Cryptocurrency Basics Part 3

PURA 101 – Cryptocurrency Basics Part 3

From DAO over ETH to FUD…
….exploring cryptocurrency terminology
PURA Vida everyone! Back to our ABCs where our last entry was the letter C as in cold storage. For those of you just tuning in now, PURA 101 is a series on terminology of cryptocurrencies and blockchain technology. Read here for the first part of the series. The PURA team wants to ensure that find as much information as possible here in our PURA blog. Feel free to contact us if you want to find out more on a certain term. We will try to include your questions in an upcoming article.

So let’s start this session with a very important PURA term:

D as in DAO

The letters DAO stand for “Decentralized Autonomous Organization”. The main difference between a DAO and a traditional hierarchical organizational model is that a decision requires consensus of all stakeholders. DAO is an organizational structure that is based on rules put into code in smart contracts. These smart contracts involve a variety of tasks, such as distributing funds on a certain date. Or when a certain percentage of voters agree to fund a project. Read more here for a great visualization of DAOs.

Concurrently, PURA believes that the political empowerment of masternode operators with a democratic vote on the spending of treasury funds will bring a social breakthrough. Activities of DAOS involve governance around network issues, and treasury decisions around proposals that relate to development of the network, software layers, functionality and various marketing activities. Correspondingly, find the current version of the PURA Whitepaper here for more details.

Daytrading
In the world of cryptocurrency, this term refers to short-term speculative buying and selling of coins within one day.

​ETH
The abbreviation for Ether, a unique piece of code for paying for the computational resources for running an application or program of Ethereum.

Fiat
Fiat money is issued by governments as legal tender without intrinsic value. For that reason, its value originates in the relationship between supply and demand. Example for fiat currencies are the US Dollar, Yen, Euro, British Pounds,…

FOMO
FOMO is an acronoym for the “fear of missing out”. It is a type of social fear or worry to miss out on a social interaction, an unusual experience or another event that may result in gratification. In the cryptocurrency world, it is the fear of missing out on the profits if you don’t buy a coin that is rapidly rising in price.

Fork
The modification of the source code of an existing​ blockchain result in a new blockchain. The new blockchain forms a path off the existing blockchain. Cryptocurrencies and their blockchains are “open source” and develop on an ongoing basis. Consequently, the source codes need to be modified from time to time. However, if the miners of a blockchain do not reach consensus on modification, two different blockchains result. More information on this term can be found here.

FUD
The acronym “FUD” is short for “fear, uncertainty and doubt”. It is an unfair strategy by investors, mostly through media, to make another currency appear flawed and inferior in order to promote the currency they are invested in.

Stay tuned in for the fourth part of PURA 101 for more terminology coming up soon.

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