One of the challenges faced by the team at mydiamondhands.io while researching, exploring, developing and extracting our datasets has been understanding the unique and specific terminology associated with crypto, such as Gas Prices, Wei, Gwei, Smart Contract, Uniswap, Blockchain, etc. To help overcome some of the challenges, and ensure that at a minimum there is a commonly accepted definition amongst our development team, we have created a Data Dictionary, which looks to define terms, and also highlight our conceptual understanding of relevance. The entire data dictionary is warehoused in our Github Repository, a few examples have been provided below to provide a quick summary and searchable values for the site.
Arbitrage: The buying and selling of asses in different markets or in derivative forms in order to take advantage of differing prices of the same asset. Arbitrage, also known as “Free Lunch” is based on the idea of risk free profit, in that the trader can execute a strategy which introduces zero risk to their position while simultaneously offering profit. The concept of arbitrage started in ancient trade routes, where traders would buy items in one market, and then take them to a different market and sell them for a price higher than which they paid, such that despite the fact that they did not produce these goods, they were still able to profit. Interestingly, some of the first documented occurrences of these activities were on the ancient trade routes of the Silk Road, which is an alias utilized in the nascent days of the crypto currency exchanges.
Smart Contract: A programmable contract that automatically enforces and executes the terms of an agreement when conditions are met, running on a blockchain network to ensure secure and transparent transactions. These contracts confirm and include various types of information such as parties , terms, and the conditions required for execution. Smart contracts are self-executing contracts with the terms directly written into code. This automation ensures transparency, security, and efficiency in transactions and agreements, reducing the risk of fraud or manipulation. Unlike standard blockchain transactions, which involve simple transfers of cryptocurrencies between addresses, smart contracts can perform complex operations and enforce complex business logic. While regular transactions are limited to value transfer, smart contracts enable decentralized applications by running code that can interact with other contracts, manage states, and even govern decentralized autonomous organizations. Smart contracts were originally created and applied on the Ethereum blockchain, and have since been copied and expanded to other blockchains.
Cryptocurrency: A form of digital or virtual money designed to work as a medium of exchange. They use cryptography, a method of protecting information, to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Cryptocurrencies offer a number of benefits, including decentralization (not controlled by entities such as Banks or Governments), transparent and immutable (all activity can be seen and never changed).
Gas : A unit of measure which calculates the computational effort required to execute a trade on the Ethereum network. The specific price is based on the computational complexity of the trade and based on activity at the time of the trade. These fees are intended to compensate miners for the computational work necessary to process and validate the transactions and can very when trades are undertaken on other networks (such as Layer 2 solutions or Sidechains). Understanding Gas is critically important to accurately predicting transaction fees, which are a direct determinanant in trade profitability. Gas prices are commonly measured in Gwei, which are valued at 0.000000001 ETH.
Gwei: A specific unit of measurement unique to the Ethereum blockchain used to measure and manage Ether, the native currency on the Ethereum Blockchain. Gwei was created to increase the precision of measurement available, given the need and importance of technical precision in the measurement of tokens, fees and transaction. A Gwei is equal equal to 10^-9 of a ETH, or 10^9 Wei.
Wei: A specific unit of measurement unique to the Ethereum blockchain used to measure and manage Ether, the native currency on the Ethereum Blockchain. Wei was created to increase the precision of measurement available, given the need and importance of technical precision in the measurement of tokens, fees and transaction. Wei is the smallest unit of measurement available, with a Wei being equal to 10^-18 of a ETH, or 10^-9 of a Gwei.