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Thursday, May 6, 2021

Directed Acyclic Graph [DAG]: Defined in CryptoCurrency

Directed Acyclic Graph [DAG]: Defined in CryptoCurrency

 

A directed acyclic graph or DAG is a structure that is built out in one single direction and in such a way that it never repeats. Here a “graph” is simply a structure of units. 


“Directed” describes the connection between each unit in the structure, and that they all flow the same way. And “acyclic” means describing something that is not circular or repeating.


A good example of a directed acyclic graph is a checklist. In order to do step 10, you must have done step 9, and before you can do step 8, you must have done step 7 and so on. 

If you were to list out these steps on a graph, you would see the flow from 1-10 and that it never repeats itself going back to 1. If it did repeat, it would not be a directed acyclic graph. 

Another example of a DAG is a family tree. Your grandparents had your mom and her brother. Your mom met your dad and had you. Your mom’s brother met his wife and had their kids. In no way does your grandpa or grandma ever show up again beneath you.

Distributed: Defined in CryptoCurrency

Distributed: Defined in CryptoCurrency


Distributed is defined as a type of computer system that is run simultaneously by many computers but run as a single system.


There are 3 separate goals a distributed computing system may be designed for:

  1. Performance: Be able to do a lot of intense computing in a short time.
  2. Scalability: Be able to service many people, in many locations at the same time.
  3. Reliability: Be able to service people even if one fails or is unavailable.

Distributed Ledger [DLT]: Defined in CryptoCurrency

Distributed Ledger [DLT]: Defined in CryptoCurrency


Distributed ledger is defined as a system of independent computers all simultaneously recording data. With distributed ledger technology, identical copies of the recording are kept by each computer.


We can define a distributed system, as one where all computers work independently toward the same goal as one large system. We can define a ledger as a book used to record transactions (money in, money out).


However, distributed ledger technology has evolved beyond recording transactions so that it can record any data. With distributed ledger technology, there is no central authority maintaining the system. 

Instead, updates to the ledger are independently created and then voted on. Once an agreement regarding the update has been reached, a recording is made in the ledger.

The latest version of the ledger, with the new recording, is then saved to each computing system and the process repeats itself. The first type of distributed ledger technology is called the blockchain.

Diversification: Defined in CryptoCurrency

Diversification: Defined in CryptoCurrency


Diversification is defined as a strategy where you buy many different investments as a way to increase your chances of becoming profitable and minimize your chances of losing everything.


Many investors are big fans of diversification, but like anything it can be overdone. By spreading yourself too thin across many different investments, you have a low risk of losing everything, but you also will not make huge profits.


If at the beginning of Facebook, Mark Zuckerberg, the founder had asked you for $5.000 as an investment, would you do it? Of course you would.

As a diversified investor, you might only want to give him $100-500 so you could avoid risking all of your money.
In other words, diversification works well with investments that you have little knowledge or understanding in.

Double Spending: Defined in CryptoCurrency

Double Spending: Defined in CryptoCurrency

Double spending is defined as the action of spending digital money twice. It is meant to cheat the first person out of their money before they’ve received it.


Bitcoin was the first digital money to provide a good solution to prevent double spending. Bitcoin prevents double spending with a permanent, public and digital book of records known as the blockchain. 


This blockchain can record any information. Each page in that book can be considered to be a block.

Because the blockchain public, many people are simultaneously verifying and recording information on it using their computers. After enough users in this network confirm your transaction, the guy who wants double spend cannot.

Dust Transactions: Defined in CryptoCurrency

Dust Transactions: Defined in CryptoCurrency

Dust transactions describes a purchase or sale using a tiny amount of cryptocurrency.

DYOR: Defined in CryptoCurrency

DYOR: Defined in CryptoCurrency


DYOR short for Do Your Own Research and is defined as doing research before making an investment. 


There are many manipulating people who urge others to buy a cryptocurrency so the price will rise and they can sell it for a profit. 


DYOR is advice to do research studying websites, Reddit, forums, and more before making an investment.