Crypto Glossary

Crypto Glossary

From Airdrops to Zero-Knowledge Proofs, I have tried to cover every crypto term in this comprehensive set of glossary.

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0x Protocol

The 0x Protocol is an open-source and decentralized protocol that forms a standard for trading assets on the Ethereum blockchain. This protocol provides a peer-to-peer exchange of ERC-20 and ERC-721 tokens without the need for any centralized authority.

The relayers in 0x Protocol play a vital role. They perform the task of matching buyers and sellers by keeping off-chain order books. Instead of executing trades directly on-chain, relayers manage them off-chain. This saves the transaction costs and lowers the gas fee.

The protocol uses smart contracts to carry out trades in a secure and immutable way. It is also modular, i.e. it is flexible and can be upgraded., which lets devs build customized dapps. ZRX token is the native token of a 0x protocol. It is not only used to pay transaction fees but is also used for governance; holders of this token are eligible to vote on various upgrades of the protocol.

10x

10x or 10 times is a shortcut for exponential growth in investment returns. It is used in different contexts. In terms of price increase, 10x means investors would get a 10 times return on their investments. 10x also means a significant growth in technology or adoption of blockchain. The growth could be in terms of the number of users or developers who use a particular network or an increase in the number of applications. An example could be Polygon, a layer 2 solution for bringing 10x scalability to Ethereum layer 1.

In the context of a developer or project, 10x means more efficient or innovative than other developers or projects. A 10x dev means a highly skilled dev who can produce far better results than others. Similarly, a 10X project gives superior implementation, imparts better scalability, enhances security in a better way, or provides a higher level of decentralization.

In terms of crypto trading, 10x means the leverage given to margin and derivative traders is 10 times the amount they bring in as their investment. For example, on investing $1000, a 10x would mean a leverage of $1000*10 =$10,000. This means, a trader can now trade with a higher amount and gain higher profits (but it also means amplified losses).

1inch

It is a decentralized exchange (DEX) aggregator. It aggregates liquidity from different DEXes (like Uniswap, Sushiswap, Balancer, and Curve, to name a few). It also splits a trade across several DEXes so that users get the best trading prices. 1inch is based on a ‘Pathfinder Algorithm’, which decides the most economical trade route in terms of gas fees, liquidity, and slippage. This algorithm gives its traders the best price and cost-effective execution across different liquidity pools.

An example can be seen like this: A trader wants to swap ETH for USDC. Instead of performing the trade on a single DEX, he uses 1Inch, which checks the prices across multiple DEXes and makes a decision that splitting this trade across these DEXes would give the user the best rate; it also executes the trade optimally.

1inch is also known for its own liquidity protocol; it is a way with which users get liquidity and can earn rewards. Another prominent feature is ‘limit order’ which lets users decide specific buy and sell prices. 1inch works smoothly in a multi-network environment and finds its applications in DeFi space. The platform works on a 1INCH token, which acts as a governance token and allows users to participate in decision-making and upgradation of the protocol. This aggregator uses audited smart contracts, which impart security to the users.

There are a number of use cases for 1inch. The most common is the efficient swapping of tokens with the best rates and minimal slippage. Another use case is linked to liquidity where users are rewarded for providing liquidity to the 1inch pools. Yet another use case includes arbitrage: users use the platform to get the best arbitrage opportunities (due to differences in prices on different DEXes).

2FA

2FA stands for Two-Factor Authentication. In the blockchain, it means that there would be two types of identification checks before granting access to a user to his account or wallet or before initiating a transaction. It acts like an additional security layer that can protect user’s assets from attacks from malicious actors or hackers. The first factor in a 2FA is mostly a password or a PIN, which is set by the users. The second factor is a code generated by an app like Google Authenticator and is sent to the user’s device.

Users would be required to pass both these authentications before they can log in to an application or start a transaction. 2FA is a security measure that helps prevent unauthorized access to user’s crypto assets and accounts. This mitigates the risk of phishing attacks as the codes generated by the second factor are short-lived and once used, they cannot be used again.

51% Attack

When more than 50% of the blockchain network’s hashing power is controlled by a single entity or a group of entities, it is called a 51% attack on the network. A 51% attack enables hackers to control and manipulate the blockchain in their way. Mostly the networks that employ the Proof of Work consensus mechanism are prone to such attacks. When the attacker gains control, he can easily produce as well as validate blocks, and that too faster than the other nodes on the network.

Manipulation can be in the form of double-spending under which a hacker first initiates a transaction and broadcasts it to the blockchain. He also creates a separate but hidden version of the blockchain, i.e. a fork where the transaction does not exist. Once this forked chain grows longer than the public chain, he releases it to the network. This overwrites the original blockchain and his initial transaction is erased. Thus he gains control of the spent funds. Not only this, the attacker can also prevent new transactions from being confirmed. This is done by not disallowing the inclusion of that transaction in the block.

The attack, if successful, can reduce the market value of the network and also mitigate its trust among users. In 2018 and 2020, Bitcoin Gold suffered a 51% attack; it resulted in millions of dollars in double-spent transactions. Ethereum Classic (ETC) was also attacked; hackers were able to reorganize the blockchain and double-spend the funds.

The attack can be reduced by increasing the mining power (hashing power) thus making it more expensive to attack. Switching to a Proof of Stake consensus mechanism can also help mitigate the risk of attack as controlling the network requires owning a majority of cryptocurrency.

#Crypto

Hashtag Crypto or #Crypto refers to news, talks, and content related to cryptocurrency and blockchain. It is a short form of cryptocurrency and is used to tag topics that are related to the blockchain ecosystem in one way or the other. It refers to the crypto asses like Bitcoin, Ethereum, and other altcoins.

In news, it is used to share updates, price movements, and any innovations in crypto technology. #Crypto is widely used by the community in discussions and ideas related to blockchain. Projects use it to promote themselves and align with the values associated with this niche. Hashtags can also be used before the name of the cryptocurrency or the terms related to crypto, for example, #Bitcoin, #Ethereum, #DeFi, and #NFT.

$BTC

The dollar sign before Bitcoin or any other cryptocurrency refers to its fiat value in dollars. For example, $BTC=30,000 means Bitcoin is worth 30k dollars. It is used when someone is referring to a crypto asset’s price. The dollar symbol is widely used by traders in their discussions surrounding technical analysis and price predictions. It is often used in tweets and posts to tag crypto-related content.

@Satoshi

In the blockchain, @Satoshi is used to refer to Satoshi Nakamoto, who is considered the pseudonymous creator (or a group of people) who laid the foundation of Bitcoin. Satoshi is credited with writing the whitepaper for Bitcoin in 2008. The true identity of Satoshi is unknown.

In the context of social media handles, @Satoshi is used by blockchain enthusiasts and developers to associate themselves with the mystery surrounding Bitcoin’s founders. In the blockchain community. @Satoshi refers to the true spirit of blockchain, i.e. decentralization and innovation. The smallest unit of Bitcoin is also called “Satoshi” or SAT. 1 SAT equals 0.00000001 BTC.

Ξ(Xi)

Ξ(Xi) in blockchain refers to Ethereum. This symbol, though not an official one, is often used by the blockchain community to represent this cryptocurrency. The symbol Ξ is the uppercase form of the Greek letter ‘xi’. It was adopted by Ethereum developers as the shorthand as it represented a futuristic and clean appearance, which aligns with Ethereum’s principles of forward thinking and innovation.

Ξ (Xi) represents the Ethereum ecosystem as a whole. It is used to represent ETH values. For example, Ξ 2  means 2 ETH. It is used on social media platforms to better represent Ethereum visually. While the official symbol of Ethereum is ETH, Ξ (Xi) represents its shorter and more popular form.

A

Aave

A prominent decentralized finance (DeFi) protocol that allows users to lend and borrow cryptocurrencies without the need for any intermediaries. You can swap an ERC-20 token on Aave and can also stake your crypto, thereby contributing to the security of the Aave protocol and earning rewards in return. It uses smart contracts to implement automation of its Defi protocol. The Aave token is the governance token of the Aave Protocol that users can employ for voting and contributing to the Aave Improvement Proposals. Aave also facilitates over-collateralization under which users need to deposit more collateral than they are actually lending.

Account Abstraction

Account Abstraction is a concept under which instead of a user signing his transaction with a private key on a wallet, a smart contract is deployed with a set of rules that the user has defined for signing that transaction. For example, he may set the rule to sign the transaction with some other account like his email account on Google. This smart contract would now send the transaction to a mempool which will manage the gas and validate the transaction. This is done off-chain. Upon validation, the transactions are sent to another already deployed smart contract called EntryPoint.sol, which will, ultimately send it to the user’s smart contract. From there, the transaction gets added to the blockchain. This offers greater flexibility and enables smart contracts to manage transactions, rather than traditional Metamask-like accounts.

Adaptive Blocksize

It is a mechanism that allows the size of a block to be dynamically adjusted based on the condition of transaction traffic at that point in time., This adaptable sizing can be decided on the basis of transaction volume, network traffic, and other factors. This adds scalability to the blockchain: more transactions can be handled in less time and it also prevents resource-intensiveness of a node. Using adaptive block sizes requires utilizing some sort of consensus mechanism. This dynamic sizing concept has been employed in Bitcoin Cash, Monero, and EOSIO. It could, however, lead to more centralization and complex implementation.

Adaptive Proof of Stake (APoS)

APoS is an advanced consensus mechanism that can overcome the limitation posed by the traditional Proof of Stake(PoS). It provides flexibility regarding the weight of the validator’s stake, which can be based on factors like the validator’s performance, network conditions, or any other governance rules. Selecting weight on such a basis helps in rewarding high-performance validators and punishing the low-performing ones. Another prominent feature of APoS is that the validators can be incentivized by adapting their behavior to maximize rewards. This can ensure higher network reliability and reduce the chances of any sort of centralization, which is commonly seen in traditional PoS mechanisms.

Also, the stake distribution in this consensus mechanism is more balanced; this ensures that the participation from small stakeholders is also kept in account. As APoS helps in adjusting the number of active validators and also implements shard-specific adaptations, the scalability of the network can be increased. The best use cases of Adaptive Proof of Stake can be for Public Blockchains, Enterprise Blockchains, and Hybrid Chains.

Address

An address in a blockchain is a string of characters representing a location on the blockchain where cryptocurrencies can be sent or received. An address can send, receive, and store cryptocurrencies. It is generated from a wallet’s public key via hashing algorithms (A wallet has a public-private key pair). Addresses protect the real identities of the sender or the receiver as an address can’t be tracked to the real user. This is great for protecting the identity of users. An Ethereum-based address starts with 0x and is 42-character-long, while a Bitcoin-based address begins with 1, 3, or bc1. It is the wallet that creates an address for a user.

A single-use address is one in which the user can generate a new address every time he wants to send a transaction. Multi-Sig Address requires multiple private keys to sign and authorize to send a transaction. There are also smart contract addresses that can execute a code.

Address Reuse

It refers to the practice of using the same blockchain address multiple times for receiving or sending transactions. This can compromise the privacy and security of users. Some wallets are pre-configured to reuse the address multiple times; also some users prefer this reuse for the sake of simplicity. Some may, however, use it due to their lack of knowledge. On a blockchain, all transactions are visible to everyone. So, if a user uses the same address repetitively, it may compromise his privacy and expose it to security attacks. It also may reveal the underlying cryptographic weaknesses or the implementation flaws of the protocol.

Aggregator

 A tool, a protocol, a platform, or a mechanism that aggregates data, information, and transactions from multiple sources and produces a unified output. Aggregators help in improving efficiency and improve functionality; they are used across various blockchain applications. There are different types of aggregators including DeFi Aggregators (that collect liquidity and prices from several decentralized exchanges or leading platforms), Layer 2 Aggregators (that aggregate transaction from users off-chain, batch these transactions and then process them to be sent to Layer 1), Oracle Aggregators) that combine data from multiple oracles and provide a tamper-proof data to smart contracts, and NFT Market Aggregators (that aggregate NFT listings across NFT platforms like Rarible and OpenSea). There are also blockchain interoperability aggregators that facilitate seamless interaction across blockchains.

Agnostic

Agnostic refers to blockchain protocols or platforms that are interoperable meaning that they can work easily across multiple blockchains and are not tied to a particular blockchain network. This makes them flexible as their functionality is not restricted to any specific blockchain’s functional features. An agnostic blockchain can be deployed across multiple blockchain platforms at a lower cost. Smart Contracts that can be deployed across multiple chains are also platform-agnostic. Another application where agnostic behavior can be deployed is a cross-chain bridge, thereby allowing the transfer of assets across different blockchains. Similarly, dapps and wallets can also be designed to be fully agnostic. Example: “The project’s wallet is agnostic, meaning it works on both $ETH and $BSC.”

Airdrop

Airdrop is a cryptocurrency token that is distributed to a group of users for free in exchange for completing some basic tasks. Airdrop distribution is a marketing strategy that blockchain companies adopt to promote their projects, attract users, or simply reward their community. Airdrops garner community interest and help in increasing adoption. The target users can either be new or existing ones. Several types of airdrops are distributed to the users. Standard airdrops involve giving away crypto to users who meet predefined criteria.

Exclusive airdrops are rewarded to a specific group of individuals such as early adopters. Airdrops are also given to users who have held crypto for a long time. Under bounty airdrops, users first complete tasks (sharing the company’s page on social media, etc.), Hard fork airdrops are those in which a blockchain splits into two; a new cryptocurrency is created and holders of the original crypto receive an equivalent amount of new crypto.

Algorithmic Stablecoin

It is a stablecoin that is designed to maintain a stable value by using algorithms and smart contracts to control the supply/demand of that stablecoin. It is usually pegged to a fiat currency like the US dollar.

It is a type of stablecoin that uses algorithms and smart contracts to maintain its peg to a fiat currency rather than collateral.  Algorithms running in the background adjust the token supply based on the demand of the market. If the stablecoin trades above its pegged asset price, the protocol raises the supply of new tokens by minting new ones. This dilutes the value of the stablecoin and brings it back to its pegged value. The reverse is also true. Algorithm stablecoins ensure decentralization and help bring in more transparency. There are also non-pegged stablecoins but they are hard to trust.

Algorithmic Trading

Algorithmic trading refers to the use of algorithms to execute trading strategies for the cryptocurrency market. These algos can analyze market data, identify profitable trades, and execute such trades faster than manual trading. Automation is the key feature of algorithmic trading. It is based on pre-determined rules for price levels, volume, and technical indicators. Other plus points of such trading include its faster speed and higher efficiency than manual trades, Such an algorithm uses large volumes of data and analyses real-time data in no time to help users take profitable trades.

Several types of algorithmic trading strategies are employed in blockchain. In Arbitrage Trading, the difference in prices of an asset on different exchanges is used to make profitable trades. For example, one can buy Bitcoin at a lower price on Exchange A and sell it at a higher price on Exchange B. Market Making is another strategy that traders use. It involves placing buy and sell orders simultaneously to gain profit out of the spread between ask and bid prices.

Yet another strategy is what most small traders do manually, i.e. following the trend. They also identify the upward or downward trends using technical indicators.  Algo trading is highly efficient and reduces errors caused due to human emotions. It does not need full-time monitoring and is scalable. The negative points include technical failures, excess losses due to market volatility, and the requirement for expertise in programming languages. Several tools help in the execution of algo trading. One of these tools is a trading bot like 3Commas, HassOnline, or Cryptohopper. Other tools are smart contracts, APIs, (integrate trading algos for execution in real time), and decentralized platforms (like Uniswap and SushiSwap that provide trading via Automated Market Makers).

Algos

 Refers to algorithms or algorithmic trading bots that automatically execute trades in the crypto market based on some predefined rules. Algos plays a significant role in imparting security, decentralization, and consensus in a blockchain. Consensus algos are those that ensure the state of the blockchain among the distributed nodes. These include Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof of Stake (DPoS), among others.

There are also cryptographic algorithms that aim to provide secure data and transactions on the blockchain. These include hashing algos like SHA-256 for Bitcoin and Keccak-256 for Ethereum. Digital Signature Algos are also classified under the cryptographic category and are used to sign and verify transactions (such as ECDSA or Elliptic Curve Digital Signature Algorithm). Apart from these types, there are Encryption Algos that ensure data confidentiality. Advanced Encryption Standard (AES) is an example. Other types include Smart Contract Algos, Tokenomics Algos, and Data Storage Algos.

All-Time High Price (ATH)

 All-Time High is the highest-ever price that a cryptocurrency has reached since its inception. It is used as a benchmark that evaluates a crypto asset’s performance and its future potential to perform well. The All-Time High price does not remain static and keeps on changing depending on the asset’s performance and market conditions. ATH acts as a psychological resistance level in technical analysis.

Depending on whether the price breaks out above ATH or breaks below it, the traders can initiate or adjust their trades. An example of historical ATH is when Bitcoin reached its ATH at the $100000 mark on December 5, 2024. ATH depends on market conditions., supply-demand metrics, and macroeconomic factors. Speculative trading during bull markets can also make a crypto asset reach its ATH. The same is true for major announcements that can trigger an asset to climb up to its All-Time High quickly.

All-Time Low Price (ATL)

All-Time Low is the lowest-ever price that a cryptocurrency has reached since its inception. Like All-Time High, ATL depends on market conditions present and other triggering factors like poor financial results of a company, excessive selling by whales, or fear of losing money in unstable market conditions. See All-Time High Price also.

Alpha

Alpha refers to insider knowledge or a potential investment that is expected to perform well. Alpha in trading means the excess return that a trader generates in comparison to a benchmark. For example, if the overall crypto market increases by 10%, but your portfolio grows by 15%, your alpha is +5%.  Alpha includes insider knowledge or exclusive information about upcoming projects or token launches.

Alpha is usually early and high-quality information that gives an edge to the investors. Early announcements about a token or a project launch are usually made on Discord or Telegram groups, and can also come from developers or teams working on blockchain development projects. During the testing phase of project development, alpha refers to the first stage of development when a product is functional but may still have bugs.

Alpha Lending

Alpha Lending is a decentralized lending protocol that is built on blockchain and enables users to lend and borrow cryptocurrencies. These borrowing and lending activities are performed in a permissionless and decentralized manner. Created as a part of the Alpha Finance Lab ecosystem. Alpha Lending works on the principles of security, transparency, and automation. It uses smart contracts to help users do DeFi activities without the need to rely on a centralized intermediary. Lenders can deposit their crypto to earn interest.  Borrowers can deposit assets as collateral to borrow other crypto. An algorithm is used to adjust the interest rates based on supply and demand for each of the assets in the lending pool.

Alpha Lending automates loan issuance, interest calculation, and collateral management. It works like this: the user deposits his crypto asset into Aplha Lending ‘s liquidity pool. These assets are then pooled together and are made available for borrowers. Lenders earn interest which is dynamically adjusted based on borrowing rate and market conditions. Borrowers provide collateral and can borrow a percentage of the collateral’s value. If the collateral’s value falls below a set threshold, his position may be liquidated to protect the pool from losses. Alpha Lending is integrated with Alpha Homora, which is a leveraged yield farming platform. This benefits users as they can maximize their yields further by borrowing assets.

Alt Season

Alt Season is a period when altcoins outperform Bitcoin, usually in terms of price and market activity. It is also called Altcoin Season. Dusting this season, altcoins experience significant price increases and often outperform BTC. This usually happens after the Bitcoin halving which takes place every 4 years. Unlike Bitcoin which investors like to hold for a long time, altcoins mostly see dumps after their prices have risen appreciably. This is because a majority of altcoins may not rise to their previous years’ glory and may never appreciate again. 

Altcoin

 Any cryptocurrency other than Bitcoin. It is used as an alternative coin and is called so because it is considered an alternative to Bitcoin, which was the first-ever cryptocurrency. Altcoins can have different consensus mechanisms, features, and use cases that are different from BTC. They adopt alternative protocols to introduce variation or improvement in Bitcoin technology (such as faster finality, scalability, security, and privacy). Altcoins can operate on their own blockchain  (like Ethereum and Litecoin) while others are just tokens built on existing platforms (like ERC -20 tokens are built on Ethereum).

Some altcoins are created to support dapps (decentralized applications) and smart contracts (ETH, Cardano, Solana, etc.). Another category is Stablecoins which are pegged to fiat currency. Examples are Tether (USDT), USD Coin (USDC), and DAI. Altcoins can also be utility token types where they have a specific purpose like paying gas, or voting. Chainlink (Link) and Uniswap (UNI) are the examples. Other than these, altcoins include meme coins (based on a joke or theme), and forked coins (created by splitting of Blockchain (Bitcoin Cash is a forked altcoin carved out of Bitcoin).

Anchor

An Anchor is a mechanism that is used to create a secure connection across different blockchains or layers. This ensures data integrity and makes cross-chain communication an easy task. A transaction from one blockchain is anchored onto another blockchain. This is done by storing the cryptographic proof in the second blockchain. This results in the creation of verifiable proof of existence for data across chains.

The best example of an anchor is Polkadot which uses a relay chain that acts as an anchor for para chains, thus ensuring data interoperability across chains. In the context of layer-2 scaling solutions, anchor refers to the process of recording proofs periodically from layer 2 to layer 1 blockchain. This ensures security and decentralization by leveraging the robustness of layer 1. If we talk about protocol, Anchor Protocol acts as a lending and borrowing platform built on Terra blockchain, which provides yields by utilizing staking rewards from Proof of Stake blockchain networks.

Anchor Protocol

A decentralized finance (DeFi) protocol built on the Terra blockchain that offers high-yield savings and lending services. 

AnkrETH

It is a token that represents the user’s staked ETH on the Ankr Staking platform, which is a liquid staking solution. When a user stakes his ETH through Ankr, he receives an equivalent amount of Ankr Eth (or ankrETH) in return. It is a liquid staking derivative and is proof that a user has staked his ETH on the platform; this makes them eligible to participate in DEFI activities.

The staking works like this: The user first deposits ETH into the Ankr Staking Platform via the Proof of Stake (PoS) consensus mechanism of Ethereum. The staked ETH tokens are used in the PoS mechanism and earn the users awards for validating transactions and securing the network.  The user receives an equivalent number of ankrETH tokens in return for their staked ETH. The value of these newly received tokens increases as the staking rewards are accrued over time. ankrETH tokens can further be used to perform other DeFi activities like lending, borrowing, and providing liquidity and can earn more yield. Users can hold or trade ankrETH freely without having to wait for Ethereum’s staking lock-up period to end.

Annual Percentage Rate(APR)

APR is the annualized interest rate that a user can earn or pay on DeFI activities like staking /lending/borrowing without taking into account the effects of compounding. APR indicates the straightforward rate of returns or costs on an investment over a year. APR represents simple interest and ignores the effects of reinvestment of earnings (which is called compounding). It has a fixed rate of return, thus making it easy for investors who do not understand compounding or do not want to consider it.

There are different DeFi activities where APR is relevant. In staking, for example, the users are rewarded for locking their assets in a staking pool and these rewards can be calculated in terms of APR. Also, in the lending and borrowing activities, users can calculate their earned interest and paid interest in terms of APR. Last but not least case where APR is relevant is providing liquidity to the DeFi pools, where they can earn a percentage of the transaction fee as APR. The formula for APR is:

APR = (Interest Earned or Paid/Principal) ×100

For example:

If you lend 1,000 USDT at an APR of 10%, you will earn:

(1000×(10/100)) = 100 USDT annual interest

Annual Percentage Yield (APY)

Annual Percentage Yield is the annual rate of return on an investment after taking into account the effect of compounding interest. In DeFi, APY is used to calculate the profitability of an investor for the crypto assets he stakes, lends, or provides liquidity for in decentralized finance-based protocols.  APY considers the reinvestment of earnings (or compounding) over a year.

The compounding period can vary depending on the protocol or the smart contract used by a blockchain network. The annualized yield for DeFi users can be variable (unlike traditional financial models where users can expect a fixed yield). This is due to the variable number of participants in staking and lending, fluctuating demand for assets in liquidity pools, and also the variations in token prices (or rewards). APY is expressed in percentage, making it easier for investors to compare their yield across different crypto platforms. APY is calculated with the following formula:

APY=(1+r/n)n  – 1

r: Annual interest rate.

n: Number of compounding periods per year.

For example, If a protocol offers 10% interest compounded monthly, the APY would be:

APY = (1+(0.10/12))12  – 1 = 10.47%

Anonymity Set

Anonymity is the number of participants or number of users in a privacy system, such as Monero or Zcash that helps obscure the identity of any individual user. The higher the number in the Anonymity Set, the better the level of anonymity and privacy of the individual participants. And harder is for attackers to trace the origin of the transaction. Several privacy-focused blockchains use decoy transactions and use techniques that ensure that anonymity remains at a higher level. This way, it becomes very difficult to distinguish real transactions from fake ones. For such a set, multiple transactions are pooled together, and funds are redistributed; this transaction mixing makes tracing harder on the part of attackers.

Anti-Fragility

 A blockchain with anti-fragility can withstand adverse conditions, on the one hand, improve itself, and eventually become strong due to these stress factors, on the other. It is based on the concept that a system evolves, adopts, and enhances itself in response to difficult situations. (Just like we humans do). Anti-fragility is the marker of blockchain resilience that enables it to withstand hacking attacks and vulnerabilities. As blockchains have these mechanisms working for them, they need not depend on any external centralized factor to control and improve them.

Anti-fragility is based on repetitive auditing and getting strengthened from the feedback that it gets over time. The best example of this can be seen with the 2016 DAO attack after which Ethereum underwent a hard fork to recover stolen funds. This resulted in the creation of better security mechanisms, making community participation on a larger scale, and the eventual birth of Ethereum Classic. Similarly repeated DeFi exploits over time have resulted in the implementation of better and highly secure smart contracts. Decentralization, open-source development, consensus mechanisms, and community governance are the various anti-fragility mechanisms that blockchains have adopted.

Anti-Money Laundering (AML)

This refers to the practices, policies, and regulations designed to prevent illicit financial activities in blockchain technology. It involves prohibiting the misuse of cryptocurrencies for money laundering and other illegal activities. AML ensures that the blockchain sector complies with global and local regulations. There are several ways to implement Anti-Money Laundering. This includes processes such as Know Your Customer (KYC), transaction monitoring for any suspicious patterns, and regulatory compliance set by local and global communities. AML also ensures transparency as all the transactions are available for public view thus making it relatively easy to track funds and identify any illegal activities.

Ape

An Ape is a trader who invests a large portion of his money in a project, without doing any due diligence or research. It is the hallmark of an APE to act aggressively and buy crypto after getting influenced by social media hype or simply due to FOMO (Feat of Missing Out). Most of the apes have high-risk tolerance in the hope of getting even higher returns from a project or cryptocurrency.

Active participation in NFTs is another hallmark characteristic of an APE, as was seen with the Bored Ape Yacht Club (BAYC) NFT collection. With BAYC, ape culture became very prominent. Investing in DeFi projects aggressively in the hope of higher yields is another behavioral pattern of APES, as is their enthusiasm for token sales. Without any proper research, such behavior can result in all the investments going zero and also expose traders to various crypto scams. In the world of NFTs, “Aping in” refers to purchasing NFTs in their pre-launch period.

ApeCoin

Refers to a token related to the Bored Ape Yacht Club NFT collection, but is also used as a broader term for tokens associated with NFT projects.

API (Application Programming Interface)

A set of tools and protocols that allow different software systems or applications to communicate with different blockchain networks. An API acts as an interface between developers and blockchain, thus enabling these devs to utilize functionality features provided by blockchains without the headache of creating any infrastructure. The main purpose of APIs is to retrieve data from a blockchain; this may include extracting transaction details, wallet balance, or simply a block’s metadata. For example, one can query a Bitcoin address to view its transaction history via an API. These interfaces also let one interact with deployed smart contracts; this is done by reading the state of these contracts or invoking contract functions.

With an API, one can also monitor a blockchain event such as knowing the timing of a particular transaction. There can be public APIs and private ones. While the public ones allow devs to interact with public blockchains like Bitcoin and Ethereum, private APIs are designed for private or permissioned blockchain networks to which only authorized users can have access. There can be crypto-specific APIs, wallet APIs, token APIS, and data APIs. Examples of the best blockchain API providers are Infura (which provides access to Ethereum nodes), and Alchemy (which offers APIs for blockchain development). There are others like Moralis for web3 API and Etherscan API.

Aping In

Jumping into an investment quickly and impulsively, often without much prior research.

Application Binary Interface (ABI)

ABI is a standard interface that defines how a smart contract will interact the external applications or other smart contracts. It acts as a bridge between high-level program code (written in a language like Solidity) and low-level machine code on blockchain. An ABI includes the names of the functions, their input parameters, and return types, for example, transfer(address recipient, uint256 amount).

When ABI interacts with a smart contract, it has essentially two purposes: the first is to call a function of a smart contract into a binary format that the Ethereum Virtual Machine (EVM) can understand. The second is to allow dapps to understand (or decode) responses from smart contracts into a readable format. ABI is generated when a smart contract in Ethereum complies and this is in JSON format. JavaScript files like web3.js and ethere.js use this ABI to create data with which an app can interact with smart contracts. Also, dapps rely on ABI to call smart contracts for development. Advantages of ABI include interoperability between smart contracts and applications and ease of use.

Application-Specific Integrated Circuit (ASIC)

ASIC is a specialized hardware device that is designed to perform specific tasks. The most common use of such a device is for mining cryptocurrencies. ASIC hardware is much more efficient than general-purpose hardware like GPUs and is built to execute an algorithm with higher efficiency levels. An Application Specific Integrated Circuit, as the name suggests, is employed to perform specific tasks such as solving a cryptographic puzzle in Proof of Work (PoW). It is known for high performance due to the requirement of hash rate, i.e. speed at which a cryptographic puzzle can be solved.

Such a device is more energy efficient than its traditional counterparts. But on the negative side, an ASIC is less flexible; it is designed for only specialized algorithms like hashing algorithms (SHA-256 for Bitcoin, Scrypt for Litecloin, X11 For Dash, and Equihash for ZCash). Also, the device requires a huge initial cost, making it unsuitable for small-scale miners. It also consumes significant amounts of energy, making environmental carbon levels a big issue.

Aragon Client

Aragon Client is a dapp that enables users to create and manage Decentralized Autonomous Organizations (DAOs). It is a part of the Aragon Network (which is built on Ethereum). The Client provides tools and frameworks that help non-technical users do several tasks including creating, customizing, and operating DAOs. These DAOs can be tailored to the specific needs of the users and their community.

Aragon Client also helps build customized governance mechanisms like voting and proposal submission. The use of a smart contract framework is the hallmark of Aragon Client; these contacts are used to create and enforce rules that govern a DAO. The use of smart contracts imparts Aragon’s immutability and transparency. DAOs built with Aragon are capable of holding and managing funds on-chain and performing other financial management activities.

Arbitrage

 Arbitrage in blockchain refers to buying cryptocurrency on one exchange (or platform or network) and selling it on another for a profit. The process of identifying arbitrage can be manual or by using trading bots. This can help identify the differences in the prices of assets on different platforms and execute trades so that trader gets profits from this difference. The concept of arbitrage can arise in several scenarios.

First, cryptocurrency can have varying processes across different exchanges. This can be due to differences in demand/supply, liquidity, or transaction speeds. The second can be the case when a trader buys an asset at a lower price on one platform and sells it at a higher price on another, thus earning him a profit. Another case where arbitrage can be applicable is in the use of trading bots that a trader can use to increase the speed and automation of his trades; the bots can quickly identify arbitrage opportunities.

ASIC-Resistance

It refers to the resistance of a cryptocurrency mining algorithm against the dominance of Application-Specific Integrated Circuits (ASICs) over traditional mining equipment like GPUs and CPUs. The main purpose of ASIC-Resistance is to provide decentralization to mining and democratize it so that the broader set of users can mine it with affordable equipment.

ASIC-resistance is quite important because of many reasons. One of the most important is the decentralization that it provides. Instead of vesting powers in the hands of a few centralized entities, this mechanism ensures more equitable participation in mining. It helps in leveling the playing field, thereby allowing small miners to continue on less powerful machines without requiring any expensive ones.

The dominance of ASIC manufacturers is highly reduced by resistance. ASIC- resistance is achieved by certain algos that require high memory to operate, which is inefficient for ASIC machines. Algos like RandomX are optimized for CPU mining, which makes traditional hardware still competitive. Projects like ZCash periodically bring changes in their algos for mining. This dissuades ASIC manufacturers from developing effective hardware. A few examples of ASIC-Resistance are RandomX (Used by Monero to penalize ASICS), Ethash (worked when Ethereum was still working on Proof of Work), and Equihash (used by ZCash and is memory-intensive). Despite its advantages, ASIC-Resistance has seen criticism due to its high energy consumption and huge development costs.

Asset

An asset is a digital representation of an object that can be managed, transferred, and stored on a blockchain network. An asset can be native to that blockchain or be the tokenized representation of real-world items. It is secured with the rules of cryptography and is governed by smart contracts. Several types of assets can be stored on the blockchain. Native Digital Assets like cryptocurrencies (BTC, Ethereum, etc.) and utility tokens that are native to their blockchains. Utility tokens serve specific functions like paying transaction fees on dapps.

Another class of assets is Tokenized Assets. They are the representations of the real-world or digital items on blockchain. These include stablecoins (USDT/USDC) that represent fiat currencies; tokenized real estate, art, or commodities. Non-fungible tokens (NFTs) are also a type of assets that represent ownership of a specific item or a piece of art, music, or gaming item. Then there are Data Assets that store data as assets; the data could be intellectual property, certifications, or personal information. Assets are decentralized, immutable, programmable, and interoperable.

Asset Token

An asset token is a digital token that is a blockchain-based equivalent of a real-world asset like real estate, stocks, commodities, intellectual properties, or other financial instruments. An asset token symbolizes ownership or rights to an underlying asset and its value is locked to the value of that asset. Such tokens can be programmed for features like dividend distribution and governance rights. They also ensure transparency as the transactions and ownership records are stored on the blockchain with secure protocols.

Another important feature is fractional ownership, which means tokens allow assets to be divided into smaller, tradeable units. This is useful for buyers who cannot otherwise buy high-valued assets. Increased liquidity, global access, and cost efficiency are a few other advantages of using asset tokens. Examples of asset tokens are PAX Gold (a token backed by physical gold reserves), tZERO (a platform for trading equity and other securities), Synthetix (A DeFi platform for creating asset tokens that track real-world assets), and RealIT (provides tokenized ownership in real estate properties).

Asymmetric Cryptography

Asymmetric Cryptography or public-key cryptography involves the use of public and private key pairs for encryption and decryption. This ensures that the communication remains secure and enables efficient authentication. The public key is used for encrypting or verifying signatures. This key can be shared with others without the chance of your data being exposed. The private key is for decrypting or creating signatures. It must not be shared with anyone otherwise it can lead to data loss and the risk of being exposed to malicious actors.

The relation between public-private key pair is that the data encrypted with the public key can only be decrypted with its corresponding private key. Also, this is one-way encryption as a hacker can’t derive a private key from its public key.

An example of a public-private key pair can understood by the famous Alice-Bob example. If Alice wants to send a secure message to Bob, she encrypts this message using Bob’s public key, and Bob, on receiving the message, decrypts it using his private key. There are a plethora of use cases where asymmetric cryptography is used: Wallet (private keys are used to sign transactions and public keys are used to verify them), Smart Contracts (for secure execution of contract rules), and Identity Verification (used for the creation of Decentralized Identifiers or DIDs)/. Such cryptography also finds its use in communication protocols like SSL/TLS for establishing secure connections.

Asynchronous Byzantine Fault Tolerance (ABFT)

Asynchronous Byzantine Fault Tolerance is a mechanism that lets blockchains continue operating with consensus even in the presence of Byzantine faults (malicious nodes) in an asynchronous network. It means that the blockchain nodes can achieve agreement without the need to rely on precise timing assumptions, making it more resilient to faults and delays.  A system is Byzantine Fault Tolerant if it can continue to operate correctly and reach consensus despite some nodes behaving arbitrarily (e.g., due to errors or malicious intent).

Traditional BFT assumes that the network operates under synchronous or partially synchronous conditions, where message delivery happens within a predictable timeframe.

In an asynchronous network, however, there is no surety about the message delivery times or speed of operations. As delays can be arbitrary, it becomes harder to rely on timing assumptions. ABFTs tolerate delays well and achieve consensus without the need for any time synchronization. The fault tolerance of ABFT models is up to one-third of the malicious or faulty nodes.

The process of ABFT is like this: the nodes exchange information with one another using a gossip protocol and data is distributed to nodes. Even if some of the nodes are unreachable at that time, data can still propagate through the network. Nodes validate this data (including transactions) using various cryptographic techniques. Nodes cast their votes via multiple rounds of communication. Once a consensus is reached, data is added to the blockchain. ABFT nodes can handle a high degree of latency and unpredictable message delivery. This makes them robust. The process provides a high level of security even if up to one-third of the participants are compromised. The blockchain networks that use ABFT are Hashgraph, Alogrand, and Avalanche.

Atomic Swap

An Atomic Swap is a smart contract-based technology that lets two parties exchange cryptocurrencies from different blockchains, without any crypto exchange. An atomic swap is either completed successfully or it does not take place at all. Such a swap allows trading between crypto assets on different blockchains. It is a trustless way of sending and receiving crypto as no third party or centralized platform is part of the transaction. Atomic Swap requires special cryptographic techniques to enforce the rules of transaction. 

One such function is HTLC (Hashed Time-Locked Contracts) which requires a smart contract to lock funds using a cryptographic hash. It also requires a time-lock which makes sure that the funds will be returned to the sender if the smart contract conditions are not met within the predetermined period.  The swaps are more secure and are decentralized in nature. This can be seen with this example: Party A creates an HTLC  with its crypto and shares the cryptographic hash with Party B. Party B creates a corresponding HTLC with its crypto using that hash. Party A claims Party B’s funds using the cryptography key, which reveals the key to Party B. Then Party B uses this revealed key to claim funds from Party A. Your cryptocurrency must support HTLC for an Atomic swap to take place.

Atomic Transaction

 An atomic transaction is one that either gets executed completely or does not execute at all. This makes sure that the partial transaction is never executed. This also means that the transaction is indivisible and irreversible once it is initiated. Based on the all-or-nothing principle, if one part of an atomic transaction fails, the entire transaction is rolled back, and therefore, no changes are made to the blockchain. As there is no concept of partial transaction, there remains consistency in the state of blockchain. This prevents the funds from being transferred if the transaction is not executed in completion. Once an atomic transaction is completed, it can neither be reversed nor altered in any way. Such transactions find their use in the development of decentralized applications and smart contracts. If any part of the contract fails, the entire transaction fails.

Atomic swaps enable users to exchange one crypto asset directly for another asset and there is no need for any trusted third party. For example, a user wants to exchange his crypto from one blockchain to the other. An atomic swap ensures that if the token transfer from one blockchain succeeds, the token transfer on the other blockchain also succeeds.

Attestation

Attestation refers to verifying and confirming the authenticity of a transaction or an event on the blockchain. Such a process requires a trusted entity that can confirm that the data or the transaction is accurate. This ensures data integrity and transparency. The meaning of attestation can change depending on the context in which it is used. In the case of data validation, attestation means confirming that a transaction, identity, or asset is valid as per the rules of the underlying blockchain.

A rule could be as simple as having sufficient funds for data transfer. For digital signatures, attestation means authenticating the identity of the party that starts the transaction. This party signs a transaction (or a message) with its private key and others can validate this transaction by the party’s public key, which proves that the party authorized the transaction.

Another way attestation finds it useful is for verifiable claims, i.e. attesting claims about an individual’s identity or ownership of assets or his qualifications in a verifiable manner. Yet another way attestation can be used is for smart contracts; these contracts can handle the attestation of events or data on the blockchain. For example, a smart contract may attest that a transaction can be carried out only if the price of BTC is above $ 100000.

Audit

Like traditional audits, an audit in blockchain refers to the exhaustive examination of a blockchain network, its data, and its smart contracts. This is done to ensure systems security, integrity, and compliance with regulations. Audits identify bugs and vulnerabilities in a decentralized network. Smart Contract audit performs a thorough analysis of the code of the contract deployed on blockchain and identifies errors and vulnerabilities. This can expose any code that can hack users’ money; such an audit can tell the investors beforehand if the intention of the creators of a cryptocurrency is right or wrong.

A Security Audit evaluates the security of the nodes and consensus mechanisms. Such audits can detect 51% Attack, DDoS Attacks, and other types of attacks. Compliance Audits verify if the blockchain in question complies with legal and regulatory standards such as GDPR, AML (Anti-Money Laundering), and KYC (Know Your Customer). Financial Audits verify the accuracy of the financial transactions recorded on the blockchain and make sure no unauthorized transactions have happened.

Audit Trail

 An audit trail refers to a secure and immutable record of all transactions or events related to a crypto asset. In the blockchain, every action is recorded on a ledger which cannot be altered or tampered. This creates an audit trail. Using this trail, one can trace the series of actions taken place in the past. A prominent feature of the audit trail is its immutability. Once data has been recorded on the blockchain, it cannot be deleted or changed. This way, every transaction is recorded permanently.

We also get transparency via an audit trail as anyone can view all the entries on the ledger, this enhances trust and accountability. As each block in the chain is linked to the previous one, making alterations to any one block requires changing all the blocks before it. This is a very difficult task for a hacker. This way, the security of the blockchain is ensured. Blockchain audit trails can be quite useful in niches like finance, healthcare, and supply chain as these areas require regulatory compliance.

Augur

A decentralized prediction market platform built on the Ethereum blockchain. It allows users to bet on the outcome of events. The users can create and trade in prediction markets and bet on the outcome of future events like sports, elections, or other real-world events. The best thing about Augur is that anyone can create a market, participate in prediction activities, and earn reward points for making correct predictions. This platform is decentralized which means there is no central authority that can control the market. As it is based on smart contracts to facilitate trade, there is no way big organizations can control it.

The native token of Augur is REP, which stands for Reputation and is used as a governance and incentive token.  Users holding REP act as reporters who can validate the outcome of events and stake these tokens to ensure accuracy. Another feature of Augur is the flexibility for users to create prediction markets on any topic. After an event occurs, the platform relies on reporters for the actual outcome. Under the reporting process, the reporters are incentivized for accurate reporting and also penalized for a false one.

An example of how prediction markets work: First, a user creates a prediction market by specifying an event, for example, Trump winning the elections in 2024. Participants buy shares based on their prediction for this event. For example, if a participant thinks Trump will win the election, the participant will buy “yes” shares. When the event is complete, reporters provide reports on the outcome. The prediction market settles and traders who made the right prediction are rewarded while the others lose their shares.

Automated Market Maker (AMM)

It is a decentralized exchange (DEX) protocol that enables the trading of crypto assets without requiring any traditional order book or any centralized authorities. This way, buy and sell orders need not be matched manually. Instead, AMM uses algorithms to set the price and allows users to trade cryptocurrencies directly with the liquidity pools. A liquidity pool consists of two or more crypto assets that are locked in the pool by a smart contract.

The pool is provided by liquidity providers (LP), entities that deposit assets in the pool and get a share of trading fees in return. The prices of the assets in the pool are determined by an algorithm, which sets the prices depending on the ratio of assets in that pool. For example, if x is the quantity of one crypto asset and y is the quantity of a second crypto asset, they follow this formula:

x*y =k

Where k is a constant that remains unchanged. As one asset is traded for the other, this ratio changes and hence price also changes automatically. Automated Market Makers are decentralized entities and are open to trading by anyone. If there is a lack of liquidity in the pool, the expected price of an asset and its actual price becomes different; this is called slippage.

This is how AMMs work: A Liquidity Provider deposits assets A and B into a liquidity pool.  A trade swaps Token A for Token B, or vice versa, directly with the liquidity pool. The underlying algorithm automatically adjusts the price by the ratio of 2 tokens added to the pool. If traders buy more of Token A, it becomes scarce, causing the price to shift in favor of Token B. Thus supply and demand dynamics determine what should be the price of the tokens. Each time a user takes a trade in the liquidity pool, the liquidity providers earn a portion of the transaction fee paid by the traders. The LPs get rewards in proportion to the amount of liquidity they contribute to the pool.

One of the drawbacks of AMM is ‘Impermanent Loss’. This happens when the value of the crypto tokens in the pool changes relative to each other. Therefore, Liquidity Providers, when they actually withdraw their money, can suffer loss if the price of one of the tokens fluctuates too much. A few examples of AMMs are Uniswap (widely used on Ethereum), SushiSwap (A fork of Uniswap), Balancer, and PancakeSwap (built on Binance SmartChain).

Autonomous Economic Agent (AEA)

It is a software agent that can make decisions on its own and can execute tasks to achieve certain economic objectives. Such an agent is embedded with artificial intelligence and employs blockchain technology to operate in a decentralized manner. An AEA does not require any human intervention to operate. It can make its decisions depending on the predefined rules, machine learning algos, or smart contracts.

AEA can participate in economic activities including trading, bidding, and resource allocation. It interacts with other agents, smart contracts, and decentralized marketplaces to achieve its goals. As it employs blockchain to work, it is capable of inheriting properties of blockchain like immutability and transparency.

AEA finds its application across several areas like DeFi, Supply Chain Management, Energy Trading, NFTs, and DAOs. For DeFI, AEAs can perform automated trading and liquidity providing to decentralized exchanges. For supply chains, they can monitor and verify transactions; for example, automate payments based on Internet of Things (IoT) sensors. They can manage the creation, trading, and monetization of NFTs. They can also act like agents that can vote and propose changes to DAOs. For energy trading, these agents facilitate peer-to-peer trading on smart grids.

Avalanche (AVAX)

 A popular blockchain platform that is known for its high throughput and low transaction fees. It is commonly called AVX and is designed for decentralized applications (dApps) and custom blockchain networks. The AVAX platform is a decentralized design developed by AVA Labs. It provides low latency and higher scalability for dapps, cryptos, and custom blockchains. It employs Avalanche consensus protocol using which a consensus can be achieved on a distributed network along with faster finality.

With Avalanche, devs can create custom blockchains or subnets that are tailored to specific needs. This also makes interoperability between subnets and other networks a real thing. Transaction fee on the AVAX platform is minimal; also it is an energy-efficient platform that uses a Proof of Stake consensus mechanism.

AVAX has an X-chain (Exchange Chain), a C-chain (Contract Chain), and a P-chain (Platform Chain). X-chain enables transference of its native token called AVAX as well as other cryptocurrencies. The C-chain runs smart contracts using Ethereum Virtual Machines (EVMs). This helps in the easy deployment of dapps on Avalanche. The P-chain is responsible for creating and management of subnets and validators in the Avalanche ecosystem.

Axie Infinity

Axie Infinity is a popular blockchain-based game that works on the principles of Decentralized Finance. It is built on the Ethereum blockchain. The game is based on virtual creatures called Axies that the players can own, breed, and battle. These Axies are represented as NFTs. Axis Infinity has become one of the most popular Play-To-Earn (P2E) games ever built on blockchain. The players are rewarded with cryptocurrencies for their participation.

Each Axie character has a unique set of traits, stats, and abilities and these are represented as NFTs. Therefore, players can have true ownership and can trade these NFTs on marketplaces. The cryptocurrencies used during the game are Smooth Love Potion (SLP) and Axie Infinity Shards (AXS). SLP is used to reward the players as they complete the quests or win the battles or even participate in adventures.

AXS is used as the governance token and allows players to vote on game development decisions. Axie creatures can be bred to create new child Axies that carry the traits of their parents. Both the SLP and the AXS tokens are used for this breeding. Players can buy, sell, or trade Axies, land, and other in-game assets in the Axie Infinity marketplace.

Initially, the game was launched on the Ethereum Blockchain, but due to the high gas fee, devs of the game created a custom sidechain called ‘Ronin’ for faster and cheaper transactions. Since its creation, the game has faced several challenges: the first is the P2E model which requires a constant influx of new players and demand for gaming assets, making the game unstable. In 2022, the game’s Ronin network suffered a major hack, highlighting the vulnerabilities in the game.

B

Bag

A term used for the amount of a particular cryptocurrency that someone holds, usually implying a large quantity. When used in a negative context (i.e. bag holder), it means a user who holds a crypto that has lost its value. When used in a positive sense, it means a user simply has that cryptocurrency.

Bagholder

In the realm of blockchain, a bagholder is an individual who continues to hold a cryptocurrency despite a significant decrease in the value of that cryptocurrency. This decrease is often to the extent that it is highly unlikely that its price will ever rise again. This term is often used humorously to describe an investor who, in spite of knowing that he would never recover his loss, continues to hold his crypto assets. This can be due to blind faith in that crypto or over-confidence that his luck might shine again one day.

A bag holder often has high unrealized losses due to a loss in the market cap of the crypto that he holds. Overconfidence or misjudgment regarding an asset’s potential can make a person cling to his loss-making asset. Also, an unhealthy attachment to a specific currency prevents him from getting rid of his bag.

Many times, a specific crypto community creates an overhype around that crypto; this makes the bagholder more confident that he will eventually win the game and earn profits. Often a token bought in FOMO (Fear Of Missing Out) leads an investor to buy a bad coin in haste and in doing so, he forgets to do any research or check the fundamentals around that asset. This is a common feature seen in crypto scams where that coin is promoted too much by the crypto admin on social media channels like Telegram and Discord. 

Band Protocol

It is a decentralized oracle network that connects smart contracts with external data sources, APIs, and real-world information in an immutable way. The protocol is designed to provide secure off-chain data to decentralized applications (dapps). This helps in making DeFi, gaming, and prediction markets more safe and robust.

Band Protocol operates on Band Chain, which is an independent blockchain built using Cosmos SDK. It provides cross-chain compatibility, i.e. it feeds data to smart contracts on multiple blockchains. Behind this protocol works a network of validators that can fetch, verify, and deliver data and can avoid a single point of failure.

It also allows devs to create customized data oracles depending on their requirements. It can handle high throughput with low latency, making it a good option for real-time applications. BAND is the native token of the protocol and is used for staking (for participating in the network), payment (for payment for data queries), and governance (token holders can vote on updates and decisions.

This is how BAND Protocol works: a smart contract sends a data request to BAND protocol. The set of validators retrieves this data from different sources and aggregates the results. The aggregated data is then delivered back to the smart contract in a tamper-proof manner.

Bandwidth

Bandwidth is the capacity of a blockchain network to process and transmit data within a fixed period. It determines the number of transactions a blockchain network can process in a second, also called throughput (Transactions per Second or TPS). The higher the bandwidth, the higher its throughput and ability to reduce delays and congestion.

Bandwidth determines the speed and efficiency of transmission data among nodes. A higher rate of transmission means faster block propagation in the network and that all the nodes are synchronized. The size of a block affects bandwidth. Larger blocks store more transactions but also require more resources to validate.

Bandwidth has an impact on network latency, i.e. the time taken by data to travel across the network. Latency plays a big role in determining the scalability of the network (how efficient a blockchain is when the number of users and transactions increases).

The TPS of different networks is different. For the Bitcoin Network, it is 7 TPS (due to its 1 MB block size and 10 minutes taken to add a new block to the network). Ethereum has a TPS of 30 due to the use of the Proof of Stake consensus mechanism. Solana TPS is significantly higher: 65000 TPS (as Solana is designed for higher bandwidth).

Block Propagation Time is also an important aspect of Bandwidth. It is the time taken by a new block to reach all the nodes in the network. A smaller propagation time means faster synchronization and a more robust network. The consensus mechanism also determines how fast blocks are created and validated. To raise the bandwidth, we use sharding, which is dividing the into smaller pieces or shards so that the transactions can be processed in parallel. The speed of each node and the underlying hardware also determine how much data the network can handle.

Bear Market

Bear Market refers to the period during which prices of almost all cryptocurrencies fall by more than 20% or more from their recent highs. The investor sentiment at such a time is negative, or better said, full of pessimism. This negative sentiment can be as short as a few weeks and as long as a few years. Such a market is characterized by appreciable fall in the prices of major cryptocurrencies like Bitcoin and Ethereum, which is almost mimicked by altcoins though the exact top formed by every crypto after which it starts falling may differ from one crypto to the other.

Another characteristic feature of the Bear Market is low trading volume; this is because of sluggish or almost no volume due to waned investor interest. The prominent sentiments of the investors are primarily of fear, uncertainty, and doubt, commonly called FUD. Investors, therefore, keep on selling their crypto, which decreases the market cap of these assets.

There may be several factors responsible for a Bear Market; these include over-extended bull markets, regulatory crackdowns, high-profile scams, and global economic conditions. A Bear Market is the opposite of a Bull Market. See Bull Market.

Bear Trap

A bear trap is a short-term fall in the price of a crypto asset that gives a false impression to an investor that the price of that crypto would fall more. He may believe that since the price of the asset has fallen, it will continue falling; this propels him to sell his assets. But the price of the crypto rises again, often sharply, thus trapping such investors who had created short positions or had sold their assets at a lower price.

There are three distinct stages of a bear trap. First, there is a decline in the price of the crypto and it appears to break below the support zone or trendline. For many novice traders, this sounds like an opportunity to make short positions or sell their already purchased coins.

The second step is the selling process: traders start selling their holdings to avoid bigger losses while short sellers start creating new positions expecting that the price would go down further and make them profitable.

During the third stage, the price reverses, to the dismay of the traders and the shock of short sellers. It is almost always the whales and the institutions that push the market process to the upside. Short sellers face losses as their positions start liquidating post-price rise. 

Market manipulation, the psychology of a trader, and false breakout all play a role in creating such a situation. It is always advisable to wait for the confirmation of the price fall before a trader sells his position or a short seller creates a new position. It is also worthwhile to look at the volume factor; in bear traps, often the volume during a breakout below the support zone is low, which indicates a lower user conviction.

Bearish Divergence

A Bearish Divergence is a state when the price of a crypto asset is rising or is in a range but the underlying technical indicator is showing a weakness or downward momentum. Such a divergence between crypto asset price and technical indicator strength indicates that the current price trend of that crypto might reverse at any time and the price may start falling, i.e. an uptrend can soon become a downtrend. This suggests a bearish outlook.

There can be several causes behind Bearish Divergence. Overbought markets, i.e. buying pressure without any worthwhile demand can be one of the reasons. Dips in market sentiment and manipulation in prices can also play a role in bringing about bearish divergence. The most commonly used indicators for noticing bearish signals are RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and Volume. Also See: Bullish Divergence

BEP-20

BEP-20 is a token standard for the Binance Smart Chain (BNB Chain) of Binance. This token defines the set of rules that the tokens on the BNB Chain must follow. BEP-20 is an extended functionality of the BNB Chain just like BEP-2 token standard for Binance Chain.

BEP-20 offers interoperability, i.e. these tokens can be easily swapped with BEP-2 tokens. Also, this standard offers a wide spectrum of tokens, ranging from stablecoins to utility tokens to pegged tokens. It also helps in faster transaction execution and lower fees if compared to ERC-20 tokens on Ethereum.

BEP-20 tokens are also compatible with Ethereum Virtual Machine (EVM); this allows easy porting of dapps based on Ethereum to the BNB Chain. There are several use cases of this token standard. It is used for creating native digital currencies and using stablecoins that are pegged to fiat currencies; for example, BUSD is pegged to USD.  Also, BEP-20 is used for creating dapps on the BNB Chain. A few examples of BEP-20 tokens are BNB (native token for transactions on BNB Chain), BUSD, and CAKE, among others. 

Beta

In the context of blockchain development, beta refers to the pre-release version of a dapp, platform, or product. A beta version is available for testing by users and developers. Beta is not the final product; in fact, it is used to identify bugs and test features.

A blockchain’s Beta Release is known for its testing phase, user feedback, and capability in the real world. In the testing phase, the product is final but may still have bugs or incomplete development. Early users who are called beta testers help identify bugs and also suggest improvements in the product or platform.

A beta version is deployed on a testnet first. In the context of crypto markets, beta measures the volatility or risk of a crypto asset as compared to the overall market. Beta > 1 means the asset is more volatile and less than 1 means less volatile than the market. A beta of 1 makes it equally volatile to the market. Investors use this concept to determine if crypto would have high volatility during bear and bull markets or not.

Finally, in the context of smart contracts, beta means deploying these contacts in a live environment with the expectation that they could undergo further refinement or updates.

Bid

A bid isan offer to buy a cryptocurrency or an NFT  at a specified price. This price is set by the buyer. Depending on which context it is used, a bid can be defined differently. In an auction system, a bid is an offer to purchase an asset at a specific price during an auction. For example, in NFT marketplaces like OpenSea and Rarible, users place bids for digital assets. This bidding is handled by smart contracts. All bids are visible to everyone and are recorded on-chain.

A second type of bidding is Gas Fee Bidding. In it, users bid for a gas fee to have their transaction execution prioritized. A higher bid or gas price means miners would give preference to such transactions to be included in the next block. This is used by traders at times of network congestion when they pay a higher fee to have their transactions processed more quickly than others.

A third type is Validator Selection Bidding which is used in Proof of Stake Systems. In this, users can bid by staking their tokens and vote for validators or delegators. This stake acts as a bid for participation in the consensus mechanism.

Binance

Binance is one of the largest cryptocurrency exchanges where one can buy, sell, and trade cryptocurrencies. It is a Centralized Exchange (CEX) that provides powerful trading features and supports several crypto tokens. It was founded in 2017 by Changpeng Zhao (commonly called CZ) and Yi He. Traders can do Spot Trading (simply buying and selling crypto), Futures and Derivative Trading (predicting the process of tokens while getting leverages, and Margin Trading (trading with borrowed funds to increase returns).

BNB is the native token of Binance. It is used to pay trading fees; acts as a tool for staking, and also a medium for participating in other ecosystem features. The Binance Network lets users trade assets using a lower trade fee than that available in Ethereum and Bitcoin networks.

Binance also provides an exhaustive set of ecosystem tools and services. These include Binance Smart Chain or BSC ( a blockchain network to create dapps with smart contracts), Launchpads (platforms for initial token offerings or IEOs), NFT Marketplace (a place to trade NFTs), and Binance Earn (that lets traders earn passive income via staking, lending, and other Defi activities). Initially, Binance was based out of China but later shifted its operation overseas due to regulatory complications. Since its inception, Binance has faced several regulatory challenges globally.

Binance Coin (BNB)

BNB is thenative cryptocurrency of the Binance exchange. It was launched in 2017 as an Initial Public Offering (ICO). Initially, BNB operated on the Ethereum blockchain as an ERC-20 token. Later, it was migrated to the Binance blockchain called Binance Chain.

BNB is also used on Binance Smart Chain (BSC), which is a platform for developing decentralized applications (dapps).

There are several use cases of BNB. The most important role that it plays is the mode of paying trading fees; the users get a discount in return for that. On Binance Smart Chain, it is used to pay gas fees for performing transactions. BNB is also widely used in Decentralized Finance  (DeFi) applications. Binance burns BNB regularly to reduce its total supply; this results in scarcity of the token and therefore, helps in increasing its price. Due to the burning mechanism, BNB is a deflationary token.

Binance Smart Chain (BSC)

Binance, one of the major cryptocurrency exchanges developed a blockchain network called Binance Smart Chain (BSC). It is a low-cost network that provides fast and secure transactions to users. BSC also provides a cost-effective framework for developing decentralized applications, smart contracts, and DeFi projects.

It is a popular alternative to the Ethereum network as the gas fee for transactions is significantly less on BSC. This chain works on a dual-chain architecture: Binance Chain (BC) and Binance Smart Chain (BSC).

Binance Chain is for high-speed transactions and has the BNB as the native token. Binance Smart Chain is for smart contracts, dapps, and DeFi. Both chains run parallel to each other; this makes the transfer of assets a seamless process.

BSC is compatible with Ethereum Virtual Machine (EVM), which means it supports Ethereum-based tokens like ERC-20 tokens. The consensus mechanism used in BSC is Proof of Staked Authority or PoSA. The throughput or number of transactions per second is higher on this chain than that on Ethereum. To interact with Binance Smart Chain, one can use wallets like MetaMask, Trust Wallet, and Binance Chan Wallet. BSCScan is the block explorer for this network. One can also stake his BNB on BSC and earn rewards.

Bitcoin (BTC)

Bitcoin is the first-ever cryptocurrency ever created. Created by an anonymous person (or maybe a group of anonymous people), Satoshi Nakamoto, Bitcoin operates on a technology called blockchain.

It was created in 2009 and is a form of virtual currency that allows peer-to-peer transactions without the need for any intermediary like a financial institution like a bank or any central authority.

Bitcoin has a blockchain of its own and this blockchain or distributed ledger records all the digital transactions taking place in the form of blocks. Transferring Bitcoin to a blockchain makes it secure, immutable, and transparent. As its blockchain (or any other blockchain, for that matter) is governed by a network of nodes, it is very hard for any single entity to control it. That is why Bitcoin supports decentralization, a hallmark of most cryptocurrencies.

On the Bitcoin blockchain network, new blocks are added by a complex set of operations performed in a consensus mechanism called Proof of Work (PoW). These operations are performed by the miners who solve cryptographic puzzles to validate incoming transactions; post validation, these transactions are added to blocks, which form part of a blockchain. Read More: Here

Bitcoin Cash (BCH)

Bitcoin Cash is a hard fork created from Bitcoin. It was created.on August 1, 2017, and resolved the scalability issues associated with Bitcoin.  Like Bitcoin, it is a peer-to-peer electronic cash system. BCH allows more transactions to be adjusted within a block; this is because the BCH block size limit is raised to 8 MB from 1 MB block size on the Bitcoin network. Larger blocks mean lesser congestion and low transaction fees.

BCH transactions are also faster as compared to that on Bitcoin. Bitcoin Cash works on its blockchain that uses the Proof-of-Work consensus mechanism. The token supply is the same as that of Bitcoin, i.e. 21 million coins.

Though the adoption of BCH is not as wide as Bitcoin, some merchants and payment platforms now accept it as a mode of payment. Due to its high speed and cost-efficiency, it is a preferred choice for performing international transactions. With smart contract upgrades (SmartBCH), Bitcoin Cash can be used for extended functionalities also.

Bitcoin Dominance

It measures the percentage share of Bitcoin’s market capitalization as compared to the total cryptocurrency market cap. It is a measure of how dominant or influential is Bitcoin as compared to the entire crypto world. The formula for calculating Bitcoin Dominance is:

(Bitcoin Market Cap/Total Crypto Market Cap) * 100

Where Bitcoin Market Cap  is the total value of all the Bitcoins mined so far and can be expressed as:

Bitcoin Market Cap  = Bitcoin Proce * Bitcoin’s Circulating Supply

A higher dominance value indicates that Bitcoin is performing better than altcoins. It also indicates that the investors’ confidence in it is high. A low dominance suggests that altcoins are more preferred by investors and this is often seen during alt season.

During the early days of cryptocurrency, Bitcoin’s dominance was almost 90%. But as time elapsed, a number of altcoins and different blockchains over which they worked erupted, thus lowering the overall dominance of BTC.

Generally, during a bull run, altcoins outperform Bitcoin in terms of percentage increase in their prices. At such a time, Bitcoin’s dominance is reduced. During the bear market, investors mostly sell their altcoins, and Bitcoin dominance becomes high.

Bitcoin Halving

Taking place every 4 years, Bitcoin halving is an event where the block rewards for miners who validate the transactions on the Bitcoin network are reduced by half. This happens for every 210,000 blocks and is embedded into the Bitcoin’s code to control the issuance rate of new bitcoins.

Bitcoin halving is designed to achieve the scarcity of BTC  so that its supply can be regulated, thus making sure that its supply remains finite. Miners achieve rewards for solving complex cryptographic problems (using the Proof of Work consensus mechanism) and adding new blocks to the blockchain. When mining started, the initial reward was 50 BTC per block. After every halving, this reward kept on decreasing by 50%. So, in 2008, when BTC was launched, the reward was 50 BTC. In the subsequent, the amount was reduced like this:

2012 (First Halving): 25 BTC
2016(Second Halving): 12.5 BTC
2020 (Third Halving): 6.25 BTC
2024(Fourth Halving): 3.125 BTC

BTC’s total supply is capped at 21 million coins, i.e. only 21 million BTC would ever be mined. At present, its Circulating Supply stands at 19.81 M. Halving makes sure that the remaining supply (Total supply-circulating supply) is released gradually, with diminishing rewards over time. Going like this, the last BTC would be mined in the year 2140.

The halving event is important, as stated above, as it ensures Bitcoin’s scarcity and raises its value. It also ensures a predictable and declining supply, bringing inflation under control. Mostly after every BTC halving event, there is a surge in the price of Bitcoin, which is mimicked by other cryptocurrencies also. This is due to reduced supply and growing demand.

With every halving, rewards to miners are reduced; this makes mining less profitable especially if they incur a high cost of electricity for running their machines for mining. Despite this, miners keep on getting incentivized by the transaction fees that a trader pays. Mining difficulty gets adjusted every two weeks; this makes sure that the network continues to create blocks every 10 minutes.

Bitcoin Improvement Proposal (BIP)

A Bitcoin Improvement Proposal or BIP is a document that proposes a set of changes, features, and announcements in the Bitcoin Protocol. It provides a way to present new ideas that can be implemented to make the protocol more trustworthy, scalable, and secure.

A BIP creates a consistent framework to propose changes. Anyone can submit a BIP and discuss things with community members. These could be developers, advocates, users, or miners. The proposals are reviewed, discussed, and tested before being implemented. As BIPs are public documents, they are open for discussion and bring transparency to the whole system. 

There are several types of BIPS. Standards Track BIPs are those that propose changes related to the block size, transaction format, and consensus rules. An example of this type is BIP-141. Informational BIPs provide guidelines, design issues, or general information but do not propose any change to the protocol. BIP-32 is an example of this type.

Process BIPS suggests changes to the processes used in the development of Bitcoin or those related to its governance. BIP-1 is a type of Process BIP.  It can be really challenging to be understood by non-technical people, thus limiting the average user’s participation in creating them. BIP, if not tested or implemented thoroughly, can bring about several vulnerabilities.

Bitcoin Lightning Network

It is a layer 2 scaling solution for the Bitcoin network. It is built on top of layer 1 and addresses the scalability issues associated with layer 1 solutions (which the Bitcoin network is). Bitcoin Lightning Network enables faster, cheaper, and more scalable transactions while keeping intact the security and decentralization of the original Bitcoin Network.

This layer 2 solution increases the throughput (number of transactions processed per second) significantly. The original TPS of 7 transactions per second in Bitcoin created network congestion problems. Also, the block size limit was limited to 1 MB. Apart from this, the transaction fee on the Bitcoin network is very high, making it unsuitable for small investors.

With Lightning Network, the TPS reached millions of transactions per second and transactions also became instantaneous. Another difference is that the transactions on this network are not broadcast to the entire network but are restricted to their payment channels; this provides better privacy.

The cons of this network are many: payment channels must have sufficient liquidity to handle transactions, otherwise, there can be scalability issues. Also, if one participant goes offline during a dispute, funds are exposed to risk. Bitcoin Lightning Network has found its use case in instantaneous, low-cost transactions in retail. In gaming, it can be used for performing micro-transactions for in-game purchases.

Bitcoin Reserve

Bitcoin Reserve is the accumulation of Bitcoin by a person, organization, exchange, or government. Individuals store Bitcoin as a part of their investment portfolio for future financial gains and keep BTC in their wallets.

For corporates, the Bitcoin Reserve is meant to be a hedging tool against inflation. These corporates need to report these reserves in their financial papers. Companies like Microstrategy and Tesla have deliberately accumulated a vast number of BTC  and consider it as a superior store of value as against traditional assets. MicroStrategy sees this as a strategic asset that can play a vital role as a tool that protects against the price rise and the fall in the value of the dollar. At the time of writing this, (as of Jan 27, 2025), the total BTC held by MicroStrategy is 461,000.

In addition to Institutes, some governments have also started storing BTC as a part of their national reserves. El Salvador, as of Jan 21, 2025, has 6044 BTC holdings as a part of its strategic Bitcoin Reserve plan. Crypto exchanges like Coinbase and Binance also need to maintain such reserves to maintain liquidity for way withdrawals by their customers, Proof of Reserves (PoR) audits are conducted by such exchanges to verify if they hold enough Bitcoin to back their users’ balances; this is important for maintaining transparency and solvency of that exchange.

Bitcoin SV (Bitcoin Satoshi Vision or BSV)

Bitcoin SV is a cryptocurrency created by the hard forking of Bitcoin Cash (BCH) in 2018. SV stands for Satoshi Vision, which stresses its goal of adhering to the original version of Bitcoin as was presented by Satoshi Nakamoto (creator of Bitcoin) in his whitepaper of 2008. Due to its disagreement with the Bitcoin Cash community regarding its course of development, Bitcoin SV was created by forking.

Since its main focus is to adhere to the goals of the original protocol, Bitcoin SV lays stress on stability and scalability to support processing more transactions. The block size of BSV is larger as compared to Bitcoin and Bitcoin Cash. A larger block size means more transactions can be processed for each block. This makes the throughput of BSV higher and renders it suitable for enterprises and also for high-data applications including smart contracts and tokenized assets. The transaction fee is lower in BSV, which makes it an appealing option for both businesses and micro-payments alike.

Bitcoiner

A Bitcoiner is a dedicated investor of Bitcoin or a true enthusiast of it. A Bitcoiner always supports, uses, and advocates for Bitcoin as a digital currency and its applications in the real world. Such people are deeply involved in the Bitcoin ecosystem and promote its use cases often. These could be investors, developers, or miners.

A strong belief in Bitcoin’s potential store of value or medium of exchange is the hallmark of a true Bitcoiner. Such people have certain core beliefs that they adhere to: this includes decentralization, financial freedom, censorship resistance, and a permissionless financial institution.

Many Bitcoiners are of the view that BTC is the digital gold as its capped supply of 21 million coins makes it a deflationary coin and therefore, it is resistant to inflation. A Bitcoiner keeps on holding his BTC despite market fluctuations as there are firm believers in its long-term potential.

Developers run nodes that can help validate transactions while maintaining the network’s decentralization and security. They actively participate in meetups, forums, and events related to cryptocurrency advocation, with more stress on BTC. There are also Maximalists who are of the view that Bitcoin is superior to all other cryptocurrencies and often consider altcoins as useless or inferiors. 

Bitconnect

Bitconnect was a cryptocurrency lending and investment platform that emerged as one of the biggest Ponzi schemes in the history of crypto. It operated between 2016 and 2018. In 2016, it launched its currency called Bitconnect Coin (BCC). The platform promised users high returns via a lending program.

Investors needed to buy BCC along with Bitcoin. They were supposed to lend these coins to the platform. According to the claims made by BitConnect, its trading bot and volatility software would be able to generate profits by leveraging the volatility of BTC prices. It also promised a daily return of up to 1 %, which would compound over time. This way BitConnect convinced its users that it would ultimately lead an exponential growth for them.

The platform also had a pyramid-like structure for a referral program that would incentivize users to attract referrals. The investors would earn commissions on new referrals. The promises of  BitConnect were unrealistic. If we compound daily returns of 1%, it would mean an annual return of 3700%, which was impossible. Regulators in the UK, US, and India issued warnings against it.

The abrupt end of the platform came when it announced the sudden closure of its lending and exchange platform. According to BitCoonnect, bad press, regulations, and DDos attacks were reasons for its shutdown. After this announcement, BCC started plummeting and it fell from $400 to less than a dollar in a number of days. A large number of investors lost billions of dollars. They filed lawsuits against the platform and charged its promoters with fraud. They also blamed promoters for aggressively promoting BitConnect on social media channels.

In 2021, Satish Kumbhani, the platform’s founder was indicted for wire fraud and other charges. Securities Exchange Commission (SEC) also charged the company and promoters for running an unregistered securities offering.

Bitfinex

Launched in 2012, Bitfinex is one of the longest-running cryptocurrency exchanges. Headquartered in Hong Kong, the exchange lets users trade, borrow, and lend a number of cryptocurrencies. It provides advanced trading features, making it a preferred choice among crypto traders and investors. It also provides advanced trading tools like margin trading, easy-to-use charting tools, and Over-the-counter trading (OTC).

Bitfinex offers deposit and withdrawal of fiat currencies like USD, JPY, EUR, and GBP. The exchange is known for its high liquidity and its deep liquidity pools. It provides REST and WebSocket API options for integration with other systems. A huge number of tokens are listed on this exchange and one can trade across several trading pairs.

BitPay

Bitpay is a payment service provider that lets users and businesses accept Bitcoin and other cryptos as a mode of payment. It was founded in 2011 and is one of the largest cryptocurrency payment systems. It acts as a bridge between traditional finance systems and cryptocurrencies. The payment done via Bitpay is fast, low-cost, and secure.

Merchants can accept Bitcoin and other cryptocurrencies via Bitpay; they can convert these into local fiat. It also provides a Bitpay Wallet that lets users store and manage their assets securely. Businesses can leverage this payment system by integrating Bitpay’s payment gateway into their e-commerce platforms.

It also supports cross-border payments without the need for currency exchange; this results in faster and cheaper transactions. It offers a prepaid Bitpay Visa debit card that one can use to convert to fiat so that money can be spent at any merchant that accepts Visa cards.

Blind Signature

A blind signature is a digital signature done by a sender who cannot see the message on which he puts his signature. The content of the message is hidden from him which ensures the signer cannot know about the actual content of the message. This provides privacy to the creator of that message. The message is signed and the creator can decrypt it to view the original message that he sent along with the signature of the signer.

David Chaum introduced the concept of billing signatures. The process followed in a blind signature is like this: The first step is called blinding. Under this step, a message creator blinds his message using a mathematical blinding factor, thus making the message obscured. The signer digitally signs this message without knowing the actual content of the message.

Then there is Unblinding which involves the creator, upon receiving the signed message, removing the blinding factor, and can read the original message that he sent along with the signature of the signer.

Lastly, this signature can be verified using the signer’s public key; this makes sure that the signature is valid and that the message is not altered in any way. Blind signatures are used in privacy-focussing cryptocurrencies where users can carry on transactions without revealing their identities to any third party.

The system is also used for doing anonymous voting on blockchain where voters can cast votes without revealing their identity. The success of blind signature largely depends on the signer who must have the integrity to not alter the message.

Block

A block forms part of its blockchain and contains a group of transactions and/or data. It stores the information in a set order (based on which transactions are validated). The data stored is immutable (cannot be changed once a transaction is added to a block) and secure.

All the blocks in a blockchain, except the Genesis block (the first-ever block that was ever created in a blockchain), are connected to their previous blocks, thus forming a chain of blocks. A block has two parts: a header and a body.

The header part contains metadata for a block; this includes that block’s hash or a unique identifier generated using the hashing of that block’s contents. Another metadata stored in the header is the hash of the previous block. This means a block not only stores its own hash in its header; it also carries its previous block’s hash. The other metadata includes: a timestamp ( which records the exact time at which the block is created), Nonce (Number Once Used or a number that is used on PoW for solving cryptographic puzzles in the consensus mechanism), and a Merkle Root (A hash of all the transactions in the blocks). 

The second part of the block is its body, which contains all the transactions or data entries. There is a limit to the number of transactions that can be added to a block. A block is an immutable, transparent, and secure way of storing data. Miners are rewarded for validating transactions and adding blocks to the blockchain.

Block Explorer

Block Explorer is a tool that lets you see all the transactions that were recorded on a particular blockchain. Apart from transactions, you can view wallet addresses and blocks linked with those transactions. In this way, Blockchain Explorer works like a search engine for blockchain networks. This makes it easy for everyone to keep track of the transactions done by others.

The transactions are tracked using a transaction hash (TxID), which helps you to search details including the sender’s address, receiver’s address, amount transacted, and time of transactions.

You can also track information linked to a particular block; this can be the block number, block hash, and the transactions it contains. Apart from this, wallet addresses, token details (network on which it is created), and network details (total supply of tokens, block height, hash rate, etc.)

Bitcoin Block Explorers are Blockchain.com Explorer, BTC.com, and Blockchair. Ethereum Block Explorers are Etherscan and Ethplorer. BSCScan is the explorer for Binance Smat Chain while Solscan is for Solana blockchain. 

Block Height 

Block Height refers to the number of blocks that have been added to a blockchain since its first block (called Genesis Block) was created. It is the current position or the sequential number of a block that was lastly added to the blockchain.

The height of the Genesis block is 0 as it is the first ever block that is added to a blockchain. Every subsequent block added above the Genesis block makes the block height increase by 1. So, if there are 1000 blocks in a blockchain, the current block height would be 999 as the Genesis block has a height of 0.

Block Height helps in determining the longest chain available in a consensus mechanism; this is because only the longest chain is considered valid.

Another way in which block height finds its use in determining the transaction confirmation. A transaction is confirmed by how many blocks have been added to the blockchain after the block in which that transaction took place, which means how many blocks have been mined since that transaction happened. For example, if a transaction is in block 100 and the current block height is 110, it means there would be 10 confirmations before that transaction is considered ‘confirmed’. As stated earlier, Block Height is used during a fork to determine the valid chain; the highest block height is considered valid.

Block Lattice

Nano is a cryptocurrency that is designed for performing fast, feeless, and scalable transactions. Block Lattice is the blockchain network used in Nano. Unlike other blockchains in which transactions are grouped into blocks to form a chain, Block Lattice provides individual chains for each account. So, each account has its own blockchain. This results in higher efficiency.

Each separate blockchain is termed an “account chain” and transactions are processed on an account level rather than in batches for blocks. When a user initiates a transaction, only his account and the receiver’s account chains are updated instead of all the nodes in the entire blockchain. So, there is no need for all the nodes to validate transactions.

As only the participating account chains are involved, there is no need for miners or validators to process transactions. This makes transaction fees zero.

When a sender sends a transaction, a block is created in his account chain and a corresponding block is also created in the receiver’s account chain. Both blocks are confirmed immediately as soon as they are created, thus eliminating the need for any consensus mechanism. The negative side of Block Lattice is the complexity of its architecture, which is harder to implement. Due to this, it becomes difficult for such networks to gain easy traction among developers.

Block Reward

A block reward is given to miners and validators for adding blocks to the blockchain. A block reward can be in the form of a new cryptocurrency or in the form of transaction fees paid by the user for adding these transactions to the blocks. This way, network participants (miners and validators) are incentivized to validate new blocks and add them to the blockchain.

In Bitcoin Network, miners receive newly minted BTC as a reward. The reward for minting new coins eventually decreases due to fewer coins being mined. Initially, the block reward for Bitcoin was 50 BTC. After each halving event, the number of BTC rewards continued to decrease. Examples of block rewards can be seen in different consensus mechanisms.

For instance, in the Proof of Work mechanism on the Bitcoin Network, miners compete to solve a complicated cryptographic puzzle to add a block successfully to a blockchain. The first miner to solve it gets the block rewards. On the Ethereum Network, which is based on the Proof of Stake mechanism, validators are rewarded based on how much ETH they stake in the network.

Block Size

A block is a data structure that stores information about transactions. It is the maximum data that a block in a blockchain network can hold. Data could be transaction data, metadata, time stamps, and cryptographic signatures. Block size impacts a blockchain’s performance. It also decides its scalability and the extent of decentralization. The limit on the block’s size determines how much data can fit into one block.

The size of the block is defined in megabytes (MB) or kilobytes (KB). For example, the size of a Bitcoin is limited to 1 MB. This 1 MB can hold approximately 2k-3k transactions. It was the debate on block size that Bitcoin Cash was created as a fork of Bitcoin. The sizes of blocks on the Ethereum network are not fixed. The larger the block size, the more transactions it can accommodate, and therefore, the more the network’s capacity.

Also, a bigger block takes a longer time to propagate across the network, which increases the risk of forks. A big block size requires more storage. A larger block size means higher Transactions Per Second (TPS ) or throughput. It also means lower transaction speed; more space in the block means less competition among users to include their transactions on a single block hence lowering transaction fees.

On the negative side, big block size increases the risk of centralization as it makes it hard for smaller nodes to participate in the network. And only a few big nodes (with enough resources) can run the nodes. Larger blocks are also harder to propagate across the network. This may further expose the network to double-spending attacks.

There are several solutions to this big-size problem. Layer 2 solutions such as Lightning network for Bitcoin, zk rollups for Polygon, and optimistic rollups for Ethereum reduce the burden on the main chain by carrying the transactions off-chain. Some blockchains like Monero adjust the block size dynamically, based on network demand. Sharding is another way to handle the size; it divides the blockchain into smaller shards that can run in parallel.

Blockchain

A blockchain is a distributed ledger that records transactions and data in a secure and immutable way. It is a ledger that records transactions across multiple computers. Blockchain technology is the foundation of cryptocurrencies The transactions are stored in a series of blocks that are linked chronologically, thus forming a chain called blockchain.

A blockchain is managed by a network of nodes. It requires consensus of these nodes before a blockchain can be altered in any way. This makes a blockchain immutable. It is a decentralized ledger; no central authority can control it.

Every blockchain works on an underlying consensus mechanism, depending upon which type of blockchain is under question. For example, the Bitcoin blockchain works on the Proof of Work consensus mechanism while Ethereum works on Proof of Stake (PoS).

The process of creating a blockchain simply works like this: Users initiate transactions and submit them to the network. Nodes validate these transactions using a consensus mechanism. Upon validation, the transactions are grouped in a block. Every new block is added to the existing blockchain in chronological order. All the nodes on the network replicate this blockchain.

A blockchain can be of many types. A Public Blockchain is fully decentralized and is open to everyone. A Private Blockchain is controlled by an organization. A Consortium Blockchain is under the control of a group of entities. A Hybrid Blockchain is a combination of public and private blockchain.

Bounty

A bounty is a reward or an incentive given to all those participants who perform some specific tasks related to a blockchain project. The task could be to solve a problem, identify a bug, contribute to the project development, or simply, promote this project. Bounties help engage user communities on a blockchain and encourage them to participate in project development activities. This adds to the security and robustness of these projects.

There are several types of bounties in the blockchain. The most popular one is a Bug Bounty. Such a bounty is mostly offered to developers and security experts who find and report a bug or vulnerability. It could be finding bugs in the project’s database, smart contracts, or the platform.

Development Bounty rewards developers for contributing to the project’s codebase. Dervs are encouraged to build new features, fix issues, and create tools for that project. Developers are called bounty hunters and can explore the open tasks listed by the project team. Once these tasks are completed, devs are rewarded.

Another type is Marketing Bounty, which, as the name indicates, is used to reward the community for promoting a blockchain project on various social media platforms or YouTube channels. This could involve writing a press release, creating promotional videos, and creating blogs.

Airdrop Bounty involves distributing tokens to the participants who are incentivized to perform simple tasks like joining a Telegram group, following a project on social media, or sharing project-related content with others.

Then there is Translation Bounty which involves translating a project’s work into different languages so that the project is accessible to a wider audience across the globe.

Testing Bounty is yet another type that rewards users for testing features, applications, and platforms for any functionality, performance, and bugs.

Bounty Hunting

Bounty Hunting is a program that lets participants earn cryptocurrency for completing some specific tasks or for contributing to blockchain projects. These tasks can be to find bugs in code, promote a project on social media, or any other task. It has become a popular way for participants to engage with the blockchain ecosystem and earn rewards without the need to make any direct investment in crypto. Read more: Bounty

Bridge

A bridge is a blockchain technology that enables interoperability between two different blockchain networks. With a bridge, a user can transfer assets and data from one blockchain to the other seamlessly. Even if the two blockchain networks are built on entirely different protocols or follow different consensus mechanisms, a bridge enables easy asset transfer. This overcomes the limitations of the siloed networks that act in their own realms and do not support assets provided in other networks.

For a bridge to function, a crypto asset is first locked in a smart contract or a custodian wallet on one blockchain. After that, the bridge issues a corresponding asset to the destination blockchain, in the form of a wrapped or synthetic token. This wrapped token represents the original token. When a user wants to redeem his original asset, this wrapped asset on the destination network is first burned or locked. Then the original token is released from the smart contract or the wallet on the source blockchain.

A bridge uses oracles or validators that can verify that the transactions on one blockchain are valid and that the assets are locked properly. There are different kinds of bridges in the blockchain.  A Token Bridge facilitates the transfer of assets (tokens and coins) between two blockchains. For example, one can transfer his ERC-20 tokens from Ethereum to Binance Smart Bridge using a token bridge.

Wrapped Bridges use the assets that are the wrapped version of the original assets. An example is Wrapped BTC (WBTC) where BTC is locked on the Bitcoin blockchain and an equivalent amount of wrapped BTC is mounted as an ERC-20 token on the Ethereum blockchain.

A Cross-Chain Bridge that allows broader interoperability across multiple blockchains. A few popular bridges are Wrapped BTC, Polygin Bridge, Avalanche Bridge, Binance Smart Chain Bridge, and Cosmos Inter-Blockchain Communication(IBC).

Bubble

A bubble is a market condition under which the prices of crypto assets increase appreciably due to factors like market hype and the speculative behavior of the participants. The price increase is not related to the fundamentals of the assets or their utility. A sharp price rise is mostly followed by bubble bursts, i.e. sharp decline in the process. This sudden crash can cause heavy losses to those who invested in a crypto asset merely because of the hype and ignored its intrinsic value.

Investors usually buy during a bubble for FOMO (Fear of Missing Out). They pour large amounts of money to make quick gains. Often projects with no real value grow heavily during a bubble but this growth is often unsustainable. The ICO (Initial Coin Offering) of 2017 is a clear example of a bubble; we saw a plethora of blockchain startups booming during this period, but they eventually vanished due to no substance or weak fundamentals.

Bug Bounty

A Bug Bounty is an initiative in which blockchain companies and projects reward developers, ethical hackers, and other participants for identifying bugs in their systems. Such an initiative plays a great role in imparting security to blockchain networks and decentralized applications (dapps).

There are different types of vulnerabilities that the participants can find and report. These include finding issues in smart contracts, protocols, web applications, DeFi apps, and APIs. For high-impact bugs, participants are given higher payouts as the severity of the bug is high.

Payment in a bug bounty program is mostly in the form of cryptocurrencies. Platforms like Immunefi, HackenProof, HackerOne, and BugCrowd are popular bug bounty platforms.

Different blockchains have run their bug bounty programs in the past successfully. One was on Polygon Network where Polygon had paid $2 million to a white-hat hacker for identifying a vulnerability in its Plasma Bridge. Uniswap and Aave regularly host bug bounty programs to ensure the safety of their smart contracts.

BUIDL

BUIDL is slang in cryptocurrency that actually stands for BUILD, It emphasizes building new blockchain networks, applications, and infrastructure so that the adoption of crypto in the real world increases.

The main focus of BUIDL is on development rather than speculation. It means rather than predicting how high a crypto coin will go in terms of its price, the main focus is on contributing to the blockchain ecosystem. This contribution is expected from developers and entrepreneurs. The goal, as stated earlier, is to increase the adoption and find real use cases for cryptocurrency and blockchain.

The best time to BUIDL is during a bear market when the speculation in the market is less and trustworthy cryptocurrencies with long-term goals can be created. It also keeps the spirit of open-source development alive and encourages project collaborations. It focuses on building robust blockchain ecosystems that can result in the creation of wallets, dapps, NFTs, and other blockchain networks. It also encourages the creation of DeFi platforms that can support decentralized financial systems.

Bull Market

Bull Market refers to the prolonged period during which the prices of cryptocurrencies start increasing. This period is characterized by investor optimism and confidence. The market activity increases appreciably during the Bull Market.

Many cryptocurrencies reach their all-time high prices during their bull run. Prices of major cryptocurrencies like Bitcoin and Ethereum rise; this is almost mimicked by the rest of the altcoins. The trading volume is at its all-time high. A bull market is often accompanied by increased media coverage and celebrity endorsements. 

Triggering factors for a bull market to start are many. An overextended bear market is one of them. Also, the Bitcoin halving event every 4 years is seen as one of the most important propellers for bull run. Apart from this, economic stability, increased consumption rate, and institutional adoption also play an important role. The bull market post-Covid in 2020 was triggered by a previous sharp decline in prices. This run continued up to 2021 due to the BTC halving event in 2020.  A bull market is just the opposite of a bear market. See Bear Market.

Bullish Divergence

A Bullish Divergence is a state in which the price of a crypto asset is falling but the underlying technical indicator is showing strength or upward momentum. Such a divergence between crypto asset price and technical indicator strength indicates that the current price trend of that crypto might reverse at any time and the price may start rising, i.e. a downtrend can soon become an uptrend. This suggests a bullish outlook.

There can be several causes behind Bullish Divergence. Oversold markets, i.e. selling pressure without any worthwhile supply can be one of the reasons. Other reasons can include temporary panic selling or liquidation, positive sentiment from new partnerships, announcements, and upgrades in protocol.

Bullish divergence indicates that the sellers are losing momentum and a reversal is possible. A bullish divergence is commonly seen after extended correction periods or bear markets. A bullish divergence can also be of the hidden type, i.e. price of a crypto asset is making a higher low while the indicator is making a lower low, indicating the uptrend would continue.

The most commonly used indicators for noticing bearish signals are RSI  (Relative Strength Index), MACD (Moving Average Convergence Divergence), and OBV (On-balance Volume).

Burn Address

A wallet address where tokens are sent to be permanently removed from circulation. See Burning.

Burning

Burning is the process of permanently removing a cryptocurrency or a token from circulation; this reduces that crypto or token’s total supply. The burning in the blockchain is achieved by sending these cryptos to a special wallet. The characteristic of this wallet is that one can send cryptocurrencies to this wallet’s address but cannot withdraw them. Such a wallet is called an unspendable wallet and its address is called a burn address or eater address.

A burn wallet has no private key, thus making it impossible to retrieve any tokens from it.  A typical burn address looks like this: 0x00000….000dead. Like every other transaction, this transaction (for burning tokens) is recorded on the blockchain, so that everyone can view it. The tokens once burned are permanently removed from the circulating supply and therefore, reduce the total supply of that token.

A token-burning has several plus points. As the number of tokens is reduced, it increases scarcity which ultimately leads to a price rise for that token. It also helps to maintain inflation in token supply. However, frequent burns might be seen as manipulation to increase the token’s price artificially. Burning tokens can also help overcome the problem of sudden oversupply during the issuance of tokens.

In some blockchains instead of token burns, a part of the transaction fees is burned, for example, in Ethereum (EIP-1559). Binance also regularly burns its BNB tokens) to maintain total supply. 

Byzantine Fault Tolerance (BFT)

For a blockchain to work smoothly, its nodes must agree on the state of the blockchain (whether the transactions are valid or not). Even if a few nodes are faulty or compromised, the blockchain must be able to perform the validation seamlessly. Byzantine Fault Tolerance is the ability of a blockchain to continue functioning correctly even if a few of its nodes have turned malicious.

It is named after the Byzantine Generals Problem which can be explained in this way: We suppose that The city of Byzantine has an army whose generals are making a strategy to whether attack or retreat. For this decision to be made, these generals must reach a consensus among themselves, But, some generals turn dishonest and fail to relay this consenses communication. Now, the problem is to ensure that all the remaining loyal generals should reach the same decision despite some deceitful generals trying to miscommunicate.

A key feature of BFT is its fault tolerance. A blockchain with this much tolerance can handle up to a certain percentage of faulty nodes; usually, this percentage is up to 33%. Blockchains use Proof of Stake (PoS), Delegated PoS (DPoS), and Practical Byzantine Fault Tolerance (PBFT) to achieve BFT. Byzantine Fault Tolerance makes sure that no single node or a group of nodes can gain control over the blockchain. 

There are several types of BFT algorithms: PBFT is used in permissionless blockchains like Hyperldger Fabric; DPoS is used in Tron blockchain; and Tendermint BFT is used in Cosmis blockchain.

Q

QR Code

A QR code (Quick Response Code) is a machine-readable code that can help you easily retrieve information like wallet addresses, transaction details, smart contact details, and NFTs. Instead of manually entering this complex alphanumeric data, you can simply a QR code to scan all the information.

For example, when you initiate a transaction, you would need the destination wallet address, which is often a long one. Instead of manually typing this address, you can use the QR code feature and retrieve that address quickly.

For crypto payments, a merchant displays that code that customers can scan to make payments; it is also used in Self Sovereign Identity (SSI) solutions that use these codes to verify a credential without revealing any sensitive data related to that credential. QR codes can also be used to execute smart contracts and to connect a wallet to an exchange or crypto platform. This way of scanning information is fast, error-free, and imparts security.

Quadratic Voting (QV)

A powerful voting system in which a voter gets several voting credits (or tokens) and with the help of these credits, he can cast the intensity of his preferences. This means that instead of voting a ‘yes’ or ‘no’,  a voter can distribute his votes across multiple choices (as he has multiple tokens for voting). This makes sure that the influence of large stakeholders is reduced and individuals can show strong preferences for various proposals. It makes the process more democratic and fair.

As strong preferences require more resources, the threat of centralization by wealthy stakeholders is reduced. Quadratic Voting is calculated in terms of cost as:

Cost = (Number of Votes)2

This means the cost of 1 vote = 1

2 votes = 4

3 votes = 9, and so on.

For example, if someone has 14 voting credits, he can cast 1 vote for proposal A (costs 1 credit), 2 votes for proposal B (costs 4 credits), and 3 votes for proposal C (costs 9 credits). So, depending on how strongly he thinks about a proposal, he can distribute his votes.

Apart from discouraging wealthy voters from dominating the voting process, Quadratic Voting also encourages the voters to show the intensity of how strongly they care for a proposal.

Decentralized Autonomous Organizations(DAOs) use this system of voting to make the system fairer and more democratic. It can also play a good role in blockchain-based elections. There are also risks associated with it. A few malicious voters may create multiple wallets to cast more votes; this could lead to Sybil attacks.

Qualitative Risk

Qualitative risks are the subjective risks that can affect a blockchain project or protocol. These cannot be quantified as they are not based on any mathematical or quantifiable models. Rather, they are based on judgments and experiences. Because of their non-numerical nature, they are hard to calculate.

Qualitative risks involve identifying potential threats linked to security, regulatory compliance, user adoption, governance, ethical, or societal risks. A security risk can be a smart contract vulnerability, private key management, or a Sybil attack (a single entity creating multiple fake nodes to control blockchain).

Regulatory and compliance risks are related to regulations put forth by the government on the use of cryptocurrencies and blockchain.  A government may put restrictions on their use or ban them altogether. Also, lack of legal clarity on the use of DeFi, NFT, Metaverse, DAOs, and stablecoins are classified as legal risks.

User adoption risks are related to the hesitancy of users to adopt blockchain technology. Then there are market risks like extreme volatility or low liquidity. Governance risks involve hard fork risks (creation of forks due to disagreement in the developer community), and developer exit risks (developers leaving a project leading to no updates and poor security). The risks of centralization in DAOs also come under this category.

Quantitative Easing (QE)

Under Quantitative Easing, the central bank of a country purchases government bonds or assets; this is done to inject liquidity into the economy. In the context of blockchain also, QE is performed to increase liquidity. This can be done by making use of Central Bank Digital Currencies (or CBDC) to control inflation. By issuing unlimited CBDCs into the system, inflation can be kept under control.

Another form of Qualitative Easing is seen in the use of Liquidity Mining and Yield Farming. DeFi protocols like Aave and Compound inject tokens into the liquidity pools, which encourage more user participation. New tokens are distributed to the users as rewards; this increases the supply and incentivizes users to provide liquidity.

Layer 1 blockchains mint new tokens and require validators to secure their networks. This is also a form of QE. Issuance of stablecoins to cater to increased demand is also classified as Quantitative Easing.

There can be a downside of QE also. Hyperinflation risks associated with the excessive supply of tokens can reduce the value of these tokens. Injecting large amounts of liquidity can lead to price manipulation. Also, it carries the risk of centralization.

Quantitative Trading

Also called Quant Trading, Quantitative Trading involves the use of mathematical modes, statistical analysis, and algorithms that can quickly execute the trading of cryptocurrencies. Employing strategies based on these models helps traders automate their trades, minimize risks, increase accuracy rates, and hence gain more profits. This is better than manual analysis performed by a trader as data-driven algorithms help analyze real-time data in no time.

This also helps in performing back testing on historical data and helps identify common patterns. There are different types of Quant strategies that traders can use. One of them is Arbitrage trading which involves buying crypto on one exchange at a lower price and selling it on another exchange at a higher price thus gaining profits. One can also place buy and sell orders at different price levels and gain profits from the bid-ask spread. This can be done by employing bots.

Quantitative Trading eliminates the risks associated with human emotions and increases the accuracy rate of the trades.

Quantum Computing

It uses quantum mechanics to perform cryptographic calculations that are exponentially faster than traditional computers (which use bits 0 or 1). Quantum computers use ‘qubits’, that can exist in multiple states at the same time. This means a ‘qubit’ can be 0 or 1 or both at the same time. This allows computers to perform multiple calculations simultaneously.

Also, two ‘qubits’ can be linked which means their states are interdependent. Being able to execute calculations parallelly, quantum computers are very fast. However, this can pose several threats to a blockchain. It can break public-key cryptography. Several crypto assets use algorithms to secure users’ wallets.

Quantum computers can use their own algorithms to crack private keys from public ones and break security. For example, such a computer can extract a private key from the public wallet addresses.

Quantum computers can perform hash calculations in a Proof of Work consensus mechanism much faster than any traditional equipment; this could make them a dominant factor in mining, which could lead to centralization. To counterfoil such efforts by a quantum computer, researchers are developing Post-Quantum Cryptography (PQC) algorithms and quantum-proof blockchains; these protocols would be resistant to quantum attacks.  

Quantum Resistant Ledger (QRL)

QRL is a blockchain that can secure computers against the possible attacks of quantum computers. It is one of the first steps to implement post-quantum cryptographic security.

Quantum Resistant Ledger makes sure that the transactions on blockchain remain secure when quantum computers become powerful enough to break the entire blockchain encryption that we follow these days.

QRL is developed to overcome the possible threat of attacks from quantum computers that could use Shor’s Algorithm to break blockchains. It protects transactions even before they are attacked by these powerful computers. It also provides special wallets that can generate quantum-resistant addresses. It uses Post-Quantum Cryptography (PQC) which uses the eXtended Merkle Signature Scheme, which is immune to Shor’s algo. Quantum Resistant Ledger can create secure smart contracts and dapps that are resistant to attacks.

Quantum-Resistant Cryptography

It refers to the cryptographic algos that secure blockchains against the threats from quantum computers (a possibility in the future). Quantum computers can break present-day blockchain systems that commonly use RSA encryption and Elliptic Curve Cryptography (ECC).

Quantum-resistant cryptography aims to build a powerful system that can withstand attacks from quantum computers. Quantum mechanics can perform calculations that are exponentially faster than present-day cryptographic systems. This is due to the employment of Shor’s Algorithm (which can attack RSA and ECC) and Grover’s Algorithm (which can speed up the brute-force attacks).

There are several Quantum-resistant cryptographic techniques to counterfoil those attempts; Lattice-Based Cryptography, Hash-Based Cryptography, and Code-Based Cryptograhy, to name a few.

Quantum Tokens

The quantum tokens are designed with quantum-resistant technology to counter the attacks from quantum computing in the future. These tokens leverage post-quantum cryptography to safeguard crypto assets; these assets would be hard to compromise by quant algos.

Quantum tokens are built on quantum-resistant blockchains (like Quantum Resistant Ledger or QRL) and use algos that are immune to attacks from quantum computers. This is required for the future-proofing of blockchain. Such algos are secured using Post-Quantum Cryptography (or PQC). For example, XMSS (eXtended Merkle’s Signature Scheme) and Lattice-based cryptography can safeguard blockchains from quant attacks. Such algorithms use immense computational power to function. Quantum tokens work on quantum-resistant blockchains to maintain asset security. This ensures that everything including tokens, smart contracts, and transactions is safeguarded from attacks.

An example of a quantum token is QRL, which is a native token of Quantum Resistant Ledger and uses PQC. These tokens can be staked and used to build quantum-safe dapps. ‘QANX’ is the native utility token of QANplatform, which is a quantum-resistant hybrid blockchain for developers and enterprises. Quant tokens are used to incentivize quantum-related research as many blockchain networks integrate quantum capabilities in smart contracts and DEFI protocols.

Query

A query requests data stored on a blockchain network. Just like we query a database, a blockchain can also be queried. Such queries are used to retrieve details like smart contracts, transactions, blocks, state of the network, etc. A transaction query retrieves specific transactions stored on the blockchain. This is done using Transaction ID (TXID).

A block query accesses information related to a block; this can be the block’s height, its timestamp, its transaction history, or its hash. A smart contract query retrieves call functions from contracts to get the balance of an address. A state query gets the current state of the blockchain or smart contract.

For example, a contract can be queried to get information related to the amount of tokens sold or funds raised. A node query can be made to a full node or a light node. This can get you information related to recent blocks or validate transactions on the network.

Queries are sent to a blockchain node (Ethereum node, Bitcoin node), using an API or a query protocol like Remote Procedure Call (RPC) or GraphQL.

Blockchain explorers of most of the networks provide read-only queries related to that blockchain (instead of querying that network directly). For smart contracts, Contract ABIs (Application Binary Interface) are used to call specific functions and return data via web3.js.

Devs can also use blockchain APIS like Infura, Alchemy, or Quicknode to send queries to the blockchain via decentralized or hosted nodes.  Some platforms use blockchain query languages like BigChainDB (for SQL-like queries) and The Graph (GraphQL).

Quicksilver

QuickSilver is a highly efficient blockchain that is fast and has been designed for performing rapid, scalable, and seamless transactions. It can also be used in the context of blockchain projects or protocols that aim to optimize the speed and efficiency of dapps, token transfers, and smart contracts.

Quicksilver is also a Cosmos SDK-based blockchain that focuses on performing fast liquid staking and providing cross-chain interoperability. In such a context, the Cosmos network can provide smooth cross-chain features for DEFI and staking mechanisms.

It provides a liquid staking protocol; this allows traders to stake their assets and also be able to retake their liquid assets in other defi projects. The output of Quicksilver is high; transaction processing times are fast and have low latency. This feature can be used in defi apps and gaming. With Cosmos Inter-Blockchain Communication Protocol or IBC, it provides seamless data transfer across different blockchain networks.  

Quickswap

Quickswap is a Decentralized Exchange (DEX) that is built on the Polygon Network. It is a popular alternative to Etehreum-based DEXs like Uniswap as it offers lower fees and faster transaction times. Automated Market Makers (AMMs) in Quickswap utilize liquidity pools; this enables users to trade directly with each other and not be dependent on traditional order books.

As it is built on Polygon, the transaction fees are lower than on Ethereum-based platforms. Polygon’s layer 2 scaling feature helps in reducing gas fees and faster confirmation times for transactions. Therefore, it is ideal for high-frequency trading.

The exchange offers a wide variety of ERC-20 tokens that can be traded or swapped and can be used to provide liquidity. Users can also perform yield farming to gain rewards in the form of QUICK tokens, which are native to Quickswap. These tokens can be staked to earn more rewards. The exchange offers slippage control, which allows traders to set their price deviation tolerance to avoid significant losses while they swap their tokens.

Quorum

Minimum number of participants or nodes that can take part to make a decision or perform an action in the blockchain. This makes sure that the decisions are decentralized, valid, and secure.

In consensus mechanisms, quorum stands for a minimum number of validators or nodes that must agree on a particular decision. For example, a block can be validated only if it is mutually agreed upon by quorum. In the Proof of Work consensus mechanism, a quorum is the minimum number of miners that are needed to reach a consensus on a block’s validity. In the Proof of Stake mechanism, quorum means the number of validators required for adding a new block to a blockchain.

In the Byzantine Fault Tolerance (BFT) Algorithm, the quorum is the number of nodes that must agree upon the state of the blockchain; two-thirds of nodes are required to agree before a block can be added even if that means one-third of the nodes have turned malicious or are faulty.

In private and permissioned blockchains like Hyperledger, it is the number of authorized participants who can validate transactions or agree on the integrity of the blockchain. For example, in Hyperledger Fabric, the quorum is required to specify how many authorized participants or endorsing peers are required to sign off a transaction before it can be added to a blockchain.

Lastly, in the context of governance, it means the number of token holders or voting participants that are needed to make decisions linked to a blockchain protocol or approve any changes to it. Governance via quorum is an essential requirement in Decentralized Autonomous Organizations (DAOs).