When you are new to the world of cryptocurrencies, you will come across a number of terms that you will not be able to understand right away.
Here is a glossary that can help you get acquainted in a better way:
This is an abbreviation of All Time High.
This term refers to any cryptocurrency other than Bitcoin and Ethereum.
It is a technology that defines distributed ledgers, which are secured through cryptography. These are basically public databases that can be read and accessed by everyone, but only the owners can update the data. The data is not stored on a single centralized server. Instead, it is copied across thousands of computers all over the world.
This term refers to a person holding an altcoin after a pump and dump. It can also be used for someone holding a coin when its value is sinking and has limited future prospects.
Expecting the price of a cryptocurrency to increase.
Expecting the price of a cryptocurrency to fall.
It is the process of moving cryptocurrency ‘offline’. It is a way of safeguarding your crypto from the risk of hacking. There are several ways this can be done like moving the files of a software wallet to a USB, choosing a hardware wallet or storing the QR code of a software wallet in a safe place like a safety deposit box.
The network for a digital currency reaches consensus when the network's nodes agree that a transaction took place. This agreement is crucial if the varying network participants (nodes) are to have the same information. In other words, consensus is crucial to distributed ledger systems.
It is a field of study for securing information to prevent third parties from reading information for which they are not authorized.
It is the use of someone else’s computer without their consent for mining cryptocurrency.
This refers to a situation when a sum of money is spent more than once illegitimately.
An individual who owns a moderate amount of cryptocurrency. They don’t classify as a whale.
An adage that means Do Your Own Research and not just take others at their word.
Escrow refers to a third-party holding financial resources on the behalf of other parties. A third-party would hold funds in escrow when the other entities involved in a transaction may not trust each other.
These are websites where you sign up for buying and selling cryptocurrencies. Coinbase is a popular exchange in North America.
Someone who owns a very small quantity of cryptocurrency is called a Fish or a Minnow. They are usually at the mercy of whales who cause market movements.
This is an investment strategy, which became popular due to real estate investment. It involves buying something with the aim of reselling it in the future at a profit, usually during a short time period. In regard to ICOs, flipping refers to investing in tokens before they are available on exchanges and selling them quickly at a profit once they are listed.
Fundamental Analysis, which involves researching the underlying value of the asset by looking at is team, technology, growth prospects and various other indicators.
It is a situation in which a blockchain is split into two separate chains. These forks usually occur in the cryptocurrency world when the blockchain’s code is changed with the introduction of new ‘governance rules’.
This stands for Fear of Missing Out. It is the overwhelming sensation that you need to jump the cryptocurrency bandwagon when its price starts to rocket.
This stands for Fear, Uncertainty and Doubt. It is baseless negatively that’s spread intentionally by someone who wants the price of a cryptocurrency to drop.
A term used for someone spreading FUD.
This refers to currency issued by the government, such as the US Dollar.
A margin trade that results in a profit if price increases.
A margin trade that results in a profit if price falls.
This is the first block of data that’s validated and processed to form a new blockchain. It is also called Block 1 or Block 0.
This is the maximum amount that can be raised through an ICO. After a hard cap, no more funds can be collected.
A hard fork is a type of fork that creates a permanent change to a digital currency's protocol, or rules. When one of these forks takes place, it results in a whole new blockchain, which will not accept any blocks mined using the old rules. The old chain can survive, however, leading to a scenario where both the old and the new blockchains can continue
It is a device that can be used for storing cryptocurrency. They are often considered to be the most secure way of holding cryptocurrency.
This is a passive investment strategy, which involves holding an investment for a long period of time, no matter what changes take place in the market. This term became popular due to a typo that was made in a Bitcoin forum and is now expanded as Hold On for Dear Life.
This is a property used to define cryptocurrency, which means inability of change, especially over time.
Initial Coin Offering, which is very similar to IPO in other financial markets.
This is an acronym for ‘Know Your Customer’. It is a process used by financial institutions or exchanges for verifying the identity of a customer in accordance with international anti-money laundering standards.
This refers to how easily you can buy or sell a cryptocurrency without having an impact on the overall market price.
Limit Order/ Limit Buy / Limit Sell
These are orders placed by traders for buying or selling a cryptocurrency when the price reaches a certain level. These are what are bought and sold when market orders are placed by traders.
Going long, also known as taking a long position, means making a wager that an asset will rise in value. If a trader purchases a digital currency like bitcoin, for example, they are making a bet that the cryptocurrency will appreciate.While simply buying digital currency is one example of taking a long position, there are other methods available. For instance, traders can leverage options and futures.
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Market Order/ Market Buy/ Market Sell
This is simple buying or selling on an exchange at the existing price. Market Buys means purchasing the cheapest crypto available while Market Sell is the most expensive buy order.
Increasing the risk of your trades by investing your existing coins is called margin trading. It is only recommended for experienced traders and that too on some exchanges.
Mining is the process for creating new units of a digital currency. For example, the bitcoin network releases new bitcoins every time a block is mined. In this instance, mining involves confirming transactions and combining them in to blocks.This verification requires hardware and electricity, and miners are rewarded with digital tokens for contributing these needed resources.
The mining incentive is a reward that miners get for confirming transactions and mining them in to blocks. Verifying the transactions of the bitcoin network, for example, requires specialised hardware and substantial electricity, so miners are compensated with a mining incentive.
This is a computer that has been designed especially for processing proof-of-work blockchains. They contain several high-end graphic processors (GPUs) for maximizing their processing power.
This refers to the total value held in cryptocurrency. It can be calculated by multiplying the current price of a single unit with its total supply in the market.
When a digital currency moons, that means it rises sharply in value. For example, a crypto trader could talk about how an altcoin is going "to the moon!"
It is the process of ‘solving’ the next block. Massive amounts of computer processing power is required to do it effectively and it is rewarded with cryptocurrency.
This is a computer possessing the copy of a blockchain and working to maintain it.
Newcomers are frequently described as "noobs" by industry insiders. If you are this person, you may want to sit back and observe before "jumping in with both feet." Digital currencies are highly volatile, so those who are newer to these assets should keep their risky nature in mind.
A contract that gives the buyer the right and not obligation of buying and selling an underlying asset at a specified price. There are European and American options, the former of which can only be exercised at the date of expiration while the latter can be exercised any time before they expire.
Over The Counter (OTC)
This is defined as a transaction that’s made outside of an exchange, often via private trading. The OTC route is usually taken in regions where exchanges are not allowed to operate or where the traded amounts can move the market.
It refers to Proof of Work, which is the consensus algorithm used by several cryptocurrencies, including Bitcoin and Ethereum.
Private Key/ Secret Key
This is a piece of code that’s generated in asymmetric-key encryption procedure. It is paired with a public key for decrypting information.
Pump and Dump
This refers to the recurring cycle of an altcoin getting a lot of attention, experiencing a sudden increase in price and then suffering from a huge crash.
It stands for Proof-of-Stake and is the future consensus algorithm to be used by Ethereum and other cryptocurrencies.
It is a label readable by a machine, which shows information encoded into a black-and-white graphical pattern. In case of cryptocurrencies, it is used for sharing wallet addresses.
The term "rekt" is crypto trader slang for "wrecked." Basically, it means that a trader lost substantial amounts of money.
It stands for Return on Investment. It is the percentage of how much money has been made as compared to what was invested. For instance, 100% ROI means you doubled your investment.
Satoshi Nakamoto is the pseudonym for the creator of bitcoin, and more than one individual has claimed to be Nakamoto. However, none of these claimants have managed to convince the broader cryptocurrency community that they are, in fact, the creator of bitcoin.
Sell Wall/ Buy Wall
Traders use depth charts for checking the current limit buying and selling points. The graphical representation on these charts looks like walls.
Any cryptocurrency that has low volatility and can be used for trading against the overall market.
This is storage for cryptocurrency that purely exists as software files on a PC. These wallets can be generated from a variety of sources for free.
A situation when a new block is mined by a miner, but it is not broadcasted to others. If the miner is able to find the second block before the others, they can create the longest public blockchain, which would automatically invalidate other blocks that are discovered during this time.
Promoting an ICO project or cryptocurrency enthusiastically is known as shilling.
This is Gentlemen
This was originally an error made while writing ‘This is it, gentlemen’. Now, it is used for introducing good news.
A digital token is a unit of a digital currency, such as a bitcoin. It is worth noting that some of these tokens are used for specific ecosystems, and those are frequently referred to as utility tokens. Other digital tokens are essentially securities.
This is the amount of cryptocurrency that has been traded in 24 hours.
Technical Analysis or Trend Analysis, which is the process of examining existing charts for predicting the direction of the next market movement.
A term used to refer to someone who owns a huge amount of cryptocurrency.
Zero Knowledge Proof
In cryptography, this enables a party to provide evidence that an event or transaction happened without giving any private details about it.