Proof of Work (PoW)
By CoinGecko | Updated on Mar 03, 2020
An algorithm that rewards the first person that solves a computational problem (i.e. mining) to achieve distributed consensus. Miners compete to solve difficult cryptographic puzzles in order to add the next block on the blockchain. It prevents spam and cyber attacks such as DDoS as it requires work (i.e. processing time) from the service requester.
Related Terms
Yield Farming
Yield farming involves putting cryptocurrency into a DeFi protocol to collect interest on trading fees.
Utility Token
cryptocurrency tokens with specific utilities on a network besides being used as medium of exchange and investment vehicle.
Derivatives Market
A market for derivatives which are instruments such as futures or options whose value is derived from an underlying asset.
Dead Cat Bounce
Price rally that is short lived after a prolonged decline. Price charts will show a recovery in anticipation of a market turnaround only to decline further.
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