Dictionary of Cryptocurrency terms you need to know
Address: An online location where Bitcoin and other cryptos can be sent to and from. These addresses are usually a string of more than 30 characters.
Airdrop: It usually occurs when the creator of a cryptocurrency provides its coin to low-ranked traders or existing community members in order to build their use and popularity. so, it refers to the expedited distribution of a cryptocurrency through a population of people.
ATH: “All-Time-High”, The highest price ever achieved by a cryptocurrency.
Altcoin Generally any crypto-currency other than Bitcoin or Ethereum, including Litecoin, Ethereum, Dogecoin, XRP (commonly referred to as Ripple).
Algorithm: Mathematic instructions coded into and implemented by computer software to produce the desired outcome.
ATL: “All Time Low” The lowest price ever achieved by a cryptocurrency.
AML: “Anti-Money Laundering” a set of international laws that hope to prevent criminal organizations or individuals from laundering money through cryptocurrencies into real-world cash.
ASIC: “Application Specific Integrated Circuit”, a piece of computer hardware that has been designed specifically to mine cryptocurrency to solve hashing problems efficiently.
Arbitrage: the act of buying from one exchange and then selling it to the next exchange if there is a margin between the two profitable.
Atomic Swap: a way of letting people directly and cost-effectively exchange one type of cryptocurrency for another, at current rates, without needing to buy or sell.
Bad holder: a term to refer to a trader who bought in at a high and missed his opportunity to sell, leaving him with worthless coins.
Bag: If you have a large number of units in a certain cryptocurrency, you’d have a bag of them.
Bear/Bearish: a downward trend, it is a negative price movement in the price of a cryptocurrency
Bit: a sub-unit of bitcoin. 1 bitcoin = 1,000,000 bits.
Bitcoin: When the B is capitalized, it represents the overarching concept of Bitcoin: The technology, the community, the protocol, and the software.
bitcoin: When the b is not capitalized, it is describing the unit of currency.
Bear Trap: it is set by a group of traders aimed at manipulating the price of a cryptocurrency, all selling their cryptocurrency at the same time, which bluffs the market into thinking there is a drop incoming.
Blockchain: an online ledger containing records of every crypto transaction. it is public and decentralized and is maintained by a peer-to-peer network of computers.
Block Explorer: an online tool for exploring the blockchain of a cryptocurrency, where you can watch and follow, live, all the transactions happening on the blockchain.
Block Height: the number of blocks connected in the blockchain
Block Reward: a form of incentive for the miner who successfully calculates the hash in a block.
Bull/Bullish: a positive price movement in the price of a cryptocurrency.
Burned: the unspendable for a coin in any particular cryptocurrency.
BTFD: “Buy the F$%king Dip” a less-than-savory phrase used when you’re (enthusiastically) telling someone a currency has dipped to a low value and should be bought.
Bip: a set of bitcoin Improvement proposals that members of the bitcoin community have submitted to improve bitcoin, For example, BIP0021 is a proposal to improve the bitcoin URI scheme.
Buy Wall: it occurs when a large limit order has been placed to buy when a cryptocurrency reaches a certain value, This can prevent a cryptocurrency from falling below that value.
Central Ledger: a control in all financial records by a single entity.
Chain linking: the process that occurs if you transfer one cryptocurrency to another.
Coinbase: a popular website and app used to buy and sell cryptocurrencies.
Cold storage: The process of moving cryptocurrency “offline”, this Keeping a reserve of crypto offline for security reasons.
Cryptocurrency: a form of money that exists as encrypted, digital information. Operating independently of any banks, a cryptocurrency is used to regulate the creation and transfer of funds between entities.
Cryptographic Hash Function: This process happens on a node and involves converting an input into a fixed, encrypted alphanumeric string that registers its place in the blockchain.
Cryptography: The process of encrypting and decrypting information.
DAO: “Decentralized Autonomous Organization”, it Refers to organizations that are run by an application (computer program) rather than direct human input.
dApp: “Decentralized Application“, it is a computer program that utilizes a blockchain for data storage,it is a not controlled, open source, and runs autonomously.
Decryption: Turning encrypted ciphertext back into plain text.
Deflation: the decreasing in demand of a particular cryptocurrency, it is the bringing down in the price of its economy.
Depth Chart: This graph plots the requests to buy and sell on a chart. it shows the crossover point at which the market is most likely to accept a transaction in a timely fashion and shows if there are any significant buy or sell walls in play.
Deterministic Wallet: This type of wallet is created by producing multiple keys from a seed.
Digital Commodity: an intangible, hard-to-get asset that is transferred electronically and has a certain value.
Digital Signature: it is used to confirm that a document being transmitted electronically is authentic.
Distributed Ledger: it refers to the blockchain being held on multiple nodes on the network, all of which are checked simultaneously.
Double Spend: This occurs when someone tries to send a cryptocurrency to two different wallets or locations at the same time.
Dump: The term used to describe selling all of your cryptocurrency, When a lot of people dump at once, causing a sharp downward movement in a cryptocurrency’s price.
DYOR: “Do Your Own Research”, Cryptocurrencies are highly speculative and a potential buyer should be prepared to lose their entire investment.
ERC: “Ethereum request for comments“, it is a summation of proposed improvements to the Ethereum system.
Escrow: a third party between the entity sending and the one receiving.
Ethereum: One of the top three cryptocurrencies in the world based on its market capitalization.
Exchange: The platform through which cryptocurrencies are exchanged with each other.
FA: “fundamental analysis” is a method through which you can attach value to a coin by looking at similar economic and financial factors and researching the underlying motives of the creators and market opinion.
FOMO: “Fear Of Missing Out” An emotion experienced by those who haven’t bought any cryptocurrency and see prices continually rising.
Futures Contract: a pre-approved contract between two entities to fulfill a transaction when the value of cryptocurrency hits a certain price.
Hardware Wallet: a physical device, similar to a USB stick, that stores cryptocurrency in its encrypted form. It’s considered the most secure way to hold cryptocurrency.
Hash: The shorthand for a cryptographic hash function.
Hash Rate: Measurement of performance that reveals how many hashes per second your computer is capable of producing.
Hashing Power: The hash rate of a computer per second being produced. 1,000 kH/s = 1 MH/s, 1,000 MH/s = 1 GH/s and so forth.
HODL: “Hold on for dear life”, It means to hold onto the cryptocurrency that you have invested and ignore the sentiments
ICO: “Initial Coin Offering” it occurs when someone plans on creating a new crypto coin and wants to start selling it to the public.
KYC: “know your customer”, refers to a financial institution’s obligation to verify the identity of a customer in line with AML laws.
Lightning Network: a peer-to-peer system for cryptocurrency micropayments that is focused on low latency, instant payments. They’re typically low cost, scalable and can work across chains, and transactions can be public or private.
Liquidity: The liquidity of a cryptocurrency is defined by how easily it can be bought and sold without impacting the overall market price.
Limit Order (Limit Buy/Limit Sell): Buy/Sell orders placed by traders to buy or sell a crypto-currency when the price meets their target amount.
Margin Bear Position: the position you are taking if you are going “short”.
Margin Bull Position: the position you are taking if you are going “long”.
Margin Trading: a risky strategy used by experienced traders where they risk their existing coins to magnify the intensity of their trades. This allows them to buy more than they can afford using the leverage provided by an exchange.
Mining: The process of trying to solve the next block. It requires obscene amounts of computer processing power.
Mining Contract: an investment in mining hardware whereby you rent out the hashing power of mining hardware for a certain amount of time.
Multipool Mining: If a miner moves from one cryptocurrency blockchain to another depending on the profitability provided by the network at that moment in time, they are engaging in multipool mining.
Mooning: the rapid increases in the price of a cryptocurrency.
Tank: The opposite of “mooning“, a crash in a cryptocurrency.
OCO: “One Cancels the Other Order”, When two orders for cryptocurrency are placed simultaneously with a rule in place whereby if one is accepted, the other is canceled.
Overbought: If a large number of purchases have been made on a cryptocurrency.
Oversold: If a cryptocurrency has spent significant time being sold without an upward movement.
Paper Wallet: Storing your wallet code on a physical document makes it a paper wallet. It’s also sometimes referred to as cold storage
Pre-Sale: a period before an ICO “Initial Coin Offering” goes public when private investors or community members are able to buy the cryptocurrency.
Public Key: This is your unique wallet address, which appears as a long string of numbers and letters. It is used to receive cryptocurrencies.
Pump: it refers to an upward price movement, usually driven by whales investing large sums of money in a cryptocurrency.
PND: “Pump and Dump”, The frowned-upon practice of buying a lot of one cryptocurrency to drive up its price and encourage others to invest, then selling the lot when there is a suitable margin.
Ring Signature: a type of encryption process that retains anonymity for the user