Crypto 101

Byzantium fork

A "hard fork in the Ethereum network that occurred in October of 2017.

bytecode

A "lowlevel" computer language. that is, meant to be processed by a computer, rather than a "highlevel", more human readable, language.

brain wallet

A blockchain account generated from a seed phrase of your choosing. Humans are not capable of generating enough entropy, or randomness, and therefore the wallets derived from these phrases are insecure; they can be brute forced by super fast computers. For this reason, they are Insecure and should not be used.

soft fork

A change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, This is backward-compatible. However, this can result in a potential divide in the blockchain, as the old software generates blocks that read as imvalid according tothe new rules

digital signature

A code generated by public key encryption and attached to an electronically transmitted document in order to verify the contents of the document.

transaction block

A collection of transactions on a blockchain network, gathered into a set or a block that can then be hashed and added to the blockchain

finney

A denomination of ether

digital asset

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

Blockchain

A digital form of record keeping, and the undertying technology behind cryptocurrencies The result of sequential blocks that build upon one another, creating a permanent and unchangeable ledger of transactions (or other data)

Halving

A feature written into Bitcoin's code in which after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. This can have an impact on Bitcoin's price

Enterprise Ethereum Alliance (EEA)

A group of Ethereum core developers, startups, and large companies working together to commercialize and use Ethereum for different business applications website here.

gas

A measure ofr the computational steps reguired for a transaction on the Ethereum network This then equates to a fee for network users paid in small units of ETH specified as Gwel

cryptography

A method for secure communication using code. Symmetric key Xx is used by various blockchain networks for transfer of public and private keys that allow transfer of cryptocurrency. Paired public and private keys allow funds to be unlocked.

airgapping

A method for securing computers in which the device does not conect to the internet or any other open networks

Gwei

A minuscule and common denomination of ETH, and the unit in which gas prices are often specifled.

Bitcoin Cash

A peerto peer electronic cash system that formed from a forkof the original Bitcoin. where Bitcoln is widely accepted as too volatile to be useful as a currency, this is designed to be better optimized for transactions

hardware wallet

A physical device that can be connected to the web and interact with online exchanges, but can also be used as cold storage (not connected to the intermet).

decentralized exchange (DEX)

A platform for exchanging cryptocurrencies based on functionality programmed on the blockchain (le, in smart contracts) The trading is peer-to-peer, or between pools of liquidity

Coinbase

A popular centralized cryptocurrency exchange. it made history recently as the first cryptocurrency exchange to go public on the Nasdaq

Decentralized Autonomous Organization (DAO)

A powerful and very flexible organizational structure built on a blockchain. The original one served as a form of investor directed venture capital fund, which sought to provide enterprises with new decentralized business models.

Ethereum Name Service (ENS)

A protocol to assign human-readable and easy to-remember addresses to Ethereum addresses and assets, homologous to the traditional internet's DNS

Coin

A representative store of digital value that lives on a given blockchain or cryptocurrency network. Some blockchains have the same name for both the network and this, like Bitcoin. Others can have different names for each, like the Stellar blockchain, which has a native coin called Lumen

bounty / bug bounty

A reward offered for exposing vulnerabilities and issues in computer code.

transaction fee

A small fee imposed on some transactions sent across a blockchain network This is awarded to the miner that successfully hashes the block containing the relevant transaction

Hot Wallet

A software based cryptocurrency wallet connected to the Internet while more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks

API (Application Programming Interface)

A software intermediary that allows two separate applications to communicate with one another. These define methods of communication between various components.

airdrop

A token distribution method used to send cryptocurrency or tokens to wallet addresses

final, finality

A transaction is considered this once it can no longer be changed.

Distributed Denial of Service (DDOS) Attack

A type of cyber attack in which the perpetrator continuously overwhelms the system with requests in order to prevent service of legitimate requests.

distributed ledger

A type of database which spreads across multiple sites. countries, or institutions. Records are stored sequentially in a continuous ledger. The data can be either "permissioned" or "unpermissioned" to control who can view it.

Hash

A unique string of numbers and letters that identify blocks and are tied to cryoto buvers and sellers

Token

A unit of value on a blockchain that usually has some other value proposition besides just a transfer of value (like a coin)

EVM (Ethereum Virtual Machine)

A virtual machine that operates on the Ethereum network. it is Turing complete and allows anyone, anywhere to evecute arbitrary EVM bytecode. All Ethereum nodes run on the this. It is home for smart contracts based on the Ethereum blockchain

Initial Coin Offering (ICo)

A way that funds are raised for a new cryptocurrency project

Smart Contract

An algorhythmic program that enacts the terms of a contract automatically based on its code. One of the main value propositions of the Ethereum network is its ability to execute these.

Testnet

An alternative blockchain developers use to test applications in a near-live environment.

faucet

An application, sometimes a very simple website, other times more complex, that dispenses cryptocurrency for use on test networks only. These are used by developers to test out dapps or smart contracts before deploying them on Ethereum Mainnet, or users who want to practice an action on the blockchain with no risk. Tokens dispensed by a test XX stay on the test networks and cannot be exchanged for mainnet equivalents.

Hyperledger

An ecosystem of open solutions system tools, libraries, and products designed to enable and support enterprise-grade blockchain technology. in general, the products focus on creating solutions for permissioned blockchains-that is, non-public blockchains, with alternathve consensus mechanisms other than Proof of work (Pow) or Proof of stake (Pos)

difficulty bomb

An element of Ethereum's upgrade to Ethereum 2.0 and a Proof of Stake (Pos) consensus mechanism. it is a mechanism that will increase the block verification difficuity, making it more expensive and difficult-eventually, prohibitively so-to mine a new block. The intention is to force the shift to Pos consensus

double spend

An event during which someone on the bitcoin network tries to send a specific bitcoin transaction to two different recipients at once. However, as each bitcoin transaction is confirmed, this becomes almost impossible. The more confirmations that a particukar transaction has, the decreased likelihood of this happening.

cold wallet / cold storage

An offline wallet that is never connected to the internet. These wallets protect cryptocurrencies from getting hacked anline.

digital identity

An online or networked identity adopted by an individual, organization, or electronio device.

stablecoin

Any cryptocurrency pegged to a stable asset, like fiat currency or gold. it theoretically remains stable in price as it is measured against a known amount of an asset less subject to fluctuation

Turing Complete

Any machine that can calculate on a level equal to a programmable computer is considered XX, or computationally universal

Brian Armstrong

Billionaire American business executive and investor who is CEO of eryptocurrency platform Coinbase. He received media attention for his policy of keeping the workplace free of political activism.

Codefi

Derived from "Commerce & Decentralized Finance": XX is building a suite of commerce and financial applications

cryptocurrency

Digital currency that is based on mathematics and uses encryption techniques to regulate the creation of units of currency as well as verifying the transfer of funds. They operate independently of a central bank, and are kept track of through distributed ledger technology

deposit

Digital property put into a contract involving a different party such that if certain conditions are not satisfied that property is automatically forfeited to the identified counterparty

EIP (Ethereum Improvement Proposal)

EIPS describe standards for the Ethereum platform, including core protocol specifications, client APIS, and contract standards. They are, precisely, proposals for modifications to the network and the way it functions

Decentralized Applications (DApps)

Ethereum is the main network supporting activities in decentralized finance. Applications designed by developers and deployed on a blockchain to carry out actions without intermediaries. Decentralized finance activities are often completed using theses.

Decentralized Finance (DeFi)

Financial activities conducted without the involvement of an intermediary, like a bank, government, or other financial institution.

Block

Groups of data within ablockchain. On cryptocurrency blockchains, these are made up of transaction recards as users buy or sell coins. Each can hold only a certain amount of information. Once it reaches that limit, a new one is formed to continue the chain

entropy

In the context of cryptography. this refers to randomness': generally, t he more random something is, the more secure it is.

Trustless

In the context of decentralized technology, it has a more technical meaning since everyone has a copy of the ledger of all transactions ever executed, hacked or changed there is arbitrarily, anyone can verify the transactions themselves

hard fork

Occurs when there is a change in the blockchain that is not backward compatible (not compatible with older versions), thus requiring all participants to upgrade to the new version in order to be able to continue participating on the network

staking

On decentralized exchanges (DEXes), there is no centralized authority or bank putting up the funds to allow transfers to happen between parties; rather, the parties amongst themselves have to establish liquidity pools in order to facilitate swaps. In this context, someone might "xX tokens into a liquidity pool, often a promised rate of return in eschange for the use of their tokens, with the option to withdraw their tokens later.

slot

On the Ethereum Beacon Chain, this is a 12-second period of time during which a new block may (or may not) be proposed. Every 32 of these composes an epoch

Constantinople fork

One of the "hard forks" made to the Ethereum network, in February 2019.

BUIDL

Ostensibly coined by Gitcoin's Kevin Owocki. It reflects the Ethereum focused mindset of not just investing in a cryptocurrency as a store of value, but rather investing in it as an ecosystem and a platform for public goods and software; it complements, in this sense, the now-infamous HODL

Infura

Part of ConsenSys. XX offers backend access to the Ethereum network over established HTTP and webSockets technolegy. This enables developers of dapps and websites seeking to interact with the Ethereum blockchain to do so, and at scale

state channels

Part of the set of tools and platforms involved in scaling Ethereum and enabling Layer 2, while a complex topic, these are essentially methods through which the current 'state' of the blockchain can be exported, and based on that any given number of transactions can take place off chain, and then be moved back onto the main Ethereum chain

Vitalik Buterin

Programmer who invented Ethereum in 2015

block time

Refers to how long it takes for a block of transactions to be confirmed by the network, either by miners under Pow or by validators under PoS

sharding

Refers to splitting the entire network into multiple portions called "shards" Each one would contain its own independent state, meaning a unique set of account balances and smart contracts. Usually, shards must be tightly coupled and side-chains must be loosely coupled

Consensys

Short for Consensus Systems, XX is the software engineering leader of the blockchain space

client (Ethereum)

Software that accesses the Ethereum blockchain via a local computer and helps to process transactions; this usually includes a cryptocurrency software wallet.

"Hold On for Dear Life" (HODL)

Stands for though the term originated from a user typo on a Bitcoin forum in 2013. it refers to a passive investment strategy in which people buy and hold onto cryptocurrency-instead of trading it-in the hopes that it increases in value.

difficulty

The concept outlining how hard it is to verify blocks in a blockchain network during Proof of work mining in the Bitcoin network, the XX of mining adjusts every 2016 blocks. This is to keep block verification time at ten minutes

gas price

The cost the network is paid for the computational work being performed in a given transaction. it is paid in units of ETH called Gwel Depending on network congestion, this may vary significantly

cryptoeconomics

The economic analysis of decentralized finance

Bitcoin

The first and most valuable cryptocurrency, launched on Jan. 3, 2009. while its value has olimbed steadily since then, it has seen wild fluctuations. In the past months alone, the price has fluctuated from a record high of $60,000 to below S30,000

Genesis Block

The first block of a cryptocurrency ever mined

Changpeng Zhao "cz"

The founder and CEO of Binance, the worlds largest cryptocurrency exchange by trading volume as of April 2018

immutability

The inability to be altered or changed. This is a key element of blockchain networks: once written onto a blockchain ledger, data cannot be aitered. This provides the basis for commerce and trade to take place on blockchain networks.

block height

The number of blocks connected together in the blockchain. For example, Height o would be the very first block, which is also called the Genesis Block

Decentralization

The principle of distributing power away from a central point. Blockchains are traditionally this because they require majority approval from all users to operate and make changes, rather than a central authority

serialization

The process of comverting a data structure into a sequence of bytes. Ethereum internally uses an encoding format called recursive-length prefix encoding (RLP).

consensus

The process used by a group of peers, or nodes., on a blockchain network to agree on the validity of transactions submitted to the network. Dominant consensus mechanisms are Proof of work (Pow) and Proof of Stake (PoS)

Solidity

The programming language developers use to write smart contracts on the Ethereum network

block reward

The rewand even to a miner after it has successfully hashed a transaction block. These can be a mixture of coins and transaction fees. The composition depends on the policy used by the cryptocurrency in question, and whether all of the coins have already been successfully mined

Ethereum

The second largest cryptocurrency by trade volume, it is a crypto network and software platform that developers can use to create new applications, and has an associated currency called ether

state

The set of data that a blockchain network strictly needs to keep track of, and that represents data currently relevant to applications on the chain

encryption

There are many types, but for our purposes, it is a process that combines the text to be encrypted (plaintext) with a shorter string of data referred to as a key in order to produce an output (ciphertext). This output can be "decrypted" back into the original plaintext by someone else who has the key

sidechains

These represent a way in which developers can build and enable cheaper transactions for the user while maintaining compatibility with the Ethereum network. This often requires routing tokens through a special portal or bridge

Hierarchical Deterministic HD wallets

These were first created for Bitcoin, and enable the creation of a very large number of accounts based on an initial seed phrase.

confirmation

This happens when the network has verifled the blockchain transaction. Under a Proof of work (Pow) consensus mechanism, this happens through a process known as mining; under Proof of Stake (Pos), the process is known as validation. Once a transaction is successfully confirmed it theoretically cannot be reversed or double spent. The more XX a transaction has, the harder it becomes to perform a double spend attack

derive / derivation

To obtain something from an original source. in the context of crypto-technology, we often discuss "XX" wallets and accounts from seed phrases / Secret Recovery Phrases

slashing condition

Under a Proof of Stake (PoS) consensus mechanism, a Xx is one that causes the valldator's deposit to be destroved when they trigger it.

attestation

Under the Proof of Stake mechanism (on the Beacon Chain), every validator other than the one proposing a new block will provide an attestation, or vote, in favor of a block with which it agrees, hereby forming consensus and confirming the block and the transactions it contains

address / public key

Used to send and receive transactions on a blockchain network. This is an alphanumeric character string, which can also be represented as a scannable QR code,in Ethereum, it begins with Ox.

hexadecimal

XX is a base 16, rather than base 10, counting system. Used all over Ethereum for a variety of things, a XX string is comprised of the numbers 0123456789 and letters ABCDEF

Mining Pool

a joint successfully group of cryptocurrency miners who combine their computational resources over a network to strengthen the probability of finding a block or otherwise mining for cryptocurrency

epoch

a measure of blockchain progression, on a given blackchain

Impermanent loss

happens when the price of your tokens changes compared to when you deposited them in the pool. The larger the change is, the bigger the loss

Yield farming

involves lending cryptocurrency and in return, you get interest and sometimes fees, but theyre less significant than the practice of supplementing interest with handouts of units of a new cryptocurrency. The real payoff comes if that coin appreciates rapidly.

Ethereum Request for Comment (ERC)

it is used to refer to suggestions for modifications that have already made it through the Ethereum Improvement Protocol (EIP) process and have been made standard on Ethereum. it is, essentially, a set of standards for a given operation or topic on the Ethereum network

Beacon Chain

one element in the infrastructure being built to scale Ethereum, and is the foundation for a transition from a Proof of work (POW) consensus mechanism to Proof of Stake (PoS)

ASIC (Application Specific Integrated Circuit)

silicon chips designed to do a specific task; performs a calculation to find values that provide a desired solution when placed into a hashing algorithm.

gas limit

the maximum amount you're willing to pay for any given transaction to go through the Ethereum network Another way of looking at it is as a rough estimate of how mach computing power your transaction will take.

Fork

when a blockchain's users make changes to its rules. These changes to the protocol of a blockchain often result in two new paths- one that follows the old rules, and a new blockchain that splits off from the previous one.