Fichte Legal July 12, 2018September 6, 2023 A Address A string of letters and numbers that are used to receive cryptocurrency. Works similar to a traditional bank account number and can be shared publicly with others. All Time High (ATH) Refers to the maximum price of an asset, higher than at any other time in its trading history. Cryptocurrencies have risen dramatically, creating many consecutive ATHs. Altcoin Describes all crytocurrencies that are not Bitcoin – like Ethereum, Litecoin, and Monero. It is short for “Alternative Coin” (AKA coins that were created after Bitcoin). Arbitrage Taking advantage of the price difference of an asset on two different markets or exchanges, often internationally. The price difference is used for a quick profit. ASIC A type of computer chip. For cryptocurrencies, it’s used to mine new coins efficiently (see mining below). Short for Application Specific Integrated Circuit. Attestation Ledger A distributed ledger that codifies agreements, statements, and other facts into the Blockchain. Can provide evidence to “attest” that something actually happened. B Bagholder A person who is still holding an asset after a pump and dump scheme (see below). Can also refer to somebody who is believing in and holding a coin that’s declining in value. Bear A person who is pessimistic about market prices and expects them to go down. This person is also known to be “bearish” about the market and price expectations. Bear Trap A false market signal where the rising trend of an asset appears to be turning down, but actually is not. Short sellers are forced to to exit their positions to stop losing money. Bitcoin (lowercase) When using the word bitcoin as a unit of measure (e.g. 1 bitcoin), it is used in the lower case version. When using Bitcoin as the name, it is spelled in the upper case version. Bitcoin (uppercase) The first decentralized cryptocurrency created 2008 by Satoshi Nakamoto. Lets you send and receive money without any middlemen like banks. Bitcoin Cash A clone (AKA “fork”) of Bitcoin that focuses on processing high volumes of transactions differently. Created because of disagreements about how to best grow digital currency. Bitcoin Gold A clone (AKA “fork”) of Bitcoin that focuses on handling high volumes of transactions differently. Similar to Bitcoin Cash and also created because of community disagreements. BitLicense The controversial business license issued for cryptocurrency companies in New York. Created and provided by the New York State Department of Financial Services (NYSDFS). Block A collection of transactions that have happened during a certain amount of time (10 minutes for Bicoin). The transactions are bundled in a block and added to the Blockchain. Block Explorer A tool to see detailed information of transactions, accounts, and other activity on a Blockchain. Depending on the cryptocurrency, sweeping data or limited data is available. Block Halving Bitcoin’s supply of new coins issued to miners is cut in half about every four years to keep it scarce. This 50% cut is known as the halving. The next halving will be around 2020. Block Height Refers to the total number of blocks on a given cryptocurrency blockchain. It starts with the first block, also known as the Genesis Block (Height 0) and counts up from there. Block Reward Payment made to the volunteers who offer their computers to facilitate transactions on a blockchain network. The payment can be a mix of new coins and transaction fees. Block Size Shows the file size of each block on a blockchain and therefore how many transactions can be bundled and processed in each one. For Bitcoin, the current block size is 1MB. Blockchain A decentralized, unchangeable record of all transactions that have ever happened for a cryptocurrency. It bundles transactions in order on blocks and stores them permanently. BTC BTC is the short ticker symbol for Bitcoin, which is often used on exchanges and other financial platforms. Bitcoin is the first decentralized cryptocurrency, created 2008. Bug Bounty A reward offered for finding vulnerabilities and other issues in computer code. Often offered by cryptocurrency companies like exchanges and wallet providers to prevent hacks. Bull A person that is optimistic and confident that market prices will be going up. This person is also known to be “bullish” about the market and price expectations. Bull Trap A false market signal where the falling trend of a asset appears to be turning up, but actually is not. Long buyers can be forced to exit their positions to stop loosing money. C Chargeback Intraditional payment systems (like credit cards), a customer can reverse a transaction and force the merchant to return funds. This is prevented with cryptocurrencies. Client Software that can access blockchain on a local computer and also help process blockchain transactions. Often includes a cryptocurrency software wallet. Cold Storage The offline safekeeping of private keys which allow for access to cryptocurrency funds. Typically this is done through hardware wallets, USB drives, and paper wallets. Confirmation Each past block makes a transaction more irreversible because it stores them more deeply in the blockchain. Each time that happens it is called a confirmation. Consensus An automated mechanism that allows blockchain participants to agree on which transactions happened and in which order. This agreement is known as a trustless consensus. Consensus Point A point in time when blockchain participants agree on which transactions happened and in which order. Can be based on a time interval or based on a volume of transactions. Cryptocurrency A digital currency that uses strong computer code (cryptography) and a decentralized system to allow for transactions without using middlemen like banks. AKA digital currency. D Darknet A peer-to-peer layer of the internet that can only be accessed with special software. It is known as Darknet because it often involves illegal marketplaces and illicit activity. Decentralized Application Applications that run without the control of a central authority (like a software company or government). Ethereum is the first and largest decentralized application platform. Decentralized Autonomous Organization (DAO) An investor-funded and directed venture capital crowd-fund built on the Ethereum network that was hacked in June 2016 and subsequently shut down. DAICO A method for decentralized funding of projects. It combines ideas from Decentralized Autonomous Organizations (DAOs) and Initial Coin Offerings (ICOs). Project investors have the ability to vote and, if dissatisfied with the project’s progress, could get their money back. Proposed by Vitalik Buterin, the creator of Ethereum. Decentralized Exchange A peer-to-peer exchange that allows users to buy and sell cryptocurrency and other assets without the control or fees of a central authority. Unlike central services like CoinBase. Decentralized Organization A smart-contract based organization that uses automated rules to run without a central authority. Funding, voting, and more are all handled via platforms like Ethereum. Difficulty A measurement of how difficult it is for a miner to solve the mathematical puzzle required to process a cryptocurrency block. The difficulty can change over time. Digital Currency A digital currency that uses strong computer code (cryptography) and a decentralized system to allow for transactions without using middlemen like banks. AKA cryptocurrency. Digital Identity Personal information like name, address, social security number, and more that are bundled and stored digitally. For blockchain digital identity can be stored decentralized. Distributed A system that is not controlled and cannot be changed by a central authority like a person, company, or government. Most cryptocurrencies are decentralized systems. Distributed Ledger A type of computer database that is stored on many private computers at the same time, instead of central company servers. Blockchains are also known as distributed ledgers. Double Spend A problem in which somebody fraudulently sends digital money to two different receivers (even though they only have enough for one transaction). Bitcoin solves this issue. E Encryption The use of mathematics and computer code (cryptography) to protect sensitive data like digital wallets, private keys, and personal information from unauthorized access. Enterprise Ethereum Alliance (EEA) A group of Ethereum core developers, startups, and large companies working together to commercialize and use Ethereum for different business applications. ETH ETH is the short ticker symbol for Ethereum, which is often used on exchanges and other financial platforms. Ethereum is a platform for creating and running smart contracts. Ether The digital currency of the Ethereum network. Ether is used to pay the transaction and processing fees of Ethereum decentralized applications and smart contracts. Ethereum A platform for creating and running smart contracts. These are programmable applications that run exactly as promised – without downtime, censorship, or interference. Exchange A system on which assets like cryptocurrencies can be bought, sold, and stored. Exchanges can be centralized where a company controls them; or decentralized (peer-to-peer). Exchange Traded Fund (ETF) A security that tracks a basket of assets such as stocks, bonds, and cryptocurrencies but can be traded like a single stock. Bought and sold on traditional stock exchanges. F Fiat A term used to describe traditional government-issued and backed currencies like dollars, Euros, and Yen. Not backed by physical commodities but by legal tender laws. Flippening A potential future event, hoped for by Ethereum fans, where the total market cap of Ethereum surpasses the total market cap of Bitcoin – making Ethereum the most valuable. FOMO Internet culture term that stands for Fear of Missing Out. Describes actions taken by investors based on emotions and the fear of not benefitting from a price rise or drop. Fork A change to the software and rules of a cryptocurrency that creates two separate versions of the currency’s blockchain. Forks can be soft forks or hard forks, see below. FUD Internet culture term that stands for Fear, Uncertainty, and Doubt. It means negative information that is being purposefully spread about an asset to make people sell. Futures Contracts to buy assets (like cryptocurrencies and stocks) with an agreement for future delivery on a regulated stock exchange. Used to speculate on the future price of an asset. G Gas To run decentralized applications and smart contracts on the Ethereum network, apps calculate their usage using an internal pricing unit called Gas. Actual fees are then paid in Ether. Genesis Block A blockchain is a string of “blocks” that are linked together in order. Each block is a collection of bundled transactions. The genesis block is the very first block of a blockchain. H Halving Bitcoin’s supply of newly generated coins is cut in half about every four years to keep it scarce. This 50% cut if known as the halving. The next halving will happen around 2020. Hard Fork A change to the rules of a cryptocurrency that creates two separate versions of the blockchain. Hard forks are changes that are not backward compatible with previous rules. Hardware Wallet A physical storage device fo cryptocurrencies that uses special technologies to protect the assets on it. Examples of hardware wallets are the products Ledger Nano S and Trezor. Hash Function Cryptographic computer code works like a one-way street. It’s easy to decipher 250 + 250 = ? but much harder to find the correct answer (out of many) for ? + ? = 500. Hash Rate The number of hash computations that can be performed by a cryptocurrency miner with their computer hardware. The rate determines their mining effectiveness and profit. HODL Internet culture term that stands for the resolve to hold assets over a longer period without selling. Became popular after an internet user misspelled the word hold. Hot Storage The online safekeeping of private keys which allow for access to cryptocurrency funds. Typically this is done through open-source online wallets and digital asset exchanges. I Initial Coin Offering (ICO) A public, crowdfunded sale of cryptocurrency tokens to raise money for a project. Typically, company-specific tokens are offered in exchange for Bitcoin and Ethereum. Intermediary For cryptocurrencies, an intermediary is a traditional middleman like a bank. It’s a central third party that no longer is required in a decentralized Blockchain system. K Know Your Customer (KYC) Laws and regulations that require banks and other financial institutions to keep and report many details of their customers’ personal information and transactions. L Lambo Short for Lamborghini, the luxury sportscar. Popular internet meme that is used to show the large gains made by cryptocurrency investors, who dream of buying the car. Ledger A store of records that can only be appended (added to). It is immutable (unchangeable after the fact). Blockchains use decentralized ledgers as their core technology. Ledger Nano S A popular hardware wallet, designed and sold by the French company Ledger Wallet. The company offers different products, including Ledger Nano S and Ledger Blue. Lightning Network A proposed change to Bitcoin’s blockchain that’s designed to fascilitate faster transactions and better scaling. Involves bi-directional payment channels and other changes. Litecoin An offshoot of Bitcoin with very similar features. However, this cryptocurrency is designed for very cheap and fast transaction. Has the goal to become digital money. LTC LTC is the short ticker symbol for Litecoin, which is often used on exchanges and other financial platforms. Litecoin is an offshoot of Bitcoin with a focus on cheap transactions. M Margin Trading This is some Refers to the trading practice where existing assets are used as collateral for short-term loans. The loans are then used in risky trades to magnify the gain or loss of the trade.text inside of a div block. Market Capitalization The total value of an asset, calculated by multiplying the total number of outstanding shares (or coins) and the price per share (or coin). Represents total size and popularity. Merkle Tree A system that splits complicated hash code functions into smaller chunks (creating a tree-like shape). This allows faster verification on large-scale blockchains. Microtransaction A business model where very small payments can be made in exchange for digital goods and services. For example, paying a tiny fee for every page of an ebook you read. Middleman For cryptocurrencies, a middleman is a traditional intermediary like a bank. It’s a central third party that no longer is required in a decentralized Blockchain system. Miner An important participant in the blockchain network, who bundles transactions and gets paid in new coins and transaction fees in return for helping to run the system. Mining The process by which transactions get verified, bundled, and added to the Blockchain. It’s an essential part of any cryptocurrency, because it processes all transactions. Mining Pool A group of people or organizations who come together to pool and share their computer resources for cryptocurrency mining. They then also split the rewards. Mining Reward The payment resulting from volunteering computer resources to process cryptocurrency transactions. Mining rewards are often a mix of new coins and transaction fees. Mining Rig A computer setup that’s specially designed for mining a cryptocurrency. Often involves multiple graphic cards (GPUs) or other complicated setups for maximum efficiency. Monero A secure, private, and untraceable cryptocurrency. Monero is focused on being anonymous internet money, hiding your accounts and transactions from anybody but you. Moon / Mooning Refers to a cryptocurrencies price shooting up to astronomical levels. A popular internet slang term used to describes the positive past or future performance of an asset. Multi Signature (MultiSig) Some cryptocurrency wallets and addresses are protected by multiple keys. Several people are required to approve (sign) transactions before they can take place. N Node A participant in a cryptocurrency network that provides a copy of the entire blockchain to the network. All miners host a node, but not all nodes have to mine cryptocurrency. O Off-Ledger Currency A digital currency that is created (minted) outside of the blockchain ledger but used on the blockchain ledger. Example: government currencies that get used on the blockchain. Offline Storage Cryptocurrency wallets can be stored on devices and systems that are connected to the internet or not. Offline storage is the latter case, providing additional protection from hacking. On-Ledger Currency A digital currency that is both created (minted) on the blockchain ledger and also used on the blockchain ledger. Most cryptocurrencies (like Bitcoin) are on-ledger currencies. Online Storage Cryptocurrency wallets can be stored on devices and systems that are connected to the internet or not. Online storage is the former case, offers more convenience but also increased risk. Open Source Collaborative and open software development approach that encourages experimentation and sharing. Project computer code is offered to others to work with and modify. Oracle For blockchain, an oracle is an automated system that decides based on pre-set rules and real-world events. It’s an essential function that helps to arbitrate smart contracts. P Paper Wallet A type of cold storage where private and public keys (and often a QR code) are printed or written on physical paper to prevent hacking and theft. Peer-to-Peer (P2P) A peer-to-peer network that distributes computing tasks among many, private computers (decentralized), instead of using company computers (centralized). Permissioned Ledger Similar to a ledger (see above) but designed with restrictions, so that only a select group of people or organizations have permission to access it. Private Key A string of letters and numbers that are used for sending cryptocurrency. The private key should be kept secret because it enables spending with the cryptocurrency wallet. Proof of Stake (POS) Because proof of work requires substantial computer resources and electricity, it’s environmentally unfriendly. An alternative is POS which is based on ownership of coins. Proof of Work (POW) Miners process transactions by using computers to solve complicated mathematical puzzles. They proof that they did that computational work by finding the solution. Public Key A string of letters and numbers that are used to receive cryptocurrency. Works similar to a traditional bank account number and can be shared publicly with others. Public Key Cryptography A cryptographic system that uses both a private key and public key to safeguard transactions. It’s the central security-layer behind cryptocurrencies like Bitcoin. Pump & Dump Investment scheme that advertises the benefits of a certain asset, with the hope that a lot of people buy it and raise the price. The asset is then sold by the originator for profit. Q QR Code A machine-readable label that shows information encoded into a graphical black-and-white pattern. For cryptocurrencies, often used to easily share wallet addresses with others. R Raiden Network An upcoming protocol change to the Ethereum blockchain that is designed to allow for high-speed transfers and better scaling. Similar to Bitcoin’s proposed Lightning Network. Replicated Ledger A blockchain ledger (see above) with one main copy of the data (master ledger), connected to a set of sub-layers of the same data (slave ledgers). Return on Investment (ROI) The percentage gain that was made with an investment or asset. For example, a 100% ROI means that the price of the asset or investment has doubled in value. Ripple A Blockchain payment system for banks, payment providers, digital asset exchanges, and other companies. Designed to move large amounts of money more quickly and reliably. S Satoshi Named after the creator of Bitcoin, a Satoshi is the smallest unit of measure of the cryptocurrency. Each Satoshi is 0.00000001 Bitcoin, making the currency very divisible. Satoshi Nakamoto The mysterious creator of Bitcoin. Even though Bitcoin was created in 2008, to this day nobody knows his or her true identity. Satoshi could be a woman, a man, or a group. SEC Short for Securities and Exchange Commission. A United States government agency that regulated securities (stocks, bonds, etc.) as well as stock exchanges. Segregated Witness (SegWit) A proposed change to Bitcoin’s blockchain that would increase the block size limit from 1MB to 2MB for faster transactions. The implementation would be a fork (see above). SHA 256 A very strong cryptographic standard that is used as the basis for Bitcoin’s and other proof of work systems (see above). It is also the technology that protects wallets. Sharding A scaling solution for blockchains to improve high-volume transaction speeds. Instead of every node (see above) holding a full blockchain copy, they only hold partial copies. Shill / Shilling Aggressively advertising an asset for personal financial gain, even to the detriment of others and often while distorting the truth. Also known as pumping. Silk Road A now defunct marketplace on the Darknet (see above) that was shut down by the FBI. It was best known for selling drugs and other illegal products and accepted Bitcoin. Smart Contract Self-running computer code that makes decisions based on pre-set rules that later cannot be changed. The most well-known implementation is the Ethereum system. Soft Fork A change to the rules of a cryptocurrency that creates two separate versions of the blockchain. Soft forks are changes that are backwards compatible with previous rules. Solidity Computer programming language that is used to develop smart contracts and decentralized applications on the Ethereum platform and other blockchains. State Channel A system that moves transaction interactions off the blockchain to reduce cost and increase speed. Transactions are locked until all participants agree and verify them. T Testnet An alternative blockchain that is not public and live. It is used to test new code and doesn’t transact any real money or value. Allows developers to experiment and learn. Token A unit of value for a blockchain system. Tokens can be used for payment, access, voting, and facilitating the overall blockchain infrastructure. Most tokens are based on Ethereum. Tokenless Ledger Refers to a distributed blockchain ledger that doesn’t require a token (see above) or other native digital currency to function and to facilitate transactions. Transaction Fee Payment made to the volunteers who process transactions on a blockchain (miners). Transaction fees can vary by cryptocurrency and also by the desired transaction speed. Trezor A popular hardware cryptocurrency wallet. Trezor was the first Bitcoin hardware but today offers support for altcoins such as Ethereum, Litecoin, Dash, and more. Trustless Blockchains are trustless because no participant needs to trust any other participant for transactions to work out. Trust comes from the system itself, which is impartial. Turing Complete A computer system or computer language is Turing complete (computationally universal), if it can process any code that a general-purpose computer could. Example: Ethereum U Unpermissioned Ledger A ledger (see above)
