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Quick guide to common terms

Common technology terms explained

  • Address / Public Key

    Used to send and receive transactions on a blockchain network. An address is an alphanumeric character string.

  • Airdrop

    A distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses. Airdrops are primarily implemented as a way of gaining attention and new followers, resulting in a larger user-base and a wider disbursement of coins.

  • AML

    AML stands for “Anti-Money Laundering” – processes designed to stop the disguise of illegally obtained funds.

  • API

    Application Programming Interface. A software intermediary that allows two separate applications to communicate with one another.

  • Attestation

    Under the PoS mechanism, every validator will provide an attestation, or vote, in favor of a block with which it agrees, hereby forming consensus and confirming the block and the transactions it contains.

  • Block

    After a number of transactions have been added to the ledger, then they are cryptographically locked into a “block”. This “block” forms the basis for the next one; in this way, they are all linked together in a chain, hence–blockchain.

  • Block Height

    The number of blocks connected together in the blockchain. For example, Height 0 would be the very first block, which is also called the Genesis Block.

  • Blockchain

    A digital ledger comprised of unchangeable, digitally recorded data in packages called blocks. Each block is ‘chained’ to the next block using a cryptographic signature.

  • BPM

    Transaction speed of the blockchain network as gauged by the number of blocks processed per minute.

  • CEFI

    Centralized Finance, or centralized market, as opposed to decentralized finance, is a market solely independently working not affected by competition from any other market or finance. Examples are stock markets and central banks.

  • CEX

    Centralized Exchange. Platform which facilitates the buying and selling of Cryptocurrency. They function as trusted intermediaries in trades, and often act as custodians by storing and protecting your funds.

  • Coin

    A coin, in cryptocurrency, is a representation of digital asset value that is generated via its own independent blockchain.

  • Confirmation

    A confirmation happens when the network has verified the blockchain transaction. Under a Proof of Work (PoW) consensus mechanism, this happens through a process known as mining; under Proof of Stake (PoS), the process is known as validation.

  • Consensus

    The process used by a group of peers, or nodes, on a blockchain network to agree on the validity of transactions submitted to the network. Dominant consensus mechanisms are Proof of Work (PoW) and Proof of Stake (PoS).

  • DAO (Decentralized Autonomous Organization)

    A community-led entity with no central authority. It is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO’s financial transaction record and program rules are maintained on a blockchain.

  • Decentralization

    The transfer of authority and responsibility from a centralized organization, government, or party to a distributed network.

  • DeFi

    Decentralized Finance. A blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments.

  • DEX

    Decentralized Exchange. A type of cryptocurrency exchange which allows for direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary.

  • Digital Asset

    A digital commodity that is scarce, electronically transferable, and intangible with a market value.

  • Digital Identity

    An online or networked identity adopted by an individual, organization, or electronic device.

  • Distributed Ledger

    A type of database which spreads across multiple sites, countries, or institutions. Records are stored sequentially in a continuous ledger.

  • Exchange

    A place to trade cryptocurrency. Centralized exchanges, operated by companies, function as intermediaries, while decentralized exchanges do not have a central authority.

  • Fiat Currency

    Government-issued currency. For example, US Dollars (USD), Euros (EUR), Yuan (CNY), and Yen (JPY).

  • Finality

    Finality is the guarantee that a set of transactions before a given time will not change and can’t be reverted.

  • FUD

    Fear. Uncertainty. Doubt. A term used to describe behavior by trolls in the Blockchain/Crypto/Web3 community who seek to be negative for no legitimate reason.

  • Gas

    This is the fee charged to complete a transaction on a blockchain. Whenever you make a crypto transaction you will pay a small gas tax.

  • Hash

    A fixed-length fingerprint of variable-size input, produced by a hash function.

  • ICO

    Initial Coin Offering – The launch date that crypto/tokens are open for public trading via a DEX.

  • IDO

    Initial DEX offering – The initial date that a Decentralized Exchange allows public trade of crypto/tokens

  • IEO

    Initial Exchange offering – The initial date that a coin is listed on an exchange, this can be either a CEX or a DEX.

  • KYC

    Know Your Customer. A process in which a business must verify the identity and background information (address, financials, etc) of their customers.

  • Layer 1

    The term that’s used to describe the underlying main blockchain architecture.

  • Layer 2

    Is an overlaying network that lies on top of the underlying blockchain, or Layer-1.

  • LBP

    Load Balancing Protocol.

  • Liquidity Pool

    A crowdsourced pool of cryptocurrencies or tokens locked in a smart contract that is used to facilitate trades between the assets on a decentralized exchange (DEX).

  • MainNet

    A MainNet is the primary network where transactions take place.

  • MCAP

    Market Capitalization. This is the value of a publicly available token or cryptocurrency. It is equal to the token price multiplied by the number of tokens in distribution.

  • Miner

    A network node or operator that finds valid proof-of-work & proof of stake for new blocks on the blockchain.

  • Mining

    The process by which blocks or transactions are verified and added to a blockchain using a Proof of Work (PoW) consensus mechanism.

  • NFT

    The acronym for Non-Fungible Token. At a basic level, an NFT is a digital asset that links ownership to unique physical or digital items, such as works of art, real estate, music, or videos.

  • Node

    A software client that participates on the network to facilitate validating and providing consensus.

  • P2P

    Peer-to-Peer refers to interactions that happen between two parties, usually two separate individuals. A P2P network can be any number of individuals.

  • PoA

    PoA stands for “Proof of Authority”, an algorithm used by blockchains to deliver faster transactions.

  • PoS

    PoS stands for “Proof of Stake”, a consensus mechanism used by a blockchain networks.

  • PoW

    PoW stands for “Proof of Work”, a cryptographic verification method used by a blockchain networks.

  • Private Key

    A secret number that allows users to prove ownership of an account by producing a digital signature.

  • Public Key

    A number, derived via a one-way function from a private key, which can be shared publicly and used by anyone to verify a digital signature made with the corresponding private key.

  • Reward

    An amount of cryptocurrency included in each new block as a reward by the blockchain to the miner who found the proof-of-work solution.

  • SagaChain™

    The underlying layer 1 blockchain that SagaOS will operate on.

  • SagaCoin™

    The name of the cryptocurrency that powers the SagaChain and SagaOS.

  • SagaOS™

    The global operating system that powers the SagaChain and all development therein.

  • SagaPython™

    A modified syntax of the Python programming language that allows developers to build apps and services on top of the SagaChain, leveraging the base classes available natively in the chain itself.

  • Secure Hash Algorithm (SHA)

    A family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST).

  • Sharding

    Sharding is a database partitioning technique used by blockchain companies with the purpose of scalability, enabling them to process more transactions per second. Sharding splits a blockchain company’s entire network into smaller partitions, known as “shards.” Each shard is comprised of its own data, making it distinctive and independent when compared to other shards.

  • Smart Assets™

    A single, editable, blockchain object that can track the entire lifecycle of a product, asset, or application.

  • Smart Contract

    A computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of need in trusted intermediators, arbitrations and enforcement costs, fraud losses, as well as the reduction…

  • Stable Coin

    Any cryptocurrency pegged to a stable asset, like fiat currency or gold. It theoretically remains stable in price as it is measured against a known amount of an asset less subject to fluctuation.

  • Staking

    Staking is the process of locking up crypto holdings in order to obtain rewards or earn interest.

  • TestNet

    An alternative blockchain developers use to test applications in a near-live environment.

  • TGE

    Token Generation Event. When Tokens are generated/created.

  • Tokenomics

    The study of the economics of crypto tokens or cryptocurrencies is called tokenomics. It fundamentally involves studying the factors that impact the demand and supply of tokens. The factors include quality, distribution and production of crypto tokens.

  • Transaction Fee

    A fee you need to pay whenever you use the blockchain network. You can think of this as a service fee. This fee will change based on how busy the network is. This is because miners, the people responsible for processing your transaction, are likely to prioritize transactions with higher fees – so congestion forces…

  • Validators

    Validators are participants in Proof of Stake (PoS) consensus.

  • Wallet

    A designated storage location for digital assets (cryptocurrency) that has an address for sending and receiving funds. The wallet can be online, offline, or on a physical device.

  • Web 3.0

    Terms used synonymously with “the decentralized web” and are often used to refer, broadly, to the blockchain and decentralized technology ecosystems as a whole.

  • XBOM

    XBOM™ (the eXtensible Blockchain Object Model) was an early name for what is now known as SagaOS™