Expand your crypto knowledge with the ultimate dictionary for the most commonly used word in cryptocurrencies.
An airdrop is a way to distribute coins to users for free. Often users will have to complete some tasks to be eligible for the airdrop.
An ‘alternative’ coin or ‘altcoin’ is generally considered any cryptocurrency that is not Bitcoin.
By remaining anonymous a person can hide their identity online. There are privacy-focussed coins – such as Monero or ZCash – that help users retain anonymity.
A bag holder is someone who has held a certain cryptocurrency for a long time without making any profit.
A term often used to describe your portfolio of cryptocurrencies. Each cryptocurrency is considered a bag – akin to carrying shopping bags.
A fork of the original Bitcoin with larger ‘blocks’ and cheaper fees. It was created following disagreements in the Bitcoin community about the best way to scale the network.
A block contains the data of a cryptocurrency transaction which is eventually added to the blockchain.
A place for users to view previous and current transactions on a cryptocurrency network.
All transactions of a cryptocurrency are stored on the blockchain forever. Every time a new block is created it is added to the chain. Hence the word ‘Blockchain’.
If someone is feeling bullish, they generally believe that the price of a cryptocurrency is soon to rise.
CBDC stands for “Central Bank Digital Currency”. Several nations are investigating the possibility of releasing a CBDC via their own central banks
Cold Storage is a safe place to keep your private keys, as they are not connected to the internet.
Before a transaction is completed, it must receive a certain number of confirmations. The more confirmations a transaction has the safer it is.
A shortened way of saying ‘cryptocurrency’. The name stems from cryptography which forms the building blocks of cryptocurrency.
A niche section of Twitter which focusses on cryptocurrencies and has created its own culture.
DAO stands for decentralised autonomous organisation whereby an organisation can run itself without the need for human interaction.
The darknet is an area of the world wide web that usually requires anonymous browsing software such as TOR to access. It became synonymous with Bitcoin in the early years as users were able to buy a variety of illegal goods and services without using traditional payment methods.
DCA, or dollar cost averaging, is an investment strategy where a person will invest a fixed amount on a regular basis no matter the cost of the asset.
DeFi stands for decentralised finance. It is an umbrella term for a variety of innovation within both cryptocurrencies and traditional finance. One example of DeFi is the ability to take out loans or earn interest without the need for a central intermediary.
A DEX is a decentralised exchange that requires no central authority to operate it. Users are able to buy and sell cryptocurrencies via smart contracts and with the user retaining their private keys, unlike many traditional exchanges.
Often used in the phrase “buy the dip”, the ‘dip’ refers to a loss of value in a certain cryptocurrency
ERC-20 are tokens that are built on top of the Ethereum platform and use the Ethereum network as the base layer.
Ethereum is the second largest cryptocurrency, and was created by Vitalik Buterin. Many cryptocurrencies are built on top of the Ethereum network.
Fiat currency is money created by a nation’s government which has no underlying asset backing the currency. Its value is often determined by the trust of the nation state system.
A flippening occurs when one cryptocurrency reaches a larger marketcap value than another cryptocurrency.
FOMO – or ‘fear of missing out’ – is an emotional state investors experience when the value of an asset increases and fear they will miss out on potential gains if they do not buy in.
FUD stands for ‘fear, uncertainty and doubt’ and is used to describe news that is derogatory and therefore could cause the price of a cryptocurrency to drop.
A hard fork is the splitting of a blockchain into two separate chains. If both chains gather enough support, they will continue to function independently of each other. If there is no support for one of the two chains, then one will die. One example of a hard fork is the split of Bitcoin into BTC and BCH.
A measuring unit that is used to determine the processing power of a cryptocurrency network. The higher the hash rate, the harder it is for unethical actors to attack the network via a double spend attack.
A misspelling of “hold” which stems from a drunken post of a ‘bitcointalk’ forum. The term caught on and is now used widely within the cryptocurrency industry.
An ICO is an initial coin offering which became an extremely popular way for companies to raise money in 2017 by offering anyone the opportunity to purchase early access to a cryptocurrency. Due to a variety of legal issues, ICOs are currently not so common.
One of the key tenets of a blockchain is that it is said to be immutable. In essence, this means that no one person or company should be able to alter the history or transactions that have happened. However, Ethereum is one example, whereby the chain was ‘rolled back’ removing immutability from the chain.
Slang for Lamborghini, the car brand has become the unofficial mascot of the cryptocurrency industry with many proclaiming they will “buy a Lambo” from the money they made in cryptocurrency.
A method to determine the total value of a cryptocurrency. It is determined by multiplying the price of a cryptocurrency by the number of coins in circulation.
A plug-in wallet for your web browser that allows users to interact with DeFi protocols as well as NFT markets.
A miner is someone who ‘mines’ cryptocurrency in the hope of being rewarded with said cryptocurrency. By mining, they add ‘hash rate’ which provides more security to the network.
Mining is the process of complex mathematical puzzles that are solved by computers. These solutions create ‘blocks’ which are then added to the blockchain.
An NFT is a non-fungible-token which can represent digital art or real assets such as a concert ticket. It creates a unique proof of ownership.
A way to store your private keys for your cryptocurrency wallet. A paper wallet is secure in that it has no connection to the internet – as long as it is stored safely and securely.
Anyone who owns a collection of cryptocurrencies may refer to that as their portfolio. Similar to how people who invest in stocks call it their ‘portfolio’.
A privacy coin is one that cannot be traced and remains fully anonymous. Bitcoin is considered pseudonymous, as with modern tracing capabilities it can be possible to link wallets to certain people.
Your private key is what allows you to move or interact with your cryptocurrency. Should you lose – or someone steal – your private keys then you will lose your cryptocurrency.
Proof of Stake is an alternative consensus mechanism that many cryptocurrencies have chosen to use. By staking a cryptocurrency you help secure the network and can also help in processing the next block, thereby receiving a reward for doing so.
Proof of Work is the consensus mechanism that Bitcoin uses. It involves many computers attempting to solve complex mathematical puzzles with the first one getting it correct mining a block and receiving a reward. Proof of work can be extremely energy-intensive.
A QR code, also known as a quick response code, is a type of barcode invented in Japan. QR Codes work in the similar fashion to traditional barcodes that you would find in supermarkets. They are often used within cryptocurrency to scan for wallet addresses which is much easier than typing out the wallet address manually.
Satoshi Nakamoto is the anonymous creator of Bitcoin. To this day, it is unknown who Satoshi Nakamoto is, or whether he/she is alive.
Named after the creator of Bitcoin, satoshis are units lower than one Bitcoin. They are also called ‘Sats’ for short.
A fraudulent method of gaining money from someone else. The methods are various, from giveaway scams, Ponzi schemes or phishing emails.
The SEC is the Security & Exchange Commission of the USA. It has a high interest in cryptocurrencies as cryptocurrencies generally fall within its jurisdiction.
SegWit or Segregated Witness was part of a scaling solution on Bitcoin. The implementation of SegWit at the time was somewhat controversial and was one of the debates in the block size wars.
Shilling is the process of promoting a coin that you own to other people. Think of it as recommending a cryptocurrency, but often in an over-enthusiastic manner.
A ‘shitcoin’ is a term used mainly by Bitcoin maximalists to described any cryptocurrency that isn’t Bitcoin.
Simple programmes stored on a blockchain that run when predetermined conditions are met. They are generally used to automate the execution of an agreement so that all parties can be immediately certain of the outcome, without the need for any intermediary involvement.
Staking is the process of earning interest on your cryptocurrency. In the way you might deposit traditional money to a bank and earn interest, you can stake your cryptocurrency and earn interest.
TA is known as Technical Analysis and helps traders predict where the price of a cryptocurrency might be heading in the short term.
Telegram is a messaging app that has become very popular in the cryptocurrency community to hear about announcements and to join in the discussion.
Tether or USDT is the largest stablecoin on the market. The cryptocurrency is ‘tethered’ to the price of $1 so rarely ever fluctuates at all.
The total supply of a cryptocurrency is the amount that will only ever be created. In Bitcoin’s case, this amount is 21 million.
A transaction fee is the price that a user must pay for the blockchain to process the transaction. Every cryptocurrency has a transaction fee which will vary depending on the congestion of the network.
A wallet is where you store your cryptocurrency. There are a variety of a different wallet types, including hardware wallets, paper wallets and online wallets.
A term used to describe a person who would sell on a dip in the price. They are considered to have weak hands as they did not have the strength to ‘hodl’.
Yield Farming is a cryptocurrency investment strategy that has become extremely popular with the rise of DeFi protocols. By lending your cryptocurrency to other users via a decentralised platform it is possible to earn high levels of APY (annual percentage yield). This is in stark contrast to traditional forms of finance where interest rates have been at historically low levels since the 2008 Financial Crisis. Since their launch however, there have been many protocols that have either been hacked or where the developers have gone AWOL leaving many empty handed. With the high APY via Yield Farming comes high risk.
zk-SNARKs, is a form of a “zero-knowledge proof” protocol or by their more technical term “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” help in not only speeding up blockchain transactions but by also increasing the privacy of the transaction as well. They are most commonly used on the Zcash blockchain, a privacy focussed cryptocurrency.
It is so important you have a comprehensive understanding of the space, before you start trading cryptocurrencies.
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