Part17 - US content creation for blocktrades_US
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Fiat Money
Fiat Money is a central government issued currency, which is not backed by physical commodities such as gold, or silver, but by the government that issued tha fiat currency. Examples include the United States Dollar (USD), the Euro (EUR), the Chinese Yuan (CNY), the Swiss Franc (CHF) and the British Pound Sterling (GBP).
The term "fiat" originates from Latin and means "it shall be", mostly due to not being backed by physical commodities. Its value is derived from the relationship and ratio of supply and demand, as well as by the economic stability and trustwortiness of the issuing government.
Earlier in history, the US Dollar was indeed backed by gold but following the "Emergency Banking Act" in 1933 the Federal Government forbid citizens to exchange US Dollars for government gold, and later on in 1971, when the United States stopped issuing gold to foreign governments in exchange for US Dollars, the Gold Standard was completely eliminated, effectively decoupling gold from US Dollars. Since then, U.S. dollars are backed by the "full faith and credit" of the U.S. government, hence being "fiat money".
Hard Fork
To be compared with a software upgrade of the code running a blockchain, which upgrade / change consists of new "rules" in both features and block validation processes. In case of such a Hard Fork, the nodes which are tasked to produce and validate blocks need to be updated by their operators (miners, block producers, witnesses). And as such a Hard Fork requires consensus / agreement by those node operators, apart from the actual development of Hard Fork code a lot of discussions and code reviewing happen "behind the scenes".
Immutability
A blockchain block is said to be "immutable" for the intentional inability to change previously recorded blockchain data afterwards. Such immutability allows for trustless transactions, circumventing the need for a single trusted party (like a "notary" for example) confirming the validity of a transaction.
Initial Coin Offering (ICO)
An event at which a new cryptocurrency issues and sells its tokens to raise capital. Over the course of especially 2016 and 2017, many (especially Ethereum-based) ICOs took place, back then largely un-regulated by authorities. Even though many such ICOs had perfectly valid project intentions, among them were also a numer of ICOs that were, in hindsight, only intended to trick investors; so-called "exit scams".
Since then, improved ICO regulation, and even ICO bans in some countries, have greatly reduced the number of newly-held ICOs.
Initial Exchange Offering (IEO)
An alternative way for new cryptocurrency projects to raise capital is an Initial Exchange Offering (IEO). The initial token sale at an IEO is executed on and by a cryptocurrency exchange, in exchange for the token issuer / project to pay (often high) listing fees to the exchange, usually combined with an additional percentage of IEO tokens sold.
Initial Token Offering (ITO)
Similar to an ICO, except that an ITO is a tokenized project without launching a new coin.
KYC / AML
AML, the abbreviation for "Anti Money Laundering", refers to a set of procedures, government laws and regulations intended to prevent malicious actors (criminals) to convert and use illegally obtained (digital) funds as legitimate income. AML regulations for example require financial institutions such as banks to comply and prevent them to aid said criminals in ways to "launder" their funds.
These financial institutions are tasked to monitor their clients' transactions, for example to verify the origin of large amounts, to monitor suspicious transactions, and to report about them.
KYC, the abbreviation for "Know Your Customer", refers to the verification of a financial client's identity before a financial institute may provide their services to said client.
While many early cryptocurrency enthusiasts seem to be of the opinion that KYC/AML is being forced on them and that it goes against the fundamental privacy-centric and pseudonymous nature and intent of Bitcoin, it's an undeniable fact that hackers and other forms of malicious actors are active in the world of cryptocurrencies, and hence it can also be reasoned that in order to prevent those malicious actors from being able to freely do as they please, KYC/AML compliancy protects honest cryptocurrency enthusiasts, as well as aid to realize mainstream adoption of cryptocurrencies and blockchain technology.