Tag Archives: Cryptocurrency

Hitchhikers Guide To Cryptocurrency Terminology

Hitchhikers Guide to Cryptocurrency Terminology

 

Just as I’ve often marveled at how many internet gurus take it for granted that the average person is familiar with Microsoft Word, I think the same situation will probably develop as Bitcoin and other cryptocurrencies get more into the mainstream of society and people encounter a whole new terminology they are not familiar with.

So, as a public service, here’s my non-academic, non-professional survey of some terminology that you either will need to know, might need to know, or might enjoy knowing as cryptocurrency becomes a part of your life.

Alt Coin

It has been said that ‘imitation is the sincerest form of flattery’ and there have been plenty of groups who have come out with their own imitations of Bitcoin. Some have been more successful than others but here is a list of several of the more successful ‘alternate’ cryptocoin patterned after Bitcoin to one degree or the other. Keep in mind that alt coin pundits can be pretty snarky in their opinions and alt coins are not all created for the same purpose or by the same means. As for which one is, “x” (where x is a particular attribute)… the answer is, “It all depends.”

Litecoin

Peercoin

Namecoin

Quarkcoin

Primecoin

Novacoin

Feathercoin

Zetacoin

MyCrytoCoin

Digitalcoin

Dogecoin

Stablecoin

Ethereum

Ripple

Bitcoin

The original cryptocurrency launched in 2009 and based on a scholarly paper released on the internet by a mysterious figure, or possibly group of people, going by the name of Satoshi Nakamoto. Some people doubt that the originator was Japanese. Nevertheless, the paper was titled Bitcoin: A Peer-to-Peer Electronic Cash System. In January 2009, Nakamoto released the first bitcoin software, open source, that launched the bitcoin network. The first units of the bitcoin cryptocurrency were called bitcoins. Note: “Bitcoin” is the network and “bitcoin” is the payment unit used in that network.

 

Cryptocurrency (also cryptocoin)

A digital asset designed to work as a medium of exchange using cryptography to implement and secure the transactions and to control the creation of additional units of the currency. In practical terms for the consumer… cryptocurrency is digital money used for the same things traditional money is used for… except with certain advantages over traditional money. All bitcoins are cryptocurrency but not all cryptocurrency is Bitcoin.

IBAN

The International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information of the owner if a bank account such as the account number, bank and branch information and country code. Since the processes for transferring bank funds into cryptocurrencies can sometimes still be rather rigorous and tedious, this number could be seen on some paperwork.

Bank Secrecy Act

This fine work of legislative art, The Bank Secrecy Act of 1970 (otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering (as if the NSA wasn’t enough). Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Of course, in periods of inflation, even a trip to 7-11 approaches this criminal parameter thus conveniently making almost everybody a criminal.

BBAN

Basic Bank Account Number. It represents a country-specific bank account number. The BBAN is the last part of the IBAN when used for international funds transfers. The average cryptocurrency user or purchaser may see it on a form.

BIC

Bank Identifier Code… an international code that banks use for financial transactions. Each bank has its own BIC. Also known as SWIft CODE. Could be 8 or 11 characters.

FinCEN

FinCEN is the federal agency principally charged with combatting money laundering and financial crimes. A feat they accomplish primarily through the regulation of banks and related entities, or “Money Services Businesses” (“MSBs”).

Hash

AKA: hashing or hash function. Hashing isn’t directly relative to a consumer’s use of cryptocurrency but it is a word that pops up a lot when looking at descriptions of various cryptocurrencies. It refers to a security protocol whereby a data string is jumbled up (i.e. like real “hash”) at the sender-end and then put back together at the receiver-end. Both results should match of course. Just like in the kitchen, there are different kinds of hashes.

Keys (or Crypto Keys)

In the world of cryptocurrency, ‘keys’ are small strings of alphanumeric data used to unlock a larger piece of code relating to a cryptocurrency transaction. Keys are either Public or Private and are very important to the success and security of cryptocurrency systems and processes.

KYC

An acronym for “Know Your Client/Customer” and referring to a large body of rules and regulations enacted and enforced by governments on financial institutions to presumably prevent them from doing business with criminals and terrorists. The two main facets of KYC rules are (1) traceability and (2) identification verification.

Mixing Service

A service that mixes your bitcoins with someone else's, sending you back bitcoins with different inputs and outputs from the ones that you sent to it. A mixing service (also known as a tumbler) preserves your privacy because it stops people tracing a particular bitcoin to you. It also has the potential to be used for money laundering. For some users and in some scenarios, mixing is a desirable feature because it adds extra layer of anonymity to a transaction.

mBTC

1 thousandth of a bitcoin (0.001 BTC).

OTC Exchange

An exchange in which traders make deals with each other directly, rather than relying on a central exchange to mediate between them.

Public Key

An alphanumeric string which is publicly known and unique to each transaction. This key is used in conjunction with your Private Key to complete a transaction.

Pump and Dump

Inflating the value of a financial asset that has been produced or acquired cheaply, using aggressive publicity and often misleading statements. The publicity causes others to acquire the asset, forcing up its value. When the value is high enough, the perpetrator sells their assets, cashing in and flooding the market, which causes the value to crash. This can and has happened with some alt coins and MLM cryptocoin scams.

PSP

Not a video game system but rather a Payment Services Provider. This is not a consciously important term for the average cryptocurrency user but is important to merchants who want to accept cryptocurrency…much in the same way that merchants need a ‘merchant account’ to accept Visa, Mastercard, or other credit or debit cards. Cryptocurrency PSP’s are ‘hot’ financial services right now. Note: The MyCryptoWorld block chain, when released, will incorporate all the features of PSPs for merchants and will be a very-much ‘game-changing’ development in the cryptocurrency ecosystem.

Private Key

An alphanumeric string kept secret by the user, and designed to sign or authenticate a digital communication when combined with a public key.

Paper Wallet

A ‘Paper Wallet’ is the physical equivalent of a digital or e-wallet. It is a printed sheet containing one or more public bitcoin addresses and their corresponding private keys. It is often used to store bitcoins securely, instead of using software wallets which can be corrupted or web wallets which can be hacked or simply disappear. They are useful but require great accuracy and security.

SEPA

The Single European Payments Area. A payment integration agreement within the European Union, designed to make it easier to transfer funds between different banks and nations in euros.

Silk Road

An underground online marketplace, generally used for illicit purchases, often with cryptocurrencies such as bitcoin. Silk Road was shut down in early October 2013 by the FBI after owner Ross Ulbricht was arrested. Ulbricht was later convicted on money laundering and drug distribution charges.

 

Scamcoin

An altcoin produced with the sole purpose of making money for the originator. Scamcoins frequently use pump and dump techniques and pre-mining together. A great conversation starter at a party: “Hey, have you bought any Scamcoin yet!?”

Satoshi Nakamoto

The name used by the original inventor of the Bitcoin protocol, who withdrew from the project at the end of 2010. Not to be confused with Sasushi Nakamoto who owns a sushi restaurant in Los Angeles.

Satoshi

The last name of the mythical inventor of Bitcoin but also used to denote the smallest subdivision of a bitcoin currently available (0.00000001 BTC).

Transaction Fee

A small fee imposed on some transactions sent across the bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction. Cryptocurrency transactions fees are miniscule in comparason to transaction fees in traditional banking channels. Thus no wonder that banks and ‘banking families’ are very sceptical of cryptocurrencies.

Transaction block

A collection of transactions on the bitcoin network, gathered into a block that can then be hashed and added to the blockchain.

TOR

An very robust, effective, and anonymous internet data routing protocol, used by people wanting to hide their identity online.

QR Code

A two-dimensional graphical block containing a monochromatic pattern representing a sequence of data. QR codes are designed to be scanned by cameras, including those found in mobile phones, and are frequently used to encode bitcoin addresses. QR codes are frequently used in the buying and selling of cryptocurrencies via smartphone.

uBTC

One microbitcoin (0.000001 BTC)

Wallet

A method of storing bitcoins for later use. A wallet holds the private keys associated with bitcoin addresses. The blockchain is the record of the bitcoin amounts associated with those addresses.

So, that’s a starter Primer for your Bitcoin and/or cryptocurrency adventure. Of course this document is meant more to the benefit of Beginners but I do plan on updating it as time goes by because I know that getting into cryptocurrency can be a bit intimidating at first.

If you encounter a term that you think should be highlighted and clearly defined in future revisions of this list, please let me know at 713 701 1853, xpatflipper@gmail.com, or by joining Markethive, the free community for Entrepreneurs (for free… here) and connecting with me there.

 

Art Williams
Freelance Writer
Case Studies and Email Copywriting

 

 

Trump Picks Cryptocurrency and Blockchain Advocate as Budget Chief

Trump Picks Cryptocurrency and Blockchain
Advocate as Budget Chief

Bitcoin Caucus co-founder Mick Mulvaney is the US'
next Director of Office of Management and Budget.

It seems the election of Donald Trump could spell great news for American blockchain startups and cryptocurrency users. President-elect Trump has added to his cabinet an active and vocal supporter of cryptocurrencies and blockchain which means that there will be at least one powerful voice in the US government that will resist further efforts to legislate the technology into oblivion.

Trump picked Congressman Mick Mulvaney, Tea Party Republican, as his administration’s Director of Office of Management and Budget. He is considered a staunch fiscal conservative that wishes to drastically limit the federal government’s spending on social programs.

Just this September he was among the founders of the bipartisan Blockchain Caucus. Commonly called the Bitcoin Caucus by American media, it is meant to help congressmen stay up to speed on cryptocurrency and blockchain technologies, and develop policies that advance them.

Mick Mulvaney

“Blockchain technology has the potential to revolutionize the financial services industry, the U.S. economy and the delivery of government services, and I am proud to be involved with this initiative,” Mulvaney said in a statement back then.

Mulvaney is also a supporter of Coin Center, a non-profit research and advocacy center focused on public policy issues facing cryptocurrency technologies, which raised over $1 million earlier this year.

“For the past two years we have worked with Representatives Mulvaney and Polis to educate their colleagues through briefings and other events, and the new Congressional Blockchain Caucus will be a wonderful new platform to continue these efforts,” Jerry Brito, executive director of Coin Center said at the time. “Their forward-thinking leadership on blockchain technology in Congress is unmatched.”

 

Thomas Prendergast
CEO
Markethive Inc.

Join our Bitcoin Group. Time is running out.

https://markethive.com/group/cryptocoin

Excuse Us…Perhaps You’d Like some Fed-Coin?

Fed Coin – The Government’s Cyber-Swindle?

Does the US government have a shady knock-off of Bitcoin (BTC) up their sleeve to cope with the increasingly likely collapse of the US dollar? Doug Casey thinks they might.

Doug Casey is a writer, speculator, and the founder and chairman of Casey Research. He describes himself as an anarcho-capitalist influenced by the works of novelist Ayn Rand. Doug has a very prescient hypothesis of how the US government, and indeed world governments, might try to solve their debt and currency-value problems.

Mr. Casey’s idea is within the realm of possibility and smart patriots, citizens, and consumers would be wise to, as the Bible says, “Pay attention!”.

First of all, we must recognize the reality that although the US dollar is still fairly well regarded internationally, that’s only because it’s living off of the reputable reputation it once had. See this article.

But don’t delude yourself that lots of countries haven’t been looking for currency and financial system alternatives. They have.

In fact, a growing number of countries have already taken proactive action to set up their own international settlements network that bypasses the New York City banks. These countries are already starting to trade in their own currencies.

This group of countries is known as BRICs ( Brazil, Russia, India, China, and S.Africa) and is described in Wikipedia in the following manner:

“In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diverse, stable and predictable". Although the statement that was released did not directly criticize the perceived "dominance" of the US dollar – something that Russia had criticized in the past – it did spark a fall in the value of the dollar against other major currencies.”

Some background to the chain of events which led up to this point: Since the US dollar went off the gold standard and US coinage lost all silver content by the mid 70’s to mid 80's, US currency has barely been worth the paper it is printed on or the value of the base metal it is minted with.

The only thing that has kept the US economy afloat, other that the fact that the US has been pretty good at intimidating and destabilizing other countries, is the ability unique situation whereby the Fed can print all the money it wants, America does have a large consumer base, and other countries have been dumb enough to take it our worthless dollars in return for the merchandise they manufacture and ship to us.

But accepting US ‘funny money’ is like building a skyscraper with fake steel. Such a structure is inherently unstable and nobody in their right mind would want to rent on one of the upper floors. Foreign governments are realizing that US dollars, especially with the US government influence that comes packaged with it, is not a smart deal.

So what would happen if foreigners stopped taking US dollars for their ‘stuff’? Today, there are multiple economic scenarious that could bring the US economy down. And of course when the US economy fails, the rest of the world would suffer too. Everybody except the politicians of course.

Many experts have quietly been warning for several years that one such precipitous event could be a collapse of the US derivatives market. Although derivatives might theoretically be a sound financial product in some circumstances, the problem with most derivatives, especially in the US, is that most of them are based on lousy collateral.

Lots of foreign governments also own US derivatives. And when these governments eventually decide they don’t want to refinance their US debt securities anymore and would prefer to take their money and do something else with it…the US won’t be able to comply with that request because it simply doesn’t have the cash.

A derivatives crash, or anything of similar scope which might cause a run on the US banking system, would be bad news not only for America but also for the world economy.

US banks don’t have enough cash to cover all the debt they’ve issued. No US bank, including the Fed, even meets its own reserve requirements.   

In such an event, even if the US government resorted to printing more of the worthless money they’ve been printing for several years, it would be a practical impossibility to print the amount needed. And that presumes that debtors would even want US “dollars” at that point…. Which they probably wouldn’t.

This looming catastrophe has been in plain view for several years now.

To summarize the problem to this point: US currency is worth nothing, the US government is up to its eyeballs in debt, there is growing suspicion and outright lack of confidence in US geopolitics and the US economy (e.g. we don’t ‘make’ anything anymore except war), the US middle class is ‘feeling the pinch’ and they’re not very happy about it, the US has a bloated and unproductive bureaucracy and and welfare class, and the list goes on.

So, if you’re in the government, there’s not much to be positive about economically. Unless you think you can ‘dance between the hailstones´.

Enter Bitcoin (BTC) and Mr. Casey’s theory: Since US cash is worthless, what if the government tried to come out with their own version of Bitcoin? Wouldn’t that tend to reset the clock and buy them more time to kick the can down the road?

Could such a nefarious scheme actually work?

Yes, it could. It all depends on how it would be packaged to the public and whether the public accepted it.

What would the government have to do to pull off a ‘caper’ like this?

First of all, they would push the mantra that ‘government is good’ and ‘market forces’ are bad.

Next it would enact laws ‘to protect the public’. These laws would probably favor their plan over the private market option (i.e. BTC et.al.). Similar to what the Indian government is doing now with gold ownership laws…ostensibly to protect Indians. See that article here.

Simultaneously they would use their influence with the vestiges of the almost obsolete US banking industry to regulate or curtail conversion between the cryptocurrency domain and traditional types of ‘money’ in the US. They would use regulatory powers to make Bitcoin, Dogecoin, et.al. more difficult to use.

Also they would probably become more intrusive into the citizen's cyberspace…including trying to control capital flight from the US.

And of course, they would use their power to try to throw in some proprietary ‘perks’ to their “Fed Coin” scheme to make it more attractive than alternate type of cryptocurrency.

They could have other tricks up their sleeve. Don't be surprised if they even try to tie Fed Coin in with anti-terrorism. But Mr.Casey’s point is valid: The government might figure, “If we can’t beat’em….join 'em!”

“Fed Coin.”

It sorta has a patriotic, SuperHero ring to it, doesn’t it?

Don’t fall for it. Fed Coin: Bad. Bitcoin: Good.