Crypto Terminology. A Helpful Crypto Glossary
If you are getting into crypto, there will be some terminology that goes over your head.
We compiled a list of many terms that is common in crypto and will be valuable to you during this learning phase of your journey into crypto.
Crypto Terminology A-Z
This occurs when a person or group has control of an entire network. They can stop mining, reuse coins even stop or change transactions. They can accomplish this because the person or group controls more than half the computing power on a network; hence, the meaning 51% attack.
Every person is given a unique identifier where the ownership of the crypto can be verified and stored on a particular digital wallet.
Any other crypto that is not Bitcoin. This includes forks of Bitcoin such as Bitcoin SV, Bitcoin Diamond, etc.
The is a particular time in the crypto market where many altcoins go up rapidly against Bitcoin and the dollar.
This is a tactic used to market crypto where the crypto is distributed for free or in exchange for minor tasks that must be completed. For example, following the coin creators on social, holding a certain amount of coins or just using the native wallet provided by the creators are a few come ways to receive an airdrop.
Instructions mathematically coded into a particular computer software that is used to provide a specific solution.
Anti Money Laundering.
Securities, currencies, and commodities vary in price at times in different market regions. So if you buy low in one region and simultaneously sell it high in another region for a profit, you are considered to be Arbitraging.
A sell order.
Someone who buys crypto, and regardless of what the market is doing, they plan to hold their crypto for a specific amount of time.
Bearish (Bear market)
When prices continue to fall in the entire market.
A buy order.
The first cryptocurrency built on a blockchain by Satoshi Nakamoto in 2009 and is considered to be the Gold of the internet.
A hard-forked from Bitcoin to process more transactions per block.
A decentralized network that securely records each transaction.
Blocks can be considered the receipts for each transaction made on the blockchain.
Crypto issued to miners when a block of transactions on the network has been successfully mined.
Where users program or use pre-programmed software via an API. For example, a trading bot for an exchange can be programmed to buy when crypto goes down a certain percentage in value and automatically sell once it has gained a specified percentage in value after the buy.
When the price of an asset exceeds the actual value of that asset. This generally harms the asset because when a bubble “pops” prices fall rapidly with many losing much or all their investment.
Bullish (Bull market)
The opposite of a bear market. When prices continue to rise at a rapid pace.
Buying the Dip
In the crypto market prices are very volatile and are on a continuous cycle of ups and downs. It’s the strategy of purchasing crypto when the price falls below a certain threshold instead of buying at the peak of a cycle.
A wallet that is kept offline and is only connected to the internet to complete a transaction.
When all nodes validate a transaction on the network on the blockchain; this completes what is known as Consensus.
When crypto hits a peak in a particular cycle, it is common that there will be some sell-off, and the price will go back down to its actual market value. This can be as much as 10-20% in crypto.
Any digital currency that uses cryptography.
The practice of securing information between multiple parties.
A Decentralized Application. If someone created an app using the Ethereum framework, it is considered a Dapp.
Dollar-Cost Averaging- The practice of investing a particular amount, on a schedule, over an extended period, regardless of market conditions.
A protocol where controls and authority are distributed amongst multiple participants instead of one centralized network like banking, for example, where they control everything that happens within their network.
A Decentralized EXchange.
The amount of effort required to mine blocks. Each cryptocurrency executes different methods of adjusting the difficulty. This can be done for many various reasons such as a way to throttle the amount of the crypto being distributed amongst miners to stabilize the value better.
Cryptocurrency is a general term, but not all crypto is meant to be a currency. Some crypto intends to be a store of value specifically.
This happens when a person or entity tries to send the same amount of crypto to two different locations or wallets at the same time. This is where blockchain thrives as a solution to catch these type of tactics before validating the transaction.
The selling all or most of your cryptocurrency in a short period.
Do Your Own Research. This is commonly used when people make investment decisions listening to an influencer or random people instead of researching the coin, team, etc. for themselves.
Created by Vitalik Buterin, Ethereum is a blockchain built to process transactions and information, such as smart contracts.
The Ethereum token used by the Ethereum network. Other cryptocurrencies that use the Ethereum network are also considered an ERC-20.
Where buyers and sellers meet to exchange an asset. For example, you sell Bitcoin (BTC) to buy Cardano (ADA).
Fear of missing out (FOMO)
When the price of crypto or asset continues to rise, receives a lot of positive news, and a person makes an investment based on not wanting to miss out on the gains. Usually, it is to late to get involved by the time you feel FOMO.
Your conventional or government-issued local currency.
A fork occurs when miners run a different version of the software (protocol). If the new version compatible with the blockchain it was forked off of it is considered a soft fork. It is regarded as a hard fork if the new version of the fork requires its own blockchain.
Fear, Uncertainty, and Doubt. A term commonly used when there is negative news circulating about a project that is not considered factual.
Somebody who distributes FUD.
The first blocks created on a blockchain.
Whenever a miner successfully verifies a transaction, they earn Bitcoin. There is not an infinite amount of Bitcoin available so the halving cuts the amount miners can earn in half averaging about every four years to ensure the 21 Million supply is kept. For more details on the halving and what it means for you and the price of Bitcoin, we created this in-depth articles called, What Does Bitcoin Halving Mean?
This is a physical device used to store your crypto offline. It can also be referred to when cold storage is used. This is a crucial device to have in the current climate of the crypto market. Our battle-tested solutions is the Trezor hardware wallet.
A cryptographic algorithm.
The measurement of how powerful a Bitcoin miner’s machine is for validating transactions. In more detail, it is the calculation of how many times a hash function is computed per second as well as to measure how much computing power is securing the network.
This means to hold or not to sell your positions. The term became popular in 2010 from a simple typo. The viral term has been used ever since.
Hot storage is the less secure way of storing your crypto as it always connected to the internet. If you feel more comfortable using hot storage instead of securing a physical device or paper, use an insured hot storage solution, that stores crypto on their network in cold storage, such as Coinbase. Learn everything you need to know about Coinbase and how you can earn free crypto using them in this details review we made on them called, “Coinbase Review | Earn Free Crypto.”
Know Your Customer. Every financial institution must verify the identity of their customers to comply with AML laws.
ICO / token sale
Initial Coin Offering (or ICO) is the public sale of tokens on a blockchain. The public pay to receive the tokens at a premium price and are issued the coin or tokens on a specific release date.
People use the term Lambo to reference making a lot of money when a currency goes up significantly in value affording them, the Crypto status symbol, of owning a Lamborghini.
A record of transactions.
A new function is allowing for faster and cheaper transactions. Scaling has been an issue for that has been talked about a lot that is holding Bitcoin back. The Lightning Network is said to be what will solve this problem. Many maximalist consider this to be a wrong decision and to leave Bitcoin as is.
An order that is automatically placed at the specified quantity and price at which you want to execute a trade.
You can own a massive amount of particular crypto, but if there is not enough volume where people want to buy the crypto you wish to sell, then there is no Liquidity in that coin. Liquidity has enough volume from buying and selling particular crypto to be able to get in and out of positions when you choose.
Market Capitalization- The value of a crypto. This value is calculated by multiplying the number of coins by the coin’s current price at any given time.
When you make a limit buy order below the market price or a limit sell order above the market price. The order waits in the order book until the set order is reached, which is considered to ‘make’ the market (control the price).
The market order matches with the existing orders waiting in the order book.
The use of computer hardware to process transactions on a blockchain.
Miners earn block rewards when solving blocks (verify transactions).
When the price of crypto you are holding makes a parabolic move upward significantly increasing, it’s price.
Multi-signature / multisig
The process of multiple verified authorizations from multiple sources to successfully send a transaction on a blockchain.
A device with a record of all blockchain transactions on it that shares information with other nodes in the network. The more nodes on a network, the more secure the network which directly contributes to the decentralization of a blockchain.
Execution of a buy or sell order on an exchange to trade crypto for another or trade fro crypto into fiat.
A network where participants communicate directly with one another.
A secret digital code, like a password, that is used to authorize transactions on a blockchain. Your private key permits the use of a specific wallet.
A set of rules. In crypto, a protocol is a set of rules for a particular network.
A unique digital code that identifies a wallet on a blockchain. This is also commonly known as a wallet address. This is the address that’s necessary to send and receive crypto to another wallet.
Pump and dump
Typically a group of individuals coordinating the shilling of crypto to increase its price in a short period, the pump. The result is people involved in the pump, sell their position for a profit, leaving many others at a loss, the dump.
REKT is slang for “wrecked.” A term used to describe a bad or complete loss of your position.
Return on Investment. The calculated percentage of how much money has been made on an investment. If you doubled your money, that would be an ROI of 100%.
An acronym that stands for “Safe As “F*%k.”
A satoshi is also the smallest unit into which a Bitcoin is divisible. 1 Satoshi = 0.00000001 Bitcoin.
A seed is a phrase that is mathematically engineered to be unique to your wallet. It usually consists of 12 words that can be used to recover your wallet and crypto in case of a lost password or device. This should be stored in a secure location and never shared.
The SHA256 (Secure Hash Algorithm) that is used by Bitcoin.
A person that spreads nothing but good news or defends a crypto regardless of price volatility or FUD being circulated.
Crypto that is considered to be useless and has no value. Thi sis strictly opinion-based, and most of the time, there is no legitimate facts behind why an individual is calling a coin a shit coin.
A software program this is used to complete transactions between two parties on the blockchain.
Fake volume on an exchange. This is done by a person setting up a bot to buy and sell small amounts of their crypto to give the illusion a lot of transactions being made. $1 can be bought and sold 1,000 times in a day to create fake transactions resulting in $2,000 in volume. So doing this with more money and more times can create hundreds of thousands, even millions of dollars in phony volume every day.
The gap between the highest buy order and the lowest sell order for an asset. The lower the spread is considered to be a sign of a more stable market.
A cryptocurrency that is pegged to the value of fiat, which allows the coin to hold is value.
Strong Hands / Weak Hands
Strong hands are people who are strong enough to HODL (hold) their positions regardless of what’s happening in the market. Weak hands are just the opposite where any small shift in the market or news causes them to panic and sell their positions.
Trend Analysis or Technical Analysis. The process of analyzing the cycle of a particular crypto, to determine when and where the price may go in the future.
A potential event where another Altcoin’s market cap surpasses Bitcoin’s market cap, making it more valuable than Bitcoin.
A token is a cryptocurrency that uses the functionality of another currency’s blockchain.
Transaction ID (or TxID)
An identifier used to identify a particular transaction.
Also known as “2FA”. This is an extra layer of security where another device must be used to authenticate further that you have the authority to enter a particular site, complete a transaction, etc.
The place where you store, send, and receive your crypto. You will be provided with a seed phrase and private key that must be stored safely and securely always to control and regain access to your crypto. You will also receive a public key which will be used to send and receive crypto to your wallet. Be sure to secure your crypto safely and securly as possible. Check out our battle-tested, Recommended Tools for Crypto which host our list of tools to help you securly store, protect and trade crypto to and from your wallets.
Someone who owns a large amount of a particular crypto and can positively or negatively affect the price depending on what they decide to do with their positions.
White papers are a technical breakdown and description of future development milestones revolving around a new project.
Final thoughts on Crypto Termanology
That completes this massive list terms you are for sure going to see as you read more on cryptocurrency and Bitcoin.
We hope you found this resource helpful.
If you think there is one that should be added to the list, let us know in the comments!