General FAQs for crypto users
zk SNARKs is the abbreviation for Zero-Knowledge Succinct Non-interactive Argument of Knowledge. It is a coded proof system that enables one user (Provider) to verify the transaction to the other user (verifier) that the statement is true while maintaining the anonymity of the provider. zk SNARK thus maintains the privacy of the users while validating the transactions according to the consensus algorithm of the network.
An Atomic swap can be termed as a smart contract technology that facilitates the exchange of crypto assets on a decentralized platform like crypto exchanges, without third-party intervention.
Custodian Wallet provider is the online service provider for crypto-asset account holders similar to other digital payment services. The custodian wallet provider enables the account holders to store and hold the crypto assets in their accounts.
DEX is the short form for Decentralized exchange. These exchanges have no physical location where investors can go buy and sell tokens. These exchanges are blockchain-powered and allow peer to peer (P2P) trading and exchange of tokens and digital currencies. However, the level of decentralization differs per DEX.
Security Token Offerings (STOs) is a type of public offering in which tokenized digital securities, known as security tokens,are offered that are compliant with the regulatory laws under the specific jurisdiction. Any token launched under any appropriate regulations of the respective regulatory institutions are considered legal tokens. One of the example in the USA is launching securty tokens (Digital Securities) under Reg D or Reg S or Reg A+ or Reg CF
An individual who performs cryptographic computations on the systems which allows exploration of new crypto assets on the distributed ledger system. The miners are rewarded with tokens and are changed with transactional fees as a commission.
Crypto-assets broadly includes all the crypto-related assets stored on distributed ledgers. The term covers all types of crypto tokens such as securities tokens, utility tokens, privacy coins, cryptocurrency
Based on a peer-to-peer (P2P) topology, blockchain is a distributed ledger technology (DLT) that allows data to be stored globally on thousands of computers – while letting anyone on the network see everyone else's entries in near real-time. Each block in the chain contains a number of transactions and every time a new transaction occurs on the blockchain a record of that transaction is added to every participant’s ledger.
Block time is the time required to develop a particular blockchain protocol. Generally, for the Ethereum blockchain, new blocks are added approximately after every 14 seconds. The development of blockchains is done in a linear design which is an ideal structure for validation.
Ether is the local token of the Ethereum blockchain and also functions as the fuel to execute the operations on the Ethereum platform. Every operation on the Ethereum platform needs a certain amount of power to operate efficiently. Ether is designated as the unit of measurement of the energy utilized to perform the operations. This unit of measurement is called as ‘Gas ‘which compensates the miners for the transactions they perform on the Ethereum blockchain. The more the energy required more the gas is required and more complex is the coded program written for it. The value of each unit of Gas is measured in Ether and ETH is the symbol used to represent it.
Ethereum has initiated the smart contract programming for the blockchain ecosystem. A smart contract is a program written or coded to meet the specific needs of the business requirements in a wide array of industries. Ethereum based smart contracts are used widely in various industries such as in supply chain management, Ethereum based smart contracts are coded to perform asset tracking processes and to automate compliance and reporting system. In the banking and Finance sector, Ethereum based smart contracts automate the real-time implementation of regulatory control limits that can automate claim processes.
POS is the abbreviation for Proof of Stake. This Proof of Stake has been invented to overcome the problem in POW. In the POW procedure, a heavy amount of power supply is required for mining. The miners thus have to sell their reward coins to pay electricity bills. The POS thus provides them an alternative to pay as per their percentage volume of coins.
POW is the abbreviation of the term Proof-of-Work. It is the original consensus algorithm on a blockchain network to add new blocks to the network. The miners have to compete in calculations with each other to accomplish the transactions at minimum time. They further need to confirm transactions on a network with consensus. In turn, they get rewarded with cryptocurrencies and this process is called proof of work.
Smart contracts are the set of rules that are followed for transactions to complete.
A lightning network is a peer to peer cryptocurrency micro-payment platform powered by blockchain technology which enables fast and low latency transactions. It uses smart contracts and multi-signature wallets for efficient functionality.
The term Halving is originated from the word half. In the crypto industry, while the mining process is performed, miners compete with each other to solve complex mathematical computations. After resolving the calculations the winner is rewarded with Bitcoin. This Bitcoin reward is cut half or halved after a certain number of Bitcoin blocks are mined.
Gas is the amount of computational power that is required for performing every operation on the Ethereum platform. It measures the amount of work or set of actions required to complete the transactions or contracts on the Ethereum platform. It ensures that an appropriate fee is being paid to miners on completion of each transaction.
A hard fork is the radical modification in the protocol of blockchain-based network that validates previously invalid blocks/ transactions (and vice a Versa). The miners in a blockchain set the rules that move the memory in the network. If some miners want to change those rules they need to ""fork it""to indicate that there`s been a diversion to the protocol. It requires an up-gradation of the latest protocol software on all nodes or computers within the network.
Distributed Consensus is the virtual agreement between all the nodes or computers within the decentralized network, permitting peer to peer transactions without interference of any third authority
Decentralized Applications (DApps) are the blockchain-based peer to peer decentralized programs that run on the distributed ledger system .Mostly Smart contracts in the Ethereum blockchain are called as DApps.
ERC Tokens are cryptocurrencies developed on the Ethereum platform and are solely used for this platform. ERC20 stands for Ethereum Request for Comments and 20 is a unique identification number assigned to differentiate it from other cryptocurrencies. They are created by a smart contract written in codes. It is a protocol standard that outlines certain standards and rules for issuing tokens on the Ethereum blockchain network. They are stored and sent or exchanged using the Ethereum platform.
Intangible assets are the non-physical assets that are utilized for the long term. Intangible assets are intellectual properties such as company brand, Trademarks, Patents, goodwill, Franchises, copyrights, etc. can be categorized under hard assets.
Tangible assets are measurable assets that have a physical form and finite monetary value. Tangible assets include machinery, equipment, land, furniture items, inventory and also financial securities like cash, bonds or stocks.
Airdrop is a popular marketing strategy on social media that involves the distribution of coins or tokens to the customers as a reward. The airdrop generally appeals to the participants to perform certain tasks like liking, commenting, joining and following the groups or social accounts. While some ask to subscribe to the company newsletter, tweeting in favor of the company or entity. In the crypto industry, users may get airdrops for holding a coin, using a particular crypto exchange, linking the wallet with the crypto project. Airdrop is not legally recommended to offer securities publicly in the USA.
Cold storage or the cold wallet can be termed as the type of digital data storage that is not often connected with any network or computer or the internet. It is generally used for long period storage and ensures more security and control.