仮想通貨に関する用語集(CRYPTO GLOSSARY) D行

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A B C D E F G H I J
K L M N O P Q R S T
U V W Y Z

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  1. Data Availability
    1. What is Data Availability in Blockchain?
    2. Why Does the DA Problem Matter?
    3. What are the Solutions to the DA Problem?
  2. Day Trading
    1. What Is Day Trading in Cryptocurrency?
    2. How Does Day Trading Work?
  3. Decentralized Application
    1. What is a Decentralized Application (dApp)?
    2. Characteristics: What Defines a dApp
    3. What are the Advantages of Using a Decentralized Application?
  4. Decentralized Automous Organization (DAO)
    1. What Does Decentralized Autonomous Organization (DAO) Mean in Crypto?
    2. How Does a Crypto DAO Work?
  5. Decentralized Digital Identity
    1. What is a Decentralized Digital Identity?
    2. Centralized Architecture Vs Decentralized Architecture
      1. What Makes up a Decentralized Identity System? 
  6. Decentralized Exchange (DEX)
    1. What is a Decentralized Exchange (DEX)?
    2. CEX vs DEX
  7. Decentralized Finance
    1. What is Decentralized Finance?
    2. DeFi vs CeFi 
      1. What is the Difference Between Blockchain, Cryptocurrency, and DeFi? 
  8. Decentralized Identifiers (DIDs)
    1. What are Decentralized Identifiers (DIDs)?
    2. Key features of DIDs
  9. Decentralized Storage
    1. What Is Decentralized Storage?
    2. Benefits and Drawbacks of Decentralized Storage
  10. Deepfake
    1. What Is a Deepfake?
    2. Illicit deepfakes
      1. Acceptable use cases
  11. Deflationary Asset
    1. What is a Deflationary Asset?
    2. How Do Deflationary Cryptocurrencies Work?
  12. Degen
    1. What is a Degen in Crypto?
  13. Delegated Proof-of-Stake (DPoS)
    1. What is Delegated proof-of-stake (DPoS)?
  14. Delegator
    1. What Is a Delegator in Crypto?
      1. Staking vs Delegation
  15. Delisting
    1. What Is Delisting in Crypto?
    2. What Factors Contribute to Delisting Tokens?
  16. Dencun
    1. What Is the Dencun Upgrade?
      1. What are the key improvements?
  17. Depeg
    1. What is a Cryptocurrency Depeg?
    2. Why do Stablecoins Depeg?
  18. DePIN
    1. What Is A Decentralized Physical Infrastructure Network?
    2. How Does DePIN Work?
  19. Derivatives
    1. What Are Crypto Derivatives?
  20. Design Flaw Attack
    1. Example of Design Flaw Attack
  21. Desktop Wallet
    1. What is a Desktop Wallet?
  22. Difficulty Time Bomb
    1. What is the Difficulty Time Bomb?  
    2. Timing of Difficulty Bomb Updates
  23. Digital Signature
    1. What is a Digital Signature?
    2. How Do Digital Signatures Work? 
  24. Distributed Ledger
    1. What is a Distributed Ledger?
    2. What are the Benefits of a Distributed Ledger?
  25. Dollar Cost Averaging (DCA)
    1. What is Dollar Cost Averaging In Crypto?
    2. Dollar Cost Averaging Benefits
  26. Domain Name Service (DNS)
    1. What Is Domain Name Service in Blockchain?
    2. Popular Blockchain Domain Name Service Platforms
  27. Double Spending
    1. What is Double Spending?
      1. Can Bitcoin Be Spent Twice? How Does Bitcoin Prevent Double Spending?
  28. Dust Transaction
    1. What Is a Dust Transaction?
  29. Dynamic Music Data NFTs
    1. What Are Dynamic Music Data NFTs?
    2. How Does a Dynamic Music NFT Work?
  30. Dynamic NFT
    1. What is a Dynamic NFT?
      1. Static NFTs vs. Dynamic NFTs 
    2. What Are the Various Use Cases of Dynamic NFTs?
  31. DYOR
    1. What is DYOR in Crypto?
    2. What Happens If You Don’t DYOR in Crypto?
    3. How To DYOR in Crypto
  32. Crypto Exchanges Affiliated with This Site
  33. Hardwallet Affiliated with This Site

Data Availability

Data availability is the process of ensuring data is continually accessible to applications, end users, and organizations, when and where it is needed.

What is Data Availability in Blockchain?

Data availability (DA) in blockchain refers to the ability to access all transaction data for verification in a decentralized network. It is the guarantee that every transaction in a block is accessible to every participant in the network. 

The availability of data is crucial in promoting transparency and integrity in a distributed ledger. In native blockchains such as Bitcoin and Ethereum, full nodes download and validate all transaction data in the blockchain network. This requires a lot of resources that may not be available in other complex systems, such as Layer 2 Solutions. Light nodes, on the other hand, can be operated with less powerful resources. 

Since light nodes and layer 2 solutions do not process transaction data by themselves, they provide effective scaling solutions.

However, light nodes do not download or validate transactions and only contain the block header. In other words, light nodes assume that transactions in a block are valid without the verification that full nodes provide, which makes light nodes less secure. This issue is referred to as the data availability problem.

Why Does the DA Problem Matter?

If you are not running a full node, there is a need to ensure that the summarized form of transaction data represents a set of valid transactions for the whole network.

For instance, when increasing the block size limit, running a full node will be expensive, and more people will choose to run a light node instead, which is less secure. Therefore, light clients will need some kind of fraud-proof support to verify all the data in a block.

Layer 2 scaling solutions, such as rollups, enhance blockchain scalability by processing transaction data off-chain. In the case of optimistic rollups, the sidechain users will need fraud proof to detect invalid transactions. Zero-knowledge (ZK) rollups, on the other hand, rely on cryptographic proof for data validation.

What are the Solutions to the DA Problem?

As mentioned in the problem, clients will need to enter DA proof to check the validity of their “sample data”. Technologies such as Data Availability Sampling (DAS) and the Data Availability Committee (DAC) employ two distinct approaches to ensuring data is available.

DAS uses statistical probability to download small, random portions of the data in the block. The process is called data erasure coding. It confirms, with a high probability, that data is available. 

With DAC,  the network employs trusted parties, nodes, or validators, to store copies of off-chain data, which they use to confirm DA. DAS can be used in combination with DAC to enhance scalability in blockchain networks.

Day Trading

Day trading is the practice of buying and selling assets to make profits from price movements within a single day.

What Is Day Trading in Cryptocurrency?

In the cryptocurrency context, day trading refers to entering and exiting positions of digital assets within the same day. Also known as intraday trading, it is a fast-paced trading strategy involving individuals buying and selling cryptocurrencies in a small amount of time – specifically in a single day.

Simply, the primary objective of day traders is to speculate on a cryptocurrency’s price to yield profits from the short-term change. Therefore, intraday traders use different tools and strategies to determine the best trades to enter or exit. 

Day trading often demands great mental dexterity for real-time decision-making. In addition, an effective risk management strategy is essential to mitigate the risks associated with a high frequency of trades executed in a short timeframe.

How Does Day Trading Work?

Similar to traditional markets, the value of digital assets in crypto markets tends to consistently fluctuate due to supply and demand forces. In less volatile conditions, the fluctuations are almost insignificant to long-term investors. However, day traders capitalize on these small movements to accumulate profits by opening and closing trades within a short period.

Therefore, crypto intraday trading involves predicting or identifying short-term price actions of cryptocurrencies to engage in favorable buy or sell opportunities. Day traders then purchase digital assets anticipated to appreciate within a short period and sell or short those likely to dip. Put another way, day traders prioritize the overall profitability of all trades over the success of individual positions.

Most day traders rely on technical analysis (TA) – a common approach for analyzing an asset’s price history to predict price trends and patterns that are likely to recur in the future – to make trading decisions. However, some solely base their trading decisions on intuition while others leverage advanced trading software to automate the analysis of real-time market data and execution of trades.

Some intraday trading strategies include:

  • High-frequency trading (HFT) – Involves using complex algorithms to automate the execution of a large number of trades within a fraction of a second.
  • Range trading – Involves determining overbought and oversold levels to make trading decisions, where the trader buys the asset at the oversold range and sells at the overbought area.
  • Scalping – Scalping is an intraday trading technique that exploits minute price movements to make small, consistent gains within a short timeframe. In other words, scalpers capitalize on price discrepancies caused by the bid-ask spread, gaps in liquidity, or other market inefficiencies.

Decentralized Application

A decentralized application is a software program operating on a peer-to-peer network. It runs independently on the internet using smart contracts, outside the control of a single entity or authority.

What is a Decentralized Application (dApp)?

Decentralized application (dApps) are software applications that run on a blockchain network or a distributed system of computers. A dApp is like a typical web application, but one that operates on a peer-to-peer (P2P) network. Hence, you can think of a dApp as a combination of a graphical user interface (GUI) and smart contracts as the backend. dApps are open-source software applications built almost exclusively on the Ethereum network.

DApps allow two parties to transact or enter a contract without the need for an intermediary or central authority to oversee the process. Smart contracts allow dApps to operate autonomously, ensuring that the contract or agreement is automatically fulfilled without human involvement.

Characteristics: What Defines a dApp

DApps are also open source and censorship-resistant. This means that a dApp’s source code is available for anyone to view, inspect, copy, modify for their own use, and contribute suggestions.

dApps are decentralized since they operate on a decentralized network and no single entity controls them. In addition, they have no single point of failure.

What are the Advantages of Using a Decentralized Application?

Some of the benefits decentralized applications have over regular applications include:

  • User privacy – dApps are secured using cryptography, meaning that your information is encrypted so that no one else in the network can access it.
  • Fault-tolerance – Unlike traditional apps that store data on a centralized server that is controlled by a single entity, dApps’ decentralized nature eliminates the possibility of a single point of failure.
  • Data integrity – On top of each node (or computer) storing every transaction, the blockchain’s consensus mechanism ensures that the data cannot be manipulated. This improves the security and integrity of decentralized applications.

The distributed nature of dApps ensures their transparency, resistance to malicious attacks, and decentralization.

Decentralized Automous Organization (DAO)

A decentralized autonomous organization (DAO) is a community with no centralized authority, in which members collectively make decisions in a bottom-up manner regarding its governance and operation.

What Does Decentralized Autonomous Organization (DAO) Mean in Crypto?

Decentralized Automous Organization (DAO) are communities that function without a hierarchy in place, and instead run based on a set of rules enforced via a smart contract. The members of a DAO share a common goal which is to work together to achieve a common goal. As an example, users can form a DAO dedicated to charitable courses, pool funds together and members will vote on who and where to donate their funds to. 

The DAO model operates like a traditional financial corporation but with better transparency and shared voting power. DAOs are governed by members of the community who share equal responsibilities and vote on oversight decisions. Unlike a traditional organization, there are no executives and every member partakes in governance. 

With DAOs, members do not have to trust each other, they only need to trust the smart-contract. This is another departure from traditional institutions which require trust between executives and investors. A DAOs’ source code is available to the public and is tested severally before launch. This builds trust. 

How Does a Crypto DAO Work?

DAOs function using smart contracts which define and enforce the DAO’s rules. Participants who buy tokens for a DAO have voting rights and the privilege to suggest and implement new governance proposals. For a proposal to pass, the majority of stakeholders in the DAO have to approve it. The voting process is available on the blockchain and voting power varies depending on the number of tokens a participant holds. For instance, a user with 500 tokens of the DAO will hold more voting power than another participant with 50. 

Decentralized Digital Identity

A decentralized digital identity is a type of identity management that enables individuals to control their own digital identities, without relying on a centralized authority. The concept involves the creation of unique and verifiable identities directly controlled by the holders.

What is a Decentralized Digital Identity?

A digital identity refers to the set of credentials an individual or organization uses online to represent who they are. Digital identities are derived from attributes such as usernames and passwords, name, date of birth, online search history, purchase history, and social security number. Digital IDs can be as simple as an email address or as complex as a digital certificate.

A decentralized digital identity, often interchangeably used with self-sovereign identity, is the concept of identifying and verifying individuals or entities without the need for a centralized authority. Blockchain technology facilitates the use of cryptographic keys that control identity and allow users to decide how and with whom their information is shared. The interactions are recorded on the blockchain network, creating an immutable history of the interactions with the digital identity.

Centralized Architecture Vs Decentralized Architecture

Centralized digital identities are associated with a myriad of problems, including certificate fraud, slow verification process, fake credentials, identity thefts, and data breaches. For instance, if biometric data is stored in a centralized location, it could be susceptible to a single point of failure. 

Decentralized identities present an opportunity to address the drawbacks of centralized architecture. With decentralized identities:

  • Individuals can decide what information is shared, how it is shared, and who can access it.
  • Users completely own and control their personal information.
  • It eliminates data and activity tracking.
  • The overall identity verification process is streamlined, reducing bureaucracy.
  • Credentials and certificates become fraud-proof.
  • It eliminates the single point of failure by distributing encrypted user data across nodes in a blockchain network.

What Makes up a Decentralized Identity System? 

A decentralized identity system is made up of three key components: blockchain, Verifiable Credentials (VCs), and decentralized identifiers (DIDs).

  • Blockchain: A blockchain is a decentralized and distributed ledger system that stores transactional data. It records user information in a permanent and tamper-proof manner, making it nearly impossible to manipulate the system.
  • Verifiable Credentials (VCs): VCs are digital and cryptographic versions of documents that identify and verify an individual or organization. They allow the verifier to easily identify the holder and trust the data without needing to trust the source. 
  • Decentralized identifiers (DIDs): A type of digital identifier that allows users or entities to create and manage their own unique identities, without requiring a third party. DIDs interlink users’ credentials using cryptography, without relying on personally identifiable information (PII).

 

Decentralized Exchange (DEX)

A decentralized exchange (DEX) is a peer-to-peer marketplace that allows users to directly trade with each other. It doesn’t need a custodian or intermediary to hold the users’ funds or facilitate transactions.

What is a Decentralized Exchange (DEX)?

A decentralized exchange (DEX) defines an exchange where crypto transactions are conducted in a non-custodial manner. This means that it has no intermediary or custodian that facilitates custody and exchange of funds. Instead, users have complete control over their digital assets and can trade directly from their wallets. 

Instead of relying on order books to execute trades, decentralized exchanges typically rely on smart contracts – pieces of self-executing code – to facilitate these transactions. However, trading volumes in DEXs tend to be lower than they are in centralized exchanges (CEX). Hence, the platforms offer incentives for users to provide liquidity to liquidity pools. 

The liquidity providers (LPs) – users supplying the liquidity pool with their digital assets – deposit an equal value of trading pairs (two tokens) to generate interest from their cryptocurrencies. Every transaction made incurs a transaction or trading fee, which is then rewarded to the LPs.

CEX vs DEX

A centralized exchange is a type of crypto exchange where the marketplace is created and owned by a single entity with its own motives and priorities. The entity acts as an intermediary that matches buy and sell orders using an order book system, which is the same system traditional banks still use. In contrast, DEXs are not controlled by any entity. Instead, they use automated market makers (AMMs) to crowdsource funds in liquidity pools and automate transactions. Thus, while CEXs rely on market participants to decide the price for exchanging two assets, the pricing is automatically adjusted in AMM DEXs. 

CEXs are characterized by their custodial nature, where the exchange holds the assets being traded. DEXs, on the other hand, carry out non-custodial transactions, meaning that the asset never passes through an intermediary. The users maintain complete custody of their digital assets during the entire transaction process, reducing counterparty risks. Traders typically interact with a smart contract rather than a counterparty in a DEX.

While CEXs vet digital assets before they can be listed, DEXs list any token minted on the protocol they are built on. This creates token availability for early adopters in DEXs before they can be found on centralized exchanges, but also exposes them to potential rug pulls. DEXs are also prone to a myriad of risks, including liquidity risks, smart contract risks, front running risks, network risks, and volatility risks.

 

Decentralized Finance

Decentralized Finance (DeFI) refers to financial applications and services that are built on a blockchain and operate without a central governing authority (hence, “decentralized”).

What is Decentralized Finance?

Decentralized Finance or DeFi is an umbrella term that refers to financial applications built using blockchain technology, mostly on the Ethereum network. DeFi was developed as an alternative to the more centralized traditional financial system. DeFi uses smart contracts – blockchain-based programs that execute a given action when predetermined conditions are met – to operate services without a central authority. Users interact peer-to-peer, with interactions governed by the smart contract of the protocol.

The Ethereum blockchain was the first to introduce smart contract functionality. This is the origin of DeFi, and most applications are still on Ethereum today.

Decentralized Finance has several functions in the cryptocurrency market, including:

  • Peer-to-peer lending and borrowing 
  • Decentralized financial services, such as insurance
  • Stablecoins
  • Staking and yield farming
  • Decentralized exchanges, such as DEXs and AMMs.

DeFi vs CeFi 

Traditional Banks are the best examples of centralized financial entities. You use banks to create an account and save money, take loans and send money. As middlemen , The banks hold significant power; they can demand significant personal data, extensive credit checks before giving access to loans and services and limit certain transactions  to banking hours. In contrast, DeFi removes the need for  third-party involvement: thanks to smart contract based protocols, users can access financial services with only a crypto wallet and internet connection. 

The DeFi ecosystem operates 24/7, is accessible to anyone, and provides much more privacy than traditional banks. You can secure your cryptocurrencies in hardware or software wallets to ensure control over your assets. A major perk of DeFi is the shorter processing time for transactions, like loans or staking. 

DeFi also gives users a way to generate income on their digital assets by contributing to lending pools which are used for offering collateral-backed loans to other users. 

What is the Difference Between Blockchain, Cryptocurrency, and DeFi? 

Blockchain is a digital ledger that stores information and transaction histories; it is the foundation for crypto and DeFi.  

Cryptocurrencies are units of value hosted on the blockchain, and are units of exchange in the DeFi ecosystem. 

DeFi is the ecosystem of decentralized financial services enabled by smart contracts on the blockchain.

 

Decentralized Identifiers (DIDs)

Decentralized Identifiers (DIDs) are a new kind of tool that allow individuals and organizations to establish and control their online identities without relying on centralized authorities.

What are Decentralized Identifiers (DIDs)?

Our identities have become scattered across numerous platforms and databases. From social media profiles to online shopping accounts, our digital footprints are everywhere. However, this fragmentation has led to significant issues surrounding data privacy, security, and control.

Traditionally, we’ve relied on centralized identifiers like email addresses and usernames to access online services. While convenient, these identifiers come with inherent problems. They’re often controlled by third parties, vulnerable to data breaches, and can be revoked or altered without our consent. Moreover, they contribute to the tracking and profiling of our online activities.

Enter Decentralized Identifiers (DIDs). DIDs are a new type of identifier that puts users in complete control of their digital identities. They enable individuals and organizations to create, manage, and authenticate their online presence without depending on any central authority. DIDs are cryptographically verifiable, globally unique, and can be used across various platforms and services.

Key features of DIDs

DIDs represent a paradigm shift in how we manage our digital identities. Here are some key features that set them apart from centralized identifiers:

  1. User Control: Unlike traditional identifiers, DIDs are created and managed entirely by the user. This means you have full ownership and control over your digital identity.
  2. Decentralization: DIDs don’t rely on any central authority for creation or verification. This eliminates single points of failure and reduces the risk of large-scale data breaches.
  3. Cryptographic Security: Each DID is associated with a pair of cryptographic keys – a public key for verification and a private key for authentication. This ensures that only the rightful owner can access their DID.
  4. Persistence: DIDs are designed to be long-lasting and independent of any particular service provider. They can’t be arbitrarily revoked or altered by third parties.
  5. Interoperability: DIDs are based on open standards, making them usable across different platforms and services. This promotes a more connected and user-centric digital ecosystem.
  6. Privacy-Preserving: With DIDs, users can selectively disclose information about themselves, giving them greater control over their privacy.

By addressing the shortcomings of centralized identifiers, DIDs pave the way for a more secure, private, and user-centric digital identity landscape. They empower individuals and organizations to take control of their online presence, fostering trust and authenticity in their digital interactions.

 

Decentralized Storage

Decentralized storage is a type of storage that allows users to store and access files or data in a distributed manner.

What Is Decentralized Storage?

Decentralized storage refers to the distributed storage of data across various nodes within a peer-to-peer network. It is often associated with blockchain-based networks as an alternative to legacy, centralized storage methods. 

To provide context, storing data in centralized servers grants substantial power and control to a single entity. The centralized storage approach entails storing and managing data in a central location on a single server or group of servers. While this approach provides users with easy data accessibility and management, they are also susceptible to a single point of failure, data loss during network or hardware failure, cyberattacks, and privacy breaches.

Decentralized storage solutions, on the other hand, spreads data across a geographically distributed network of computers, known as nodes, instead of storing it in a single location. This approach facilitates the storage of large data volumes without the need for a centralized entity. By eliminating the need for a central authority, decentralized file storage solutions eliminate privacy breaches and potential censorship. In other words, users have complete control over the utility of their data, including what to share and how to share it.

Benefits and Drawbacks of Decentralized Storage

Decentralized storage options hold several benefits over the traditional storage methods. Some of the benefits include:

  • Enhanced security and privacy – Since the data is distributed across various network nodes, it eliminates the risk of a single point of failure. This also means they are more resilient to attacks. And since users have complete control over their data, no third party can use or share their data without their consent.
  • Increased fault tolerance and reliability – By eliminating a single point of failure, users can still access or retrieve data from systems even if one node fails.
  • Faster data retrieval or download speeds – In decentralized file storage systems, data is retrieved from the nearest nodes. This also potentially minimizes bandwidth usage and lowers cost.
  • Enhanced data integrity – Such an architecture ensures users can access their data anytime, even if something happens to one or several nodes. In addition, by hashing data, these solutions ensure the data quality remains intact over time.

While decentralized storage has its merits over centralized system, it is not without drawbacks. For instance, by distributing data storage and access over a network of nodes, the access times can sometimes be slower compared to centralized storage. In addition, malicious nodes can potentially compromise the security of data stored within a decentralized data storage system.

Another potential challenge lies in the lack of standardization in this kind of storage, where different protocols use different encryption techniques. This creates an issue in achieving interoperability.

 

Deepfake

A Deepfake is a kind of synthetic media produced using artificial intelligence (AI).

What Is a Deepfake?

If you’ve spent some time on the internet, then you’ve probably come across a deepfake. Whether it is your favorite artist collaborating with a reimagined late artist in 2024, or a content creator dancing with a celebrity from a different part of the world. 

Deepfake, a portmanteau of “deep learning” and “fake,” refers to artificial or digitally altered media that uses a person’s likeness. Deepfakes are usually created through a combination of machine learning (ML) algorithms, image processing techniques, and AI. 

Illicit deepfakes

Artificial media generated using this AI technology is becoming increasingly convincing, making it difficult to discern digitally manipulated content from authentic media. This has led to malicious actors misusing it for nefarious purposes such as:

  • Spreading misinformation and fake news – Deface the trust in institutions and media by spreading false information, misleading content, or manipulating election outcomes by tarnishing political campaigns.
  • Identity theft and financial fraud – Duplicate or steal the identities of real people to commit financial fraud or other crimes that incriminate the identity theft victim.
  • Scams and hoaxes – Scams, financial crimes, and false claims that can undermine an organization’s integrity, brand, and public reputation.
  • Social engineering – Social engineering attacks, such as fooling victims with audio deepfakes into believing a close friend or trusted entity needs financial aid.
  • Automating disinformation attacks – Fuel conspiracy and incorrect theories regarding political and social issues.

Acceptable use cases

Deepfake AI equally holds potential for acceptable applications in voice cloning and creative arts. Other acceptable use cases include:

  • Entertainment – It can be used in creating parodies and satire in entertainment and political speech.
  • Demonstrating technology – It also exhibits the advancement in technology in technical show demonstrations, films, research and development, and news report fields.
  • Historical recreations – Historians can use deepfakes to recreate historical events or animate relics and old paintings.
  • Creative derivative simulations – Deepfake technology can also be used to reimagine pseudo-historic recordings, books, films, and other media to appear as if they were produced before the original art itself.

 

Deflationary Asset

A deflationary asset is a digital or virtual currency designed to decrease in supply over time, leading to an increase in its value.

What is a Deflationary Asset?

Inflation is an economic phenomenon characterized by a currency losing its purchasing power.  Traditional fiat money gradually increases in supply, which makes it subject to inflation by default. In contrast, a deflationary asset is one that typically increases in value over time due to a decrease in its supply.

A deflationary cryptocurrency is one where the supply of coins or tokens gradually decreases. The number of coins in circulation declines over time, creating scarcity and increasing its value. As a result, the purchasing power of a deflationary cryptocurrency increases over time. 

How Do Deflationary Cryptocurrencies Work?

Deflation in cryptocurrency occurs in two ways – burning mechanism and capped supply or issuance (hard cap).

Crypto burning occurs when coins or tokens are sent to a burn or eater address (dead wallet) to remove them from circulation indefinitely. For instance, a platform or crypto community may repurchase coins or tokens from holders and burn them, which is known as a buyback-and-burn mechanism. Alternatively, some blockchain networks use smart contracts to burn a small percentage of their tokens or coins as a transaction fee or during minting. This is called a burn-on transaction. Crypto burning often appreciates the value of the cryptocurrency as its overall circulating supply gradually declines.

Some cryptocurrencies are hard-capped or limited to allow only a specific number of coins to ever be created. Bitcoin, for example, is capped at 21 million, meaning that only 21 million coins can ever exist. Once Bitcoin attains its maximum supply, supply and demand forces come into play. Bitcoin’s supply will remain stagnant, while its demand grows. This will create scarcity, leading to an increase in its value. 

Bitcoin also uses a halving mechanism, where the block reward is reduced by half every four years. This slows the rate at which new coins are added to circulation.

In general, deflationary cryptocurrencies are perceived as assets that protect capital from inflation.

Degen

In the context of the crypto community, “degen” is short for “degenerate” and is often used to refer to a person who is involved in high-risk, speculative trading or investing in cryptocurrencies.

What is a Degen in Crypto?

The origin of the term “degen” can be linked to sports betting, where it was used as a shortened form of “degenerate”. Typically used as a derogatory term, it refers to bettors who place large sums of money without the necessary knowledge or expertise to support their bets.

“Degen” is a shorthand term used in the world of cryptocurrency to describe traders who engage in risky, speculative behavior without conducting proper research and due diligence. They are referred to as those who do not pay attention to metrics, tokenomics, fundamental analysis, or technical analysis, and may make buying decisions based on superficial factors like an asset’s logo or a catchy slogan. 

Despite its negative connotations, the term “degen” has been adopted by many in the crypto community as a badge of honor, indicating a willingness to take risks and embrace the industry. They are known to be typically committed to the projects and communities they invest in. 

Despite the potential for losses, degens are often seen as passionate and committed members of the crypto community. They may contribute to projects through active participation, offering ideas, feedback, and support to help build up communities.

Delegated Proof-of-Stake (DPoS)

Delegated proof-of-stake is a consensus mechanism which allows users of a network to vote and elect delegates who will validate transactions on that network.

What is Delegated proof-of-stake (DPoS)?

Proof-of-stake (PoS) consensus mechanism uses validators to verify transactions and create the next block in the network. This technique is viewed as a cheaper and more efficient alternative to proof-of-work (PoW)consensus mechanism. The latter requires high computing power, large amounts of electricity, and technical know-how. The PoS mechanism does not require validators to mine, instead they stake the required number of coins on the network and are randomly selected to create the next block and earn rewards. 

The criteria for choosing validators differ but users with the largest number of staked coins have a higher chance of being selected for each block. This system reduces the risk of a compromise as it would require a hacker to control 51% of the staked coins on the network to launch an attack.  

A delegated proof-of-stake (DPoS) system allows users to stake their coins but instead of becoming validators, they elect a delegate to perform this task. Delegates are also known as ‘witnesses’ or ‘block producers’. The number of delegates for every new block is limited (20-100) and they are elected based on their reputation. New delegates are elected for each block and they receive the reward for validating that block which is distributed to users who staked their coins in that delegate’s pool.

The DPoS system solves most of the constraints associated with PoW and PoS blockchains like democratically electing delegates and a shorter transaction per second (TPS) time. The consensus mechanism uses a voting system to select witnesses who validate transactions and create new blocks. Delegates oversee governance in the DPoS system and they are voted in by other users. They can propose changes like altering the size of a block or which witnesses will receive block rewards. Another component of this consensus mechanism are validators who validate the blocks created by witnesses. Validators receive no rewards for this task. 

The DPoS consensus mechanism evolved from the PoS system with variations that add more value to consensus mechanisms. The system allows users to select delegates based on reputation and not wealth allowing for more diversity and trust. The small pool of validators allows for a faster transaction time. 

Delegator

A delegator is a network participant who assigns their economic stake to a network validator in a proof-of-stake (PoS) or delegated proof-of-stake (DPoS) blockchain.

A delegator is a network participant who assigns their economic stake to a network validator in a proof-of-stake (PoS) or delegated proof-of-stake (DPoS) blockchain.

What Is a Delegator in Crypto?

A delegator is a node that indirectly participates in a network’s consensus process without running as a full node. Through a process known as delegation, the network participant stakes their cryptocurrency tokens with a staking provider or an active validator node. By doing this, the node receives a percentage of the block rewards based on their token contribution.

Moreover, the delegator retains control over their tokens and can cash out at any time, based on the token’s unbonding period (the wait time before a user can withdraw their tokens after unstaking them).

Staking vs Delegation

Staking typically allows users to participate in the network as validators. It involves locking up a certain amount of the network’s native token for the opportunity to be selected as a validator. Delegating is the alternative method of earning yields besides staking in PoS or delegated proof-of-stake (DPoS) networks. While the staking process requires a minimum amount of tokens for participation, even users with the smallest account balances can participate in the delegation process.

Due to a lack of necessary resources (such as computing power and hardware), technical know-how, or the minimum token requirement to run a validator node, users who still wish to participate in the validation process choose to delegate. And by contributing their tokens to a validator’s staking pool, they can receive a commission from the block rewards the validator receives. Compared to staking, delegation is less of an active investment and demands less effort from the participants.

Generally speaking, this process is a mutually beneficial situation for both the validator and the delegator. Why?

In most PoS blockchains, the probability of being pseudorandomly selected to forge the next block is based on a node’s economic stake and the staking period. This means the more economic stake the network participant has on the network, the higher their chances of being selected as validators. Hence, contributing tokens to a validator’s node increases the size of their economic stake, thereby increasing their odds of earning rewards.

 

Delisting

Delisting is the act or process of removing digital assets, securities, or stocks from a trading exchange.

What Is Delisting in Crypto?

Delisting refers to the removal of cryptocurrency assets from an exchange’s listing. This can either be voluntary or involuntary. 

For instance, the project team can request to withdraw its assets, or the exchange can involuntarily delist the token if the project violates or fails to uphold the exchange’s listing standards.

When a token is delisted, the exchange typically removes all its trading pairs. This means that users can no longer buy, sell, or trade the token on the exchange. However, the token holders are given a specified period to decide what to do with their holdings before the exchange completely ceases supporting the token. During this timeframe, users can:

  • Swap the token for one that is supported on the exchange,
  • Withdraw the crypto to an external wallet or another exchange where it is still active, or
  • Sell the token on an over-the-counter (OTC) market.

If the holder fails to sell or withdraw the delisted token, the exchange can automatically convert it to a stablecoin in the user’s wallet. Alternatively, the exchange may confiscate it, leaving the user with no rights to recover the funds.

What Factors Contribute to Delisting Tokens?

Traditionally, company shares are delisted from an exchange when the company dissolves, declares bankruptcy, no longer meets the exchange’s listing requirements, or is privatized. However, suspending cryptocurrency tokens from trading activities is often due to various reasons. This includes:

  1. Low liquidity and trading volume – The low trading activity associated with low-liquidity assets can create challenges in maintaining an efficient trading environment. As a result of low trading volume, an exchange may decide to remove a token from its listings. 
  2. Regulatory uncertainties – A cryptocurrency can be removed from an exchange finds it is non-compliant with local or international regulations.
  3. Security risks – Networks or smart contracts with exploitable bugs or technical ambiguity threaten the safety of user funds and the exchange’s reputation. Thus, tokens facing security threats face delisting actions.
  4. Absence of protocol development – Protocols that lack progress or community involvement lose credibility and risk the project token being delisted.
  5. Non-existent business-to-customer interaction – Project teams are required to maintain a certain level of communication with the public and can face delisting if they don’t.
  6. Proof of market manipulation – If a crypto project is suspected of engaging in activities regarded as fraudulent, unethical, or illegal, such as market manipulation, insider trading, or pump-and-dump schemes, the exchange can delist the project’s token.

It’s important to note that only centralized exchanges (CEX) can fully delist a token. In contrast, a decentralized exchange (DEX) can delist a token from its frontend user interface. In this case, the token can still be traded manually using the token’s smart contract address as long as there is liquidity.

 

Dencun

Dencun is an upgrade on the Ethereum blockchain aimed to improve its performance by optimizing execution efficiency and data availability within the network.

What Is the Dencun Upgrade?

Cancun-Deneb (Dencun) upgrade is a portmanteau of Cancun and Deneb upgrades, simultaneously implemented on the Ethereum network. The Cancun upgrade comprises the changes made to the execution layer, while the Deneb upgrade focuses on boosting the consensus layer. 

Therefore, Ethereum Dencun refers to Ethereum’s concerted efforts to boost execution efficiency and increase data availability within the network. It will be the most significant upgrade since the Shapella fork, which allowed the network’s validators and stakers to unstake and withdraw their staked Ether.

What are the key improvements?

The Cancun-Deneb upgrade primarily focuses on Ethereum Improvement Proposal 4844 (EIP-4844), also known as proto-danksharding. This update introduces ‘data blobs’ that increase the data availability capacity in Ethereum transactions while effectively reducing gas fees.

Other improvements included in the upgrade include:

  • EIP-1153: Enhances the efficiency of Ethereum smart contracts by minimizing permanent on-chain data storage costs and optimizing block space.
  • EIP-4788: Exposes the Beacon Chain to the execution layers to improve the interoperability between different chains, i.e., it enables direct interaction between smart contracts and Ethereum’s consensus state without needing an external data source.
  • EIP-5656: Seeks to make smart contract processing more efficient by optimizing memory management within the EVM.
  • EIP-6780: Reduces smart contract termination risks by limiting their SELFDESTRUCT function to certain conditions, such as blob expiry.
  • EIP-7044: Allows validators to seamlessly leave the network without compromising the validity of their actions in upcoming upgrades.
  • EIP-7045: Increases the limit for adding validator votes in the Beacon Chain.
  • EIP-7514: This improvement is designed to slow down the growth rate of the active Ethereum validator set by limiting them to a maximum of 8 per epoch.
  • EIP-7516: Enables smart contracts to directly retrieve the current base fee for on-chain data blobs, thereby facilitating manageable and predictable data blob costs in rollups.

 

Depeg

A depeg is a phenomenon that occurs when a stablecoin, which is a cryptocurrency whose value is pegged to another currency, decreases or increases in value relative to the asset it is pegged to.

What is a Cryptocurrency Depeg?

Cryptocurrencies are volatile and can often see sharp swings in price. Stablecoins were created as a hedge against this volatility. Stablecoins are cryptocurrencies designed to withstand volatility and serve as a store of value or means of exchange. To achieve this, they are collateralized by assets such as fiat currencies, gold, silver, or other valuable assets that experience minimal volatility.

Stablecoins and stable assets can also be pegged algorithmically via smart contracts and code. In this case, an on-chain algorithm maintains the pegged value of the stablecoin by managing volatility of the coin.  The code adjusts the supply of the coin to match the value of the asset it is pegged to. Despite these stabilizing models, however, sometimes a stablecoin’s value can deviate from that of the asset it is pegged to, and this is known as a ‘depeg’.

A depeg occurs when the value of a stable asset strays exponentially from its pegged value. There are several reasons why this can happen, including liquidity problems, unfavorable market conditions, and regulatory crackdowns. It can be temporary and cause minimal losses, or it can be permanent and cause significant losses for investors.

Why do Stablecoins Depeg?

Stablecoins can depeg for a variety of reasons. The most frequent factor is market conditions. A sudden spike or drop in the demand for a stablecoin can cause it to depeg, especially if there is not enough liquidity to fill orders. Poor collateralization ratios can also lead to a depeg. Ideally, a stablecoin is supposed to be backed by a ratio of 1:1 to the underlying asset it is pegged to. For example, every supply of the USDC stablecoin issued is typically backed by its equivalent in USD or bonds. Stablecoins that are not adequately backed are more likely to depeg during adverse market conditions. 

Other factors that can cause a stablecoin to depeg include regulatory crackdowns, a bug in the stablecoin’s code, and network congestion. The most recent example of depegging occurred in May 2023 with UST. The stablecoin on the LUNA blockchain was the third largest stablecoin by market capitalization at the time of its crash. The algorithmic stablecoin worked with its sister token, LUNA, to maintain a value pegged to 1 USD through a set of mint and burn mechanisms. However, the UST depegged due to market conditions and lost over 97% of its value.

 

DePIN

A Decentralized Physical Infrastructure Network, or DePIN, is a protocol using cryptocurrency tokens to incentivize creating, maintaining, and operating real-world infrastructures in a decentralized manner.

What Is A Decentralized Physical Infrastructure Network?

DePIN is any blockchain protocol or decentralized application (dApp) incentivizing communities to crowdsource and build real-world infrastructures in a bottom-up approach. The physical infrastructures can range from wireless and sensor networks to energy networks and cloud storage. 

Deploying and managing physical infrastructures, such as power grids and mobility networks, often demands substantial capital. The high capital requirement and complex logistics have left this area predominantly undertaken by major corporations. The lack of competitiveness has led to complete monopoly over end-user services and pricing. Blockchain technology and pervasive network connectivity have made it possible to implement physical infrastructures in an open and decentralized way.

Decentralized Physical Infrastructure Network comprises physical resource networks (PRNs) and digital resource networks (DRNs).

  • PRN: encourages contributors to implement or allocate site-based hardware that will facilitate the provision of non-fungible goods and services– such as connectivity, mobility, and energy– in the real world.
  • DRN: incentivizes individuals to allocate or deploy hardware to enable the provision of versatile, fungible virtual resources, such as storage, memory, computation, and bandwidth.

DePIN is just one of the many terms used to define such infrastructure networks. Some refer to them as Proof of Physical Work (PoPw),  EdgeFi, or Token Incentivized Physical Networks (TIPIN). 

How Does DePIN Work?

In particular, these networks are open source, meaning that both individual contributors and companies can participate in their development. The contributors receive token incentives as compensation, in the form of token rewards, a stake in the network, and a share of the goods and services the network provides. The token rewards are allotted based on geography, network progress, contributor quality, and contributor productivity.

Technically, high productivity and quality contributions attract better rewards than others. Some locations are also perceived as more valuable, hence more rewards. Consequently, a more beneficial network typically generates more incentive for the contributors. 

Some examples of DePIN crypto projects include:

  • Storj: Storj provides decentralized cloud storage solutions to users in a decentralized way, allowing users to transfer large data volumes over a network at a lower fee compared to conventional cloud service providers.
  • React Protocol: React protocol is an energy network that rewards users for contributing to building a decentralized and environment-friendly power grid system. It aims to create a stable energy by incentivizing users to connect their batteries and share surplus energy.

 

Derivatives

Derivatives are products or contracts that obtain their value from an underlying asset like stocks, bonds, commodities, or cryptocurrencies.

What Are Crypto Derivatives?

Derivatives are financial instruments that derive their value from underlying assets, hence the term ‘derivatives’. Through derivatives, traders can gain exposure to the price fluctuations of an underlying asset without possessing it directly. In traditional financial markets, these are assets like stocks or bonds, while crypto derivatives derive their value from cryptocurrencies. 

When trading derivatives, two parties – buyers and sellers, enter into a contractual agreement that obliges them to buy or sell an asset at a predetermined future date.

Derivatives are frequently utilized to hedge against risk. An investor who plans to purchase an asset may opt to sign a derivatives contract that establishes a fixed price for the asset. This method aids in safeguarding against potential fluctuations in the asset’s value.

One of the reasons for the popularity of derivatives is their ability to safeguard portfolios from unexpected risks resulting from high volatility in cryptocurrency prices. A robust derivatives market is attractive to investors as it reduces the risk of portfolio exposure to bear markets.

Futures, Options, and Perpetual swaps are the three popular types of cryptocurrency derivatives.

 

Design Flaw Attack

A design flaw attack is a cyberattack where hackers use corrupted software to access a user’s cryptocurrency asset.

A design flaw attack is a method employed by hackers to compromise a user’s assets by exploiting software vulnerabilities. The attacker deliberately introduces these vulnerabilities into a decentralized exchange or marketplace. Unsuspecting users then engage with this software, resulting in the loss of some or all of the digital assets stored in their wallet.

Design flaws are engineered to persuade users to execute transactions through a smart contract. The malicious tactics deployed by bad actors usually involve offering users incentives, prompting them to deposit their assets into the smart contract. Users interact with the software without realizing the underlying malicious elements, which can ultimately lead to the loss of their assets.

It’s worth noting that not all design flaws in software are created with malicious intent. Sometimes, developers deploy new smart contracts without being aware of inherent code flaws. When a malicious party discovers such a flaw, they exploit it to their advantage.

Example of Design Flaw Attack

One of the most well-known instances of a design flaw attack occurred on Augur. It is a decentralized prediction protocol operating on the Ethereum network. In many prediction markets on Augur, they heavily rely on oracles to provide external information on which bets are placed. Consequently, these markets deceived users into betting on contracts with ambiguous parameters, which ultimately led to disputes and losses.

In other cases, design flaw attacks specifically target the oracles and price feeds of protocols within the DeFi space. In this particular scenario, an attacker with malicious intent deliberately deploys a design flaw bug within a marketplace that depends on a single API as its price data source. Subsequently, the API is disabled before expiration. This allows the attacker to manipulate assets, smart contracts, or protocols that depend on the API for their own advantage.

 

Desktop Wallet

A desktop wallet is a computer program or software cryptocurrency holders use to store and manage private and public keys. It is downloaded and executed on a personal computer.

What is a Desktop Wallet?

A desktop wallet defines a software application that is installed and operates on a desktop computer. It is a type of software wallet since it requires a connection to the internet. 

Typically, cryptocurrencies never leave the blockchain. Thus, instead of storing digital assets, desktop wallets allow users to store and manage their private and/or public keys, which facilitates access to their cryptocurrencies.  Hence, they only provide an interface to interact with the blockchain that hosts the digital assets. 

They work in a similar way to mobile wallets, which are also a type of hot wallets that are rather more convenient. They are considered less convenient due to their lack of portability. However, they can be easily integrated with corresponding mobile wallets.

Most desktop wallets are often non-custodial wallets, in that the holders are usually in complete control of their private keys. Thus, users directly manage and control the transfer of their cryptocurrencies rather than delegating the duty to a third party, such as an exchange.

Hardware wallets are also non-custodial and are known for their superior security. Do desktop wallets share the same advantage? 

Unlike hardware wallets that hold private keys in an offline environment away from the Internet, desktop wallets still require an Internet connection. The internet factor makes the crypto wallet susceptible to malware attacks, hackers, and other online threats. For instance, a malicious hacker can access the holder’s private keys through phishing attacks. Technically, if your private keys fall into the hands of a malicious actor, they gain control of your crypto funds on the blockchain. 

Examples of desktop wallets include Exodus, AtomicDEX, Guarda, and Electrum.

 

Difficulty Time Bomb

The Difficulty Time Bomb describes the growing difficulty in mining Ethereum as the network transitions from a Proof of Work to a Proof of Stake blockchain.

What is the Difficulty Time Bomb?  

The Ethereum network uses a proof of work consensus mechanism to validate transactions. In the proof of work system, miners solve puzzles to validate transactions. These puzzles take a fixed amount (10 – 20 secs) of time to solve. As more miners participate in the Ethereum network, the puzzles may be solved in a shorter time. To maintain the time it takes to validate transactions, the network makes the puzzles more difficult to solve. The difficulty time bomb is the increasing difficulty of the puzzles required for mining on the Ethereum blockchain.

As the difficulty level increases, miners will be able to create fewer blocks, and will therefore earn less Ether. This will make mining on the network less attractive and unprofitable, which would lead to an Ethereum ‘Ice Age’ where mining activities on the network are frozen. 

The difficulty time bomb was introduced into Ethereum’s code in August 2015, beginning from block 200,000. This addition to the blockchain will lead to longer processing times for solving puzzles, which in turn leads to fewer ETH rewards. The goal is to discourage miners from continuing to operate the PoW model on the old chain as the network plan is migrating to the Proof of State (POS) consensus model as part of its roadmap. 

Miners will not be allowed to continue creating blocks on the old chain once this migration happens, because it would lead to the blockchain disintegrating into two separate forks. 

Timing of Difficulty Bomb Updates

It was introduced in August 2015 and went into effect in November 2016. This caused the block resolution time to go up and increase significantly in difficulty. The initial timeline suggested that difficulty levels would ramp up within a month of the launch till the difficulty time bomb detonated i.e. stop miners from creating new blocks. 

However, there have been a number of delays to roll out the difficulty time bomb. There have been five updates since the difficulty bomb was introduced, with the last one happening in June 2022, to push back the difficulty time bomb. Ethereum developers have suggested that that upgrade known as the Gray Glacier Upgrade may be the last setback to the detonation.  

 

Digital Signature

A digital signature is an encrypted, electronic imprint that authenticates digital information, software or messages. Like a handwritten signature, it verifies the identity and origin of data.

What is a Digital Signature?

A digital signature is an electronic seal that confirms the sender of a message, digital document, or data. They use mathematical encryption to provide integrity and security for digital transactions. The purpose of digital signatures is to prevent impersonation and the compromise of electronic communication.

In blockchain technology, it proves that a transaction is being initiated by the owner of the asset. For example, say you want to send Bitcoin to another address. You will add the recipient address to your wallet and enter your password to complete the transaction. This password acts as your digital signature and proves to the nodes on the network that you are the authentic owner of the account. Once authenticated, the transaction will then be validated. 

How Do Digital Signatures Work? 

When you initiate a crypto transaction, you need to prove to the network that the cryptocurrency belongs to you. You do this by signing in with your private key so the network can authenticate the transaction.

A private key and a public key are vital components of cryptocurrencies and together they control access to your assets. Your public key is your address, and anyone can send you cryptocurrency with this address. The private key is the password to your wallet; you need the private key for identification, access, and to create a digital signature.
Public Key Cryptography (PKC) uses a ‘trapdoor’ concept to generate digital signatures that are virtually impossible to forge. This means that your digital signature is unique to you alone.

The nodes on a blockchain network will verify the source and content of the transaction once the digital signature has been detected before executing the transaction.  

 

Distributed Ledger

A distributed ledger is a record or database spread across a network that is accessible from several geographical locations.

What is a Distributed Ledger?

Distributed ledger technology (DLT) refers to a digital system that records every transaction regarding an asset. The transaction details are simultaneously recorded and accessed from multiple sites, as opposed to a central location used in conventional databases.

Distributed ledgers use independent nodes or computers to record, process, validate, and synchronize every transaction in their respective digital ledgers. It uses a decentralized server, which means that there is no central authority or central storage location. Instead, a record of each transaction is replicated on every node and a consensus is reached based on the transaction’s accuracy.

Distributed ledgers are used to create blockchain networks. They also create immutable records, meaning that once data is recorded on the ledger, it cannot be tampered with, deleted, or modified.

While the terms DLT and blockchain are sometimes used interchangeably, there’s a big difference between the two. Blockchains chain together blocks of data to form a distributed ledger, while DLTs do not organize data into blocks.

What are the Benefits of a Distributed Ledger?

Distributed ledgers offer enhanced security and immutability compared to conventional databases.  Since a distributed ledger is inherently decentralized, it lacks a central point of failure or authority, making the system resilient to hacks/attacks and less prone to system-wide failures.

By removing the need for a central authority, distributed ledgers improve the speed of transactions and significantly reduce transaction costs. In addition, distributed ledgers facilitate a high level of transparency in databases by ensuring information is shared and easily accessible across a network.

Distributed ledger proponents argue that the technology has the ability to help in monitoring ownership and intellectual property (IP) rights for music, art, films, etc.

However, the technology, mostly due to its infancy, is more difficult and complex to implement and sustain as compared to conventional ledgers. It also struggles with scalability as transactions and system users increase, heightening costs and slowing processing capabilities. Distributed ledgers like Bitcoin also consume a significant amount of energy to process transactions and sustain the ecosystem.

 

Dollar Cost Averaging (DCA)

Dollar Cost Averaging (DCA) is a strategy that involves investing a fixed amount in any asset like digital asset at regular intervals.

What is Dollar Cost Averaging In Crypto?

Dollar Cost Averaging (DCA) refers to regularly investing smaller, fixed amounts of money in a specific digital asset (i.e. purchasing USD30 worth of Bitcoin every week). 

With dollar cost averaging, investors buy a set amount of the asset over a period of time, rather than all at once. As a result, the investor buys a set unit of the assets regardless of the price of the asset being invested in. By entering the market gradually, the investor has the potential to purchase the asset at a lower overall cost than if they had bought a large amount of the asset in a single trade.

Here’s an example of dollar cost averaging:

Ogee and Gigi both intend to buy at least 1 BTC each. Let’s say that 1 Bitcoin is currently valued at USD10,000. Ogee uses all his investment money to buy 1 BTC at the current price.

Gigi, on the other hand, decides to apply the dollar cost averaging technique and spreads the fund over 10 months, purchasing USD1,000 worth of Bitcoin each month. For the first month, she purchases 0.1 BTC when Bitcoin retails at USD10,000. Over the succeeding months, the price of 1 BTC goes from USD10,000 to USD8,000, USD9,000, USD6,000, USD11,000, USD7,000, USD9,000,  USD12,000, USD11,500, and USD9,000, respectively. 

Here’s how much BTC Gigi bought each month:

  • Month 1: USD1,000 / USD10,000 per BTC = 0.1 BTC
  • Month 2: USD1,000 / USD8,000 per BTC = 0.125 BTC
  • Month 3: USD1,000 / USD9,000 per BTC = 0.1111 BTC
  • Month 4: USD1,000 / USD6,000 per BTC = 0.1667 BTC
  • Month 5: USD1,000 / USD11,000 per BTC = 0.0909 BTC
  • Month 6: USD1,000 / USD7,000 per BTC = 0.1429 BTC
  • Month 7: USD1,000 / USD9,000 per BTC = 0.1111 BTC
  • Month 8: USD1,000 / USD12,000 per BTC =  0.0833 BTC
  • Month 9: USD1,000 / USD11,500 per BTC = 0.0869 BTC
  • Month 10: USD1,000 / USD9,000 per BTC = 0.1111 BTC

To find how much BTC Gigi had by the end of the tenth month, we add up all the purchases over the months:

0.1 BTC + 0.125 BTC + 0.1111 BTC + 0.1667 BTC + 0.0909 BTC + 0.1429 BTC + 0.1111 BTC + 0.0833 BTC + 0.0869 BTC + 0.1111 BTC = 1.0191 BTC

Dollar Cost Averaging Benefits

  • Risk reduction – By investing a fixed amount at regular intervals, DCA can help to smooth out the impact of market volatility on the overall portfolio.
  • Simplifies process – By setting up a process, it reduces the need to constantly monitor market movements and streamlines the investment process.
  • Helps avoid FOMO – Using DCA can help you stay disciplined and avoid making impulsive purchases, like FOMO-buying, which is common for new investors.

Domain Name Service (DNS)

The Domain Name Service, or DNS, is a directory that provides a hierarchical naming system for resources on the internet in human-readable domain names.

What Is Domain Name Service in Blockchain?

In the context of blockchain, DNS is associated with wallet addresses and assets stored on the blockchain, giving the owner full control over the domain. They convert long, hard-to-remember crypto wallet addresses, into simpler names, such as “example.eth”. 

Anyone can send crypto payments to a wallet owner by entering their blockchain domain name (example.eth) rather than their full wallet address. This not only makes the address easier to remember but also eliminates the chances of errors while sending payments. 

However, blockchain domain names operate on decentralized protocols, unlike the traditional DNS, which is regulated by the centralized authority, the Internet Corporation for Assigned Names and Numbers (ICANN). 

When a user claims a blockchain domain name, it is mapped to the user’s associated wallet address using smart contracts. These smart contracts maintain a list of all registered domains with information such as owner and the linked wallet address, and are also responsible for managing domain-related transactions or ownership transfers.

That means no one can unilaterally control or censor these domains. What’s more, they don’t comply with or function within the traditional DNS hierarchy, as ICANN does not recognize them.

Popular Blockchain Domain Name Service Platforms

Ethereum Name Service (ENS):  

The Ethereum Name Serice is a popular domain name provider for “.eth” domain names on Ethereum. Its ecosystem is managed by a decentralized governance system, ENS DAO, which consists of over 2 million domains with 750 integrations. Users can claim a domain for $5 or more depending upon the number of characters in the domain name.

Unstoppable Domains

Unstoppable Domains allows you to claim domain names ending with .crypto, .nft, .polygon, .dao, .bitcoin, etc. The platform also has a self-custodial wallet extension and an in-built marketplace where users can buy and sell domain names.

Bonfida:

Bonfida enables users to claim Solana Name Service (SNS) domains on the Solana blockchain. Its ecosystem has 113k unique users and supports 115+ integrations with Web3 wallets, NFT marketplaces, etc.

Double Spending

Double spending is a scenario where an individual manages or attempts to use the same units of a currency more than once for valid transactions.

What is Double Spending?

Assume you have a blueprint for the next-gen tech that could take space exploration to another level. You stealthily sell it to five of the largest space exploration companies for $1 billion each to make more money from it. Here, you are “double spending” the exact blueprint.

In cryptocurrency, double spending is the potential for a digital asset to be spent on more than one transaction simultaneously. It often occurs due to a 51% attack, or a race attack– which involves the recipient of a cryptocurrency accepting payment for unconfirmed transactions.

While double spending in physical (fiat) money and gold is almost impossible, it is one of the primary concerns of digital currencies. This is due to the relative ease of duplicating data and the increased availability of computing power to do it. A successful double-spend would require the transaction information of a cryptocurrency to be altered to meet conditions that allow modified blocks to be added to the blockchain.

However, the likelihood of it happening is very slim since blockchains require every transaction to be validated by miners/validators before they are added to the network. The transaction validation process requires a great deal of computing resources, and any conflicting transaction information included in a block is immediately detected. This makes it exceedingly difficult to duplicate, reverse, or modify a transaction and add it to the blockchain.

Can Bitcoin Be Spent Twice? How Does Bitcoin Prevent Double Spending?

Bitcoin uses a consensus algorithm called proof-of-work (PoW) to validate transactions and add new blocks to the network. It requires the miners to check and verify that transactions are immutable (cannot be computationally modified ), irreversible, and final before the block containing them is added to the blockchain. 

In addition, each transaction is timestamped and broadcasted to all nodes within the Bitcoin network. This allows every node to update its transaction records and ensure the transactions satisfy specific conditions, including the absence of any double-spending instance. 

The expense of computational resources needed for miners to launch a 51% attack, coupled with the fact that Bitcoin transactions are tamper-proof, irreversible, and tied to previous blocks, makes double-spending on Bitcoin nearly impossible.

Dust Transaction

A blockchain dust transaction is a crypto transaction where the value of the transfer amount is smaller compared to the transaction fees.

What Is a Dust Transaction?

A dust transaction involves sending crypto that is less than the transaction fee required to process the transaction on the blockchain. It occurs when the wallet’s UTXOs (Unspent Transaction Outputs) total to crypto or “dust” less than the gas fees to cover another transaction.

Dust is a remnant of multiple crypto transactions, which lead to the accumulation of fractions of crypto in the user’s wallet. It generally occurs as a result of rounding errors or transaction fees associated with each transfer.

For example, a wallet has a balance of 1.2502921 BTC, and you transfer 1.25 BTC to another address. If the transaction incurred 0.000257 BTC in fees, you’ll be left with a very small amount of ~0.0000351 BTC.

These amounts are too small to move dust due to negligible value and exorbitant transaction fees. Hence, are non-tradable and often remain stranded.

However, dust can also be added deliberately. For example, some protocols send a very small amount of crypto to the user’s wallet address to promote their project. It can also be used to track a wallet or malicious activities like dust transaction attacks. 

Through dust transactions, malicious actors send unnoticeable amounts of crypto to random wallets. They use dust to track users’ activity and linked accounts to identify them through off-blockchain activities. 

When the user moves funds from a wallet address to a centralized exchange, which has their KYC and other personal information—it can be used to find their real identity and exploit them through blackmail, extortion, and phishing scams.

Some crypto exchanges and dust conversion tools enable users to consolidate and transfer their dust and even isolate it.  

Dynamic Music Data NFTs

Dynamic music data NFTs are digital assets combining the features of non-fungible tokens with music-related content.

What Are Dynamic Music Data NFTs?

Dynamic NFTs (dNFTs) are a type of non-fungible tokens (NFTs) that combine flexibility and interactivity. A dNFT is tailored to change its features based on pre-specified conditions. Thus, dynamic music data NFTs, or simply music dNFTs, are a category of dNFTs.

Dynamic music NFTs are digital assets that integrate music with the distinctive attributes of dNFTs, enabling the creation of a unique and ever-evolving form of ownership. Unlike traditional NFTs that represent static assets such as digital art and collectibles, dynamic music NFTs adapt to external input. This means that it can change its appearance, information, or value based on various real-time factors, such as user interactions.

Therefore, a dynamic music NFT can represent an individual song, full album, extended play (EP), music video, concert ticket, or even generative music. This reshapes how music is shared in the digital world while providing both artists and fans with new ways of engaging with music.

How Does a Dynamic Music NFT Work?

Picture an NFT linked to an artist’s song, such that each time the song is played in a club or concert, the NFT changes to reflect their performance in some sort of music charts or rankings. This is because, rather than immutability, dynamic music NFTs are designed to enable modifications or changes over time.

Similar to any other dNFTs, music dNFTs are composed of:

  • Smart contracts – These contracts define how the music NFT responds to certain real-time conditions. They specify what triggers the changes and when the fans can anticipate new features or content to unlock.
  • Blockchain technology – Similar to conventional NFTs, music dNFTs are hosted on blockchains. However, while music’s metadata and ownership are recorded on-chain, the music file itself is held off-chain.
  • Oracles – Oracles provide dynamic music NFTs with real-time data that informs the changes.
  • Interactive fan engagement – Music dNFTs comprise interactive elements that enable fans to personalize their music experience, such as access to live streams, exclusive concert tickets or content, or even contribute to the artist’s creative process.

In addition, music dNFTs include royalty- and revenue-sharing features. These features offer artists a passive source of income besides their earnings from streaming services or intensive marketing. Rather than creating a large following, artists can capitalize on a smaller, more dedicated group of fans.

 

Dynamic NFT

Dynamic NFTs are a category of NFTs designed to change their characteristics based on certain pre-defined conditions. They have codes in their smart contracts that enable them to achieve this change.

What is a Dynamic NFT?

Non-fungible tokens, or NFTs, are unique digital assets that exist on the blockchain. They are designed with different guidelines compared to regular cryptocurrencies. Creators can attach files, videos, links, or images to an NFT’s metadata. The moment these NFTs are minted by a user, the metadata and characteristics are usually permanent. This is known as a static NFT. However, dynamic NFTs or dNFTs are different because they can evolve under certain conditions..

dNFTs are a type of NFT whose metadata changes in real time in response to a user’s activity. A program in the code of the NFT or other external factors triggers these changes. For example, in NFT games, an in-game NFT may be designed to display certain attributes like changing appearance or behavior when the player reaches a particular level in the game. These attributes can also result from a user purchasing an upgrade. 

Dynamic NFTs have intrinsic features that make them different from other tokens. They are built with the ERC-1155 token standard, which combines elements of the ERC-721 and ERC-20 token standards. They react to codes in a smart contract, and finally, oracles transmit changes to the NFT’s smart contract from outside the blockchain. These three features are essential to a dynamic NFT’s evolution.

Static NFTs vs. Dynamic NFTs 

Static NFTs are digital arts or collectibles with a fixed set of characteristics that are immutable on the blockchain. Static NFTs, such as images, videos, or music, can only represent stationary items. Dynamic NFTs, on the other hand, change when the conditions are right. The metadata of a dynamic NFT can interact with external sources and evolve based on these interactions. Static NFTs only provide traditional NFT revenues like staking rewards, while dynamic NFTs provide more revenue streams for the owner, including royalties and rewards from interacting with the NFT.  

What Are the Various Use Cases of Dynamic NFTs?

Dynamic NFTs have several use cases besides the regular utility they offer alongside static NFTs like digital arts. The ERC-1155 token standard of dynamic NFTs makes them perfect for blockchain gaming, where they can transform according to a player’s activity. Dynamic NFTs can also be used to represent art and music, such as a digital painting that can evolve its characteristics.

With the growing use of blockchain-based identification, dynamic NFTs can be used as a form of digital identity. The NFT evolves based on the user’s behavior, achievements, or activity. dNFTs can also be used to represent real-world assets, like real estate. Real estate tokenization is something that can be done with static NFTs, but dynamic NFTs can be used to track properties like price change, ownership, and size.  

DYOR

DYOR (Do Your Own Research) is a common crypto slang referring to the idea that investors should conduct extensive research before investing in a project.

What is DYOR in Crypto?

DYOR is closely related to fundamental analysis in crypto. It refers to a research-based approach to buying cryptocurrency or investing in DeFi projects. The concept of DYOR aims to reduce misinformation and the investment pitfalls that come from relying solely on other people’s opinions or assurances.

The term “DYOR” can also act as a disclaimer when crypto traders or experts share their thoughts, recommendation, or research on social media platforms. By adding the phrase, the writer expects you to verify the information on the post, and not to take it as direct investment advice. This is a way of mitigating potential liabilities on their part, such as if a coin they discuss turns out to be a scam. 

What Happens If You Don’t DYOR in Crypto?

If you don’t do your own research as an investor, you risk trusting an unverified source and losing all of your capital. Many scam projects can be hard to spot at first, and it’s not uncommon to see new or inexperienced traders lose significant assets because they were drawn in by marketing tactics. 

This type of aggressive marketing is known as shilling. Shilling is when a person or group of people aggressively promotes a crypto project to generate excitement and bring in investments. They drive the token’s market value up before the issues with the project come to light and the project’s value plummets.  These projects often pay celebrities or influencers to back the project and lend an air of credibility to the short-lived scam. 

Another way scammers can trick investors is a Sybil attack on social media platforms like Twitter and Reddit. In this case, the scammer opens multiple fake accounts and talks up the scam project with these accounts to make it a trending topic. 

How To DYOR in Crypto

There are several steps you can take to research and evaluate a crypto coin or project before investing:

  • Use websites like the Ledger Coin Price page to get more information about the coin, including links to the website and social media. Review details like the market cap and the total coins in circulation to understand the overall token prospects.
  • Evaluate the project’s website. Be on the lookout for red flags like:

o   Little to no information about the project

o   No contact information

o   A shabby-looking website

o   No information about the team behind the project 

  • Review the project development activity on the smart contract. Is there a history of updates to the codes? Is the smart contract audited yet? A genuine project should have regular updates and smart contract audits.
  • Check out the social media presence and marketing tactics. Are they trying to explain and promote their project organically? If you discover that they are into flashy practices like shilling, you want to be extra careful.
  • Visit the project’s community groups on Telegram or WhatsApp. How active are the community members? A relatively quiet and small community can be a red flag.
  • Use Ledger Academy resources to understand project types and ways to spot red flags. 

 

Crypto Exchanges Affiliated with This Site

現物仮想通貨取引所最大レバレッジ
(証拠金取引の場合)
取扱通貨数取引手数料会社所在国特徴公式サイト
Bybit最大100倍300種類以上・メイカー手数料:-0.025%
・テイカー手数料:0.075%
シンガポール
ドバイ
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・コピートレード可能
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Bitget・最大125倍 (先物)
・最大10倍 (現物)
840種類以上・現物取引: 0.1% (BGB払い: 0.08%)
・先物取引: メイカー0.02%、テイカー0.06%
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・コピートレード機能
・元本保証型の投資商品
・レバレッジ取引
MEXC最大200倍2000種類以上・現物取引: メイカー0.05%、テイカー0.05%無料
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*MXトークンを保有すると、取引手数料が大幅割引!

招待コード:mexc-fxcfdlabo
を入力すると、
現物取引手数料キャッシュバック:10.00%、
先物取引手数料キャッシュバック:10.00%
もらえます。
シンガポール・約3,000種類以上の取扱銘柄
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・独自通貨のMXをお得に活用できる
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CoinW最大200倍350以上・先物取引手数料

メイカー手数料: 0.04%
テイカー手数料: 0.06%

・現物取引手数料

メイカー手数料: 0.2%
テイカー手数料: 0.2%
英領ヴァージン諸島

シンガポール
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・レバレッジ1日当り利息最低手数料0.500%

・契約取引最低手数料 Maker 0.0200%,
Taker 0.0400%
香港、エストニア、
サモア、
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セーシェル共和国
キプロス
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bitflyer2倍37銘柄約定数量 × 0.01 ~ 0.15%

(単位: BTC, ETHなど)
日本・販売所/取引所
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Cryptos


(FXブローカーbigbossが運営)
1倍BTCUSDT
ETHUSDT
EXCUSDT
RSVCUSDT
BXCUSDT
BTCJPY
ETHBTC
XRPJPY
ETHJPY
EXCUSD
USDTJPY
BBCUSDT
BBCJPY
Taker: 約定数量の0.1~0.2%


Maker: 約定数量の0.09~0.18%
Seychelles・BigBossのFXアカウントとシームレスに利用可能
・快適な動作スピード
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・Ethereum, Litecoinの出金には1%の手数料
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・仮想通貨送金の処理に1.8%の手数料
イギリス・国際電子決済サービス
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将来はこの0.01BTCが持てるかどうかが富裕層の分かれ目となる。

0.01BTCを保有すれば、世界において13%の上位保有者に入る。法定通貨とビットコイン市場の相対的な富の集中度を比較すると、ビットコインのトップ13%の中にいることは、法定通貨での資産トップでいることと同じ価値を持つ。

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HardwalletPriceSupported CoinsFeaturesOfficial Site
Ledger13,499JPY~Over 5,500 cryptocurrencies
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