Cryptocurrency Glossary / dictionary

DAG - Directed Acyclic Graph is a cryptocurrency first introduced in 2015 by Sergio Demian Lerner. It differs from other digital currencies in that it does not need blocks or miners to function with blockchains. In order to confirm transactions, DAG employs the transactions made to confirm each others' transactions. In a way, only those participating in the transactions are needed to confirm other transactions, not outside parties. The current price of DAG is here.

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"DApp" means Distributed Applications. They are software applications that use APIs (see definition above) in order to share data which is necessary to complete some task. These apps are usually stored in the cloud.  When related to cryptocurrency, they are stored on the related blockchain.  Two, or even more, apps can coordinate with each other for this purpose. They must be on the same network to communicate, but not necessarily on the same computer platform.

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A "Dead Cat Bounce" is when the price of a cryptocurrency that is in a long-term falling trend makes a short-term reversal. The price might start to go back up by some small percent, but the decline continues again soon after that. Some investors make the mistake of buying the cryptocurrency during that bounce because they can't believe the coin can fall further. They mistakenly jump back in, hoping that they have found the bottom and make a profit, but they are soon disappointed. An investment can experience many dead cat bounces on its way down before it finally finds a base and then begins a long journey back up.

"Decentralized" means that no one central authority controls all cryptocurrency transactions. Instead, many independent and unrelated parties share the work to make the buying and sell currencies possible. See also "Peer-to-Peer" and "DEX".

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DeFi means Decentralized Finance. It is an attempt on the part of the crypto community to create an alternate system to the traditional brick-and-mortar financial system. DeFi's goal is to use smart contacts to allow for lending/borrowing funds, earn interest on savings, provide credit, etc. It will also provide for all other traditional banking services. Since this will be accomplished with cryptocurrency, it will be implemented in a decentralized way that the government will not control. Most cryptocurrency tokens that are implementing these smart contracts are currently on the Ethereum blockchain.

A "Destination address" is the cryptocurrency address of some user (or business) which can receive cryptocurrency. Any sender of coins needs to know this address to ensure that coins are sent to the right destination.  The destination address will be entered into a cryptocurrency wallet to make a transaction.  This destination address might also be called a "receive address" and is very closely related to a "public address".

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"Deterministic" mathematically means the ability to consistently compute the same set of outputs (data) given a specific set of inputs. This term is often used when referring to a feature of cryptocurrency wallets, passphrases and private keys. It indicates the ability of a wallet to faithfully recreate the same set of private keys given a single passphrase input. This ability is considered a positive feature of a wallet since only a single passphrase needs to be memorized (or written down) and backed up. Otherwise, ALL private keys in a wallet would need to be recorded and backed up. You can always "Determine" all of your private key from your single passphrase (if you have a deterministic wallet). Deterministic wallets can create a nearly infinite number of keys from one passphrase. If you use this type of wallet and you later lose it, but you remember your passphrase, then you can get a new wallet and regenerate all your previous private keys - nothing will be lost. Not all wallets are deterministic but more and more wallets are adding this feature. Note also that you can have as many passphrases as you have wallets. See also "HD" and "HD Wallet".

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"DEX" means Decentralized Exchange. A Dex facilitates cryptocurrency trading (i.e. currency exchanges) without relying on a trusted third party to hold (temporarily) or transfer your funds.  A DEX also does not rely on any centralized authority, such as the government to make transactions. A peer-to-peer exchange is an example of a decentralized exchange since funds can be sent directly between two users without relying on a third party, nor government, to permit nor help in the transfer. DEXes are usual more secure and more private then centralized exchanges - but there are also no ways to revert any transactions if an erroneous or fraudulent transfer is made on a DEX. A DEX is the opposite of a centralized exchange.  See also "decentralized".

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A "Dictionary Attack" is a method of trying to guess a user's password. This attack is a type of "brute force" attack in that it attempts to use every word in a standard dictionary as a possible password. It may also combine words. This attack takes more time and computer power than other types of more sophisticated attacks. This attack can often be successful since many users still use simplistic passwords. Better passwords do not use any known words and include upper as well as lower case letters, numbers and special symbols. A dictionary attack will never be able to break these types of better passwords.

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"DID" means Decentralized Identification. A blockchain is typically used to store a DID. The blockchain used is also usually decentralized (but a centralized blockchain can also be used for other types of digital IDs). A DID allows a user/owner to fully control their identification by ensuring that only chosen applications and entities (like school, doctor, government, ...) can access the ID. Access to the DID can also be permanently and completely revoked if and when desired by the user. When a DID is stored on a decentralized public blockchain, then it is also censorship resistant since usage permission can't be denied. Note that even though a blockchain is used to store a DID, a DID is not necessarily related to cryptocurrencies - A DID can be an ID for any digital purpose, and the blockchain is used to protect and control access to it. Microsoft and other large players and investigating creating various types of DID systems.  Microsofts DID system is built on the bitcoin blockchain.

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Digital money is a type of money that can be used only electronically. Although it has no physical form, in most cases, it can be converted into some sort of physical currency.  It may also be called Digital Currency, Electronic Money, CyberCash or Cryptocurrency. It can be used to purchase goods and services which accept that type of money. All cryptocurrency can be considered Digital Money. Digital money can be issued by a bank or by independent currency developers.

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"Distributed" refers to the computers in a network which are located in relatively remote locations. "Distributed" also refers to different computer systems in the network sharing databases and performing different tasks but all are working in conjunction to achieve some common goal. Distributed networks such as bitcoin, ethereum, and many others have computers participating in the network all around the world. The goal of a distributed computer network share resources and ensures that if a small percentage of those computers go offline that the system as a whole can still function. The networked computers may go offline for maintenance, due to hardware failures, or by government or police mandate.  Most cryptocurrencies use a distributed network model to ensure that their networks have near 100% uptime and cannot be forced to shut down.

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"DLT" means Distributed Ledger Technology. DLT is a ledger (a database) of records which is hosted and managed by a set of decentralized computers. A blockchain is an example of a DLT, but it is important to note that not all DLTs are necessarily blockchains. Both blockchains and DLTs may store digital currency data records but storing currency is not a defining element of either one. Cryptocurrency blockchains are always encrypted, but not all DLTs are necessarily encrypted. See also "blockchain" and "decentralized".

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"DPoS" means Delegated Proof-of-Stake. It is a type of "consensus algorithm" which is used to validate data blocks on a blockchain. In this type of consensus algorithms, the token (or currency) holders are allowed to vote for a small group of "delegates" (other token holders) to validate blocks of data. The token holders do not directly vote on the validity of the blocks themselves. The term "proof of stake" is referring to the fact that only the token holders own the tokens and, as such, have a "stake" in the process. Not all blockchains use the same consensus algorithm. There are many other types of consensus algorithms, such as "Proof of Work" which is most famously used by bitcoin. See also "Proof of Stake" and "Proof of Work".

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A "dump" has various meanings in the cryptocurrency world and relates to the price and/or trading volume of a coin. It can mean that one or many currency holders are selling (dumping) large amounts of their currency quickly. They usually sell regardless of the price. It can also mean that the price of a currency is going down very fast. These two things usually go hand-in-hand.  Currency holders will often sell their currency when prices are going down which makes the downwards price movement even more dramatic. See also "Pump-and-Dump" [link].

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