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Sources &
References
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Kucoin
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"Capitalism & Freedom" - Milton Friedman
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BitLab Academy
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"The Bitcoin Standard" - Saifadean Ammous
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"The Bitcoin White Paper" - Satoshi Nakamoto
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"The Ethereum White Paper" - Vitalik Buterin
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Fidelity Digital Assets
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"Sapiens" -Yuval Harari
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"The Price of Tomorrow" - Jeff Booth
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"Gradually, then Suddenly" - Parker Lewis
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"The Great Monetary Inflation" - Paul Tudor Jones
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Binance Academy
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Coinbase Basics web resources
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The Biden Executive Order on Ensuring the Responsible Development of Digital Assets, 3/9/2022
Educational Resources
Websites & Blogs
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Fidelity Digital Assets
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Investopedia Academy, Crypto Courses
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Gradually, then Suddenly Blog, Parker Lewis
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Coinmarketcap.com
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Coinmarketcap "On Chain Analysis" (BTC)
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Binance Academy
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IBM Blockchain Industry Insights
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KuCoin Crypto Market Analysis
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Coinbase Crypto Basics
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6 Reasons why Ethereum is Valuable, Reuters
Podcasts, Papers & Books
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"The Bitcoin Standard" - Saifedean Ammous
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"The Price of Tomorrow" - Jeff Booth
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"Sapiens" -Yuval Noah Harari
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The Great Monetary Inflation - Paul Tudor Jones
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The Bitcoin Whitepaper - Satoshi Nakamoto
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The Ethereum Whitepaper - Vitalik Buterin
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The Coin Bureau Podcast
Crypto Term Glossary
Altcoin
As Bitcoin became the first cryptocurrency to capture imaginations, all other coins were subsequently termed “altcoins,” which is short for “alternative coins".
These coins range from large-scale dominant coins like ETH, LTC and SOL, through "Meme coins," which include the likes of SHIB and DOGE. While the majority of Altcoins will likely prove useless and become insolvent, a handful will certainly be up and comers which can provide big upside for early adopters.
Bitcoin
Bitcoin (with a capital B) launched in 2009, establishing the world's first decentralized digital asset and network.
Bitcoin uses blockchain technology to create a digital asset that is entirely decentralized and managed peer-to-peer by its users across a wide network of cpu's globally. The virtual coins generated by the Bitcoin network are called bitcoins (lowercase b).
What is Bitcoin? -Coinbase Basics
A Block
A block is a set of updates to the blockchain ledger. In other words, it's a virtual container of transactions that can hold a limited amount of data. Each block can store a certain number of transactions and their associated data.
A node receives these blocks, validates all transactions in them, and then applies the updates to the global ledger. The whole blockchain ledger is a publicly viewable record that keeps track of every transaction that has ever occurred within that digital asset.
Blockchain
Blockchain is the underlying technology that Bitcoin and most other digital assets use to record and validate transactions. It is a linked list of transaction updates to a virtual digital public ledger.
A blockchain consists of a group of transactions in blocks. These blocks connected to each other cryptographically as they are mined, creating a chain. The nature of the cryptographic tie from one block to previous blocks means that previous blocks can never be altered.
Block Reward
Block rewards are new issued coins awarded to cryptocurrency miners for being the first to solve a complex math problem and creating a new block of verified crypto transactions.
The miners use networks of computers to execute this process, and every time a new block is created it is verified by all the other competing miners. Then a new math problem is introduced and the miners start over, incentivized by the chance to win that next block reward.
Consensus Mechanism
A consensus mechanism is used in computer and blockchain data systems to achieve the necessary agreement on a single data value or a single state of the network between distributed processes or multi-agent (P2P) systems. They are useful in record-keeping and decision verification among other things.
A consensus mechanism may refers to any of a number of methodologies used to achieve agreement, trust, and security across a decentralized computer network.
Cryptocurrency
Also known as digital assets and digital currencies, cryptocurrencies are issued and transferred electronically.
Bitcoin and Ethereum are widely recognized cryptocurrencies. Other growing forms of cryptocurrency that have been issued are referred to as altcoins such as Solana, Cardano, Avalanche or USD Tether. Cryptocurrencies generally seek to create more efficient means of digital finance and monetary transfer without need for central mediators like banks or clearing houses.
Decentralized Ledger
A distributed ledger is a decentralized database consensually shared and synchronized across multiple sites or geographies, and accessible by multiple people participating as computing "nodes". Data transfers and transaction info on such networks have a digital community of verifying witnesses.
Each node on the network can access the data records shared and store an identical copy of the up to date ledger. Any changes or additions made to the records are reflected and sent to all participants in unison.
Double Spend
A double spend is creating two conflicting transactions, one which sends funds to a counterparty, and the other sending those same funds back to yourself. This is prevented by the Bitcoin network and double-spends are not allowed.
This is arguably the primary innovation of the Bitcoin blockchain— an algorithm for preventing double-spends. However, in combination with a 51% Attack, an attacker can cause one conflicting transaction to be replaced with another if he or she controls 51% or more of the hashrate.
Ether or ETH
Ether tokens are the native cryptocurrency created within the Ethereum network and, like bitcoins, are tradable digital assets. Founded by Vitalek Buterin, ETH has spent the majority of its existence as the #2 digital asset by market-cap behind BTC.
Unlike bitcoins, the focus of ether tokens is not as a store of value or payment system, but rather as a system for creating and paying for the execution of smart contract logic.
Ethereum
A decentralized, blockchain-based computing platform that allows developers to build and deploy decentralized applications, facilitate digital-transaction processes and securely run smart contracts. In the Ethereum blockchain, mining computers work to earn ether, the digital asset that supports the Ethereum network.
While Bitcoin was the original crypto innovation meant to be used as digital currency and store of value, Ethereum is creating a marketplace on which industries can be built.
An Exchange
In the Securities Exchange Act of 1934, the SEC defined an exchange as "any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for... the functions commonly performed by a stock exchange... and includes the market place and the market facilities maintained by such exchange."
As the SEC is yet to classify almost any cryptocurrencies as securities, hence its determination on the classification of crypto platforms where users buy, sell & swap digital assets is still pending.
Fiat Currency
Any government-backed and government-issued currency, typically referring to hard currency assets like a U.S. Dollar bill. Other examples include the Yen, Euro, Pound or Peso.
These currencies are controlled by a single central bank and throughout history, fiat currencies have repeatedly fallen victim to rampant inflation as leadership groups print new currency units in a misguided effort to artificially create value for new initiatives. Excluding those circulating at the present time, all Fiat currencies have collapsed.
Gas Fees
Gas fees are the transaction fees that users pay to miners or validators on a blockchain protocol to have their transaction included in the block and fund the operations of the blockchain network.
The system works on a standard supply and demand mechanism. If there is more demand for transactions, miners can choose to include the transactions that pay more, compelling users to pay more to have their transactions processed quickly and efficiently.
Halving Cycle
Digital asset miners are compensated, or rewarded, for their work, which aids the process of validating and processing transactions.
In Bitcoin, the reward amount for successfully mining a block is cut in half every four years. This is done to control the distribution of new digital assets in circulation. It is the technical mechanism by which the creator implemented the monetary policy of the system and established a stable stock-to-flow.
A Hash
A Hash is an alphanumeric output that results from the cipher cryptography process used for data privacy known as a hash function.
Once generated by the encoding cipher process, each hash created is a unique digital fingerprint used to identify a block and every piece of data contained
within that block.
Hash Function
Hash functions are mathematical algorithms used in cryptography that convert an input value of any size into an output (hash) of fixed size. In most cases, the output consists of a hexadecimal number.
Hash functions are essential to the data encryption process that allows for secure and immutable data verification on distributed blockchain networks.
Hash Rate
The term hash rate refers to the speed at which a computer is able to perform hashing computations to verify block submissions.
In the context of Bitcoin and cryptocurrencies, the hash rate represents the efficiency and performance of a mining machine. It defines how fast a mining hardware operates when trying to compute a valid block hash.
HODL
Beginning as a typing error on a Bitcoin forum in 2013, this term has become a beloved rally cry for long-time bitcoiners.
It has been claimed to mean "hold on for dear life" but essentially expresses the belief that long-term value is better obtained by holding a digital asset than actively trading it.
Don't rush to correct someone when you see this term; instead, ask them to tell you their story and understand why they view their coin holdings as vital to long-term wealth.
Market Capitalization
The term market capitalization or market cap comes from the world of equities and is determined by multiplying the total outstanding shares of an asset by the last available share price. It ultimately expresses the complete market wide value of the entity issuing the asset in question.
The term has been adopted for use in the digital asset space and is computed by multiplying the total coin supply by the current market value of each coin.
(# of coins) X (value per coin) = Market Cap
Mining
Cryptocurrency mining refers to the proof-of-work consensus process performed on blockchains that verifies and validates blockchain transactions. It’s also the process that creates new units of cryptocurrencies.
The work done by miners to secure and verify new network data requires intensive computational resources, and it’s a fundamental component in keeping a blockchain network secure. Honest and successful miners are rewarded for their work with newly created cryptocurrencies plus transaction fees. The Bitcoin network is one blockchain that leverages mining.
Non-Fungible Token
A non-fungible token (NFT) is a specialized type of cryptographic token that represents a unique digital asset that cannot be exchanged for another type of digital asset. The term non-fungible refers to an asset which is not equivalent in value to other units.
This characteristic is in contrast to cryptocurrencies and blockchain utility tokens (like Bitcoin and Ethereum) that are fungible in nature, as any bitcoin is equivalent in value to any other bitcoin at a given moment. NFT's are created via smart contract technology and are most commonly used for digital art, real estate, gaming & sports blockchain projects.
Nodes
Nodes are software that run on internet-connected computers tied into specific decentralized blockchains and function as non-mining transaction validators, as well as digital-asset wallets for the network they serve.
Each node stores a full copy of the distributed ledger, meaning no single node controls data verification.
Open Source Software
The term open source refers to something people can modify and share because its design is publicly accessible.
The term originated in the context of software development to designate a specific approach to creating computer programs.
Peer-to-Peer (P2P)
A P2P network consists of a group of users or devices that collectively store and share files. Each participant (node) acts as an individual peer to all other participating network nodes.
Each user supports a distributed data system. There's no administrator, so rather than connecting into a single central server to exchange information and connect with each user (centralized system), the transmitting user sends it directly to all their peers (decentralized system).
Click HERE for a visual representation of centralized vs. decentralized P2P systems
Proof of Work (PoW)
Proof of work (PoW) describes a network consensus system that requires a significant but feasible amount of effort to be made by a network's computing nodes to deter frivolous or malicious uses of network processes.
PoW was first used to secure digital assets by Hal Finney in 2004 through the idea of "reusable proof of work" using the SHA-256 hashing algorithm. PoW systems require "miners" to expend energy in order to verify and validate new blocks of data to the blockchain. It incentivizes these computing efforts with the opportunity to obtain newly minted coins.
Proof of Stake (PoS)
Proof of stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain. A consensus mechanism is a method for validating entries into a distributed database and keeping the database secure.
Proof-of-stake changes the way blocks are verified using the machines of coin owners. The owners offer their coins as collateral for the chance to validate blocks. Coin owners with staked coins become "validators."
1 Satoshi
Satoshis refer to the fractional subunits of "change" into which a single bitcoin can be divided. Named for the founder of the Bitcoin system (Satoshi Nakymoto), each bitcoin is comprised of 100,000,000 satoshis in the same way each American dollar is comprised of 100 cents.
Satoshis are what allow for the incredible divisibility of bitcoin, a strong point of it's viability of a currency. For investors who can't afford a full bitcoin, you can always "stack sats" by purchasing smaller value quantities of satoshis instead, resulting in the buyer holding fractions of a bitcoin.
Securities
A security is a financial asset, defined by the SEC as:
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It is an investment of money;
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The investment is in a common enterprise;
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There is an expectation of profit from the work of the promoters or the third party driving it's development.
The SEC uses two tests known as the Howey Test & the Reves Test when assessing and qualifying assets as possible securuities. If an asset is deemed to be a security, that asset and the group promoting it would be subject to the requirements of SEC filings, reportings and regulatory oversight.
Self Custody
With cryptocurrencies, any asset holder has the ability to completely hold, control, send or transfer their digital assets without relying on a third party custodian having any control or access. This is known as self custody, and it allows holders to obtain complete control over their holdings.
Much like traditional banks where depositors allow an institution to take custody of their traditional monetary assets, centralized crypto exchanges are places that take custody of a users digital assets and the private keys that control access to them. Also like banks, several exchanges have found their reserves insufficient to payout account holders when a "bank run" occurs. Self-custody wallets eliminate any outside actor from controlling your crypto.
Smart Contracts
Smart contracts are software programs stored on a blockchain, that are coded to reflect a contractual agreement and run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary's involvement or time loss.
Smart contracts are a core innovation of the Ethereum system. A blockchain network automatically executes the contract terms when the necessary conditions are met. The chain is then updated & the transaction cannot be altered.
Stock to Flow Ratio
The stock-to-flow (SF or S2F) model is a way to measure the abundance of a resource. It is the amount of a resource held in reserves divided by the amount produced annually.
For example, the projected global supply of held gold is 190,000 tons; this represents the "Stock." Annually, about 3,000 tons is mined and added to the supply; this represents the "Flow." As a result gold's stock-to-flow ratio is 190,000/3,000, which equates to a ratio of ~63.
Assets with ratios above 1 can be viewed as quality, long-term stores of value since the increase in supply, or flow, is less than the circulating stock of that asset.
Store of Value
A store of value is essentially an asset, commodity, or currency that can be saved, retrieved, and exchanged in the future without deteriorating in value.
In other words, to enter this category, the item acquired should, over time, either be worth the same or more. Commonly known store of value assets include gold, government bonds and certain real estate assets
51% Attack
A 51% attack refers to an attack on a blockchain by a group of miner or validator nodes controlling more than 50% of the network's mining hash rate or computing power.
The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse transactions that were completed while they were in control of the network, meaning they could double-spend coins.