Types of Forks in Crypto Explained.

Welcome to another edition of my short series “Crypto Jargon”.
In these series, I break down the complex terminology we use in reference to cryptocurrencies and blockchain technology.

In this article are featured the following acronyms for software changes and upgrades (known as software forks):

  • Soft Fork (SF)
  • Hard Fork (HF)
  • User-Activated Soft Fork (UASF)
  • User-activated Hard Fork (UAHF)
  • Miner-Activated Soft Fork (MASF)
  • Contentious & Non-Contentious Forks.

These are some of the types of forks most commonly referred to, so let’s explain the differences.

First, what is a fork?

In programming terms, a fork is a (permanent) modification, upgrade, divergence or simply any change in the original code of a software.

Forks generally happen in the crypto world when new “rules” are built into a blockchain’s code. Sometimes a fork is used to test a process, but with cryptocurrencies, it is mostly used to implement a fundamental change or to create a new asset with similar (but not equal) characteristics as the original.

There are two main types of programming fork: hard and soft.

FORKS

A Soft Fork is an upgrade in the software that is compatible with the original version. When the changes are implemented, they are backward compatible, meaning that even users who haven’t upgraded to the new software, are still able to run their nodes and mine blocks on that blockchain. In the case of Segwit for instance, which was a soft fork on the bitcoin blockchain, users and node operators could choose if they want to run the older version (legacy) or the new version (segwit) of the protocol. And still, to this day there are certain economical nodes, such as the Blockchain.com Wallet and KeepKey for instance, which are running the legacy version and you can tell by the wallet address – a Legacy Bitcoin address begins with the number 1 while a Segwit wallet address begins with the number 3.

A User Activated Soft Fork (UASF) is when a soft fork is activated on a specified date and is enforced by full nodes; a concept sometimes referred to as the economic majority. A UASF requires a lot of industry support and coordination. Originally Segwit was going to be implemented as a UASF and as a response to that Bitmain, a major mining firm, announced A contingency plan against it in the form of a User Activated Hard Fork UAHF which they did anyway and thus Bitcoin Cash was born.

A Hard Fork is an upgrade in the software that requires all users to switch to the new version of that software. It is not backward compatible, meaning that anyone who wants to mine blocks on that blockchain has to use the latest version of the code.

It can be a “Planned hard fork” – which is simply an upgrade to the protocol that had already been made clear in advance by the project developers and there’s no conflict in its implementation. Usually, a high-degree of consensus from the project developers and the community would have already been reached, before the hard fork occurred. Examples of a planned hard fork is Monero’s hard fork in January of 2017, which saw the addition of a new privacy feature known as Ring Confidential Transactions (RingCT) and the 2019 Ethereum change to a Proof Of Stake protocol which was announced years ahead of implementation.

In this regard it’s also known as a non-contentious hard fork which means everyone upgrades and moves on.

The opposite is a “Contentious hard fork“, which is not being accepted by everyone and some users decide to continue running the older version and this way the chain splits into two: one path which follows the new, upgraded blockchain; and one path which continues along with the old blockchain version. This is how Ethereum Classic was created and also Bitcoin Cash when it split from Bitcoin in 2017.

A hard fork can also be initiated if a 51% attack occurs, or due to a bug in the system so it doesn’t always create a new coin.

A User Activated Hard Fork (UAHF) is where developers add a mandatory rule set to change the node software. These changes make previously invalid blocks become valid after a flag day, which does not require a majority of hash power to be enforced.

The most significant example for applying UASF and UAHF is the forking of Ethereum.

In May 2006, Ethereum started The DAO project. But a month later the project was hacked and a sum of about $55,000,000 was stolen. This amounted to more than 10% of the circulating supply of Ether at the time. After the incident three solutions were suggested:

  1. To accept the theft and do nothing
  2. To roll back the Blockchain to the time before the theft which would be through a hard fork
  3. To accept all the transactions to the hacker’s wallets false and return the money back which would be done as a soft fork.

The Ethereum community chose to go with the second proposal, but some users weren’t happy with that. They assumed that “code is law” and is the main concept of cryptocurrency. These users accepted the theft and decided to stick to the original version without any rollback, so when the hard fork was executed, there were two chains. One that is known as Ethereum, ETH, and another, known as Ethereum Classic, ETC.

The signaling for consensus on a fork proposal can also be handed to the miners which are known as a Miner Activated Soft/Hard Fork (MASF).

There are also Accidental forks – a rare occasion when two or more blocks have the same block height, forking the blockchain. Typically occurs when two or more miners find blocks at nearly the same time. It can also happen as part of an attack.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

CYA, CYOA, DYOR, ELI5, IMO & YABC Explained.

Welcome to another post from “Crypto Jargon” – the series where we break down the complex crypto terminology. Today’s article features the following slang acronyms:

These are acronyms mostly used on chat forums and twitter and haven’t quite made it into the mainstream yet, so if you happen to spot them and not sure what they stand for, keep reading:

  • CYA
  • CYOA
  • DYOR
  • ELI5
  • IMO
  • YABC

Starting with CYA and CYOA are referring to pretty much the same thing Cover Your Ass or Cover Your Own Ass and can mean two things:

First, it is referred to as covering your digital footprint, your online activity in order to not be identified. But more often it is used simply as a warning about careless investments of those who are new to the crypto space. It means that one should do a lot of research before they make a buy position of a cryptocurrency and make sure they set a stop-loss to protect against possible reverse in the market.

In that respect, similar usage has the acronym DYOR which stands for: Do Your Own Research. Not to be confused with the luxury fashion house of Dior. The warning here is that you really must protect yourself against losses and scams by doing a lot of research and mainly, Your Own Research, rather than just following other people’s advice blindly, which can get you in trouble.

There are too many Shills, Trolls and Scam artists, who can easily misguide you and cause you great losses. So, most of the influencers and content creators would always tell you to Cover Your Ass by Doing Your Own Research. By the way, Shill and Troll are terms I cover in another article in these series so look in the description here for the link.

Another common expression on forums and chat rooms is ELI5, which stands for: Explain Like I’m a 5-year-old, basically calling for a simple, easy to follow explanation of something that is usually more complex. Just what I am doing here with these series.

IMO, in My Opinion, I am doing a good job, wouldn’t you agree? This is what IMO stands for.

And lastly, YABC means “Yet Another Bitcoin Company” or it can also be used as “Another Blockchain Company”. It’s a term indicating that there is really nothing special with this specific company and that it is just trying to jump on the Bitcoin/Blockchain trend for more gains. There are thousands of companies that want to be associated with Bitcoin just to appear as cool and in 2017 there were many instances where businesses added the word Bitcoin or Blockchain to their brand name and saw huge increases in revenue as a result.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet

DAPP, DAO, DAC, DAICO, DLT & DIF EXPLAINED.

Welcome to another edition of my short series “Crypto Jargon”. In these series, I break down the complex terminology we use in reference to cryptocurrencies and blockchain technology.

In today’s article: What is a

  • DAPP
  • DAO
  • DAC
  • DAICO
  • DLT
  • DIF

It seems we are stuck with the letter “D” today, so let’s get started.

First let’s look at the definition of DAPP, which stands for Decentralized Application – an application that is run by many users on a decentralized network on many computers instead of one, single unit and therefore is outside the purview and control of a single authority.

A standard web app, like Amazon or Twitter, runs on a computer system that is owned and operated by an organisation giving it full authority over the app and its workings. There may be multiple users on one side, but the back-end is controlled by one single organisation. In the context of cryptocurrencies, a dApp exists and runs on the blockchain network in a public, open-source, decentralised environment and is free from control and interference from any single authority. With trust-less protocols.

For example, a developer can create a Twitter-like dApp and run it on a blockchain where any user can tweet messages. Once posted, no one – including the app creators – can delete the tweets. Editing may be possible by the sender, but the original tweet would be retained forever. Many such applications use Ethereum smart contracts as their back-end code since Ethereum was built with the purpose of being a platform that specifically caters to the creation of dApps.

DApps can also serve as an acronym for Distributed Applications, which are software applications that are stored mostly on cloud computing platforms and that run on multiple systems simultaneously. The systems run on the same network and communicate with each other in an effort to complete a specific task or command.

The next acronym in this episode is DAO which in cryptocurrency terms stands for Decentralized Autonomous Organization. Also known as a DAC (the C stands for cooperative), so the DAO is a company or organization, that could carry out business according to rules that are encoded as smart contracts, needing no human management.

These rules are not susceptible to one person’s permission or control and cannot be changed by anyone person’s decision.

The best-known attempt at creating such an organisation was called “The DAO” and was hacked soon after it launched in June 2016 resulting in a loss of a third of its funds. The Ethereum developers just wanted to reverse the huge hack, it was accepted by consensus, but a small group wanted to retain it as it was before the hack, as they “believe it goes against their core values”. This led to Ethereum being hard-forked the following month and splitting to ETH (Ethereum) and ETC (Ethereum Classic). The DAO is often cited as one of Ethereum’s biggest stumbles to date.

Moving onto DAICO – an acronym for Decentralised Autonomous Initial Coin Offering.  A type of capital raising, originally proposed by Vitalik Buterin (founder of Ethereum). DAICOs have many features different from regular Initial Coin Offerings, but the most prominent feature is that the investors in a DAICO can take back their funds if the relevant project team does not fulfil certain conditions. In this respect, it acts similar to a STO which I explained on the previous episode of Crypto Jargon, you will find it popping up here right now or also in the description box of this video, so check it out.

Next is DLT – Distributed Ledger Technology. What is a Distributed Ledger then? In most simple terms this is publicly shared, replicable and synchronised data, spread across multiple networks, across many computers. It is a dynamic, independently maintained database, unlike a central ledger that is kept by a central agency, such as a bank and usually is not publicly accessible. So, DLT is the technology behind a Distributed Ledger.

And the last one for this article is DIF, an acronym for Decentralised Identity Foundation. This is a group of businesses and organisations working together to build a globally accepted identity verification system. The DIF uses blockchain technology to create a system that doesn’t require a centralised authority for purposes of identification.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet

 

ICO, IEO, STO, IPO and FREECO Explained.

Welcome to another informative article of Crypto Jargon. Today I will explain the terms behind the following acronyms:

  • ICO
  • IEO
  • STO
  • IPO
  • IMO
  • FREECO

So, let’s start with the most well-known I guess – ICO. It’s been explained in a hundred videos already and you might have seen my video from a couple of years ago, so I’ll keep it short and sweet.

ICO stands for Initial Coin Offering and it’s a form of crowdfunding a crypto-related project at a pre-launch stage.

ICOs are frequently used by developers of a new crypto currency to raise capital.

Since the first Initial Coin Offering in 2013 by Mastercoin, ICO have become a very popular method for investors to obtain tokens at low prices. At the same time, they have also been used by many scammers for illicit funding of dubious or non-existent projects, which put pressure on many government bodies to set regulatory framework for ICOs in 2017. China, India and America are currently amongst the few governments that require KYC registration for participants in ICOs.

While 2017 was the year of ICOs (thousands were launched back then), 2019 is the year of IEOs – this stands for Initial Exchange Offering and it’s a crowdfunding similar to an ICO but which relies on having an exchange or a number of exchanges that function as a counter-party. Developers mint the project’s tokens and send them to the exchange, which will then sell the tokens to individual contributors. It is more convenient in the way that the tokens are received directly into the users accounts in that exchange and they can start trading them without the nuisance of having to remember which wallet they used when they placed their orders for the Initial Coin Offering and then having to claim them and move them into the exchange once they are listed, a process that could in some cases take months and be quite a challenge for those who are not very tech-savvy.

STO stands for Security Token Offering and it’s a step further into providing more security for the investors. Similar to an Initial Coin Offering (ICO), an investor is issued with tokens representing their investment but unlike an ICO, a Security Token Offering represents an investment contract with agreed minimum returns or a return of the invested amount upon failure to meet this agreed minimum.

IPO is the original term that this stem from – it stands for Initial Public Offering and the event in which a company “goes public” selling early shares of their business in exchange for funds. This term gave birth to the crypto-specific term ICO but the two have major differences. IPO is about selling shares with a price are determined by the profitability of the company and its expectancy for future performance while ICO is about selling tokens that do not represent equity, not shares from the company, their price is based purely on hope and speculation about potential future performance of that project.

Now, about IMO – this is not a term related to cryptocurrencies or investments in any way, but I thought it belongs to this list purely because of the spelling similarities.

It stands for In My Opinion and it’s widely used on social media and could be confused with an IPO, so I thought I’d insert it here just to be on the safe side.

Lastly, there’s a term that isn’t used very much, FreeCO – Unlike a traditional ICO where investors are required to send money before the project launches, in a FreeCo, you just have to register with the project, and you get some free coins. You only get to invest later when the project is up and running. You won’t really find many of these but it’s worth mentioning it, I guess.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet

BIP, BPI, EIP and ERC20 Explained

Welcome to Crypto Jargon, the series where I break down the complex terms used in reference to cryptocurrencies and blockchain tech.

In this article of Crypto Jargon, we take a closer look at the terms:

  • BIP
  • BPI
  • EIP
  • ERC20

Starting with BIP which stands for Bitcoin Improvement Proposal. A document outlining technical specifications on how to improve the Bitcoin protocol. Since Bitcoin is governed by a mutual consensus, the author of the document presents it to the Bitcoin community as a proposal. The person behind the BIP is also responsible for collecting and documenting both positive and negative input from the community and if there is a majority consensus on a BIP, the change gets approved and can be implemented in the protocol.

This is how the Segwit upgrade was implemented years after it was first proposed. It took quite some time for it to win over the majority of the miners who had to signal their agreement for it. Segwit, by the way, is explained in another article. You will find it linked below, so check it out.

BPI is something very different from BIP so do not confuse the two. It stands for the Bitcoin Price Index and represents the summed average of Bitcoin prices based on collected data from a wide range of exchanges across the globe. It applies aggregated statistics to reach a more balanced and realistic picture of the currency’s market value at present. It was created by the US-based exchange ‘Coinbase’ in 2013.

Next is EIP, which is pretty much the same as BIP but for the Ethereum Platform. It stands for Ethereum Improvement Proposal and it sets out the technical standards (protocol specifications, contract standards, client APIs and more) for the Ethereum blockchain. Speaking about Ethereum, let’s also take a look here the most popular Ethereum token standard ‘ERC20’. This is a technical standard for tokens built on the Ethereum blockchain platform via smart contracts.

ERC stands for Ethereum Request for Comment and 20 is the number that is assigned to that request. Most of the tokens built on the Ethereum blockchain are in fact ERC20 tokens but there are many other standards like ERC-777, ERC-1410, ERC-820, ERC-1644 and much more, all with different functionality and limitations to what use they serve.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet

POA, POB, POC, POD, POE, POI, POP, POS, POW, POST dPoW and dPoS explained.

Welcome to another article from these series called “Crypto Jargon”. This article is about the following types of digital proofs in relation to blockchain technology and cryptocurrencies.

  • POA
  • POB
  • POC
  • POD
  • POE
  • POI
  • POP
  • POS
  • POW
  • POST
  • dPOW
  • dPOS

I will begin with the most commonly used ones, so I will not follow alphabetical order.

So, the first one here should be POW which stands for Proof-of-Work and it’s related to mining. If you need more clarity about what the Mining process is and how it works, check out the previous episode where I explain it in more detail.

Proof-of-Work is a consensus algorithm, pioneered by Satoshi Nakamoto (the creator of Bitcoin), that ties mining capability to computational power. Blocks must be hashed, which in itself is not a difficult computational process, but an additional variable is added to the hashing process to make it harder. When a block is successfully hashed, the hashing must have taken some time and computational effort. Thus, a hashed block is considered to be the Proof of work.

The rewards for this type of mining are straightforward: miners receive coins and transaction fee rewards in direct correlation to the actual mining work they complete. This type of mining is very high energy-consuming too and it’s often criticized as one of the main downsides to Bitcoin’s production. On the other hand, the PoW consensus algorithm is the most reliable and secure in existence today. However, it is not really scalable. Bitcoin, as well as other PoW-based blockchains, have limited performance in terms of transactions per second (TPS). Such limitation is related to the fact that Bitcoin relies on a distributed network of nodes, which need to reach consensus and agree on the current states of the blockchain. That is time-consuming and new alternatives are being invented to address this issue.

One of them is called Proof of Stake (POS). This is a consensus distribution algorithm that rewards earnings based on the number of coins that a user owns. Holding any number of units of that cryptocurrency for a (fixed) period of time is called “staking” and is used to calculate the amount of that currency that you mine. Proof-Of-Stake is incentivizing users to hold on to their coins which in return reduces the available volume on the market and ultimately aims at preventing deflationary effect on that currency. The dividends paid out to the stakeholders are proportionate to the amounts they stake, meaning that the more they stake, the larger their earnings will be over time.

POS was first implemented by Peercoin as an “environmentally-friendly” approach to mining and in 2019 the second-largest cryptocurrency by Mcap – Ethereum – switched from POW to a POS algorithm. In regards to the amount of transactions per second, Proof of Stake blockchains usually present a better performance than Bitcoin. However, the difference is not that significant and PoS networks did not really manage to solve the scalability problem.

Another alternative is Proof-of-Stake-and-Trust (PoST). A consensus mechanism used by Waltonchain – a project which focuses on cross-chain technologies. Their hybrid consensus mechanism rewards token holders and nodes with dividends, but it also adds a node reputation mechanism to further reward higher quality performance and more honest nodes.

There’s also dPOS, which stands for Delegated Proof-of-Stake. It’s also a type of mechanism used to achieve consensus and was developed by Daniel Larimer – American software developer and founder of BitShares, Steemit, and EOS. Delegated Proof Of Stake is designed as an implementation of technology-based democracy, using voting and election. The users vote for “delegates” who produce blocks on the relevant blockchain. The first implementation of dPoS was executed on BitShares. DPoS is also considered to be more secure than the regular Proof-of-Stake consensus, which is not very well protected from the malicious intentions of stakeholders.

Another hybrid approach is the Delayed Proof of Work (dPoW). A consensus mechanism used by the cryptocurrency Komodo. Delayed Proof of Work (dPoW) allows one blockchain to take advantage of the security and hashing power of another blockchain (which is Bitcoin, in Komodo’s case).

Next on my list is Proof-of-Authority (PoA). A method used to achieve consensus on the blockchain similar to Proof-Of-Stake. When the blockchain achieves consensus through Proof-of-Authority, it uses identity as a stake. The PoA consensus algorithm leverages the value of identities, which means that block validators are not staking coins but their own reputation instead. Therefore, PoA blockchains are secured by the validating nodes that are considered trustworthy entities.

Moving onto Proof-of-Capacity (POC), also known as Proof-of-Space (PoSpace). A means of showing that one has a legitimate interest in service by allocating a non-trivial amount of memory or disk space to solve a challenge presented by the service provider. Proofs of space are very similar to proofs of work, except that instead of computation, disk space (storage) is being used.

Proof-of-Burn (PoB). There is more than one version of PoB. Firstly, it is a method used to achieve consensus on the blockchain. Proof of Burn looks like a Proof of Work algorithm but with reduced rates of energy consumption. The block validation process of PoB-based networks does not require the use of powerful computational resources and does not depend on powerful mining hardware. In Proof-of-burn users must show proof that they burnt a certain amount of coins in order to demonstrate their commitment to the network, gaining the right to “mine” and validate transactions. Since the process of burning coins represents virtual mining power the more coins a user burns in favor of the system, the more mining power he/she has and thus, the higher the chances to be chosen as the next block validator. Because proof of burn transactions is recorded on the blockchain, there’s enough necessary proof that the coins can no longer be used and the user can be rewarded as a result.

Another use of the term Proof-Of-Burn is in relation to Token burns which is a method used by some developers in order to create scarcity – to reduce the total supply of their tokens, which in return should increase the value of these tokens. I talk more about this in the next Crypto Jargon Episode, so make sure you check it out.

Moving on to Proof-of-Developer (PoD). This is literally as it sounds: proof that a specific developer exists. Why is this needed you might ask? Well, it makes it less likely that an anonymous developer will go underground after having fraudulently raised capital (which has happened in the past on a number of occasions). Developers are the brains behind any cryptocurrency and their involvement and consistency are of utmost importance for the stability and long-term existence of that cryptocurrency. This type of proof takes inspiration from the pre-digital era when people had to pose with the most recent newspaper issue in order to provide “Proof Of Life” but now this is done with the help of blockchain technology. The most famous use case to date is that of Vitalik Buterin, founder of Ethereum posting this tweet in 2017 after a fake article claimed he had passed away. So yeah, Proof-Of-Developer is a thing. Really.

Next is Proof-of-Existence (POE), which sounds similar, but it refers to pretty much anything, including intellectual property, documents, pictures, and other digitally stored data. It’s a service provided through the blockchain that allows people to prove that something existed at a certain point in time and demonstrate their ownership of it.

Proof-of-Importance (POI). A consensus algorithm, similar to PoS that was introduced by NEM, another very popular cryptocurrency. A proof of importance algorithm prioritizes miners based on the number of transactions in the corresponding cryptocurrency that they perform. The more transactions are made to and from an entity’s cryptocurrency wallet, the higher that entity’s chances of being given mining projects are.

Proof-of-Provenance (POP). A consensus mechanism used by DigixDAO (DGX) cryptocurrency project, to track the movements of physical assets, identify their ownership, and ensure their security through the change of hands, from the bullion supplier to the custodial vault in a transparent and cryptographically secure manner.

These are all the proofs and consensus mechanisms that I managed to squeeze into this episode. You’ll probably find some more and with time, surely there will be new ones popping up but currently, these are the ones worth mentioning.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet

 

FUD FOMO JOMO SHILL & TROLL EXPLAINED

Welcome to another post from my short series “Crypto Jargon”.
In these series, I break down the complex terminology we use in reference to cryptocurrencies and blockchain technology.

In this article of Crypto Jargon, we break down the terms:

  • FUD
  • FOMO
  • JOMO
  • SHILL
  • TROLL

You’ve probably seen FOMO and FUD a lot lately as these acronyms made it into the mainstream and are used a lot not only on social media but also in the mainstream publications. They are not restricted to the crypto industry, but they do apply to it big time.

FUD stands for FEAR, UNCERTAINTY, and DOUBT: a term directed to any negative news or information that appears to confuse, scare you or put you off from a certain product, service or anything really. In the crypto space it is used in regard to any news that are “warning” about the dangers of crypto or new regulations coming (like the China ban on ICOs or India’s ban on Bitcoin per se) also when people predict yet another crash of the market… Pretty much anything that is negative or that can have a negative effect on the prices of crypto is considered FUD.

The opposite of FUD is the FOMO effect. It stands for “Fear Of Missing Out” and it describes that moment of sudden exhilaration you feel when you just found out about something and want waste no second in the fear that you might otherwise miss on potential gains. FOMO goes hand-in-hand with hype and it happens a lot during Bull markets, when coins experience huge gains and the mainstream media coverage brings in attention from the general public, attracting even more buyers just like in late 2017 when so many people rushed to buy Bitcoin at the inflated price levels of $15k, $17k and even higher just because it was on the news pretty much on a daily basis. Typically, this is just a hype that later subsides and it’s best to avoid buying anything while in FOMO mode but to take a step back and be more rational.

FOMO is also a strategy used by experienced marketers to “Shill” coins or ICOs that they are invested in or are being paid to promote. “Shill” can also serve as a verb referring to the act of promoting under the pretense of being sincere, while in reality, you have been paid to do so and it’s a term thrown at pretty much anyone who speaks well of a certain coin on social media, chat forums or on Youtube. The most infamous Shill out there must be John McAffee who has been known to promote many a coin to his 800k followers on Twitter and most recently another very public figure – Elon Musk was also seen shilling – he made a post about Dogecoin, which drove its price up by 30% in a matter of hours. This was short-lived as there are less and less nooks in the crypto space these days.

Along with the Shills, there are also the Trolls who spread all kinds of misinformation online and engage in fake “price predictions” about coins in order to create hype or engagement, purely because of their vested interest. Some exchanges even call their chatrooms “Trollbox” in reference to those users.

JOMO is the last acronym for this article, as I want to end on a positive note. It stands for “Joy Of Missing Out” and it’s what the more experienced traders and investors say when they see people caught up in the hype and manipulation of the markets.

As you probably know I also post these definitions on my YouTube channel, here’s my episode with today’s terms:

If you liked this article, you will most certainly love my eBook “Crypto Jargon A-Z” – this is the most up-to-date publication of its kind. With over 700 terms, acronyms and trading slang, it contains everything related to cryptocurrencies and blockchain tech – all the complex terminology we use in media articles, blogs, forum chats, social media posts and of course video content too so go check it out on Amazon at one of the following links:

r_5z9VFhAGXB4lkIi

US https://www.amazon.com/dp/B07Y9DT3H6
UK https://www.amazon.co.uk/dp/B07Y9DT3H6
Germany https://www.amazon.de/dp/B07Y9DT3H6
France https://www.amazon.fr/dp/B07Y9DT3H6
Spain https://www.amazon.es/dp/B07Y9DT3H6
Italy https://www.amazon.it/dp/B07Y9DT3H6
Netherlands https://www.amazon.nl/dp/B07Y9DT3H6
Japan https://www.amazon.co.jp/dp/B07Y9DT3H6
Brazil https://www.amazon.com.br/dp/B07Y9DT3H6
Canada https://www.amazon.ca/dp/B07Y9DT3H6
Mexico https://www.amazon.com.mx/dp/B07Y9DT3H6
Australia https://www.amazon.com.au/dp/B07Y9DT3H6
Asia-Pacific https://www.amazon.in/dp/B07Y9DT3H6

=== ===

🏆Exchanges I use for trading crypto:

Binance
Kucoin 
Bittrex
Bitfinex
HitBtc 

=== ===

Where I buy crypto:

BitPanda (Europe)
Cex (Global)
Coinmama (Global)
Changelly (good for instant coins swaps)(Global)
Payeer (Europe, Asia, alternative to paypal)
Bitfinex 
Coinbase (USA, EU, Africa) Get $10 worth of Bitcoin on your first $100 crypto purchase with this link: http://bit.do/coinbase_join

=== ===

Where I store my crypto:

  • Ledger Nano – the best hardware wallet (offline storage)
  • Trezor – also one of the best wallets out there.
  • Exodus – desktop wallet
  • Coinomi – mobile phone wallet with instant coin swap feature
  • Crypto.com – mobile wallet and exchange

Ledger Nano X - The secure hardware wallet