As cryptocurrency and blockchain evolve, the crypto glossary includes new terms
Crypto enthusiasts often engage in conversations about how blockchain technology and cryptocurrencies are going to be the next fire on the internet. Thirty years ago, the concept of the World Wide Web changed the tailwind of our lives. Likewise, blockchain and cryptocurrencies are considered a pioneering source of the 21st century. People first fell in love with cryptocurrencies when bitcoin became a popular source of investment. Subsequently, Bitcoin became a household name in the field of digital currency. Following the upsurge in the use of bitcoin, many vendors unraveled cryptocurrencies that supported similar motives. Today, digital currency is part of our life. Crypto enthusiasts also shape their brains with cryptocurrency vocabulary to understand the gist of it. Remarkably, as blockchain technology evolves, the crypto glossary expands to include new terms. Therefore, Analytics Insight has listed the top 10 crypto glossary terms that everyone should know.
1 inch liquidity protocol
1inch Liquidity Protocol is a platform designed to increase protocol liquidity to use virtual balances to reduce temporary losses. It is an Automated Market Maker (AMM) that benefits large-scale users. Clients can provide tokens as liquidity on the 1 inch platform through a process called “cash extraction”. Then traders provide assets like ETH to a specific pool and earn 1INCH, the native token operated by the 1inch platform. The same digital currency earning pattern has also been followed in other famous crypto trading sites, the Uniswap line.
3d model rendering
3D model rendering is the process of creating an animation or virtual image using different digital texture, color and lighting software. When creating a 3D model, the modeling process uses data points to represent objects in a three-dimensional format. In addition, the 3D model can also be converted to 2D images through a computationally intensive process.
A 51% attack represents a hypothetical scenario when a single group takes control of more than 50% of the nodes in a blockchain network. When this happens, the decentralized model and consensus of the blockchain network crumbles, leaving the platform open to manipulation. Attackers will be able to freely interfere with transactions, such as stopping, reversing or duplicating new transactions when they take more than 50% of control. As the network size grows and distribution and value increase, it is 51% less likely to face such an attack.
Airdrop is a token distribution method used by cryptocurrency platforms. They send cryptocurrencies or tokens to clients’ wallet address for free or in exchange for a simple job like advertising the cryptocurrency through simple tasks like sharing, providing referrals, or downloading the application. It is mainly used as a marketing tool to attract investors to new cryptocurrencies.
Any digital currency born out of bitcoin is called altcoin. For example, Litecoin is a famous altcoin that performs well in the market. Altcoins for the most part have a very similar working system to bitcoin. However, they do come with minor changes from Bitcoin’s plan. With the exception of the idea of the internal working system, nothing is similar between altcoins and bitcoins.
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 provides a user response to a system and returns the system’s response to a user. It allows two separate applications to communicate with each other, allowing easy access and frequency.
Bitcoin stands for the cryptocurrency market. The face of the digital currency sphere was first revealed in 2009 after its founder Satoshi Nakomoto presented his research on the Bitcoin white paper. After companies found it interesting and feasible, they started creating bitcoin on a Proof-of-Work blockchain platform. Since then, bitcoin has seen some major ups and downs in the market. Earlier this year, bitcoin pushed the wind to the top. But after Elon Musk, the CEO of Tesla, and the Chinese government ditch bitcoin, the price of digital currency declines accordingly.
Cold wallet / cold storage
Cryptocurrencies are already known for their decentralized mode of operation. Blockchain made it even secure by encrypting all information in various blocks, making it difficult for anyone to break into it. However, emerging from the routine, cold wallet or cold storage presents itself as an even safer source. The cold wallet is an offline wallet that is not connected to the Internet. Hence, they protect your cryptocurrency from the victims of online hacks.
Decentralized finance (DeFi)
Decentralized Finance (DeFi) is a revolutionary model that liberates the financial system that was stuck in centralized and closed financial systems for a long time. DeFi refers to the economic paradigm shift enabled by decentralized technologies, in particular the blockchain network. DeFi leverages a universally accessible economy based on open, interoperable, programmable and composable protocols.
Proof of work
The concept of proof of work has its imprint on history. In the 1800s, when gold mining was a big job in California, owners paid mining workers based on how much gold they got. Moving on to the digital world, routine follows in blockchain technology. Today, blockchain users solve puzzles to make money out of them. They solve a math problem or a lot of them that take at least a while. Depending on the number of problems they solve and the complexity they involve, users will be truly rewarded.
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