Basic terms

51% attack — a condition when more than a half of the computing power of the cryptocurrency network is controlled by one miner or group of miners. Theoretically, this amount of computing power gives power over the network. This means that every client program on the network believes in damaged transaction block of the attacker’s side.

Address – the bitcoin address is used to send and receive transactions. It consists of alphanumeric symbols, but can also be represented as a scanned QR code. The bitcoin address is also the public key used by bitcoin holders to digital sign of transactions.

Autonomous agents are software entities (applications and modules) that can make decisions without the need for human intervention and approval. Smart contract is a kind of Autonomous agent based on a blockchain.

Altcoin — is a common name for all cryptocurrencies offered as an alternative to bitcoin. They include Litecoin, Namecoin, Novacoin, etc.

Ask – the price at which the seller is ready to sell the currency.

Bitcoin is a peer-to-peer digital monetary system built on cryptographic algorithms. The unit of account in this system is called bitcoin — is written with a lowecase letter in contrast to the name of the monetary system, which is written with a capital letter. Bitcoin is the first massive cryptocurrency.

Block — a list of verified transactions that is added to the blockchain as a result of mining. It is the basic element of the blockchain structure. It consists of two parts — Head and Payload — the actual transaction record.

Block chain is a distributed registry consisting of a chain of financial transaction blocks, in which each subsequent block is cryptographically linked to the previous block. Includes peer-to-peer (P2P) networks, distributed data storage, and cryptography. There are three types of block chains: Public, Private and Permissioned.

Bulls is a designation for market participants who raise the rate with their purchases.

Bears – a designation for market participants who reduce the rate with the help of their sales.

Bid – the price at which the buyer is ready to buy the currency.

Cryptocurrency exchange is a trading platform where traders exchange one cryptocurrency for another or for the main Fiat money.

Cryptocurrency – is a distributed and decentralized system of secure exchange and transfer of digital currency based on cryptography means.

Cryptography – is the science about the methods of ensuring confidentiality (impossibility of reading information by outsiders), data integrity (impossibility of imperceptible change of information) and authentication (verification of authorship or other properties of the object).

Cloud mining — web services selling power for mining of cryptocurrency. The equipment itself is located on the seller's site and is serviced by his forces. The buyer pays for the ordered processing power and receives income from mining.

Cold storage or offline storage — in a broad sense — the storage of crypto-currencies without Internet access. In fact — the storage of private keys or seed on devices that do not have access to the Internet. For example, printed on paper. It is carried out for security purposes.

Colored coins — a add-in above the bitcoin protocol that allows bitcoin users to endow them with additional properties set by the user himself, allowing to mark bitcoins as "shares" or even "real assets". This allows you to use bitcoins as tokens for any other property.

Dump – the collapse of the rate, reasoned by a directed trade of individual market participants.

Double spending – an attempt to spend money twice. This happens when someone executes a financial transaction and then makes a second transaction with the same money.

Digital signature (DS) – a code, which generates the encryption algorithm with the public key attached to the transaction to check the invariability of its contents and the identity of the sender. It is used to confirm the transaction by the owner of the sender's bitcoin wallet.

Drain – a sharp drop in the rate.

Fork — a creating of an alternative successful version of the block chain. This can happen intentionally when a group of miners gains too much control over the network (see attack 51%), accidentally (a simultaneous recording of new blocks by different miners or due to a system error), or purposefully when a development team decides to introduce new features in a new version of a client program. Often a fork is called a new cryptocurrency, which is built on the protocol of an existing one. For example, litecoin (LTC) is a fork of bitcoin (BTC).

Fiat currency – the money, government (Euro, dollar, ruble, hryvnia, etc.)

Glass (stock glass, list of quotations) – a table indicating the request from market participants, which offers a price close to the current one.

Haircut – a definition of the situation, when funds from hamsters come to more experienced players. Often, the definition applies to situations of draining funds of hamsters that fell into the trap of provocation, false price movement.

Hamster – is a newcomer to the cryptocurrency exchange, who has little understanding of the situation, makes decisions and trades without taking into account even the main features of the market, analysis and forecasting.

Keys – is a character string (bit string) used by the cryptographic algorithm for encryption and decryption of messages, setting and verification of digital signatures, and also identification. Keys can be symmetric (the same key is used for encryption and decryption) and asymmetric (public and private).

Long position-a situation when a trader buys a currency at a low price, waits until the rate rises, and then sells the currency more expensive, getting his profit.

Level of support – the price stop line, which moves down, reaching a certain level several times, begins to rise. At this point, the market includes buyers in such an amount so to stop the further decline of prices.

Lost price – the price at which the last transaction took place on the exchange.

Mining – is a necessary and important process in the Bitcoin network and other cryptocurrencies, in the result of which a new block of transactions is added to the blockchain and the coins emission happens.

Masternodes — special nodes (servers) of the network that provide the mechanism of mixing of transactions for increasing the degree of anonymity.

Node — a node (server) of the Bitcoin network – that is a computer that stores the full current version of the blockchain.

Obfuscation (confusing) – is a technology that allows to increase the degree of anonymity of cryptocurrency transactions.

Opening price – the quotation at the opening of trading that forms the daily trend.

Pump – is a provocative filling of the market with voluminous transactions aimed at the forced reaction of less informed players to enter the market and support the movement.

Pre-mining — is a procuring of cryptocoins by the founder of cryptocurrency before it is officially announced about its appearence. It allows you to accomplish the cryptocurrency emission before it enters the market. It is often used in fraudulent cryptocurrencies, but not all pre-mining coins are fraudulent.

Private key — a code line which gives an access the wallet or bitcoin address. Required for transactions.

Public key — a paired code line suitable to a private key, to which has a public access. It is used along with a secret private key to send transactions. The public key corresponds to the bitcoin address.

Pool or Mining Pool – a collection of miners who collectively extract the block, and then divide the reward. Mining pools – is a way to increase profitability with the growth of mining complexity.

Reversal – a situation when the movement of the pair changes direction. For example, the cryptocurrency grew and after having reached a certain level of resistance started to decrease.

Short position – a situation when the broker provides funds to the trader in debt. When opening a short position, the trader expects making money on the fall of the market.

Satoshi Nakamoto – is an anonymous creator (or a group of creators) of the peer-to-peer electronic monetary system Bitcoin..

Spread – the difference between the best Ask (sell) and Bid (buy) of currencies which are currently offered on the exchange.

Stop order Buy – an order for purchase at the specified or higher price. It is used by the trader if he expects the price to rise to a certain level, after which the price continues to rise.

Stop-order Sell – an order for sale at a specified or lower price. It is used by the trader if he expects the price to fall to a certain level, after which the price continues to fall.

Spread – is the difference between the currently proposed best values for sale (ask) and buying (bid) of a currency that are relevant to the exchange.

Smart contracts — a mechanism that includes digital assets and two or more parties that invest assets into the contract, after which they are automatically distributed between these parties, according to the formula based on indicators the values of which are unknown at the time of signing the contract.

Token (badge, coupon) – is a digital asset produced to attract investment into a cryptocurrency project or company. A kind of cryptocurrency, but its properties are closer to stocks or bonds. They are produced during the ICO and then traded on cryptocurrency exchanges on a par with cryptocurrencies.

Transaction – money transfer between two addresses.

Trend – the mainstream of the overall price movement. If each next maximum of a trend is higher than the previous one –the trend is upward. If each next minimum of a trend is lower than the previous one – the trend is downward.

The level of resistance – the price stop line, which moves up, reaching a certain level several times, begins to fall. At this point, the market includes sellers in such quantity so to stop further growth of a price.

The graph of the amount of trade – displays the general amount of the cryptocurrency that was bought / sold for a certain time period.

The closing price – the quotation at the closing of trading, which displays the last price of a deal on the exchange.

Vanity Address — a bitcoin address that contains a particular element, for example a name.

Volatility – changes in price movements over time for traded financial assets (including cryptocurrencies).

Wallet – is a software application that allows you to make a transaction from a given address and view its balance.

Whale – is a professional and experienced market participant.


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