Finishing Cryptocurrency Terminology
….ending the PURA ABCs with Q to Z
PURA Vida everyone! R as in reward to W as in wallet…today we are finishing up our crypto series “PURA 101” with number eight. We hope to have shed some light on your questions. 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. Also, make sure to take a look at the other parts as well in our PURA blog, the BlogChain. Of course you are still 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. As always, the PURA team wants to provide you with as much information as possible! So, here are our last definitions…
R as in Reward
Everyone loves a reward. Rewards are essential in In the world of cryptocurrencies. They are awarded in the Proof of Work and Proof of Stake consensus systems. Miners being the first to mine a new block in the block chain receive a reward and a transaction fee. Cryptocurrencies also pay out a reward to owners of masternodes.
S as in Scam
Unfortunate as it may be, there is a large number of cryptocurrencies or Initial Coin Offerings (ICOs) that turn out to be scams. Scams are fraudulent schemes performed by dishonest companies or groups of people. Many are infected by “gold-digger syndrome”. Gold diggers take advantage of the euphoria that is sweeping the markets. Scams coins are also known as Ponzi systems. Such coins seem full of promise just to drop off the planet the next day. Thus, we cannot stress enough how it important it is for investors to practice their due-diligence. Make sure you carefully research the ICO or coin you are planning to invest in!
How do you know the difference? A real, series coin should be listed on CoinMarketCap. This website reads out market data from 3000 coin markets. You can check the price, trend and trading volume. It could also mean a coin still has ICO-status or that a coin is a private coin not on the market. Also, a Whitepaper, like the PURA Whitepaper should be available online for download and whether there is a wallet available for the coin. If it turns out that more than 30 percent of your investment is distributed up in a pyramid hierarchy structure, this is usually clear evidence of a Ponzi system. In that case, you should stay away from investing.
S as in Shill / Hype
“Shilling a Coin” means creating a hype about a specific coin to increase its value. This is done to entice people into investing into a coin. The reasons could be that investors bought a coin at a high price and hope to profit or that early investors want to see the coin grow in value in the markets. For all investors, it is important to be aware of reasons for price increases – is the coin really gaining value or shilling?
S as in Shitcoin
A shitcoin is a deprecatory term used for altcoins which have become worthless. This development usually follows a similar pattern. A coin is launched in the market and jumps as investors are pouring in. Then the coin takes a dip as people start selling. Insufficient communications unsettle the community and investors sell the coin because they don’t feel the project is promising. The prices of shitcoins are driven by speculation while the prices of sustainable coins like PURA are driven by the underlying concept and comprehensive communications.
S as in Smart Contract
Blockchain technology has the potential to offer parties to enter into contracts without intermediaries. Such contracts are known as “Smart Contracts” and allow application in a vast range of situations. Smart contracts link conditions upon which a payment takes place to the fulfillment of certain requirements. For instance, a lessee has to consider that he can no longer start his car if he does not transfer payment for rates to the lessor on time. Smart contract conditions could also stipulate that funds are for specific purposes only. A sender wants to ensure that a monthly payment of PURA is spent on a specific item. If the recipient tries to spend these funds somewhere else, this payment will not be effected.
A software wallet is a software (or an app) that allows you to access and store your cryptocurrencies on a computer or mobile device. As both computers and mobile phones are connected to the internet, your digital currencies may be accessed remotely or directly if your computer or phone gets stolen. For this reason, please note once again that we want to discourage you from using software wallets. If you have been following our PURA 101 series, you know that we cannot remind you enough: Please use Cold Storage!
According to industry expert William Mougayar, a token is “a unit of value created to self-govern a business model, and empower its users to interact with its products, while facilitating the distribution and sharing of rewards and benefits to all of its stakeholders.” The terms “coin” and “token” are often used interchangeable although this is not correct. Read more here on the subtle terminological differences regarding coins, tokens and altcoins. A basic list of different types of tokens is outlined here.
PURA for the Common Good
PURA is a cryptocurrency to provide you and society as a whole with a foundation to practice decentralized social responsibility and contribution. To emphasize, PURA is for putting decision-making power on how to allot funds for common good back into the hands of people. The PURA community wants to make a difference. In detail, PURA wants to establish an environment that pioneers a new method of societal organization. This way, a cryptocurrency enables you to make a difference to work towards the common good for all. In line with this, thank you for being part of the PURA Community and for all your support! Please read our Whitepaper for more information.