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Your Crypto Glossary from Lion Gaming

The terminology surrounding crypto can be hard to understand sometimes. The ecosystem surrounding crypto also extends beyond digital currency. Refer to Lion Gaming’s crypto glossary to get a better understanding of all the terminology that you hear regularly in conversations surrounding crypto. Check back often for new updates!

Blockchain

Blockchains are decentralized ledgers where transactions are recorded. The transaction data cannot be altered, making them immutable. Because the data is immutable, there is no need to rely on a 3rd party to verify the record of data. The reason they are called “blockchains” is because the data is stored in what is known as blocks, each block has a time stamp and is publicly accessible.

On-chain

On-chain means the product is built with blockchain technology, where transactions are recorded on the public ledger of a given cryptocurrency. While Lion Gaming’s Fer0x Crypto Casino and Fer0x Crypto Sportsbook solutions supports on-chain, it is not a forced requirement. In other words, players can toggle the on-chain settings off and be able to wager in a traditional iGaming manner. Check out our blog post to learn about on-chain wagering in more detail.

Non-fungible Token (NFT)

NFT refers to non-fungible token. A non-fungible token is a unit of data that exists upon a blockchain (such as Ethereum). NFTs are commonly associated with digital art, however they can also be used to represent in-game assets for video games, such as digital plots of land or clothing for players’ avatars.

Cryptocurrency

Digital currency where transactions are stored on a publicly viewable ledger.

Smart contract

A smart contract is a self-executing, irreversible contract which is built over a blockchain. Presently, most smart contracts are built over the Ethereum blockchain. A common use of smart contracts is the creation of NFTs.

Decentralized Finance (DeFi)

Decentralized Finance, or DeFi, refers to a financial system built on blockchain technology that operates without traditional intermediaries like banks. DeFi platforms use smart contracts (explained above) to enable services such as lending, borrowing, trading, and earning interest.

Token

Tokens are similar to cryptocurrencies, and can in most cases be used interchangeably. While cryptocurrencies are the native asset of their respective blockchain (i.e. Bitcoin for the Bitcoin blockchain), tokens are built over an existing blockchain. An example of a token would be Uniswap (UNI), which is built over the Ethereum blockchain.

Gas fees

Gas fees are the costs associated with performing transactions on a blockchain network. These fees are paid to miners or validators who process and confirm transactions. The amount of gas required depends on the complexity and computational power needed for the transaction.

Web3 wallet

A web3 wallet, or crypto wallet, is a digital tool that allows users to store, manage, and interact with their cryptocurrencies and tokens. Wallets can be software-based (hot wallets) or hardware-based (cold wallets) and provide a secure way to manage private keys and conduct transactions. Lion Gaming’s crypto casino solutions integrate with some of the most popular wallets on the market such as MetaMask and WalletConnect.

Decentralized Application (DApp)

A Decentralized Application (DApp) is an application that runs on a blockchain network rather than a centralized server. DApps leverage smart contracts and are typically open-source, providing greater transparency and security.

Decentralized Autonomous Organization (DAO)

A Decentralized Autonomous Organization (DAO) is an organization governed by smart contracts on a blockchain, where decision-making is decentralized and typically made through token holder voting. DAOs operate without a central authority and are managed by their community.

Fork

A fork occurs when there is a change or upgrade to the blockchain’s protocol, resulting in a split. There are two types of forks: soft forks, which are backward-compatible, and hard forks, which create a new separate blockchain. Examples include Bitcoin Cash (BCH) resulting from a hard fork of Bitcoin (BTC).

Proof-of-stake

Proof-of-stake (PoS) is a consensus mechanism utilized by certain blockchains, such as Tron and Cardano. PoS works by allowing those holding cryptocurrency to participate in validating the block transactions by “staking” coins they own. In-exchange for staking their coins, they receive compensation in the form of cryptocurrency.

Proof-of-work

Proof-of-work (PoW) is a consensus mechanism that was made popular by Bitcoin, and is premised on computing power. For PoW, members of a decentralized network are competing to solve an arbitrary math problem, where the first to solve it receives a block reward, this is known as “mining.”

Layer 1

A Layer 1 protocol, or “main chain” is the primary blockchain within its ecosystem such as Bitcoin or Ethereum.

Layer 2

A Layer 2 protocol is a blockchain that is built off of a Layer 1 protocol. The main purposes of Layer 2 protocols are to increase transaction speeds and reduce fees associated with transactions.

Hashrate

Hashrate refers to the computational power used by miners to process transactions and secure the blockchain network. It is measured in hashes per second (H/s) and indicates the efficiency and security of the network.

Block size

The size of a block is equivalent to the amount of data it stores. The maximum amount of data a block can store is referred to as the block size limit. The block size limit varies depending on the blockchain being used. Having a larger block size limit increases scalability by being able to process more transactions-per-second.

Sidechain

A sidechain is a blockchain that is separate from the parent blockchain (i.e. Bitcoin or Ethereum) that it connects to. Sidechains have their own consensus protocols, and digital assets are transferred between a sidechain and parent blockchain through the use of smart contracts. Smart contracts are used to reduce the risk of fraud by enlisting validators on the parent blockchain and sidechain when confirming cross-chain transactions.

Nodes

Nodes are critical to ensuring a blockchain is decentralized. On a blockchain, all nodes are connected and communicate with each other. When a new block is mined and added to the blockchain, nodes can accept or reject the block. Nodes store and spread the blocks of data with each other in order to ensure all nodes are up to date.

Scalability

Scalability refers to the capacity of a blockchain to process more transactions without sacrificing transaction times and incurring higher fees.

State channel

State channels allow multiple transactions to occur without submitting each one to the blockchain. With a state channel an opening transaction is published to the blockchain, a smart contract then executes multiple transactions off-chain, and a second transaction is then settled on-chain which captures all the transactions that occurred with the state channel. The only fees incurred are the opening transaction and the closing transaction that captured all that occurred through the state channel.

Sharding

Sharding enables more transactions per second on a blockchain by splitting the network into smaller parts known as “shards.” Each shard can communicate with one another to maintain decentralization through the blockchain. Learn more about sharding in this article from Coinbase..

Consensus protocol

Consensus protocols are the different means by which blockchains verify transactions. Different types of consensus protocols include proof-of-stake, proof-of-work, proof-of-space, and proof-of-elapsed time. You can learn about the differences between each consensus protocol in this article from Decrypt.

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      Our address
      Lion Gaming Group Inc.
      855 2 St SW #3500
      Calgary, AB
      T2P 4K1 Canada
      Our address
      Lion Gaming Group Inc.
      855 2 St SW #3500
      Calgary, AB
      T2P 4K1 Canada