Key Takeaways
- Cryptocurrency is a relatively new and rapidly evolving field, which has led to the development of unique jargon and terms.
- These terms are often used to convey complex ideas concisely and efficiently.
With the current trends, crypto and related languages are popping up everywhere, from mainstream media to the most niche corners of the internet. The technical language used to talk about crypto investments makes even the most interested individuals shake their heads and turn away.
If you are one of the people intimidated by the space, don’t sigh and give up! We have put together a glossary of standard terms you are likely to come across to make crypto easier:
A
Altcoin – Constitutes any other cryptocurrency other than Bitcoin.
Addresses – A unique address identifies where crypto sits on a blockchain. A coin’s ownership data is stored here.
Airdrop – A marketing campaign that constitutes the expedited distribution of a cryptocurrency through a population of people.
All-Time High / All-Time Low – This is the highest price that a cryptocurrency can achieve. It is abbreviated chiefly as ATH. The opposite of this is the all-time low (ATL).
ASIC – Standing for an Application-Specific Integrated Circuit, an ASIC is a powerful and expensive computing device primarily used for mining crypto.
Ape – The act of rapidly investing in a new or trending cryptocurrency, token, or DeFi project without conducting in-depth research or due diligence.
Automated Market Maker (AMM) – A decentralized exchange that uses algorithms to provide liquidity and facilitate trades.
B
Bitcoin – The original, most significant, and best-known cryptocurrency.
Blockchain – The underlying technology used by nearly all cryptocurrencies. It is a complete ledger of transactions held simultaneously by multiple nodes on a network.
Bear, Bearish – It is mainly when the price of cryptocurrencies has an adverse price movement.
Bull, Bullish – This happens when the price of cryptocurrencies has a favorable price movement.
Block – The blockchain is made up of blocks. Every block holds a historical database of all crypto transactions made until it is full.
Burned – When a coin in any specific cryptocurrency has been made unspendable.
Byzantine Fault Tolerance (BFT) – A property of distributed systems that allows them to continue operating correctly even if some nodes are malicious or fail.
Blockchain Explorer – A tool that allows users to view transactions and other data on a blockchain network.
Bridge – A protocol that allows for the transfer of assets between different blockchains.
C
Coin – An informal term for cryptocurrency.
Cryptocurrency – Constitute a digital asset that stores the value of goods and services.
Cold Wallet – A physical storage device that stores crypto offline.
Cryptography – It is a process of secretly keeping info secure by writing it into indecipherable codes.
Circulating Supply – It refers to the number of cryptocurrency coins or tokens that are publicly available and circulating in the market.
Custodial Wallet – A wallet where a third-party service provider holds the private keys to your cryptocurrency, offering convenience but potentially compromising security.
Chain – A series of blocks linked together in chronological order, forming the backbone of a blockchain.
Consensus Mechanism – The method used to validate transactions and maintain the integrity of a blockchain network. Examples include Proof-of-Work (PoW) and Proof-of-Stake (PoS).
Circulating Supply – The total number of coins or tokens currently circulating and available for trading.
Cryptojacking – The unauthorized use of someone else’s computer to mine cryptocurrency.
Centralized Exchange (CEX) – A platform where cryptocurrency trading occurs through a centralized intermediary like Binance, Coinbase, etc.
D
dApp – Short for decentralized application. It is an app whose control is not through a central authority. The distribution of a dApp is done on a blockchain. As such, users can send and receive data directly without an intermediary.
DAO – An acronym for Decentralized Autonomous Organization, a DAO is a group working together toward a shared goal and abiding by the rules in the project’s self-executing computer code.
DeFi – Stands for Decentralized Finance, which enables users to send and receive assets directly without intermediaries.
Degen – Stands for degenerate trading, or degen trading for short. This refers to traders frequently engaging in highly risky and speculative trading strategies in the crypto market.
Decentralized Exchange (DEX) – A peer-to-peer platform for trading cryptocurrencies without a central authority. Notable examples are Uniswap, Pancakeswap, and Sushiswap.
DePIN – Stands for Decentralized Physical Infrastructure Networks. It is an umbrella term for networks that leverage blockchain technology to decentralize control and ownership of physical infrastructure in the real world.
Dump – It describes selling a large amount of cryptocurrencies.
DYOR – An acronym for “do your research.”
DLT – Stands for Distributed Ledger Technology. The system consists of a shared database replicated and distributed across multiple sites, countries, and institutions.
Double Spending – A fraudulent transaction where a single digital currency unit is spent more than once.
Dust – A trace amount of cryptocurrency left over after a trade or transaction.
Diamond Hands – A term used to describe investors who hold onto their cryptocurrency assets despite significant price fluctuations.
E
Exchange – A platform that allows you to buy and sell crypto assets.
Ether / ETH – The native cryptocurrency token of Ethereum.
Encryption – It involves the conversion of plain text into unintelligible text with the use of a cipher.
Escrow – A neutral third party that holds funds during a transaction to ensure trust between the parties.
ETF – Stands for Exchange-Traded Fund. It tracks cryptocurrencies’ price performance by investing in a portfolio linked to their instruments.
Ethereum Virtual Machine (EVM) – A software platform that executes smart contracts on the Ethereum blockchain.
F
Fiat – This mainly includes all traditional currencies like the US dollar, the Euro, or the British pound.
Fork – This happens whenever a community changes the blockchain’s protocol or fundamental set of rules.
FUD – Stands for fear, uncertainty, and doubt. It describes a strategy to manipulate market prices, which involves spreading misinformation to lower prices. Peddlers of FUD are called FUDsters.
FOMO – Stands for fear of missing out. It is used to express anxiety about making a trading decision. Typically, this occurs when individuals have not anticipated a change in price for a digital asset or potential investment.
Flippening – Refers to a future probable scenario where Bitcoin seizes to have the highest market cap and is overtaken by Ethereum.
Fungible – A property of assets where one unit can be exchanged for another without affecting the value.
G
Gas – It is the measurement given to an operation in the Ethereum network, relating to the computational power required to complete it.
Gwei – It is the denomination that defines the cost of gas.
Genesis Block – A term referring to the first block ever mined in a blockchain.
GM – Stands for good morning. It is an acronym used in the crypto space and is typically found on various social media platforms.
H
Hash – A hash results from data being put through a unique hashing algorithm. It compresses data into a nearly unique alphanumeric string of text.
Hash Rate – A measure of the computing power used to mine cryptocurrency.
Hack – An unauthorized access to a computer system or network, often with malicious intent.
Hard Fork – A permanent split of a blockchain into two separate chains, where one chain continues with the original rules and the other implements a new set of rules.
Halving – The number of Bitcoins to be created is finite, locked at 21 million. To ensure the cap is kept, the amount Bitcoin miners earn for filling one block is halved upon completing that block.
Hot Wallet – It is a form of online crypto storage provided by a third-party exchange.
Hardware Wallet – A physical device that stores cryptocurrency private keys offline, providing high security.
HODL – stands for hold on for dear life. It is crypto slang for buying and holding indefinitely.
Hyperledger – An open-source, enterprise-grade distributed ledger technology platform.
I
ICO – Stands for Initial Coin Offering. It is the cryptocurrency equivalent of an initial public offering (IPO).
IDO – Stands for Initial DEX Offering. It is a decentralized and permissionless crowdfunding method that leverages decentralized exchanges to raise funds for crypto projects.
IEO – Stands for Initial Exchange Offering. It is a method where a startup or project proposes its tokens for acquisition on a cryptocurrency platform.
IGO – Stands for Initial game Offering. It is a fundraising event in which investments are targeted at blockchain games.
Impermanent Loss – A potential risk faced by liquidity providers in decentralized finance protocols, specifically in automated market makers like Uniswap or PancakeSwap.
Interoperability – The ability of different blockchains or systems to communicate and exchange data or value with each other.
Inflation – The rate at which new tokens are added to the circulating supply, which can affect the token’s value.
Immutable – Unchangeable or fixed; a characteristic of blockchain data.
Incentive – A reward or benefit to encourage participation in a blockchain network or to complete specific tasks.
J
Jager – It is the smallest denomination of Binance Coin (BNB).
K
KYC – Stands for Know Your Customer. It refers to a financial institution’s obligation to verify a customer’s identity in accordance with AML laws.
L
Lambo – Slang for achieving significant financial success from cryptocurrency trading, enough to purchase a Lamborghini.
Laser Eyes – A meme used to express enthusiasm and community bonding, often involving profile pictures with laser eyes.
Ledger (Term) – It records financial transactions that have ever occurred on the blockchain network.
Ledger (Company) – A hardware wallet manufacturing company developing various products and services to enable individuals and companies to securely buy, store, swap, and manage their digital assets.
Lightning Network – A layer-2 scaling solution for Bitcoin, enabling faster and cheaper transactions off-chain.
Liquidity – The ease with which a cryptocurrency can be bought or sold without significantly affecting its price.
Liquidity Pool – A pool of crypto assets used to facilitate trading on decentralized exchanges.
Liquidity Provider – An individual or entity that supplies assets to a decentralized exchange to facilitate trading and earn rewards.
Layer 1 – It is a network that acts as infrastructure for other applications, protocols, and networks to build on top of.
Layer 2 – Refers to any off-chain network, system, or technology built on top of a blockchain (commonly known as a layer-1 network) that helps extend the capabilities of the underlying base layer network.
M
Market Capitalization – Short for market cap, it is the total market value of a cryptocurrency. It is primarily the total number of supply coins multiplied by the price.
Mining – It is the process of verifying transactions through a Proof-of-Work consensus mechanism. It involves using computer hardware to solve a hash with trillions of possible combinations.
Miner – An individual or entity that uses their computing power to verify transactions on a blockchain network and earn rewards.
Metaverse – A collective virtual shared space created by converging virtually enhanced physical reality and physically persistent virtual spaces.
Memecoin – It is an altcoin based on a meme, a kind of inside joke in the form of an image repeatedly altered and shared online.
Mainnet – A term used to describe a working, fully operational blockchain.
Minting – The process of creating new tokens or coins on a blockchain network.
Mnemonic Phrase – A group of words representing a private key, making it easier to remember and recover.
Multi-Signature Wallet – A wallet that requires multiple private keys to authorize a transaction, enhancing security.
N
Node – Mainly a computer or device connected to other computers or devices holding a copy of a blockchain.
Network – It constitutes all the nodes committed to helping the operation of a blockchain.
NFT – Stands for Non-Fungible Tokens. NFTs are tokens used to represent ownership of unique items on the blockchain.
Nakamoto Consensus – It is a protocol used by blockchain networks to achieve agreement on the blockchain’s state.
Non-Custodial Wallet – A wallet where the user has complete control over their private keys rather than a third-party custodian.
O
Oracle – A data feed that provides real-world data to a blockchain network. This data can include anything from stock prices to weather information.
Off-Chain – Transactions or data that occur outside of the main blockchain network.
On-Chain – It is a transaction that occurs on a blockchain.
Open-Source – Software whose source code is publicly available and can be modified by anyone. Many cryptocurrencies and blockchain platforms are open-source.
Order Book – A list of buy and sell orders for a particular asset, organized by price and time.
Over-The-Counter (OTC) – Trading that occurs directly between two parties rather than through a centralized exchange.
Ordinals – It is a protocol that essentially allows NFTs to be created on the Bitcoin blockchain.
P
P2P – Standing for peer-to-peer, refers to a transaction between two people without an intermediary.
Private key – A string of numbers and letters to access your wallet. Never share this with anyone.
Public Key – The public-facing address of your crypto wallet. You must share your public key to receive funds into your account.
Proof-of-Work (PoW) – It is the original consensus algorithm in a blockchain network used by Bitcoin.
Proof-of-Stake (PoS) – It is a consensus mechanism for blockchains that works by selecting validators based on their holdings in the associated cryptocurrency.
Pump & Dump – A manipulative strategy where traders artificially inflate the price of a cryptocurrency to sell it at a higher price.
Q
Quantum Computing – This refers to using quantum mechanics to perform computations. It’s a potential threat to the security of many cryptocurrencies, as quantum computers could potentially crack the cryptographic algorithms used to secure them.
Quorum – In blockchain governance, a quorum is the minimum number of participants or tokens required to make a valid decision. It ensures that sufficient stakeholders agree on a proposal before it can be implemented.
R
Rekt – A slang term for the word “wrecked.” It describes a trader who lost a ton of money from a bad trade.
Resistance Level – A price point where a cryptocurrency’s upward movement is likely met with selling pressure.
Return on Investment (ROI) – A measure of the profitability of an investment, expressed as a percentage.
Rug Pull – A fraudulent practice where developers abandon a project and take investors’ funds.
Real-World Assets (RWAs) – These are fungible or non-fungible tokens representing traditional financial assets on the blockchain.
S
Satoshi / Sats – Sats, the shorthand for Satoshis, refers to the smallest unit of Bitcoin. This term is a nod to Satoshi Nakamoto, the creator of the first digital currency.
Support Level – A price point at which an asset may find difficulty falling below as traders look to buy around that level.
Smart Contract – A program that executes itself on a blockchain when specific conditions are met without human intervention or an intermediary.
Seed – A random combination of words that your wallet generates, acting as security to secure it.
Staking – A process of locking up cryptocurrency to support the network and earn rewards.
Stablecoin – A cryptocurrency designed to maintain a stable value, often pegged to a fiat currency.
Seed Phrase – A sequence of words used to recover access to a cryptocurrency wallet.
Shill – Someone who promotes a cryptocurrency, often for personal gain.
Swap – A process of exchanging one cryptocurrency for another.
T
Tether – A company that issues a stablecoin called USDT, pegged 1-to-1 with the US dollar.
Token – It is an individual cryptocurrency. It refers to crypto running on a particular blockchain.
Transaction – A digital record of a value transfer between two or more parties on a blockchain.
Tokenomics – The economic model of a cryptocurrency, including supply, distribution, and incentives.
To The Moon! – This slang term is used when prices increase rapidly. It can be used both as a noun and a battle cry.
Testnet – A blockchain used for testing and experimentation without the risk of real funds on the main chain.
Total Value Locked (TVL) – The total value of assets deposited into a DeFi protocol.
Trustless – A system that operates without the need for intermediaries or trusted third parties.
Tokenization – The process of converting a real-world asset into a digital token on a blockchain.
U
Unconfirmed Transaction – A transaction that has been broadcast to the network but has not been included in a block yet.
Uniswap – A decentralized exchange on the Ethereum blockchain that allows users to trade tokens without intermediaries.
Undercollateralized Loan – A loan where the value of the collateral is less than the loan amount. This is common in DeFi lending protocols.
Underlying Asset – The asset or commodity on which a derivative contract is based. For example, Bitcoin is the underlying asset in a Bitcoin futures contract.
Unspent Transaction Output (UTXO) – The remaining cryptocurrency transaction amount after the recipient deducts the desired amount. UTXOs track ownership and spending of digital assets on the blockchain.
V
Volume – the total amount of currency traded in the open market at any given time.
Volatility – A market condition where prices fluctuate unpredictably.
Validator – In proof-of-stake systems, a validator is a node that stakes its cryptocurrency to verify transactions and secure the network.
Virtual Machine – A software environment that emulates a physical computer system, often used in smart contract platforms like Ethereum.
W
WAGMI – It is an acronym that stands for we’re all gonna make it. This deeply influences traders and investors and is used as motivation within the crypto community, representing a collective belief in achieving success and prosperity in the crypto market.
Whitepaper – A technical document released with a new crypto project explaining how the system of the project works.
Wallet – A digital storage device where cryptocurrencies are kept.
Whale – A large holder of cryptocurrency, often influencing market prices.
Wrapped Token – A token representing another asset on a different blockchain.
Web3 – A vision for a decentralized internet built on blockchain technology.
X
XRP – The digital asset of the Ripple network, primarily used for cross-border payments. It aims to provide fast and low-cost transactions.
Y
Yield Farming – A decentralized finance (DeFi) strategy where investors lend or stake their cryptocurrency to earn interest or rewards.
Yield Aggregator – A platform that automatically searches and combines the best yield-farming opportunities across multiple DeFi protocols.
YOLO – An acronym for “You Only Live Once,” often used in the context of risky investments, including cryptocurrency trading.
Z
Zero-Knowledge Proof (ZKP) – A cryptographic method that allows one party to prove to another that they know a value without revealing the value itself. This is often used in blockchain technology to ensure privacy and security.
Final Thoughts
Understanding the language is central to success when taking on new pursuits in the crypto space. Before you can devise an effective strategy or select appropriate tools to help you buy, trade, and monitor the market, you should have a certain level of crypto literacy. Hopefully, this article contributed to that effort by clarifying important terms and explaining essential concepts!
