Terminology

Frequently Asked Terms

What is a Cryptocurrency?


A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.


What are the main Cryptocurrencies?

Bitcoin


Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator. It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors

accepted bitcoin as payment. Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.


Bitcoin cash


Bitcoin Cash (BCH/BCC) is a hard fork of the cryptocurrency Bitcoin. The fork occurred on August 1, 2017.

Ethereum


Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality.[2] It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called “ether”, which can be transferred between accounts and used to compensate participant nodes for computations performed. “Gas”, an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.
Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowdsale between July and August of 2014.[5] The system went live on 30 July 2015, with 11.9 million coins “premined” for the crowdsale.[6] This accounts for approximately 13 percent of the total circulating supply.

In 2016 Ethereum was forked into two separate blockchains, as a result of the collapse of The DAO project, thereby creating Ethereum Classic. The new forked version was Ethereum (ETH) and the one that continued its existence is Ethereum Classic (ETC).

Ripple


Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native cryptocurrency called XRP(ripples). Released in 2012, Ripple purports to enable “secure, instant and nearly free global financial transactions of any size with no chargebacks.” It supports tokens representing fiat currency, cryptocurrency, commodity or any other unit of value such as frequent flier miles or mobile minutes. At its core, Ripple is based around a shared, public database or ledger, which uses a consensus process that allows for payments, exchanges and remittance in a distributed process.

The network is decentralized and can operate without Ripple (enterprise), it cannot be shut down. Among validators are companies, internet service providers, and the Massachusetts Institute of Technology.
Used by companies such as UniCredit, UBS and Santander, Ripple has been increasingly adopted by banks and payment networks as settlement infrastructure technology, with American Banker explaining that “from banks’ perspective, distributed ledgers like the Ripple system have a number of advantages over cryptocurrencies like bitcoin,” including price and security.

Litecoin

Litecoin (LTC) is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Creation and transfer of coins is based on an open source cryptographic protocol and is not managed by any central authority. While inspired by, and in most regards technically nearly identical to Bitcoin (BTC), Litecoin has some technical differences compared to Bitcoin and other major cryptocurrencies. Litecoin also has almost zero payment cost and facilitates payments approximately four times faster than Bitcoin.

Tether


Tethers exists on blockchains through the Omni Protocol. The Omni Protocol is open source software that interfaces with blockchains to allow for the issuance and redemption of cryptocurrency tokens, in our case, “tethers”.

Tether Platform currencies are 100% backed by actual fiat currency assets in our reserve account. Tethers are redeemable and exchangeable pursuant to Tether Limited’s terms of service. The conversion rate is 1 tether USD₮ equals 1 USD.

Dash

Dash (formerly known as Darkcoin and XCoin) is an open source peer-to-peer cryptocurrency that aims to be the most user-friendly and most on-chain-scalable cryptocurrency in the world. On top of Bitcoin’s feature set, it currently offers instant transactions (InstantSend), private transactions (PrivateSend) and operates a self-governing and self-funding model that enables the Dash network to pay individuals and businesses to perform work that adds value to the network. Dash’s decentralized governance and budgeting system makes it a decentralized autonomous organization (DAO).

Zcash


Zcash is a cryptocurrency that grew out of the Zerocoin project, aimed at improving anonymity for Bitcoin users. The Zerocoin protocol was initially improved and transformed into Zerocash, which thus yielded the Zcash cryptocurrency in 2016.

Zcash payments are published on a public blockchain, but users are able to use an optional privacy feature to conceal the sender, recipient, and amount being transacted. Like Bitcoin, Zcash has a fixed total supply of 21 million units. In the first 4 years, 20 % of the coins are transferred to a “founders reward”, via a multisignature wallet.

Zcash affords private transactors the option of “selective disclosure”, allowing a user to prove payment for auditing purposes. One such reason is to allow private transactors the choice to comply with anti-money laundering or tax regulations. “Transactions are auditable but disclosure is under the participant’s control. On April 4, 2017, Zcash entered the top 10 cryptocurrencies by market cap.


GameCredits

GameCredits (GAME) is a digital currency based on blockchain. Its purpose is to become the universal currency for 2.6 billion gamers worldwide, to empower game developers both big and small in order to further grow the 100 billion dollar gaming industry, and to accelerate the wide adoption of decentralized cryptocurrencies as a better alternative to government-issued fiats.


ReddCoin


Reddcoin is the social currency that enriches people’s social lives and makes digital currency easy for the general public. Reddcoin achieves this by integrating a digital currency platform seamlessly with all major social networks to make the process of sending and receiving money fun and rewarding for everyone.

Reddcoin Redd-ID is a unique service provided at the blockchain level which allows a user to associate a username with rich information including public keys and social network identities.

Reddcoin Broadcast provides powerful crowd-sourced marketing tools to businesses and steady Reddcoin income to individuals based on their social influence level.


Storj


Storj (pronounced: storage) aims to become a cloud storage platform that can’t be censored or monitored, or have downtime. It is the first decentralized, end-to-end encrypted cloud storage that uses blockchain technology and cryptography to secure your files.
Storj is a platform, cryptocurrency, and suite of decentralized applications that allows you to store data in a secure and decentralized manner. Your files are encrypted, shredded into little pieces called ‘shards’, and stored in a decentralized network of computers around the globe. No one but you have a complete copy of your file, not even in an encrypted form.

Because of this, Storj can be faster, cheaper, and more secure than traditional cloud storage platforms. Faster because multiple machines are serving you your file simultaneously, cheaper

because you are renting people’s spare hard-drive space instead of paying for a purpose-built data center, and more secure because your file is both encrypted and shredded. There is no need to trust a corporation, vulnerable servers, or employees with your files. Storj completely removes trust from the equation.
Storj uses blockchain features like a transaction ledger, public/private key encryption, and cryptographic hash functions for security.

Monero


Monero is a secure, private, and untraceable cryptocurrency. It is open-source and accessible to all.
Monero is a decentralized cryptocurrency. Transactions are confirmed by distributed consensus, and then immutably recorded on the blockchain.

Monero uses ring signatures and ring confidential transactions to obfuscate the amounts, origins, and destinations of all transactions.

Monero provides all the benefits of a decentralized cryptocurrency, without any of the typical privacy concessions.
Sending and receiving addresses as well as transacted amounts are obfuscated by default. Transactions on the Monero blockchain cannot be linked to a particular user or real-world identity.

Stellar Lumens


Lumens are the native asset of the Stellar network.
Native means that lumens are built into the network. Asset is how the network refers to an item of value that is stored on the ledger.
One lumen is a unit of digital currency, like a bitcoin.
While you can’t hold a lumen in your hand, they are essential to the Stellar network—they contribute to the ability to move money around the world and to conduct transactions between different currencies quickly and securely.


Ethereum


Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality.[2] It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called “ether”, which can be transferred between accounts and used to compensate participant nodes for computations performed. “Gas”, an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.
Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowdsale between July and August of 2014.[5] The system went live on 30 July 2015, with 11.9 million coins “premined” for the crowdsale.[6] This accounts for approximately 13 percent of the total circulating supply.
In 2016 Ethereum was forked into two separate blockchains, as a result of the collapse of The DAO project, thereby creating Ethereum Classic. The new forked version was Ethereum (ETH) and the one that continued its existence is Ethereum Classic (ETC).


Payment systems, how do they work?


A payment system is any system used to settle financial transactions through the transfer of monetary value, and includes the institutions, instruments, people, rules, procedures, standards, and technologies that make such an exchange possible. A common type of payment system is the operational network that links bank accounts and provides for monetary exchange using bank deposits.[3]
What makes a payment system a system is the use of cash-substitutes; traditional payment systems are negotiable instruments such as drafts (e.g., checks) and documentary credits such as letters of credit. With the advent of computers and electronic communications a large number of alternative electronic payment systems have emerged. Cryptocurrencies are one of them.

Digital currency?


Digital currency (digital money or electronic money or electronic currency) is a type of currency available only in digital form, not in physical (such as banknotes and coins). It exhibits properties similar to physical currencies, but allows for instantaneous transactions and borderless transfer-of-ownership. Examples include virtual currencies and cryptocurrencies[1] or even central bank issued “digital base money”. Like traditional money, these currencies may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an on-line game or social network.
Digital currency is a money balance recorded electronically on a stored-value card or other device. Another form of electronic money is network money, allowing the transfer of value on computer networks, particularly the Internet. Electronic money is also a claim on a private bank or other financial institution such as bank deposits.[3]
Digital money can either be centralized, where there is a central point of control over the money supply, or decentralized, where the control over the money supply can come from various sources.

Who is Satoshi Nakamoto?


Satoshi Nakamoto is the name used by the unknown person or persons who designed bitcoin and created its original reference implementation.[1] As part of the implementation, they also devised the first blockchain database. In the process they were the first to solve the double-spending problem for digital currency. They were active in the development of bitcoin up until December 2010.
As of 24 May 2017, Nakamoto is believed to own up to roughly one million bitcoins,[4] with a value estimated at approximately $7 billion USD as of November 2017. He also owns an estimated one million Bitcoin Cash coins as of the hard fork on 1 August 2017 and one million Bitcoin Gold coins as of the hard fork activated 24 October 2017.

What do you mean with “Open-source software”?


Open-source software (OSS) is computer software with its source code made available with a license in which the copyright holder provides the rights to study, change, and distribute the software to anyone and for any purpose. Open-source software may be developed in a collaborative public manner. According to scientists who studied it, open-source software is a prominent example of open collaboration. The term is often written without a hyphen as “open source software”.

How “Peer-to-peer” works?


Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.

Blockchain explained


The blockchain is a public ledger that records bitcoin transactions. A novel solution accomplishes this without any trusted central authority: the maintenance of the blockchain is performed by a network of communicating nodes running bitcoin software. Transactions of the form payer X sends Y bitcoins to payee Z are broadcast to this network using readily available software applications. Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. The blockchain is a distributed database – to achieve independent verification of the chain of ownership of any and every bitcoin amount, each network node stores its own copy of the blockchain. Approximately six times per hour, a new group of accepted transactions, a block, is created, added to the blockchain, and quickly published to all nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, which is necessary in order to prevent double-spending in an environment without central oversight. Whereas a conventional ledger records the transfers of actual bills or promissory notes that exist apart from it, the blockchain is the only place that bitcoins can be said to exist in the form of unspent outputs of transactions.

What do you mean by “Mining”?


Mining is a record-keeping service done through the use of computer processing power. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Each block contains a cryptographic hash of the previous block, which links it to the previous block, thus giving the blockchain its name.
To be accepted by the rest of the network, a new block must contain a so-called proof-of-work. The proof-of-work requires miners to find a number called a nonce, such that when the block content is hashed along with the nonce, the result is numerically smaller than the network’s difficulty target. This proof is easy for any node in the network to verify, but extremely time-consuming to generate, as for a secure cryptographic hash, miners must try many different nonce values before meeting the difficulty target.
Every 2,016 blocks (approximately 14 days at roughly 10 min per block), the difficulty target is adjusted based on the network’s recent performance, with the aim of keeping the average time between new blocks at ten minutes. In this way the system automatically adapts to the total amount of mining power on the network.
The proof-of-work system, alongside the chaining of blocks, makes modifications of the blockchain extremely hard, as an attacker must modify all subsequent blocks in order for the modifications of one block to be accepted. As new blocks are mined all the time, the difficulty of modifying a block increases as time passes and the number of subsequent blocks (also called confirmations of the given block) increases.

Digital currency exchanges


Digital currency exchanges (DCEs) or bitcoin exchanges are businesses that allow customers to trade digital currencies for other assets, such as conventional fiat money, or different digital currencies. They can be market makers that typically take the bid/ask spreads as transaction commissions for their services or simply charge fees as a matching platform.
DCEs may be brick-and-mortar businesses, exchanging traditional payment methods and digital currencies, or strictly online businesses, exchanging electronically transferred money and digital currencies. Most digital currency exchanges operate outside of Western countries, avoiding regulatory oversight and complicating prosecutions, but DCEs often handle Western fiat currencies, sometimes maintaining bank accounts in several countries to facilitate deposits in various national currencies. They may accept credit card payments, wire transfers, postal money orders, cryptocurrency or other forms of payment in exchange for digital currencies. They can send cryptocurrency to your personal cryptocurrency wallet. Many can convert digital currency balances into anonymous prepaid cards which can be used to withdraw funds from ATMs worldwide.
Some digital currencies are backed by real-world commodities such as gold.
Creators of digital currencies are often independent of the DCEs that trade the currency. In one type of system, digital currency providers, or DCPs, are businesses that keep and administer accounts for their customers, but generally do not issue digital currency to those customers directly. Customers buy or sell digital currency from DCEs, who transfer the digital currency into or out of the customer’s DCP account. Some DCEs are subsidiaries of DCP, but many are legally independent businesses. The denomination of funds kept in DCP accounts may be of a real or fictitious currency.