To pass this unit, please study the 32 vocabulary words below.
51 percent attack
an attack on crypto
a publicity announcement that a coin or token will be distributed freely in exchange for simply holding something or performing a simple task like giving one's coin or email address
The makers of the Basic Attention Token (BAT) once airdropped a million dollars of BAT tokens on users of of their Brave browser just to jumpstart it's business model and gain publicity.
AML (anti-money laundering)
laws and regulations designed to stop the practice of illegal money practices, like making criminal income look legitimate
Some AML policies include the appointment of a Money Laundering Reporting Officer (MLRO).
ASIC (application specific integrated circuit)
any chip designed for a specific purpose, such as processing SHA-256 hashes
An ASIC implements a specific function that appeals to a wide market.
Byzantine fault tolerance
an algorithm preventing different symptoms appearing to different observers in a system that requires 100% consensus
A Byzantine failure is the loss of a system service due to poor Byzantine fault tolerance.
connecting two blockchains so transactions between chains to take place
Chain linking allows blockchains like Bitcoin to communicate with other sidechains.
a coded message or secret way of writing
The boy had a difficult time time decoding the cipher in which his father's diary was written.
a group of peers responsible for maintaining a distributed ledger
CTF (counter terrorist financing)
laws or regulations that aim to stop money flowing to freedom fighters or anti-establishment groups
Fintech employees should study how to detect signs of terrorist financing.
daps (decentralized applications)
programs designed to work without a central owner, server, or controller
One can split dapps into three major types: financial transactions, traditional commerce, and “other” including everything from games to governance systems.
DAO (distributed autonomous organization)
a contract that enables users to purchase shares and vote
Data loss is a risk with the use of the Ethereum network and any network in general.
double spend problem
a single financial transaction potentially happening in two places at once
The double spend problem is difficult to solve without a blockchain or trusted partner
a standard used to define a common list of rules that an Ethereum token has to implement.
Among the most successful ERC20 token sales are EOS, Sirin Labs, Bancor, Quash and BANKEX raising over $70 million each
the first entry in a cryptocurrency ledger
The genesis block of Bitcoin was on Jan 3rd, 2009.
a protocol change that breaks backwards compatibility, or makes previously valid blocks invalid
Ethereum Classic is a hard fork of Ethereum.
KYC (Know your customer)
verification activities that financial institutions must perform to ascertain relevant information from their clients
Most ICOs now have KYC and AML requirements in order to lower the risk of scandals.
buying with borrowed money... so you can win or lose more than you actually have
Margin trading is dangerous.
a double encrypted data structure or "binary hash" used in blockchain applications to verify transactions without completely downloading them
Merkle trees are used in distributed systems like Bitcoin for efficient data verification.
states that the value of a telecommunications network is proportional to the square of the number of connected users of the system
Metalf's law can be explained easily because one person with a mobile phone is useless, two a little better, and 1 billion incredible.
what you need to sign your digital signature
a consensus mechanism in a private blockchain which essentially gives one client the right to make all of the blocks in the blockchain
No mining is involved in proof-of-authority cryptocurrencies.
an algorithm where the amount owned of something is used to determine truth and consensus
Proof-of-stake currencies can be several thousand times more cost effective than Proof of Work, which relies on energy.
a system that ties computational achievement to truth and reward
A hashed block is considered proof of work.
an alternative proof of work system to SHA-256, designed to be particularly friendly to CPU and GPU miners, while offering little advantage to ASIC miners.
Scrypt is a main reason why Litecoin mining uses much less energy than Bitcoin mining.
SegWit (Segregated Witness)
a soft fork change in Bitcoin and similar currencies which increases the block size limit and allows for the implementation of second-layer solutions for further improvement.
SegWit is the first step in fixing the massive scaling problems in Bitcoin, which are only getting worse with time.
the cryptographic function used as the basis for Bitcoin’s proof of work system
SHA 256 is a pretty secure system and only breakable with quantum computers.
the ability for one crypto to easily transform into another coin, often for a fee
Exodus was the first desktop multi-asset wallet with ShapeShift built in.
a protocol change that keeps backwards compatibility with previously valid blocks
Soft forks have been used on the Bitcoin blockchain to implement new and upgraded functionalities that are 100% backwards compatible.
an intentional subversion caused by forging identities in peer-to-peer networks
Sybil attack is named after the subject of the case study of a woman diagnosed with an identity disorder.
is a service offered to mix potentially identifiable or 'tainted' cryptocurrency funds with others, so as to obscure the trail back to the fund's original source
The Dark Web dude said that Monero provides anonymity without requiring a tumbler due to its privacy centric design utilizing ring signatures.