As cryptocurrency and blockchain evolves, the crypto glossary includes new terms
Crypto enthusiasts often engage in conversations over how blockchain technology and cryptocurrencies are going to be the next internet blaze. Thirty years ago, the concept of World Wide Web changed the tailwind of our life. Similarly, blockchain and cryptocurrencies are seen as a trailblazing source of the 21st century. People first, fell in love with cryptocurrencies when bitcoin emerged as a popular source of investment. Subsequently, Bitcoin became a house name in the digital currency sphere. Following the upsurge of bitcoin usage, many providers’ unraveled cryptocurrencies that supported similar motives. Today, digital currency is a part of our life. Crypto enthusiasts are also shaping their brain with unfolding cryptocurrency vocabulary to get the gist of it. Remarkably, as blockchain technology evolves, the crypto glossary extends to include new terms. Therefore, Analytics Insight has listed the top 10 crypto glossary terms that everybody should be familiar with.
1inch Liquidity Protocol
1inch Liquidity Protocol is a platform designed to increase liquidity on the protocol to make use of virtual balances to decrease impermanent loss. It is an automated market maker (AMM) that benefits users on a high scale. Customers can provide tokens as liquidity on the 1inch platform through a process called ‘liquidity mining.’ Then traders provide assets like ETH to a specific pool and earn 1INCH, the native token leveraged by 1inch platform. The same pattern of earning digital currency was also followed in other famous crypto trading sites line Uniswap.
3D Model Rendering
3D Model Rendering is the process of making an animation or virtual image by using varying digital texture, colour, and lighting software. While creating a 3D model, the modelling process uses data points to represent objects in a three-dimensional format. Besides, the 3D model can also be converted to 2D images through a heavy computational process.
51% attack represents a hypothetical scenario when a single group takes control of more than 50% of a blockchain network’s nodes. When this happens, the decentralized model and the consensus of the blockchain network get collapsed, leaving the platform open to manipulation. Attackers will be able to freely interfere in the transactions like stop, reverse, or duplicate new transactions when they take over 50% of control. As the network grows in size and the distribution and value increases, it is less likely to face such a 51% attack.
Airdrop is a token distribution method that is used by cryptocurrency platforms. They send cryptocurrencies or tokens to customers wallet address for free or in exchange for simple work like publicizing the cryptocurrency through simple tasks like resharing, providing referrals, or downloading the app. It is mostly used as a marketing tool to attract investors to new cryptocurrencies.
Any digital currency that was born out of bitcoin is called an altcoin. For example, Litecoin is a famous altcoin that is performing well in the market. The altcoins mostly have a working system that is very similar to bitcoin. However, they carry minor changes from bitcoin’s blueprint. Except for the idea of the internal working system, nothing is similar between altcoins and bitcoin.
API (Application Programming Interface)
An API (Application Programming Interface) is a set of functions that allows applications to access data and interact with external software components, operating systems, or microservices. An API delivers a user response to a system and sends the system’s response back to a user. It allows, two separate applications to communicate with one another, allowing easy access and frequency.
Bitcoin is synonymous with the cryptocurrency market. The face of the digital currency sphere was first unleashed in 2009 after its founder Satoshi Nakomoto presented his research on Bitcoin Whitepaper. After companies found it interesting and workable, they started building bitcoin on a Proof-of-Work blockchain platform. Since then, bitcoin has seen major ups and downs in the market. Earlier this year, bitcoin was riding the wind to the peak. But after Elon Musk, the CEO of Tesla and the Chinese government abandoned bitcoin, the digital currency price is consequently reducing.
Cold Wallet/Cold Storage
Cryptocurrencies are already known for their decentralized mode of functioning. Blockchain has made it even secure by encrypting all the info in diverse blocks, making it hard for anybody to crack into it. However, emerging from the routine, cold wallet or cold storage stands as an even secure source. The cold wallet is an offline wallet that is not connected to the internet. Therefore, they protect your cryptocurrency from falling victim to online hacks.
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) is a revolutionary model that releases the financial system that was stuck in the centralized and closed financial systems for a long time. DeFi refers to the economic paradigm shift enabled by decentralized technologies, particularly blockchain network. DeFi leverages a universally accessible economy that is based on open protocols that are interoperable, programmable, and composable.
The proof-of-work concept has its footprint in history. Back in the 1800s, when gold mining was a major job in California, the owners used to pay the mining workers based on the amount of gold they have secured. Moving on to the digital world, the routine follows in blockchain technology. Today, blockchain users are solving puzzles to gain money from that. They solve a math problem or many of them that take at least a certain amount of time. Based on the number of problems they solve and the complexity they carry, the users will be genuinely rewarded.
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