CRYPTO CURRENCY DICTIONARY

TERMS COMMONLY USED IN THE WORLD OF BLOCKCHAIN AND CRYPTOCURRENCY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Distributed Ledger

Distributed ledgers are an essential component of blockchain technology. Distributed ledgers are transaction databases that are stored on peer-to-peer servers and are updated anytime a new collection of data, often known as a "block," is added. Scattered ledgers, as opposed to centralised ledgers, which are managed by a single entity and present far greater cybersecurity threats, are maintained on several servers (or nodes) distributed across a decentralized network. If one ledger is compromised, the rest of the network's ledgers will immediately fix any inconsistencies. As a result, blockchains are far more resistant to alteration than traditional ledger systems. Consensus algorithms are used in blockchains to confirm the legitimacy of new entries

Other Important Terms

Block Reward

The block reward is the payment that is offered to a node that is securing the blockchain. In the case of Bitcoin, which has a Proof-of-Work consensus algorithm, these could be the miners. The payment is in the form of the native cryptocurrency in that blockchain. The amount is a predetermined reward for each block, but often that is supplemented with the fees that are paid for the transactions that the block holds. In Bitcoin, the current block rewards are cut in half every four years.  This is called the ‘halvening’.

Zero-Knowledge Proofs (ZKP)

A zero-knowledge proof (ZKP) is a cryptographic method for ensuring privacy and security. It is also known as a zero-knowledge protocol. A ZKP allows you to demonstrate your understanding of a given value without exposing the value itself. The ZKP technique is based on two parties: a prover who demonstrates knowledge of a piece of data without explicitly exposing any specifics, and a verifier who assesses the likelihood of the prover's claim being true. ZKPs are used by cryptocurrency to strengthen privacy by enabling verifiable transactions that selectively conceal specific transaction data, such as the sender identity, recipient identity, or amount transacted. To validate encrypted transaction data, certain digital currencies, such as Zcash, use a kind of ZKP known as the Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.

Smart Contract

A smart contract is a computer program or a transaction protocol that is designed to automatically execute, control, or document legally significant events and activities in accordance with the conditions of a contract, agreement, or negotiation.

Tokenization of Gold

As with other tokenized assets, a gold token is a digital representation of a specified quantity of gold. Traders and investors As with other goods with tokens, a gold token is a digital symbol of a specified amount of gold. Traders and investors can buy gold tokens with smart contracts on the blockchain, which can be captured, resold, or used as portable gold. In the same way that in other illegal goods such as art and housing, token production increases the availability of gold (especially when considered). High processing costs charged by traditional traders), opens up a market for potential investors who may not trade in precious metals, and reduces fraud-related problems. Gold tokens are important because they involve high-value and stable assets. Gold is considered by many to be the most “safe” currency that is not immune to the economic downturn. Gold asset tokens should not be confused with other types of gold-based coins, which are coins that have a value attached to the value of gold but do not combine. they represent tangible assets.

Due Diligence

Due diligence is the process of consideration expected of individuals or businesses prior to entering into an agreement or contract. The phrase is often used in finance to characterize the study of prospective possibilities and risks, particularly in the context of investments and mergers, prior to acquisitions and asset transfers. The growth of new currencies, the majority of which are formed without a controlling authority to prevent fraud, poses a significant concern in the cryptocurrency space. Furthermore, real cryptocurrencies are frequently unpredictable, with considerable price fluctuations over short time periods. Given this, it is suggested that due diligence be performed prior to making an investment. Investigations may include chart analysis, forecasting, business-model and white paper analysis, assessing the validity of partnerships, doing research on team members, and so on.

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