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Crypto Terms to Know – Glossary

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Crypto Terms to Know – Glossary

Cryptocurrency needs a lot of research before doing business. But when looking through social media, community forums, or print media, you’ll notice that they seem to have their own language.

The crypto community has created its own slang vocabulary, memes, and other such things, just as any other culture would. Not only can knowing these terms help you better understand discussions of cryptocurrency on social media, but some of these terms contain a kind of “wisdom” that can help you steer clear of common mistakes and learn best practices in the space of cryptocurrency investing. 

This cryptocurrency glossary can help you navigate the exciting world of cryptocurrency exchange.

Crypto Terms and Their Definitions

A, B, C

51% Attack

A bitcoin miner or group of miners wins control of more than 50% of a blockchain network.

Address (Wallet Address)

A string of characters produced at random and linked to a crypto wallet.

Airdrop

A type of marketing strategy used by bitcoin startups.

Algorithm

A well-defined computing operation that takes changeable inputs, including a cryptographic key, and outputs a result.

All-time high

The highest trading price for a digital asset ever.

All-time low

The cheapest price ever achieved by a cryptocurrency.

Altcoin

A digital currency other than Bitcoin.

AML (Anti-Money Laundering)

A term used to describe all regulations, policies, and recommendations aimed at putting a stop to criminals seeking to swap their illegally obtained cryptocurrency assets for cash.

API (Application Programming Interface)

A software middleman that allows two programs to communicate with one another.

Application-specific integrated circuit

A microchip created for a specific application, such as a transmission protocol or a handheld computer.

Arbitrage

Simultaneous purchase and sale of stocks, money or commodities in multiple markets or in derivative forms to profit from price differences for the same asset.

Atomic swap

A cryptocurrency trade between different crypto wallets.

Bag

The coins and tokens that one has in their portfolio.

Bag Holder

An investor or trader who has been holding a specific coin for an extended period of time and now must face the consequences of that decision.

Bear Trap

A misleading technical indication of a market turnaround from down to up that can entice naïve purchasers.

Bear, bearish

Market pessimism and price drops are referred to as bearish or a bear market.

Bitcoin (BTC)

A form of digital currency that functions independently of a central bank and keeps transaction records while generating fresh units of currency through the computational solution of mathematical puzzles.

Block

A distributed database that keeps an ever-growing collection of financial transactions.

Block Explorer

A piece of software that displays blocks, transactions, and blockchain network analytics.

Block Height

The number of blocks on the blockchain preceding it

Block Reward

A block reward is the number of bitcoins you receive if you successfully mine a cryptocurrency block.

Blockchain

A system in which a record of bitcoin or other transactions is kept across numerous computers linked in a peer-to-peer network.

Blockchain Transmission Protocol (BTP)

A standard for interoperability of heterogeneous blockchains, including blockchains with completely distinct consensus methods and algorithms.

Bounty / Bug Bounty

A crowdsourcing project that rewards people for detecting and reporting software defects.

BTFD

An aggressive dip-buying approach favored by traders in hot markets, such as Bitcoin. An acronym for Buy the F$%king Dip.

Bull/Bullish

Bullish describes market optimism and price increases, like a bull market.

Burned

Refers to the act of transmitting a token to a receiving account.

Buy the F$%king Dip

An investment strategy based on the basic premise of “buy low, sell high” but with a more focused strategy.

Buy Wall

The consequence of a single large buy order or the combination of numerous large buy orders placed at the same price in a market’s order book.

CAP

The monetary worth of all mined coins in cryptocurrency markets.

Central Bank Digital Currency

Central bank digital currency is a term used to describe digital tokens that are issued by a central bank of a particular country; they are similar to cryptocurrency,

Central Ledger

Individuals or organizations use physical books or digital files to record and total economic transactions in a centralized manner.

Centralized Finance (CeFi)

A central exchange handles all cryptocurrency trade orders.

Chain Linking

A cryptocurrency and technology platform that allows non-blockchain firms to connect safely to blockchain platforms.

Cipher

A data encryption and decryption algorithm with a set of well-defined stages that can be carried out as a procedure.

Circulating Supply

The number of coins or tokens of a particular cryptocurrency that are publicly available for purchase or sale.

Coin

Any form of virtual or digital currency that uses cryptography to safeguard transactions.

Cold Wallet/Cold Storage

Any crypto wallet that is not linked to the internet, but is not a physical wallet.

Confirmation/Block Confirmation

When a Bitcoin transaction is joined in a block with other transactions and added to the blockchain, it is considered confirmed.

Confirmed

Confirmations represent the number of blocks that have passed since a transaction was added to a coin’s network.

Consensus

The protocols, algorithms, or other computer systems that enable the operation of cryptocurrencies.

Consensus Process

A variety of methods for achieving agreement, trust, and security over a decentralized computer network.

Consortium Blockchain

A collection of private blockchains, each owned by a different organization, that have joined forces to share information in order to improve existing workflows, transparency, and accountability.

Cryptocurrency

A digital currency in which transactions are validated and records are kept by a decentralized finance system rather than a centralized authority utilizing cryptography.

Cryptographic Hash Function

The function that is employed for security purposes and serves as the foundation of crypto security.

Cryptography

Data encoding and decoding as a mathematical and computational method.

D, E, F

DAO (Decentralized Autonomous Organization)

An entity model in which token holders engage in an entity’s management and decision-making.

Decentralization

Control and decision-making are transferred from a centralized entity (person, organization, or group thereof) to a dispersed network or decentralized applications.

Decentralized Application (dApp)

Decentralized applications run on a blockchain system in a transparent, accessible, and decentralized environment, free of oversight or influence from nearly any authority.

Decentralized apps (dApps)

A form of distributed open-source software application that runs on a blockchain network rather than a single computer.

Decentralized Autonomous Organization (DAO)

An entity model in which stakeholders engage in an entity’s management and decision-making.

Decentralized Finance (DeFi)

Peer-to-peer marketplaces in which bitcoin traders conduct deals without entrusting their funds to an intermediary or custodian.

Decryption

The act of reversing an encryption process in order to perceive or access previously encrypted data.

Deflation

A type of cryptocurrency with a declining coin supply.

Depth Chart

A tool for determining cryptocurrency supply and demand at any given time for a variety of pricing.

Deterministic Wallet

Deriving private keys from that single starting point is how a deterministic crypto wallet works.

Difficulty

A metric that indicates how difficult it is to mine a block in a blockchain for a specific cryptocurrency.

Digital Asset

A digital asset is any asset that exists in digital form.

Digital Commodity

A transferable or fungible asset represented in the real or virtual world by exclusive tokens on a blockchain network that may represent a commodity, utility, or smart contract.

Digital Currency

Currency that can only be accessed via computers or mobile phones since it exists exclusively in electronic form.

Digital Signature

If someone wishes to show that they have created a statement, they can add a digital signature to it so that others can verify it.

Distributed Ledger Technology (DLT)

A digital system for recording asset transactions in which transactions and details are recorded in numerous locations simultaneously.

Double Spend

A term used to describe the possibility of a cryptocurrency being used twice or more.

Dump

An organized swindle in which investors are duped into acquiring a fraudulently inflated cryptocurrency token.

Dumping

A market sell-off that occurs when substantial amounts of a specific cryptocurrency are sold in a short period of time.

Dust Transaction

A small quantity of cryptocurrency left over from a trade or cryptocurrency transaction.

DYOR (Do Your Own Research)

Urging people to think for themselves and do their homework before investing in crypto or digital currencies.

Encryption

A communication, transaction, or data value illegible to an unauthorized reader or recipient, so that it may only be read and processed by the intended recipient.

ERC

Acronym for Ethereum Request for Comment.

ERC-20

The Ethereum blockchain’s established standard for fungible tokens.

Escrow

Tokens given to a third-party smart contract.

Ethereum (ETH)

A decentralized blockchain platform that creates a peer-to-peer network for securely executing and validating application code known as smart contracts.

Ethereum Virtual Machine

After each new Ethereum blockchain is added, the Ethereum Virtual Machine, a piece of software, executes smart contracts and computes the state of the Ethereum network.

Ethereum Smart Contract

Programs that are stored on a blockchain ledger and run when certain criteria are met.

EVM

Acronym for Ethereum Virtual Machine.

Exchange

Where buyers and sellers can exchange cryptocurrency.

FA

Acronym for Fundamental Analysis.

Faucet

A method of rewarding customers with quick Bitcoin payments in exchange for completing tasks on a website or app.

Fiat Currency (Fiat)

Fiat currencies are money that is legal tender whose value is linked to the value of a government-issued, actual currency.

FOMO (Fear of Missing Out)

Irrationally purchasing or trading a coin without doing due diligence.

Fork

A fork is essentially a modification to the blockchain protocol that the software uses to determine whether or not a transaction is genuine by verifying transactions.

Frictionless

Ideal trading environment with no transaction fees or constraints.

FUD (Fear, Uncertainty, Doubt)

A strategy for influencing public opinion about certain cryptocurrencies or the cryptocurrency market in general by publishing false, incorrect, or misleading information

Full Node

A peer-to-peer machine in the Bitcoin network that hosts and synchronizes a copy of the full Bitcoin blockchain

Fundamental Analysis

To forecast the future value of an item based on whether it is overvalued or underpriced in the market.

Futures Contract

An agreement between two parties to acquire or sell an item, such as digital assets, on a specified date and at a specified price.

G, H, I

Gas

A blockchain transaction fee paid to network validators in exchange for their blockchain services.

Gas Limit

The most computing power you are ready to pay for in order to analyze and validate a certain transaction.

Gas Price

The price of one unit of gas is referred to as the gas price.

Genesis Block

The term given to the first block mined in a cryptocurrency, such as Bitcoin.

Genesis Drop

The first NFT issued by a creator, hopefully to a receptive audience that will snap it up immediately.

Group Mining

Several persons or entities combining their computational resources to mine together.

Gwei

The denomination of the Ether cryptocurrency.

Halving

When the payout for mining Bitcoin transactions is slashed in half.

Hard Cap

The market cap imposed in the code of a blockchain to keep the maximum number of tokens in circulation.

Hard Fork

A significant modification to a network’s protocol that allows previously invalid blocks and transactions to become legitimate, or vice versa.

Hardware Wallet

Hardware wallets are cryptocurrency wallets that hold the user’s private key in a safe hardware device.

Hash

A hash method is used to generate a code for the data. The code is a string of characters that serves as the file’s “fingerprint.”

Hash Rate

A hash rate is a unit that measures the computing power of bitcoin mining equipment.

Hashing

A method used with the purpose of compressing data.

Hashing Power

The speed with which your hardware can mine cryptocurrencies by solving critical mathematical problems per second.

HODL (Hold On for Dear Life)

A warning to other cryptocurrency investors not to sell when values fall.

Hot Wallet

A crypto wallet connected to the internet and thus exposed to cyber-attack.

Hybrid Consensus Model

The blockchain is used to agree on rotating committees, which then execute permissioned consensus procedures to agree and validate transactions.

ICO

An acronym for Initial Coin Offering.

Immutability

The ability of a blockchain ledger to preserve a permanent, indelible, and unalterable record of transactions.

Immutable

Immutable transactions prevent any entity (for example, a government or corporation) from manipulating, replacing, or falsifying data stored on the network.

Initial Coin Offering (ICO)

The cryptocurrency industry’s equivalent of an initial public offering (IPO) is an initial coin offering (ICO). An ICO can be launched by a firm looking to generate funding to build a new coin, app, or service.

InterPlanetary File System (IPFS)

A file system similar to Git that allows you to store files and track versions over time while keeping track of them on a distributed network similar to BitTorrent.

J, K, L

JOMO

Joy Of Missing Out. It is frequently used by no-coiners to express their joy at not being involved in cryptocurrencies, usually, when prices are falling or a scam ICO is exposed.

Know Your Customer (KYC)

A series of procedures crypto exchanges do during customer onboarding to authenticate their identity and perform due diligence to understand their financial activity and dangers.

LAMBO

When a cryptocurrency investment pays out enough that an investor can purchase a Lamborghini.

Lambo Wealth

When cryptocurrency holders will be wealthy enough to acquire a Lamborghini.

Layer 2

A network or system that runs on top of a blockchain protocol to improve its scalability and efficiency.

Ledger

The ledger anonymously stores individuals’ names, cryptocurrency balances, and a record of all transactions completed between network participants.

Leverage

Borrowing money to make trades in order to profit more.

Lightning Network

The Lightning Network is intended to make bitcoin transactions as quick and inexpensive as possible.

Limit Order/Limit Buy/Limit Sell

A purchase limit order will only be filled at the limit price or a lower price. A sell limit order will only be executed if the limit price or a higher price is met.

Liquidity

The simplicity with which tokens can be exchanged for cash and other tokens without causing a significant change in the price of the asset.

Liquidity Mining

A method in which cryptocurrency investors lend assets to a decentralized finance exchange in exchange for rewards.

Locktime

A crypto transaction limitation technique that defines an actual time or block height to confirm a transaction on the blockchain network.

Long

An investor buys bitcoin with the idea that prices will climb later, allowing the asset to be sold for a profit.

M, N, O

MACD

A momentum indicator that follows a trend and displays the relationship between two exponential moving averages (EMAs) of a security’s price.

Mainnet

The name given to the genuine Bitcoin blockchain and network.

Margin Bear Position

The name of a trader’s position when going short on margin.

Margin Bull Position

The name of a trader’s position when going long on margin.

Margin Trading

A risky cryptocurrency method that allows you to magnify gains and losses with borrowed cash, often known as leveraging.

Market Cap (Market Capitalization)

A market cap is determined by multiplying a specific crypto market’s current coin price by its circulating supply. In other words, the market cap is the combined value of all mined coins on the cryptocurrency exchange.

Market Order

An order to purchase or sell bitcoin coins and tokens for fiat currency at the current market price.

MCAP

MCAP is a cryptocurrency that runs on the Ethereum blockchain.

Metaverse

The virtual world that is immersive and has enormous social and financial potential.

Mining

The competitive process for a cryptocurrency that uses the proof-of-work (PoW) mechanism to verify and add new transactions to the blockchain.

Mining Contract

Smart contracts in which a customer pays for the output of mining power generated by hardware located in remote data centers.

Mining Pool

A mining pool is a group of cryptocurrency miners who pool their computational capabilities over a network in order to increase the likelihood of finding a block or otherwise successfully mining for cryptocurrency.

Money Services Business

If your company deals with virtual currencies and provides virtual currency exchange or virtual currency transfer services.

Moon

It is the official cryptocurrency on the Reddit social media platform. Registered crypto enthusiasts are able to farm or earn this currency based on the quality of the content. they publish on Reddit.

Moving Average Convergence Divergence

A momentum indicator that follows a trend and displays the relationship between two exponential moving averages (EMAs) of a security’s price.

MSB

Acronym for Money Services Businesses.

Multipool Mining

Switch between multiple altcoins and constantly calculate which coin is the most profitable to mine at the time.

Multi-Signature (Multi-Sig) Wallets

A digital wallet that works with multiple signatures.

MultiSig (Multiple Signature)

The requirement for two or more signatures on a transaction before it may be conducted.

Network

Cryptocurrency networks can be compared to technology companies. They are, however, decentralized systems that are coordinated by an underlying blockchain-based crypto asset rather than having a central owner who organizes activities between users.

Node

A computer networked with other computers that adhere to standards and share information.

Non-Fungible Token (NFT)

Non-fungible tokens, or NFTs, are digital pieces of material that are linked to the blockchain, the digital database that underpins cryptocurrencies like Bitcoin and Ethereum.

Nonce

A number created at random or semi-randomly for a specified purpose.

OCO

Acronym for One Cancels the Others. 

On-chain

A transaction that takes place entirely on a blockchain network

One Cancels the Other Order

Consists of a pair of orders that are generated concurrently, but only one of them can be performed.

Oracle

Data feeds that bring data from off-chain data sources and place it on the blockchain (on-chain) for smart contracts.

Overbought

A term used to describe when a security is thought to be trading at a price higher than its inherent or fair worth.

Oversold

A term used to describe when an item, such as Bitcoin, is trading at a price that is lower than its true value.

P, Q, R

Paper Wallet

A paper wallet is a printed piece of paper that contains public or private keys and QR codes that you can use to facilitate cryptocurrency transactions.

Peer-to-Peer (P2P)

The direct exchange of any asset, such as digital currency, between individuals without the intervention of a central authority.

PND

It is a decentralized, peer-to-peer, environmentally friendly digital cryptocurrency. Users can process Pandacoin (PND) by mining.

Pre-Sale

A process in which assets are made available to chosen buyers for purchase prior to a stated selling date.

Private Blockchain

A distributed ledger that functions as a closed database protected by cryptographic ideas and the demands of the organization.

Private Key

A private key has a security code that allows the possessor to conduct cryptocurrency transactions and demonstrate ownership of their holdings.

Proof of Attendance Protocol (POAP)

A company offering to leverage Ethereum’s ERC-721 NFT protocol to assign individuals a unique, non-fungible blockchain-based identity that only the individual can access.

Proof of Authority (PoA)

An algorithm for cryptographic consensus used to confirm agreement on a distributed and decentralized network.

Proof of Stake (PoS)

A system to verify transactions using the number of coins staked.

Proof of Work (PoW)

A decentralized consensus technique that demands network users to spend time on solving an arbitrary mathematical puzzle in order to prevent anyone from gaming the system.

Protocol

A simple set of principles that allow computers to communicate data.

Public Blockchain

One in which everyone is allowed to join and engage in the blockchain network’s key activities.

Public Key

A public key enables you to accept bitcoin (or another crypto) transactions.

Public Ledger

A distributed ledger technology that allows for record keeping.

Pump

A message meant to attract people to buy cryptocurrencies in order to profit from the price manipulation induced by the sudden increase in demand.

Pump and Dump

Portrays a situation in which a group of people seeks to make a large profit by pumping an asset.

REKT

A bitcoin trader who has been completely devastated and destroyed as a result of recent price drops. A shortened version of wrecked.

Relative Strength Index

Meant to show whether an investment has been overbought or oversold in comparison to recent price levels.

Relayer

Individual orders are collected and organized into an order book to imitate the experience of a trade without participating in one.

Ring Signature

A sort of digital signature that can be performed by any member of a group of users who have access to the same private key.

RSI

An acronym for Relative Strength Index

S, T, U

Satoshi Nakamoto

A pseudonym of the person or people that contributed to the development of the initial bitcoin software and exposed the notion of cryptocurrency to the world in a paper published in 2008.

Satoshi (SATS)

The smallest unit of bitcoin, it is equivalent to 100 millionth of a bitcoin.

Scalability

The Bitcoin (or another crypto) network’s limited ability to manage massive amounts of transaction data on its platform in a short period of time.

Scrypt

Significant cryptocurrencies such as Litecoin and Novacoin use this type of mining algorithm.

SEC (The United States Securities and Exchange Commission)

It is an independent US federal government regulatory organization tasked with safeguarding investors, ensuring the fair and orderly operation of the securities markets, and enabling capital formation.

Seed

A string of characters generated by your bitcoin (crypto) wallet address that allows you to access the cryptocurrency connected with that wallet.

Segregated Witness (SEGWIT)

A modification to Bitcoin’s transaction format in which the witness information was deleted from the block’s input field.

Selfish Mining

A deceptive cryptocurrency mining approach in which one miner or a group solves a hash, creates a new block, and keeps it off the public blockchain.

Sell Wall

One massive sell order or many sell orders at the same price.

SHA-256

It is the Bitcoin protocol’s hash function and mining method that refers to the cryptographic hash function that produces a 256-bit long result.

Shard

Divides a blockchain company’s whole network into smaller segments.

Sharding

A database partitioning technique utilized by blockchain organizations for scalability, allowing them to handle more transactions per second.

Shill

The increasingly common practice of marketing any cryptocurrency through implicit advertising.

Shit Coin

A cryptocurrency having little to no value, or a digital currency with no obvious, immediate purpose.

Short

The goal is to sell the cryptocurrency at a high price and then repurchase it at a reduced price.

Slashing Condition

The procedure by which other network participants forcibly remove an infringing validator from the Beacon Chain while diminishing their balance.

Smart Contracts

Smart contracts are self-executing code that executes a set of instructions before being confirmed on the blockchain.

Soft Fork

A modification to the software protocol in which previously valid transaction blocks are rendered invalid.

Software Wallet

Users can store and use cryptocurrency using software or hardware. A software wallet is a digital storage for your crypto.

Solidity

A high-level object-oriented language for constructing smart contracts.

Stablecoin

Coins that try to tie their market worth to an external reference.

Technical Analysis (TA)

The examination of decentralized finance market pricing, volume, momentum, and other factors to determine whether the market is bullish or bearish.

Test Net (Testnet)

They are unique from the official (mainnet) coins, have no value, and can be obtained for free from faucets.

Timestamp

The precise time at which a block was mined and confirmed by a blockchain network.

Token

A virtual currency token or a cryptocurrency denomination.

Tokenless Ledger

These blockchains are structured in such a way that they lack the essential unit for value transmission.

Tokenomics

A phrase that describes the economics of a token.

TOR

A decentralized network that maintains anonymity by encrypting internet traffic and passing it through a series of servers before arriving at its destination.

To The Moon

A strong belief that the price of a specific cryptocurrency will shortly skyrocket.

Transaction

A Bitcoin (or another crypto) value transfer on the blockchain. In particular, Bitcoin transactions are certain messages (they can be compared to emails) that are digitally signed by means of cryptography and sent to the entire network with the purpose of verification.

Transaction Fee

A bitcoin (or another crypto) fee charged to conduct a blockchain transaction.

Turing Complete (Turing Completeness)

This term refers to a machine that can solve any computational problem, regardless of its complexity. The necessary condition is that this machine is provided with enough time and memory as well as the necessary instructions. It is used to describe modern programming languages (C++, Python, JavaScript, etc.) since most of them are Turing Complete.

Unconfirmed

Has been validated but is not yet posted on the Bitcoin blockchain.

Unspent Transaction Output

The quantity of digital cash left over after a bitcoin (or another crypto) transaction.

UTXO

Acronym for Unspent Transaction Output.

V, W, X

Validator

Computers dedicated to ensuring the integrity of a blockchain.

Volatility

A measure of how much an asset’s price has risen or fallen over time.

Wallet

Users can store and use cryptocurrency using software or hardware wallets. They are used to store private keys, keeping crypto in security and access. Wallets allow crypto owners to send, receive, and spend cryptocurrencies.

Web3

A blockchain-based decentralized online ecosystem.

Whale

A person or entity who possesses an unusually significant amount of cryptocurrency.

White Paper

A document created by developers that discusses the technology and goal of the project on which they are working.

Whitelist

A list or collection of wallet addresses approved by the administrator to participate in a presale.

Y, Z

Yield Farming

A way to earn rewards or interest by placing your cryptocurrency in a pool with other individuals.

Zero Confirmation Transaction

A transaction that has not yet been submitted to a block.

FAQ

What is crypto slang?

Crypto slang is words that are used to shorten terms that are overused and occur frequently. The majority of the time, they are unique to this sector and may involve acronyms.

Who needs to know Crypto Terms?

A fundamental comprehension of crypto terminology is essential for everyone who is even somewhat interested in cryptocurrencies. They are able to assist in breaking the “code” of the industry and assisting in navigating through all of the information that influencers utilize.

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