Lexicon

Cryptocurrency Lexicon - Alpha

Diving into cryptocurrency can be a challenge when you're not familiar with the terminology used. This page is to get you familiar with frequently used expressions in the world of cryptocurrency. Below you will see quotes form Bitcoin Talk members. This page has just started and will be updated frequently.

Airdrop

inthelongrun Airdrop is a way for some projects to introduce their tokens, and for the crypto community to get to know about their tokens and their developing project. This is one very effective way because airdrops are always characterized with very high anticipation among crypto fans. These airdrops are mostly free.

munareal Airdrops is when you get free coins of a new coin where the developers want to build new user base .They give out free coins which is cheaper to them than advertisement. People love freebies and by so doing they spread the word . Word of mouth is better than advertisement.

Blockchain

bravehearth0319 Blockchain is like a bank were you can put your bitcoins with wallet address were you can keep it there. or in some other meaning its like a data structure that makes it possible to create a digital ledger of transactions. Also blockchain works if you sign up first for you to have a chance to log in and then you can get wallet address were you can hold your coins

Bounty

ahmadakbari Bounties are rewards that distribute among people who have participated in signature campaigns, social media campaigns, etc. in order to advertise for  ICOs. You support a project and get paid for it.

Bullish and Bearish

RodeoX Bears generally believe the price is going down and try to profit from it. Bulls are optimistic about the price and try to profit from gains.

Ivanhoe Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. It's difficult to predict consistently when the trends in the market will change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.
The use of "bull" and "bear" to describe markets comes from the way the animals attack their opponents. A bull thrusts its horns up into the air while a bear swipes its paws down. These actions are metaphors for the movement of a market. If the trend is up, it's a bull market. If the trend is down, it's a bear market.

Difficulty

augustocroppo A high difficulty means a low chance to find a random hash to accept the block and obtain the reward of 25 BTC + fees. Therefore is necessary an increase of the hash rate generated in seconds to increase the chance to find a random hash which satisfy the required criteria.
The Bitcoin network do not reward in accordance with the hash rate spent to find the target in the block header. The Bitcoin network change the difficulty to lower the chances to generate a new block and thus lower the chance to pay the reward.
So, it would be something like that: The higher the difficulty, lower is the chance you would have to find the target for the same hash rate.
However, the chance is still there and anyone generating any rate of hash per second has a chance to find a number which is equal or lower than the current target.

Escrow

Superbitzz A person who perform the role of third party between to traders. if a person wants to buy some thing online from someone. he afraid to that after receiving the money the person may not send the the item . so escrow play an important role between them he receive the item from seller and the ammount from buyer, then he exchange the itms and the money. he receive a little percentage from both the parties.

Forked

crafty Creating new branch of existing software. eg making a new brand of car based off of existing brand.

ICO

Crypto-watch-Talk ICO - Initial Coin Offering

A lot like a IPO with stocks. It's when a new cryptocurrency is going public with there coin and is getting first wave of people to invest (purchase coin) at a low beginning price.
It's basically the start of the coin being released to the market for the first time and allows people to buy in first usually at a low price. The money made from the ICO usually goes back into the coin development but that does depend on what is stated it will be used for in each individual ICO.

Masternode

shyliar In general it means a coin that is moving towards centralization. Not a good thing if you believe in the decentralized model of bitcoin. Great idea if you believe in centralized systems more closely related to the current banking model,

qwizzie Masternodes are nothing more then servers that are running a Dash client 24 hrs a day and who can prove to the Dash network that they own 1000 Dash on a certain wallet address (MN public address) As long as the masternodes can proof that and are constantly online, they are  considered a masternode to the network. The masternodes can be hosted through VPS providers or through owned Raspberry Pi's. The 1000 Dash is considered collateral, is under people's own control and stored on a cold wallet (the hot wallet doesnt contain any coins, it just provides a link to the Masternode).
The owner is free to move his collateral of 1000 Dash at any time to sell it on exchanges or to move it to other addresses, but then the Dash network will consider that masternode as no longer active and will not provide any more MN payments, it will eventually drop off the masternode list.

JosNekoKopa Masternodes are support for network, they are maybe week on some particular attacks and can become security problem, but still they are far from centalazation. They are not banks, not controling anything, earnig fees, also they trigger scaresity,  price rise or fall, but as idea they are not bad at all. Every monetary model has its issues..Use ones with less.

valiant1 I disagree with the scam perspective. I think people are interested in MNs because they represent a store of value that will grow. One of the biggest problems with crypto is that the value is uncertain and subject to heavy fluctuations, as you referenced. But having MNs assures some degree of growth and utility, even if the price is unstable.

bitcoin9999 Buying a new masternode with extremely high ROI is like catching a falling dagger.  More people will have MN then the divided MN earning will be less... then people started to fire sell and you are catching a falling dagger.

Mining

odolvlobo Mining is the process of validating all transactions and recording them in the public ledger called the "block chain".

Zeek_W Satoshi lost a long passphrase to a zip folder. We are helping him

pre-ICO

tobatz23 Pre-ICO is the tokens sale event before the official crowdsale begins. In most cases, the fund-raising targets for Pre-ICOs are often lower as compared to that of the main ICO and offer tokens at a lower price with a substantial bonus or sold cheaper. For the purposes of prudence,  Pre-ICO often uses a very different smart contract compared to the actual ICO itself, this is informed by the need to avoid a mixture of Pre-ICO funds with the main ICO to enable proper and easy account reconciliation and audit.

lincolnmad Pre-ico is works like test the water on the project and usually that project give a good bonus for pre-ico sell to attract more investor to invest their project. I think all that is normal because they need to whitelist the investor through email so they can let the investor to invest on pre-ico. If the project is really good, the pre-ico can easily done in a second.

yugyug This is what we commonly called as pre-selling, it is a business and marketing practice to attract more investors. example for a real-estate business, like they have a condominium unit for investments, the regular selling price of a fully furnish is 100000 USD and if they pre-sell it at an early stage of development it will cost like 70000 USD that is 30k cheaper. let's say the pre-selling schedule is sep. 1 2017 and the actual selling schedule is dec. 25, 2017. so if you hold your investment for almost 3 months you can gain of more than 30 percent. the purpose of pre-selling is to raise fund for capitalization for further development. same analogy with the pre-ico or pre-sale of token.

Pump and Dump

itsallpc Bitcoin pump and dumps work in a very simple yet straightforward manner. Pump and Dump schemes comprise of two groups of people. The first group is players who play by artificially increasing the price of the Bitcoin by endorsing or promoting it. This category of individuals spends their time finding cheap coins to purchase then wait for when they are ready for dumping and build a buzz about the coins. The process of finding and buying cheap coins can take as quick as minutes or as long as hours or even days.

Ponylon It's when a group of traders, or a trader with a big stash, try to influence the market by first buying (increasing the price) and after more people have bought into it (by seeing the awesome gains), dump it shortly after (sell)

pitiflin Pump means that some people will buy an altcoin unanimously and then ask other people to buy it as well,when others buy the people who bought in the first place will sell theirs ,in other words they will dump and they will get a profit and others will get a loss,most of the time. Some people create groups on social media and try to attract people by saying that they will also get a good return on investment but at the end of the day all you will have with you is a empty wallet after getting a huge loss. For heaven sake don't listen to such people, you will end up getting a loss. Because trading is something which requires personal skill and not some random third party's skill.

Segwit

jaideep1000 Basically its stands for segregated witness. Its a kind of update to the bitcoin protocol. Basically we're making more space in each block of the btc blockchain so that more transactions can be processed in a block. If you noticed while bitcoin was at its peak a month or so ago, transactions were becoming slow to confirm and the transaction fees were becoming large. Segwit basically solves this(to some extent) and makes bitcoin more scalable.

Short

bitcoinisbest In stocks, short or shorting means that you know a stock priced at $ 100 at present is going to fall in coming time. So in this anticipation you sell first at 100$ and when price falls say at 95$ then you buy it. In normal circumstance its first you buy and then you sell.

Sled The meaning of short in trading is to trade the coin very often because of its fast price movement like it changes more often than the other coin in the market. It is a good coin if you can short it because you can be comfortable in trading with that since it is active and the price is very volatile. For conclusion, short term means you trade often with that coin because of price volatility.

Smart Contract

Cheburekus In a few words smart contracts are self-executing contractual states, stored on the blockchain. They help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. You can compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account

Staking

Cheburekus Normally you mine with your computer and get coins as a reward. Thats how transactions are confirmed. Thats called Proof of Work (PoW).
But there is also a System called Proof of Stake (PoS).
The transaction confirmations are not done with hardware but with already owned coins. An amount of your coins are on the stake, while they are used for staking. That depends a little on the implementation.
But basically you get a certain percentage of your coins as a reward. Some people think, they can "earn" here, but that's nonsence, because if the market cap stays stable, the single coins are worth less, if new coins are generated. So you just "keep" your value, if you are staking. And "loose", if you are not...
Its like in a bank if you get 2% interest and the inflation is 2% as well. You only "earn", if there are transaction fees and if those are also payed to the staker.

c0ffer Staking is the reward you receive for supporting the network by holding coins and running a node. If you have coins in a wallet that is a POS coin your supply of coins will grow as long as you are holding the coins.
Staking is also related to time. You are paid an amount based on an amount of time that has elapsed. Some coins also have limitations on when the coins will stake and for how long.
Different coins have different values for how the staking works and these values are important for assessing the value (or future value) of a coin.

Token

HardFireMiner Crypto Tokens are created over an Initial Coin Offering (ICO). Even though the wording of “coin” is false, that is what is currently used. Those created cryptocurrency tokens don’t have their own blockchain. Most ICOs use the Ethereum blockchain, which enables a storage in an Ethereum wallet.

Diffenrece between Coin, Token and Cryptocurrency

A coin has its own blockchain. There is no difference between a coin and a cryptocurrency. Examples are Bitcoin, Ethereum Coin. A Token is hosted on another currency’s blockchain. Example: FirstBlood Token.