Quarterly Mark December 2023 - 70

with smart contracts, blockchains can potentially transform recordkeeping and
transactions in a variety of ways. While blockchain technology has practical
limitations, there are nevertheless a growing number of businesses building
products that use distributed ledger technology. These include IBM Blockchain,
Microsoft Azure Blockchain, Oracle Blockchain Cloud Service, and JP Morgan's
Quorum.
Those who are intrigued by blockchain technology but skeptical of the upsand-downs
of cryptocurrencies may find it worthwhile to consider blockchain's
applications and the ways in which it may disrupt industries and current methods of
doing business. We expect to see a growing divergence between digital investable
assets and the emergence of distributed ledgers deployed for personal, government,
and business uses. As the first species of blockchain applications, cryptos may
ultimately prove to be an evolutionary cul-de-sac.
APPENDIX
A CRYPTO GLOSSARY
Altcoin: Any cryptocurrency other than Bitcoin.
Bitcoin: The first and most popular cryptocurrency, and a reward for participating in
the Bitcoin blockchain network.
Blockchain: A digital ledger maintained by computers worldwide, in a decentralized
manner, where each " block " is a packet of data.
Consensus mechanism: The process by which changes of a ledger are verified
and validated by involved parties. A consensus mechanism is required for every
implementation of distributed ledger technology.
Cryptocurrency: A non-traditional, digital medium of exchange that uses
cryptography to validate and secure transactions, typically through a blockchain. It's
important to note that some cryptocurrencies vary on this definition.
Decentralized Finance (DeFi): As with Web 3.0, definitions may vary. The general
idea of DeFi is to change financial markets and products by replacing financial
institutions with transparent crypto-based protocols.
Exchanges: Platforms where cryptocurrencies can be transacted with other people
or currencies for a fee.
* Decentralized exchange - Users are matched with buyers/sellers algorithmically.
Such exchanges tend to be less liquid than centralized exchanges but generally
are more secure and involve lower fees.
* Centralized exchange - Users create an account with an exchange, which
typically holds their crypto assets. Considered more liquid and regulated, but
less secure because the exchange acts as a custodian and can be hacked.
Hash Rate: The measuring unit of the processing power of a blockchain network
operating with a Proof-of-Work consensus mechanism. It is essentially the number of
guesses made per second in attempting to solve a cryptographic puzzle that is part of
the mining process in Proof-of-Work cryptocurrencies.
Initial Coin Offering (ICO): Like an IPO, but for digital coins. When they became
popular, ICOs required no formal filings but served a similar purpose to that of IPOs.
Today, ICOs are almost non-existent.
Miners: Users who participate in a blockchain network by verifying transactions and,
in exchange, are rewarded with a particular cryptocurrency in a specified amount.
Proof-of-Stake (PoS): An alternative to PoW, PoS requires that participating miners
hold an amount of the cryptocurrency-their " stake " -in order to qualify for the ability to
verify blockchain transactions. PoS is significantly less energy intensive than PoW.
70 | Exploring Cryptocurrencies: The History, the Hype, and the Future

Quarterly Mark December 2023

Table of Contents for the Digital Edition of Quarterly Mark December 2023