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An API, or Application Programming Interface, is an interface between different computer programs. Basically, the API is how different software, or different parts of a software, speak to each other. The API is the set of rules that determine how the different parts interact. Think of it like a cable that connects two electronic devices. The cable that connects a computer to a power outlet allows electricity to flow into the computer, which interacts completely different from the cable from the computer to a pair of headphones or a USB cable connecting the computer and a smartphone. By plugging in a certain cable to the computer, you are telling the computer how to interact with the other device.
Someone who holds crypto will come in contact with the term API when they connect with their exchange in order to acquire information, such as documentation needed to file taxes. Using an API key, a customer can download transaction information such as when purchases, sells, and transfers were made and the price of the cryptocurrency at the time of the transaction.
ASIC is an acronym that stands for Application Specific Integrated Circuit. An ASIC is a piece of computer hardware designed specifically to mine cryptocurrency, usually Bitcoin. Mining Bitcoin requires heavy duty computing power, so any system built to mine is built with a few key characteristics. First, the faster the better. If you want to be the first to solve the next cryptographic puzzle, you’ll want the fastest computer available. Second, cooling. The faster a computer runs, the more heat it generates and more power it takes to cool down. Some miners combat this by building their mining operations in cold places, such as Siberia, or being located in a place with cheaper energy, near power plants for example. ASIC’s were created to specifically with these characteristics in mind. Because its only use case is to mine Bitcoin, ASIC’s can sacrifice diverse functionality for efficiency and save power.
Money laundering is the act of taking money gained from illegal activities and concealing its tainted origins by running it through a series of complex bank transfers and commercial transactions. Money laundering is illegal throughout the world.
Anti-Money Laundering, commonly referred to as AML, refers to international laws against the laundering of money. This is particularly relevant to the crypto sphere. Because crypto is pseudonymous, criminals could potentially use cryptocurrency to launder money.
Much like an email address, a cryptocurrency address is a location on the blockchain where crypto can be sent to or from. Crypto addresses aren’t as easy to remember as email addresses but consist of a string of numbers and letters, from 26 to 35 characters long. Creating an address is free, and it isn’t uncommon for people to own many addresses. The Bitcoin whitepaper even suggests using a new address for every transaction.
Bitcoin was the first cryptocurrency. People immediately saw the benefits cryptocurrency offered and jumped on the bandwagon. As with any new technology, entrepreneurs picked up the idea and ran with it. New coins were soon created as alternatives to Bitcoin. The term altcoin refers to the words “alternative coins,” which means any coin or token other than Bitcoin.
The term airdrop usually refers to free coins given out as part of a marketing effort to gain traction, increase popularity, or drive up value. You’re essentially being given crypto for free, and it’s dropped into your wallet.
You may receive a new coin as a reward for installing software and trying it out. Or, everyone who holds a certain amount of Ethereum might just be given a few coins of new cryptocurrency for free. Other times everyone who subscribes to a certain podcast on a specific day might be given free crypto. Airdrops can also happen after a hard fork. The owners of the new crypto might decide to give every user an amount of coins equivalent to what they owned on the original blockchain at the time of the fork.
A 51% Attack is a form of attack on a decentralized blockchain. The strength of a decentralized blockchain lies in the number of nodes maintaining the network. To make any change to the blockchain the nodes of the blockchain must come to a consensus. These changes usually happen in the form of mining, or adding new transactions to the ledger. When over 51% of the nodes agree on a change, the blockchain is updated with the new information.
A 51% Attack happens when a single entity, or a group working together, attempts to take control of at least 51% of a blockchain’s nodes or mining hash rate. If they succeed, the attackers gain control of the blockchain. They can choose which transactions get approved, stop transactions altogether, or reverse transactions to allow for double-spending. The more robust the network of the blockchain, the more difficult a 51% attack becomes. For example, Bitcoin’s network is robust enough to make a 51% Attack is still hypothetical, but basically impossible.
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