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Cryptocurrency and Blockchain Dictionary

A complete list of crypto definitions

Cryptocurrency and blockchain glossary

Commonly used terms in the world of blockchain and cryptocurrency

Terms commonly used in the world of blockchain and cryptocurrency

Anti-Money Laundering

AML is the abbreviation for ‘anti-money laundering’. AML stands for policy and legislation on money laundering. This prevents illegally acquired funds from being converted into a legal variant. Within the crypto world, it is no longer unusual for AML techniques to be used by exchanges and wallets. This term is often used as AML/KYC, where KYC stands for 'Know your customer'.

Other Important Terms

Market Cap

Market cap – short for Market capitalization. A total value of all the units of a certain cryptocurrency combined. Changes proportionally to a single unit price change. Can be calculated using this formula: Market cap = Total supply * Price of a unit For example, if a supply of hypothetical cryptocurrency is 100 coins and each coin costs 25 USD, then the market cap is 100 * 25 = 2500 USD.

Address

A unique identifier serving as a virtual location where the cryptocurrency can be sent.

PoW

PoW – short for Proof of Work. A type of consensus mechanism, where nodes validate transactions by using computing power. Here is how it works: User A makes a transaction; User A’s transaction gets bundled into a block along with other users’ transactions; Transactions get validated; The header of the most recent block is inserted into this block as a hash; The cryptographic problem is solved during the mining process; The block is published to the blockchain; User B receives a transaction. For example, Bitcoin uses PoW consensus mechanism.

Whitepaper

Whitepaper – an official document of a certain cryptocurrency that explains how it works. Can explain novel concepts, contain financial and technological calculations.

Decentralized Autonomous Organizations

DAO is an abbreviation of 'Decentralised Autonomous Organization'. This is basically an organisation that runs automatically on itself without any human interventions. The work is automatically excecuted through Smart contracts.

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