Glossary

When a group of miners end up controlling over 50% of the blockchain network’s mining hashrate and can then launch an attack on the blockchain that could reverse transactions and therefore double-spend coins, as well as halt new transaction confirmations.

The practice of testing 2 variants of a single variable (eg a webpage) to determine which one is better.

The return on a portfolio over a given time period with no consideration for inflation or market return.

A situation where two or more miners find a block at virtually the same time. The situation is resolved after subsequent blocks are added, one of the chains becomes longer than the others, and the blocks that are not in the longer chain are subsequently abandoned (and known as ‘orphaned blocks’).

A function that maps an input signal of a node in an Artificial Neural Network to an output signal. This output is then used as the input for the next node.

Normally represented as a long string of alphanumeric characters, cryptocurrency addresses are identifiers used to send and receive (or deposit and withdraw) payments on the network.

An agreement ledger is distributed ledger used by two or more parties to negotiate and reach agreement. The blockchain is an example of an agreement ledger.

An area of computer science that focuses on the creation of intelligent machines that operate and react much like humans do. Such machines process inputs from the environment using experiences it has gained to take intelligent decisions.

Any cryptocurrency or digital currency that is not Bitcoin. Altcoins can also be forks of Bitcoin (such as Bitcoin Cash).

An Amazon subsidiary providing an on-demand cloud computing subscription service for individuals, businesses and governments.

Refers to policies and legislation designed to require that financial institutions monitor their clients in order to prevent money laundering and corruption. AML laws also usually require that financial institutions report any uncovered financial crimes and do everything to stop them.

Represents a set of routines, protocols, and tools for building software applications. functionalities of a certain program. These are important because they enable other programmers to use components of existing software.

An area of computer science that focuses on the creation of intelligent machines that operate and react much like humans do. Such machines process inputs from the environment using experiences it has gained to take intelligent decisions.

“Application Specific Integrated Circuit” – ASICs are silicon chips that are designed to perform one specific task; in the base of Bitcoin, ASICs process SHA-256 hashing problems to mine new bitcoins.

A neural network whereby the unsupervised learning algorithm is trained to set the output target values equal to the inputs. The autoencoder’s goals are to reduce the number of random variables under consideration, such that the input is represented in fewer dimensions (see Dimension Reduction).

Refers to the “backward propagation of errors”. A technique used in artificial neural networks to calculate a gradient for updating the weights and biases in the network. The error is computed at the output and distributed backward throughout the network’s layers.

A probabilistic graphical model for representing multivariate probability distributions. For example, a Bayesian network could represent the probabilistic relationships between diseases and symptoms. Given the symptoms, the network can be used to work out the probabilities of the presence of(...)

A mathematical formula for determining conditional probabilities – P(A|B) = P(B|A) / P(A)*P(B). The formula gives the probability of an event when we already have information about some other condition related to the event.

In machine learning, bias occurs when results are systematically prejudiced because of errors in the machine learning process that cause the learner to consistently learn the same wrong thing.

Collections of data – both structured and unstructured – once deemed impractical due to their volume, velocity, and variety, and could not be processed by traditional processing applications. Big Data can now be processed and analyzed to generate insights from the data and make better decisions.

Technology that enables someone to be authenticated based on a set of unique and specific recognizable identifiers. Such identifiers are usually biological or physical characteristics that enable biometric technology to be used, including fingerprint mapping, facial recognition, and retina scans.

The world’s first cryptocurrency (created in 2009), and remains the market leader, invariably accounting for over half of total cryptocurrency market capitalization. Bitcoin uses a proof-of-work consensus algorithm.

A package containing a certain amount of data recorded on the blockchain. Once completed, a new block is sequentially added to the chain to record new data.

An open source online tool that allows you to view information about blocks, addresses, and transactions on the blockchain (most commonly the Bitcoin blockchain).

The number of blocks in a blockchain, or preceding a particular block. The genesis block (the first block on the chain), fo example, has a block height of zero.

The reward given to a miner by the network for each block they successfully mine. Block rewards are usually given in the form of the network’s particular cryptocurrency, as well as transaction fees.

A decentralized, distributed ledger that exists on a network of computers and comprises digitally recorded data grouped into blocks. Using cryptography, each block is sequentially linked to the next block to form a chain of blocks that make up the ledger.

The rules governing how data is transmitted in a blockchain network.

A new business venture that has a minimal level of seed capital. The entrepreneur / group of co-founders is said to be bootstrapping when they develop a new company mainly from personal finances or from operating revenues.

Still under active development, Casper is Ethereum’s set of projects that will allow it to make the transition from using Proof-of-Work to Proof-of-Stake.

Maintained or controlled by one central authority.

A ledger that is maintained under the responsibility of a singly central authority.

Used in Hyperledger Fabric, chaincode is a program that is designed to manages and update the state of a ledgers state through submitted applications. It is equivalent to smart contracts on Ethereum and other blockchain networks.

AI software that simulates a conversation with users via messaging applications, websites and phone calls. Chatbots are becoming common for helping users with customer service inquiries, as well as more advanced requests.

A statistical hypothesis test to determine if two categorical variables are related in a population.

The process of determining the class (or targets, labels or categories) of given data points. Classes are sometimes called as targets/ labels or categories.

Software that accesses the blockchain via local computer and helps to process its transactions. A client usually includes a cryptocurrency software wallet.

The delivery of hosted computing services (such as storage, computing power, and intelligence) over the Internet (“the cloud”) to offer faster, more efficient and more flexible solutions. Cloud computing services are often divided into three categories: Infrastructure-as-a-Service (IaaS),(...)

The process of organizing data into groups such that all members of each group have some common characteristics.

A unit representation of a digital asset (eg cryptocurrency) and is mainly used for the purpose of sending and receiving payments on their respective blockchains.

An offline wallet that remains disconected from the internet. Often referred to as cold storage.

The shared use of a good or service by a group. Often associated with the “Sharing Economy,” collaborative consumption can be found in FinTech solutions such as peer-to-peer lending and crowdfunding.

Validation by the blockchain network of a legitimate transaction. Miners confirm a transaction in a proof-of-work system, and once confirmed it can’t be reversed or double spent. Zero confirmation in a block means zero transaction – a fraudulent transaction can also be rejected by the network.

A confusion matrix is a technique that defines the performance of a classification algorithm on a set of test data for which the true values are known. The matrix uses the True Positive(TP), True Negative (TN), False Positive(FP) and False Negative(FN) to evaluate the performance.

The process of securely achieving agreement on the particular state of a network. It often relates to the validation of transactions being added to the ledger, with consensus having to be reached before the ledger is updated to ensure only legitimate transactions are recorded on the(...)

The difference between what consumers are willing to pay, over and above what they actually pay (i.e. the prevailing market price).

A variable that can take on any value between its defined minimum value and maximum values.

When using cross-validation to test a learning model, it is trained on the training set, and then its performance is tested on the control set (also known as ‘test set’).

The process of dividing available data into a test set and a training set. Training is then done on the training set, and then to test the performance of the learned model it is applied to the test set (or ‘control set’). Cross-vaildation, therefore, helps us to evaluate the performance of a(...)

A method of raising capital by tapping into a network of investors, friends, family, and other individuals. Crowdfunding is usually carried out online using tailored platforms (eg Kickstarter) and often leverages social media to expand the network’s reach of potential investors.

A digital currency that uses cryptographic techniques to securely verify the transfer of currency units between users. Bitcoin was the first cryptocurrency and remains the most valuable today, despite the emergence of thousands of alternative projects. Most cryptocurrencies operate using(...)

The use of sophisticated mathematical techniques to securely verify the transfer of currency units between users. It has several uses in blockchain and cryptocurrencies, an example being the symmetric-key cryptography used in the Bitcoin, whereby matching private keys are required to access(...)

An open source, trustless software application which connects users and providers directly, and doesn’t require a centralized server or middleman to function effectively. Instead, the backend code runs on a decentralized peer-to-peer network.

The process of finding patterns, relationships, correlations and anomalies within large data sets to predict outcomes.

The interdisciplinary field of using tools and techniques to extract knowledge and insights from both structured and unstructured data.

A particular organization of units of data that enables efficient access and modification, such as an array or a tree.

The process of preparing complex data for easy access and analysis. It can involve cleaning the data, unifying the data, converting the format of the data and combining the data for easier organization.

A malicious attempt to disrupt normal traffic of a targeted server, service or network by overwhelming it with a flood of Internet traffic. By doing so, the attacker intends to render the target unavailable to its users.

The transfer of authority and responsibility from a centralized organization, government, or party to a distributed network.

An open source, trustless software application which connects users and providers directly, and doesn’t require a centralized server or middleman to function effectively. Instead, the backend code runs on a decentralized peer-to-peer network.

Organizations that are fully autonomous through software. The laws of the decentralized organization are fully stipulated through the code written in the smart contract, which itself is suitably complex enough to ensure the entire infrastructure can function autonomously.

A boundary that separates the elements of one class from those of another class.

A flowchart-like tree structure modelling a supervised learning algorithm. A decision tree represents a number of possible decision paths and an outcome for each path, where each internal node denotes a test on an attribute, each branch represents an outcome of the test, and each leaf(...)

A subset of machine learning that uses multi-layered neural networks to accelerate the learning process for computers. Deep learning is a key technology behind driverless cars.

A variable under test that changes when changes are made to an independent variable.

Used in Proof-of-Work mining to determine how hard it is to verify a block. In the Bitcoin network, is it is a measure of how difficult it is to find a hash below a given target.

A bank that predominantly offers its services to customers through digital means. Although a digital bank may have many channels in which to serve customers, including physicla branches and call centres, its core aim is to provide a comprehensive digital infrastructure to improve the customer(...)

A person who has been raised during the era of digital technology. Digital natives represent a young demographic that is seen as being a crucial driver of the growth of FinTech, as their exposure to digital solutions from an early age means they are more familiar with this technology than(...)

The process of reducing the dimensional representation of the data without losing much important information. When datasets have more than 3 dimensions, dimension reduction techniques prove particularly useful. Principal Component Analysis is one such technique.

The use of a third party to replicate and host physical and/or virtual servers in order to protect applications and data in the event of a unforeseen natural disaster.

A variable that can only taken one of a specific number of values.

A new technology whose introduction significantly impacts the existing functioning of a market or industry.

A type of database that is shared across multiple entities, with each node having access to the an identical copy. This helps to greatly improve the robustness of the network and prevent attacks.

Refers to the problem with digital money whereby transactions can be copied and spent twice. Bitcoin solves this problem with the use of a peer-to-peer network that maintains a universal ledger that is chronologically ordered since the begining of its operation in 2009. Once a bitcoin(...)

The appropriate care that a business or individual should take before entering into an agreement or contract with another party. This is usually done on a voluntary basis, but can also be a legal requirement in some instances.

Short for “electronic commerce”, refers to business transactions that take place on the internet, such as online buying and selling on Amazon.

The process of encoding communication for the purpose of security. This is normally done by using algorithms to turn information into a code, which itself requires a key to unlock and convert back to data.

Tokens designed to be solely used on the Ethereum blockchain. ERC20 tokens feature several comon standards that enable them to be easily shared and exchanged for other tokens. For this reason they have become especially popular for new projects creating ICOs.

A more secure token standard than ERC20, reducing the chance of tokens being lost during transactions which has frequently occurred under ERC20. ERC223 solves the inability of ERC20 tokens to handle incoming token transactions for non-supported tokens. It also reduces the current two-step(...)

The token standard for creating non-fungible tokens (meaning that the token is not interchangeable). Similar to ERC20 tokens, but ERC721 gains non-fungible properties by capturing the ownership of that particular token.

The native token of the Ethereum Blockchain network. Ether functions as a fuel of the Ethereum ecosystem, representing the value of Gas in the network and functioning as a method of payment for participants to execute their operations on the network.

The native token of the Ethereum Blockchain network. Ether functions as a fuel of the Ethereum ecosystem, representing the value of Gas in the network and functioning as a method of payment for participants to execute their operations on the network.

An open software public blockchain platform on which smart contract code can be written, developers can build decentralized apps and decentralized autonomous organizations, among other things. It is also the second most valuable blockchain-based tokenized project after Bitcoin.

A runtime environment for Ethereum smart contracts. The EVM is Turing complete, and is also designed to prevent DDOS attacks.

A runtime environment for Ethereum smart contracts. The EVM is Turing complete, and is also designed to prevent DDOS attacks.

A venue to buy and sell cryptocurrencies. An example of a cryptocurrency exchange is Binance.

An analytical approach used for summarizing and visualizing data, and for discovering insights from data.

Legal tender issued by the government, such as USD, JPY, GBP.

A portmanteau of “Financial Technology”. Refers to the use of technology to deliver new and innovative financial products and services that aim to compete with traditional financial methods and make financial systems more efficient.

A fork is a software change that creates an alternative version of a blockchain. Both chains then run as separate blockchains on different parts of the network. The split can either be a Hard Fork or Soft Fork.

A unit that measures the computational effort required to execute various tasks on the Ethereum blockchain. Tasks include conducting transactions on the network, which in turn determines the transaction fee required from network users. More computationally intensive tasks are represented by(...)

The very first block in a blockchain.

A web based software development platform. The code of many open source blockchain/cryptocurrency projects can be found on GitHub.

A machine learning technique for regression and classification problems, which produces a prediction model in the form of an ensemble of weak prediction models, typically decision trees.

An optimization algorithm used to minimize some function by iteratively moving in the direction of steepest ascent/descent as defined by the positive/negative of the gradient. For maximising a function, for example, the algorithm would progress in the direction that causes the function to(...)

A computer chip that performs complex mathematical calculations rapidly, mainly for the purposes of image rendering. Often used by deep learning models, which require large processing power.

An event in which people come together to solve problems. Those people often include computer programmers, developers, designers and project managers, all collaborating on specific software projects. Hackathons also usually have an end goal of creating functioning products and include(...)

Bitcoins have a finite supply, with 21 million bitcoins being the total that will ever be issued. Every 210,000 blocks that are registered on the blockchain, the amount of new coins minted will be cut in half, with the final halving scheduled to take place in 2140.

A blockchian fork that results in new validated blocks being incompatible with older versions of the software. All network nodes must upgrade their software to successfully work with the new rules.

A function that is used to map arbitrary data to data of a fixed size. A cryptographic function that confirms transactions on the blockchain by taking transaction input data and producing a unique alphanumeric output string. Each block contains its own hash value, and the hash value of the (...)

The speed at which hashes can be performed by a bitcoin miner (normally per second). The higher the hashrate, the greater the opportunity for the miner to mine the next block and receive the block reward.

Networks that transfer data almost instantaneously, in a matter of milliseconds.

A service that runs online servers that enable content to be served across the internet (web hosting is one example).

A cryptocurrency wallet that is connected to the Internet – and therefore not being kept in cold storage.

Hosted by the Linux Foundation, IBM’s Hyperledger brings together various open source enterprise blockchain projects designed to assist businesses.

Hyperledger’s open source enterprise blockchain platform which hosts smart contracts known as chaincode.

Parameters in a model that cannot be learnt from the data and is therefore determined by experimenting with different values to work out which is most suitable.

A fundraising event for new cryptocurrency-based projects in which it sells its coins/tokens in advance to investors in exchange for capital to fund further development of the project. This capital is often in the form of existing cryptocurrencies such as Bitcoin and Ethereum.

The property/feature of a blockchain that makes it an unalterable, permanent record of transactions over time. No single entity can change the data once it was been written onto the blockchain.

A business that helps to develop new and startup companies through specific stages and by providing specific services (for example, management training).

A variable that, when changed, causes a change in a dependent variable.

A form of cloud computing in which a cloud provider hosts the infrastructure components typically found in an on-premises data center, including servers, storage and networking hardware. The provider also provides accompanying services such as billing, log access, security and clustering.

A fundraising event for new cryptocurrency-based projects in which it sells its coins/tokens in advance to investors in exchange for capital to fund further development of the project. This capital is often in the form of existing cryptocurrencies such as Bitcoin and Ethereum.

Refers to the use of technology to improve the cost and efficiency of the current insurance industry model.

Refers to a system in which billions of physical devices around the world are connected to the internet, and therefore communicating and sharing real-time data without requiring human interaction. Each device is provided with a unique identifier (UIDs), and can include computing devices,(...)

An open-source, peer-to-peer distributed protocol that aims to store and share hypermedia in a distributed file system. IPFS aims to improve the speed, security and transparency of running applications based on a new distributed architecture for the internet.

Refers to a system in which billions of physical devices around the world are connected to the internet, and therefore communicating and sharing real-time data without requiring human interaction. Each device is provided with a unique identifier (UIDs), and can include computing devices,(...)

An open-source, peer-to-peer distributed protocol that aims to store and share hypermedia in a distributed file system. IPFS aims to improve the speed, security and transparency of running applications based on a new distributed architecture for the internet.

A type of unsupervised learning algorithm for use with unlabeled data (without defined categories or groups). The aim is for the algorithm to classify the data set through a certain number of clusters (represented by variable K).

A supervised learning algorithm with the goal to is to use a database in which similar data points are separated into groups to predict the classification of a new data point.

The authentication process a business undertakes to verify the identity of its clients, usually before they formally commence their business activity. Seen increasingly as a crucial anti-fraud measure, KYC involves strict identification checks and due diligence checks.

Often used in fraud prevention, Knowledge-Based Authentication is an authentication scheme in which the user must answer one or more “secret” questions. Often used as one stage of the multifactor authentication (MFA) process.

The process of adding meaningful tags to data. Models can use labeled datasets to predict labels for unseen, unlabeled data.

A variable that can not be computed directly, but rather is inferred using models from observed data. For example, if answers in an IQ test are observed data, then an estimate of the IQ is the latent variable.

A scalar that’s applied to the gradient in Gradient Descent Algorithms to determine the next point in relation to the previous point. The learning rate is a Hyperparameter that if picked too low, will result in learning taking too long; and if picked too high the model may never be converged.(...)

A permanent summary of records normally pertaining to financial or transactional data. In the case of blockchain, the ledger is distributed, decentralized and can be public.

A regression technique that is used to determine the linear relationship between a dependent variable and one or more independent variables.

An open source, peer-to-peer cryptocurrency that was founded in 2011 by Charlie Lee. Often described as the silver to Bitcoin’s gold, Litecoin started as a fork of Bitcoin but one that offers faster transaction times, lower transaction costs and a different hashing algorithm (Scrypt rather(...)

A statistical regression model that is applied when the dependent variable is binary. As such, it explains the relationship between one dependent binary variable and one or more independent variables.

An open source, peer-to-peer cryptocurrency that was founded in 2011 by Charlie Lee. Often described as the silver to Bitcoin’s gold, Litecoin started as a fork of Bitcoin but one that offers faster transaction times, lower transaction costs and a different hashing algorithm (Scrypt rather(...)

A branch of artifical intelligence. Machine learning involves the process of data analysis to learn and generate analytical models which can perform intelligent action on unseen data, with minimal human intervention.

The total value of a cryptocurrency. Calculated by multiplying the price by the circulating supply. CoinMarketCap.com is widely considered the go-to source for information on cryptocurrency market capitalizations.

A stochastic model used to model random processes. It describes a sequence of possible events where the probability of each event depends solely on the outcome of the previous event.

Named after Ralph Merkle who designed the concept in 1979, Merkle trees hash-based data structure used to verify the integrity of data in peer-to-peer systems. Each leaf node in a Merkle Tree is a cryptographic hash of a block, while each non-leaf node is a hash of its respective child nodes.

The process by which transactions are verified and added to a blockchain. Mining involves solving cryptographic puzzles using computer hardware (such as ASICs) – the first to solve the puzzle mines the block and receives a reward from the network for their efforts.

A collection of miners who join forces to aggregate their hashing power and therefore improve their chances of mining a new block and receiving block rewards (which are subsequently distributed among the constituents of the pool). An example of a mining pool is BTCC, which now controls a(...)

A service offered by financial institutions enabling their customers to remotely conduct banking tasks such as payments and other financial transactions using their mobile devices.

The process of verifying the performance of a model against a data set.

The process of selecting the appropriate statistical model from a wider set of possible models, given data.

The process of adjusting parameters of a given model in order to improve its overall performance.

Cryptocurrency addresses that require more than one party to authorize a transaction. This greatly improves security, and has many benefits for enabling facilities such as storage and escrow.

Cryptocurrency addresses that require more than one party to authorize a transaction. This greatly improves security, and has many benefits for enabling facilities such as storage and escrow.

A sub-field of artificial intelligence that studies how computers can interact with humans based on their understanding of natural language as spoken by humans. NLP aims to improve computers’ understanding of language to a level as close as possible as that of humans.

Modeled on the human brain, a neural network is a set of algorithms designed to recognize patterns. They take arbitrary inputs, process them and use the activation function to generate output that interprets sensory data through a kind of machine perception, labeling or clustering raw input.(...)

A sub-field of artificial intelligence that studies how computers can interact with humans based on their understanding of natural language as spoken by humans. NLP aims to improve computers’ understanding of language to a level as close as possible as that of humans.

A participant/computer that is connected to a particular blockchain network, and operates a copy of the ledger.

A cryptographic token that is not interchangeable (unlike most cryptocurrencies that are inherently fungible, such as Bitcoin and ERC20 tokens). Ethereum’s ERC721 token has been designed with non-fungibility in mind.

An arbitrary number used only once in a cryptographic communication, includinge a timestamp. Nonces are used in proof-of-work blockchains to vary the input into a cryptographic hash function, and therefore obtain a unique hash value to satisfy specific arbitrary conditions.

This is caused by validator nodes approving all transactions on old and new software after a hard fork occurs.

A banking service that allows customers to conduct various financial transactions through the bank’s website. Also known as “internet banking”.

Peer-to-peer online loan services that don’t require a bank.

An agent that verifies and transmits real-world data to a blockchain to be used by smart contracts. As such, oracles are important in connecting the blockchain and the real world, and trigger smart contracts when certain conditions of the contract are met.

Extreme values in data representing unusual observations, errors in measurement and recording, or accurate reporting of rare events.

When a model has been excessively trained on specific data, such that it becomes inapplicable to other datasets. The model is so specific to the original data that any attempts to apply it to previously unseen datasets results in erroneous, sub-optimal outcomes.

Refers to the distributed architecture that divides workload and interactions among two or more parties in a network. Peers can interact directly with each other without the need for intermediation.

The transfer of one form of good, service or asset for another, executed according to terms previously agreed by all parties involved. From a FinTech perspective, this process is being transformed by innovative technology startups that are improving the speed, cost, and accuracy of transfers(...)

A data security standard designed to protect credit card information during and after financial transactions in order to reduce credit card fraud.

A service provider that facilitates credit card transactions as an intermediary for online businesses.

Mainly used as a tool in exploratory data analysis, Principal component analysis (PCA) simplifies the complexity of high-dimensional data, usually by transforming the data into fewer dimensions but still retains most of the information.

Refers to the distributed architecture that divides workload and interactions among two or more parties in a network. Peers can interact directly with each other without the need for intermediation.

Mostly online, this activity involves lending and borrowing without the use of traditional banks. Borrowers typically visit the websites of P2P lenders to obtain loans at more favorable terms than what they would receive from traditional financial institutions.

Found in private blockchains, permissioned ledgers places restrictions on who can join the network, or who can articipate in specific transactions. As such, certain entities must obtain permission to access the ledger. Permissioned networks also can appoint a group of participants to be given(...)

Managing the financial matters related to an individual or family, such as budgeting, investing and retirement planning. FinTech companies are implementing innovative technology to improve this management process. For example, they are allowing customers to create budgets and using AI to(...)

A table of statistics used in data processing that allows you to summarize data from a more extensive database and explore it dynamically. Pivot tables can be rearranged (or ‘pivoted’) to explore the data from various perspectives.

A type of cloud computing model where the hosting provider delivers software and hardware development tools to users over the internet, thus freeing them up from having to install the tools themselves.

The stage at which a merchant takes the customer’s payment information during a transaction at a physical location. In the FinTech era, startups have improved the speed, security and efficiency of this process. Point-of-sale loans – where merchants can offer customers the option of taking a(...)

The stage at which a merchant takes the customer’s payment information during a transaction at a physical location. In the FinTech era, startups have improved the speed, security and efficiency of this process. Point-of-sale loans – where merchants can offer customers the option of taking a(...)

The original consensus mechanism in a Blockchain network, used by Bitcoin. The mechanism confirms transactions and adds new blocks to the chain. Miners compete against each other to solve cryptographic problems for the next block (hashing) and thus validate transactions on the network to(...)

The process of using data, statistical algorithms and machine learning techniques to predict future outcomes based on historical data. By knowing what has already happened, predictive analytics allows us to provide the best assessment of what will happen in the future.

Mainly used as a tool in exploratory data analysis, Principal component analysis (PCA) simplifies the complexity of high-dimensional data, usually by transforming the data into fewer dimensions but still retains most of the information.

A blockchain network that is not open to the general public, and usually requires an invitation that must be validated by the network owner. As such, private blockchains are controlled by a centralized entity. Permissions in the network are also often given varying levels of authority.

Code that allows users to gain access to their cryptocurrency wallets. Like a password, a private key must only be revealed to the wallet owner, as they grant the owner access to their bitcoins in the wallet. It is paired with a public key to enable both encryption and decryption when storing(...)

A mathematical function that provides the probabilities of occurrence of different possible outcomes of a statistical experiment.

An alternative consensus mechanism to the proof-of-work system. Instead of using computational power to mine for block rewards, validators use their existing stake in the project’s cryptocurrency to determine how much mining power can be attributed to them. PoS aims to reduce the wasteful(...)

The original consensus mechanism in a Blockchain network, used by Bitcoin. The mechanism confirms transactions and adds new blocks to the chain. Miners compete against each other to solve cryptographic problems for the next block (hashing) and thus validate transactions on the network to(...)

A blockchain network completely open to the public, allowing anyone to participate. Bitcoin is a public blockchain network, whereby anyone can execute transactions, become a validating node and determine which blocks get added to the blockchain.

A cryptographic system that involves pairs of keys: a public key that can be widely shared, and a private key that is confined to only the owner. Both are used to encrypt data when sending from one party to another, allwoing trustless transactions to be possible. The public key converts the(...)

An interpreted, general purpose and high-level programming language. Python is popular for use in data science, partly due to its power when working with specialized libraries such as those designed for machine learning and graph generation.

Applying the properties of quantum physics –  such as superposition and entanglement – to process information.

A statistical programming language and free software environment widely used by data scientists.

A statistical measure that determines the closeness between predicted values and actual values. In a regression model, the metric represents the proportion of the variance for a dependent variable that’s explained by one or more independent variables.

An ensemble learning method that works by combining many decision trees in a single model. By pooling predictions from multiple trees, a random forest will enable more robust predictions than from a single decision tree.

A class of artificial neural network containing loops that allow information to persist. it is designed to recognize a data’s sequential characteristics and use patterns to predict the next likely scenario.

A statistical technique used to measure the strength of the relationship between a dependent variable and one or more independent variables.

Using technology (such as AI, biometrics and blockchain) to facilitate and improve the delivery of regulatory requirements.

A type of machine learning algorithm whereby rather than meeting pre-defined goals, agents take decisions and learn whether they are progressing or not as they go along.

A ledger with one master (authoritative) copy of the data, and many slave (non-authoritative) copies.

A payment network and real-time gross settlement system (RTGS). Ripple is intended to facilitate the near-instantaneous transfer of money between two parties, and can be exchange for any type of currency, including gold and fiat. It does not employ a traditional blockchain, but rather uses a(...)

A class of artificial neural network containing loops that allow information to persist. it is designed to recognize a data’s sequential characteristics and use patterns to predict the next likely scenario.

Automated investment advice, usually in the form of an online service that employs algorithms to build an investment portfolio. Robo-advisers have a varying level of input from humans, depending on the type of firm and the preferences of customers.

A type of cloud computing service whereby the hosting provider delivers applications – often called web-based software, on-demand software or hosted software – over the Internet to users. This means users can access the software through the internet, rather than having to install and manage it(...)

The smallest unit of the Bitcoin cryptocurrency: 0.00000001 BTC. Named after Bitcoin creator Satoshi Nakamoto.

Widely regarded as a pseudonym, Satoshi Nakamoto is the creator of Bitcoin, having published the whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System in 2008. The true identity of Nakamoto remains unknown to date, despite much speculation.

An increase in the scale of a network in response to meeting its greater demands. In a blockchain context, scalability refers to a network’s ability to handle substantial increases in network traffic, both now and what is expected in the future.

An alternative hashing algorithm to Bitcoin’s SHA-256, used by Litecoin. Scrypt requires much less RAM to be required in the hardware needed to successfully solve the cryptographic problem in mining. As such, it does not require specialist hardware such as ASICs in order to mine blocks.

The cryptographic hash function used in Bitcoin’s proof of work system. SHA-256 generates an almost-unique 256-bit (32-byte) alphanumeric string of output.

The horizontal partitioning of data within a database into smaller components known as shards. In a blockchain context, sharding is being explored as a scaling solution to Ethereum’s current limitations, whereby nodes in the network are grouped together into shards, and each shard processes(...)

A mathematical function with an “S”-shaped curve or sigmoid curve, whereby the output approches 1 as the input approaches positive infinity, and the output approaches 0 as the input approaches negative infinity. Is often used in the special case of the logistic function.

Contracts that are represented by computer code, and stored and executed on a computing system, such as a distributed network like the blockchain.

A rule change that requires a software update. But unlike a hard fork, a soft fork is compatible with older versions of the software. For example, Bitcoin’s SegWit update was a soft fork, where nodes using older versions of the software are not affected by the update.

A function used in multiple classification logistic regression that takes an un-normalized vector, and normalizes it into a probability distribution.

A type of cloud computing service whereby the hosting provider delivers applications – often called web-based software, on-demand software or hosted software – over the Internet to users. This means users can access the software through the internet, rather than having to install and manage it(...)

A programming language native to Ethereum. Developers use Solidity to write smart contracts on the Ethereum network.

A cryptocurrency that has a fixed peg to a stable asset, such as fiat currency or gold. Tether (USDT) is a stablecoin that is fixed to the US dollar, such that each stable coin has a value of $1.00. Theoretically, the circulating supply of the stablecoin should be back by an equivalent value(...)

A type of machine learning algorithm in which both input and actual output data are provided, and both are labelled as such for classification purposes. The model is then trained to ensure the predicted output is close to the actual output, in order to make similarly trained predictions on(...)

The use of technology to address challenges faced by supervisory authorities. Often known as “”RegTech for supervisors,” SupTech is helping supervisors automate administrative and operational procedures, digitize working tools, and improve data analytics.”

Data that is specifically used to evaluate the performance of a model which has been trained using a separate Training Set.

A testing network environment for a decentralized project, so new features can be tested without risking any damage to the project’s main blockchain.

The DAO was one particular decentralized autonomous organiztion built on the Ethereum blockchain. Its ICO was record-braking in terms of fund raised at the time, but funds were infamously stolen by hackers who were able to exploit an error in the code, resulting in a hard fork of Ethereum that(...)

A form of data that measures how things change over time. As such, the data is indexed by time, and time itself is a primary axis.

A digital asset designed for use on a blockchain network. Unlike a coin which is just used for payment, a token has a specific use within the project’s ecosystem.

A distributed ledger that does not require a cryptocurrency to operate.

Data that is specifically used to train a model, which can then be tested with the separate Testing Set.

A small fee imposed on some transactions sent across the bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction.

Any system in which a program can be written that can solve any computational problem. A machine that is Turing Complete is is said to be computationally universal.

Refers to those people who do not use banks in any capacity. Unbanked persons tend to pay using cash, and include those who mistrust the banking system, poor people who can’t maintain minimum balances and criminals who want to avoid being tracked.

People who don’t have access to proper banking or services offered by retail banks. They might have a banking account.

When a model is not sufficiently complex to accurately capture the relationships between a dataset’s features and a target variable, and therefore does not work well on new data.

Unpermissioned ledgers such as Bitcoin have no single owner — indeed, they cannot be owned. The purpose of an unpermissioned ledger is to allow anyone to contribute data to the ledger and for everyone in possession of the ledger to have identical copies. This creates censorship resistance,(...)

A model comprising of inputs and outputs that determine how transactions are executed on the Bitcoin network. Under this model, when a bitcoin transaction takes place, two UTXOs are created – the first is the total amount in the sender’s wallet that is sent to the recipient; and the second is(...)

A machine learning technique of providing the model with only input data (and NOT output data, unlike in the case of Supervised Learning). The model is then trained to learn patterns in the data, to then be used to make predictions on unseen data.

A model comprising of inputs and outputs that determine how transactions are executed on the Bitcoin network. Under this model, when a bitcoin transaction takes place, two UTXOs are created – the first is the total amount in the sender’s wallet that is sent to the recipient; and the second is(...)

An ordered set of real numbers, each denoting a distance on a coordinate axis. These numbers can represent a series of details about the specific entity being modeled.

Refers to those who may use limited banking services, such as a checking or savings account, but tend to prefer alternatives to banking products to fund their purchases and manage their finances.

A designated storage location for cryptocurrencies. A wallet can be online (called a hot wallet), and has an address and key for storing, sending and receiving crypto, or it can be offline (in cold storage), on a separate physical device.

The FinTech segment that focuses on using technology such as AI and Big Data to improve wealth management and the retail investment process, as well as offer an alternative to traditional wealth management firms. For example, see robo-advisory.

The service that allows web pages to be posted onto the Internet. A web hosting provider provides the technology and service required to for the web page to be viewed online.

Measures the strength of the connection between two neurons in two successive layers of a neural network.

An document explaining the business model of a new blockchain project. A whitepaper is a crucial marketing tool for convincing investors that a project is a worthwhile investment, and therefore is deemed essential when conducting an ICO.

The native cryptocurrency for the Ripple network.