Term | Definition |
---|---|
Cryptocurrency | A type of currency that uses cryptography instead of a central bank to provide security and verify transactions. Bitcoin is the first cryptocurrency. |
Cryptography | A field of study and practice to secure information, preventing third parties from reading information to which they are not privy. |
Altcoin | As Bitcoin is the first cryptocurrency that captured the world’s imagination, all other coins were subsequently termed “altcoins”, as in “alternative coins”. |
Alts (Altcoins) | Refers to all cryptocurrencies other than Bitcoin. |
Token | A digital unit designed with utility in mind, providing access and use of a larger cryptoeconomic system. It does not have store of value on its own, but are made so that software can be developed around it. |
Tokenize | The process by which real-world assets are turned into something of digital value called a token, often subsequently able to offer ownership of parts of this asset to different owners. |
Blockchain | A blockchain is a continuously growing, append-only, list of records called blocks, which are linked and secured using cryptography. |
Block | A block is a permanent record of data stored in the blockchain, acting like a page or ledger. Each block contains and confirms pending transactions. Roughly every 10 minutes, on average, a new block along with the transactions it contains is added to the blockchain through mining. |
Side Chain | A blockchain ledger that runs in parallel to a primary blockchain, where there is a two-way link between the primary chain and sidechain. This allows the sidechain to operate independently of the primary blockchain, using their own protocols or ledger mechanisms. |
Block Height | Block height refers to the number of blocks connected together in the block chain. For example, Height 0, would be the very first block, which is also called the Genesis Block. |
Genesis Block | The very first block in a block chain. |
Mining | A process where blocks are added to a blockchain, verifying transactions. It is also the process through which new bitcoins or some altcoins are created. |
Mining Pool | A setup where multiple miners combine their computing power to gain economies of scale and competitiveness in finding the next block on a blockchain. Rewards are split according to different agreements, depending on the mining pool. Another term for this is Group Mining. |
Difficulty | A relative measure of how difficult it is to discover a new block. In Bitcoin, the difficulty is adjusted periodically as a function of how much hashing power has been deployed by the network of miners. |
Cloud Mining | Cold Storage |
Mining Contract | Another term for cloud mining, where users can rent or invest in mining capacity online. |
Mining rig | A computer especially designed for processing proof-of-work blockchains, like Ethereum. They often consist of multiple high-end graphic processors (GPUs) to maximize their processing power. |
Miners | Contributors to a blockchain taking part in the process of mining. They can be professional miners or organizations with large-scale operations, or hobbyists who set up mining rigs at home or in the office. |
Hash | A mathematical process that takes a variable amount of data and produces a shorter, fixed-length output. |
Hash Rate | In simple terms, a hash rate can be defined as the speed at which a given mining machine operates. |
Proof-of-Work (PoW) | A blockchain consensus mechanism involving solving of computationally intensive puzzles to validate transactions and create new blocks. |
Proof-of-Stake (PoS) | A blockchain consensus mechanism involving choosing the creator of the next block via various combinations of random selection and wealth or age of staked coins or tokens. |
Hybrid PoW/PoS | A hybrid PoW/PoS allows for both Proof-of-Stake and Proof-of-Work as consensus distribution algorithms on the network. This approach aims to bring together the security of PoW consensus and the governance and energy efficiency of PoS. |
Staking | Participation in a Proof-of-Stake (PoS) system to put your tokens in to serve as a validator to the blockchain and receive rewards. |
51% Attack | If more than half the computer power or mining hash rate on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means that this entity has full control of the network and can negatively affect a cryptocurrency by taking over mining operations, stopping or changing transactions, and double-spending (reusing) coins. |
Blockchain Explorer | Explorer is an online tool/site that allows you to view information about blocks, addresses, and transactions on the Coin blockchain. |
Asset | Asset (or Cryptoasset) is a currency or token that depends on a cryptocurrency blockchain (usually on Ethereum blockchain) as a platform to operate. |
Bitcoin Testnet | The testnet is an alternative Bitcoin block chain, to be used for testing. Testnet coins are separate and distinct from actual bitcoins, and are never supposed to have any value. This allows application developers or bitcoin testers to experiment, without having to use real bitcoins or worrying about breaking the main bitcoin chain. |
Mainnet | An independent blockchain running its own network with its own technology and protocol. It is a live blockchain where its own cryptocurrencies or tokens are in use, as compared to a testnet or projects running on top of other popular networks such as Ethereum. |
Fiat money | Fiat or Fiat money physical money (paper money and coins), while representative money is something that represents intent to pay the money such as a check. Fiat money is backed by the government, and representative money can be backed by different things. For example, a personal check is backed by the money in a bank account. Without backing, both fiat money and representative money are completely worthless. |
Fiat-Pegged Cryptocurrency | Also known as “pegged cryptocurrency”, it is a coin, token, or asset issued on a blockchain that is linked to a government- or bank-issued currency. Each pegged cryptocurrency is guaranteed to have a specific cash value in reserves at all times. |
Stablecoin | A cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. |
Private Key | Every public key (bitcoin address) has a private key associated with it. A private key is a secret piece of data that proves your right to spend bitcoins from your wallet. Your private key(s) are stored in your computer if you use a software wallet; they are stored on some remote servers if you use a web wallet. If you don’t encrypt your bitcoin wallet it makes it easier for someone to steal your private keys. Anyone with access to your private keys can spend your bitcoin from any computer worldwide. |
Public Key | A public key is a cryptographic code that allows a user to receive cryptocurrencies into his or her account. The public key coupled with the private key are significant tools required to ensure the security of the crypto economy. |
Address (Public Address) | The public address is a hashed version of the public key. Because the public key is made up of an extremely long string of numbers, it is compressed and shortened to form the public address. |
Vanity Address | A cryptocurrency public address with custom letters and numbers, usually picked by its owner. |
Node | A copy of the ledger operated by a participant of the blockchain network. |
Fork (Blockchain) | A situation where a blockchain splits into two separate chains. Forks generally happen in the crypto-world when new ‘governance rules’ are built into the blockchain’s code. |
Fork (Software) | A software fork, also known as a project fork, is when developers take the technology (source code) from one existing software project and modify it to create a new project. An example is Litecoin, which was a software fork of Bitcoin. |
Hard Fork (Blockchain) | A type of protocol change that validates all previously invalid transactions, and invalidates all previously valid transactions. This type of fork requires all nodes and users to upgrade to the latest version of the forked protocol software. In a hard fork, a single cryptocurrency permanently splits into two, resulting in one blockchain that follows the old protocol and the other that follows the newest protocol. Some examples are Bitcoin and Bitcoin Cash, or Ethereum and Ethereum Classic. |
Soft Fork (Blockchain) | A protocol upgrade where only previously valid transactions are made invalid, with most soft forks requiring miners to upgrade their mining software in order to enforce it. |
Chain Split | Another term used to describe Fork. |
Pump and Dump | Inflating the value of a financial asset that has been produced or acquired cheaply, using aggressive publicity and often misleading statements. |
Dead Cat Bounce | A temporary recovery in prices after a huge decrease. |
Whale | A whale is a large holder, who owns enough coins to move the market by a substantial amount when they buy or sell. |
Dolphin | A person who owns a moderate quantity of cryptocurrency. This person does not qualify to be a whale, but has evolved from being a fish/minnow. |
Fish | A fish, or minnow, is someone who holds insignificant amounts of cryptocurrencies, often at the mercy of whales who move the market up and down. |
Symbol | The ticker of a cryptocurrency; for example, Bitcoin’s symbol is BTC. |
Ticker | An abbreviation used to uniquely identify cryptocurrencies. |
Bit | A common unit used to designate a single sub-unit of a bitcoin. 1,000,000 bits is equivalent to 1 bitcoin. |
mBTC | A bitcoin metric of 1 thousandth of a bitcoin (0.001 BTC). |
MicroBitcoin (uBTC) | One millionth of a bitcoin or 0.000001 of a bitcoin. |
Satoshi | The satoshi is currently the smallest unit of the bitcoin (It is a one hundred millionth of a single bitcoin), The unit has been named in collective homage to the original creator of Bitcoin, Satoshi Nakamoto. |
Satoshi Nakamoto | The individual or group of individuals that created Bitcoin. The identity of Satoshi Nakamoto has never been confirmed. |
Wei | The smallest fraction of an Ether, with each Ether to 1000000000000000000 Wei. |
Wallet | A cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currency. |
Paper wallet | A physical document containing your private key or seed phrase. |
Hardware wallet | A Hardware wallet is a USB device with usually 2 buttons. It stores the keys. The private keys never leave the device so they won’t be stolen/copied by malware. A hardware wallet communicates with a wallet on the computer or a web wallet running in a browser. Transactions are send from the client computer to the hardware wallet through a USB connection. A user can sign/confirm or cancel a transaction by using the buttons on the hardware wallet. Hardware wallets often use a PIN chosen by the user or a password to confirm transactions. You also don’t have to download the entire blockchain. |
Electrum Wallet | Lightweight wallet, based on a client-server protocol, It protects you from losing coins in a backup mistake or computer failure, because your wallet can be recovered from a secret phrase (Seed) that you can write on paper or learn by heart. There is no waiting time when you start the Wallet, because it does not download the Coin blockchain. |
HD Wallet | An HD wallet, or hierarchical deterministic wallet, is a system of bitcoin/altcoin key and address generation that allows for an initial seed (a number based on the 12 random words) to control subsequent behavior. Standard wallets generate both change and new addresses in a random fashion, meaning that the private keys to each newly generated address are wholly independent from one another. In a standard wallet, if a newly generated private key is lost, it cannot be derived from previous inputs to that standard wallet system. However, with HD wallets, an initial seed value acts as a sort of master key, such that private keys generated after the initial seeding are regenerable as long as that single seed value remains known to the user. The usability upside to this deterministic system is coupled with the potential vulnerability of losing control of many private keys if the seed is compromised. |
Seed | A single starting point when deriving keys for a deterministic wallet. It is usually presented as a series of words to enable the owner to quickly backup or restore a wallet. |
Mnemonic Phrase | A mnemonic phrase (also known as mnemonic seed, or seed phrase) is a list of words used in sequence to access or restore your cryptocurrency assets. It should be kept secret from everyone else. It is a standard in most HD wallets. |
Shamir Backup | Shamir Backup is a method of splitting the seed into multiple unique shares. To recover the wallet, a specified number of shares has to be collected and used. The feature got its name from Adi Shamir, the author of Shamir's Secret Sharing algorithm. |
Deterministic Wallet | A type of wallet that derives keys from a starting point called a seed. As long as you have this seed, you are able to backup and restore any wallet. |
Hot Wallet | A Bitcoin/altcoin wallet that resides on a device that is connected to the internet. A wallet installed on a desktop computer or smartphone is usually a hot wallet. |
Cold Storage | Offline storage of cryptocurrencies, typically involving hardware non-custodial wallets, USBs, offline computers, or paper wallets. |
Market Cap | The market capitalization of a digital currency is the total value of all its coins. It is usually used to compute the currently available supply rather than the expected total supply, and excluding unreleased/premine coins/tokens. So, market cap is derived by multiplying the market price by the number of coins that are released to the open market. |
Circulating Supply | The best approximation of the number of coins that are circulating in the market and in the general public’s hands. |
Max Supply | The best approximation of the maximum amount of coins that will ever exist in the lifetime of the cryptocurrency. |
Total Supply | The total amount of coins in existence right now, minus any coins that have been verifiably burned. |
Premine | When some or all of a coin’s initial supply is generated automatically by the developer at, or prior to, the public launch, rather than being generated over time through a form of mining, this is called a ‘pre-mine’ or ‘premine’. Pre-mines can be used for legitimate purposes: for example to crowdfund development through an ICO, or to put into a fund for the continued development and promotion of a coin. They can also be dumped onto the market, for a quick and easy profit, by a developer who then abandons the coin and disappears in a kind of exit scam. |
ICO | An Initial Coin Offering (also called an ICO) is an event in which a new cryptocurrency sells advance tokens from its overall coinbase, in exchange for upfront capital. ICOs are frequently used for developers of a new cryptocurrency to raise capital. |
Initial Token Offering (ITO) | Similar to ICOs, but the focus is on the offering of tokens with proven (or unproven) intrinsic utility in the form of software or usage in an ecosystem. |
Initial Bounty Offering (IBO) | An Initial Bounty Offering or IBO is the limited-time process by which a new cryptocurrency is made public and distributed to people who invest time and skill into earn rewards in the new cryptocurrency, such as doing translation or marketing. Unlike an Initial Coin Offering where you can buy coins, an IBO requires more mental commitment from the receiver. |
IEO | An Initial Exchange Offering, commonly referred to as an IEO, is a fundraising event that is administered by an exchange. In contrast to an Initial Coin Offering (ICO) where the project team themselves conduct the fundraising. |
ROI | Return on Investment. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money). |
Confirmations | A transaction is only confirmed when it is included in a block on the blockchain, at which point it has one confirmation. Each additional block is another confirmation. Different exchanges require a different number of confirmations to consider a cryptocurrency transaction final. |
Unconfirmed | A state in which a transaction has not been appended to the blockchain. |
Double Spend | Double spend refers to a scenario, in the Bitcoin network, where someone tries to send a bitcoin transaction to two different recipients at the same time. However, once a bitcoin transaction is confirmed, it makes it nearly impossible to double spend it. The more confirmations that a particular transaction has, the harder it becomes to double spend the bitcoins. |
Block Reward | A reward that is given to a miner after successfully hashing a transaction block. |
Halving | Bitcoins have a finite supply, which makes them a scarce digital commodity. The total amount of bitcoins that will ever be issued is 21 million. The number of bitcoins generated per block is decreased 50% every four years. This is called “halving.” The final halving will take place in the year 2140. |
Scrypt | An alternative proof of work system to SHA-256, designed to be particularly friendly to CPU and GPU miners, while offering little advantage to ASIC miners. |
Smart Contracts | Smart contracts are contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system. |
Transaction Fee | A small fee imposed on some transactions sent across the bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction. |
Dust Transactions | Minuscule transactions that flood and slow the network, usually deliberately created by people looking to disrupt it. |
Whitepaper | A documentation describing a crypto currencies protocol in detail |
P2P | Peer-to-peer (P2P) refers to direct, decentralized cryptocurrency interactions between two parties or more. No bank or other financial institution is required as a third party. |
Atomic Swap | A way of letting people directly exchange one type of cryptocurrency for another on a different blockchain or off-chain without a centralized intermediary such as an exchange. |
Decentralized | Without a central authority or controlling party. Bitcoin is a decentralized network since no company, government, or individual is in control of it. |
Exchange | Cryptocurrency exchanges (sometimes called digital currency exchanges) are businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. |
Decentralized Exchange (DEX) | A peer-to-peer exchange that allows users to buy and sell cryptocurrency and other assets without a central intermediary involved. |
dAPPs | A type of application that runs on a decentralized network, avoiding a single point of failure. |
DAO | Decentralized Autonomous Organizations (DAO): An organization that is run through rules encoded in smart contracts. |
Open Source | Software whose code is made publicly available and that is free to distribute. Bitcoin is an open source project and arguably the first open source money. |
Mooning | In the crypto-world, this does not mean exposing your buttocks. It is referring to a price going up astronomical levels. |
HODL | A type of passive investment strategy where you hold an investment for a long period of time, regardless of any changes in the price or markets. The term first became famous due to a typo made in a bitcoin forum, and the term is now commonly expanded to stand for “Hold On for Dear Life”. |
Lambo | A running joke among traders, you’re cryptorich when you can buy a Lamborghini. |
FOMO | An acronym that stands for 'fear of missing out' and in the context of investing, refers to the feeling of apprehension for missing out on a potentially profitable investment opportunity and regretting it later. |
JOMO | The opposite state of FOMO, JOMO stands for “Joy of Missing Out”. Most often used by no-coiners who declare their happiness that they are not involved in cryptocurrencies, usually when prices are declining or a scam ICO is revealed. |
FUD | An acronym that stands for “fear, uncertainty and doubt”. It is a strategy to influence perception of certain cryptocurrencies or the cryptocurrency market in general by spreading negative, misleading or false information. |
FUDster | Someone that is spreading FUD. |
Airdrop | A marketing campaign that distributes a specific cryptocurrency or token to an audience. It is usually initiated by the creator of a cryptocurrency in order to encourage use and build popularity of the coin or token. |
Faucet | A cryptocurrency reward system usually on a website or app, that rewards users for completing certain tasks. It is mostly a technique used when first launching an altcoin to interest people in the coin. |
Bug Bounty | A reward offered for finding vulnerabilities and issues in computer code. It is often offered by cryptocurrency companies like protocols, exchanges and wallets to identify potential security breaches or bugs before they are exploited by unfriendly parties. |
Arbitrage | A practice of taking advantage of differences in price of the same commodity in two or more markets or exchanges. For example, cryptocurrency prices on Korean exchanges can be different from those on US exchanges. An arbitrage trader would be in both markets in order to buy in one and sell in another for profit. |
Ashdraked | A situation where you lose all your money, more specifically when you lose all your money shorting Bitcoin. This was based on a story of a Romanian trader who continued to short BTC when it went from $300 to $500, since he had made a lot of profit doing so historically. Adapt your trading strategy! |
Astroturfing | A deceptive practice where a sponsor is masked or hidden, making it seem as though a marketing message came from and is strongly supported by the community when it is not. |
Bag | A significant quantity of a specific cryptocurrency is considered a “bag”. How many depends on the definition of the person using the expression. *see Bagholder. |
Bagholder | A person who holds large quantities, or bags, of a cryptocurrency. Often used to describe such a person when the price of that cryptocurrency is declining. |
Bear | A person who is pessimistic about market prices and expects them to decline. This person is also known to be "bearish" about the market or price. |
Bear Trap | A technique played by a group of traders, aimed at manipulating the price of a cryptocurrency. The bear trap is set by selling a large amount of the same cryptocurrency at the same time, fooling the market into thinking there is an upcoming price decline. In response, other traders sell their assets, further driving the price down. Those who set the trap then release it, buying back their assets at a lower price. The price then rebounds, allowing them to make a profit. |
Bull | A person that is optimistic and confident that market prices will increase. This person is also known to be "bullish" about the market or price. |
Bull Trap | A false market signal where the declining trend of an asset appears to be on the upturn, but does not actually materialize, leading bulls to lose money after going long. |
Buy the F*cking Dip | An enthusiastic exclamation by supporters of a cryptocurrency to buy while prices are at a low point. |
Buy Wall | A situation where a large limit order has been placed to buy when a cryptocurrency reaches a certain value. This can sometimes be used by traders to create a certain impression in the market, preventing a cryptocurrency from falling below that value, as demand will likely outstrip supply when the order is executed. |
Sell Wall | A situation where a large limit order has been placed to sell when a cryptocurrency reaches a certain value. This can sometimes be used by traders to create a certain impression in the market, preventing a cryptocurrency from rising above that value, as supply will likely outstrip demand when the order is executed. |
Liquidity | How easily a cryptocurrency can be bought and sold without impacting the overall market price. |
Cypherpunk | An activist who advocates for the mass adoption and use of strong cryptographic solutions and privacy-enhancing technologies to enact social and political progress. |
Limit Order / Limit Buy / Limit Sell | Orders placed by traders to buy or sell a cryptocurrency when a certain price is reached. This is in contrast with market orders at which a cryptocurrency is sold at the current best available price. |
Market Order / Market Buy / Market Sell | A purchase or sale of a cryptocurrency on an exchange at the current best available price. Market orders are filled as buyers and sellers are willing to trade. This is in contrast with limit orders at which a cryptocurrency is sold only at a specified price. |
DYOR | Age old adage: “Do Your Own Research”. Don’t just take people at their word. |
Securities and Exchange Commission (SEC) | An independent agency of the United States federal government, responsible for enforcing federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other related activities and organizations. |
KYC | Acronym for “Know Your Customer”, this process refers to a project’s or financial institution’s obligations to verify the identity of a customer in line with global anti-money laundering laws. |
Flippening | A situation hoped for by Ethereum fans, where the total market cap of Ethereum surpasses the total market cap of Bitcoin. |
Leverage | A loan offered by a broker on an exchange during margin trading to increase the availability of funds in trades. |
Lightning Network | The Lightning Network is a "second layer" payment protocol that operates on top of a blockchain. Theoretically, it will enable fast, scalable transactions between and across participating nodes, and has been touted as a solution to the Bitcoin scalability problem. |
No-coiner | A no-coiner is someone who has no cryptocurrency in his or her investment portfolio and firmly believes that cryptocurrency in general will fail. |
This is Gentlemen | Originally an error in writing the full “This is it, gentlemen”. It is now used as an introduction for good news. |
TLT (Think Long Term) | A mindset where you have a longer-term investment horizon of months to years. |
Custodial | Usually referring to the storage of keys, in relation to wallets or exchanges, a custodial set-up is one in which private keys are being held by the service provider while they provide a login account. |
Non-custodial | Usually referring to the storage of keys, in relation to wallets or exchanges, a non-custodial setup is one in which private keys are held by the user directly. |
Pair | Trade between one cryptocurrency and another, for example, the trading pair: BTC/ETH. |
Ponzi Scheme | A fraudulent investment involving the payment of purported returns to existing investors from funds contributed by new investors. |
Vaporware | A cryptocurrency project that is never actually developed. |
Portfolio | A collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. |
REKT | A shorthand slang for “wrecked”, describing a bad loss in a trade. |
Shilling | The act of enthusiastically promoting a cryptocurrency or ICO project. |
Shitcoin | A coin with no obvious potential value or usage. |
Short | A trading technique in which a trader borrows an asset in order to sell it, with the expectation that the price will continue to decline. In the event that the price does decline, the short seller will then buy the asset at this lower price in order to return it to the lender of the asset, making the difference in profit. |
Long | A situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. |
Trade Volume | Is the amount of the cryptocurrency that has been traded in the last 24 hours. |
Weak Hands | An investor prone to panic selling at the first sign of a price decline. |
Mixing Service | Also known as Tumbler, it is a service to improve the privacy and anonymity of cryptocurrency transactions by mixing potentially identifiable or “tainted” cryptocurrencies with other unrelated transactions, making it harder to track what the cryptocurrency was used for and who it belongs to. |
Wash Trade | A form of market manipulation in which investors create artificial activity in the marketplace by simultaneously selling and buying the same cryptocurrencies. |
UTC Time | Coordinated Universal Time. It is the primary time standard by which the world regulates clocks and time, kept using highly precise atomic clocks combined with the Earth’s rotation. |
Virgin Bitcoin | A bitcoin that has never been spent. |
All-Time-High (ATH) | The highest point (in price, in market capitalization) that a cryptocurrency has been in history. |
All-Time-Low (ATL) | The lowest point (in price, in market capitalization) that a cryptocurrency has been in history. |