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Explore Crypto Terms & Definitions
Input
In relation to bitcoin transactions an Input is the source of Unspent Funds used to enable a transaction, which become Spent when sent to a new address. Also see Output.
Internet of Things (IoT)
The network of physical items that are connected via the internet. Physical objects that have software, sensors and other technologies can send and receive data over the internet - from door bells to thermostats. The network that these devices create is known as the Internet of Things.
IOU
Tokens representing any type of debt, not just currency, serving as a line-of-credit of sorts.
JOMO
Cryptocurrency lingo – joy of missing out.
KYT
An abbreviation for Know Your Transaction. A variant on KYC which refers to compliance guidelines for cryptocurrency businesses to understand where transactions have come from rather than you has made them and monitor their characteristics for common AML flags.
Latency
The delay between an instruction to transfer data and the actual transfer of the data, which is a crucial factor in cryptocurrency trading as may impact the ability to execute trades.
Ledger
A record of financial transactions.
Lightning Network
Described as a Layer Two Bitcoin application because it enables off-chain transactions via payment channels, that are only processed on-chain when those channels are closed. It therefore offers a solution to scaling transactions as off-chain transactions are almost instant and far cheaper than on -chain.
Limit Order
A type of trade that will only be executed once a cryptocurrency reaches a specified price.
Liquidity
The measure of how much of a cryptocurrency is available for immediate buying or selling. The more liquid, the more efficient the price.
International Money Remittance
Describes the process of sending money abroad, one of the most common use cases being payments by migrants living abroad sending money to their family and friends in their home country.
InterPlanetary File System (IPFS)
A protocol and peer to peer network used to store and share data in a distributed file system. IPFS uses content addressing to allow data and files to be stored and served by anyone anywhere on the globe. Essentially a censorship resistant system for storing/serving web files.
Issuance
In specific relation to cryptocurrency, issuance means the creation and distribution of new coins, in line with the economic rules governing the supply of the currency.
KYC
Abbreviation for Know Your Customer, generally relates to the information new customers must provide to open an account with an exchange and prove their identity. A Centralised Exchanges (CEX) is required by local regulation to collect KYC whereas a DEX isn't bound by the law of any specific location.
LAMBO
Abbreviation for Lamborghini, which is a popular meme associated with getting rich through crypto appreciation.
Layer Two
Describes the concept of building systems on top of a blockchain, such as Bitcoin, to leverage its functionality but avoid on-chain constraints. See our article on layer two, building on top of Bitcoin, to understand more.
Leverage
A high-risk trading approach where exposure to a given trade can be multiplied by an agreed Margin - essentially on credit - thereby increasing both potential gains and losses. A 50x leveraged position will increase profits/losses by that amount e.g €200 price increase on €10,000 trade at 50x leverage will generate 100% profit, while a €200 decline will wipe out your entire investment.
Lightweight Node
Also known as Simplified Payment Verification clients, Lightweight Nodes enable users to view the transactions within blocks of a blockchain e.g Bitcoin. They don’t require a user to download the whole copy of the blockchain. Essentially, lightweight nodes participate in the network as communication endpoints.
Liquidation
The automated selling of collateral, against which a crypto loan is secured, when it falls below an agreed price. Can also describe a similar process in leveraged trading when the margin requirements are no longer met.
Litecoin
A cryptocurrency modelled closely on Bitcoin but with a faster block confirmation time of 2.5 minutes (instead of ten), bigger maximum supply and different Hashing Algorithm.
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