Cryptocurrency and Blockchain Dictionary

Accrued Revenue

What Is Accrued Revenue? Accrued revenue in simple terms, is when a business sells its goods or services to the customer but does not expect payment at the time of delivery but in the near future. When an accrued revenue occurs, the company has to note two important dates - the first being the date at which the goods or services are provided to the customer. On this date, the business can record the sale in the sales account and can allocate the balance to the trade receivables account. Once the payment is received by the business, an entry in the cash/bank account is made and the amount previously added to the trade receivables account is then credited.  Advantages of Accepting Accrued Sales Many businesses accept credit sales mainly due to the fact that they may lose out on a lot of potential sales as numerous businesses look to buy on credit. This is because they do not have to pay instantly and thus get to deploy their capital in other places. Moreover, in several industries, the payment period is generally slow due to a number of reasons, such as low liquidity. Therefore, many businesses prefer to purchase goods and services on credit and many companies have to offer credit sales so that they do not lose such customers. Accrued revenue also helps the business analyze the long-term growth and profitability.  Accrued Revenue vs Regular Revenue The only difference between accrued revenue and regular revenue is if the payment by the customer was done immediately. If the payment was done immediately the accounting treatment would be fairly simple: The bank or cash account would be debited whilst the sales account would be credited. If the payment was not done immediately then there would be two entries:     The first entry would be done at the time of the sale. This is due to two accounting principles which are revenue recognition and matching principle. Therefore, trade receivables account is debited and the sales account is credited. The sales balance would be seen in the income statement whilst the trade receivable balance would be seen in the balance sheet as an asset. The second entry would be recorded at the time of receiving payment from the customer. This is when the bank or cash account would be debited and the balance in the trade receivable account would be written off by crediting the account.

Anarcho-capitalism

What Is Anarcho-Capitalism? Anarcho-capitalism advocates for the abolition of centralized states, and the primacy of private property and contractual agreements in the economic system.  Anarcho-capitalists believe that the state as it is currently conceived is an impediment to the development of a “free” society — and that the existence of states in capitalist societies result in a system of coercion.  This political philosophy maintains that the free market is the cornerstone of a truly free society, and that people should be free to engage with each other through contractual agreements — beyond the control or oversight of the state.  Instead of the state handling the enforcement of contracts and the resolution of grievances, private agencies competing in a free market would take charge. Anarcho-capitalists believe that the means of production should be privately owned — and that work and commodities should be organized through the system of wage labor.  The concept of "original appropriation" allows for any individual to claim an absolute right of ownership over any resource that has not previously been used. “Self-ownership” is another important principle, and this refers to an individual's absolute right over their own body.Many anarcho-capitalists consider blockchain-based decentralized technologies to be a means by which the practical problems of anarcho-capitalism may be solved.  They claim that decentralized services provide an alternative to the bureaucratic functions of the state, particularly by providing immutable and publicly available records of identity and contractual obligations (the latter through the use of smart contracts.)There have been small-scale experiments in the creation of real communities organized according to anarcho-capitalist principles. The most notable of these is Liberstad, a private city-society in Norway that was founded in 2015.

Byzantine Generals’ Problem

What Is the Byzantine Generals' Problem? The Byzantine Generals' Problem is a thought experiment that deals with a key question of computer science: is it possible to form a consensus in a computer network composed of independent, geographically distributed nodes? The problem was proposed in 1982 by researchers from the SRI International Research Institute.  It goes as follows: there are a number of Byzantine generals besieging a city. They can only communicate via sending messengers to each other. The generals must agree on a common plan of action: whether to attack the city or retreat. However, some of the generals are traitorous and actively working against the forming of a consensus; their number and identities are unknown. The question posed by the problem is what decision-making algorithm the generals should use to devise a common plan — regardless of the traitors’ interference — and whether such an algorithm exists at all. According to the researchers’ own analysis, such a system is indeed feasible, but the number of loyal generals must strictly exceed two-thirds. For example, in a situation with three generals, one of which is traitorous, the loyal ones can never guarantee that they will be able to reach a consensus. This problem is highly relevant for cryptocurrencies as they are, in essence, distributed computer systems: they are composed of transaction-processing nodes that are independent of each other and any central authority and can only communicate remotely. They are the “generals” that need to reach a consensus about which transactions have taken place and when. Nodes have the potential to supply faulty data about transactions either by choice or by accident, and their information must be sorted out. Bitcoin (BTC) and other cryptocurrencies solve this problem via technical solutions such as the proof-of-work and proof-of-stake algorithms. See Byzantine Fault Tolerance (BFT).

Client

What Is a Client? In computer science, a client is a piece of software or hardware (or an individual using such tools) that connects to the server in a client-server relationship, or to the rest of the network in a peer-to-peer environment. It allows end-users to remotely interact with other entities over the Internet. In the cryptocurrency industry, software clients are used to connect to and interact with the blockchain network. As part of their operation, clients communicate with other nodes on the network. Cryptocurrency clients are employed in numerous use cases. One of these is for miners, software that manages the operation of its user’s mining equipment and communicates the calculated hashes to the blockchain network. Another example is a wallet, which allows users to deposit, store, send, receive and withdraw cryptocurrency coins and tokens. These often come with streamlined graphical user interfaces (GUIs) which allow even relatively unsophisticated users to easily manage their crypto funds. There are also block explorers, which are used to access blockchain data, such as block height, current hashrate, overall transaction volume and individual transactions and more in a format that is easily readable by a human.

Baking

What Is Baking? Baking is a process that is used by Tezos in order to append new blocks of transactions onto its blockchain. This is a delegated-proof-of-stake system, where bakers receive rewards for each block that is baked. Now, in order to conduct the baking process, or n other words, in order to become the baker, you will need to have 10,000 XTZ, which is the native currency on the Tezos blockchain. Once you collect or earn 10,000 XTZ, you can either become a baker, or an endorser. Now, since we are discussing the baking process, let's assume you have selected to become a baker. Bakers, by running a full-note in order to maintain the network produce new blocks in the Tezos blockchain, and as such, get rewards with additional XTZ tokens. To explain the process of baking further, you need to understand that there are two main types of Tezos blockchain accounts. First, you have implicit accounts, which are the only accounts that are allowed to be a part of the baking process. Here, you have the ability to either bake with your own balance or through a delegated account or delegated accounts. Then you have originated accounts, which are the ones that can be delegated. These cannot become a part of the baking process, and there is a special delicate key that allows partaking in the consensus algorithm. Keep in mind that delegates can also be reassigned.

Decentralized Social Media

What Is Decentralized Social Media? Decentralized social media, also known as blockchain-based social media, refers to social media platforms powered by distributed ledger technologies (DLT) like blockchain or DAG. As such, activities on these platforms are irrevocably recorded on a decentralized protocol where no central authority can control or oversee, unlike centralized networks like Facebook, Twitter, etc.  Conventional social platforms not only control users’ posts but also what they see, since these networks tend to prioritize revenue generation. Therefore, they present users with attention-grabbing advertising content, making them more entertained than well-informed. On the other hand, users on decentralized social media networks have the freedom to interact however they wish without censorship as the developers usually only provide guiding rules, leaving the rest to a distributed group of users.  Decentralized social media platforms prevent the unauthorized sale of user data which is one of the contentious issues with centralized social networks. Moreover, blockchain technology increases user privacy and data security using cryptography methods. Despite their promises, decentralized social media also have some shortcomings. For example, lack of moderators may result in users posting inaccurate information or offensive content with no way to delete. Furthermore, there’s the risk of a 51% attack in which a malicious actor could theoretically control over 50% of a network’s power, allowing them to edit data as they please, which would damage the integrity of the system. Examples of decentralized social media networks include Subsocial (built on Polkadot and Kusama’s Substrate framework), Uptrennd and Steem. Despite their massive potential, blockchain-based social networks have a long way to go before becoming mainstream and being on equal footing with their centralized counterparts.