Blockchain Glossary

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A TO Z GLOSSARY OF BLOCKCHAIN TERMS FROM BASICS TO ADVANCED
PREFACE
Blockchain has emerged as one of the most important technologies in the last
few years. It is being embraced by all fields including medical, fintech, and
education.
As the technology is becoming more popular, new terms and lexicons enter
continuously, expanding its universe.
This Ebook on Blockchain Glossary covers all the important terms related
to blockchain and Bitcoin. The terms have been explained in a simple and lucid
manner.
The Glossary, arranged in alphabetical order, covers all the terms, concepts,
protocols, tools, and lots more. After completing this Ebook, you will have all the
information to become a blockchain pro.
The core concepts of blockchain have been simplified so that it becomes your
one-stop source to understand the technology.
Thank You,
Team Blockchain Magnets
Copyright
All the information in this book has been given by experts who have domain expertise in this
field. If you find any information given in this e-book inaccurate, please contact our team
at support@blockchainmagnets.com. Our editors will endeavor to make corrections in future
issues.
The information given in the book has been presented after much deliberation in the editorial
teams.
All rights reserved. No part of this eBook including the cover page and images may be
reproduced, distributed, or transmitted in any form or by any means without the prior written
permission of BlockchainMagnets.com, the copyright owner.

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Absolute Advantage
The ability of a producer to produce goods and services in higher quantity using
the same cost or producing the same good quantity at lower costs than other
producers is known as absolute advantage. It can lead to large trade gains
between the producers of different goods with an absolute varied advantage.
A firm with an absolute advantage can produce goods and services at a low
absolute cost per unit using small inputs compared to another firm producing
similar goods and services. The ability to produce certain goods and services at a
lower cost than another party is referred to as specifically. A party, in this case, is
a company, a country, a person, or anything that can create goods and services.
Active Management
It is where human capital is used to manage the portfolio of funds. Normally,
managers in charge of active management rely fully on personal judgment,
forecasts, and analytical research to decide the type of securities to purchase,
hold or sell. Those investors that don't use the efficient market hypothesis always
believe in active management.
Investors believe that there are inefficiencies in markets that make the market
prices not be correct. Thus, it is easier to make a profit in the stock market by
identifying those securities that are mispriced and coming up with a strategy to
take advantage of them.
Active management aims to generate good returns than that of a
benchmark(market index). Investors use the stock index to measure the stock
market and compare the current prices with previous prices, which helps to
calculate the market performance. Unfortunately, many active managers are not
able to outperform passively managed funds. Moreover, the actively managed
funds usually charge high fees than the passively managed funds.
A

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Ad Hoc
This Latin word means "to this," commonly understood as "for this." Besides, it can
be used to mean "as needed."This term is commonly used in government and
business settings. Business firms and governments form ad hoc committees
frequently to study a certain issue or problem and develop recommendations to
address it.
Airdrops
In the cryptocurrency business, an airdrop means a marketing stunt that involves
sending tokens or coins to the wallet addresses to enhance awareness of the
new virtual currency. Cryptocurrency airdrops are free coins that are dropped
directly into your wallet. It is free money given to you.
Airdrops are marketing processes that save firms a lot of money. Companies
distribute their coins or tokens into the wallets of the users free through the
process of airdrops.
Algorithm
Cryptocurrency is a type of currency where encryption is normally used to
regulate and generate currency units. It uses cryptography to ensure there is
security and blockchain technology for recording transactions.
The mechanism of adding chains of records to the validation of transactions is
known as the blockchain algorithm. Blockchain developers are doing all they
can to ensure that every person controls their algorithms and personal
information related to identity on their own.
Allocation
This is an allotment of equity or tokens that may be purchased, earned, or set
aside for a certain investor, an organization, a group, etc. For instance, a team
may sell out the allocation of the maximum amount to the early investors.

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All Or None Order (AON)
It is used in the general entities context. It means a limited order price that is to
be carried out in its entirety or not at all, which leads to testing the strength of
the counterparty. You can't cancel the AON order if it is not executed during its
representation in the trading crowd.
It remains alive until when it will be canceled or executed. AON order differs
greatly from the FOK order.
Altcoin
Altcoin is a cryptocurrency, just like Bitcoin. Bitcoin and Altcoin share some
characteristics, but they are different in some ways. Altcoin differs from Bitcoin
in terms of coin-distribution techniques, mining mechanisms, and the ability to
design decentralized applications.
Even though Bitcoin is highly influential and innovative, it has few issues being
fixed by the developers. Altcoin makes faster transactions, is less volatile, and is
more private.
Angel Investor
An Angel investor is also called a private investor, angel funder, or seed investor.
It is a high-net-worth person who offers financial backing to small entrepreneurs
or start-ups in exchange for equity ownership in the business. Often, an angel
investor can be an entrepreneur's family or friend.
Unlike institutional venture capitalists that invest other individuals' money, angel
investor invests in an entrepreneurial firm. Recently, angel investing has greatly
soared as individuals seek good returns on their money. Typically, angles come
in two varieties, i.e., those you know and don't know.
Anti-Money Laundering
It refers to the policies and legislation forcing financial institutions to monitor
their clients to prevent corruption and money laundering. Financial institutions
are needed to report any financial crimes they get, and everything is done to stop
the crimes.

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Application Programming Interface (API)
This is software that enables two applications to talk with each other. Every time
an app like Facebook is sends a message, the API makes that possible.
ASIC-Resistance
Application Specific Integrated Circuit (ASIC ) are computers designed to serve
a specific task. These devices are to be used in the process of mining Bitcoin.
Bitcoin is the largest cryptocurrency with a truly decentralized consensus, and as
such, it can't be considered ASIC resistant.
Arbitrage
It refers to the buying and selling of assets simultaneously from varied platforms,
locations, or cash exchanges in price difference. In the arbitrage trade, the
underlying asset's quantity bought and sold must be the same. The price
difference is captured as the net payoff from trade.
Ask Price
It represents the minimum price the seller is willing to take for the security.
Asset Management
It is where the assets are developed, operated, maintained, and sold cost-
effectively. Asset management is mostly used in finance to mean individuals or
firms that manage the assets on behalf of other individuals or firms.
Asynchronous
It is the relationship between more events that interact within the same system
but don't happen at predetermined intervals and don't rely on each other for
existence.

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Atomic Swap
This is a peer-peer cryptocurrency exchange from one party to another without
going through a third-party service. The users have control during the whole
process.
Attack Surface
Refers to the ways the attackers can exploit your apps. It may be protocol,
operating systems, SSL certificates, and more.
Auction
This is a common name for sales where the price is not set or arrived at by
negotiation but is known through open bidding. The types of auctions are
forward auctions where many buyers bid the goods of one seller. And reverse
auction where many sellers bid for the order of one buyer. For an auction to be
complete, the bid must be accepted by the buyer or seller.

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Bag
A bag in crypto means coins or tokens a person is holding as part of their
portfolio. It simply means a significant quantity of a certain cryptocurrency.
Bear markets
When a market experiences a prolonged decline in prices, it becomes a bear
market. Bear markets are shorter than bull markets. In such markets, prices of
securities fall to 20% from recent highs due to widespread pessimism and
negative sentiments from investors. It is used in traditional markets and
cryptocurrencies.
Benchmarking
It is the process of measuring the success of your company against other similar
firms. This helps you to discover any performance gap and closing it to enhance
your performance. By studying other firms, you can know what is needed to
improve the efficiency of your company and become a bigger player in an
industry setting.
Beta Coefficient
This is a measure of the correlation of an investment portfolio or security to the
overall market movements. A statistical measure of risk can be derived when the
returns of individual security are compared to that of an overall market. Then the
proportion risk that can be attributed to the market is identified.
B

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Bid Price
Bid price refers to the highest price a buyer pays to purchase shares of the stock
at a specific time. It is also the lowest price a seller will sell a stock. The bid price
is usually lower than the offer/ask price. Spread is the difference between the
asking price and the bid price.
Bid-Ask
Bid-ask is the term used on stocks. It is also known as the spread and is the
difference between the stock's bid price and the ask price of the same stock.
Usually, individual exchanges such as NASDAQ or New York Stock Exchange
always work for hand in hand with brokers or stock specialists to set the bi-ask
price of the security.
Bid-ask spread is ideal in purchasing the security at the best price. The ask price
is always high as compared to the bid price. The broker makes a profit from the
spread. In short, the bid is the price an investor is willing to pay to purchase a
certain stock and at a specified time. The ask is that amount an investor is ready
to sell the stock at a specific time.
Bitcoin
This is a type of digital cryptocurrency. Ideally, it acts as a US dollar or Japanese
yen, but it doesn't link itself to any central bank, and a government body like the
treasury does not regulate it. Its transactions normally take place online and
provide a certain degree of anonymity to its users. The users are securely
recorded in a ledger known as a blockchain. Normally, bitcoin users do buy the
bitcoins and can store them digitally in a cryptocurrency wallet.
Bitcoin Address
This is a unique identifier that acts as a virtual location to send cryptocurrency.
Sending cryptocurrency to Bitcoin is done the same way as sending fiat
currencies to the email address. The Bitcoin address is not for permanent use
but rather for a single transaction. Bitcoin address differs from a digital wallet in
that it can't hold any balance and has 26-35 alphanumeric characters.

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Bitcoin Pizza
May 22, which is known as Bitcoin Pizza Day, a programmer named Laszlo
Hanyecz in the year 2010 paid for the two pizzas with a cryptocurrency. He paid
10,000 for two pizzas, thus making him the first person to use bitcoin in the
commercial transaction. At that time, the deal was valued at $41.
Bitcoin Dominance
This is a measure of how much a crypto cap is comprised of Bitcoin. Bitcoin
dominance can assist you in knowing the trend of adults and BTC.
Black Swan Event
This phrase is commonly known and used in the finance world. It is a highly
negative occurrence that is challenging to predict. In simple terms, black swan
events are not only unexpected but also unknowable. This term was made
popular by the former Wall Street trader called Nassim Nicholas Taleb. The Black
Swan Event aids you to understand whether the altcoins are uptrend or
downtrend against BTC.
When BTC increases, the alts lose BTC value, and when BTC decreases, alts gain
BTC value. It, therefore, means that you will want join Bitcoin when the
dominance has an uptrend and join alts when the dominance is downtrend.
Blocks
These are records that, when put together, forms a blockchain. In
cryptocurrencies, these blocks are things like ledger pages, and the record-
keeping book is a blockchain. Typically, a block is just a file to help store
unaltered information related to the network. They hold all the cryptocurrency
records on transactions and are hashed and encoded into the hash or Merkle
tree.

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Block Explorer
It is a tool that enables people to see the current and past cryptocurrency
transactions online on the blockchain. The user will be able to see all the data on
the hash rate. Besides, Block explorer tells us how the transaction growth rate is
and offers other useful info. In simple words, a block explorer is an online
blockchain browser that reveals all data of blocks and transactions.
Block Header
Block header helps in identifying a block in a blockchain. The block header hash
is arrived at by running the block header via a SHA256 algorithm twice and is
calculated by each node.
Block Height
This refers to the current number block in the blockchain. The genesis block is
the first block in any blockchain, has a block height of zero. Thus, a block height
is not only a positive integer but also greater than zero. For instance, Alice sends
1 bitcoin to Bob, which is a block. A collection of transactions is referred to as a
block, with each block containing a cryptographic hash and a timestamp order
to ensure the block's integrity and the whole blockchain.
Block Reward
This is a rule for bitcoin cryptocurrency. The Bitcoin developer Satoshi Nakamoto
referred to block rewards as a way of controlling the circulation. It dictates the
amount miners receive from bitcoin mining.
Blockchain
This is a public and digitalized ledger that records online transactions. It is the
core technology used in the cryptocurrencies such as bitcoin. Blockchain makes
sure that there is full integrity through encryption, validation, and permanent
record of transactions.

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Bloom Filter
This data structure is designed to show you when an element is present in a set.
Boom filter is somehow probabilistic in that it shows us the element is either not
inset or maybe inset. The base data structure is the Bit Vector.
Bounty
The term bounty can mean a lot of things. First, it can mean an abundance of
fresh produce. It can also mean something given generously. It can also be a
reward from the local government to assist track the criminals. A bounty hunter
is a person who makes a living by finding the wanted criminals.
Break-even point
In accounting, it refers to the revenue available to cover a firm's total fixed,
variable expenses. Also, it can mean the time when revenue forecasts are equal
to the product.
Bull Market
This is a market condition when prices continue to rise. There are two trends that
markets tend to follow, that is, price increase or decrease.

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Candidate Blocks
These are blocks made by the miners as part of the proof of the work consensus
procedure. A miner will get a reward block when it produces a block candidate
with a valid hash block that broadcasts the block on the blockchain starts its life
as the many pre-validated block candidates.
Candlesticks
They are used to chart price action that displays the high, low, open and close
prices for the specified period. This highly depends on the candlestick that closes
high/low from the opening price. This will have a colour difference, normally, red
or green that red marks the down candle and green marks the candle, which is
closed higher. It can be displaced in various time frames, from the monthly with
daily chart throughout the way down to less than the minute data.
Capitulation
This is one of the panic selling, which builds the momentum that causes a huge
decline in the stock prices that drops them to the bottom. The floor is usually
near/below the prior support levels. The bottom is always a place where
everything does look cheap to purchase. By definition, the bottom marks the
market turn, followed by the sustained, broad rally. During the capitulation
selling period, the market watchers do talk incessantly concerning the fear in the
market. If the fear is more then, it looks like a market is likely to hit bottom.
C

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Censorship Resistance
The censorship resistance through cryptosystems that comes through
censorship resists the unalterable transactions. Normally, there is no way to
rewrite the blockchain's history. However, if the blockchain is to safeguard the
information's accessibility, it must remain public. The resistance to censorship
means that everybody can interact with the network on similar terms, regardless
of personal characteristics. To achieve true censorship resistance, the users do
not exclude others from the information.
Central Bank
This independent national authority conducts the monetary policy, regulating
the banks and providing financial services that include economic research. Its
main goals are to ensure the nation's currency stability to help keep
unemployment low and prevent inflation.
Central Processing Unit (CPU)
It is a principal part of a digital computer system generally composed of the
major memory, the control unit and the arithmetic-logic unit. Besides, it
constitutes the entire physical part of an entire computer system. And it's linked
to the various peripheral equipment, including the input or output devices and
the auxiliary storage units. In modern computers, the CPU is made on an
integrated circuit chip known as the microprocessor.
Cipher
The cipher is a technique of hiding text or words with encryption by replacing
the original letters with other letters, numbers or symbols via substitution or
transposition.
Besides, a cipher also means an encrypted text, an encryption key and a
cryptography system for an original text. The encrypted text is also referred to as
ciphertext. The plaintext is an original and encrypted text.

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Circulating Supply
These are the main numbers that are currently available in the people's hands.
The locked, reserved coins are not included in a circulating supply.
Cloud
It also refers to the servers accessed on the internet, with the databases and
software that runs on the servers. The cloud servers are usually located in data
centres worldwide. When cloud computing is used, the firms and users do not
have to manage the physical servers or run the software applications on their
machines.
Collateral
Its simple definition is an intangible or tangible asset that a borrower pledges to
the lender to secure a loan. Suppose the borrower defaults in their obligations
to a secured lender of the loan documents. In that case, a secured lender will
automatically exercise remedies to the foreclose on collateral and try to sell it to
recover that loan amount.
Colocation
It is a data centre facility where a business can rent a space for servers and other
computing hardware. Normally, a colo offers the building, bandwidth and power
and cooling and physical security. On the other hand, the customer offers the
servers and the storage. The facility's space is usually leased by track, cage,
cabinet or the room. Its many colours have highly extended the offering to
include the managed services which can support their clients' business
initiatives.

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Commodity Futures Trading Commission
The CFTC is an independent federal agency in the US established by the
commodity futures trading commission Act. The CFTC usually regulates the
future and option markets of a given commodity with the main goal of
promoting competitive and efficient markets and protecting its investors from
manipulation, fraud, and abusive trade practices.
Confirmation Time
It is defined as an elapsed time between a blockchain transaction submission to
the network, and the period it's finally recorded to the confirmed block. In simple
words, it represents the total time any user has to wait till their transaction is
collected and confirmed by the miner mode.
Cryptocurrency
This is a virtual or a digital currency which is usually secured by cryptography.
This, in turn, makes it almost impossible for a counterfeit to happen. Most of the
cryptocurrencies are usually decentralized networks that are based on
blockchain technology. The disparate networks of computers always enforce this
type of a distributed ledger. The defining cryptocurrency feature is generally
unique and not issued by any central authorities, making them theoretically
immune to government manipulation or interference.
Cryptography
This is always associated with the procedure of converting ordinary plain text to
unintelligible text and vice versa. This is a method of transmitting and storing
data in a specific form so that only those for which it's intended and can be read
and processed. Cryptography not only safeguards data from alteration and theft
but can also be used for the authentication of the user.

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Daemon
This program type on the Unix-like operating system runs unobstructedly in the
background rather than the user's direct control that is waiting for activation by
an occurrence of the specific event or a condition. The daemons are normally
instantiated as the processes.
A process is executing the instance of the program. The processes are normally
managed by a kernel assigned to each on a unique process identification
number.
Dead Cat Bounce
This is market jargon where the security or the index experiences a short burst
of the upward movement in a largely downward trend.
Decentralized Applications
The dApps are digitalized programs or applications that exists and runs on the
blockchain or the P2P network of the computers rather than a single computer.
They are always outside a purview and the control of any single authority.
Decentralized Autonomous Organizations (DAOs)
The DAOs are typically involved in the set of people interacting with each other
as per the open-source protocol's self-enforcing. The keeping of the network sites
the performance of the other network tasks, which are rewarded with native
network tokens.
The blockchains and the smart contracts reduce the costs of transaction of the
management at a higher level of transparency, which aligns with all the
stakeholders' interests by a rule consensus rules tied to a native token.
D

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Individual behaviour is incentivized with the token to contribute to a common
goal collectively. The members of the DAO aren't bound to the together by the
legal entity, nor do they get into the formal legal contracts.
Decentralized Exchange
The decentralized exchange is the market exchange that doesn't rely on the
third-party service to hold the client's funds. But, the trades happen directly
between the users via an automated process. Such a system can be established
by forming the proxy tokens or the assets or via a decentralized multi-signature
escrow—system, among many solutions.
Decryption
This is the procedure of transforming the data rendered unreadable through the
encryption lack to the encrypted form. In the decryption, the system removes
and converts garbled data into texts and images easily understandable by the
reader and the system.
The description might be accomplished either automatically and manually. A
set of passwords or keys may also perform it.
Deep Web
Deep web refers to a secret section of the internet whose content isn't accessible
through the standard search engines such as Google, Bing and Yahoo.
Delisting
The delisting solves the removal of the listed securities of the firm from a stock
exchange that is traded permanently.

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Difficulty
This is a difficulty is the parameter that the bitcoin and cryptocurrencies used to
keep an average time between the blocks steady since the network's hash power
changes. The cryptocurrencies that use the proof of work blockchains are
maintained via a process known as mining.
In such a system, the miners running a cryptocurrency software client complete
to find the new block that adds the recent batch of the transaction data on a
chain. They usually receive the fees and a reward of a new token.
Diversification
It can be understood as a corporate strategy that a firm implements to increase
market share and sales volume by introducing new products in the new
industries or markets. This is distinct from the core business.
Diversification means expanding a business by entering into a whole new
segment or investing in the business external to the company's existing product
line scope. Businesses use this strategy to manage the risk by using the potential
feats during an economic slowdown.
Dollar-Cost Averaging
This is a strategy that spreads out your fund or stock purchases at regular
intervals and in roughly equal amounts. When it is done effectively, it can have
great benefits for the portfolio. The main reason this happens is that the dollar
cost averaging smoothens the purchase price over time and ensures that you are
not dumping your money in a high point for the prices.
This strategy can be powerful in the bear market, thus allowing you to purchase
the dips of the purchase stock at low points when most investors fear to
purchase. When you commit to this strategy, it means that you may be investing
in when the stock or market is down.

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Double-Spending
This is one of the major concerns of a cryptocurrency developer. Double
spending refers to an incidence where an individual spends a balance of the
cryptocurrency more than once, creating a disparity in the process between the
record spending and the amount of such a cryptocurrency available.

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Eclipse Attack
A node always depends on an x number of the nodes chosen using the peer
selection strategy that views a distributed ledger.
Encryption
This is the process of using the algorithm to the transformation to make it
unreadable for the authorized users. The cryptographic methods safeguard
sensitive data like credit cards for unauthorized data.
Enterprise Ethereum Alliance
This is a member-led organization that aims to drive open standard technology
to empower all enterprises.
ERC-20
This is a popular cryptocurrency system based on the use of the token and which
can be bought, traded or sold. ERC 20 is one of the major tokens and is emerged
as a technical standard for smart contracts.
Exchanges
They offer a high varying degree of security, privacy, safety and control on your
funds and data.
E

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Falling Knife
This type of stock represents those stocks that have experienced a speedy
decline of the stocks. Besides, it can happen with other assets.
Fiat
Fiat money means all types of money made legal bender by the government
decree or fiat. This term is mainly reserved for the legal tender paper money or
the coins that have the face values for exceeding the commodity values.
Fal Or Kill Order
This is a specific market type order that shows a broker to execute an order
immediately.
Fest Mover Advantage
It refers to n advantage made by the firm that introduces a product/service first
to market.
Fiscal Policy
It is where the government uses its spending and taxation to influence an
economy. This greatly helps the government.
F

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Forced liquidation
It is where an outsider party forces the sale of an asset of another party's asset.
Foreign exchange/forex
Typically, this is an over the counter technique. Banks, firms or individuals convert
one currency to another through foreign trading.

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Gas
Ethereum Gas is a unit that measures the amount of the computational effort
taken for a certain operation to be executed. Every operation in Ethereum, be it
a small contract execution or a transaction, needs some gas. Subsequently,
miners get paid in Ether which is equivalent to the amount of gas used to
execute and complete an operation.
Gas Limit
This term is used in two ways in Ethereum. Usually, there is a limit to the total
gas spent on transactions contained within a block. By limiting the gas used in
every block, managing the growth of Ethereum blockchain and the cost of
operating a node or miner becomes easier. Collectively, miners can increase or
reduce Ethereum's block gas limit to a certain range.
Theoretically, increasing the limit would enable an Ethereum network to process
many transactions per second. Therefore, when the transactions begin to pile up,
you will often hear the miner’s discussions signaling for the higher gas limits.
General Public License
The GPL (General Public License) is one of GNU's most popular open-source
licenses. Richard Stallman created the to safeguard the GNU’s software from
being proprietary. It’s a great implementation of his concept referred to as
“copyleft.”
If you’ve used any component of a GPL in your software, then the whole software
is considered the ‘work based on the GPL. As such, you aren’t allowed to claim
copyright or patent on the software. Furthermore, you’re obligated to display a
warranty disclaimer, copyright notice, copy of the GPL, and intact GPL notices.
G

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Genesis Block
The genesis block is the basis of the entire blockchain system and the prototype
of all subsequent blocks in the blockchain. The genesis block is almost always
hardcoded into the software of the applications using its blockchain. This is a
special block that does not refer to the previous one. Each block, created from
the moment zero, can automatically track the genesis block as its ancestor
through links with the previous ones.
GitHub
At Github’s heart is Git, an open-source project started by Linus Torvalds, the
creator of Linux. A trainer at Github, called Matthew McCullough, explains that
Git manages and controls systems and stores revision of projects just like other
versions.
Even though it is mostly for code purposes, McCullough claims that Git can
control the type of file, like Word documents or Final Cut projects.
The Git repository uploaded to GitHub is accessible through the Git CLI and Git
Commands. Github offers a Web-based graphical interface.
Gossip Protocols
Gossip protocols are a family of protocols that enable eventual consistency in a
distributed system. They sacrifice consistency, gain accessibility and resilience to
separation. As such, Gossip protocols could be used to solve issues such as
calculating averages.
Gwei
Gwei is denoted in the Ethereum cryptocurrency (ETH) and is used on the
Ethereum network. This Ethereum is also a blockchain platform just like Bitcoin
where users can transact among themselves to purchase and sell goods &
services without intermediaries or third-party intervention.
Gwei is also called nanoester or simply nano to denote the ninth power of
fractional ETH. If you try to imagine the physical size of gwei - how you can
visualize 100 pennies - you probably won't be able to because measurements on
the air are almost invisible, like digital dust.

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Hacker
There are tons of definitions for the term hacker, most of which have to do with
technical competence and the pleasure of solving problems and overcoming
obstacles. A hacker breaks into computer security to subsequently recommend
practical ways to improve their protection mechanisms. The term hacker may
also refer to professionals of the highest level, criminally using their knowledge
and experience.
Halving
Halving is the process of reducing the rate at which new units of cryptocurrency
are generated. In particular, this refers to a periodically occurring event, the
consequence of which is a decrease in the miners' reward for a successfully
mined block.
Hard Cap
The maximum amount of money a cryptocurrency can get from the investors in
its ICO (Initial Coin Offering). An Initial Coin Offering is a limited-time procedure
where new cryptocurrencies make their coins known publicly by selling them to
people.
Mostly, people invest in these coins with hopes that later on, the coins will be
worth many times more than what was paid. A hard cap is larger than a small-
cap.
H

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Hash
A hash is mainly a function that is one of the main components of modern
cryptography and blockchain algorithm. Hashing is the transformation of
information into a unique set of characters, which is inherent only in this array of
incoming information. This set of characters will be called the hash.
Hash Rate
It is a unit of measurement that determines the computing power of the Bitcoin
network. The bitcoin network should be made of intensive mathematical
operations for safety reasons. If the network reaches a hash rate of 10, it can make
10 trillion calculations per second.
Hashed TimeLock Contract (HTLC)
Temporary Hash Lock Contract (HTLC) is a smart contract used in cryptocurrency
channels to eliminate counterparty risk. This allows time-limited transactions to
be implemented. In practice, this means that the transaction recipients must
confirm the payment by creating cryptographic evidence within a specified
period. Otherwise, the transaction will fail.
HODL
This term is derived from misspelling the word "hold," which refers to purchase-
and-hold strategies in the Bitcoin and cryptocurrencies context. HODL term
originated in 2013 from a post on the bitcoin talk forum.
Honeypot
This is a security system designed to detect and counteract any unauthorized
access or the use of a computer system. Honeypot refers to the way the system
traps unauthorized users like hackers or spammers.

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Iceberg Orders
An iceberg order is a large, single order split into smaller batches, usually with an
automated program, to obscure the actual order quantity. The portion is then
sent to market.
Immutability
The blockchain ledger can remain unaltered. The blockchain data can't be
changed. Each of information in the blockchain like transaction details or facts.
Index
An index is a virtual set of securities collected according to some criterion. It
helps to track the behavior of the securities market. When some securities rise in
price and some fall in price, the index shows how much the market has risen or
fallen on average.
Initial Coin Offering (ICO)
An ( ICO ) is a funding type that uses cryptocurrency. When a project is in need
of tokens, it conducts ICO to attract investors.
Initial Exchange Offering
The Exchange's Initial Offering (IEO) enables firms to sell their tokens to investors
to raise capital. IEO is usually administered by the crypto exchange for those
startups that seek to raise their funds.
The issuers of the tokens have to pay a fee with a percentage of tokens sold at
the IEO. Then those tokens are sold on exchange platforms.
I

29
Initial Public Offering
This is the process where a private firm can go public to sell its stocks to the
general public. It could be a new or old firm that decides to be on an exchange
list thus goes public. Firms can increase their capital with IPO by providing new
shares to the public.
Integrated Circuit
The IC is a small chip that can function as an amplifier, timer, microprocessor,
oscillator, or computer memory. It is a small wafer made with silicon to hold
many transistors capacitors or resistors. These small electronics can perform
various calculations and even store info using digital or analog technology.
Interoperability
It means the possibility of sharing values freely across the blockchain networks
without intermediaries. Even though the lack of standards in blockchain may
provide developers freedom, it will give the IT departments a tricky time when
there is no interoperability.
InterPlanetary File System
This is a peer-peer, content-addressed, version-controlled file system. It uses the
concept of Computer Science such as Distributed Hash Table, BitSwap,
MerkieDag.
Isolated Margin
Isolated margin mode shows the margin placed in a position is isolated from a
trader's account balance. The mode enables traders to control their risks
according to the maximum amount a trader may lose from liquidation.

30
Issuance
This means creating something and making it available. In cryptocurrency,
issuance means the new cryptocurrency generation coins or tokens. The process
can happen in various ways as per the parameters specified by the creators.

31
Jager
One Jagger is a small unit of the BNB. For instance, one Satoshi is the smaller
unit of Galcon. Many cryptocurrencies can only be divisible up to some decimals.
J

32
Know Your Customer (KYC)
Even though this term may seem not significant to many people, it has an
essential meaning in the world o business. The KYC is what firms do to verify their
client's identities before starting doing business with them.
K

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Latency
It describes the type of delay. Normally, it refers to delays in transmitting or
processing info due to various reasons. Two types of latency are network and disk
latency.
Network latency shows a delay taking place during the communication over a
network. Disk latency is means the delay between the time info is requested
from the storage device and when info starts being returned.
Law Of Demand
It states that all actors being constant, the price and demand of a good/service
is inversely related to each other. An increase in the price of commodities leads
to a decrease in the demand for the same commodity.
Layer 2
Often referred to as an "off-chain" solution, its major purpose is to know the
blockchain's transaction capacity while keeping the decentralized benefits of
the protocol.
Ledger
It is a system for keeping records of a firm's financial data. It has the debit and
credit account records of the trial balance.
L

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Lightning Network
It adds a new Blockchain layer to allow users to create payment channels
between two parties. The channels can exist for a long time, and the transaction
will be instant with low fees.
Liquidity
It refers to the ease an asset/security can be converted to cash without affecting
the market price. Simply put, it describes the extent to which the asset can be
easily bought or sold at a price reflecting the intrinsic value.

35
Mainnet
This is a major blockchain network for the project to run after being tested on
the test net.
Mainnet Swap
It comprises of switching from one blockchain to another. The swap occurs when
a crypto project moves from the third-party platform to its native blockchain
network.
Malware
It is a collection of various malicious variants like viruses, spyware, and
ransomware.
'Margin Trading'
It refers to the procedure where the investors buy more stocks than they can
afford.
Market Capitalization
It means the total value of the firm's shares of stock. It is derived by multiplying
the stock price by its total outstanding shares.
Market Momentum
It is the acceleration of the price of stock movement. Actually, it is one of the
major determinants of the stock's behavior.
M

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Market Order
This is an order that can buy/sell the crypto coins and tokens at a given price. The
market order aims to fill the order.
Masternode
This is a governing hub in the crypto networks. A node is any computing device
that maintains a network.
Mempool
It is where the valid transactions wait for confirmation from the Bitcoin network.
The higher the mempool size, the more the network traffic.
Merged Mining
It is the process that allows two cryptocurrencies of the same algorithm to be
mined simultaneously.
Markel Tree
It is also referred to as a hash tree. Markel tree is a data structure that is used to
verify data and synchronize.
Metadata
It is the data that describes other data. Meta implies an underlying
meaning/description.
Mining
This is a procedure of adding the records of a transaction to the public ledger of
Bitcoin of the past transactions.

37
Monetary Policy
It os macroeconomic policy from the central bank, mainly involving managing
money supply and the interest rates.
Moon
The phrase used when the prices of the cryptocurrency are rising is "to the moon."
If a token is "mooning," it implies that price is at its peak.
Multisignature
It means requiring many keys to authorize a Bitcoin transaction.

38
Node
This is a device like a computer with a full copy of the blockchain's transaction
history. There are seven nodes that are connected and run a blockchain together.
Non-Fungible Tokens
Also, know as NFTs, they contain identifying data recorded in their smart
contracts. This data makes each of the NFTs different. Thus, they can't be directly
replaced by any other token.
Nonce
A nonce in cryptography is an arbitrary number that can be used only once in
cryptographic communication. It's often a random number issued in the
authentication protocol to ensure that the old communications are not reused
in replay attacks.
N

39
Off-Chain
Off-chain transactions are those transactions that occur on the cryptocurrency
network, moving the value outside the blockchain. Due to its low cost, off-chain
transactions are becoming more popular, more so in large participants.
Offshore Account
Offshore means a location outside the national boundaries. This term can be
used to mean foreign banks, investments, deposits and corporations. A firm may
move offshore legitimately with the main aim of avoiding tax. Also, offshore
financial firms can be used for an illicit business like money laundering or tax
evasion.
One Cancels The Other (OCO)
This is considered the major basic form of trade automation. OCO is an order
that combines two entry orders. Basically, it is a conditional order that means
that when an order is executed, the remaining one is cancelled automatically.
Open Source Software
This software is released through a certain type of license, making its source code
legally available to users. Software is considered open-source when it's only
available in the source code form without any additional cost. This means that
the users can see the code that has software and make any changes they want.
O

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Order Blocks
These are different ways of looking at resistance/support and demand/supply. A
trader can use the concept of order blocks to enhance his trading skills and chart
readings in two possibilities. One is by identifying the re-entry opportunities into
the reversal trades, and two is by finding key high-impact price levels.
Orphan Blocks
These are verified and valid blocks, but the blockchain network does not accept
them. The orphan blocks are rejected valid blocks, but they remain detached
blocks in the cryptocurrency network.

41
Paper Wallet
Simply put, paper wallets are an offline cold storage method of saving
cryptocurrency. It entails printing your public and private keys on paper to help
you store and save in a safe place. Usually, the keys are printed in QR code form
for easier. scanning
Passive Management
This is the opposite of active management, where the manager of the fund tries
to beat the market with several investing strategies with buying and selling
decisions the securities of the portfolio.
P2P
P2P means "peer to peer". The peers are the computer systems that are
connected to each other through the internet. It makes it possible to share files
directly between the systems on the network without a central server. P2P
network is a file server and a client.
Pegged Exchange Rate
This is also referred to as a fixed exchange rate. It is where one country's currency
is tied to the usually stronger currency like the US dollar or euro. Its main purpose
is to attempt to maintain the value of the currency.
P

42
Phishing
It is a cyber attack that uses distinguished email as a weapon. Its main goal is to
trick email recipients into believing that the message is something they need or
want.
Plasma
It is a framework that enables the child blockchain to be created which uses the
Ethereum chain as an arbitration lawyer. Here, the configuration of the child
chains can be conducted to match the demands of cases that aren't feasible on
Ethereum.
Ponzi Scheme
This is an investment fraud that pays the existing investors with the funds
collected from the new investors. The organizers of the Ponzi scheme promise
to invest your funds to generate high returns with little/no risk. In many schemes,
the fraudsters don't invest the money, but they rather use it to pay people who
invested earlier.
Price Action
This is a methodology for the financial market speculation that comprises of
analysis of the basic price. Many retail traders and institutional traders use this
method to provide the price direction of a financial market.
Private Key
In the Bitcoin context, a private key is a secret number that enables bitcoins to
be spent. Each bitcoin wallet has one or more private keys saved on a wallet file.
Private keys are "ticket" which enables a person to spend bitcoins. As such, the
keys should be kept secret and safe.

43
Progressive Web Application
The progressive web app uses the latest technology to combine the best web
and mobile applications. Think of it as a site built using web technologies but
serves and feels like an app.
Proof of Stake (POS)
The POS concept states that a person can validate or mine block transactions
according to the number of coins she holds. The more the Bitcoin/altcoin, the
more the mining power he has.
Pseudorandom
A pseudorandom number generator is a program or function that uses math to
show randomness.

44
Quantum Computer
This computer harnesses the mystical phenomena of the quantum mechanics
to bring large leaps in the processing power.
Q

45
Race Attack
It is a specific type of double-spend attempt and needs the recipient to accept
unconfirmed transactions like payments.
Ransomware
This is a malware that encrypts in the files of the victim. The attacker will then
demand a ransom to recover access to data after payment. The users are shown
how to pay the fee to get the description key.
Rekt
It is defined as completely ruined or destroyed. And it means a total financial loss
in cryptocurrency.
Relative Strength Index (RSI)
It was developed by J. Welles Wilder and means a momentum that measures
speed and change in price movements. RSI oscillates between 0 and 100.
Return on Investment (ROI)
This is one of the most common probability ratios. ROI can be determined by
dividing the net profit by the total assets.
R

46
Satoshi
It is currently the smallest bitcoin currency unit recorded on a blockchain. It's
one hundred millionths of a single bitcoin (0.00000001 BTC).
Secure Asset Fund for Users
This is an emergency insurance fund that safeguards the future interests of the
users.
Security & Exchange Commissions (SEC)
This is an independent government regulatory body that safeguards investors,
maintaining a fair and the orderly functioning of security markets.
Security Audit
This is a high-level description of the ways an organization can assess and test
overall security like cybersecurity.
Seed Phrase
Also known as the seed recovery phrase, it's a list of words that stores all the info
needed to restore Bitcoin funds on-chain. Wallet software generates a seed
phrase and shows the user to write it on paper.
S

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Segregated Witness
SegWit is the name given to the Bitcoin protocol upgrade that was upgraded on
23rd Aug. Like in decentralized blockchain, if the algorithm of the Bitcoin
requires updating, it's upon the Bitcoin developers to agree on when to make a
change and how.
Selfish Mining Attack
It is also referred to as a block withholding attack, which describes a malicious
attempt to discredit the network integrity. The selfish mining attacks happen
when an individual attempts to withhold validation from being broadcast to the
mining pool network.
Sell Walls
Huge sell walls show that a cryptocurrency is being liquidated, and they are often
a negative indication of the coin's health. A cell wall is when there are large sell
order blocks for the coin set at a specific price. The wall works to prevent sell
orders from being executed at a high price than the wall limit.
Sharpe Ratio
It is a measure of the risk-adjusted return of the financial portfolio. A portfolio
that has a high Sharpe ratio is more superior.
Snapshot
Traditionally, this term means the ability to record a computer system's state at
a certain time. In cryptocurrency, the term means the act of recording a
blockchain's block state on a particular block height.

48
Source Code
It is the fundamental component of the computer program created by a
programmer. When a sequence of C programming language is typed into
Windows Notepad and saves that sequence as textiles, the file is said to be a
source code.
StableCoin
It aims to bridge the gap between the benefits of cryptocurrencies and the
stable nature provided by flat currencies. A stable coin is needed when the price
of Bitcoin rises, or it is unsustainable.
Staking Pool
The staking pool enables many stakeholders to combine the computational
resources to increase the chances of being rewarded.
State Channels
It refers to the process of users transacting with each other directly outside a
blockchain. This minimizes their use of 'on-chain' operations.
Store of Value
A currency, commodity or other types of capital can be traded and stored for
future use. Store of value is an important component of the economic system
since it enables trade to happen with those items of inherent value.
Super Computer
This is a specialized computer that greatly surpasses the technical parameters
and the speed of computing. A modern supercomputer is a huge device
consisting of memory modules; processors, boards united into computational
nodes connected by a network.

49
Taker
If you place an order and it is immediately filled, you're a taker, and you pay a
taker fee. The idea is that you're taking the price you want by buying/selling limit
orders.
Ticker
Every cryptocurrency has a ticker to identify it when trading on an exchange or
to view the trading cart.
Tokens
They are also called crypto assets. They are special virtual currency tokens found
on their blockchains and represent a utility or an asset.
Token Lockup
It refers to the specific period where cryptocurrency tokens can't be traded or
transacted. Normally, they are used as a preventive strategy to maintain the
stable long-term value of an asset.
Token Sale
It is commonly known as an initial coin offering. It is a limited time of sale of the
predefined crypto tokens to the public.
T

50
Transaction ID (TXID)
Sometimes, TXIDs are called hashes or transaction hashes. Times, the recipient
of the cryptocurrency transfer may request the transaction ID from you to
confirm you have sent the payment.
Trustless
Blockchains are trustless when there are mechanisms in place where all parties
can reach a consensus on the canonical truth.

51
Unit of Account
In economics, it's a function of money. The value of something is measured in a
specific currency.
Unspent Transactions Outputs (UTXOs)
Only UTXOs can be spent as an input in another transaction while spent outputs
are already spent. Normally, you require UTXO or output of the unspent
transaction to make a transaction.
User Interface
A user interface is a set of software and hardware that allows a user to interact
with a computer.
U

52
Verification Code
This is a security protection method that is used to prevent internet robots from
spamming web forms.
Virtual Machine
Virtual machines are software computers that provide all the capabilities of
physical computers. Applications and the operating system run on them in the
same way as on physical computers. However, virtual machines are computer
files that run on a physical computer and whose behaviour is similar to that of
physical computers. In other words, virtual machines are used as separate
computer systems.
Vladimir Club
This is a club created by Bitcoin Talk forum users in 2021 for Bitcoin. Any person
owning 1% of the total supply of Bitcoin becomes a member of this club.
V

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Wallet
This is a digital wallet that enables users to store and manage their ether and
bitcoin.
Weak Subjectivity
It is a concept that describes a requirement found on the Proof of Stake
blockchains, where the nodes rely on other nodes to determine the system's
current state.
Whale
Refers to individuals/entities that hold huge amounts of digital currencies.
Whitelisting
This is a security feature found on all Gemini customers. It makes sure that the
cryptocurrency in your account can only be sent to a known withdrawal address.
WINk
WINk (WIN) is a blockchain-based on decentralized gaming ecosystem. It is
issued as TRC10 or BEP2 token.
Wick
It is a line found on the candlestick chart to show where the asset's price is
fluctuating.
W

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Zero-Knowledge Proof
It is a method where one party(prover) can prove to another party (verifier) that
they know the value x without conveying any other data.
Zk-SNARK (Zero-Knowledge Succinct Non-Interactive
Argument of Knowledge)
This means a construction proof where an individual can prove possessions of
specific information.
"51% Attack"
Usually, attackers use 51% of attacks to reverse the transactions that have already
taken place in the blockchain.
Z

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