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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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.