Fintech Glossary

fintech glossary bitcoin ethereum wallet exchange airdrop ico ripple monero allart softworks

FINTECH GLOSSARY

ALTCOIN - Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin.

BITCOIN CASH - Bitcoin Cash is a cryptocurrency. It is a result of a prolonged disagreement on how to handle the bitcoin scalability problem. A group of people not content with the Segregated Witness bitcoin rule change decided to increase bitcoin transaction capacity eight times. The change took effect on 1 August 2017. The change is incompatible with the existing bitcoin rules, which is why it is called a hard fork. As a result, the bitcoin ledger called the blockchain and the cryptocurrency split in two.

CRYPTO-ANARCHISM (OR CRYPTO ANARCHY) - it is a cyber-spatial realization of anarchism. Crypto-anarchists employ cryptographic software to evade prosecution and harassment while sending and receiving information over computer networks, in an effort to protect their privacy, their political freedom, and their economic freedom. By using cryptographic software, the association between the identity of a certain user or organization and the pseudonym they use is made difficult to find, unless the user reveals the association. It is difficult to say which country's laws will be ignored, as even the location of a certain participant is unknown. However, participants may in theory voluntarily create new laws using smart contracts or, if the user is pseudonymous, depend on online reputation.

DOUBLE SPEND - A double spend is an attack where the given set of coins is spent in more than one transaction.

BITCOIN - A type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

BLOCKCHAIN - a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.

CRYPTOCURRENCY - A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

DECENTRALIZED APPLICATION (dappp, dApp, DAPP or DApp) - An application that runs on a decentralized network. Dapps are not deployed by a single individual or company, but instead run on a peer-to-peer network such as Ethereum.

ETHEREUM - Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract functionality. It supports a modified version of Nakamoto consensus via transaction based state transitions.

FIAT MONEY - It is a currency without intrinsic value established as money, often by government regulation. It has an assigned value only because the government uses its power to enforce the value of a fiat currency or because the exchanging parties agree to its value. It was introduced as an alternative to commodity money and representative money. Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity). Representative money is similar to fiat money, but it represents a claim on a commodity (which can be redeemed to a greater or lesser extent).

HARD FORK - A hard fork is a rule change such that the software enforcing the old rules will see the blocks adhering to the new rules as invalid. To prevent a blockchain split, all nodes running the old software shall upgrade to new rules.  Alternatively, all nodes using the new software shall return to the old rules as was the case of bitcoin split on 12 March 2013.

ICO - An initial coin offering (ICO) is a controversial means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies. In an ICO, a quantity of the crowdfunded cryptocurrency is preallocated to investors in the form of "tokens", in exchange for legal tender or other cryptocurrencies such as bitcoin or ethereum. These tokens supposedly become functional units of currency if or when the ICO's funding goal is met and the project launches.

LEDGER - A distributed ledger (also called a shared ledger, or distributed ledger technology, DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralized data storage.

MONERO (XMR) - It's an open-source cryptocurrency created in April 2014 that focuses on privacy and decentralization that runs on Windows, macOS, Linux, Android, and FreeBSD.  Monero uses a public ledger to record transactions while new units are created through a process called mining. Monero aims to improve on existing cryptocurrency design by obscuring sender, recipient and amount of every transaction made as well as making the mining process more egalitarian. 

MARKET CAPITALIZATION (MARKET CAP) - It is the market value at a point in time of the shares outstanding of a publicly traded company, being equal to the share price at that point of time times the number of shares outstanding. As outstanding stock is bought and sold in public markets, capitalization could be used as an indicator of public opinion of a company's net worth and is a determining factor in some forms of stock valuation.

MINING - In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network.

MINERS - In cryptocurrency a miner is a computer or group of computers 'searching' for cryptocurrency. They constantly verify transactions and as an incentive they get rewarded with cryptocurrency.

OFF-CHAIN TRANSACTION - An off-chain transaction is the movement of value outside of the block chain. While an on-chain transaction - usually referred to as simply 'a transaction' - modifies the blockchain and depends on the blockchain to determine its validity an off-chain transaction relies on other methods to record and validate the transaction.

PERMISSIONED LEDGER - A distributed ledger built on top of a permissioned blockchain (aka private blockchain).

PROOF-OF-WORK SYSTEM -  An economic measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer.

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

ROBO-ADVISOR or ROBO-ADVISERS are a class of financial adviser that provide financial advice or Investment management online with moderate to minimal human intervention.[1] They provide digital financial advice based on mathematical rules or algorithms. These algorithms are executed by software and thus financial advice do not require a human advisor. The software utilizes its algorithms to automatically allocate, manage and optimize clients' assets.

SECURITY TOKEN - A physical device used to gain access to an electronically restricted resource. The token is used in addition to or in place of a password. It acts like an electronic key to access something. Examples include a wireless keycard opening a locked door, or in the case of a customer trying to access their bank account online, the use of a bank provided token can prove that the customer is who they claim to be.

SMART CONTRACT - A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible. Smart contracts were first proposed by Nick Szabo, who coined the term, in 1994.


Sources: Wikipedia, Reuters, Dataconomy, Bitcoin.it, web search.

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