Introduction to cryptocurrency

Cryptocurrencies are traded on peer-to-peer networks that are secured by cryptographic systems, recorded on a public ledger using blockchain technology.

An off-chain transaction takes place outside of the blockchain, and is often defined as a second-layer protocol.

Bitcoin manages to solve this issue thanks to confirmations and its proof of work consensus mechanism.

A private blockchain operates by invitation only and is often run by an entity or ‘trusted intermediary’.

Stablecoins are often backed by assets with values that are considered to be stable, such as a local currency like the US dollar, or an asset class like gold.

An unspent transaction output (UTXO) is the amount of digital currency left over after a cryptocurrency transaction.

Cryptography is the key to blockchain technology and allows the storage of huge numbers of transactions and protect them from hackers.

An atomic swap is the process of exchanging cryptocurrencies between different blockchains. 

The Byzantine Generals Problem describes the difficulty of achieving consensus in distributed systems.

Stablecoins are collateralised to provide stablecoin holders with the opportunity to redeem the tokens for US dollars or the assets that can then be used in the real world.

Anti-money laundering (AML) practices monitor and report suspicious activities to prevent money laundering and terrorist financing.

A stablecoin is a type of cryptocurrency which has a value that’s ‘pegged’ to either an individual local currency such as the US dollar, or an asset class such as gold.