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

Initial Coin Offering (ICO)

An initial coin offering (ICO), similar to an initial public offering (IPO) on the stock market, is a procedure through which firms or individuals gather funding to develop new blockchain applications, cryptocurrency, or financial services. It is a type of crowdsourcing in which investors may purchase tokens generated by a corporation. These tokens are used to represent an interest in a company or a future product or service as a potential investment. IPOs often employ "white papers," which outline what is on sale and how the ICO will operate. If the fund criteria are not satisfied and the ICO fails, investors' money is refunded. ICOs, on the other hand, are frequently unregulated, and investors should conduct due research before investing.

Other Important Terms

Wash Trading

Wash trading is the artificial and unlawful action of manipulating the perceived liquidity of assets and market volume in a marketplace. It is an issue in most financial markets and can show itself in a variety of ways. Wash trading occurs when traders swap assets among themselves to produce fake market activity on controlled exchanges in the cryptocurrency space. Wash traders may also generate "pump and dumps," causing the value of an asset to surge and plummet dramatically. Market volume is an inaccurate metric of liquidity due to the absence of regulation of bitcoin exchanges. Exchanges frequently keep users' identities private, making it simpler to launder deals. It is expected that wash trading affects a considerable amount of Bitcoin deals.

Liquidity Pool

A liquidity pool is a cryptocurrency supply that a decentralized exchange uses to keep its liquidity and asset prices stable. Traditionally, exchanges complete each crypto transaction using peer-to-peer transfers. Price slippage can occur as a result of this sequential "order book" approach. Furthermore, due to a lack of peers, a tiny, decentralized exchange with few users will have poor liquidity. This makes trading untrustworthy. Decentralized exchanges address these concerns by establishing liquidity pools. Currency stores enable exchange users to lock their monies in order to build a consistent supply of assets. Traders can then conduct transactions with the pool at any moment, increasing liquidity. Smart contracts are used to automate liquidity pools. Liquidity providers are users who offer their currency to the liquidity pool. They are rewarded with transactions fees on the blockchain.

Livepeer (LPT)

Livepeer is an Ethereum-based technology that decentralizes video transcoding operations. The protocol's goal is to offer a cost-effective, secure, and dependable infrastructure capable of handling today's huge demand for video streaming.

Cryptocurrency

Cryptocurrencies, sometimes known as "crypto," are digital assets that serve as mediums of trade. Various layers of cryptographic technologies assure the safe storage and movement of cryptocurrency. Cryptocurrencies are often based on decentralized networks and are either issued or managed by central authorities or financial institutions. These decentralized systems rely on publicly accessible distributed ledgers, often known as blockchains, to prevent cryptocurrency from being double-spent.

Tezos

Tezos is a 2014 open-source blockchain platform for dApps and smart contracts. It was developed to overcome blockchain adoption challenges such as the future of long-term upgrades, the security of smart contracts, and open participation. Unlike the Bitcoin and Ethereum blockchains, which presently employ inefficient Proof of Work consensus models, Tezos uses a Proof of Stake model, which uses on-chain procedures to alter chain protocol autonomously once proposals have been agreed by the community. The "Tez" token is the Tezos blockchain's native coin (XTZ).

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