Glossary of all the cryptocurrency terms you need to know
Glossary of all the cryptocurrency terms you need to know
If you want to live in a world of cryptocurrencies, you need to know at least the main cryptocurrency terms. The CryptoAddicted team, based on the experience gained in these years and after an adequate research on several sites and cryptocurrency related forums on the web, has collected a glossary of all the terms you may find around and that can help you better understanding this world.
General Cryptocurrency Terms
Generally any crypto-currency other than Bitcoin or Ethereum. (Though some Bitcoin folks would probably still say Ethereum is an altcoin). Claim a lot of Altcoin from the CryptoAddicted Faucets List.
Blockchain is distributed ledger, secured by cryptography. It is essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Instead of the data is stored on a single centralized server, the data is copied across thousands and thousands of computers worldwide. More detailed information available on Wikipedia Blockchain.
The process of moving crypto-currency ‘offline’, as a way of safekeeping your coins from hacking. There are a variety of ways to do this, but some methods most commonly used:
- Printing out the QR code of a software wallet and storing it somewhere safe, such as a safety deposit box.
- Moving the files of a software wallet onto a USB drive and storing it somewhere safe.
- Using a hardware wallet.
A Cryptocurrency Faucet is a website that grants to you to earn a free small amount of bitcoins (named satoshis) or other altcoins. Read more on What is a Bitcoin Faucet and visit the Crypto Faucets List.
A situation where a blockchain splits into two separate chains. Forks generally happen in the crypto world when new ‘governance rules’ are built into the blockchain’s code. More information available on Hard Fork Wikipedia.
A device that can securely store crypto-currency. Hardware wallets are often considered as the most secure way to hold crypto-currency. Two of the most popular hardware wallet models are: Ledger Nano S and Trezor.
A High Yield Investment Program is a website that grants to you to earn a very high interests of your deposit funds. Hyips require to you to send a deposit in Bitcoin or in US dollar and, after a specific period, they will return your money with a quantity of interest that can go from 0.1% to well over 10%.
Initial Coin Offering, somewhat similar to an IPO in the conventional business world. Startups issue their own tokens essentially by a crowdfunding for bitcoin, ethereum and other currencies.
The process of trying to ‘solve’ the next block. It requires obscene amounts of computer processing power (CPU and GPU) to do effectively, but is rewarded with a specific amount of a minable cryptocurrency. You can leverage on a pool, like Minergate, or on cloud, like Genesis Mining or others.
A computer especially designed for processing proof-of-work blockchains, like Ethereum. They often consist of multiple high-end graphic processors (GPUs) to maximize their processing power.
A computer that possesses a copy of the blockchain and is working to maintain it.
Proof-of-stake. The proposed future consensus algorithm to be used by Ethereum. Instead of mining in its current form, people that own ETH will be able to ‘lock up’ their ether for a short amount of time in order to ‘vote’ and generate network consensus. The plan is that these stakeholders will be rewarded with ETH by doing so.
Proof-of-work. The current consensus algorithm used by Bitcoin. This algorithm is used to confirm transactions and produce new blocks to the chain. With PoW, miners compete against each other to complete transactions on the network and get rewarded.
The satoshi is currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin. The unit has been named in collective homage to the legendary creator of Bitcoin, Satoshi Nakamoto.
A scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.
Storage for crypto-currency that exists purely as software files on a computer. Software wallets can be generated for free from a variety of sources. See the listed Software Wallets.
Refers to the ‘currency’ of projects built on the ethereum network that have raised money via issuing their own tokens. Examples: Golem (GNT) and Augur (REP).
Someone that owns huge amount of crypto-currency and can influence its price.
Cryptocurrency terms about Trading
Taking advantage of a difference in price of the same commodity on two different exchanges. Often mentioned when it comes to comparing BTC prices on Korean exchanges against US exchanges.
All-Time-High. When a crypto-currency reaches a maximum against another coin, generally US dollar.
Someone still holding an altcoin after a pump and dump crash. Can also just refer to someone holding a coin that is sinking in value with few future prospects.
An expectation that price is going to decrease.
Bollinger bands are based on the volatility of a price calculated as a moving average on G days (often 20) to which the value of the standard deviation, multiplied by a given F factor (often around 2), is added or subtracted.
An expectation that price is going to increase.
Using a depth chart, traders can see the current limit buy and sell points.
Government-issued currency, such as the US dollar or Euro.
Fear Of Missing Out. The overwhelming sensation that you need to get on the train when the price of something starts to skyrocket.
Fear, Uncertainty, and Doubt. Baseless negativity spread intentionally by someone that wants the price of something to drop.
Someone that is spreading FUD.
A margin trade that profits if the price increases.
A margin trade that profits if the price decreases.
Limit order / limit buy / limit sell
Orders placed by traders to buy or sell a crypto-currency when the price meets a certain amount. They can be thought of as ‘for-sale’ signs. These orders are what are bought and sold against when traders place market orders.
Moving Average Convergence Divergence. A trend indicator that shows the relationship between two moving averages of prices.
Type of trading where the risk, and the consequent gain or loss, is magnified by the use of financial leverage
The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit.
Market order / market buy / market sell
A simple purchase or sale on an exchange at the current price. Market buys purchase the cheapest price available on the order book, and market sells fill the most expensive buy order on the books.
Shilling / pumping
Someone essentially advertising another crypto-currency.
A crypto-currency with extremely low volatility that can be used to trade against the overall market.
Pump And Dump
The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash.
Return on Investment. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money).
Trend Analysis or Technical Analysis. Refers to the process of examining current charts in order to predict which way the market will move next.
Cryptocurrency terms about Ethereum
Decentralized Autonomous Organization. An investor-directed venture capital fund built on the Ethereum network that was hacked in June 2016. The hack stole about a third of the DAO’s funds and led to Ethereum being hard-forked the following month. The DAO is often cited as one of Ethereum’s biggest stumbles thus far.
Decentralized Application. This refers to an application that uses an Ethereum smart contract as it’s back-end code.
Enterprise Ethereum Alliance. A coalition of startups and corporations trying to figure out the best way to use this dang thing.
ERC20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens
A measurement of how much processing is required by the ethereum network to process a transaction. Simple transactions, like sending ether to another address, typically do not require much gas. More complex transactions, like deploying a smart contract, require more gas.
The amount of ether to be spent for each gas unit on a transaction. The initiator of a transaction chooses and pays the gas price of the transaction. Transactions with higher gas prices are prioritized by the network.
Gwei is a denomination of ether (ETH). Gas prices are most often measured in Gwei. 1 Ether = 1000000000 Gwei.
MyEtherWallet. A free site that can generate ethereum software wallets for you.
Code that is deployed onto the Ethereum blockchain, often directly interacting with how money flows.
A potential future event wherein Ethereum’s market cap surpasses Bitcoin’s market cap, making Ethereum the most ‘valuable’ crypto-currency.
The smallest denomination of ether. 1 Ether = 1000000000000000000 Wei
Cryptocurrency terms: Memes
Long ago, someone on a bitcoin forum got drunk and made a post with this typo in the place of ‘hold’. A meme was born.
In the crypto world, it is referring to a price going up astronomical levels.