Cryptocurrency Glossary

Cryptocurrency Glossary

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A-E

Address

An address is a unique string of characters that allows you to send, receive, and store cryptocurrencies.

Altcoin

Altcoin refers to cryptocurrencies other than bitcoin. There are thousands of different altcoins in existence and the number is growing. Most altcoins are similar to bitcoin in functionality, but include different blockchains, rules, speeds, and fees.

Arbitrage

Arbitrage refers to different prices of the same cryptocurrencies on different exchanges.

ASIC

ASIC is short for Application Specific Integrated Circuit. ASICs are produced for cryptocurrency mining to save power.

Asset

Cryptoassets, digital assets, or assets refer to cryptocurrency or tokens that rely on a blockchain to operate.

ATH

ATH stand for All Time High, or the highest price value a given cryptocurrency has reached.

Bagholder

Bagholder refers to a person who is still holding a cryptocurrency after a pump and dump crash, or a cryptocurrency with weak prospects.

Bear/Bearish

Bearish refers to predictions of a declining market or dropping price.

Bit

A bit refers to a subunit of a bitcoin. There a 1,000,000 bits within 1 bitcoin.

Bitcoin

Bitcoin was created in 2009 and became the first decentralized cryptocurrency to enable instant peer to peer transactions on a global network.

Block, Transaction Block

Blocks consist of cryptocurrency transaction data and work to keep a permanent collection of data on the blockchain network. Each block contains and confirms pending cryptocurrency transactions. New blocks are added to the blockchain through the mining process.

Block Height

Block height refers to the number of blocks connected within the blockchain.

Block Reward

Block reward is generated and distributed when miners successfully calculate the hash in a block. New coins a generated when new transactions have been confirmed and added to the blockchain. A portion of the new coins make up the block reward.

Blockchain

The blockchain is the technology underlying cryptocurrencies. It is a digital ledger that contains all cryptocurrency transactions. The blockchain’s history is distributed and updated across a distributed, decentralized network of computers. New blocks are added through mining as new cryptocurrency transactions are processed.

Blockchain Explorer

A blockchain explorer is a tool that allows the user to explore all historical and current transactions added to the blockchain.

Bull/Bullish

Bullish refers to an expectation that the market is rising or that price is going to increase.

Central Ledger

Unlike a distributed or decentralized ledger, a central ledger is controlled and maintained by a central entity like a bank.

Circulating supply

Circulating supply refers to the amount of cryptocurrency available in the public market.

Cloud Mining

Cloud mining refers to the process of blockchain mining using a remote datacenter rather than physical hardware locally.

Cold storage

Cold storage refers to storing cryptocurrency offline to protect it from hacking. Cryptocurrency cold storage includes paper wallets, storing software wallet files on a USB or offline hard driver, or using a hardware wallet.

Confirmation

Confirmation refers to the successful hashing of a cryptocurrency transaction. This means the transaction has been added to blockchain and can never be undone or double spent.

Consensus

Consensus refers to all blockchain participants agreeing on the validity of cryptocurrency transactions so that all digital ledgers match.

Cryptocurrency

Cryptocurrency refers to digital assets that can be used to store value or process transactions. It uses cryptography and is managed through a decentralized network to add security, prevent manipulation, and work on a peer-to-peer basis rather than a third party.

Cryptographic Hash Function

Cryptographic hash functions, such as SHA-256, produce a unique hash value for each cryptocurrency transaction.

Cryptography

Cryptography uses mathematics to encrypt, protect, and authenticate data.

Decentralized Applications (Dapps)

Decentralized applications are open source, autonomous, and store data on a decentralized peer-to-peer network rather than a central server.

DDoS

DDoS stands for a distributed denial of service attack that maliciously takes control of other computers to drain the server resources of the target.

Decentralized

A network without a central point of control, power, or function. Cryptocurrencies operate based on copies of the blockchain (all transactions) distributed and updated across different computers rather than a single, central server.

Digital Signature

A digital signature is attached to an electronic document through encryption to verify the message contents and the identity of the sender.

Distributed Ledger

The distributed ledger refers to the decentralized manner in which cryptocurrency transactions are confirmed and recorded.

Distributed Network

A distributed network refers to a network that relies on separate and dispersed nodes to process data rather than a central processing center.

Double Spend

Double Spend refers to spending a single amount in two places. The blockchain eliminates the risk of double spending as transactions are confirmed and recorded.

Dust Transaction

A dust transactions refers to a transaction with a small amount of cryptocurrency, which often becomes lower priority as new blocks are mined and added to the blockchain.

Electrum Wallet

An electrum wallet is a way to store and protect cryptocurrency. It can be accessed and recovered with a secret seed phrase in the case a computer or backup fails.

Escrow

Escrow refers to the process of using a third-party to hold assets during a transaction.

Ether (ETH)

Ether is a cryptocurrency that operates on the Ethereum platform to pay transaction fees.

Ethereum

Ethereum is a decentralized platforms that operates on the blockchain to facilitate smart contracts. It allows developers to create markets, store data, and more.

EVM

EVM refers to the Ethereum Virtual Machine which is used by Ethereum nodes.

Exchange

An exchange is a place where users can buy and sell cryptocurrencies.




F-J

Faucet

A faucet refers to giving away a pre-minded amount of a new cryptocurrency for free to increase interest and network participation.

Fiat Money

Fiat money refers to physical currency issued by a government or central agency as its legal tender such as the US dollar, Euro, or Yen. Fiat money is not backed by a physical commodity like gold.

Flipping

Flipping is an investment strategy with the goal of buying something and selling it later for a profit in a relatively short period of time.

FOMO

FOMO refers to the Fear of Missing Out. In the context of cryptocurrency, it refers to the sensation/urge to buy into a cryptocurrency as the price begins to increase rapidly.

Fork

A fork refers to the creation of an alternative version of the blockchain. It results in different blockchains running on different parts of a decentralized network at once. Fork occur when new governance rules are created within the blockchain’s code as altcoins are created.

FUD

FUD is an acronym for Fear, Uncertainty, and Doubt. It typically refers to baseless negativity and disinformation spread by parties with the intention to lower the price of an asset.

Gas limit/Gas Price

Gas limit refers to the maximum amount a user is willing to spend for a transaction on the Ethereum platform. The gas covers the computational resources required to complete a transaction, and the difference is refunded once the transaction is complete. Transactions with higher gas prices/limits are typically prioritized by miners.

Genesis Block

The genesis block refers to the first block of the blockchain.

Halving

Halving refers to rules that govern how bitcoins can be mined and released into the public market. The total amount of bitcoins that will ever be issued is 21 million. As new blocks are mined, new bitcoins are created. Every 4 years, the number of bitcoins created per block mined decreased by half.

Hard Cap

A hard cap refers to the maximum amount than an Initial Coin Offering plans to raise.

Hard Fork

A hard fork refers to changes in the code that governs the rules of a the blockchain and a particular cryptocurrency. A hard fork changes transaction rules and is not valid with the old version of the blockchain.

Hardware Wallet

A cryptocurrency hardware wallet is an offline device that can be used to securely store cryptocurrency. Hardware wallets store the private key on the device at all times so that it cannot be compromised.

Hash

A hash is a cryptographic mathematical process that produces a shorter output used to identify a particular file. Hashes are unique to the file for which they were created and cannot feasibly be reverse engineered.

Hash Rate

A hash rate refers to the rate of computational power used to mine a cryptocurrency on the blockchain.

Hodl

Hodl is a meme in many cryptocurrency communities that originated as a misspelling of the word “hold.” It has also been referred to as an acronym for “hold on for dear life.” It is a passive investment strategy in which an asset is held for a long period of time despite potential market volatility.

Hot Wallet

A hot wallet refers to a cryptocurrency wallet that is connect to the internet.

Hybrid PoS/PoW

A hybrid PoS PoW system allows for Proof of Stake and Proof of Work consensus algorithms on the distributed network.

Initial Coin Offering (ICO)

An ICO, or initial coin offering, is a way for new cryptocurrency developers to raise capital for a project. Developers issues their own tokens in exchange for Ether on the Ethereum platform.




K-O

Lightning Network

Lightning Network refers to a peer-to-peer method for making small cryptocurrency transactions off of the blockchain through smart contracts.

Limit order/Limit Buy/Limit Sell

Limit orders refer to orders placed by cryptocurrency traders on exchanges to buy or sell a cryptocurrency when it hits a certain price.

Litecoin (LTC)

Litecoin (LTC) is a cryptocurrency created in 2011 that allows for faster and cheaper processing.

Market Capitalization (Market Cap)

Market capitalization refers to the total value of an asset. It is calculated by multiplying the total (or current) supply by the current price.

Market order/Market Buy/Market Sell

A market order is an order placed on an exchange at the best current price.

Maximum Supply

The maximum supply refers to the total amount of a cryptocurrency that will ever exist.

mBTC

An mBTC represents one thousandth of a bitcoin or 0.001 BTC.

Mining

Mining is the process in which cryptocurrency transactions are confirmed and added to the blockchain and new coins are created. Mining computers use processing power to solve cryptographic functions to validate new transactions.

Mining Difficulty

Mining difficulty refers to how easy of difficult a block can be successfully hashed and mined.

Mining Pools

A mining pool is a collective of mining resources that share processing power and split the mining reward when a block is successfully mined.

Mining Rig

A mining rig is a computer designed for processing blockchains.

Mooning

Mooning refers to the price of a cryptocurrency reaching extremely high levels.

Multi-Signature

Multi-signature addresses require more than one key to validate a cryptocurrency transaction.

Node

A node is a participant computer in the distributed blockchain network that maintains and updates a copy of the current blockchain.

Open Source

Open source refers to code that is publicly available and free to use and distribute.




P-T

Paper Wallet

A paper wallet is a way to store cryptocurrency addresses and private keys. They are a hardcopy that can be printed and stored completely offline without any software or hardware.

Peer to Peer (P2P)

Peer-to-peer, or P2P, refers to transactions that take place between two individuals and do not require a third party like a bank.

Private Key/Secret Key

A private key or secret key is a unique string of data that allows its owner to access their cryptocurrency within a wallet. The private key is associated with a unique public key in order to send, receive, and access data.

Proof of Stake (PoS)

Proof of Stake (PoS0 is a consensus algorithm that rewards miners based on the number of coins or tokens they currently hold.

Proof of Work (PoW)

Proof of work is a consensus algorithm that rewards miners based on the computational resources they provide.

Public Key/Public Address

A public key or public address is what a user can share with others to send and receive cryptocurrency.

Pump & Dump

Pump and dump refers to a scheme in which an asset is intentionally hyped and inflated with the goal of artificially increasing its price so that a quick profit can be made.

QR Code

A QR code is an image that represents a string of data. It can be used to share public keys and transfer cryptocurrency.

ROI

ROI stands for return on investment, or the percentage of money made on the initial money invested.

Satoshi

A Satoshi refers to the smallest unit of a bitcoin. It represents one hundred millionth of 1 BTC or 0.00000001 BTC.

Satoshi Nakamoto

Satoshi Nakamoto is the pseudonym for the original creator of bitcoin.

Scrypt

Scrypt is a cryptographic algorithm used by cryptocurrencies such as Litecoin (LTC). It is designed to work faster and require less processing power.

SHA-256

SHA-256 is a cryptographic algorithm used by cryptocurrencies like bitcoin. It uses a large amount of processing power and time.

Segregated Witness (SegWit)

SegWit is a process in which digital signatures are moved to the end of a transaction in order to increase capacity and the block size limit.

Sharding

Sharding is a method in which not every node is required to contain a full copy of the blockchain. The goal is increased network efficiency and performance.

Smart Contracts

Smart Contracts code contract rules between two parties onto the blockchain. Smart contract can control the release of assets based on rules agreed upon by the participating parties. Compared to legal contracts, smart contracts do not require a third party and are protected from downtime, fraud, and censorship.

Soft Cap

Soft cap refers to the minimum amount that an ICO aims to raise.

Soft Fork

A soft fork refers to a change in the blockchain that is backward compatible and only requires most nodes to upgrade to the new version.

Software Wallet

A software wallet is a way to store cryptocurrency on a computer.

Solidity

Solidity is Ethereum’s programming language for developing smart contracts.

Stable Coin

A stable coin refers to a cryptocurrency with low volatily.

Testnet

A testnet is separate from the blockchain and is used for developers to test applications without putting the main blockchain or real bitcoins at risk.

Token

Tokens are a type of cryptocurrency that are often used to raise money to develop new decentralized network projects and platforms.

Total Supply

The total supply refers to the number of a given cryptocurrency that a currently circulating in the public market.

Transaction Fee

A transaction fee is tagged onto cryptocurrency transactions and rewarded to miners as part of the mining reward for successfully completing a block.




U-Z

Volatility

Volatility refers to the price change of a traded asset over time. The more the price changes in a short amount of time, the more volatile the asset.

Wallet

A wallet is used to send, receive and store cryptocurrency. Wallets are accessed and protected through a private key. Cryptocurrency wallets include hardware wallets, software wallets, and paper wallets. Different types of wallets have their own pros and cons in terms of security, convenience, and cost.

Whales

A whale refers to an investor that holds a large share of a given cryptocurrency. Whales with a large enough portion of a cryptocurrency are able to influence the market on their own.

Whitepaper

A whitepaper is an informational document that describes the technology, philosophy, goals, and timelines for a particular cryptocurrency.


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