CrypticCoin

Cryptocurrency Terminology

For a person learning about cryptocurrencies, there are many terms that you may have never heard of. This article will provide a short explanation of important terms to know, and will be updated over time.

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51% Attack: A 51% attack refers to an attack on a blockchain. Generally, a block is validated on a blockchain once the majority of miners can agree and confirm the same transactions on that block. In a 51% attack, the attackers will take control of over 50% of the networks mining power (hashrate), and can then prevent new transactions, forge false transactions and modify additional transactions.

 

A

 

Arbitrage: Arbitrage is when a trader will simultaneously buy and sell a cryptocurrency on two different exchanges to take advantage of price discrepancies between the two (buy the coin on the exchange where the price is lower and simultaneously sell on the exchange where the price is higher).

Altcoin: “Altcoin” is short for alternative coin and encompasses any coin other than Bitcoin, which has been generally accepted as the primary cryptocurrency.

AES 25: Meaning algorithm applied for minting AES 256 Cryptogeld.

ASIC:- Application Specific Integrated Circuit – means a customized chip for a specific application like mining.

ATH:  This is a shorthand term for “All-Time High.” It refers to the all-time high price of a specific coin or market, generally denominated in USD or Satoshi.

Address: the location of a wallet from which you would send or receive cryptocurrency. The address format is generally manifested in a long string of alphanumeric characters.

 

B

 

Bagholder: someone who still holds an altcoin despite a large downward move and often well below their purchase price; alternatively, someone who owns a coin that is steadily falling.

 

BCH: means digital currency abbreviation Bitcoin Cash (separation from Bitcoin).

 

BCG: means digital currency abbreviation Bitcoin Gold (separation from Bitcoin).

Bear/Bearish: when sentiment is “bearish”, it means that market sentiment is negative and participants believe that prices will decline.

Block: a single collection of transaction data on the blockchain.

Blockchain: the public ledger generally underlying a cryptocurrency, which records all transactions that occur within the network and validated by multiple market participants.

Bot: it’s a trading bot powered by an artificial intelligence algorithm that will buy and sell based on its programmed series of rules.

Bubble: when a market is extremely overvalued, usually followed by a crash.

Buy order: an offer to buy cryptocurrency on an exchange entered by a buyer. The buyer can purchase at market price (lowest price a seller is willing to sell at), or at a fixed (limit) price.

Bull/Bullish: When sentiment is “bullish”, it means that market sentiment is positive and participants believe that prices will rise.

 

C

 

Coin: often used interchangeably with cryptocurrency and token, generally referring to a coin that’s purpose is to be used as money.

Consensus Algorithm: the set of rules/algorithm used by miners to write blocks on the blockchain (example, proof of work, proof of stake).

Coldwallet: Means a cryptocurrency storage medium, created and stored entirely offline.

Crypto: refers to cryptocurrency, coin or token.

 

D

DDoS: This is a shorthand way to say, “Distributed Denial of Service.” This is a type of hack on a system where an attacker will flood the network with requests in an attempt to overload and crash the system.

 

Difficulty Hashrate: Means degree of difficulty of mining a block.

Day trading: frequent buying and selling of cryptocurrencies, which may occur every day and several times a day. Day trading is often performed by professionals and includes high frequency trading algorithms. These (mostly algorithms) can get in and out within a few millisecond.

Decentralization: the property of not being owned or controlled by a single individual or group of people.

Dead Cat Bounce: refers to a situation where a stock, crypto etc. experiences a short-lived burst of upward movement after a large down move within a larger downtrend.

Distributed Ledger: A distributed general ledger (also known as a shared general ledger) is a consensus of replicated, shared and synchronized digital data geographically dispersed over multiple locations, countries or institutions. There is no central administrator or central data repository.

 

Dual-Mining: mining 2 types of cryptocurrenies at a time using 2 different algorithms on 1 system.

 

DYOR: “Do Your Own Research”, referring to properly assessing a project and its risks prior to investing in it.

 

E

Escrow: Holding funds or assets in custody (a third party) on behalf of two other parties that are in the process of completing a transaction. Only when the contractual obligations have been fulfilled, the funds are asset will be released.

Exchange: a marketplace where you can buy and sell cryptocurrencies.

F

Fiat currency: Fiat is money that is recognized by governments and recognized as a legal form of payment.

Fork: a permanent divergence of an alternative operating version of the current blockchain, resulting in the creation of a new coin. It may occur as the result of a 51% attack, a bug in the program, or more commonly a new set of consensus rules come into existence.

FOMO: This is a shorthand way of saying “fear of missing out.” It refers to situations where an individual will purchase a coin after a strong bullish move has occurred, so as to not miss out of the continuation of the bullish move. For most, this often results in buying high and realizing losses.

FUD: Fear, Uncertainty and Doubt – a tactic of decreasing trust in a cryptocurrency in order to drive the value down so that it can be purchased cheaply or to drive people to the competition.

 

G

Genesis Block: The Genesis Block is also known as Block Zero or Block 0. It is the ancestor that every Blockchain network’s block can trace its origin back to. Remember how every block in a Blockchain is linked back to the previous block using a hash in the block header? You keep going back and you realize every block is hence linked to the genesis block.

 

H

Hash: the process of taking an input of any length and outputting a string of letters and numbers of the same format. For example, SHA-256 will always have an output of 256 bits in length.

Hardware wallet: storage medium for cryptocurrency that uses a physical piece of hardware to validate the transactions and store private keys.

Hyperledger: means an open source blockchain platform, which was launched in December 2015 by the Linux Foundation.

HODL: “Hold On For Dear Life” – refers to cryptocurrency holders holding on to their coins despite significant losses. This strategy has worked for some due to the extremely volatile nature of cryptocurrency price fluctuations.

I

ICO: This is another shorthand term that means “Initial Coin Offering.” This is inspired from an Initial Public Offering (IPO) of a company’s stock for sale on public equity markets. Investors generally attempt to sell the coins purchased during an ICO for a profit once the coin is traded on exchanges.

IOTA- (MIOATA) Cryptocurrency focused on micropayments and connecting all “Internet of Things” devices on their platform. IOTA uses a distributed ledger technology, which is different from a blockchain like Bitcoin.

J

K

L

Lambo: Short for Lamborghini, which is what cryptocurrency enthusiasts want to buy with their crypto trading profits, as opposed to Ferraris (because they’re a “Wall Street thing”).

Limit Buy/Sell Order: A limit order is an order placed on an exchange to buy or sell a cryptocurrency at a specific price. A buy order will only be executed at the limit price (or lower) and a sell order will only be executed at the limit price (or higher).

M

Mining: In order to maintain an up-to date and accurate public ledger, miners dedicate their resources to the system, generally in the form of computing power to record transactions on the blockchain. When miners record transactions on the network, they are compensated through mining fees paid on the transaction, and through the discovery of new blocks.

Market cap: the total value of a cryptocurrency network, calculated by multiplying the total supply of coins by the current price of an individual coin

Market Order: A Market order is a buy or sell order to be executed immediate at the current market price. A market order is the simplest of order type.

Margin Trading: an act of borrowing funds against your existing funds (collateral) and often magnifying the leverage (intensity) of your trades.

 

Multisig: needing more than one signature to approve a transaction.

 

N

 

Nocoiner: A nocoiner is someone without cryptocurrency. It’s an outsider who mocks cryptocurrencies and anyone who loves it. Although the term is used for someone who does not own cryptos, it is usually used for cynics and skeptics.

 

O

 

P

P2P: Is a peer-to-peer network, i.e. a computer network without fixed workstations and servers. A peer-to-peer network uses a serverless network technology that allows participants to share files amongst each other.

Private Key: A private key is the string of letters and numbers used to generate a public address and to transfer funds out of the wallet.

Public Key: A public key is derived from the private key and is the address is provided to others to receive cryptocurrency.

Pump N’ Dump: a coordinated purchase, often by a group of individuals, to push the price of a cryptocurrency to abnormally high levels and subsequently sell the coins quickly thereafter at those abnormally high prices, driving the price down quickly.

Q

R

S

Smart Contract: It’s a computer code that allows for the execution of an agreement upon the fulfillment of an obligation, eliminating the need for a middleman.

Shill: a person that promotes a coin with the intent to drive its price up because he already owns some

Shorting: Selling a cryptocurrency that one does not own, with the hopes of purchasing it at a lower price later on, profiting from selling it at a higher price today.

Stable coin: A crypto-currency that is designed to hold a stable value (such as USDT which is pegged to the value of 1 US dollar).

Shitcoin: a coin that generally has no actual underlying project or future prospect.

Stop-loss: a type of sell order that is triggered only if a coin drops below a specific price. It is used to protect against further downward movement below the specified price.

T

Trading wall: a large sell order on the order book, increasing the difficulty of moving past that price as many buyers are required to purchase all of the coins to push through the wall.

Transaction fee: a fee paid to miners to write the transaction on a block on the coin’s blockchain.

Technical analysis (TA): analysis of a cryptocurreny’s chart using various methods and indicators to attempt to predict future movements.

Tokens: often used interchangeably with coin and cryptocurrency and refers to a token that is used to perform an action on a platform.

To The Moon: is a statement that is used when the prices of the cryptocurrencies rise significantly. If the price of a coin is “mooning”, this means that the price has reached a peak.

U

V

Volatility: Volatility refers to the rapid and significant price variations in short periods of time.

W

Wallet: a place where you store your cryptocurrencies, can be online, offline, software, hardware and even printed on paper.

White paper: A white paper is a detailed description of the project, including information on the team, technology, token economics etc.

Whale – someone who owns an significant amount of cryptocurrency and can significantly affect the price of the coin when trading those amounts.

X

Y

Z

ZEC: Digital currency abbreviation for ZCASH, ZCASH was created in September 2015 and uses a Private Blockhain.

The list is in no way exhaustive. You are bound to come across many other terms that we have not covered here, but for a beginner, this list is your best friend. Hope this helped you get started and Happy trading!

 

References/Sources:

 Hickson, Kiah. “Medium.” medium.com. N.p., 4 Feb. 2018. Web. 9 Jul. 2018.

“Trading Terminology.” cryptocritics.com. Crypto Critics, 1 Jan. 2017. Web. 9 Jul. 2018.

Middleman, Max. “21 Terms to Understand Cryptocurrency.” medium.com. Medium, 16 Dec. 2016. Web. 9 Jul. 2018. 

Fadilpašić, Sead. “A Guide to Crypto Terminology.” cryptonews.com. Cryptonews, 12 Apr. 2018. Web. 9 Jul. 2018 

Bitcoin Wiki.” en.bitcoin.it. Wikipedia, 27 Mar. 2018. Web. 9 Jul. 2018

Business News Definitions Equity.” economictimes.indiatimes.com. Economic Times/India, 1 Jan. 2017. Web. 9 Jul. 2018.