may actually slowly fall behind in net value of your assets. This is similar to a traditional monetary system, because if the interest you earn in a bank account is not equal to the devaluation of the currency due to inflation, then your net worth is slowly eroded. To stake a cryptoasset in a POS system, you may be required to hold your coins or tokens in a certain specific wallet. Critics of PoW (mining) systems point out that staking a coin (merely holding onto the coin) is much more environmentally friendly than mining (which consumes a lot of electricity).
Stealth Addresses - Allows you to generate a public key that you can provide to multiple parties, and the parties can pay you but cannot see funds you receive from the other parties. Essentially, although the public key is visible, each individual transaction made to that key ends up getting its own specific public and private key, which provides a greater (but not absolute) amount of privacy for parties to the transaction. For example, if a company is soliciting payments on a website, they might not want every client's payment to go to the same address, because then clients can be tied to the same supplier/company. By using a stealth address system, each payment actually goes to a different wallet with its own public and private keys, and the receiver accesses that wallet individually, rather than owning a single wallet with all transactions combined.
Stop Loss - A type of order that is set and left as a long-term precautionary measure to conserve capital in the market in the event of a downturn in a specific security. The stop-loss sets a specific low price at which an order is triggered. If the trading price of a stock goes low enough to hit that price or drop below that price, the order is then executed at the best possible price. Note that the executed price is not necessarily going to be the same as the stop-loss price, especially in a market with low liquidity or in a situation where the market price drops precipitiously. For example, let's assume that ExampleCoin is trading for several days in a range around $8 to $9, and you hold 1000 coins of ExampleCoin , and you're worried that the bottom is going to drop out of the market if a certain hypothetical upcoming news announcement doesn't materialize. You don't want to get caught blind-sided when you're asleep at night, or away from your trading desk, so you set a stop-loss order for $7.50. If at any point ExampleCoin's trading price hits or drops below $7.50, your exchange will automatically do a market sell of your holdings at the best possible price for you. If there were a lot of buyers sitting at $7.50, you might get lucky and your 1000 coins might get sold at that price. If there weren't a lot of buy orders sitting on the exchange, maybe some of your coins were sold for $7.50 and some for $7.40 and some for $7.27, or whatever price points existed for the available buy orders on the exchange at the time that your stop-loss was triggered.
StringCT - An upgrade to the original RingCT (Ring Confidential Transactions) used in Monero to help ensure that transactions are untraceable. Ring signatures that allow for higher ring sizes provide greater untraceability, privacy and fungibility. Ring signatures that are more compact provide greater scalability. StringCT delivers these improvements. StringCT ring signature sizes are independent of the number of real inputs, which leads to dramatic storage savings (but not computational savings). StringCT allows for a much smaller blockchain than RingCT.
Sub - Slang used commonly on Reddit, but which can mean two different things. The first is short for "SubReddit," which is any online community within Reddit that is dedicated to a specific topic or group. Reddit subs are usually listed in the format /r/SubredditName. The second slang usage is a shortened form of "subscriber." This can lead to confusion, although the context may indicate the meaning. For example, a comment such as "this sub has 10k subs" would mean that the particular SubReddit in question has over ten thousand subscribers.
Sybil Attack - A computer security term referring to an attack wherein a reputation system is subverted by forging identities in peer-to-peer networks.
Tainted Coins - Taint is the probability of tracing coins back to any given address after mixing and tumbling, or the level of connectivity between two wallet addresses which have both held certain coins. This sounds confusing. It is, because in the popular lexicon, most people say that tainted coins are coins which have at some point been used for some sort of transaction which does not meet certain standards for ethical transactions. For example, if someone uses some Bitcoin to buy drugs on a darknet market, then it is said that those particular coins have become tainted, as if it was some form of dirty money. Because the public blockchains of all cryptocurrencies can be examined by anyone, it is easy to trace the path of any particular Bitcoin through all the wallets that they have been stored in since they were mined. The same applies to all other cryptocurrencies, not just Bitcoin (actually, Monero is an exception since its ledger cannot be examined). Interestingly, probably the vast majority of all Bitcoins were used in some sort of shady transaction at some point in their history, so according to this definition, almost all Bitcoins are tainted in some manner. Ironically, most fiat paper money is probably similarly tainted, although of course it is very difficult to trace a single paper bill of any currency back through all the different entities that have held it since it was issued by a mint. That's because even though each bill has a unique identifier (the serial number on the bill), there is no public ledger to trace the transactions of a bill. Some people worry that some governments may be able to trace certain coins of various cryptocurrencies back to specific criminal transactions, and to say that since they were part of a crime, those coins should be seized by the government. This may be a valid concern, even if a remote one. After all, the US government enacted an Executive Order in 1933 to confiscate most gold from US citizens, except for allowing some minor exceptions for jewelry and collector coins. Stranger things have happened.
Take A Position - To either buy securities outright, or to set up a short sale.
Tangle - A third-generation distributed Ledger used by the Iota project, based on a directed acyclic graph (DAG). Rather than a structured orderly chain of blocks, the Tangle is a network that grows in a method that mimics nature in some ways. The Tangle is scalable, lightweight, and makes it possible to transfer value without any fees. It has no blocks and therefore no miners. Each transaction on the Tangle is required to "verify" two previous transactions, therefore the proof-of-work being done by the network is spread out among all participants of the network, rather than concentrated into the hands of miners. If you were to try to envision the Tangle (there are 3D graphic live representations online) you might be able to say that it is slightly analogous to a swarm of ants moving through the jungle. However, with the ants, there is a fixed number of ants and they are moving, whereas on the Tangle, each transaction stays put and new transactions are attached to historical transactions, so the size of the Tangle is constantly growing. Another analogy, again not a perfect one, is to envision a giant three-dimensional petri dish where the bacteria grows outward from existing growth, akin to new transactions being attached to and expanding the Tangle.
Technical Analysis (TA) - Evaluating the trading patterns of securities, in an attempt to forecast their future movement. Technical analysis is based upon statistics gathered from trading activity, such as price movement and volume. Technical analysis has a heavy reliance upon trading charts, candlesticks, trends, and moving averages.
Testnet - The pre-public-release test platform or blockchain for a project. After a project has been vetted using a testnet, and the developers feel that it is ready for public launch, they release the mainnet.
Ternary Computer - A computing device that uses three separate states of logic in its calculations, instead of the much more common binary that permeates the landscape today.
Three Letter Agency - Government agencies with three-letter acronyms, which are also associated with oversight or law enforcement. Examples include the NSA, FBI, CIA, ATF, ICE, SEC, and so on.
Ticker - The ticker is the symbol for a stock or for a cryptoasset. It can also refer to a data stream showing prices for a number of assets. Examples include stock tickers (AAPL for Apple or MSFT for Microsoft on the NYSE), crypto tickers (ETH for Ethereum or LTC for Litecoin), and foreign exchange tickers (CAD for Canadian dollars or GBP for Britain's pound sterling). In the case of a data stream, if you're watching a show on a financial television network, you may see a stream of stock symbols running dynamically along the bottom of the screen, with current prices for various stocks. This is also referred to as a ticker, shortened from the original Ticker Tape.
Token - A token is a symbolic representation of a portion of the value of a project. Tokens represent assets that can range from accounting info to commodities to intellectual property to loyalty points to computing resource rights. Tokens are usually built on top of another blockchain platform (such as Ethereum or Neo) so they don't really need all of the technology created from scratch. Examples of projects that currently use Ethereum-based tokens include Golem, OmiseGo, District0x, and Civic. We often categorize tokens based upon their purpose, ie. a platform token is used with a platform such as Ethereum or Neo, and a Utility Token is used within a specific project that has been built upon one of the platforms. Utility tokens can be further broken down into Usage Tokens and Work Tokens (see those definitions).
Token Burn - See "Burn."
Token Sale - See "Initial Coin Offering."
Total Value Locked (TVL) - The number of assets that are currently being staked in a specific protocol. This value is not meant to represent the number of outstanding loans, but rather the total amount of underlying supply that is being secured by a specific application completely.
Trex - Slang shorthand for the Bittrex Exchange.
Trusted Platform Module (TPM) - An international standard (written by a computer industry consortium called Trusted Computing Group) for a secure cryptoprocessor, which is a dedicated microcontroller designed to secure hardware by integrating cryptographic keys into devices. TPM offers facilities for the secure generation of cryptographic keys and limitation of their use, as well as other capabilities such as remote attestation, sealing, and binding.
Trustless - IIn traditional finance, parties to a contract need a trusted third party to ensure that a transaction can be processed, such as a bank or credit union or credit card issuer. When a transaction occurs, that third party acts as the middleman to facilitate the transfer of value (when you buy a computer from NewEgg using a Visa, Visa pays NewEgg and then you subsequently pay Visa). The trusted party acting as an intermediary takes on the risk of the transaction, hence the reason why there are banking and credit fees to compensate the trusted third party for their efforts and assumption of risk. With a trustless transaction, no third party is necessary. You interact directly with another party during your trade. Of course, when the two parties are in different parts of the world, how does that happen? If you're sending them 1 Bitcoin and you expect 20 Ethereum in return, how do you know that you'll get your 20 Ethereum after you've sent your Bitcoin? Well, certain transactions can be set up through mechanisms such as atomic swaps, such that both parties have to "irrevocably" commit their sides of the transaction before either side can move ahead to complete their own side of the transaction. Once both sides have committed, one party can then opt to "instantiate" the transaction by telling the blockchain code to move forward. From that point forward, the transaction cannot be stopped, although failure to instantiate by a certain time will cancel the transaction for both sides. Because neither of the parties to the transaction had to trust the other in order for the transaction to occur, it's called a trustless transaction. Of course, this is really just a transfer of trust. You're trusting technology and the cyptoasset mechanisms rather than trusting another human.
Tumbling - A service offered to mix potentially identifiable or colored cryptocurrency funds with other coins, with the intention of confusing the trail that leads back to the fund's original source.
Turing Machine - A computer science term which refers to a system of rules, states and transitions, rather than to a real physical machine.
Two Factor Authentication (2FA) - A security protocol whereby in order to access a system, a user must have more than just a username and password; they must also possess a second form of identification or verification to make it more difficult for anyone else to bypass the password security for the account. 2FA is usually tied to actions relating to physical devices that a person carries with them, such as inserting a special type of USB key, receiving a SMS text message on a specific cell phone, or getting an authorization code from an authenticator app on a mobile device.
Usage Token - These are tokens that act like native currency in their respective DAPPS. Golem is a good example of this. If you want to use the services in Golem then you will need to pay with Golem Network Token (GNT). While these tokens have monetary value they won't give you any particular rights or privilege within the network itself.
Unload a Position - To sell your securities.
Utility Token - A token used in a specific project. Some utility tokens are integral to coding used in a project, and derive their value from utility in the operations of the project. For other projects, the project's token may not be used directly in coding or transactions, and instead acts only as a representation of the value of a project. Tokens are usually treated similar to a security, namely functioning like a share in a company's stock.
Wash Trading - A form of market manipulation in which a single entity (or several entities acting in collusion) buy and sell a security repeatedly, "from themselves to themselves," in order to create an artifical impression that there is more market interest in the security. If a manipulator owned a crypto that almost never traded, because there were practically no users interested in buying or selling, but the manipulator owned two accounts, the manipulator could keep buying and selling back and forth from one account to the other, never changing the overall amount of the crypto owned, but making users watching the exchange think that there is far more trading in that asset than actually exists.
Watering Hole - A watering hole is a computer attack strategy, in which the victim is targeted as any individual within a particular group of members who share a common characteristic(s), such as an organization, an industry, or a geographic region. In this attack, the attacker guesses or observes which website(s) the group often uses, and infects one or more of those sites with malware. Eventually, some member(s) of the targeted group become infected. The malware used in these attacks typically collects information about the user, and with respect to cryptocurrencies, may seek seeds or private keys as the primary target.
Weak Hands - Someone who is very nervous and considers selling a coin during a bearish period, because they think it's going to go down a lot more. Someone with weak hands can't hold their coins when there is downward pressure.
Whale - A market participant with a large amount of power (money) in the market. Because they have so much money invested, they can make trades that affect pricing and sentiment in the markets, or they act as a market maker by putting up very large buy and sell walls that keep a coin trading in a certain price range (a collar). A whale may have hundreds of thousands or even millions of dollars to play with in the markets.
White Paper - A report about a subject that may contain overview, technical, marketing, and other information about a potential project. This written document is intended to inform readers in detail about the characteristics, attributes, and features of a project or proposed project. It can include information about everything from the creation of the project to ongoing technical features and considerations, to proposals for future governance. The white paper can be treated as something that acts partly as a vision and mission statement, and partly as a master plan for a project.
Winternitz Hash - Formerly known as the Winternitz One-Time Signature Scheme, this is a hash (encryption algorithm) which is known as a post-quantum signature because quantum attacks don't significantly lower the security given by this hash. While this is rather irrelevant at the present time, since we don't have practical working quantum computers, it may become important in the foreseeable future.
Work Token - These are tokens that identify you as being effectively similar to being a shareholder in a DAPP. Because of that, you have a say in the direction that the DAPP takes. A perfect example of this is the DAO tokens. If you were a DAO token holder then you had the right to vote on whether a particular DAPP could get funding from the DAO or not. This type of token is very much akin to a share of stock in a traditional corporation.
Wraith Protocol - A privacy protocol that was intended for use by the Verge project. Basically, Verge uses a dual private/public blockchain approach, so theoretically, when Wraith is turned on, the blockchain info is hidden from the public. When wraith is off, the blockchain info is visible to the public. The last time we looked, this protocol was not yet perfected/implemented properly, although it had been promised many times.