Address
Much like a URL, a blockchain address is the location to or from which transactions occur on the blockchain.
Block
A group of transactions entered into a blockchain; analogous to a page of a ledger or record book.
Bitcoin
The first and most popular cryptocurrency based on DLT technology developed from a whitepaper written by Satoshi Nakamoto in 2008.
Cryptocurrency
A cryptocurrency is a decentralised digital currency. It works through a system of peer-to-peer (P2P) transaction checks, with no central server. All the transactions are added to a shared digital ledger called blockchain through a process that is known as mining.
ICO
An initial coin offering (ICO) is a type of capital-raising activity in the cryptocurrency and blockchain environment. The ICO can be viewed as an initial public offering (IPO) that uses cryptocurrencies.
Blockchain
A mathematical structure for storing digital transactions or data in an immutable, distributed, decentralized digital ledger consisting of blocks that are linked via cryptographic signature that is nearly impossible to fake, hack or disrupt.
Centralized
A system or process for which there is a singular (i.e., central) source of authority, control and/or truth.
Cryptography
The science of securing communication using individualized codes so only the participating parties can read the messages.
DAO (Decentralized Autonomous Organization)
A governance structure without a central authority which rewards good behaviour and penalizes bad behaviour by a set of pre-defined rules which can only be changes by a vote, which typically requires a stake, adding risk to the process to discourage bad actors, amongst the participants.
DApp
Software which does not rely on a central system or database but can share information amongst its users via a decentralized database, such as a blockchain.
Decentralization/Decentralized
A system with no single point where the decision is made. Every node makes a decision for its own behaviour and the resulting system behaviour is the aggregate response.
Etherium
A public blockchain that supports smart contracts.
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Fiat
Legal tender the value for which is backed by a government or governmental body (e.g., US dollars, Euros).
Fork
A collectively agreed upon software update by all nodes in a distributed network. Sometimes, the previous version continues in parallel with the new version.
Fungible
The property an item of being exchangeable with other like items. For example, USD and Euros are fungible. The value of USD can be expressed in Euros.
Gas
A fee charged to write a transaction to a public blockchain. The gas is used to reward the miner which validates the transaction.
Interoperability
The ability of two or more systems to communicate and exchange data. Due to various design decisions (e.g., consensus protocol) most blockchains are not interoperable, however there are many projects that are working to connect various blockchains.
Know Your Customer (KYC)
The legal process of a business identifying and verifying the identity of its clients. KYC requirements vary from jurisdiction to jurisdiction.
Mining
In a public blockchain, the process of verifying a transaction and writing it to the blockchain for which the successful miner is rewarded in the cryptocurrency of the blockchain.
Non-fungible
The property an item of not being exchangeable with other like items. For example, USD and Euros are fungible. For example, a Stratovarius violin is non-fungible because the value of it cannot be expressed in a number of other violins.
Peer-to-Peer (P2P)
A direct connection between two participants in a system – can be computer to computer or person to person.
Public/Private Key
A public key is a unique string of characters derived from a private key which is used to encrypt a message or data. The private key is used to decrypt the message or data.
Seed Phrase
A random sequence of words which can be used to restore a lost wallet.
Smart Contract
Self-executing computer code deployed on a blockchain to perform a function, often, but not always, the exchange of value between a buyer and a seller.
Stablecoin
A cryptocurrency which is underwritten by an asset or assets (e.g., fiat currency, commodities, etc.) designed to minimize the volatility of the price of the coin/token.
Tokens
Cryptographic tokens represent programmable assets or access rights, managed by a smart contract and an underlying distributed ledger. They are accessible only by the person who has the private key for that address and can only be signed using this private key.
Tokenomics
The study, design and implementation of monetary management and distribution based on blockchain technology.
Transactions Per Second (TPS)
A measurement of the speed of a blockchain. The low TPS of most block chains is a significant barrier to using blockchain for business, especially financial, applications.
Transparency
A primary property of public block chains whereby any participant in a system or transaction can view the transactions on the blockchain.
Trust
Confidence in the integrity of an entity (e.g., person, organization, etc.).
Wallet
A digital file that holds coins and tokens held by the owner. The wallet also has a blockchain address to which transactions can be sent.
Wallet (Cold)
A wallet disconnected from the internet.
Wallet (Hot)
A wallet connected to the Internet.
STOCK MARKETS
Blue Chip Stocks
The stocks behind large, industry-leading companies. Blue chip stocks offer a stable record of significant dividend payments and have a reputation of sound fiscal management.
Bid It is the highest price that the buyer of a stock is ready to pay for a particular stock
Bear Market It refers to a period in which the prices of equity shares fall consistently.
Brokers
Companies or Individuals who acts as intermediates between a buyer and seller and receives commission in exchange for executing orders.
Bull market
When the stock market as a whole is in a prolonged period of increasing stock prices. It’s the opposite of a bear market
CFD
A contract for differences (CFD) is a financial contract that pays the differences in the settlement price between the open and closing trades. CFDs allow traders to trade in the price movement of securities and derivatives.
Commodities
Commodities are naturally occurring materials or goods that are collected and processed for use in human activity – such as oil, sugar and gold, silver and other precious metals. Just like stocks, commodities are bought and sold on exchanges, like stocks.
Derivatives
A derivative is a contract between two parties which derives its value/price from an underlying asset. The most common types of derivatives are futures, options, forwards and swaps. Generally stocks, bonds, currency, commodities and interest rates form the underlying asset.
Diversification
An investment strategy used to minimise risk. By investing in assets in different sectors and with different behaviours, the investor’s portfolio should be safer than investing in a single type of assets.
Dividend Yield It shows how much a company or firm pays out in dividends every year as compared to the stock price.
ETFs
ETFs are baskets of stocks, commodities or other assets that pool investors’ money and track a benchmark to measure their performance. Exchange-traded funds (ETFs) are among the most popular financial instruments that investors add to their portfolios for exposure and diversification.
Federal Reserve Board (The Fed) The Fed Reserve is an agency of the US government tasked with setting monetary policies, ensuring the nation’s financial system’s stability, creating mechanisms to ensure transparency in currency markets and banking practices, and protecting consumers and community development.
Hedge Funds Managers
A hedge fund manager is an individual or firm that manages the operations of a hedge fund. Hedge fund managers make investment decisions on placing investments on behalf of their clients using aggressive investment strategies.
Indices.
Grouped sets of assets or instruments with common characteristics (same industry, country, performance etc. For example, the FTSE 100 is compiled from the 100 largest companies listed on the London Stock Exchange measured by the market capitalisation (or ‘market cap’). Other poplar Indices includes NASDAQ, Dow Jones, and S & P 500.
Inflation When the price of goods and services across all industrial sectors gradually increases to the point of depressing consumers’ purchasing power, the economy is considered to be in a period of inflation.
IPO
It stands for ‘Initial Public Offering’, it is the first time that a company offers shares (or ‘floats’) to the public on a stock exchange. One of the chief reasons why companies offers IPOs is to raise more capital by issuing shares and spread the risk of its business among a wide range of shareholders.
Stock/share
In financial terms, a stock/share is a unit of ownership of a company or financial asset.
When a company needs to raise capital, it may decide to sell shares to investors, who then become equity shareholders in the business/company.
Margin
The amount of money needed to open a leveraged trading position.
The margin is calculated by finding the difference between the full value of your desired position and the funds lent to you by a broker or leverage provider.
NASDAQ
The National Association of Securities Dealers Automated Quotations – or simply the NASDAQ, is the world’s second-largest share trading market after the New York Stock Exchange (NYSE). The exchange is home to some of the largest technology stocks in the US – including the likes of Apple, Microsoft, Tesla, NVIDIA, PayPal, Amazon, and Facebook
Penny stock
A penny stock is any low-priced stock of smaller public companies with a low market capitalisation. In the US, the Securities and Exchange Commission has declared any stock valued at under $5 and not traded on a national exchange to be a penny stock.
Portfolio
A collection of investments owned by an investor makes up his or her portfolio.
Rally
A rapid increase in the general price level of the market or of the price of a stock is known as a rally. Depending on the overall environment, it might be called a bull rally or a bear rally.
Spread
This is the difference between the bid and the ask prices of a stock, or the amount for which someone is willing to buy it and the amount for which someone is willing to sell it.
Stop-loss order
These are designed to minimise losses incurred from an investment. The investor chooses the maximum drop in price they can tolerate. If the value reduces by this much it is automatically sold.
Venture Capitalist
A venture capitalist (VC) is an investor who provides capital to firms that exhibit high growth potential in exchange for an equity stake. VCs target firms that are at the stage where they are looking to commercialize their idea.
Volatility Refers to the fluctuations in the price of an equity share. Highly volatile stocks witness severe ups and downs during trading sessions. These are highly risky bets which can bring huge profits for the skilled trader.
Warrants
According to the Johannesburg Stock Exchange, Warrants are financial instruments that give investors the right but not obligation to buy (Call Warrants) or sell (Put Warrants) an underlying asset, at an agreed price (the strike price), on or before an agreed expiry date.
DISCLAIMER
Copyright
All data and information provided by the Mega Purpose Investment Group (MPIG), except as otherwise indicated, is proprietary to MPIG. You may not reproduce, modify, copy, reformat, distribute, store, publish or transmit any data and information, except for your personal use. For the avoidance of doubt, you may not develop or create any product that uses, is based on, or is developed in connection with any of the data and information available in this investment guide or MPIG website. You are not permitted (except where you have been given express written permission by MPIG) to use the information and data for commercial gain.
CFDs
CFDs are complex financial instruments and therefore may be difficult to understand. Essentially, they are intended for investors who have relevant knowledge and experience in order to understand the high level of risk involved in investing and trading with such leveraged products. The Company applies risk management tools and knowledge to the clients, however, whilst trading in CFDs it is possible to rapidly lose the entire invested capital due to leverage. In this respect, investors should have appropriate financial means and the ability to bear such loss. Additionally investors are advised to stay away from CFDs if they haven’t fully understood the risk involved and focus on other investments without CFDs that are offered.
Responsibility
Although Mega Purpose Investment Group (MPIG) has taken care to ensure that the content on this document is true and accurate, MPIG cannot be held responsible for any inaccuracies in the information herein. The information and content (collectively ‘information’) provided herein are provided by MPIG as general information. Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Adviser. You assume full responsibility for the risk or loss resulting from your use of this document, website-site and your reliance on the material and information contained on it.
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SOURCES
ABIOLA, L. K., ‘Ethereum (ETH) Co-Founder Provides Answer To Long-Lived Supply Limit Question’, April 2018, https://oracletimes.com/ethereum-eth-co-founder-provides-answer-to-long-livedsupply-limit-question/.
BLUMBERG, J., “We Need To Shut Bitcoin and All Other Cryptocurrencies Down. Here’s Why. “, March 2018, https://www.forbes.com/sites/jasonbloomberg/2018/03/10/we-need-to-shutbitcoin-and-all-other-cryptocurrencies-down-heres-why/#1dbed32b1bca.
KAPLAN, A., “Who accepts Ethereum as payment 2018 (List of companies that accept Ethereum)”, May 2018, https://smartereum.com/2072/accepts-ethereum-payment-2018-list-companiesaccept-ethereum-mon-may-28/.
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