Have you been browsing through forums and blogs without having a clue of what people actually referring to or talking about? The exact same thing happened to me when I first stepped into this exciting cryptosphere. Back then, to understand a single article, I might need to go back and forth between google and the article multiple times, therefore I think it might be a good idea to put together and compile a glossary of common terms that are frequently come across in the Crypto World. If we missed anything, feel free to let us know in the comment section below!
* All terms below are explained in the context of cryptocurrency
Cryptocurrency / Blockchain Related Terms
- Address / Public Key
Cryptocurrency address is used for sending or receiving transaction on the cryptocurrency network which normally presents itself as a string of alpha-numeric characters. An address is a hashed version of the public key.
A unique event where the investors/participants are able to receive free tokens or coins into their digital wallet.
Short for alternative cryptocurrencies. Typically refers to all other crypto-currencies other than Bitcoin.
- ASIC Miner:
Short for "Application Specific Integrated Circuit Miner" which is a machine that features an integrated circuit customized for cryptocurrency mining.
A sub-unit of bitcoin. 1 BTC is equivalent to 1,000,000 bits.
Bitcoin is the very first open source and decentralized digital currency in which encryption techniques are utilised in order to regulate the creation of currency units as well as the verification of the fund transfer, operating independently of middlemen or centralized issuer ( e,g, bank).
Blocks are files which the transcational data are permanently recorded on the blockchain network. Analogous to a page on a ledger.
A universal public ledger where all transactions that ever occurred are recorded via the creation of new blocks, from the very first genesis block until the latest block.
- Block Explorer
Block Explorer refers to an online block chain browser that allows you to view the contents of individual blocks, the status of transactions, the transaction histories as well as the balances of addresses.
- Block Height
The total number of blocks mined following the genesis block.
- Block Reward
An incentive that takes the form of the native cryptocurrency for miners that computed the hash in a block successfully via mining. Verification of these transactions / Adding blocks to the blockchain will essentially create new coins and the miner will be rewarded with a fraction of those new coins.
- BTC & XBT
A common abbreviation of bitcoin. They are used synonymously with no difference between one another.
- Cold storage
Offline storage of cryptocurrencies, that could take the form of a private key written on a physical paper or stored in a USB drive. Cold storing your cryptocurrency prevent the risk of your cryptocurrencies getting hacked but at the same time carries the risk of your physical storage getting lost, stolen or damaged.
When a transaction occurs, its validity is verified by the miners within the blockchain network. the confirmation is implemented by the so-called "miners" whenever a block is mined, which happens in every 10 minutes i
The use of someone else's computers to mine cryptocurrency without their consent.
Short for decentralized application. Dapp is an application that operates autonomously on a decentralized peer-to-peer network with its data storing on a blockchain.
Short for Decentralised Autonomous Organization. It refers to an organization that is operated via a set of business rules encoded as smart contracts independent of any human intervention.
Ethereum is an open blockchain-based software platform featuring smart contracts functionality which allows the development and deployment of decentralized applications by developers.
A cryptocurrency reward system that takes the shape of a website or app, which basically rewards the user for completing certain task or engagements described by the website or app.
- Genesis Block
The very first block that is created in a blockchain.
It refers to the 50% decrease in block reward after the mining of a prespecified number of blocks.
- Hard Cap
A hard cap is defined as the maximum amount a crowdsale will receive.
- Hard Fork
A hard fork refers to the event where a single cryptocurrency splits into two. It takes place when the existing code of a cryptocurrency is modified, resulting in two separate versions.
Referring to the output of a hash function.
- Hash Rate / Hash Power
The number of times a hash function is computed in a second. Typically used as a measurement of the performance of a mining rig.
Short for Initial Coin Offering, analogous an IPO in the non-crypto scene, a revolutionary way of crowdfunding. Tokens or coin are offered to the investors normally in exchange against other stable cryptocurrencies like Bitcoin as well as Ethereum.
Mining refers to the process of validating blockchain transactions via computer hardware. Individuals that use their computers/machines to perform such activity are regarded as miners.
A copy of the ledger operated by a computer that connects to the blockchain network is regarded as a node.
- Soft Cap
A soft cap is the amount received at which a crowdsale will be considered a success.
- Soft Fork
A soft fork is essentially similar to a hard fork, but only one blockchain ( hence one cryptocurrency )will remain as the users adopt the modifications and update.
- Private Key
A private key is a which allows you to access your tokens in a specific wallet. Private key should never be disclosed to anyone other than the owner of the address.
- Proof Of Work (POW)
POW refers to a consensus distribution algorithm which requires playing an active role in data mining. In simpler terms, doing more "work" or in other words, providing more computational power will get you rewarded with more coins.
- Proof Of Stake (POS)
POS refers to a consensus distribution algorithm which essentially rewards you based upon the amount of the coin that you own. In other words, more investment in the coin will leads to more gain when you mine with this protocol.
Peer to peer/person to person.
The smallest unit of Bitcoin, a hundredth of a millionth BTC ( 0.00000001 BTC). Named after its creator, Satoshi Nakamoto.
Solidity refers to Ethereum’s programming language for writing/implementing smart contracts.
A comprehensive report that details everything you need to know about the cryptocurrency/blockchain project prior to your decision to invest / adopt.
Trading Related Terms
Websites where you can buy or sell cryptocurrencies.
Fiat money refers to any legal currency declared by the government to be legal tender. Fiat doesn't carry any intrinsic value and are not backed by physical commodity of any sort such as US Dollar
Someone that is in possession of a tremendous amount of cryptocurrency or fiat money.
Technical Analysis or Trend Analysis. TA refers to financial analysis that takes advantage of the patterns in market movement in order to identify trends and perform relevant predictions.
- Market Cap
Market Cap is short for Market Capitalization. Market Capitalization refers to the market value of a particular cryptocurrency. It is computed by multiplying the Price of an individual unit of coins by the total circulating supply of the coins.
Market Cap = Price of Individual Unit of Coin X Circulating Supply.
- Limit Order ( Limit Buy / Limit Sell )
A limit order is an order placed by the traders to purchase or sell a cryptocurrency at a predefined price. A limit buy order will only be executed at the limit price if not lower while a limit sell order will only be executed at the limit price if not higher
- Market Order (Market buy/Market Sell)
A market order is an order placed by the traders to be executed on the spot at the best price that the market currently offers. Market Orders are filled as long as there are sellers and buyers willing to perform the trade.
- Margin Trading
Margin trading is fundamentally trading with borrowed funds to purchase or sell more cryptocurrencies than one would otherwise be able to afford. When a margin order is placed, the money that you are using is essentially borrowed from other users in the exchange that offers their funds as loans. ( Highly risky, not recommended for beginners)
- A long position
A long position refers to the purchasing of a specific cryptocurrency with an expectation that it will rise in value.
- A short position
A short position refers to the selling of a specific cryptocurrency with an expectation that it will drop in value.
An expectation that the value of a specific cryptocurrency is going to increase.
An expectation that the value of a specific cryptocurrency is going to decrease.
All time high. A term used to describe when a cryptocurrency reach its highest value.
Arbitrage refers to the simultaneous buying and selling of the cryptocurrency to essentially take advantage of the price difference on two different exchanges. Arbitrage is relatively common in the cryptocurrencies market which is considerably less mature.
- Pump & Dump:
Massive buying and selling activity of cryptocurrencies (sometimes organized and to one’s benefit ) which essentially result in a phenomenon where significant surge in value of coin followed by a huge crash take place in a short timeframe.
Return on Investment. A popular metric to measure the profitability of an investment, calculated via dividing the net profit by the net investment amount X 100%. ( E.g. A 100% ROI indicates that you have doubled your money. )
- Buy wall
Huge amount of buy orders under the current market price.
- Sell Wall
Huge amount of sell order above the current market price.
- Bull Trap:
A phenomenon when a general downtrend reverses briefly and subsequently continues its downwards movement.
- Bear Trap
A phenomenon when a general uptrend reverses briefly and subsequently continues its upward movement.
Relative Strength Index. A popular trading indicator which is frequently employed in technical analysis.
Moving average convergence/divergence. Another popular trading indicator.
Act of holding onto your coin disregarding the market sentiment / under dire market circumstances.
Fear Of Missing Out. A strong urge to buy when a particular coin is skyrocketing as you think the price would continue to rally.
Fear, uncertainty & doubt. A panic feeling as a result of over-exaggeration of the negative sentiments
Individual that is spreading FUD within the community
"Do Your Own Research." Due to the highly speculative nature of cryptocurrencies, it is vital for a potential investor to do their own research prior to committing their resources into pruchasing cryptocurrencies. Never invest more than you are willing to lose.
- Bag Holder
Referring to someone that is still holding a particular coin following a market crash typically as a result of a pump and dump event.
A slang referring to the word "wrecked"
Explain to me like I am five
Coin with little potential or future prospects
- Dead Cat Bounce
A short-lived price recovery after a huge market crash
- To The Moon
Referring to the value of a coin rising to astronomical heights.
Buy The Dip. Buy a coin when its value has experienced a significant decrease.
A project that has been advertised but never actually implemented.
Spreading buzz by heavily promoting a particular coin in the community to create an impression that the coin would go up significantly in terms of its value, most of the time with the pretense of sincerity.