When you are new to the world of cryptocurrencies, and blockchain it can be pretty daunting to get through reading related news, let alone an entire Whitepaper. Don't worry. We've all been at that point. That's why we've created this glossary, to help you understand not only Minima but the entire crypto-industry and the slang they use on CT (Crypto-Twitter) better.
If there are any terms that we're missing, don't hesitate to ask in the comments, and we'll add them. We will consistently work on adding new words, editing old ones to ensure accuracy.
An attack where a malicious actor overtakes 51% of a network's hashrate and wreaks havoc on the system. If a blockchain undergoes a 51% attack, the attackers can reverse transactions, mint new tokens, and enrich themselves while destroying the integrity of the original chain.
ABS is short for Adaptive Block Scaling and describes the Process Minima uses to adjust the block size depending on the traffic over the previous 24 hours. If the network traffic was high, blocks will automatically scale up to host more transactions, whereas lower traffic is met with smaller blocks.
“Application-Specific Integrated Circuit miner” is powerful high-performance hardware specifically designed to mine Proof-of-Work cryptocurrencies. ASIC mining has increased the hashrate on blockchain networks but also led to excluding individual miners from meaningfully participating in block validation.
BFT stands for Byzantine Fault Tolerance and describes the ability of a system to tolerate up to 1/3 of its participants acting maliciously.
Byzantine Fault Tolerance is based on the Byzantine Generals Problem — which consisted in reaching consensus in a system one message at a time with a potential traitor among them.
Block rewards describe how much miners earn for validating blocks in a blockchain.
The Blockchain Trilemma describes the idea that a blockchain cannot unite all three: Decentralization, Security, and Scalability. According to the trilemma, a blockchain can only ever achieve two of the three features and has to sacrifice one of them.
This is crypto-slang and a play on HODL (see below). It's unclear when the term was first used, but it seems to have emerged around 2017. It serves as a reminder to focus one's energy and resources on building and not just short-term gains.
In the context of tokens, a burn is a mechanism that removes tokens from the circulating supply, therefore reducing tokens in circulation. A burn can be either directly programmed into the protocol, or conducted by a company by buying back, and destroying tokens (by sending them to a wallet address that no one can control).
On Minima, our burn serves to order transactions, regulate on-chain traffic and maintain our deflationary model.
Short for centralized Finance, describing the existing financial system which is run mostly by centralized intermediaries. Sometimes also called TradFi, short for traditional Finance.
Coin Mixers are services promising users more privacy when they transact on public blockchains. When using Coin Mixer, users' transactions are mixed with other transactions, obfuscating the path of the original transaction to increase its anonymity.
DAO is an acronym for Decentralized Autonomous Organization. A DAO is a community-led entity without one central authority that is governed by rules of open-source blockchain protocols. Most DAOs employ governance tokens to help them come to a consensus.
dApps is short for decentralized apps and describes apps running on top of blockchain networks. One important thing to remember is that the User-Interface you will likely interact with by going to a dApps website such as Uniswap.com is not the actual dApp. It's a centralized interface that enables anyone to engage with the dApp and the underlying blockchain easily.
Decentralization more broadly refers to the dispersion of power and control. In Blockchain networks, decentralized means having thousands, millions of nodes all running the same software and storing a copy of the entire blockchain ledger.
Decentralization increases accessibility, fault tolerance and makes everyone an equal participant. At Minima, one of our prime measures for decentralization is our node count and the lack of any entity that could overtake the network. In a truly decentralized network, there is no space for any bit of centralized infrastructure.
Short for decentralized finance, describes an ecosystem of financial apps built on top of public blockchains that promises to be more accessible, transparent, and fair than the currently existing financial system.
dPoS stands for delegated Proof-of-Stake and is a variation of Proof-of-Stake consensus algorithms. Usually, in a delegated Proof-of-Stake network, you will find a set amount of validating nodes that other participants can delegate their stake (token holdings) to in return for a percentage of the Staking Rewards.
“Do your own research” highlights the need to not simply trust what others on Twitter or YouTube are trying to sell. Instead, spend time researching what a project is trying to achieve and how they stack up against their claim. Ideally, researching a crypto project goes all the way to reading the Whitepaper.
Fear of missing out - or that nagging feeling you get when you see a cryptocurrency’s price skyrocket in a short amount of time and you haven’t invested in it, and are missing out. Note that investing based on FOMO is usually a very risky thing to do. The opposite of FOMO is sometimes coined JOMO - Joy of missing out.
Not all nodes are equal (except on the Minima Protocol). A complete node in other blockchain protocols is a node that validates and constructs the blockchain. It also keeps a copy of the entire ledger.
Future of France
A Crypto community Meme. It’s not exactly clear who the first one was to mistype, or spell Defi as the “Future of France” but whenever you encounter it (in the context of DeFi), it means the “future of finance”.
The first block of a new blockchain is its genesis block.
It stands for “Good Morning” and is often used on Crypto Twitter by y crypto enthusiasts to wish each other a good morning. The correct reaction to receiving a “GM” is responding with “GM.” Not to be confused with General Motors.
A hard fork is a significant network upgrade on a blockchain. During a hard fork, all network nodes are required to upgrade to the new blockchain software. Only nodes running the latest version will be participating in the network, the rules of the old blockchain aren’t accepted into new blocks — a hard fork is not backward compatible.
The Hashrate describes the computing power backing a blockchain network.
The Hashrate distribution shows how the computing power in a blockchain network is distributed and offers valuable insight into how (de)centralized a network is.
Hodl is not unlike often assumed short for “Hold on for dear life”, but simply a misspelling of hold. It’s often used by crypto investors to encourage each other to not sell their coins. Since the wall streets bet saga earlier this year, it’s often used in conjunction with diamond hands (💎 🙌).
Layer 1 refers to the base protocol of a blockchain — the actual blockchain on top of which other applications and layers can be built. For Minima, Layer 1 is the Minima blockchain, which every node runs.
Layer 2 refers to other networks built on top of the underlying blockchain. Examples include lightning to Bitcoin and Arbitrum to Ethereum.
On Minima, our peer-to-peer network Maxima will function as a Layer 2 enabling limitless scalability.
Light clients are lightweight applications, that only keep track of their own transactions. They rely on connections to full nodes to catch up and execute their transactions or verify the status of the blockchain.
Liquidity in financial markets and crypto refers to the ability to easily buy and sell an asset. The more liquid an asset is, the faster one can sell or buy it.
Describes the process of providing liquidity to decentralized exchanges and earning a share of transaction fees in return.
Individuals or entities that provide liquidity by depositing tokens into a DEXs smart contracts are called Liquidity Providers, sometimes shortened LP.
Maxima is the peer-to-peer network on top of the Minima protocol allowing anyone to easily transfer peer-to-peer value and information.
The maximum amount of a token that will ever exist. By capping the supply, a token retains scarcity. Minima’s maximum supply is one billion Minima coins.
Short for “memory pool” is a sort of waiting area, where transactions that full nodes have verified are waiting to be added to the block by a miner. Once a node reaches capacity, it’ll start prioritizing transactions based on fees — a leading cause for network congestion.
At Minima, things work slightly differently as we don’t have a fixed block size, causing congestion during busy times. Thanks to our Adaptive Block Scaling (ABS), block size adjusts automatically relative to the previous 24 hours of on-chain throughput. The maximum input of transactions per block grows and shrinks accordingly.
The Metaverse is the latest buzzword in crypto, and a term put together from the greek meta for Beyond and Universe which describes everything that exists. While no agreed-upon definition of it exists, we believe that it will be an experience that combines the digital with the real world, contain its economy that connects to broader economies, spans different worlds together, leverages VR & AR, and provides a level of interoperability we’ve not seen so far. You can read more about the Metaverse here.
miniDapps is the term used to refer to decentralized apps built on top of Minima.
The process in which nodes race to find the right hash in Proof-of-Work blockchains, to validate blocks and receive block rewards.
Mining Pools are groups or communities of people pooling their computing resources to mine cryptocurrencies. Often, these are commercial operations run by profit-oriented businesses.
Non-Fungible-Token, a digital asset with unique properties, that can't be replicated nor interchanged. You can read more about them here.
Any computer that is connected to a network is referred to as a Node. While many might think mostly of mining nodes when referring to PoW networks, various other node types exist that play a crucial role in storing the ledger's history.
On Minima, all Minima nodes are equal. Each one of them participates in constructing the blockchain and in validating transactions.
Transactions that don't happen on the main blockchain, are off-chain. Often implemented to increase the transactions a network can handle.
On Minima, users can transact off-chain once a relationship has been established on-chain.
All transactions that happen on the main blockchain are on-chain. In Minima's case, that's establishing transaction relationships, and anything related to resolving conflicts.
Sometimes blocks are verified, and valid, but not added to the blockchain.
This often happens when two or more miners try to solve the block at the same time.
Ultimately, the block with the highest amount of PoW is added to the chain, while the one with lower PoW will be discarded, and miners working on it won't receive any rewards.
Proof-of-Stake. A consensus algorithm in which nodes with the native platform token at "stake" are responsible for validating new transactions.
Often in these networks, the more stake a node has, the higher the chances to validate blocks and verify blocks. Another implementation of Proof-of-Stake is delegated Proof-of-Stake (see dPoS).
Proof-of-Work, nodes in Proof-of-Work networks solve cryptographic puzzles (deliver work) in order to verify transactions.
PoW first came up as a measure to fight spam and Denial-of-Service attacks. Since the inception of Bitcoin, it's been implemented in various blockchains to enable the trustless transfer of value. Minima uses a variant of PoW to secure its network: TxPoW.
A 32-character string that enables its owner to spend the cryptocurrency associated with it.
The public key is generated from the private key and the address that users can share with others to receive tokens and cryptocurrency.
Pulse is the unique mechanism Minima uses enabling all Layer 2 users to secure the base layer by providing PoW to the chain. The Pulse is information all Maxima users must process on the p2p Maxima network.
When talking about Scalability in relation to Blockchain, what most think of is "Transactions per second" - how high the throughput for a network can be.
However, scalability isn't just about TPS. It has a broader meaning as well, with more scalable blockchains being able to adjust to handling a growing amount of work.
Sidechains are separate blockchains that are connected with the main chain to increase their functionality, and often throughout. Examples include Loom which is a PoS sidechain on Ethereum, and the Blockstream Liquid side-chain that enables faster, confidential Bitcoin transfers. Sidechains tend to be more centralized than the main chain, and require their own set of validators/miners.
A soft fork brings upgrades to a blockchain. It maintains the old chain by running different sets of rules. The latest Bitcoin Upgrade was a soft fork introducing changes to the base protocol. This means that, unlike a hard fork, a soft fork is backward compatible. Even nodes that haven’t been updated will still be able to run the chain.
A term made up of a combination of "token" and economics, describing the structure of a token from an economic standpoint. Tokenomics cover areas such as token distribution, allocation, supply, issuance schedule, and utility.
UTXO stands for unspent transaction output and describes how in some cryptocurrencies transactions are handled. For a valid blockchain transaction, only unspent outputs can be used as inputs for a transfer.
A protocol upgrade mechanism was first proposed by researchers at the Imperial College of London. Unlike hard forks, velvet forks don't harm the miners that haven't updated to the new rules, as they are completely backward compatible.
WAGMI is an acronym for "We're all going to make it". It's expressing the sentiment of crypto enthusiasts that it's not just about getting rich oneself, but ensuring that we are all going to make it. The opposite of WAGMI is "NGMI", short for "not going to make it".
Wallet (Hot & cold)
Wallets enable users to store their cryptocurrencies. Generally, we distinguish between hot and cold wallets. Hot wallets are software-based, and constantly connected to the internet, therefore hot. Cold wallets are either paper wallets or specialized hardware devices that keep crypto holdings offline. It's advised to keep crypto as much as possible in cold wallets.
The first iteration of the Web, the so-called "Read-only Web", consisted of static websites, and had to be accessed through phone lines. You can learn more about it here.
The second version of the Web, the web as we currently use it. Web 2.0 enabled anyone to become a content creator and offered a much richer user experience. More details on it are also covered in our blog.
Web 3.0 doesn't have a clear-cut definition yet. It's used to refer to the next generation of the Web, a web that's not just read, and write, but also empowers individuals to own their data. You can learn more about the characteristics of Web 3.0 here.
In a Whitepaper blockchain, companies and crypto projects explain their project in-depth, outline the need for it, and the token structure. You can find the Minima WP here.
Zero-Knowledge-Proofs are a cryptographic method used to prove that something is known without revealing the underlying information directly.
When using them you can basically prove that you know a secret to another party, without revealing the secret itself. The method dates back to the 80s and has since found its way into cryptocurrencies, with Zcash being the first one to deploy it, enabling private transactions.