The world of cryptocurrency is laden with jargon that may invite confusion. Here are some of the most common and relevant terms you will encounter, all in alphabetical order.
Address (addy) – A unique set of characters on a node that is used to transfer cryptocurrency.
Altcoin – Cryptocurrencies just like Bitcoin, but that have much lower market share. Many have unique features and specific applications.
AML – Acronym for Anti-Money Laundering, made up of sets of laws, internationally and nationally, in order to prevent money laundering through cryptocurrencies.
ASIC – An acronym for Application Specific Integrated Circuit – a specialized hardware that miners use in order to achieve the maximum mining cost efficiency.
Bitcoin – The first implementation of blockchain technology in the form of a cryptocurrency. Bitcoin is the dominant and most popular cryptocurrency that aligns the price of other cryptocurrencies.
Block explorer – A way to view blockchain transactions in the form of a web tool.
Blockchain – Innovation in decentralized distribution of information that is virtually impossible to fudge thanks to its validation of copies across the entire network. Blockchain consists of data blocks and cryptographic chains that bind these blocks across the network via nodes. One implementation of blockchain is cryptocurrency, but there are many others. Whichever system deals in information and needs decentralization, it can benefit from blockchain.
BTC – A short form name for Bitcoin to be used on exchanges.
Consensus – When all nodes on a network validate a transaction, a consensus is achieved, meaning that the transaction can be completed and is not fraudulent.
Cryptocurrency – Digital money powered by cryptography and decentralized computer networks.
DAO – Decentralized Autonomous Organization is an entity, for any purpose of a group, which operates without human control and top-down hierarchy. Instead, the coherency and efficacy of the group is enforced by a set of rules to which each member complies.
DApp – Open-source decentralized applications powered by blockchain technology.
Ether – Blockchains created on the Ethereum platform use Ether tokens for mining compensation.
Ethereum – The next step in the evolution of blockchain technology, with a focus on providing an open, decentralized platform that hosts decentralized applications (DApps).
Ethereum Virtual Machine (EVM) – Instead of creating new blockchains for each application, developers can use EVM to develop their DApps, regardless of the programming language used.
Exchange – A website that provides the convenient service of buying and selling cryptocurrencies. It can also serve as an online wallet.
Fork – When blockchain’s code receives new protocol rules, it splits into separate chains, which is called a fork. These rules are usually added in order to improve functionality, fix security exploits, or reverse transactions to recover from a security oversight.
Hard Fork – Complete separation of new chains with the original blockchain, which sometimes results in the creation of a new cryptocurrency (Bitcoin Cash) if both blockchains are adopted. Otherwise, the older blockchain is rendered obsolete, and users have to update to the newer version.
Hash – A mathematical function that performs a conversion of letters and numbers into an encrypted form of fixed length.
Hash Rate – Used in mining to measure the mining capacity of mining rigs.
Miners – People who utilize computer hardware in order to add new blocks to a blockchain. Upon adding new blocks, they receive token rewards which translate into real money.
Mining – Employing computing power in order to solve math problems, which is how a new block is added to the chain.
Mining rig – Computer hardware used to perform cryptocurrency mining.
Multi-signature – When you want extra security for transactions, you can add another key in order to authorize them.
Node – A computer on a blockchain network that holds a copy of the blockchain and updates it.
Oracles – Programs that serve as necessary links between smart contracts on the blockchain and the real world. Oracles provide data to smart contracts and relay data to the outside world.
Private Key – A cryptographic string of characters that allows one to access cryptocurrency assets. Just like the keys to your car, the private key must be guarded at all cost.
Proof-of-Stake (PoS) – Consensus algorithm on an Ethereum network. With PoS, new blocks are added to the chain by a collection of random stakes of the creator.
Proof-of-Work (PoW) – Consensus algorithm on a Blockchain network. PoW is used to add new blocks to the chain by miners, in addition to validating transactions.
Public Key – Is generated from a private key in an irreversible manner, meaning that a private key cannot be reverse-engineered from a public key. Public keys are used to receive cryptocurrencies into wallets, and work in conjunction with private keys. In short, public key is a hashed version of a public address.
QR Code – A machine-readable barcode that serves as a cryptocurrency address. Therefore, smartphones with cameras make cryptocurrency usage much more convenient.
Satoshi – The smallest unit of Bitcoin, named after an unknown creator of Bitcoin who used the pseudonym Satoshi Nakamoto.
Smart Contract – A set of rules within a code on the Ethereum network. Once an event triggers these rules, a contractual action is completed, thus removing the need for intermediaries in doing business.
Soft Fork – Blockchain splits into two separate chains, but is still backwards compatible.
Testnet – A blockchain that developers use to test new functions and security features before releasing them to the public.
Token – At lower tier than altcoins, tokens are specific currency of projects built on the Ethereum network. These tokens are used to raise money for the projects.
Transaction fee – The cost of transferring cryptocurrency. It is highly dependent on the service used – exchange – and the type of cryptocurrency.
Wallet – Software on a computer that acts as safe storage for cryptocurrencies. Wallets can be desktop-based, mobile, online, or specialized devices that hold the wallet – hardware wallets (Trezor, Ledger Nano…). All wallets save private keys needed to access cryptocurrency.
Ask price – The minimum price someone is willing to sell an asset.
ATH – All-Time-High. The highest price the asset has ever had.
ATL – All-Time-Low. The lowest price the asset has ever had.
Bagholder – A much disciplined altcoin holder who still holds the assets after its crash. Someone who holds altcoins despite its future prospects being poor.
Bear Trap – Misinterpreting bearishness of the market when, in fact, the price is about to skyrocket.
Bearish – Anticipating a decrease in price.
Bid price – The maximum price someone is willing to pay for an asset.
Bollinger Band – An indicator that points out when a cryptocoin is oversold or overbought.
Bull Trap – Misinterpreting bullishness of the market when, in fact, the price is about to take a dive.
Bullish – Anticipating an increase in price.
Buy Wall – A description of a depth chart that collates buy orders. It could denote whales trying to drive price up, or to ensure that the price doesn’t drop further.
Depth Chart – A chart that plots all the bids and asks. It serves as a key tool in showing buy and sell walls, as it indicate if an asset’s price will change significantly given the balance of sell and buy orders.
Fiat – regular currency issued by government. Unlike gold-backed currencies of the past, fiat currency’s value is decreed by government. Fiat = an arbitrary order.
FOMO – Fear Of Missing Out. An irresistible urge to get on the crypto train just as the news headlines are talking about a skyrocketing price of a certain cryptocurrency. Sometimes, this hype results in losses.
FUD – Fear, Uncertainty, and Doubt. Opposite to shilling. Someone wants a drop in price, so they will spread baseless negativity.
FUDster – The spreader of FUD.
Going long – Margin trading that relies on profits if the price increases.
Going short – Margin trading that relies on profits if the price decreases.
ICO – Initial Coin Offering analogue to IPO (Initial Public Offering) in the non-crypto sphere. A form of crowdfunding by startups using tokens in exchange for Ether.
Leverage – Using borrowed capital for investing/trading.
Limit order (sell or buy) – A customized trading order in which a trader sets a price threshold upon which cryptocurrency is either sold or bought.
Margin trading – An advanced form of trading that uses borrowed money in order to buy additional assets. In this case, the borrowed money is in the form of existing coins. Usually requires a margin account.
Market Cap – When you visit an exchange, you will see the total value of certain crypto-currency. This is called the market cap.
Market order (sell or buy) – A regular sale or purchase of cryptocurrency on an exchange at its current price rate.
Mooning – When cryptocurrency price surge exceeds all expectations.
Pump and Dump – An often seen cycle in which a new altcoin emerges, its price skyrockets, and ends in a steep crash.
ROI – Return on Investment. A measure to determine how much money you gained compared to how much money you invested. A 50% ROI means that the investor gained half as much value from the initial investment.
Sell Wall – A description of a depth chart that collates sell orders. When a graph looks like that, the market is likely being manipulated by whales in order to drive down the price of assets.
Shilling – Aggressive promotion of a new cryptocurrency in order to jack up its value.
Stable coin – An altcoin designed to tackle the biggest problem of cryptocurrencies – volatility. Often tethered to precious metals or other assets, stable coins offer volatility comparable to fiat currency.
TA – Trend Analysis; using statistical methodology and past performance to predict market trends.
Volatility – Frequency of change in value. The higher the frequency, the greater the volatility.
Whale – A person/institution/group who own so much cryptocurrency that they can singularly disrupt the whole market, either plummet the value of cryptocoins or raise it. Sometimes, they are referred to as High-Net-Worth Individuals (HNWI).