Blockchain Dictionary
A type of digital currency in which a record of transactions is maintained and new units of currency are generated by the computational solution of mathematical problems, and which operates independently of a central bank.
Ethereum is an open source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions.
A blockchain, or chain of blocks, is a technology of storage and transmission of information without control organ. Technically, it is a distributed database whose information, sent by the users, is checked and grouped at regular time intervals in blocks, linked and secured by the use of cryptography, and thus forming a chain. By extension, a blockchain is a distributed database that maintains a list of records protected from falsification or modification by storage nodes. A blockchain is therefore a distributed and secure register of all transactions made since the start of the distributed system. The Internet transfers data packets from point A to point B, while the blockchain allows “trust” to be established between separate agents in the system.
An initial coin offering (ICO) or initial currency offering is a type of funding using cryptocurrencies. Mostly the process is done by crowdfunding but private ICO’s are becoming more common. In an ICO, a quantity of cryptocurrency is sold in the form of “tokens” (“coins”) to speculators or investors, in exchange for legal tender or other cryptocurrencies such as Bitcoin or Ethereum. The tokens sold are promoted as future functional units of currency if or when the ICO’s funding goal is met and the project launches. In some cases like Ethereum the tokens are required to use the system for its purposes.
A security token is any cryptocurrency that pays dividends, profits, shares or interest or invests in any other asset that also generates profits. Although some ICOs have attempted to circumnavigate this definition, the SEC uses the so-called Howey Test to determine if an asset meets the definition of a security. According to the Howey Test, a cryptocurrency token is a security if it invests in money, invests in a common enterprise or expects to make a profit from the effort of others.
Unlike ICO (Initial Coin Offering), IEO is not open to the public. You’ll have to be a user of the hosting exchange to participate in the token sale. While ICO allows any contributors to buy the token for sale by sending funds into a specific address, IEO requires contributors/users to buy the token with the exchange’s accounts.
The acronym ITO stands instead for Initial Token Offering. Some argue that it is more appropriate to talk about tokens rather than coins for projects that are not planning to become Coins.
Airdrops can be defined as the process whereby a cryptocurrency enterprise distributes cryptocurrency tokens to the wallets of some users free of charge. Airdrops are usually carried out by blockchain-based startups to bootstrap their cryptocurrency projects. Also, established blockchain-based enterprises like cryptocurrency exchange platforms and wallet services can also carry out airdrops as well.
Hodl is slang in the cryptocurrency community for holding the cryptocurrency rather than selling it. It originated in a December 2013 post on the Bitcoin Forum message board by an apparently inebriated user who posted with a typo in the subject, “I AM HODLING.” In 2017, Quartz listed it as one of the essential slang terms in Bitcoin culture, and described it as a stance, “to stay invested in bitcoin and not to capitulate in the face of plunging prices.” TheStreet.com referred to it as the “favorite mantra” of Bitcoin holders. Though originally used in relation to holding Bitcoin, it is now also used to describe holding other cryptocurrencies and tokens such as Ethereum.
An Initial Public Offering, represented by the acronym “IPO”, is a financial operation conducted by a company and its various boards (commercial banker, auditors, business lawyer , etc.) which allows the listing of equity securities of this company on a stock exchange.
The term “white paper” has been applied to documents used as marketing or sales tools in companies. These white papers are rather lengthy content designed to promote the products or services of a specific company. As a marketing tool, these articles use selected facts and logical arguments to build a business case for the company sponsoring the document. B2B white papers are often used to generate leads, build thought leadership, make a business case, or inform and convince potential customers, distribution partners, journalists, analysts or investors.
A smart contract is a computer protocol designed to digitally facilitate, verify or enforce the negotiation or execution of a contract. Smart contracts allow the realization of credible transactions without third parties. These transactions are traceable and irreversible. Supporters of smart contracts say that many types of contract terms may be partially or fully self-executing, self-enforcing, or both. The goal of smart contracts is to provide greater security than traditional contract law and reduce other transaction costs associated with contracting.
DApp is an abbreviation of “decentralized application”. A DApp has its backend code running on a peer-to-peer (decentralized) network.
A distributed ledger is a type of shared, replicated and synchronized database between members of a network. The distributed ledger records transactions, such as the exchange of assets or data, between network participants.
The Market Cap (Market Cap) is the market value, at a given time, of the outstanding shares of a publicly traded company, being equal to the stock price at that time times the number of shares outstanding. Since outstanding shares are bought and sold on the public markets, capitalization could be used as an indicator of public opinion of the net worth of a company and is a determining factor in certain forms of stock valuation.
A token is a digital asset that can be transferred (and not copied) between two parties over the Internet, without the need for third party agreement. Tokens are at the heart of the ICO (Initial Coin Offering) mechanism.
Utility tokens are services or units of service that can be purchased. These tokens can be compared to the API keys used to access the service. They provide a way to fund shared infrastructure projects that could not have been funded before.
A fork is a new software created from the source code of an existing software when the rights granted by the authors allow it: they must authorize the use, modification and redistribution of the source code.
Know Your Customer (KYC) is the name given to the process of verifying the identity of a company’s customers. The term is also used to refer to the banking regulations that govern these activities.
These are tokens represent the shares of a company. In addition, given the SEC’s announcement, any token that can not pass the Howey test should be considered a security and fall under the Exchange of Securities Act, 1934.
Similar to the way HTTP has defined the Internet, ERC20 is a protocol that defines a set of commands that a token must implement. ERC20 is not a technology, a software or a piece of code. It is a technical specification. If a token implements the specification, it is an ERC20 token.
A bonus (bounty) is a payment or reward offered by a group as an incentive to perform a task by a person who is not usually associated with the group.
A pre-sale is the marketing of tokens before the official date of placing on the market (Start of the ICO). Example: Cocoricos token pre-sales have been open for two days. The token is being created but it is still possible to get it in advance while waiting for it to go online.
The “Howey test” is a test created by the Supreme Court (USA) to determine whether certain transactions qualify as “investment contracts”. If so, under the Securities Act of 1933 and the Securities Exchange Act of 1934, these transactions are considered securities and are therefore subject to certain disclosure and registration requirements. In the context of ICOs tokens, this test only concerns Tokens Securities.
A Decentralized Autonomous Organization (DAO) is an organization operating through a computer program that provides governance rules to a community. These rules are transparent and immutable as part of the blockchain, an information storage and transmission technology, transparent, secure, and operating without a central control body.
The Token Generation Event (TGE) – often called an initial offer of tokens (ICO) – is one of the most exciting applications of cryptocurrency technology. Unfortunately, many tokens buyers for the first time express some confusion as to how to participate in these innovative blockchain-based ICOs.
The Securities and Exchange Commission (SEC) is a commission created by Congress to regulate financial markets in the United States and protect investors. In addition to its regulatory and protection work, the SEC also controls takeover bids.
A roadmap is a simplified graphic representation of communicating and effectively sharing a strategic intent to mobilize, align and coordinate the efforts of stakeholders to reach a roadmap. one or more objectives.
The principle is to achieve a certain reliability of a system in distributed decision problems, in the presence of failures. There are some concrete examples of applications of this problem in distributed databases. In the world of blockchain, there are several types of consensus algorithms, the best known of which are Proof Of Work and Proof of Stake.
An asset is an identifiable asset of an entity or economic agent (household, enterprise, etc.) with a positive economic value, that is, generating a resource that the entity control due to past events and from which this entity expects a future economic advantage (Article 211.1 of the French General Chart of Accounts). The definition according to international standards is almost identical.
These are applications that use Blockchain technology but are intended for end-users (which implies sufficient ergonomics so that any average user with no particular knowledge around Blockchain can use it easily).
A cryptographic key that can be obtained and used by anyone to encrypt messages intended for a particular recipient, such that the encrypted messages can be deciphered only by using a second key that is known only to the recipient (the private key ).
A cryptographic key that can be obtained and used by anyone to encrypt messages intended for a particular recipient, such that the encrypted messages can be deciphered only by using a second key that is known only to the recipient (the private key ).
Sale of tokens to potential users for a “fundraiser” that will be used to make the system operational. It is a way of financing oneself only by issuing cryptocurrency.
Peer-to-peer and decentralized electronic money, whose source code is based on the principles of cryptography to validate transactions and issue the currency itself. Crypto-currencies use a proof-of-work system to protect them from electronic counterfeiting. Many crypto-currencies have been developed, but most are similar and derive from the first full implementation: Bitcoin
Decentralized Autonomous Application (see Dapp) D.A.P.P. : Decentralized application open source, autonomous, with no central entity that exercises special control. The data and records of the application must be stored cryptographically on a public and decentralized
This is a protection algorithm to create a digital signature. It is also used to identify the user. For example: 1HeLLo4uzjaLetFx6NH3PMwFP3qbRbTf3D
Registration or automatic definition of the time and date associated with an event.
A network of networks which, via standardized and unified electronic identification systems, and mobile wireless devices, enables the direct identification of digital entities and physical objects and thus the ability to retrieve, store, store, transfer and process, without discontinuity between the physical and virtual worlds, the related data. The Internet of Things is considered the third evolution of the Internet, sometimes called Web 3.0.
Small power grids designed to provide a reliable and better power supply to a small number of consumers. They aggregate multiple local production facilities, consumer and storage facilities, and supervisory and demand management tools.
Transaction of a few cents. In a “classic” circuit, for example via a bank, microtransactions are too expensive to carry out (the costs are indeed greater than the amount of the transactions). The Blockchain provides a solution to this problem.
Use of computing power to process transactions, secure the network and allow all users of the system to stay in sync.
Persons (individuals or companies) who connect to the network one or more machines equipped for mining. Each miner is remunerated in proportion to the computing power he brings to the network.
The open source designation, or “open source code”, applies to software whose license meets criteria established by the Open Source Initiative, that is to say, the possibilities of free redistribution, access to source code and creation of derivative works.
In smart contracts, third parties check physical events. Oracles are part of the techniques that make it possible to integrate a real-world factor into a digital variable in order to make the Smart Contract work.
Peer-to-Peer is a computer network model similar to the client-server model, but each client is also known as Peer-to-Peer a waiter. This is called a node. Peer-to-Peer can be centralized (connections through an intermediate central server) or decentralized (connections are made directly). It can be used to share files from peer to peer, distributed computing or communication.
Terminology used by Michael Bauwens who denounces the capitalist practices practiced by Web platforms like Facebook. Indeed, thanks to the hierarchy of networks, these companies manage to acquire a quasi-monopolistic position and often have obscure practices in terms of monetization of user data.
These are platforms created by users, intended for users. It is a model in which there is no central power that has ancestry over the users, their productions and the data they provide. Wikipedia is currently a good example of a cooperative platform.
A Proof of Concept or P.O.C. or Demonstration of Feasibility, is a short or incomplete realization of a certain method or idea to demonstrate its feasibility. Proof of concept is usually considered an important step towards a fully functional prototype.
Decision-making mechanism based on proof of interest. Each user has a right of decision up to the interests / shares he owns. In the case of a virtual currency fundraiser, the interest is redistributed according to the share of chips owned by each member.
Proof of work is a security measure designed to dissuade, on a computer network, denial of service attacks and other abuses of services such as spam by requiring computing power from the service requester, which usually means processing time by a computer. The Bitcoin blockchain works on this model.
Latin word meaning “how much” that represents the smallest indivisible measure Smart Contract: Intelligent contract that executes itself according to predefined and evolutive variables. For example: upon receipt of the product, the payment runs automatically from the customer to the company. Tokens: Token that serves as artificial currency.
Usually any cryptocurrency other than Bitcoin or Ethereum (some people will argue that Ethereum is also an altcoin).
Take advantage of the difference in price that may exist between several exchanges. Example: the price at time t of bitcoin on coinbase is $ 2,000, while on kraken it is $ 1,990. So I buy my bitcoin on kraken and sell it instantly on coinbase, for a profit of $ 10.
Highest price ever. The ATH for the Eth at the time of writing is $ 414.76 on June 12, 2017. For the BTC, it is $ 2999.91 on June 6, 2017.
Website where you can buy and sell crypto-currencies. Small (not exhaustive) list of the most famous exchanges: Coinbase, GDAX, Gemini, Bittrex, Poloniex, Quadriga, Kraken …
Today, refers to the currency issued by central banks, which is based on the confidence that we have in these issuing institutions. Example: $, €, £ …
Purchase order placed by the investor to buy crypto-currencies at a price fixed in advance. Example: I place a limit buy of 100 € to 0.01 € / unit. The current price is 0.012 €. As long as the price is not lowered, my order will not run; and even if the price goes down to 0.010 € / unit, it is not sure that the entirety of my order is executed: maybe my order will not be totally filled and will only buy for 10 € to 0.010 and then the price will go up!
Sell order to sell crypto-currencies at a price fixed in advance. To oppose the limit buy!
Buy order at the best market price at the moment of purchase. Example: I place a market buy at 100 €. I do not determine the price I buy; I buy at the market price. If the market price is 0.02 € / unit, I will instantly buy 100 / 0.02 = 5000 units, and all of my 100 euros will be invested.
Sell order at the best market price at the moment of sale. To oppose the market buy. Margin trading: borrowing money to do trading. Has the effect of amplifying the gains and losses: indeed if the market plays in our favor, we earn more, but if the market does not play in our favor, we lose more (because we must repay the money borrowed …).
Equivalent of market capitalization: used to estimate the size of a cryptocurrency. We take the number of units in circulation of the said currency, which is multiplied by the current price of this cryptocurrency: we get there the market cap of this cryptocurrency. At the time of writing, the ETH market cap is: 93,019,795 * $ 283.4 = $ 26,362,181,902
Bet down using margin trading. That is to say, borrow cryptos and sell them in date t, and then buy them at a lower price in t + 1 (if the price has fallen!). Once the cryptos bought at a cheaper price, we repay the borrowed cryptos, and we generate a profit equal to (differential prices) * units – (price of the loan).
Bet upwards using margin trading. That is to say, to borrow money in date t, hoping that on date t + 1, the price has increased and that you can sell them by releasing in profit (and by repaying the borrowed amounts).
ROI:
Return on Investment: Calculated by making (realized profit / amount invested). A 100% ROI means that you doubled your starting bet.
Sell wall / buy wall:
On the exchanges, each actor places sales and / or purchase orders. When the sale price is equal to the purchase price, a trade (exchange) takes place. All these orders go into what is known as an “order book” or a “book of orders”. We can then look at what we call the “depth chart”: in green, the purchase orders, in red sales orders. In abscissa price, in ordinate the number of units: in the image below, if one wants to arrive at the price of 334 $, it will be necessary to buy for (approximately, to read on the ordinate of right) 100 units. Since each unit is ~ 333.5 euros, it will cost about 0 * 333.5 = 33 350 $!
A sell wall is literally a sales wall: a big order (or lots of small orders all at the same price, it’s the same) at a fixed price …. it’s graphically a huge wall. The same kind of wall can appear in the green too: we talk about buy wall. I hope that it’s clearer !
An order that is executed when the price exceeds a certain limit. Example: The price of XX is 50 €. I tell myself that I do not want to buy, unless the price exceeds 70 € (because if the price exceeds 70 €, I think that we are entering a bull market, and the price will go up for real !). I therefore place a stop buy at 70 €.
An order that is executed when the price falls below a certain limit. This is the opposite of stop buy: the price is 50 €. I do not want to sell at this price unless the market is falling sharply. So I place a stop loss at € 35, because I think that if the price goes below € 35, it’s that it smells of scorched and it is better to leave the boat before it sinks!
Refers to graph analysis, mixing lines, circles, triangles, to predict future market movements.
Tokens specific to different projects. These projects are created and deployed on the Ethereum network, and tokens usually follow a standard, called “ERC20”. Do not confuse these tokens (eg GNT, REP, ICN) with other Ethereum-independent altcoins (FCT, XRP, LTC for example).
Market with a downward trend (the opposite of bull market). We can also hear “bearish”, and by extrapolation “I’m bearish on XX”, translating as “I’m not confident about XX”. Bull market: bullish market (rising prices). As you can imagine, we can read “bullish”, and the extrapolation “I’m bullish on XX” or “XX looks bullish”.
Refers to the red and green sticks we see on the charts. As a reminder of how these candles work: each stick represents a duration (1 min, 5 min, 30 min, 1h, 1j …). A green stick indicates that between the beginning (opening price) of this duration and the end (closing price), the price has increased. A red stick, on the other hand, indicates that the price has dropped. Example: at 16:00: the price is 100 €. At 16:29 the price is 90 €. At 16:59 the price is 110. My stick of 30 minutes between 16:00 and 16:29 will be red: the price has dropped! The second stick of 30 minutes, between 16:30 and 16:59 will be green: the price has increased! The stick of 1h will be green, because between 16:00 and 16:59 the price has increased!
Refers to the price curves that we often see.
The sudden price change that an asset may experience as a result of a relatively long rise or fall in its price. Due to psychological effects (such as FOMO), sometimes some assets may be overvalued (or undervalued), and a price correction so that it regains its true value may occur.
Designates the hollow that can sometimes be: the price can suddenly lose 20% of its value in a few minutes and regain them right after. It is said that the price has had a dip: you will often hear “buy the dips”! Stack: Refers to all the crypto that an investor owns. Example: “Today I sold to ATH and I bought during the dip: I increased my stack by 20%! “Automated Trading (or bot trading): Trading involves a computer or computers (often called bots). Computers follow predefined strategies (or in some cases, machine-learning strategies) by the programmer.
A trader who makes purchases / sales every day: to oppose a long-term investor, who buys once and who hodl for a long time.
Dollar Cost Average: Investing regularly, regardless of the price, to spread the risks. Example: I have € 1,000 to invest. Either I take the risk of investing them all at once now. If the price falls tomorrow, I will regret not having bought tomorrow. What I can do is spread out the purchases: I will buy for 100 € today, 100 € tomorrow, 100 € the day after tomorrow and so on until I have invested my 1,000 €. Race
Result: I diluted my risk by buying over a longer period.
Fear of missing out: (afraid to miss) The sensation that can come when the price starts to take off and you feel that you are going to miss the boat. Can lead to perverse group effects: the price goes up, investors see the price rise and decide to buy, for fear of missing the boat. Since they buy, the price continues to rise, and other investors arrive … then follows a vicious circle, which can end in the bursting of a bubble (which some will call correction).
Fear, Uncertainty and Doubt (Fear, uncertainty and doubt). Circulating negative ideas about a project, in order to see the price go down. The inverse of pump. Example: “Project XX is useless, it will never succeed, you had better sell because this project has no future”
Someone who FUD.
A market manipulation, usually operated by a whale or a group of whales that involves buying huge amounts of some cryptocurrency, in order to drive up prices. Once the prices are inflated and the investor takes the feeling of FOMO, the technique is to sell all the purchases made previously. The price then begins a long fall, linked to the fact that there are no more buyers; investors are then aware of the circle, but it is too late …
Advertising for some cryptocurrency without having a valid argument to argue, exclusively for the purpose of inducing others to invest so that prices go up. Example: “The new corner ‘XX’ will revolutionize the world, it will cure the cancer and solve the problems of access to water, food and electricity for all the inhabitants of the planet, you have to buy it now! “
Someone who holds a lot of crypto or a lot of money, which can therefore have a significant impact on the course. Example: “you saw the sell wall, a whale who gets rid of his stack”
The moment (if it arrives) where the market cap of the ETH will exceed that of the BTC.
