The Art of Blockchains

Hosted by
Adam Lindemann

Address

A string of alphanumeric characters used to send or receive transactions on a blockchain network.

Altcoin

Any cryptocurrency that is not Bitcoin or Ether (Ethereum).

Appraisal

Assessment of the market value of artwork through consultation with experts and evaluation of prices of recently sold comparables.

Artist Resale Right (Droit de Suite)

In the EU and UK, artists are entitled to a royalty each time their artwork is resold by an art market professional for the duration of the artist’s copyright in the work (life + 70 years), subject to certain conditions.

Artnet Price Database

A publicly accessible database documenting sale prices of artworks sold at auction, with records dating back to 1985.

All Time High (ATH)

When the price of a certain cryptocurrency or coin has broken its previous price records, and is trading at the highest price it has ever achieved.

Auction Guarantee

An agreement to assume the payment of a certain price for an artwork offered for sale at auction, whether or not it sells or a reserve price is met, by an auction house and/or a third party guarantor who assumes a degree of financial risk or reward.

Authenticity

The quality of artwork being of undisputed origin and verifiably attributed to an artist.

Bagholder

An investor or a trader who has been holding (or “hodling”) for too long on a particular cryptocurrency, and must face the consequences of that decision.

Bear

A term borrowed from Wall Street, indicating an investor who believes that prices of a particular cryptocurrency or market will fall, and wants to profit from that fall.

Bitcoin

The first peer-to-peer electronic cash system, run without reliance on an intermediary or centralized issuer; first proposed by the anonymous Satoshi Nakamoto in 2008.

Block

A bundle of data permanently recorded on a blockchain.

Blockchain

A shared, public, digital ledger of transactions recorded across a vast network, that runs on the labor and usage of its participants.

Bought-In

When artwork remains unsold after public auction, if there are no bids or a reserve price is unmet.

Bull

A term borrowed from Wall Street, indicating an investor who believes the market, a specific security, or an industry is poised to rise; optimistic investors who are attempting to profit from the upward movement of stocks.

Buyer’s Premium

The fee paid by the purchaser of an artwork to an auction house after winning an artwork lot, that is in addition to the Hammer Price.

Byzantine Fault Tolerance

The ability of a distributed computing network to function, communicate and display accurate and consistent data across all parts, despite potential failures of individual components, malicious activity and imperfect information.

Catalogue Raisonné

The definitive, annontated catalogue documenting all work created by an artist.

Commission (artwork)

Artwork created on certain specified terms, requested and agreed upon between an artist and a purchaser.

Commission (payment)

A fee for services rendered, such as the sale of an artwork or an introduction to a prospective buyer.

Condition Report

Documentation of the physical appearance of an artwork, identifying any wear or damage that may impact value.

Consensus

A digital process to ensure that all entries recorded on a blockchain are exact copies of each other, that works when a collective network agrees on the validity of calculations.

Consignment

The provision of artwork by an owner (consignor) to an art dealer or auction house (consignee) for the purpose of facilitating a sale on the owner’s behalf.

CryptoKitties

The first attempt to deploy blockchain technology for recreational purposes; a game developed by Axiom Zen allowing participants to purchase, collect, breed and sell various types of virtual cats on the Ethereum blockchain.

Cryptocurrency

A cryptographically secured digital asset and store of value; a medium of exchange for transactions verified and recorded on blockchains.

Cryptography

The art of protecting information through coded mathematical equations, using secret keys to encrypt and decrypt data.

Curator

An individual or group that selects the artwork exhibited or included in a particular show.

Cypherpunks

Early activists pushing for the use of cryptography and privacy-enhancing technologies as a route to social and political change.

Decentralized

Shared across many parties rather than a single, central administrator (i.e., a corporation or government), and synchronized and upheld by all participants.

Decentralized Application (dApp)

Applications built on a decentralized peer-to-peer network with back-end code, always online and not reliant on a server’s availability.

Decentralized Autonomous Organization (DAO)

An entity that functions without human intervention, entirely controlled by an incorruptible set of business rules.

Decentralized Exchange (DEX)

An exchange platform allowing users to trade cryptocurrencies peer-to-peer, without an intermediary.

Distributed Ledger

Data storage mechanisms spread across a network of decentralized nodes; these do not need their own own currency and may be permissioned and private.

Distributed Network

A system with processing power and data spread across many nodes rather than one central source.

Double Spending

When a sum of money or cryptocurrency is spent more than once.

Dump

To sell or offload an (alt)coin.

Dutch Auction

A descending bid/ask auction model with a set target asking price, fielding underbids from prospective purchasers and lowering the asking price until a bid is accepted.

Equity Token

A subcategory of security tokens, representing ownership of a company’s assets (i.e., debt or stock).

ERC-20

The Ethereum standard for fungible tokens.

ERC-721

The Ethereum standard for non-fungible tokens.

Ether

The native token of Ethereum.

Ethereum

An open-source, public, blockchain platform and operating system enabling decentralized applications and smart contracts to be built and run without third party control, interference or downtime; the platform is also the basis of a cryptocurrency.

Ethereum Virtural Network (EVM)

The Ethereum Virtual Machine (EVM) is a Turing complete virtual machine that allows anyone to execute arbitrary EVM Byte Code. Every Ethereum node runs on the EVM to maintain consensus across the blockchain.

Exhibition History

Chronology of museum and gallery shows where an artwork has been publicly exhibited; inclusion in important exhibitions may impact its value or desirability.

Fiat Currency

Money with value backed by its issuing government (i.e., US Dollar).

Flip

The act of buying and selling artwork in rapid succession.

Fork

The divergence of a blockchain from its initial trajectory, either accidentally or intentionally, that creates a simultaneously-running alternate version of the blockchain.

FUD

Acronym for ‘fear, uncertainty, and doubt’; usually refers to investors who are unsure of the potential of a situation.

Fungible Tokens

Non-unique cryptographic tokens that are interchangeable with other tokens of the same kind.

Gas

Transaction fees paid to miners for verifying blocks on the Ethereum blockchain.

Genesis Block

The first block on a blockchain, that every other block can be traced back to.

Grey Market

Artwork traded privately without any public record.

Hammer Price

The winning bid for an artwork at public auction, determined when the auctioneer’s hammer falls.

Hash

An algorithm that converts certain input data into a fixed-size, encrypted alphanumeric string.

Hedge

An investment position intended to offset potential losses or gains that may be incurred by a companion investment; a hedge may be achieved via various financial instruments, including stocks, insurance, forward contracts, futures contracts, swaps, options, gambles, exchange-traded funds, over-the-counter and derivative products.

HODL

A misspelling of “hold” that was popularized after a cryptocurrency investor’s post about holding his Bitcoin despite a recent serious fall in its price; the term signals to “hold on for dear life” and is generally used when one believes his or her coin will be profitable one day, if not today.

Howey Test

A four-part test created by the U.S. Supreme Court to determine whether a transaction constitutes an investment contract subject to U.S. federal securities regulations: (1) whether an investment is of money or assets; (2) whether the investment of money or assets is in a common enterprise; (3) whether there is an expectation of profits from the investment; and (4) whether any profit arises from the efforts of a promoter or third party.

Immutability

The fixed, permanent state, without the ability to be modified.

Initial Coin Offering (ICO)

The first issuance of a company’s tokens to investors or contributors in exchange for capital.

Long

A margin bull position.

Market Cap (MCAP)

The total estimated value of a company or cryptocurrency, calculated as: (price per coin) x (total available supply).

Mesh Network (Meshnet)

A local network topology in which nodes connect directly and non-hierarchically to as many other nodes as possible, and cooperate with one another to efficiently route data between clients.

Metamask

A Chrome-browser extension that allows any user to access Ethereum enabled distributed applications, preserving anonymity.

Mining

The act of validating transactions by solving algorithms and adding data to a blockchain; mining results in a new token (cryptocurrency) as payment for a reward.

Multi-Signature (MultiSig)

Addresses that require more than one key to authorize a transaction, providing an added layer of security.

Node

A computer (one of many) connected to the blockchain network that carries out a variety of computing tasks and enables the network to function.

Non-Fungible Tokens (NFTs)

Cryptographic tokens representing unique assets that are not interchangeable, such as art and real property.

Open Source

Freely available software code that may be accessed, modified and enhanced by anyone.

Oracles

A bridge between the real world and a blockchain by providing data to smart contracts.

Over-the-Counter (OTC)

Off-exchange trading directly between two parties, without the supervision of an exchange; does not require products to be standardized, or have a clearly defined quantity and quality, exposing each party to counterparty-credit risk concerns.

Peer-to-Peer (P2P)

Decentralized interactions between two or more parties in a highly-interconnected network, where participants deal directly with each other through a single mediation point.

Permissioned Blockchain

A blockchain where a participants can restrict participation in the blockchain’s consensus mechanism; needing authorization to read the information in the chain.

Permissionless Blockchain

A public blockchain open to all; participants must have access to computing power and software resources in order to validate transactions, such that anyone in the network (nodes) may join, validate blocks, read the chain and add new blocks to it.

Primary Market

The first sale of an artwork directly from an artist or an artist’s estate; may be facilitated through a gallery or art dealer representing the artist.

Private Key

A string of data that constitutes a password for accessing tokens in a specific wallet, known only to the holder; the digital “pin code” to access a holder’s account.

Proof of Ownership

The method of tracking the different owners of a certain information over time, using a blockchain network.

Proof of Stake

An algorithm by which a blockchain network aims to achieve distributed consensus, requiring users to stake an amount of their tokens for the chance to validate blocks of transactions and get rewarded for doing so.

Proof of Work

Data that is costly and/or time-consuming to produce, but easy for others to verify and which satisfies certain requirements; the original consensus algorithm in a blockchain.

Protocol

A blockchain’s standard for inter-node communication and validating new blocks.

Provenance

The ownership history of an artwork, from the artist (at the date of creation) to the present owner; important for determining authenticity and impactful on value.

Public Key

A string of data used to encrypt messages by any party that are intended for one recipient; i.e., the digital “routing number” to send to a holder’s account.

Pump

The creation of artificial upward price movement of a token or cryptocurrency.

Resale Agreement

An agreement between the dealer and purchaser of an artwork, binding the purchaser to sell the artwork back to the dealer before offering it to another party, and the dealer has the right of first refusal to purchase the work.

Reserve Price

The confidential minimum price at which an artwork may be sold, as set by the seller.

Retrospective

An exhibition that surveys the career of an artist from an art historical perspective.

Satoshi Nakamoto

The name used by the anonymous individual or group who authored the Bitcoin whitepaper in 2008, and founded and developed Bitcoin and developed the first blockchain database.

Secondary Market

Resales of artwork after its initial sale; generally between private parties, may be facilitated through secondary market art dealers or auction houses.

Security

A tradable financial asset; generally a fungible, negotiable financial instrument that holds some type of monetary value; may represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership (option).

Security Token

The blockchain representation of a tradable asset deemed a security and subject to federal securities regulations; the primary motivation for purchase of these tokens is the anticipation of future profits through dividends, revenue share or price appreciation.

Security Token Offering (STO)

An issuance of security tokens to investors, subject to applicable securities regulations.

Shitcoin

Slang within the blockchain community ascribed to cryptocurrencies that are considered worthless.

Short

Margin bear position that occurs when an investor borrows a security, sells it on the open market and expects to buy it back later at a cheaper price.

Smart Contract

Computer code facilitating the exchange of currency, content, property, shares, or anything of value, that automatically executes when specific conditions are met.

Soft Fork

A backward-compatible fork, where only previously valid transactions are invalidated; requires most miners to upgrade in order to enforce, while a hard fork requires all nodes to agree on the new version.

Solidity

Ethereum’s programming language for coding.

Stock

Security that signifies ownership in a corporation, and a claim to part of the corporation’s assets and earnings.

Testnet

A blockchain used by developers for testing out code, to prevent expending assets on a main blockchain.

To the Moon

A catchphrase referring to a cryptocurrency’s upward momentum as it keeps climbing in price, as in, “the price of this coin will one day go to the moon!”

Token

The blockchain representation of a tradable asset or a utility, deriving its value from what it represents.

Transaction Fee

See “Gas Fee.”

Turing Complete

The ability of a machine to perform calculations that any other programmable computer is capable of; i.e., the Ethereum Virtual Machine.

Utility Token

The blockchain representation of future access to a company’s products or services; these do not convey any ownership in the company itself nor provide holders with any investor rights.

Vitalik Buterin

Programmer and writer who co-founded Ethereum and co-founded Bitcoin Magazine.

Wallet

A storage file housing private keys.

Whale

A term borrowed from gamblers, indicating a trader with a fat account and usually bullish on the price of a specific cryptocurrency.