Frequently asked Questions - Page 2

FUD (fear, uncertainty and doubt) is a market manipulation strategy of spreading disinformation in order to lower prices. However, real FUD also exsists. For example, news about a possible ban of cryptocurrency is some country may lower its price. 

Token is Blockchain-integrated digital version of some asset.

ATH (all-time-high) is the highest price ever of a cryptocurrency. Buying at an ATH is inadvisable, since ATHs are usually followed by price corrections. 

 

Node is a 'knot' of a network. Cryptocurrency network must be fully secure in order to be fully functionable. Using several randomly selected nodes the network may solve the double-spending problem which occurs when a user, by accident or on purpose, tries to transfer a single token twice. 

Fork  has several meanings:

  • Accidental fork occurs if updates of a network are not compatible. People using different versions of the software create two different registers: one from the old version and one from the newer version. In this case, developers must quickly eliminate errors that cause incompatibility and decide how to combine two different blockchains.
  • Hard fork is created when developers decide that it is necessary to make changes to the program part of the cryptocurrency, which will create incompatibility between the older and the newer version. When changes are made, all users of this network should be ready to update all applications in order to continue to use their coins correctly. 
  • Often as a result of a combination of two aforementioned cases, a new, based on the old one, cryptocurrency might be created. This new cryptocurrency may also be called fork. For example, a Bitcoin fork Namecoin (NMC) is the first fork in history.

Mining is one of the basic elements in cryptocurrency structure. As a result of mining a transaction block is added to blockchain and coins get issued while a miner (the one who performs mining) gains cryptocurrency as a reward.

Hashrate is processing capacity of hardware for cryptocurrency mining. It is measured in hash per second.

Sharding is scalability solution for blockchain. Generally, every node of blockchain contains full copy of the whole blockchain. Sharding is a method allowing the nodes to have partial replicas of blockchain to increase total capacity of the net and consensus speed.

Short (short position, short selling) is a sale of an asset that a trader does not own at the time of a deal. The main idea of a short selling is that a trader hopes to subsequently repurchase sellings at lower price and make profit. 

Whale is an owner or a group of owners of a huge amount of cryptocurrency. They can manipulate the market using their large share.

Blockchain is a distributed ledger consisting of a chain of financial transactions in which each subsequent unit is connected with previous ones via cryptography methods.

Essentialy, blockchain is a database (log) of all transactions and a constantly growing list of log records called blocks that are linked together and protected by cryptography. Each block usually contains a hash pointer, as a link to the previous block, a timestamp, and transaction data. This makes blockchains protected from any data alterations. In order to be used as a distributed register, blockchain is usually managed by a p2p network that collectively stick to validation protocols. 

Block is a file Blockchain data are written into.  Block records the last cryptocurrency transactions. So block is like a page in a book. Everytime a block is finished it gives way to the next block in a chain. That is to say block is a permanent record storage which cannot be modified or deleted after its creation.

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