Q What is Cryptocurrency?
Cryptocurrency is best defined as a digital asset used as a
medium of exchange that is circulated on the internet. As the name implies, is
leverages advanced computer cryptography and the digital record of transactions
that are facilitated by blockchain. Bitcoin was the first cryptocurrency to
achieve mainstream success and has paved the way for the proliferation of many
other cryptocurrencies.
Q What is Cold Storage?
Cold storage refers to the offline storage of a cryptocurrency wallet that is disconnected from the internet. As such, cold storage is ideal for preventing access to hackers and considered to be the most secure way to hold crypto assets.
Q What is a Central Bank Digital Currency (CBDC)?
A central bank digital currency (CBDC) is the fiat currency of any given country that has been converted to digital. It continues to be both a centralized currency and regulated by a country's monetary authority.
Q What is an Altcoin?
Essentially, an altcoin is short for "alternative coin",
which is any cryptocurrency that was launched after Bitcoin. Examples of
altcoins would include: ETH, XRP, DOGE and LTC.
Q What is Bitcoin?
Bitcoin is the original blockchain network that featured a
native digital cryptocurrency (BTC) and has continued to have a dominant
presence within the broader crypto ecosystem. Bitcoin's emergence in 2009 was
powered by the pioneering Proof of Work of technology that created the
necessary roadmap for reaching consensus on a decentralized network.
Q What is Blockchain?
A blockchain is a digital public ledger of transactions that
is maintained and verified by a decentralized, peer-to-peer network of
computers that adhere to a consensus mechanism to confirm data. Every computer within
a blockchain network maintains its own copy of the shared record, thus making
it nearly impossible for any single computer to change any previous
transactions or sabotage the network. Truly decentralized blockchains do not
rely on centralized authorities like banks to transact globally in a secure and
verifiable fashion.
Q What is a Cryptocurrency Exchange?
A cryptocurrency exchange is a digital currency exchange where digital assets can be bought, sold, and traded for either other digital assets or fiat currency. As with much of the industry, cryptocurrency exchanges have evolved significantly from the earliest iterations and now provide more security, accessibility and ensure legal compliance in accordance with the jurisdictions in which they operate. As the industry continues to grow, the emergence of more exchanges provides greater competition for trading fees, exchange rates, and user-friendly features as they vie for more customers. Rubicon Crypto leverages Gemini for their custodial and exchange services.
Q What is a Cryptocurrency Wallet?
The most basic function of cryptocurrency wallets is to
store a user's private and public keys and interact with various blockchains
enabling users to send and receive digital currency and monitor their cryptocurrency
balances. Wallets can be digital in the form of software or physical in the
form of hardware such as a USB memory stick. Other important distinctions of
cryptocurrency wallets include: hot wallets (that are connected to the internet),
cold wallets (no connection to the web), and, custodial or non-custodial
(private).
Q What is a Crypto Token?
A crypto token is a blockchain-based unit of value that
organizations can develop and customize for use within existing blockchain
ecosystems. These digital tokens can be programmable and transferable while
also serving many functions on the platforms for which they are built. Some popular uses for crypto tokens include
serving as collateral in decentralized financial (DeFi) applications, voting on
DeFi protocols, and within the fast-growing world of blockchain gaming.
Q What is a Custodian?
A custodian is responsible for securely storing assets for
another institution or individual which may include traditional assets like
stocks and bonds, as well as, cryptocurrencies.
Custodians may hold assets in both electronic and physical form, and because
they are responsible for safeguarding assets for many customers, custodial
firms tend to be extremely large and reputable institutions. With
cryptocurrency and blockchain custody solutions, custodianship may also include
the management and safekeeping of a customer's private keys. Cryptocurrency
exchanges often custody their customers' private keys and cryptocurrency
holdings. Rubicon Crypto leverages Gemini for their custodial and exchange
services.
Q What is a Decentralized Application or dApp?
A decentralized application — or dApp — makes use of
blockchain technology to address use cases ranging from investment to lending
to gaming and governance. Although dApps may appear similar to web applications
in terms of user experience (UX), dApp back-end processes eschew centralized
servers to transact in a distributed and peer-to-peer fashion. Rather than
using the central HTTP protocol to communicate, dApps rely on wallet software
to interact with automated smart contracts on networks like the Ethereum
blockchain.
Q What is a Decentralized Exchange or DEX?
A decentralized exchange (DEX) is a financial services
platform for buying, trading, and selling digital assets. On a DEX, users
transact directly and peer-to-peer on the blockchain without a centralized
intermediary. DEXs do not serve as custodians of users' funds and are often
democratically managed with decentralized governance organization. Without a
central authority charging fees for services, DEXs tend to be cheaper than
their centralized counterparts.
Q What is a Digital Asset?
Digital asset is the broad and universal description of assets
that exist digitally. It covers a wide variety of assets, including
cryptocurrencies, utility tokens, security tokens, digital stocks, and digital
collectables. It is important to remember that while all cryptocurrencies are
digital assets, not all digital assets are cryptocurrencies.
Q What is a Digital Currency?
A digital currency is a currency that exists purely in a
digital form and possess multiple advantages over traditional currencies,
including lowered transaction costs, greater transparency, increased
transaction speeds, as well as, decentralization. Various forms of digital
currencies have existed since the late 1980s, but it was not until 2009 that
the Bitcoin blockchain protocol and the bitcoin (BTC) cryptocurrency solved
many of the prior technological problems.
Q What is Ethereum?
Ethereum launched in 2015 as a vision for a decentralized,
blockchain-based network of computers that would serve as the foundation for a digital
ecosystem that other companies and technologies could build on. The Ethereum is comprised of interoperable,
decentralized applications (dApps) powered by token economies and automated
smart contracts. Assets and applications designed on Ethereum are built with
self-executing smart contracts that remove the need for a central authority or
intermediary. The network is fueled by its native cryptocurrency ether (ETH)
and is currently the second-largest cryptocurrency in the industry. Ethereum
forms the backbone of a decentralized internet, which has already spawned
significant innovation like Initial Coin Offerings (ICOs), stablecoins, and
decentralized finance (DeFi) applications.
Q What is a Fiat Currency?
Fiat currency is any type of government-issued money that is
used as legal tender by a specific nation's citizens and government (US dollar,
EU euro and Japanese yen). Fiat currencies are backed by the government that
issued it, and not a physical commodity such as gold or silver. Fiat currencies
function as both a medium of exchange, store of value, and unit of account.
Q What is a Fork?
In the digital world, a fork occurs when one blockchain is
divided into two blockchains. This type of split in a blockchain network typically
occurs when an update is made to the blockchain protocol, but not all of the
network participant nodes agree to adopt it. There are two main types of forks
that blockchains can experience: a soft fork or a hard fork. Soft forks result
in a "backwards compatible" update, one where the various blockchain network
nodes that accept the update are still capable of interacting with the nodes
which do not. Conversely, in a hard fork, the update is so significant that it
alters the original blockchain protocol such that the two versions are no
longer compatible with one another. The resulting hard fork creates two unique
blockchains that diverge after the triggering software update event.
Q What is Gas in the blockchain world?
Gas refers to the fees associated with running and executing
smart contracts on the Ethereum blockchain. For example, the countless decentralized
applications (dApps) running on the Ethereum blockchain do so by using smart
contracts that layout rules for the execution of events, which in turn requires
transactions that come with a cost to the network. Gas fees are generally
priced in a small amount of the cryptocurrency ether (ETH). An interesting
feature of Ethereum stipulates that the sender of a transaction can decide if
they want the transaction to be sent slowly or quickly. Perhaps not surprisingly then, the faster the
transaction is processed, the more gas fees it will require.
Q What is an Initial Coin Offering (ICO)?
Initial Coin Offerings (ICOs are a fundraising mechanism within
the blockchain and digital world that incorporates the creation and sale of a token
to raise funds for a project. Such
projects range from the creation of a new blockchain platform, a decentralized
application (dApp), or other digital asset products. Instead of providing buyers
with equity or shares, an ICO sells tokens that usually claim future utility in
the technology products they are sold to fund. Despite being referred to a
"coin" offering, ICO tokens may still be considered securities and regulated as
such.
Q What is the Internet of Things (IoT)?
The Internet of Things (IoT) refers to many commonplace
devices (household appliances, televisions, home media and security systems,
etc.) that are connected to the internet to enable features. These IoT products
offer increased functionality, share data, interact with each other and present
a wide array of blockchain use cases.
Q What is a (crypto) Miner?
Miners are an essential component of every Proof-of-Work (PoW) blockchain consensus protocol, and are responsible for validating new transactions and recording them on the blockchain ledger. Miners validate these transactions by solving complex math problems, which results in the minting of new tokens while reinforcing the network's security and trustworthiness. In order to incentivize users to allocate processing power to mine new blocks, miners are typically rewarded a fraction of a network's native currency with every successfully mined block.
Q What is a Non-Fungible Token (NFT)?
A non-fungible token (NFT) is a specialized type of
cryptographic token that leverages smart contract technology and represents a singularly, unique digital asset that can never be exchanged for another digital asset or
be divided into fractions. By contrast, cryptocurrencies and blockchain utility
tokens such as Bitcoin and Ethereum are fungible in nature and capable of being
divided into fractions.
Q What is Proof of Stake (PoS)?
Proof of Stake (PoS) is emerging as one of the most widely
used and important blockchain consensus mechanisms in existence. PoS networks
incentivize its participants to stake native coins to help drive network
functions. Although they are a relatively newer model, PoS networks are not
only proving they can be faster and more scalable than Proof-of-Work (PoW)
blockchains, but also far more energy-efficient.
Q What is Proof of Work (PoW)?
Proof of Work (PoW) is a blockchain consensus mechanism
first popularized by the Bitcoin blockchain network that relies on a process of
mining to maintain the network. Miners provide computer hardware that competes
to solve the complex cryptographic puzzles required to confirm data transacted
on the network, and are rewarded with the network's underlying cryptographic token
for doing so.
Q Who is Satoshi Nakamoto?
Satoshi Nakamoto is the pseudonym for the individual or
group that created the Bitcoin protocol. In October of 2008, Satoshi Nakamoto
famously published the original Bitcoin whitepaper and then a few months later mined
the first 'genesis' block on the Bitcoin network in January 2009. Despite many
theories, the true identity of Nakamoto has remained unknown.
Q What is a Smart Contract?
Smart contracts are computer programs that run within a
blockchain protocol that automatically executes tasks based on pre-set
conditions without the need for a third party. Smart contracts can be written
in various types of computer programming languages and are designed to solve
real-world problems and use cases.
Q What is a Stablecoin?
A stablecoin is a digital currency created with the intent
of holding a stable value. Presently the value of most existing stablecoins is
tied directly to a predetermined fiat currency or tangible commodity such as the
US dollar. Since stablecoins do not fluctuate significantly in price, they are
designed to be used rather than as an investment or store of value.
Q What is Staking?
Staking is the process through which a blockchain network
user 'stakes' or agrees to lock up their cryptocurrency assets on a network to
help the network maintain or improve functionality and security. Staking is encouraged by the various
blockchain projects by offering incentives in the form of yields that are paid
out regular basis, typically in the form of that chain's respective tokens. Staking
is a core feature of Proof-of-Stake (PoS) blockchain protocols, with each
blockchain project that incorporates a staking feature having its own unique policies
for staking requirements, withdrawal restrictions and financial rewards.
Q What is a Token?
Within the world of blockchain technology, a token generally refers to a unit of value for an asset that is programmable and managed by a smart contract. Tokens are the primary method of transferring and storing value on a blockchain network and can be designed to be either fungible or non-fungible, depending on a network's specific needs. Although many tokens are used primarily for simple transactions, a vast amount of new blockchain projects are designing custom tokens for a variety of use cases ranging from on-chain governance and network maintenance.