Cryptionary

Many new terms are used in the cryptocurrency market. With the cryptionary we want to make it easier to find these terms.

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Address

An address is a string of alphanumeric characters, but can also be represented as a scannable QR code to send and receive transactions on the network

Agreement Ledger

An agreement ledger is distributed ledger used by two or more parties to negotiate and reach agreement.

Altcoin

Alternative coin, all other coins than Bitcoin.

Atomic Swaps

The exchange of one crypto currency to another crypto currency without a third-party.

Bit

Bit is a common unit used to designate a sub-unit of a bitcoin - 1,000,000 bits is equal to 1 bitcoin (BTC or B⃦). This unit is usually more convenient for pricing tips, goods and services.

Block height

Block height refers to the number of blocks connected together in the block chain. 

Block Reward

The reward given to a miner which has successfully hashed a transaction block. Block rewards can be a mixture of coins and transaction fees, depending on the policy used by the crypto currency in question, and whether all of the coins have already been successfully mined.

Block time

How long it will take to generate a new block

Blockchain

A continuously growing list of records, called blocks. Each block has a link to a previous block. A blockchain can serve as an open distributed ledger that can record transactions between two parties in a verifiable and permanent way.

Colored coin protocol

A class of methods for associating real world assets with addresses on the bitcoin network.

Confirmation

Confirmation means that a transaction has been processed by the network and is highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like 1000 US$, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.

Consensus Process

The process a group of peers responsible for maintaining a distributed ledger use to reach consensus on the ledger’s contents.

Crypto currency

Crypto currency is a digital asset designed to work as a medium of exchange. Also classified as a subset of digital currencies. (Alternative currencies or virtual currencies).

Crypto note

The technology that allows the creation of completely anonymous egalitarian crypto currencies.

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.

Decentralized

The process of distributing or dispersing functions, powers, people or things away from a central location or authority.

Digital Commodity

A digital commodity is a scarce, electronically transferrable, and intangible, with a market value.

Digital Identity

A digital identity is an online or networked identity adopted or claimed in cyberspace by an individual, organization, or electronic device.

Double spend

If a malicious user tries to spend their bitcoins to two different recipients at the same time, this is double spending. Bitcoin mining and the block chain are there to create a consensus on the network about which of the two transactions will confirm and be considered valid.

Electrum wallet

Electrum's focus is speed and simplicity, with low resource usage. It uses remote servers that handle the most complicated parts of the Bitcoin system, and it allows you to recover your wallet from a secret phrase

Ethereum

Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality, which facilitates online smart contractual agreements.

Genisis Block

The very first block in a block chain's sequence.

Hard fork

A radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa), and as such requires all nodes or users to upgrade to the latest version of the protocol software. Put differently, 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, one path which follows the new, upgraded blockchain, and one 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.

Hash rate

The number of hashes that can be performed by a miner in a given period of time.

Hodl

An enthusiastic misspelling of Hold, prompting crypto currency users to avoid the temptation of selling off their coins once price starts moving up or down.

ICO (Initial Coin Offering)

An Initial Coin Offering is an event in which a new crypto currency sells advance tokens, in exchange for upfront capital. ICOs are frequently used for developers of a new crypto currency to raise capital.     

Iconomi

ICONOMI is a platform which offers investors a golden opportunity to get into the Crypto world by index investing that are managed by experts. ICONOMI concentrates to channel funds.

Ledger

A ledger is the principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.

Mesh network

A mesh network is a local network topology in which the infrastructure nodes (i.e. bridges, switches and other infrastructure devices) connect directly, dynamically and non-hierarchically to as many other nodes as possible and cooperate with one another to efficiently route data from/to clients. Mesh networks dynamically self-organize and self-configure, which can reduce installation overhead. The ability to self-configure enables dynamic distribution of workloads, particularly in the event that a few nodes should fail. This in turn contributes to fault-tolerance and reduced maintenance costs.

Mining

The process by which transactions are verified and added to a blockchain. This process of solving cryptographic problems using computing hardware also triggers the release of crypto currencies.

Mining pool

A mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to solving a block. A "share" is awarded to members of the mining pool who present a valid proof-of-work that their miner solved. Mining in pools began when the difficulty for mining increased to the point where it could take years for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks more quickly and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.

Mining pool

A mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to solving a block. A "share" is awarded to members of the mining pool who present a valid proof-of-work that their miner solved. Mining in pools began when the difficulty for mining increased to the point where it could take years for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks more quickly and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.

Multi mining pool

Multipools switch between different altcoins and constantly calculate which coin is at that moment the most profitable to mine. Two key factors are involved in the algorithm that calculates profitability, the block time and the price on the exchanges. To make sure you don’t need many different wallets for all possible minable coins, almost all multipools now automatically exchange the mined coin to a coin that is accepted in the mainstream (for example bitcoin). Using this method, because the "most profitable" coins are being mined and then sold for the intended coin, you generally receive more coins in the intended currency than you would by mining that currency alone. This method also increases demand on the intended coin, which has the side effect of increasing or stabilizing the value of the intended coin.           

Node

A node is a point of intersection/connection within a network. In an environment where all devices are accessible through the network, these devices are all considered nodes. The concept of nodes works on several levels, but the big-picture view defines nodes as the major centers through which Internet traffic is typically routed. This usage is somewhat confusing, as these same Internet nodes are also referred to as Internet hubs.

Open source

In general, open source refers to any program whose source code is made available for use or modification as users or other developers see fit. Open source software is usually developed as a public collaboration and made freely available.

P2P (Peer 2 Peer)

Peer-to-peer (P2P) refers to the decentralized interactions that happen between at least two parties in a highly interconnected network. P2P participants deal directly with each other through a single mediation point.

Paradigm

A distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field.

Ponzi scheme

A Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading. Operators of Ponzi schemes can be either individuals or corporations, and grab the attention of new investors by offering short-term returns that are either abnormally high or unusually consistent.

Pre-Mining

A premine is where a developer allocates a certain amount of currency credit to a particular address before releasing the source code to the open community.

Private Key

A private key is a string of data that shows you have access to bitcoins in a specific wallet. Private keys can be thought of as a password; private keys must never be revealed to anyone but you, as they allow you to spend the bitcoins from your bitcoin wallet through a cryptographic signature.

Proof of Stake (PoS)

An alternative to the proof-of-work system, in which your existing stake in a crypto currency (the amount of that currency that you hold) is used to calculate the amount of that currency that you can mine.

Proof of Work (PoW)

A system that ties mining capability to computational power. Blocks must be hashed, which is in itself an easy computational process, but an additional variable is added to the hashing process to make it more difficult. When a block is successfully hashed, the hashing must have taken some time and computational effort. Thus, a hashed block is considered proof of work.

Satoshi

The satoshi is currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). The unit has been named in collective homage to the original creator of Bitcoin, Satoshi Nakamoto.

Scam coin

Coins (crypto currency) which are created to make the “creators” rich.

SegWit

Segregated Witness is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain. Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness in short, means to separate transaction signatures.

SegWit2x

SegWit2x (do not confuse with SegWit), also called B2X, was an attempt to introduce a change in Bitcoin. 
Intention was to increase the block size limit to be 2 times bigger, despite block size being already increased by over 50% (for users of SegWit-enabled wallets) done just 3 months earlier by SegWit update.

Signature

A cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of Bitcoin, a Bitcoin wallet and its private key(s) are linked by some mathematical magic. When your Bitcoin software signs a transaction with the appropriate private key, the whole network can see that the signature matches the bitcoins being spent. However, there is no way for the world to guess your private key to steal your hard-earned bitcoins.

Smart contracts

Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. 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.

Soft Fork

A change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. This kind of fork requires only a majority of the miners upgrading to enforce the new rules, as opposed to a hard fork which requires all nodes to upgrade and agree on the new version.

The Lightning Network

The Lightning Network is a proposed solution to the bitcoin scalability problem. The software uses an off-chain protocol.  It features a P2P system for making micropayments of digital currencies through a scale-free network of bidirectional payment channels without delegating custody of funds or trust to third parties.

Token

Digital tokens being used to represent different assets on a blockchain.

Wallet

A wallet is a secure digital wallet used to store, send and receive digital currency. Most coins have an official wallet or a few officially recommended third party wallets. In order to use any crypto currency you will need to use a crypto currency wallet.

White paper

A white paper is an informational document issued by a company to promote or highlight the features of a solution, product or service.

Wraith Protocol

Wraith Protocol is a technology that allows the user to seamlessly switch between public and private ledgers on the Verge Blockchain. 

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