仮想通貨に関する用語集(CRYPTO GLOSSARY) I行

暗号通貨の専門用語に取り残されていると感じていませんか? 明確でわかりやすい説明で、Web3 の世界をシンプルにしましょう。

当サイトは、シンプルな暗号通貨の定義で暗号通貨とブロックチェーンの「A から Z」までをナビゲートするのに役立ちます。

暗号通貨の用語の意味を一緒に解明し、プロのように Web3 について話す準備をしましょう。

Do you feel left behind by all the crypto terminology?

Let’s simplify the world of web3 with clear and easy-to-understand explanations.

This site helps all readers navigate the ‘A to Z’ of cryptocurrency and blockchain with simple crypto definitions.

Let’s demystify the meaning behind crypto terminologies together and get ready to talk web3 like a pro with us.

Immutable

The term “immutable” in the context of a blockchain implies that the data or ledger is permanent and tamper-proof, and its history cannot be modified or changed after its creation.

What is Immutable in Blockchain?

Immutability is one of the core, defining properties of a blockchain. It is a trait in which something, once created, cannot be changed. Immutable transactions are an essential aspect of blockchains.

Immutable transactions mean that the transactions or data stored in the blockchain are impossible for anyone (government, organizations, or individuals) to manipulate, modify, or falsify. 

Immutability, as one of the main features of blockchain technology, is achieved through a method called cryptographic hashing that converts plaintext of any size into a unique string of text of a fixed length.

For instance, a plaintext input like the term “immutability” can be converted to produce a 64-character value, called a hash value, that is irreversible. The value for this term will be: c2dd567a7abf29bce640cbbab5a07c9c96ca8a147038798bc2e8a6443bdeb750

Since participating nodes need to agree on the legitimacy of a transaction before approving it, immutability serves as a key element in enabling data integrity in blockchain technology. Once data is added to the blockchain, the records cannot be retroactively altered without changing all the subsequent blocks in the network.

Benefits of Immutability in Blockchain Technology

The key benefits of immutability in blockchain technology are related to data integrity, security, fraud detection and prevention, and auditing. Immutability:

• Makes the auditing process easier and cost-efficient, since auditors can rely on the authenticity and legitimacy of the data source (blockchain). This is coupled with the indelible, permanent, and indisputable nature of blockchain transaction history.
• Facilitates a verifiable, shared source of truth.
• Minimizes the risk of any data modifications, since it would require all the participating nodes in the network to verify and accept the change.
• Protects data integrity by preventing invalid transactions.

While immutability is one of blockchain’s core benefits, it doesn’t make blockchains resilient to vulnerabilities like double spending or a 51% attack. While the odds are low, a malicious actor could gain control of a majority of a network’s hash rate to alter data or transactions.

Impermanent Loss

Impermanent loss is a risk that occurs when participating in DeFi liquidity pools. It happens when the price of your deposited assets change from the time you deposited them.

What is Impermanent Loss in Crypto?

It refers to a situation in which the profit you gain from staking a token in a liquidity pool is less than what you would have earned just holding the asset. It happens when a token’s price changes in the market, which causes your deposited assets in the liquidity pool to become worth less than their present value in the market. The bigger this price change, the more your assets are exposed to impermanent loss. 

For example, if the value of the assets in the pool decreases by 10%, but the value of the LP tokens only decreases by 5%, the user will have incurred a 5% impermanent loss.

It indicates how much more the value of your assets would be if you just HODL instead of providing liquidity. This gap is “impermanent” because it is possible to close the gap if the token price returns to the former price. It’s also important to note that impermanent loss does not take into account trading fees that investors earn for providing liquidity, which in many cases can negate any losses.

How Does It Work?

Firstly, it does not necessarily prevent liquidity providers from making a profit. This loss is only tangible if investors withdraw their liquidity from the pool at that exact moment in time. Often, pools employ strategies to offset this loss, such as charging high fees to make more profit. Therefore, liquidity providers make more from fees to cover their impermanent loss. 

But, in case of a considerable price difference, your fee profit might not cover the loss. In this case, you would have gained more value if you held the assets instead of providing liquidity. 

Let’s see an example:

• Say you deposit ETH worth ＄500 and BTC worth ＄500 (total of ＄1000) at a 10% stake into a ＄10,000 ETH/BTC liquidity pool. 
• Suppose the price of ETH increases to ＄800 after your deposit; the pool becomes unbalanced and opens up room for arbitrage traders. 
• The liquidity pool value increases to ＄12,000 when it regains balance. If you withdraw your tokens at this point, you get 10% of the pool, which is ＄1200.

Although it may look like you made more profit, your gains may be less than the base shift in value of your tokens. Due to the price increase, the value of your deposited ETH increased from ＄500 to ＄800 while your BTC assets remained at ＄500. So if you would’ve held your assets, your total profit would’ve been ＄1300 (＄800+＄500). You would have made ＄100 more if you did not participate in the liquidity pool. This is what we call impermanent loss.

How to Calculate Impermanent Loss?

Calculating your exact loss might be a little tricky due to the complexity of some of its variables. 

The price ratio is the ratio between the token price at deposit and withdrawal. 

How To Avoid It?

While you can’t avoid impermanent loss, you can reduce exposure. Here are some tips to help: 

• The more volatile the assets, the more impermanent loss is likely to occur. Use more stable tokens like stablecoins or BTC to reduce the chance of impermanent loss.
• Ensure you also use tried and tested Automated Market Makers to reduce your exposure to market manipulation.
• Start by staking a small amount to diversify your portfolio and reduce the percentage of your assets exposed to impermanent loss. 

Incentive Network

An incentive network is a type of decentralized network that rewards a user’s behavior for actions that benefit the entire network.

What Are Incentive Networks in Crypto?

Traditionally, the primary purpose of incentive systems is to encourage individuals or teams to achieve certain objectives, outcomes, or performance targets. This is achieved by aligning an organization’s goals with the personal interests of its employees, thereby promoting productivity. The employees are often incentivized or rewarded with bonuses, commissions, recognition, and profit-sharing plans, among other rewards.  

In the cryptocurrency context, an incentive network is a form of decentralized network that is intentionally designed from its onset to reward users for acting in the best interest of the network as a whole. Put another way, incentive systems are crafted for shared success, incentivizing individual actions that positively impact the entire network. What’s more, participants are offered rewards and micro-rewards using cryptocurrency tokens, which allows them to operate in complex economies.

The intentionality of these networks is what separates them from simple ecosystems which derive their balance and value from competing forces operating within the rules of the network. Incentive networks, on the other hand, are tailored to progressively increase in value by rewarding participants for their contributions.

To protect the decentralization of the network, the rewards for participants need to be:

• Structured to encourage actions that benefit the network
• Designed and approved by the majority of network participants
• Simple enough for the user to understand and effectively trust.
• Fair and scalable, where the network acknowledges every user while promoting a diverse ecosystem.

Through the use gamification, incentive networks also aim to increase user participation within the ecosystem and overall user adoption. When effectively implemented, these systems can offer significant benefits, particularly in industries such as decentralized finance (DeFi) and artificial intelligence (AI), where balancing participant and network alignment is both vital and complex.

Infinite Mint Attack

An infinite mint attack is a situation where an attacker exploits a smart contract flaw or a cryptocurrency’s code to create an unlimited amount of tokens within a protocol.

What Is an Infinite Mint Attack?

An infinite mint attack is a type of exploit involving a malicious actor or hacker manipulating smart contract vulnerabilities to generate tokens in large quantities. The actor typically creates token amounts that exceed the token’s intended supply limit. This attack devalues or debases the token’s value and may potentially damage its economy and disrupt the entire ecosystem.

This type of attack occurs due to security lapses in a blockchain protocol, which enables attackers to find loopholes, bugs, or other code vulnerabilities to exploit. The perpetrators often quickly dump all the freshly minted tokens on the market, causing the token’s price to rapidly decline in value.

For example, in March 2021, an attacker accessed the PAID Network’s private keys and used them to modify smart contract code. The modified code allowed the attacker to mint more than 59M ＄PAID tokens nearly leading to a loss of ＄180M. The hacker converted 2.5M of these tokens into ETH (worth over ＄3M at the time) before the attack could be stopped. The inflated supply dropped the token’s price by 85% due to the inflated supply.

How Can It Be Prevented?

This attack underscores the significance of thoroughly auditing smart contracts and protocol code to prevent such exploits. In addition, introducing a proof-of-work (PoW) algorithm in a protocol is a common approach to discourage such dishonest acts.

PoW would typically require the attacker to expend vast amounts of computing power to solve complex mathematical puzzles to create new coins.

This makes it difficult and expensive to carry out such an attack. Alternatively, implementing a proof-of-stake (PoS) consensus mechanism and establishing a hard cap on the total token supply can also effectively mitigate the risk of an infinite mint attack.

Inflation

Inflation refers to a significant increase in asset prices over time due to a decline in the purchasing power of a specific currency.

Inflation Explained

Inflation is the process through which a currency gradually loses its value over a given period. It is often experienced in fiat currencies such as the U.S. dollar, Euro, or any other government-issued currency. It is driven by factors such as increased money supply, changes in demand and supply forces, and changes in economic conditions.

For instance, as the government prints more fiat money, each unit of the currency becomes less valuable. Inflation typically decreases the purchasing power of the currency, leading to an increase in the prices of assets. This means that the same amount of money purchases fewer goods or services than it did in the past. 

Why are Cryptocurrencies Resistant to Inflation?

Investors treat cryptocurrencies like Bitcoin as a hedge against monetary inflation (sustained growth in currency supply) due to their decentralized nature. This means that no entity can manipulate cryptocurrencies by adjusting interest rates or increasing their supply to meet its policy objectives. 

In addition, the scarcity of Bitcoin makes it appeal to investors as a deflationary asset. Bitcoin supply, for instance, is hard capped at 21 million coins only. This scarcity is programmed into the cryptocurrency’s code so that the maximum number of Bitcoin that can ever exist is fixed. It makes Bitcoin a deflationary asset rather than subject to monetary inflation.

Bitcoin also uses a unique process, called halving, to reduce the rate of releasing new coins to circulation. The process reduces the reward given to miners by half every four years. It ensures a gradual and steady coin issuance until it reaches the maximum supply. The scheduled reduction gives Bitcoin a predictable appeal to investors.

Generally, cryptocurrencies are designed to have low and predictable inflation rates. For instance, Bitcoin’s inflation rate by year is currently 1.8%, while Ethereum’s is approximately 0.5%.

Initial DEX Offering (IDO)

An Initial DEX Offering (IDO) is a crowdfunding method that enables blockchain projects to release their native coins or tokens through a decentralized exchange (DEX).

What is Initial DEX Offering (IDO) in Crypto?

Imagine you’re attending a startup fair, where founders showcase their ideas and projects. One of the projects presented is innovative and has prospects to make an impact, but it needs funding to bring it to life. Instead of approaching investors or acquiring bank loans, the founder(s) offer a token to anyone who contributes. The token holders can utilize it to access perks or services once the project is complete. This fundraising method is like an IDO in the crypto space.

An Initial DEX Offering (IDO) is a crowdfunding approach that raises investment capital from everyday investors. It takes place on a decentralized liquidity exchange (DEX) through the use of liquidity pools and smart contracts. 

IDOs are an alternative to Initial Coin Offerings (ICOs) that allow new cryptocurrency projects to launch their tokens on a DEX platform. In ICOs and IDOs,  anyone can participate in the crowdfunding process by providing liquidity to the pool and receiving tokens in return.  IDOs are often characterized by decentralization, ease of use, accessibility, and liquidity provision.

How IDOs differ from IDO and IEO

Even though the outcome for ICOs, IEOs, and IDOs is the same, these fundraising approaches are quite different. For instance, ICOs don’t go through any vetting process since the project runs the fundraising itself. The tokens are usually created after the sale through the project’s website. The project also manages investors’ funds, creates and runs smart contracts.

For these reasons, scams and rug pulls became widespread in ICOs, forcing the crypto community to develop alternative crowdfunding methods, like Initial Exchange Offering (IEO) and IDO. In IEOs, a centralized exchange (CEX) vets the crypto project, manages investors’ funds, creates and runs smart contracts and lists the token. On the other hand, the vetting process in IDOs is carried out by a decentralized exchange.

The DEX is also responsible for creating and running smart contracts and handling funds. During the IDO, the smart contract handles the allocation and distribution of tokens based on their contributions. It collects funds, usually in the form of a base currency such as Ethereum (ETH), and automatically calculates the corresponding token amounts based on the predetermined price or exchange rate.

Interoperability

Blockchain interoperability refers to the ability to share or see information across different blockchains. It allows blockchains to communicate, share data, and build on each other’s features and use cases.

What is Blockchain Interoperability?

Blockchain interoperability is the concept of different blockchain protocols interacting across multiple networks.  

It can get pretty technical, but a good analogy for the overall goal of interoperability is an email.  No matter your email provider, whether it’s Google, Yahoo, or Hotmail, you can send an email to any address. You can send an email from a Gmail address to a Yahoo account – that’s interoperability. 

Right now, it isn’t possible to directly exchange data or assets without some sort of intermediary mechanism. If you’re building a dApp on the Ethereum Network, you can’t make payments from Bitcoin. 

Interoperability solves this problem by creating a platform for you to send data and tokens from one blockchain to another, e.g. Bitcoin to the Ethereum network. 

Why is Interoperability Important to Blockchain Technology?

Interoperability is necessary for the adoption, scale, and innovation opportunities within blockchain solutions and Web3. 

Various blockchains have different functions and solve different problems. For example, the Bitcoin blockchain was created to offer a decentralized way of storing and transferring money. On the other hand, the Ethereum network is designed to create a platform for building decentralized platforms like dApps. Solana was created to offer a faster and more scalable blockchain to build dApps. 

But without interoperability, it is almost impossible to adopt blockchain technology, because each individual project would be too siloed. You can think of blockchains without interoperability as computers without the internet; they exist independently and can’t communicate with each other. 

Interoperability (sometimes called cross-chain) solutions allow blockchain to read and write data to other blockchains. It facilitates cross-chain solutions that can operate on different blockchains, while utilizing the different functionalities from each blockchain. For example, a dApp built across the Bitcoin, Ethereum, and Solana blockchains can take advantage of the security of Bitcoin, the ease of use of Ethereum, and the speed of Solana.

How is Interoperability Achieved?

There are degrees to interoperability, and multiple approaches to achieving it. Here are some of the current cross-chain technologies in the crypto space: 

Sidechains: Sidechains are layer two independent consensus protocols built on a layer one blockchain. They use a cross-chain communication protocol and utility tokens to communicate and transfer data to and from the main blockchain. 

Oracles: Oracles serve as bridges between a blockchain and the outside systems. It feeds the necessary information from the outside world to blockchain for the smart contracts to execute.

Bridges and Swaps: A blockchain bridge connects two blockchains and allows token transfer between them. A cross-chain swap connects two blockchains through smart contracts and Automated Market Makers that govern transactions. 

What are Interoperable Blockchains?

Interoperable blockchains allow the transfer of data between that network and the outside world, or act as a bridge to connect other blockchains. Here are examples of blockchains that have focused on interoperability: 

Polkadot: Polkadot acts like a bridge for other blockchains via para-chains. Para-chains are like parallel independent blockchains that connect to a central component through bridges. 

Cosmos: Cosmos relies on an inter-blockchain communication (IBC) protocol that acts like a messaging protocol between blockchains. The Cosmos blockchain can connect a non-interoperable blockchain like Bitcoin to another blockchain through its Cosmos architecture. 

Cardano: Cardano is an interoperable blockchain built to support multi-tokens and cross-chain transfers. The blockchain also allows several smart contract languages to run different types of smart contracts. 

Wanchain: Wanchain leverages the power of cross-chain technology to create a bridge-like protocol that connects both public and private blockchains. 

InterPlanetary File System (IPFS)

An InterPlanetary File System (IPFS) is a distributed, peer-to-peer system for sharing, storing and accessing files, digital data, applications, and websites.

What is an InterPlanetary File System?

An InterPlanetary File System (IPFS) is a distributed file-sharing and storage protocol. An IPFS distributes data to nodes consisting of hundreds of thousands of individual computers connected to the IPFS, rather than storing data in a single centralized server. 

The nodes store the content or files uploaded to IPFS. This means that users can still access their files or content even when there is downtime in one (or several) node(s). It’s difficult to know where the data is in the decentralized storage, which eliminates the risks of a central point of failure and reduces the chances of attack and censorship.

An IPFS works similarly to blockchains in that the information sent to the protocol is distributed and shared across the network, and is accessible via the nearest node. While blockchains will hash transaction records and share them with participating nodes, IPFS focuses on hashing files or content instead of transactions, allowing users to search for content based on hashes. 

IPFS is also ideal for storing large files and efficient file distribution, which makes it highly scalable. Another important use case is delivering content to websites, building towards a decentralized web. The type of data stored in IPFS includes files and hypermedia. 

IPFS vs. HTTP

An IPFS offers several advantages over HyperText Transfer Protocol (HTTP) connections. This includes low operational costs, enhanced performance and security, data integrity, and censorship resistance.

IPFS utilizes content identifiers to fetch the exact information users are looking for, while HTTP connection sends users to a specific address or location. This means that IPFS deals with the “what” (content-focused) while HTTP the “where” (location-focused).

Since information on HTTP is stored and maintained by a central server, the content is temporary and access to it can be affected by downtime or network congestion. On the other hand, IPFS enables users to implement a permanent and distributed web for storing and sharing files and digital data.

Inverse Futures Contract

An inverse futures contract is a type of financial agreement obligating the seller to pay the buyer the price difference between a pre-specified price of an asset and its current value, upon the contract’s expiration.

What Is an Inverse Futures Contract?

An inverse futures contract is a financial derivative in which the seller profits when the price of the underlying asset declines. At the same time, the buyer benefits when the base cryptocurrency’s value rises.

In contrast to its linear counterpart, which is valued in a stablecoin or a fiat currency and settled or margined in the quotation currency, an inverse contract quoted in fiat or USD equivalents is margined and settled using the base cryptocurrency. Therefore, while linear futures are exposed to the volatility of their fiat money or USD equivalent, inverse futures are more susceptible to the underlying asset’s price fluctuations. 

For example, if the value of the BTC/USD pair is calculated in USD, its profit/loss and margin will be determined in BTC in an inverse contract.

Put another way, the relationship between the underlying asset’s price change is inverse or non-linear to its profit and loss (PnL). This means that a trader profits from a positive price difference between the contract’s price and the underlying asset’s value at expiry and loses when the difference is negative. 

How Do Inverse Contracts Work?

Inverse futures technically operate in a non-linear manner. This means when you are going long on (buying) an inverse futures trading pair, such as BTC/USD, you’re going short on (selling) the USD. In other words, your trading position becomes worth less Bitcoin and more USD as Bitcoin’s value increases. 

While it allows traders to hedge against market risks by speculating crypto price movements, this type of contract is also susceptible to market volatility, leverage risks, forced liquidation, and counterparty risks.

 

Crypto Exchanges Affiliated with This Site

当サイトと提携している仮想通貨取引所です。

仮想通貨取引をするとき、資産を増やすためには、仮想通貨だけでなく、FXCFD取引を行う必要性も出てきます。

仮想通貨に話題性がない時、いわゆる仮想通貨の冬の時代が続くときは、仮想通貨の時価総額が下がり、値動きがしない状態が続くからです。取引も合わせて、現物仮想通貨を保有し、しっかりと資産を増やしていきましょう。

将来、お金持ちになるには0.01BTC保有すればいいだけです。

現在10万ドル以上の資産を持つ残りの5億9000万人は、結果として大人1人あたり0.01BTCしか購入することができない。

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。

Hardwallet Affiliated with This Site