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Cryptocurrency Glossary

Just as with any specialized field, cryptocurrencies also come with their own terminology. Our cryptocurrency glossary includes the most frequently used terms and concepts related to cryptocurrency to make it easier for you to understand.

cryptocurrency glossary

Address

Is a cryptocurrency address is used to send and receive transactions into Digital Wallets. Similar to a routing number, wallet owners share this address with anyone they wish to receive funds from.

Altcoin

Altcoins are abbreviated from bitcoin alternatives. It’s used to describe a single cryptocurrency that is not bitcoin.

Arbitrage

Arbitrage is a technical term from the world of finance and economics. It is a form of trading that capitalizes on the price difference between two or more markets.

ASICs

ASICS are application-specific integrated circuits designed to process only a specific kind of application. An ASIC is programmed to do one thing only, and it does this much faster and more efficiently than multi-purpose processors. Bitcoin mining ASICs are tailored to mining bitcoins quickly and efficiently.

ASICs

ASICS are application-specific integrated circuits designed to process only a specific kind of application. An ASIC is programmed to do one thing only, and it does this much faster and more efficiently than multi-purpose processors. Bitcoin mining ASICs are tailored to mining bitcoins quickly and are more efficient.

ATH

ATH is an acronym for all-time high. In cryptocurrency, ATH refers to the highest valuation reached to date for a particular currency.

Bear Market

Bear Market refers to a market where the prevailing trend is falling prices, encouraging selling. Bearish is used to describe speculators and analysts who have an outlook that assumes falling prices are likely to occur in the near future. The opposite of bearish is bullish.

Bitcoin (BTC)

The world’s first peer-to-peer decentralized digital currency. As the leading cryptocurrency, the Bitcoin network is a payment system that functions without an intermediary, unlike banks and other conventional payment administrators.

Block

Blocks are where unalterable data from the network is stored, mainly the data for transactions.

Block Reward

The block reward is the prize miners receive for successfully validating a new block and adding it to the chain.

Blockchain

Blockchain refers to the public ledger that records cryptocurrency transactions. A blockchain is a linear, chronological list of transaction records called blocks. The blocks are linked together and secured against tampering using cryptography.

A blockchain is not stored in a single set of central servers controlled by one entity. Instead, a blockchain is spread around the globe using a vast network of private computers that simultaneously store data and execute computations.

Bull Market

A term used to refer to a market where the prevailing trend is rising prices, encouraging buying. Bullish is used to describe speculators and analysts who have an outlook that assumes raising prices are likely to occur in the near future. The opposite of bullish is bearish.

Coin

In cryptocurrency, the term coin refers to individual units of account within a particular cryptocurrency.

Cold Storage

Cold storage refers to a method of storing a reserve of cryptocurrency offline. Cold storage lowers the risk of theft from hackers.

Confirmation

Confirmation refers to the process of verifying a bitcoin transaction on the blockchain. When a new block is created and added to the blockchain by miners, it records new transactions that have occured since the last block was created. A transaction that is verified and recorded in a block has been confirmed.

Cryptocurrency

A cryptocurrency is a digital currency, that uses cryptography and encryption techniques to regulate the generation of units of currency and to verify the transfer of funds. Like traditional currencies, cryptocurrencies are designed to function as a unit of account, store of value, and as a medium of exchange. Unlike traditional currencies, cryptocurrencies are decentralized from a governing authority.

Cryptography

Cryptography is the practice and study of techniques for secure transmission and storage of data. It includes a wide variety of methods for storing and transmitting data in a form readable only by those who are intended to read and process it. Cryptography is the basis for all cryptocurrencies.

Day Trading

Day trading refers to a financial activity in which individuals or organizations buy and sell financial instruments within the same trading day or very frequently. Because day traders only hold on to the securities they purchase over the short term, day trading is considered highly speculative.

Digital Money

Digital money refers to only those types of currency that are available exclusively in digital form. Digital currencies do not exist in the physical realm, and therefore do not circulate as banknotes and metal coins.

Distributed Ledger

A distributed ledger refers to a database of transactions that is stored and updated in a large network of computers and servers. This means that transactions are public, and recorded at each network point, or “node”.

ERC-20

ERC-20 is the Ethereum token standard used for Ethereum smart contracts (associated with tokens). ERC-20 gives developers the ability to understand in advance how any new token based on the standard will behave on the Ethereum platform. Ethereum-based apps can then easily adapt to any new cryptocurrency or token that follows the ERC-20 protocol.

Ether

Ether is the primary value token of the Ethereum blockchain and distributed computing platform.

Ethereum

Ethereum is a distributed public blockchain network similar to Bitcoin. However, there are important differences between both. Ethereum uses smart contracts and gives developers resources to raise funds. Ethereum also has a faster transaction speed than the Bitcoin network.

Exchange

In cryptocurrency, exchanges are where cryptocurrencies are bought and sold by traders, much like in traditional stock exchanges.

Exchange Rate

An exchange rate is the value of a currency in terms of another currency. Also known as a currency pair.

Fiat currency

Fiat currency refers to currency without any intrinsic value other than by legal decree. Fiat currencies are usually regulated and controlled by a government or central bank.

FOMO

In cryptocurrency this means “Fear of Missing Out.” Cryptocurrencies that are quickly rising in value often draw interest from investors due to the fear of missing out (FOMO) on a chance to get in when prices are still low.

FUD

In cryptocurrency this means “Fear, Uncertainty, and Doubt”. FUD refers to negative analysis that stimulates investors to step back from the market. FUD can cause the perceived value of a cryptocurrency to drop.

Fork

A hard fork splits a blockchain into two divergent chains when a cryptocurrency’s existing code is changed, which is why two very simular cryptocurrencies arise, such as BTC and BTG. A soft fork is only results in one coin.

Genesis Block

A Genesis Block is the first block created on a blockchain. All cryptocurrencies begin with a Genesis Block.

Going Long

Going long is a term used to describe when an investor purchases an asset with the assumption that the asset price is likely to rise in the future. Also called a long position, going long is the action of an investor with bullish expectations about a given asset. Going long on bitcoin means purchasing bitcoin because the price is believed to rise in the near future. The opposite of going long is going short.

Going Short

Going short is a term used to describe a position when an investor expects an asset to lose value. Going short involves borrowing an asset from a broker, then immediately selling the asset at the current price. Once the asset loses value, the investor can repurchase the asset and pay back the broker with it. The investor profits off the difference between the asset’s value when it was initially borrowed and the lowered value when the asset was paid back. Going short is the opposite of going long.

Hashrate

The hashrate is the measuring unit for the processing speed of a given cryptocurrency network. The higher the hashrate, the faster the cryptocurrency network will complete transactions and other operations.

Hedging

Hedging describes an investment meant to reduce risk of price movements in a related asset.

HODL

in cryptocurrency means holding on to a cryptocurrency for the long term rather than selling it for a profit when it hits a certain valuation.

Hot Wallet

A hot wallet is a method of keeping a cryptocurrency reserve or wallet connected to the internet.

Initial Coin Offering

An initial coin offering (ICO) involves selling a newly created cryptocurrency or token to raise money for a startup, software project, or blockchain network. Investors generally buy tokens from ICOs which they hope to sell on an exchange for a profit later.

JOMO

in cryptocurrency means the “Joy of Missing Out.” It happens when an individual is glad they didn’t invest in a cryptocurrency that proved to be less valuable than initially imagined.

KYC

KYC is an acronym that stands for “Know Your Customer” or “Know Your Client”. KYC is used to refer to the methods a business deploys to verify and record the identity of its clients.

Limit Order

A limit order is a term from finance used to describe an order to buy or sell an asset at a specific price or better.

Long

A long position refers to when a party has invested in an asset with the expectation that the asset’s price will rise.

Margin Trading

Margin trading refers to the practice of investing in assets with money borrowed from a broker.

Market cap

The market capitalization of a cryptocurrency refers to the total value measured in US dollars of all the coins in a given cryptocurrency.

Mempool

The mempool is the pool of unconfirmed transactions on the Bitcoin network. After a transaction happens, it is first placed in the mempool before it gets picked up confirmation.

Multisig

Multisig short for multisignature. It is a security mechanism that requires more than one person to authorize access to a system. Most cryptocurrencies support both single signature and multisig transactions. Multisig is useful for organizations that do not want a single individual in total control of its cryptocurrency wallet.

Network

A cryptocurrency network is a peer-to-peer payment system that works under a cryptographic protocol. Users send and receive coins by sending messages to the network using compatible cryptocurrency wallet software. Miners solve complex, time consuming math equations to validate these transactions.

Network Fee

A network fee is a fixed amount of cryptocurrency a user must pay to transfer an amount via the blockchain. Network fees go to the miners who verify the transactions. Anytime you buy or sell a cryptocurrency, you must pay a network fee. Higher network fees generally mean faster transaction speeds as they are given priority over transactions with lower fees.

Node

A node is a computer on a cryptocurrency network.

Private Key

A private key is a cryptographic code made up of 51 alphanumeric characters. A private key allows its owner to access his/her cryptocurrency assets and gives its owner unique protection from theft and unauthorized access to funds. A private key is one half of a key pair. The other half is the public key (or address). Funds can be deposited with knowledge of the public key, but withdrawn only with access to the private key.

Public Key

The public key is the known identity of a cryptocurrency reserve or wallet. It serves as an address known to the public, and allows for the deposit of funds into the wallet. A public key is also one half of a key pair. The other half is the private key, known only to its owner.

Rekt

In cryptocurrency decribes describe the condition of one who has suffered a major financial loss due to unwise cryptocurrency trades.

Satoshi

A satoshi is one hundred millionth of a bitcoin. Each bitcoin can be divided into fractions up to 8 digits long. That means 1 bitcoin can be divided into a maximum of 100,000,000 subunits. Each 0.00000001 of a bitcoin is called a satoshi. This is the smallest possible fraction of a bitcoin.

SegWit

SegWit is a soft fork that changed the rules of the transaction format used in the Bitcoin blockchain and increased the block size limit. SegWit solved the problem by stripping off the signature from the public address of the sender in a transaction and moving it to a structure towards the end of the transaction.

Short

A short position refers to when a party has borrowed against an asset with the expectation that the asset’s price will fall, allowing them to profit from the difference.

Smart Contract

A smart contract can be used to set out the parameters of a legally-binding agreement in a transparent way that minimizes conflict. Smart contracts are stored and replicated on the blockchain and enforced by the network of computers that run the blockchain.

TA

TA is an acronym for Technical Analysis. TA considers the the history of a coin with regards to price charts and trading volume, without focusing on value projections. TA is useful for traders to asses the crypto market.

Token

Token is a word often used interchangeably with cryptocurrencies, or single units of a particular cryptocurrency, but tend to represent a digital asset, utility, or equity that runs on top of another blockchain.

Trading Pair

A trading pair entails a trade between two different kinds of currency.

Trading Volume

Trading volume refers to the total value of assets and/or securities that are traded in a given period.

Volatility

Volatility in finance is the level of variation in asset prices measured over time.

Wallet

A digital wallet stores bitcoin and other cryptocurrencies. A digital wallet is exclusively controlled by its owner.

Whale

A whale is a cryptocurrency trader with significant financial resources. Whales are major players in the market, and can even affect the exchange rate of a cryptocurrency by buying or selling a large amount of coins.

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