At the start of my journey into the cryptosphere I always thought the terms banded about techy types were bewildering. The number of times Angus would passionately tell me about some amazing crypto asset or venture. I kept having to stop his flow and ask him about the terms he was dropping. Not everyone has a crypto-guru like Angus to question. And if we put all the explainers into our podcasts...well they would test the attention spans of people who don't own a smart phone.
So here are the terms that have come up throughout the course of our podcasts
This what we normally call cash. Y'know Pounds, Dollars, Rubles anything that you'd use to conventionally pay for things. It derives it's value from government regulations or law. It also includes that money you have in the bank, which kinda perversely you only see as a digital currency. The term Fiat has only really come into regular usage since the advent of crypto assets. Now it's not enough to simply say currency, it needs to be expressed. A whole new world!
The art of disguising information. I like that this is considered an art. One that helps keep our information secure. I guess the first time I heard of cryptography is when WhatsApp told me my messages were encrypted. Then when I saw in the news that governments wanted WhatsApp to let them read message of criminals. They couldn't because they were encrypted and only the receiver can decipher the message. Whoa! WhatsApp can't read messages on their own system, that's some secure communication right there.
Think of this as the BIG ledger in the sky. A digitized decentralised ledger where all transactions are recorded for the public. Think of it like Santa's list but rather than recording whether you've been naughty or nice, this records whether you're rich or poor! And replace Santa with everyone on God's green earth. So once a transaction is made, maybe bitcoin or most other crypto assets it is recorded for ever. This is the tech which takes the banks and other 3rd party payment companies out of the loop. And hence increases trust because we can all validate the transactions ourselves and see that they are linked to particular assets. Man Santa can probably lay off an army of elves now blockchain is here.
IOT (Internet of Things)
This is a term which encapsulates the interconnected nature of physical things such as vehicles and home appliances, which contain electronics, software, sensors, actuators and connectivity which enable things to connect and exchange data. The are things like your fridge knowing that your running low on milk. Monitoring that a wind farm is working as it should. Managing energy consumption in real time. Y'know loads of schizzle. You get the picture?
ICO (Initial Coin or Currency Offering)
This is a form of crowdfunding using crypto-assets. It is a source of capital for blockchain based companies. During an ICO amounts of their tokens (crypto-asset) are exchanged for fiat currency or other crypto assets. The tokens are promoted as future units of valuable crypto-asset if or when the ICO reaches its funding target and the project is launched. Some famous ICOs are the Brave browser (think Angus mentions it in episode #5) which raised $35 million in 30 seconds. Then there was Tezos which started off as one of the most successful ICOs and collapsed when investors launched an investigation into it.
It's a crazy exciting world from what I can see, but you gotta do your research on these before parting with your readies
OTC (Over the Counter)
I find this a contradiction. Over the Counter to me implies that everyone can see it happening. However, it is the opposite! In Crypto these are usually mahoosive transactions that are carried out without using a digital exchange. This is done because if a huuge transaction was made on a exchange, it would instantly affect the price of the asset being traded. So it makes sense really, if someone told me I could buy a mansion if we trade OTC and a tiny terrace house if we trade on an exchange, I know what I'd choose.
A cryptographic hash function allows one to easily verify that some input data maps to a given hash value, but if the input data is unknown, it is deliberately difficult to reconstruct it (or any equivalent alternatives) by knowing the stored hash value.
I'm not sure I can dumb this down. It's like a data converter. A mass of data goes in one end and the data that comes out the other side is called hash. Much more clinical than the hash I was aware of before I got involved in crypto.
ETF (Exchange Traded Fund)
Is a marketable security which tracks a pool of investments. So if a particular stock is volatile, as many crypto assets are right now, it smooths out that volatility by spreading the investment across a range of assets. The reason crypto ETFs are struggling to get authorisation is that all cryptos are considered risky and hence no perceived negation of risk.
For me this is like buying stocks in a fund that manages stocks. As long as they know what they are doing and you agree with the amount of risk involved. Then have at it!
PROOF OF STAKE (PoS)
This concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more Bitcoin or altcoin owned by a miner, the more mining power he or she has. The first cryptocurrency to adopt the PoS method was Peercoin.
So as Angus said in Episode #11 it is unlike Bitcoin which is a Proof of Work (PoW) which means you are rewarded for working out algorithms which from what I can tell, gets harder and harder the more of the 21 million Bitcoins are mined. As an average Joe, I don't think it's essential that I know this. But it's good to know a little of what is going on within the blockchain.
Radio Frequency Identification (RFID)
This was mentioned in Coin or Con episode and I realised we didn't really explain what it is at all. Sorry about that! Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically-stored information. Passive tags collect energy from a nearby RFID reader's interrogating radio waves. In the context of the app we were talking about it would be used to pay for things within an app during a festival.
Practical Byzantine Fault Tolerance Matrix (pBFT)
This is an algorithm based on a Byzantine command order which was able to tolerate bad or false commands. So in this case it is the ability of a distributed computer network (blockchain) is able to reach a sufficient consensus despite malicious nodes that fail to transmit correct information to other peers.
The fault tolerance of this is system is 1/3. Meaning that if over a third of the nodes are malicious the system will breakdown.
I'm not sure the analogy still stretches to a Byzantine commander. If 1/4 of his army are traitors, he ain't gonna win no battles noway. But I get the gist.