Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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Race Attack

Race attack – a double spend attack on the P2P network which is only possible if the recipient of the transaction accepts unconfirmed transactions as a payment. If this is true, the attacker broadcasts a conflicting transaction to the network at the same time; in case the conflicting transaction gets more confirmations, an attack is successful and the recipient does not get paid. It is easier to carry out such an attack if the attacker has a direct connection to the victim’s node, and perhaps deposits the conflicting transaction directly to miners

Other Important Terms

PoS

Proof-of-stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. This is done to avoid the computational cost of proof-of-work schemes. PoS blockchains include Ethereum, Polkadot, Avalanche, and Cardano

FOMO

FOMO – short for Fear Of Missing Out. Describes the anxiety a trader feels when it seems he did not buy in before the increase in price or did not sell before the fall. If the increase/fall is still happening while the trader is experiencing FOMO, it can force him to make an irrational decision. For example, those who bought Bitcoin at 19 000+ USD during the late 2017 bull run were experiencing FOMO.

ICO

ICO – short for Initial Coin Offering. A way for a cryptocurrency startup to raise money via selling own issued tokens for fiat or a common cryptocurrency, such as Bitcoin or Ether. The money raised is then used to realize the plans described in the startup’s roadmap and whitepaper.

Whitepaper

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

ROI

'Return on Investment', or ROI for short, is a ratio or percentage value that reflects the profitability or efficiency of a certain trade or investment.

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