GLOSSARY

Cryptocurrency terms glossary

Basic crypto terms that anybody, willing to join the crypto community, must know.

Cryptocurrency is often a tough nut to crack, especially if you’re new to the crypto space. Here are some of the basic cryptocurrency-related terms that you must know if you want to explore the murky water of crypto!

1. Blockchain

A blockchain acts as a database, storing information in a decentralized platform. It can be accessed across computer network nodes. They are well known for their critical function in keeping a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. The most popular application of blockchain is cryptocurrency. Unlike currency, crypto employs blockchain to operate as a public ledger and an advanced cryptographic security system, ensuring that all online transactions are processed and safeguarded.

2. Cryptocurrency

A cryptocurrency is a digital currency (also called virtual currency) that is protected by encryption, making counterfeiting and double-spending exceedingly difficult. It is monitored and verified by blockchain (a decentralized peer-to-peer network).

Cryptocurrencies are mined or bought on cryptocurrency exchanges. Not all e-commerce sites accept cryptocurrency payments. Nevertheless, cryptocurrencies’ expected potential has made them prominent as trading instruments. They are also utilized for cross-border transactions to a limited degree.

3. Cryptocurrency Exchange

A crypto exchange is a platform for buying and selling cryptocurrencies such as Bitcoin, Ether, and Dogecoin. Cryptocurrency exchanges function similarly to other trading platforms you might be acquainted with. They set up accounts for you where you may generate various order types to buy, sell, and predict in the cryptocurrency market.

In general, there are two types of cryptocurrency exchanges: centralized and decentralized exchanges. The presence or absence of intermediaries is the key distinction between centralized and decentralized exchanges.

Centralized Exchange

Centralized cryptocurrency exchanges operate as an intermediary between buyers and sellers. Almost all cryptocurrency transactions happen through centralized exchanges because they are more reliable. Centralized cryptocurrency exchanges include Coinbase, GDAX, Kraken, and Gemini, to name a few.

Decentralized Exchange

Decentralized crypto exchanges, popularly known as DEXs, are blockchain-based apps that facilitate large-scale crypto asset trading among multiple users. Rather than having a centralized entity control the transactions and collect the fees, in a DEX, users known as liquidity providers pool their funds for other users to trade with, and are rewarded with a percentage of the swap fee.

4. Cryptocurrency Wallet

Crypto wallets protect your private keys. This private key lets you send or receive cryptocurrencies such as bitcoin and Ethereum.

5. Cost Basis

The cost basis of a token is the amount you paid in US dollars for it, plus any fees. For instance, suppose you paid $500 to buy 1 ETH in 2019. So the cost basis will be $500, plus the fair value in USD of the gas fee to transfer it.

6. Taxable Crypto Events

Some crypto taxes are categorized as capital gains and some as income taxes.

Capital Gains & Loss Events

– Selling cryptocurrencies for fiat money, or government-issued money
– Payment for goods or services, such as buying a car using Bitcoin income
– The process of converting one cryptocurrency for another.

Income Tax Events

– DeFi lending
– Receiving airdropped crypto
– Mining, Staking and liquidity pools
– Crypto as a reward or bug bounty
– Earning from transaction fees or block rewards for crypto mining
– Token rewards from play-to-earn games like Axie Infinity
– NFT artists minting income

7. Non-Taxable Crypto Events

– Purchasing cryptocurrency with fiat currency
– Transfer cryptocurrency from one of your wallets to another one you control
– Crypto gifts are non-taxable to a certain limit
– Donate cryptocurrency to a tax-exempted non-profit organization

8. Crypto Tax Accounting Method

You must pay taxes (capital gains or income) when you sell your cryptocurrency, which may be computed using the formula:
‍
‍Capital Gain = Price at the time of sale – Cost Basis
‍
‍You’ll suffer a capital loss if the value at the time of sale is larger than the cost at the time of acquisition. The accounting system you use to calculate your taxes determines how much tax you must pay and can potentially lower your taxes greatly.

The following are the most common tax accounting methods:

FIFO Cryptocurrency Cost Basis Method
LIFO Cryptocurrency Cost Basis Method
Specific Identification Cost Basis Method

FIFO Cryptocurrency Cost Basis Method

One of two recognized ways for assessing the cost basis of Cryptocurrency is First in First Out (FIFO). The difference between the sale price and the earlier buy price is used to compute capital gains under FIFO.

LIFO Cryptocurrency Cost Basis Method

Last in, first out, or simply LIFO is an accounting approach for calculating gains based on the difference between the purchase price and the latest buying price.

Specific Identification Cost Basis Method

A Cryptocurrency trader can define which asset it is trading and calculate profits or losses based on the cost basis of that particular asset using Specific Identification. The best tax strategy for limiting obligation is often specific identification.

9. IRS Tax Forms

Tax Form	Purpose
Form 8949 (Sales and Other Dispositions of Capital Assets)	Complete summary of all crypto activities like, selling, trade, etc.
Schedule D (Capital Gains and Losses)	Summary of your Form 8949 and includes the sum total of short term and long term capital gains
Form 1040 (Individual Income Tax Return)	Calculates total taxable income
Schedule 1	Your total additional income from crypto activities
Form 1099 K	Report non-employment income to the Internal Revenue Service.

10. Crypto Tax-Loss Harvesting

The method of selling a cryptocurrency that has suffered a loss is known as tax-loss harvesting. Investors can reduce taxes on both profits and income (up to $3000) by “harvesting” the loss. To preserve an ideal investment strategy and predicted returns, the traded crypto can be restored in the portfolio.

11. Miscellaneous Terms

Airdrop

Crypto airdrops are a type of distribution strategy used by cryptocurrency companies. It includes sending bitcoins or tokens to existing cryptocurrency traders’ wallets for free or as a reward for participation.

Hard Fork

When the program code changes so much that the latest version is no longer backward compatible with previous blocks, a hard fork occurs. The blockchain divides in two in this scenario:

– The original blockchain
– A new one that matches the bunch of rules

This results in the creation of a completely new cryptocurrency, which is the source of several well-known coins.

ICO

ICO is short for initial coin offering. An ICO can be used by a firm to acquire funding for the development of a new cryptocurrency, software, or service.

To put it simply, the cryptocurrency industry’s equivalent of an initial public offering (IPO) is an initial coin offering (ICO).

Margin Trading

Margin trading is a method of conducting asset transactions utilizing funds supplied by a third party. Margin trading accounts, as opposed to standard trading accounts, allow traders to get extra funds and assist them in leveraging positions.

Mining

Mining is the method by which Bitcoin and other cryptocurrencies bring in new coins and validate new transactions. The miners authenticate and safeguard blockchains, which are virtual ledgers that record bitcoin transactions.

Proof of work (POW) systems verify transactions and reward miners with bitcoin in exchange for their efforts.

Non-Fungible Tokens

NFTs are individual tokens that contain important information. They can be purchased and sold like other physical pieces of art because their worth is mostly determined by the market and consumers. The distinctive data on NFTs makes it simple to verify their ownership as well as token transfers between owners.

Proceeds

Proceeds are the amount you made when you sold or exchanged a cryptocurrency. You will get a greater profits amount if you trade regularly.

It must be noted that you are not taxed exclusively on the profits you make. Rather, subtract your profits from your cost basis to determine your gain or loss.

Staking

The process of keeping cryptocurrency to validate transactions and sustain the network is known as staking. Staking allows you to earn money without having to work. The proof-of-stake system eliminates the need for specialized equipment and the related energy expenses that come with mining.

12. Initial Coin Offering (ICO)

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13. Ethereum Virtual Machine

Once each new block is added to the chain, the Ethereum Virtual Machine, also known as the EVM, computes the state of the Ethereum network and executes smart contracts. The hardware layer and node network layer of Ethereum are on top of the EVM.

14. Centralized Exchange (CEX)

A centralised exchange (CEX) is a third-party platform that allows the trading of crypto assets between buyers and sellers. It is privately run by a central entity.

15. Total Value Locked (TVL)

Total value locked refers to the total amount of underlying supply that a certain application is fully securing. This value does not refer to the number of existing loans, but rather the total amount of underlying supply that is now being staked in a particular protocol.

16. Token Generation Event (TGE)

The technical creation of the token on a blockchain-based network and its introduction to the market, typically in the form of a public sale, private sale, or initial coin offering, are both considered to be part of a token generation event (TGE), which is a brief commercial and technical act (ICO).

17. Gwei

Gwei is a combination of the terms giga and wei. The digital token used on the Ethereum network, ether (ETH), has a unit called “gwei.”

18. Anarcho-capitalism

According to the political concept known as anarcho-capitalism, private property rights are what society needs, not governments.

19. aNFT (Autonomous NFT)

Non-fungible tokens known as aNFTs (autonomous NFTs) have the ability to be programmed to start transactions on their own.

20. Adaptive State Sharding

Adaptive state sharding automatically divides data depending on specific parameters to increase performance and effectiveness.

21. Nifty Gateway

The Winklevoss twins have since bought Nifty Gateway, a digital art online auction site for non-fungible token art that was developed by Duncan and Griffin Cock Foster.

22. Rug Pull

In the cryptocurrency sector, a rug pull occurs when a development team abruptly drops a project and sells or eliminates all of its liquidity. The expression “take the rug out from under (someone)” is the origin of the word, which refers to abruptly ending assistance.

23. Mainnet

The phrase “mainnet” refers to a fully functional, operating blockchain. Like the blockchains for Bitcoin and Ethereum, a mainnet network has been completely implemented and is now in use.

24. Vitalik buterin

Ethereum was created by Russian-Canadian computer programmer Vitaly “Vitalik” Buterin. Buterin became active with cryptocurrencies in the very beginning, helping to launch Bitcoin Magazine in 2011.

25. 0x Protocol

A system called 0x makes peer-to-peer (P2P) trading of Ethereum-based assets possible. The protocol, created by 0x Labs, is an open standard and fundamental DeFi building component for any developer in need of exchange capability.

26. Fee Tiers

The phrase “fee tiers” refers to the fee structure that establishes the cost associated with an investor’s money deposit or withdrawal and transaction execution on a cryptocurrency exchange. Every exchange has a unique fee structure that frequently varies based on trade volume and kind.

27. Annual Percentage Yield (APY)

The annual percentage yield (APY) of an interest-bearing account, such as a savings account or certificate of deposit (CD), is the amount you may expect to make in a single year.

28. Initial Dex Offering (IDO)

A cryptocurrency startup can launch its native token or coin on a decentralised exchange using the initial DEX Offering (IDO) crowdfunding approach (DEX).

29. Byzantium Fork

The Ethereum network had a hard fork known as Byzantium in October 2017 at block 4,370,000. The Ethereum network underwent a crucial upgrade with the Byzantium hard fork.

30. Odysee

In the LBRY decentralised blockchain, there is a video sharing service called Odysee.

31. Zero Knowledge Rollups

A layer-2 scalability method known as zero-knowledge rollups, or zk-rollups, enables blockchains to validate transactions more quickly while simultaneously guaranteeing that gas costs are kept to a minimum.

32. Automated Market Maker (AMM)

A sort of decentralized exchange (DEX) called automated market makers (AMMs) uses algorithmic ‘money robots’ to make it simple for independent traders to purchase and sell crypto assets. Users trade directly through the AMM rather than directly with other users as they would with a typical order book.

33. FUD

FUD, or dread, uncertainty, and doubt, is an acronym. When the market refers to anything as ‘FUD,’ it often denotes that a bad event has occurred with notable fluctuations in the price of Bitcoin that have a substantial impact on the whole crypto market.

34. Ethereum Virtual Machine (EVM)

The compute engine for Ethereum that controls the blockchain’s state and makes smart contract functionality possible is called the Ethereum Virtual Machine (EVM). The client software you require to run an Ethereum node, such as Geth, Nethermind, and others includes the EVM.

35. BEP-20

The most popular Ethereum token standard, ERC-20, is extended by the BEP-20 token standard on the BNB Smart Chain (BSC). It functions as a set of guidelines for tokens that specify how they may be used, who can use them, and other usage restrictions.

36. SHA-256

The United States National Security Agency created a collection of cryptographic hash algorithms called SHA-2, which was initially released in 2001. They are created utilizing the Davies-Meyer structure from a specialized block cipher and the Merkle-Damgrd construction from a one-way compression function.

37. Bubble

The Bubble Group has created Bubble, a visual programming language, a platform for no-code development, and an application platform as a service that enables non-technical individuals to create web apps without having to enter any code.

38. Gold-Backed Cryptocurrency

A derivative digital asset called a gold-backed cryptocurrency is one whose value is purportedly guaranteed by the gold’s equivalent price. Each gold-backed cryptocurrency arbitrarily assigns each of its tokens a value in grams or troy ounces of gold, requiring that this value be physically stored as collateralized assets in the company’s reserves or vaults or those of a reputable custodian.

39. Changpeng Zhao (CZ)

Changpeng Zhao, sometimes known as CZ, is a Canadian software engineer, businessman, and investor who was born in China. As of July 2022, Zhao is the co-founder and CEO of Binance, the largest cryptocurrency exchange in the world by trading volume.

40. Liquidity Provider Tokens (LP Tokens)

Liquidity Provider Tokens, or LP Tokens for short, are an incentive system used to encourage the exchange of one currency for another. To guarantee that there is a market for trading cryptocurrencies that is constantly open, decentralized exchanges rely on liquidity providers.

41. DYOR

Do Your Own Research, or DYOR is a term that cryptocurrency enthusiasts frequently employ. The term is not, however, specific to the world of cryptocurrencies. Since to how quickly and readily false information can spread online, it is frequently employed.

42. Whitelist

Typically, a whitelist is a list of individuals or objects that are viewed as acceptable. A specific crypto event, such as a pre-sale, an Initial Exchange Offering (IEO), or an Initial Coin Offering, refers to a list of authorized participants in the crypto-verse (ICO).

43. Terahashes Per Second

Terahashes per second (Th/s), a measure of a computer or mining machine’s power, is equal to 1 trillion (1,000,000,000,000) hashes per second.

44. Decentralized Exchange (DEX)

Users can trade cryptocurrencies on a DEX (decentralized exchange) in a non-custodial setting without the requirement for a middleman to handle the transfer and custody of the money.

45. Impermanent Loss

By taking part in DeFi liquidity pools, there is a chance of experiencing temporary loss. That takes place when the value of your depository assets fluctuates since you deposited them.

46. Slippage

Slippage is the discrepancy between an order’s anticipated price and the price at which it actually executes. The slippage % displays the amount of price movement for a certain asset. An asset’s price may frequently change based on transaction volume and activity due to the volatility of cryptocurrencies.

47. Layer 0

In a sense, Layer 0 protocols serve as the foundation for Layer 1 blockchain architecture. Layer 0 protocols, which serve as the base for blockchain networks and apps, are one of several approaches being used to address issues with scalability and interoperability that the sector is currently experiencing.

48. Physical Bitcoins

Physical bitcoins can be compared to a bank card or a gift voucher. There is no value in the paper or the card. Instead, what grants you access to the real cash is the magnetic strip on the front of the card or the certification on the voucher.

49. Bonding Curve

A bonding curve is a mathematical concept that is used to explain the connection between an asset’s price and supply. The bonding curve’s foundation is the premise that once someone buys a limited-quantity item (like Bitcoin), each future buyer will have to pay a little bit more for it.

50. FOMO

Making an illogical choice to acquire or sell a cryptocurrency without doing your homework is known as ‘FOMO’ in the world of cryptocurrency investment.

51. Miner Extractable Value (MEV)

The miner extractable value (MEV) is the value that miners may acquire by altering the order of transactions within the blocks they create. For permissionless PoW coins, order fairness is thus a concern.

52. Soft Cap

The term “softcap” describes the lowest amount that may be raised during an ICO, IEO, or other type of fundraising campaign. Its definition is arbitrary and speculative. In contrast, a hard cap is the highest amount of financing that a team is attempting to get.

53. Honeyminer

A Bitcoin mining application called Honeyminer is available for different devices to download. The application may automatically switch between one currency and another coin at intervals of ten minutes, utilizing GPU and CPU resources to mine the most lucrative currencies.

54. Capitulation

The significant increase in selling pressure in a losing market or asset that signals a widespread investor surrender is referred to as “capitulation” in the world of finance. Given that those who chose not to sell during a panic are unlikely to do so soon after, the ensuing sharp decline in market prices can signal the end of a decline.

55. Delegated Proof-of-Stake

A consensus technique called Delegated Proof of Stake (DPoS) is a version of the traditional Proof of Stake (PoS) system. With DPoS, which developed from PoS, network users can elect delegates to validate blocks.

56. IOU

An IOU, which is a phonetic abbreviation for the words “I owe you,” is a document that recognises the existence of a debt.

57. DeFi Degens

DeFi degenerates. a subculture linked to a shady area of decentralized money that is notorious for pump-and-dump operations.

58. Peg

The PEG ratio, also known as the price/earnings-to-growth ratio, is a measure that aids investors in valuing a business by taking into consideration a company’s market price, profits, and potential for future development.

59. Arbitrage Pricing Theory

An asset’s returns may be anticipated using the linear connection between the asset’s expected return and a variety of macroeconomic factors that represent systematic risk, according to the arbitrage pricing theory (APT), a multi-factor asset pricing model. It is a helpful tool for value investors to employ when examining portfolios to find assets that could be momentarily mispriced.

60. Swing Failure Pattern

A trader places a stop-loss at a point below a swing high or above a swing low in an attempt to drive the market in the opposite direction by generating the necessary liquidity. This is known as a swing failure pattern (SFP). Swing trading patterns can be used to find trading opportunities in high-quality markets.

61. InterPlanetary File System (IPFS)

The InterPlanetary File System is a peer-to-peer network, protocol, and hypermedia system for sharing and exchanging files in a distributed file system. Each file in a global namespace linking IPFS servers is uniquely identified via content-addressing, which is used by IPFS.

62. Deflation

A drop in the average level of prices for goods and services is referred to as deflation. When the inflation rate is less than 0%, deflation sets in. Over time, inflation lowers the value of money, whereas abrupt deflation raises it.

63. ERC-721

The ERC721 standard is used to express ownership of non-fungible tokens, or tokens with a unique identity. A more complicated standard than ERC20, ERC721 is divided among many contracts and has a number of potential expansions.

64. Layer-1 Blockchain

A base network’s core infrastructure, such as that of Bitcoin, BNB Chain, or Ethereum, is referred to as Layer 1. Without a second network, layer-1 blockchains can validate and complete transactions.

65. Ticker Symbol

A ticker symbol is a combination of two or three alphabets that is used to represent shares that are traded on the stock market. It is a distinctive and simple way for investors to identify and buy/sell a certain stock on the stock exchange.

66. Paul Le Roux

Many suspects that Paul Le Roux, an infamous criminal, is Satoshi Nakamoto, the mysterious person who created Bitcoin.

67. Directed Acyclic Graph (DAG)

A set of actions can be conceptually represented by a directed acyclic graph (DAG). A graph, which is graphically represented as a collection of circles with some of them connected by lines to indicate the flow from one action to the next, is used to show the sequence of the activities.

68. Token Economy

A contingency management system based on the methodical reinforcement of goal behaviour is known as a token economy. Symbols or tokens that may be traded for other reinforcers are known as reinforcers.

69. Apeing

Apeing is a phenomenon that occurs in the cryptocurrency market when a trader buys a token soon after the project launch date without fully investigating it.

70. Whitepaper

A detailed treatise explaining the technical and financial features of a particular cryptocurrency is called a whitepaper. It acts as a guide for potential investors, miners, and users and is often produced by the cryptocurrency’s development team or core members.

71. Fiat

While cryptocurrency is a digital asset whose value is derived from its native blockchain, fiat money is legal tender whose value is linked to a government-issued currency, such as the U.S. dollar.

72. Graphical Processing Unit (GPU)

In the realm of computers, graphics processing technology has developed to offer special advantages. The most recent GPUs provide up new opportunities in gaming, content production, machine learning, and other areas.

73. Uncle Block (Ommer Block)

It is feasible for a network to produce two blocks at once. There will be one block missing when this occurs. The term “ommer block” refers to this unused block.

74. Token Migration

A token project must transfer its tokens to the new blockchain when switching from one to another. It’s known as a token migration.

75. Absolute Advantage

Absolute advantage is the capacity of an individual, business, region, or nation to produce more of a good or service per unit of time using the same amount of inputs than its rivals, or to produce the same amount of a good or service per unit of time using less inputs.

76. Absolute Return

The complete return on an investment is its absolute return. The investment term is not taken into account by the absolute return.

77. Algorithmic Market Operations (AMOs)

AMOs, also known as direct deposit modules, are actions taken by contracts to manufacture or burn stablecoins without providing immediate collateral to support these stablecoins.

78. Unbanked

Adults who do not utilise banks or other financial institutions in any way are referred to as unbanked. Although it is frequently a problem in underdeveloped nations, there are some unbanked adults in rich nations like the United States.

79. Gray Swan Event

The phrase “grey swan” refers to a potentially highly important event whose likelihood of occurring may be foreseen in advance but whose chance is viewed as low. To put it another way, it is a risk that might have a significant impact but has a low perceived possibility of occurring.

80. Token Issuance

The process of producing new tokens and adding them to the overall token supply of a cryptocurrency is known as token issuance.

81. Backflush Costing (Backflush Accounting)

A just-in-time (JIT) inventory system typically uses backflush costing, a method of product costing. It is, in essence, an accounting technique that does not begin to record the expenses related to creating an item or service until after it has been created, finished, or sold. Backflush accounting is another name for backflush costing.

82. Backorder

A backorder is a purchase order for an item or service that cannot be fulfilled right away owing to a shortage of stock. Although the product might not be in the firm’s current inventory, it might still be in production, or the company might need to continue producing more of the item.

83. Typosquatting Easy

Typosquatting is a form of social engineering assault that targets internet users who use a search engine instead of entering the right URL into their web browser. Typically, it entails using URLs that are popular misspellings of trustworthy websites to deceive consumers into accessing harmful websites.

84. Antitrust Law

Antitrust laws are rules that promote competition by restricting a firm’s ability to dominate the market. This frequently entails dismantling monopolistic enterprises as well as making sure mergers and acquisitions don’t excessively concentrate market power.

85. Chain Split

Another name for cryptocurrency forks, or the division of a single initial coin into numerous separately maintained projects, is chain splits.

86. Laser Eyes

In essence, altering your profile image to a pair of laser eyes was an indication that you were enthusiastic about Bitcoin and other cryptocurrencies. In actuality, it was also color-specific; red stood in for Bitcoin and blue for Ethereum.

87. Moloch DAO

The Moloch DAO is a decentralised autonomous organisation that provides funding for initiatives intended to strengthen and advance the Ethereum ecosystem.

88. ConsenSys

Joseph Lubin started ConsenSys, a private blockchain technology business with headquarters in New York.

89. Proof of Reserves (PoR)

Proof of reserves (PoR) is an open auditing procedure for cryptocurrency businesses that offers a frank assessment of the assets held in reserve by the businesses.

90. Regulatory Compliance

In order to stop the actions of financial fraudsters and cybercriminals, cryptocurrency compliance makes sure that cryptocurrency investors and businesses adhere to particular standards and rules.

91. Rehypothecation

Rehypothecation refers to the practice of a financial institution or a broker-dealer using assets, typically securities, that have been posted as collateral by their clients for their own purposes, such as borrowing or lending.

92. REKT

REKT is an internet slang term derived from the word “wrecked” and is commonly used in online gaming and cryptocurrency communities. It is used to describe a situation where someone has experienced a significant loss or failure, often in a humorous or exaggerated manner.

93. Relative strength index

The Relative Strength Index (RSI) is a technical analysis indicator used in financial markets, particularly in stock trading and investing. It is a momentum oscillator that measures the speed and change of price movements.

94. Relay chain

A relay chain is a fundamental component of a blockchain network based on the concept of a relay system. In a blockchain ecosystem, a relay chain serves as the primary chain that connects and validates transactions across different shards or parallel chains.

95. Relay nodes

Relay nodes are network nodes within a blockchain network that serve as intermediaries or relays for transmitting information and transactions between different participants. They play a crucial role in maintaining the network’s connectivity and relaying data across the blockchain.

96. Abenomics

Abenomics refers to a set of economic policies implemented by the Japanese government under the leadership of Prime Minister Shinzo Abe, who served from 2012 to 2020. The term “Abenomics” is a combination of Abe’s surname and the word “economics.”

97. Abnormal Return

Abnormal return, also known as excess return, is a concept used in finance to measure the performance of an investment relative to its expected or normal returns. It represents the difference between the actual return of an investment and the expected return based on the overall market or a benchmark.

98. Account Abstraction

Account abstraction is a term used in the context of blockchain and smart contract platforms to describe a concept where the underlying account model is abstracted or generalized. In traditional blockchain systems, accounts are typically represented by addresses and managed by private keys.

99. Accounting Conservatism

Accounting conservatism is an accounting principle that requires accountants and financial professionals to exercise caution and err on the side of understating rather than overstating the financial position and performance of a company.

100. Back-to-Back Letters of Credit

Back-to-back letters of credit are a financing arrangement commonly used in international trade transactions. It involves two separate letters of credit issued by different banks.

101. Bag

In the context of financial markets and investments, “bag” is a slang term used to refer to a collection of securities or financial assets held by an individual or an entity. It can represent a portfolio of stocks, bonds, cryptocurrencies, or other investment instruments.

102. Bagholder

A bagholder is an investor or trader who holds onto a particular investment, typically a stock or cryptocurrency, that has significantly declined in value. The term implies that the individual or entity is stuck with the investment, often experiencing substantial losses and having little prospect of recovering its initial investment.

103. Bakers

In the context of blockchain and cryptocurrency networks that utilize a proof-of-stake consensus mechanism, bakers are participants who validate and create new blocks. Bakers play a critical role in maintaining the security and integrity of the blockchain. They are responsible for verifying transactions, adding them to the blockchain, and participating in the consensus process.

104. Candlesticks

Candlesticks, also known as Japanese candlesticks, are a popular method used in technical analysis to represent and analyze price movements in financial markets, such as stocks, commodities, or cryptocurrencies.

105. Casascius Coin

Casascius coins are physical collectible coins that incorporate a tamper-proof hologram containing a private key to a specific amount of Bitcoin or other cryptocurrencies. Created by Mike Caldwell, each Casascius coin represents a certain denomination of digital currency and can be physically exchanged like traditional coins.

106. Cascading Liquidations

Cascading liquidations refer to a situation in financial markets, particularly in leveraged trading or margin trading, where the liquidation of one position triggers a series of subsequent liquidations.

107. DAO Summoning

DAO summoning refers to the process of creating or establishing a Decentralized Autonomous Organization (DAO), a type of organization that operates on the blockchain and is governed by smart contracts and consensus mechanisms rather than a centralized authority.

108. Darknodes

Darknodes are a component of certain blockchain networks, particularly in privacy-focused cryptocurrencies. Darknodes serve as decentralized infrastructure nodes that provide network security, privacy, and other specialized services.

109. Data Scraping

Data scraping, also known as web scraping, is the process of extracting or gathering data from websites or online sources. It involves using automated tools or scripts to navigate web pages, retrieve specific data elements, and store the extracted information in a structured format.

110. Day Trading

Day trading is a trading strategy where individuals buy and sell financial instruments, such as stocks, commodities, or cryptocurrencies, within the same trading day. Day traders aim to profit from short-term price fluctuations and typically close all their positions before the market closes to avoid overnight risks.

111. Dead Cat Bounce

A Dead Cat Bounce refers to a temporary and short-lived recovery in the price of a declining asset, such as a stock, cryptocurrency, or commodity, after a significant and prolonged downtrend. The term comes from the idea that even a dead cat thrown from a high building will experience a brief bounce, but it will ultimately continue its fall. In financial markets, a dead cat bounce can mislead some investors into thinking that the worst is over, leading them to buy the asset, only to see it resume its downtrend shortly after.

112. Dead Coin

A Dead Coin is a term used in the cryptocurrency space to describe a digital currency or token that has become obsolete, abandoned, or inactive. These coins often lack development updates, community support, and trading volume. Dead coins are typically the result of failed projects, scams, or projects that lost relevance over time. Investing in dead coins is highly risky as there is little to no chance of revival or recovery in value.

113. Death Cross

A Death Cross is a bearish technical analysis pattern that occurs when the short-term moving average of an asset (e.g., 50-day moving average) crosses below its long-term moving average (e.g., 200-day moving average). This crossover is seen as a signal of a potential downtrend or bearish market sentiment, often leading to further selling pressure. Traders and investors use this pattern to identify potential selling opportunities and to gauge the overall market sentiment.

114. Decentralization Ratio

The Decentralization Ratio is a metric used to assess the level of decentralization within a blockchain network. It typically measures the distribution of control and influence over the network among various nodes or participants. A higher decentralization ratio indicates a more decentralized network, which is often seen as a desirable attribute in blockchain systems as it can enhance security, transparency, and resilience.

115. Decentralized API (dAPI)

A Decentralized API, often abbreviated as dAPI, is an Application Programming Interface that allows developers to access and interact with decentralized networks, such as blockchain platforms or distributed applications. dAPIs enable seamless integration between traditional centralized systems and decentralized infrastructures, facilitating the development of decentralized applications and services.

116. Decentralized Applications (DApps)

Decentralized Applications, known as DApps, are software applications that run on a decentralized network or blockchain platform. Unlike traditional applications that are hosted on centralized servers, DApps utilize blockchain’s decentralized architecture for data storage, security, and execution. DApps cover a wide range of use cases, including finance, gaming, supply chain management, social media, and more.

117. Decentralized Autonomous Initial Coin Offerings (DAICO)

A Decentralized Autonomous Initial Coin Offering, or DAICO, is a fundraising mechanism for blockchain projects that combines the features of an Initial Coin Offering (ICO) with the principles of a Decentralized Autonomous Organization (DAO). DAICOs aim to provide investors with greater control over the use of funds by allowing them to vote on the release of funds at different stages of the project’s development. This voting mechanism is designed to increase transparency and reduce the risk of misuse of funds.

118. Decentralized Autonomous Organizations (DAO)

Decentralized Autonomous Organizations are entities that operate on blockchain networks using smart contracts to facilitate decision-making and governance. DAOs are autonomous in the sense that they execute actions based on pre-defined rules and protocols, without the need for a central authority. Token holders often have voting power in DAOs, allowing them to influence the organization’s direction, fund allocation, and other governance aspects.

119. Decentralized Currency

A Decentralized Currency is a form of digital or virtual currency that operates on a decentralized network, such as a blockchain. Unlike traditional fiat currencies that are issued and controlled by central authorities, decentralized currencies rely on distributed consensus mechanisms to validate transactions and secure the network. Bitcoin and other cryptocurrencies are examples of decentralized currencies.

120. Decentralized Database

A Decentralized Database is a database system that distributes data across multiple nodes or computers instead of centralizing it on a single server. Decentralized databases are often used in blockchain networks and peer-to-peer systems, ensuring that data is replicated and maintained by multiple participants, which enhances data availability, security, and censorship resistance.

121. Decentralized Governance

Decentralized Governance refers to a system where decision-making and control over an organization, platform, or community are distributed among its members or stakeholders. In the context of blockchain and cryptocurrencies, decentralized governance mechanisms involve token holders participating in the decision-making process through voting and consensus mechanisms, reducing the influence of centralized authorities.

122. Decentralized Identifier (DID)

A Decentralized Identifier is a unique identifier used to represent entities such as individuals, organizations, or devices in a decentralized and self-sovereign identity system. DIDs are designed to be cryptographically secure, private, and under the control of the entity they represent, allowing for enhanced privacy and ownership of personal data.

123. Decentralized Marketplace

A Decentralized Marketplace is an online marketplace that operates on a decentralized network, typically utilizing blockchain technology. In a decentralized marketplace, buyers and sellers can interact directly without the need for intermediaries, providing greater control, transparency, and efficiency in the buying and selling process.

124. Decentralized Network

A Decentralized Network is a network architecture where authority, control, and decision-making are distributed among multiple nodes or participants, rather than being concentrated in a central entity. This approach enhances fault tolerance, resilience, and censorship resistance compared to traditional centralized networks.

125. Decentralized Payment Network

A Decentralized Payment Network is a financial network that enables peer-to-peer transactions without the need for intermediaries, such as banks or payment processors. Blockchain technology is commonly used to create decentralized payment networks, allowing for fast, secure, and borderless transactions.

126. Decentralized Social Media

Decentralized Social Media platforms are social networking platforms that operate on decentralized networks, ensuring that user data and content are not controlled or stored by a central authority. Decentralized social media aims to give users more control over their data, protect privacy, and eliminate issues related to data breaches and censorship.

127. Decentralized Stablecoin

A Decentralized Stablecoin is a type of cryptocurrency that is designed to maintain a stable value, often pegged to a fiat currency or another stable asset. Decentralized stablecoins use various mechanisms to ensure price stability, such as algorithmic controls, collateralization, or a combination of both.

128. Decryption

Decryption is the process of converting encrypted or encoded data back to its original, readable form. It involves using a decryption key or algorithm to reverse the encryption process and reveal the plaintext data. Decryption is a critical aspect of secure communication and data storage, as it allows authorized parties to access sensitive information while keeping it secure from unauthorized access.

129. Deep Web

The Deep Web refers to the portion of the internet that is not indexed by standard search engines like Google or Bing. It includes web pages and content that are not accessible through traditional search engine queries. The Deep Web is not inherently illegal or dangerous; it often includes private databases, subscription-based content, and other material not meant for public access. However, it is sometimes associated with illegal activities due to the anonymity it can provide.

130. DeFi

Decentralized Finance, often referred to as DeFi, is a rapidly growing sector within the cryptocurrency and blockchain space. DeFi applications aim to recreate traditional financial services such as lending, borrowing, trading, and asset management, using decentralized technologies. These applications operate on blockchain platforms and smart contracts, removing the need for intermediaries like banks and financial institutions, and providing users with greater control over their assets and financial activities. DeFi has gained significant attention for its potential to increase financial inclusion and accessibility to financial services globally.

131. Digital Asset Custodian

Custodians play a crucial role in the protection of digital assets by ensuring the secure management of investors’ private keys. They accomplish this through various methods, including online storage, referred to as “hot storage,” offline storage, known as “cold storage,” and employing multiple approval mechanisms like “multi-signature” and “smart contract” wallets.

132. Digital Asset Ecosystem

The digital asset ecosystem comprises an intricate network of interconnected data, software, and hardware pertaining to systems or assets such as pipelines, structures, processing plants, ships, and electric grids. Functioning as a data custodian, the ecosystem gathers, purifies, aligns, and ensures the quality of the data.

133. Digital Barter Economy

Early civilizations used the barter system for items like animal skins or salt as currency for trade. In the digital barter economy, you can pay for services with tokens like revenue shares or tokenized art fragments. While this system is ancient and versatile, it faces limitations at a larger scale due to distance and the lack of standardized units of measurement.

134. Digital Commodity

A “digital commodity” is defined as a fungible form of personal property in digital format that can be owned and transferred directly between individuals without the need for an intermediary. This category encompasses assets like cryptocurrencies, such as Bitcoin and Ether. It excludes physical commodities, securities, digital currencies backed by the U.S. government, or any other financial interests determined by the Commodity Futures Trading Commission (CFTC) to not qualify as digital commodities.

135. Digital Currency

Digital currency refers to a type of currency that exists solely in electronic or digital form. It goes by various names, including digital money, electronic money, electronic currency, or cybercash. Unlike physical currency (cash), digital currency is intangible and relies on electronic records and systems for transactions and ownership. It can be used for various purposes, including online purchases, peer-to-peer transfers, and as a medium of exchange within digital ecosystems.

136. Digital Dollar

A digital dollar is a digital representation of the U.S. dollar, recognized as legal tender in the United States. It can be used for various transactions, including purchases and debt settlement, and is stored and transferred electronically. Its implementation is still in the early stages and requires ongoing discussions and research.

137. Digital Identity

A digital identity is the online information tied to an individual, organization, or device. It includes unique identifiers and usage patterns used for personalization and targeted advertising. Digital identities form from user activities and may be pseudonymous or linked to IP addresses, based on contextual information provided during authentication.

138. Digital Signature

A digital signature is a mathematical method for ensuring the authenticity and security of digital documents, messages, or software. It prevents tampering and impersonation in digital communication, providing evidence of origin, identity, and status. In many countries, digital signatures are legally binding, akin to traditional handwritten signatures.

139. Digital Signature Algorithm (DSA)

The DSA (Digital Signature Algorithm) is a cryptographic method used for digital signatures, ensuring message authenticity, integrity, and non-repudiation. It employs a pair of keys: a private one for signing and a public one for verification, widely used in secure communications and digital transactions.

140. Dildo

Dildos, often depicted as red and green candles on cryptocurrency graphs, represent price movements. They display the price range or exchange rate of an asset over defined time intervals.

141. Dip

A “dip” refers to the act of purchasing an asset after its value has decreased. Buying the dip means taking advantage of the opportunity to invest in a coin or token that has recently experienced a decline in value, whether it’s a short-term or potentially long-term decrease.

142. Directed Acyclic Graph (DAG)

A Directed Acyclic Graph (DAG) is a visual representation of a sequence of activities. It portrays the order of these activities using circles (vertices) connected by lines (edges). Each circle represents an activity, and the lines show the flow from one activity to the next. “Directed” signifies that each edge has a defined direction, indicating a one-way flow between vertices. “Acyclic” indicates the absence of loops or cycles in the graph, meaning there’s no path that leads back to the initial vertex once an edge is followed.

143. Distributed Consensus

Distributed consensus is crucial in decentralized systems, ensuring reliability, fault tolerance, and agreement among multiple participants. It becomes challenging when multiple parties aim to agree on values, with complexity growing as more parties need to reach consensus. In distributed consensus, various entities collaborate via a network to achieve a common goal by agreeing on specific values.

144. Distributed Denial of Service (DDoS) Attack

A DDoS attack, or Distributed Denial-of-Service attack, is a cybercrime where the attacker overwhelms a server with excessive internet traffic, disrupting access to connected online services and websites for users.

145. Distributed Ledger

A distributed ledger is a decentralized record-keeping system spread across various sites, institutions, or geographic locations, accessible to multiple users. It ensures transparency by allowing transactions to be witnessed by the public. Each network node participant can access and maintain an identical copy of the shared record. Any modifications or additions to the ledger are quickly synchronized and replicated across all participants within seconds or minutes.

146. Distributed Ledger Technology (DLT)

Distributed ledger technology (DLT) refers to the underlying infrastructure and protocols that enable concurrent access, validation, and updating of a networked database. DLT serves as the foundation for blockchain technology, offering users the ability to track changes and their origins, reducing the necessity for data auditing, ensuring data reliability, and granting access only to authorized individuals as needed.

147. Distributed Network

A distributed network is a computer network that spans multiple networks, creating a unified data communication network. This network can be managed collectively or independently by each constituent network. In addition to facilitating shared communication among its components, a distributed network often disperses processing tasks across its nodes.

148. Distribution Phase

The distribution phase is the opposite of the accumulation phase in the market cycle. It occurs when the market moves sideways after a prolonged uptrend. Institutional investors and smart money players strategically sell their holdings without causing significant price drops.

149. Diversification

Diversification means spreading your investments across various assets or markets, rather than putting all your money into one. It’s a strategy to reduce the risk of market downturns. For instance, if you invest all your $1,000 in a single stock, you could lose it all if that stock crashes. However, by diversifying and investing, say, $500 in tech stocks, $300 in healthcare, $100 in real estate, and $100 in bonds, you can lower the risk of losing everything.

150. Diversified Proof of Stake

Diversified Proof of Stake (DPoS) is a variation of the widely-used PoS consensus mechanism that permits the staking of multiple assets on a single blockchain. This innovation facilitates the staking of assets from one blockchain onto another, enabling what’s known as interchain staking.

151. DeFi Aggregator

A decentralized finance aggregator is a platform that combines and provides access to various decentralized financial services and products, allowing users to find the best possible yields, interest rates, or other financial opportunities across multiple DeFi protocols.

152. DeFi Degens

DeFi degens refer to individuals or users who actively participate in decentralized finance activities, often taking high risks and seeking high rewards within the DeFi ecosystem.

153. Deflation

Deflation is the decrease in the general price level of goods and services in an economy, resulting in the increase of purchasing power of a currency. It is the opposite of inflation.

154. Delayed Proof of Work (dPoW)

dPoW is a consensus mechanism that enhances the security of blockchain networks by notarizing their blocks onto the Bitcoin blockchain, leveraging the robustness of Bitcoin’s Proof of Work.

155. Delegated Proof-of-Stake (dPOS)

dPOS is a consensus algorithm used in blockchain networks, where a fixed number of nodes are chosen to validate transactions and create new blocks based on the votes of coin holders.

156. Delisting

Delisting refers to the removal of a cryptocurrency or token from a particular exchange, making it no longer tradable on that platform.

157. Demurrage

Demurrage is a charge or fee levied on currency holders for keeping their money in circulation. It encourages spending and economic activity by gradually reducing the value of the currency over time.

158. Denial-of-Service (DoS) Attack

A DoS attack is a malicious attempt to disrupt the normal functioning of a targeted server, service, or network by overwhelming it with a flood of illegitimate requests or traffic.

159. Depth Chart

A depth chart in trading represents the supply and demand levels for a particular cryptocurrency or asset at various prices. It visually shows the buy and sell orders in the order book.

160. Derivative

A derivative is a financial contract whose value is derived from the performance of an underlying asset, index, rate, or event. Common types include options, futures, and swaps.

161. Derivatives Market

A derivatives market is a financial market where participants can trade derivatives, which are financial instruments whose value is derived from an underlying asset, index, or rate.

162. Desktop Wallet

A desktop wallet is a software application installed on a computer that allows users to securely store, manage, and transact with their cryptocurrencies.

163. Deterministic Wallet

A deterministic wallet is a type of cryptocurrency wallet that generates keys from a single starting point, known as a seed, ensuring that the same sequence of keys can be reproduced if the seed is known.

164. Dex Aggregator

A DEX aggregator is a platform that combines multiple decentralized exchanges (DEXs) to provide users with the best possible trading rates and liquidity across different DEXs.

165. Dharma Protocol

Dharma Protocol is a decentralized lending platform built on the Ethereum blockchain, allowing users to lend and borrow cryptocurrencies in a peer-to-peer manner.

166. Diamond Hands

“Diamond hands” is a slang term in the cryptocurrency community, referring to someone who holds onto their investments despite market volatility, showing strong conviction in their investment choices.

167. Difficulty

Difficulty, in the context of blockchain and cryptocurrency mining, refers to the level of complexity required to find a new block and add it to the blockchain. It adjusts over time to ensure a consistent block creation rate.

168. Digital

Digital refers to data or information that is in a format that can be processed and transmitted by electronic devices, typically represented in binary code.

169. Digital Art

Digital art refers to artistic creations or works of art that are produced or presented using digital technology, such as computer-generated graphics, digital painting, or interactive installations.

170. Digital Asset

A digital asset is any form of data that has financial value or represents ownership rights and can be stored and traded electronically. Cryptocurrencies, tokens, and digital representations of real-world assets are examples of digital assets.

171. Digital Asset Custodian

172. Digital Asset Ecosystem

173. Digital Barter Economy

174. Digital Commodity

175. Digital Currency

176. Digital Dollar

177. Digital Identity

177. Digital Signature

178. Digital Signature Algorithm (DSA)

179. Dildo

Dildos, often depicted as red and green candles on cryptocurrency graphs, represent price movements. They display the price range or exchange rate of an asset over defined time intervals.

180. Dip

181. Directed Acyclic Graph (DAG)

182. Distributed Consensus

183. Distributed Denial of Service (DDoS) Attack

184. Distributed Ledger

185. Distributed Ledger Technology (DLT)

186. Distributed Network

187. Distribution Phase

188. Diversification

189. Diversified Proof of Stake

190. Documentation

In blockchain, “Documentation” refers to a section storing essential data about an asset, such as its name, ownership history, smart contract code, and metadata. This information is recorded on the blockchain, ensuring transparency and immutability. The specific details included can vary based on the type of asset and the blockchain platform used.

191. Dolphin

“Dolphins” in cryptocurrency are investors with larger holdings than small players (“fish or octopus”) but not as substantial as “Whales.” The crypto market, symbolizes an ocean and accommodates investors of different sizes, represented as a home to different fishes, big or small.

192. Dominance

Dominance in the cryptocurrency market is a metric indicating Bitcoin’s value relative to other major cryptocurrencies. It measures Bitcoin’s significance within the overall cryptocurrency landscape.

193. Dorian Nakamoto

Dorian Nakamoto is a Japanese-American engineer who has been mistakenly identified by some as Satoshi Nakamoto, the pseudonymous creator of Bitcoin. However, Dorian Nakamoto has denied any involvement in the creation of Bitcoin, and there is no conclusive evidence linking him to the development of the cryptocurrency. The true identity of Satoshi Nakamoto remains unknown.

194. DotSama

DotSama is a term used to collectively refer to Polkadot (DOT) and Kusama (KSM), popular blockchain ecosystems in the cryptocurrency space. This informal term is likely coined on platforms like Twitter to conveniently encompass both emerging projects.

195. Double Spend Attack

A double spending attack is an attempt to spend the same digital currency more than once, exploiting the digital nature of the currency. It poses a risk in decentralized systems like blockchain. Preventing such attacks is a key challenge in blockchain design, and consensus mechanisms are employed to ensure the integrity of transactions and prevent duplication.

196. Double Spending

Double spending in blockchain is the risk of spending the same digital currency more than once. Blockchain addresses this issue through consensus mechanisms like proof-of-work or proof-of-stake, ensuring that once a transaction is confirmed and added to the blockchain, it is secure and cannot be duplicated.

197. dPoSec (Distributed Proof of Security)

Distributed Proof of Security (dPoSec) is an innovative consensus mechanism designed to maintain uninterrupted operation of the blockchain network, even in the event of compromise in around a third of participating nodes. Additionally, it tackles the primary challenges encountered by the distributed network of nodes and validators.

198. Drawdown

A drawdown signifies the extent to which an investment or trading account decreases from its peak value before rebounding to the peak. Expressed as a percentage, drawdowns are a gauge of downside volatility, although specific traders may use dollar terms when relevant.

199. DRC-20

DRC-20 serves as a token standard within the Dogecoin network, enabling developers and users to generate fungible assets within the Dogecoin ecosystem. This standard bears resemblance to Ethereum’s ERC-20.

200. Drivechain

Drivechain is a blockchain scaling solution that enables the sidechains to be linked to the main blockchain, allowing for increased scalability and flexibility in the execution of smart contracts.

201. Dual Governance

Dual Governance refers to a system where a blockchain project or platform is governed by two distinct sets of rules or mechanisms, often involving both on-chain (protocol-based) and off-chain (community-based) governance structures.

202. Dual-Token Economy/Model (Two-Token Economy)

In a Dual-Token Economy, a blockchain platform employs two different tokens, each serving a distinct purpose. For example, one token might be used for transactions (currency), while the other token is utilized for network governance or resource allocation.

203. Dump

In the context of cryptocurrency, “dump” refers to a significant selling of a particular cryptocurrency, leading to a rapid decline in its market value.

204. Dumping

Dumping refers to the act of selling a large amount of a particular cryptocurrency in a short period, often causing a substantial drop in its price. It can be a deliberate strategy or a panic sell-off.

205. Dust Transactions

Dust transactions involve very small amounts of cryptocurrency that are uneconomical to spend or transfer due to transaction fees. These tiny amounts may accumulate in a wallet over time.

206. Dusting Attack

A Dusting Attack involves sending tiny amounts of a cryptocurrency to numerous addresses to potentially trace and de-anonymize the owners of those addresses.

207. DYCO (Dynamic Coin Offering)

DYCO is an innovative token sale model that dynamically adjusts the token price based on market demand. It aims to find a balance between fixed and Dutch auction models, allowing for more flexibility in the token sale process.

208. DYOR

DYOR is a common acronym in the cryptocurrency space, encouraging individuals to conduct thorough research and due diligence before making investment decisions.

209. E-Signature

E-Signature refers to a digital signature or electronic signature, used to authenticate the identity of the sender and validate the contents of a digital document. It is commonly used in blockchain and digital transactions for secure verification.

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