Securing Digital Rights for Communities (Game Theory and Governance of Scalable Blockchains for Use in Digital Network States)
Annex I – Glossary of Terms and Acronyms
(Definitions are from Leo Glossary): @leoglossary/leoglossary-main-menu)
AMM - An automated market maker (AMM) is a type of decentralised exchange that allows users to trade digital assets automatically using liquidity pools instead of relying on traditional buyers and sellers
Block Producers (BP's) - Block producers are incentivized to run software that generates blocks and maintains the network. On many chains, this entails ensuring the ledger is free from any errors, including double spend problems. On DPoS chains they are also known as Witnesses
BLS Signatures - A BLS digital signature, also known as Boneh–Lynn–Shacham (BLS), is a cryptographic signature scheme which allows a user to verify that a signer is authentic where Multiple signatures generated under multiple public keys for multiple messages can be aggregated into a single signature, making the size of the signature far smaller than standard cryptographic signatures.
CEX - A centralised exchange (CEX) is an exchange that allows for the trading (or swapping) of assets yet is not decentralised. Most exchanges fit this criteria including those that handle stocks, commodities, or bonds. These, however, are rarely terms as CEX.
CFTC - The Commodity Futures Trading Commission (CFTC) is a U.S. government agency responsible for regulating the futures and options markets. The CFTC's mission is to protect market participants, promote open access to the markets, and foster economic efficiency, competitiveness, and stability.
DAO - A decentralised autonomous organization (DAO) is a business structure that is based upon the concept of decentralisation. This is in alignment with how many view the digital world. Essentially, a DAO is a digitally-native business that is built on the Internet. It is truly decentralised without traditional management structure. There is also an autonomous governance system in place
DeFi - Utilizing distributed ledger technology (DLT), DeFi eliminates the need for intermediaries such as banks, exchanges, or brokerage firms. All financial activity can occur utilizing applications built to facilitate what is needed. This is possible due to the use of smart contracts.
Delegation
DEX - Decentralised Exchange (DEX) is a structure that is most commonly used with cryptocurrency. This contrast with centralised exchanges (CEX) which are centralised and are associated with a company.
DHF - An on-chain decentralised autonomous organization (DAO) that allows community members to submit proposals for projects that benefit the ecosystem. It is through this process that funding is allocated to proposals with members using stake weighted voting to select the projects that should be funded.
DPoS (PCV) - An alternative to the Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus mechanisms for blockchains.
With PoS, there is no mining. Instead blocks are produced based upon the number of coins that are staked. Those who stake more coins will increase their chances of being chosen to validate new blocks.
DPoS takes this a step further since many who are staking the coins are not interested in being block producers. Under this mechanism, the responsibility is outsourced (delegated) to those who handle it.
HBD - The Hive Backed Dollar (HBD) is a stablecoin that is resident on the Hive blockchain. It is categorized as an algorithmic stablecoin) in that it does not keep a reserve like many other tokens in this category. Instead, each HBD is can be converted into $1 worth of HIVE
HODL - Hold On for Dear Life.
This is a play on the idea of HOLD.
It is a strategy for holding one's coins through volatile markets no matter what. Cryptocurrency can see some major pullbacks, hence the dear life part. When the crypto bear comes out, it can feel like one's world is coming to an end.
Honeycomb - Layer 2 software that builds a network of peers that use the Hive Blockchain to post and interpret transactions. This allows these peers to come to a consensus and elect peers to run tasks. Distributed computing, in this way allows for decentralised operation of a vast amount of potential applications, DeFi, and oracle services.
HP - Hive Power is the term given to a Hive coin state that is staked on the Hive blockchain. It is done through a process called powering up which switches liquid $HIVE into Hive Power, or HP.
This is what gives people access to utilize the blockchain through Resource Credits. Thus, we can consider Hive Power to be an access token for the network and to write to the database.
ICO - This is a spin on Initial Public Offering (IPO) in the equity markets.
An ICO is the selling of a token in exchange for fiat currency, Bitcoin, or other altcoins in the early phase of a project in order to fund development. However, this often results in people investing in scams without realising. It also creates a centralising force in the project as many regulatable Venture Capital firms or entities become holders at artificially low prices compared to what normal users have access to later on in the project
IPFS - The Inter-Planetary File System (IPFS) is a protocol, hypermedia and file sharing peer-to-peer network for storing and sharing data in a distributed file system. IPFS uses content-addressing to uniquely identify each file in a global namespace connecting IPFS hosts.
KYC - The Know Your Customer (KYC) rules are requirements placed upon financial institutions by governments to combat money laundering and terrorism. Basically it necessitates the institutions to know their customers by obtaining such identification where the government can determine all of an individual’s activities.
Within the cryptocurrency realm, this often applies to centralised exchanges. The design is to remove anonymity from the system in case of wrongdoing according to the different governments.
Layer 1 – Or the Base Layer is the basis for immutability. Here is where decentralization takes place due to the node system. It also includes block time, the consensus mechanism deployed, programming languages, and rules pertaining to the network's core operations.
Layer 2 - The second layer (or Layer 2) refers to the secondary layer or protocol that is build on top of a blockchain. These are designed to enhance the scaling of the ecosystem far above what can occur at the base layer. Blockchains tend to be limited in the number of transactions they can process. There are also memory concerns since individuals nodes have limitations
Network State - The Network-State is in contrast to the nation-state. Here we have a governance system that is based upon where one is geographically born. That is how citizenship is established. The rules of the land are based upon where one is physically. In comparison, the network-state is dependent within which digital eco-system one is located. This is paralleling the idea of nations and networks.
NFT - Non Fungible Tokens are unique since they cannot be replaced with something else. Each NFT is tied to a different set of data. This contrasts with Bitcoin where each coin is essentially the same
NOSTR is an open protocol for decentralised message transmission, with the intention to be able to resist internet censorship while maintaining session integrity. "NOSTR" can also be translated as "our" or "ours" from Latin
Pre-Mine - A pre-mine is the act of mining or creating coins or tokens before the cryptocurrency is released to the public. This is an activity that was very common for both blockchains and secondary projects.
The pre-mine is usually a way the founders pay themselves. During the initial coin offering days, many were giving themselves healthy chunks, an amount they typically dumped on the market. This led to price collapses, leaving the investors with near worthless assets. Many scams and centralised projects pretending to be decentralised operate by using pre-mines.
PoB (ISHD) - Incentivized Stakeholder Distribution, or Proof of Brain (PoB) is a token distribution method whereby a daily rewards pool of tokens is minted and is distributed to users in a blockchain ecosystem for creating valuable content and receiving votes from other token stakeholders. Rewards from the pool are distributed to both stakeholders for voting and users for creating content. The more stake that votes for the content, the more of the daily reward pool the content and the voters receive relative to other content in the ecosystem.
PoS (UPCV) - A blockchain consensus mechanism which requires the staking (locking up) of coins to earn a chance of adding new blocks. The chances of becoming a validator increase the more coins one stakes.
The method should also be referred to as Un-Parametered Coin Voting (UPCV) since consensus is set by stakeholders voting with their coins and the biggest stake holder has the biggest influence on the governance of the chain, hence there are no parameters to prevent a “rich get richer” scenario or to incorporate any social nuance of the community into the governance system.
PoW (IV) - Proof-of-Work (PoW) is a blockchain consensus mechanism that is used to validate blocks of information that are attached to each other. This data structure creates ledgers of transactions utilizing distributed ledger technology.
This system should also be referred to as Infrastructure Voting, since the community recognises the longest chain when forks split the consensus. The longest chain is normally formed only by the chain which has been able to deploy the most infrastructure and thereby the most computing power to secure the consensus. Eventually infrastructure operation becomes expensive and resource intensive, making it economically viable only to those who have the money to invest in large amounts of expensive equipment.
Power Down - The opposite of Power Up – As a security mechanism, this should take several weeks in order to dis-incentivise centralised exchanges holding custodial stake from powering up to attempt to control the consensus of a decentralised community, by voting against the interests of community members, using their own custodial stakes which are stored on the exchange against them.
Power Up - This is when one converts a governance token (such as $HIVE) to the staked for governance version of the token (such as Hive Power). Powering up increases one's voting power for both governance issues along with distribution of the daily reward pool. The amount of Resource Credits one has available increases as Powered Up tokens increases.
SEC - An independent federal regulatory agency that is tasked with the oversight of the securities markets. One of the main goals is to protect investors from predatory and criminal activity.
Smart Contract - A smart contract is a self executing agreement between two parties. Both the action of buyer and sellers are determined by the code that is in the contract. There are no external entities that are involved in the transactions.
Smart contracts are tied to blockchains. This are a vital part of Decentralised Finance since there is no need for any third party involvement
SPK - The governance token of the SPK Network; An offchain, decentralised, incentivised Peer to Peer: Storage, Encoding and Content Delivery Network
Staking - This is generally the process of holding coins or tokens in a wallet to support a particular blockchain or application. People typically do this to support network operations in return, typically, for some type of reward.
Depending upon the system, there might be time commitment as well as a certain period to un-stake.
Staking is viewed as a greater level of commitment than simply holding the cryptocurrency in liquid form.
Sybil Attack - A Sybil attack is a type of cybersecurity threat where a single entity creates multiple fake identities to gain control over a network, often undermining its integrity and security. This can lead to issues like manipulating votes or transactions within decentralized systems, such as blockchain networks
VSC - Virtual Smart Chain: a Layer 2 smart contract system for cross chain interoperability powered by ZK-proofs and economically secured wrapping protocols
Witness - Witnesses are elected into their positions on DPoS chains by stake weighted voting from community votes. They, like Block Producers are incentivized to run software that generates blocks and maintains the network. On many chains, this entails ensuring the ledger is free from any errors, including double spend problems. On DPoS chains they also run the social consensus software such as voting, rewards and distribution mechanisms, set interest rates and act as manual oracles for price feeds.
ZK Proof ZK proofs work, essentially by allowing someone to prove that they have access to information without actually showing that information to the party asking for proof - they are great for scaling as they can finalise proofs on the Layer 1 chain without having to compute heavy transaction data on it. They are also provide transaction privacy