Crypto terms and definitions

Crypto terms and definitions:

Block chain- a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.

Parachain- an application-specific data structure that is globally coherent and validatable by the validators of the Relay Chain. Most commonly a parachain will take the form of a blockchain, but there is no specific need for them to be actual blockchains.

Side chain- a side blockchain that is linked to another blockchain, referred to as the main chain, via a two-way peg. Imagine a global decentralized network of various blockchains, each with their own sets of rules, functionalities and purposes, that remain independent from each yet form one seamless ecosystem.

Layer 2- a network or technology that operates on top of an underlying blockchain protocol to improve its scalability and efficiency. ... For instance, Bitcoin is a Layer-1 network, and the Lightning Network is a Layer-2 solution built to improve transaction speeds on the Bitcoin network in this fashion.

Fiat- a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies.

Sound money- money not liable to sudden appreciation or depreciation in value : stable money specifically : a currency based on or redeemable in gold.

Legal tender- Coins or banknotes that must be accepted if offered in payment of a debt.

Currency- a system of money in general use in a particular country.

"the dollar was a strong currency".

Asset- property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.

Store of value- any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved.

Crypto Mining- The term crypto mining means gaining cryptocurrencies by solving cryptographic equations through the use of computers.

Smart contracts- a computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement.[1][2][3][4] The objectives of smart contracts are the reduction of need in trusted intermediators, arbitrations and enforcement costs, fraud losses, as well as the reduction of malicious and accidental exceptions.

Exchanges- A cryptocurrency exchange acts like an intermediary – a brokerage firm – between a buyer and a seller of cryptocurrency. It allows a buyer to deposit money using several methods like direct bank transfer, UPI, using debit or credit cards, etc.

Digital wallets- A digital wallet, also known as e-wallet, is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services.

Non-Fungible Token (NFT)- a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.

Minting NFTs- The act of creating an NFT.

Gas fees- payments made by users to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain. As such, the price of gas fluctuates (priced in ETH) with supply and demand for processing power.

ERC20 Tokens- a standard used for creating and issuing smart contracts on the Ethereum blockchain. Smart contracts can then be used to create smart property or tokenized assets that people can invest in. ERC stands for "Ethereum request for comment," and the ERC20 standard was implemented in 2015.

Staking- a process that involves committing your crypto assets to support a blockchain network and confirm transactions. It's available with cryptocurrencies that use the proof-of-stake model to process payments.

Liquidity- the availability of liquid assets to a market or company.

"the banks closed, causing serious liquidity problems for smaller companies"

· liquid assets; cash.

"a firm may be unable to pay unless it has spare liquidity".

Passive income- income that requires minimal labor to earn and maintain. It is called progressive passive income when the earner expends little effort to grow the income.