Glossary
Proof of Work
A consensus mechanism where miners spend computation to secure the network.
Proof of work secures a chain by making block production expensive. Miners burn electricity to solve a puzzle, and the cost of attacking the network is the cost of out-computing everyone else.
Bitcoin is the dominant example. It is extraordinarily resilient and extraordinarily energy-hungry, and it is the reason Bitcoin has never been successfully double-spent.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.