At TokenKey.io, we understand the importance of investors having the best and most comprehensive information on blockchain and tokenisation. These technologies are redefining the way assets are managed, transferred and invested in a secure and efficient digital environment.
Blockchain is a decentralised accounting database that, instead of operating with a double entry system, uses a triple entry system, where the trusted third party is the decentralised network itself. This eliminates the need for intermediaries and allows for greater transparency and security in transactions.
Tokenisation, meanwhile, allows physical or digital assets to be represented in the form of tokens within a blockchain. This facilitates the fragmentation and transfer of value in an efficient and accessible way, applying to various sectors such as finance, art, real estate and more. At TokenKey.io, we specialise in providing innovative solutions for the tokenisation of assets, ensuring security and regulatory compliance in every transaction.
To help you navigate this ecosystem with confidence, we have prepared this dictionary with the key terms that every blockchain and tokenisation investor should know.
Blockchain and Tokenisation Dictionary
A
Airdrop: Free distribution of cryptocurrencies or tokens to users as a promotional strategy or reward.
Digital Asset: Representation of value in digital format stored in a blockchain, such as cryptocurrencies, tokens and NFTs.
Consensus Algorithm: Protocol that allows participants in a blockchain to agree on the state of the network without the need for a central authority. Examples: Proof of Work (PoW) and Proof of Stake (PoS).
Altcoin: Any cryptocurrency other than Bitcoin. Example: Ethereum, Solana, Cardano.
B
Blockchain: A decentralised ledger database where transactions are recorded using a triple entry system, with the decentralised network acting as a trusted third party.
Block Explorer: An online tool that allows you to view transactions, addresses and blocks within a public blockchain.
Digital Wallet: Application that allows you to store, send and receive cryptocurrencies or tokens.
C
Centralised Exchange (CEX): Cryptocurrency exchange platform managed by a centralised entity.
Cold Wallet: Cryptocurrency storage device that is not connected to the internet, providing greater security against cyber attacks.
Smart Contract: Autonomous programme stored in a blockchain that automatically executes agreements when certain predefined conditions are met.
Cryptography: The science that studies the encoding and protection of information to guarantee its confidentiality, integrity and authenticity in blockchain.
Cryptocurrency: A blockchain-based digital asset that can be used as a medium of exchange. Example: Bitcoin, Ethereum.
Custody of Assets: Service that protects and stores cryptocurrencies on behalf of a user or company.
D
DAO (Decentralised Autonomous Organisation): Entity governed by smart contracts instead of a traditional hierarchical structure.
DApps (Decentralised Applications): Applications that work on blockchain without the need for central servers.
DeFi (Decentralised Finance): Ecosystem of blockchain-based financial services without traditional intermediaries.
DEX (Decentralised Exchange): Cryptocurrency exchange platform that operates without intermediaries, allowing direct trading between users through smart contracts.
Decentralisation: Elimination of intermediaries in the management of data and transactions, allowing for distributed control among participants.
E
Ethereum: A decentralised blockchain platform that allows for the execution of smart contracts and decentralised applications (DApps).
Exchange: A platform where cryptocurrencies and tokens can be bought, sold and exchanged.
F
Fiat (fake money): Currency issued by governments (such as the euro or the dollar) that is not backed by physical assets, unlike cryptocurrencies.
Fork: Change in the rules of a blockchain that can create a new version of it. Example: Bitcoin Cash emerged from a fork of Bitcoin.
G
Gas Fee: Commission paid on the blockchain (such as Ethereum) to execute transactions and smart contracts.
Governance in Blockchain: Mechanism by which decisions are made within a blockchain, either by voting by participants or by means of smart contracts.
H
Hash: Cryptographic function that converts any information into a unique code of fixed length, ensuring the integrity of the data.
HODL: Cryptocurrency investment strategy based on holding assets for the long term without selling them despite market volatility.
I
ICO (Initial Coin Offering): A financing mechanism in which a project launches cryptocurrencies or tokens to raise funds.
Interoperability: The ability of different blockchains to interact and share data with each other.
L
Lightning Network: A second-layer solution on top of Bitcoin that enables fast and low-cost transactions.
Liquidity Pool: Reserves of assets locked in smart contracts that allow exchange operations on decentralised platforms.
M
Meme Coin: Cryptocurrency created without any real utility, based on internet trends and memes. Example: Dogecoin, Shiba Inu.
Mining: Process by which participants validate transactions and add new blocks to the blockchain in exchange for rewards.
Metaverse: A blockchain-powered virtual world in which users can interact, buy digital assets and participate in decentralised economies.
N
NFT (Non-Fungible Token): A unique digital asset that represents ownership of a digital or physical object, such as art or virtual goods.
Node: A computer that participates in a blockchain network, validating and transmitting information.
O
Oracle: A service that provides external data to smart contracts, enabling their interaction with the real world.
P
Peer-to-Peer (P2P): A model of direct transactions between users without the need for intermediaries, used in decentralised networks such as blockchain.
S
Security Token Offering (STO): A financing method that uses digital tokens backed by real and regulated assets, such as stocks or real estate. Unlike ICOs, STOs comply with strict financial regulations.
Shitcoin: A cryptocurrency with no real value or weak fundamentals, generally created without a solid technological purpose.
Stablecoin: Cryptocurrency whose value is linked to a stable asset, such as the dollar or the euro, to reduce volatility.
Staking: The process of participating in the validation of blockchain transactions by holding cryptocurrencies.
U
Utility Token: A type of token designed to provide access to a product or service within a blockchain ecosystem. It does not represent ownership or a financial asset.
W
Web3: Evolution of the internet based on decentralisation, where users have control over their data and digital assets through blockchain.
Whitepaper: Technical document describing the purpose, technology and roadmap of a blockchain or cryptocurrency project.
Wrapped Token: Tokenised version of a cryptocurrency on another blockchain to facilitate interoperability. Example: Wrapped Bitcoin (WBTC) on the Ethereum network.
X
XRP: Cryptocurrency developed by Ripple Labs used mainly to facilitate cross-border transactions quickly and cheaply.
Z
Zero-Knowledge Proof: Cryptographic method that allows information to be verified without revealing the underlying data, improving privacy in blockchain.
For TokenKey.io investors, understanding these concepts is essential to making informed decisions and taking advantage of the opportunities that blockchain and tokenisation offer.
This dictionary is just the beginning; on our platform, we continue to provide tools, advice and technological solutions that facilitate safe and efficient investment in tokenised assets.
If you want to know more about how TokenKey can help you with your blockchain investment strategy, visit our website at TokenKey.io.