Welcome to our glossary of terms where you can find explanations for commonly used phrases and terms used on this website and in the Bitcoin, cryptocurrency and blockchain technology space. This is a brave new world and as such there are lots of unique terms to get familiar with that will help in better understanding this new innovative technology.
The crypto lexicon is vast so hopefully, this dictionary will help newbies hit the ground running. Feel free to contact us if you have any suggestions we may have missed.
Address - A Cryptocurrency address is used for sending and receiving transactions on the blockchain network. Addresses are made up of alphanumerical characters and differ between cryptocurrencies. You can't send Litecoin to a Bitcoin address for example.
Anarcho-capitalism - A political philosophy and school of thought that advocates for the removal of the state in favour of self-ownership, private property, and free markets. There's a strong synergy between the anarcho-capitalists and those pioneering cryptocurrency to give power back to the people. For more visit wiki.
ASIC - Stands for Application Specific Integrated Circuit. Commonly compared to GPUs, ASICs are specially made for mining cryptocurrency and tend to offer significant power savings.
AirDrop - Also known as a Token AirDrop this refers to a PR tactic employed by new alt coins where they will distribute tokens or coins to the community for free. This takes place after the project has completed it's ICO stage and has become tradable on the open market.
Most airdrops require only one thing, that the recipient already has some coins from the blockchain being used by this new alt coin. So if the alt coin is based on the Bitcoin blockchain you are required to be holding some Bitcoin, if it's happening on the Ethereum blockchain then you need to be holding some Ethereum. You will also need to be keeping your coins on a wallet where you are in control of your private keys, this means not on exchanges like Bittrex etc.
Altcoin / Alt Coin - An abbreviation for alternative coin or alternative currency, altcoins have the same decentralized peer-to-peer principles as Bitcoin does, however, they run on their own independent blockchain or sometimes a sidechain and often offers unique features and differences to improve on the original cryptocurrency concept.
Astroturfing - The definition of astroturfing when it comes to crypto refers to the deceptive practice of presenting an orchestrated marketing or PR campaign in the guise of unsolicited comments from members of the public.
Atomic Swaps - The objective of an atomic swap is to allow for interoperability between two cryptocurrencies. Essentially this involves using the Lightning Network to allow for off the blockchain transactions that involve switching one altcoin for another with lightning speed and very low costs.
So far Litecoin is leading the way with its adoption of atomic swaps and has successfully tested them with Vertcoin & Decred. Also known as atomic cross-chain trading this new innovation in the space will make micropayments much easier and allow for decentralized exchanges on a peer to peer basis.
If user A has Litecoin, and user B would prefer Vertcoin, then they can agree to a fixed trading price and complete the transaction instantly.
ATH - ATH stands for All Time High and is commonly used in crypto communities and conversations.
Bag Holder - Someone who has bought and is holding a lot of coins in speculation for future gains. Can also refer to someone left holding a bag of shitcoins.
Bear / Bearish - A person who is driving down the price, bearish refers to a lack of confidence in the current price. A bearish price movement is a negative one. A bearish market is the opposite of a Bullish market.
Bear Traps - A bear trap is a false signal indicating a downward price trend for something that is, in fact, rising in value. A bear trap can prompt emotional traders to place shorts and end up burnt when the asset remains steady or recovers. A bear trap is the opposite of a bull trap. .
Bitcoin - The first cryptocurrency, Bitcoin was created in 2009 by one or more individuals using the pseudonym Satoshi Nakamoto. Bitcoin is decentralized and distributed on a peer-to-peer basis. No central bank is required and transactions can be exchanged between individuals without 3rd party interference or bureaucracy.
Block - A block is a package of data that carries permanent data on the blockchain network about a transaction. All transactions on the blockchain are processed as blocks of data containing multiple transactions.
Block Explorer - A block explorer is a tool you can use to view all transactions that have taken place on the blockchain and watch existing transactions. This is a handy tool to see how many confirmations have taken place. Particularly useful when waiting for slow Bitcoin transactions and to find out why. For data nerds, this also provides a lot of information about the performance of the network.
Blockchain Technology - A blockchain is a public ledger of all transactions of a particular cryptocurrency that have ever been executed. This ledger grows as more transactions take place new blocks are added to the chain containing the recorded transaction data.
Each computer that is connected to the blockchain network using a client that performs validation and the relaying of transactions gets a copy of the entire blockchain, this is downloaded automatically when joining the network.
The blockchain has complete information including the addresses and their balances from the genesis block through to the most recently completed block. This means it can be used as a mechanism to apply transparency to something that is often hidden behind closed doors.
Bots - also known as trading bots is a casual term used to refer to automated trading software bots that trade following an algorithm and predetermined buy and sell rules to enact buys and sells extremely quickly.
Bull / Bullish - A Bull drives up the price, If you are bullish on Bitcoin then you are confident of the price and think it will go up. A bullish price movement is a positive movement upward.
Bull Traps - A bull trap is a false signal that indicates a declining trend in an asset or cryptocurrency has reversed and is heading back north when actually it will continue to be bearish and go downward in value. This is the opposite of a bear trap.
This causes investors to buy a stock thinking it is about to go to the moon when in fact it is just a short upturn that will reverse and begin to decline again leaving traders trapped "holding the bag".
Cloud Mining - Cloud mining simply means mining (as above) but with remote processing power rented from companies mining en masse in countries like Iceland where the electricity is very cheap and the ambient temperature is cold year round. Cloud mining is a topic that divides those in the community, many speculate that it isn't a profitable or sustainable enterprise no matter what the circumstances.
Cryptography - A branch of mathematics that involves using ciphers and encryption. Cryptographers write and solve codes that are used to protect privacy and validate the authenticity of data. Cryptography is a fundamental component of Proof of Work based cryptocurrencies.
Cryptojacking - This refers to the process of using someone else's computer without their knowledge to mine cryptocurrencies. This has been commonly used with privacy orientated coins like Monero, allowing those that are doing this to also anonymously move the money they are making afterward.
Cypherpunk - An activist who advocates for the widespread use of strong cryptographic solutions and privacy-enhancing technologies as a way of social and political progress. Cypherpunks were born in the late 1980s and maintained a group via an online mailing list throughout the 90s and since with an aim to work together to improve internet privacy and security. The cypherpunk movement is directly credited with influencing the cryptocurrency movement and of course, much of the work adopted into cryptocurrency came from the hard work of early cypherpunks.
Dapp - Stands for Decentralized Application and refers to an open source application that operates autonomously and stores its data on a blockchain.
DAO - A Decentralised Autonomous Organizations are like corporations that operate without any human intervention and follows predetermined business rules and automated processes.
Dead Cat Bounce - A short-lived recovery in price after a major decrease and a Technical Analysis pattern.
DEX - Short for Decentralized Exchange. This is an exchange that isn't controlled by a central authroity and instead works using smart contract technology. Examples include EtherDelta and BitShares.
Dogecoin - Dogecoin is an altcoin that initially began as a joke in reference to the Doge meme back in 2013. It features the now famous Doge Japanese fighting dog as its mascot and gained a large following despite remaining largely useless. Dogecoin still enjoys cult status among certain whales and YouTube Channel hosts.
Dolphin - A person who had a moderate amount of Bitcoin/Cryptocurrency. Not yet a whale but definitely evolved from being a minnow.
Dust - Dust generally refers to the small amounts of cryptocurrency you leave behind when trading between altcoins on exchanges, this could be satoshis or other cryptocurrencies.
Also, people who get referral payments from referring people to exchanges may get paid in dust-sized amounts of cryptocurrency that you can't sell because they don't meed the minimum threshold.
DYOR - An acronym for "Do your own research".
ERC20 protocol standard / ERC20 Token - One of the most important innovations in the creation of Ethereum based tokens is the ERC20 protocol standards.
In the same way the HTTP protocol defined how the internet should be built ERC20 is a protocol to define a set of functions and commands that a crypto token should implement. Rather than being a piece of software, code or tech ERC20 is actually a set of specifications so if a new token implements the features then it is an ERC20 compliant token.
ERC721 Non-Fungible Ethereum Tokens - OERC721, is an Ethereum Improvement Proposal introduced by Dieter Shirley in the later part of 2017. It's a proposed standard that would allow smart contracts to operate as tradeable tokens similar to ERC20. ERC721 tokens are unique in that the tokens are non-fungible. An example of their use is for CryptoKitties, where each kitty is unique and therefore non-fungible by definition.
FA - An acronym that stands for Fundamental Analysis.
Faucet - A website that rewards people with small amounts of Bitcoin or other cryptos for completing a task like a ReCaptcha form to prove you are human. These were massive in the early days of crypto but aren't a profitable way to make money these days.
Fiat - Fiat money is basically currency that has been issued by a government and declared legal tender in that state. The value of fiat money is calculated based on supply and demand and has no intrinsic value since there are no existing fiat currencies that remain backed by gold.
If you have USD that's fiat money, if you have GBP or Euros that's also fiat. Cryptocurrency is the antithesis of fiat currency. The term originates from the Latin word fiat which means "let it be done" and was used in the sense of an order or decree.
FOMO - Not exclusive to crypto FOMO stands for fear of missing out and represents the emotional reaction many traders in the crypto markets experience when seeing different coins going up.
FUD - Fear, Uncertainty & Doubt is a disinformation strategy used in sales, marketing, politics and of course the markets and especially cryptocurrency which involves spreading negative and false information to use peoples fear against them. This is used by the mainstream media, through to blogs, forums and slack channels on the internet.
Fundamental Analysis - Is a method of analyzing and evaluating an asset or in this case cryptocurrency to ascertain its true value by looking at related economic attributes, financials and other qualitative and quantitative factors that affect its health and performance.
FA is the opposing method to TA (Technical Analysis) which focuses on looking at the statistical data and patterns gathered from trading activity, volume, and charts.
In the world of cryptocurrency due to its embryonic and volatile nature, it's more important to focus on fundamental analysis than technical analysis than the traditional markets, though technical analysis shouldn't be ignored.
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Hard Fork - In blockchain technology a hard fork is a radical change to the protocol that makes previously invalid blocks and transactions valid or vice-versa. This involves all notes/users to upgrade to the latest software. This is a divergence from the original blockchain onto a new one and the most well-known hard-fork to date was when Bitcoin was hard forked by a certain percentage of the community to create a new cryptocurrency called Bitcoin Cash. This leaves the original fork continuing
This leaves the original fork continuing its path and a new fork following a new one with the general idea that over time all users will adopt the newer version once they realize the old version is flawed and or not supported. The verdict is still out on if this is the case for the Bitcoin community at the moment.
Hash / Hash Power - A cryptographic hash is a mathematical function that takes a file and produces a short code that can be used to identify the file. A hash has a couple of key properties.
A hash is unique, only a particular file can produce a particular hash and two different files never produce the same result.
It cannot be reversed. You can't work out what a file was by looking at its hash.
Hashing is used to prove that a set of data has not been tampered with and it's what makes Bitcoin mining possible.
HODL - Stands for Hold on for Dear Life. A term that originated out of the BitcoinTalk forum community in 2013 as people began to realize that most of the time you make more money by holding onto your coins in bear market situations rather than day trading and trying to make your profit that way. Ever since it has caught on as one of the most used terms in the community.
ICO - Initial Coin Offering. An unregulated means of raising funding using cryptocurrencies. The terms crowdfunding and token sale are often used alongside ICOs. They are much riskier, however, the value proposition is that you are buying in at a very early price and being rewarded with a low price and in many cases bonuses of free tokens or coins.
The term ITO (Initial Token Offering) has also grown in popularity.
Immutable - You may hear people say Bitcoin is immutable or public ledgers are immutable, this is defined as unchanging over time or unable to be changed which is true of public ledgers and blockchains because all transactions are permanently stored on the blockchain.
KYC - KYC Stands for Know Your Customer as is employed by lots of exchanges or vendors where you can exchange fiat money for cryptocurrency to ensure they abide by regulations and can work to prevent money laundering, fraud and identity theft.
Lightning Network - A potential solution for the bitcoin scalability problem. The software uses an off-chain protocol allowing more lightweight transactions. In particular, this software opens up the doors for micropayments and cross-currency trading on a peer to peer basis without the need for trusted third parties.
Mainnet - The Mainnet refers to the main blockchain once live. So when you hear that a coin will be listed on exchanges once the Mainnet is running this means when the blockchain goes live and typically means they are currently using a Testnet.
Market Cap / MCap - Stands for Market Capitalization and refers to the total dollar market value of a particular company's share. In Crypto this refers to the total market value of the cryptocurrency. This is calculated by multiplying the current number of shares, coins or tokens in circulation by the current market price for a single unit.
Investors use this to work out the value of a cryptocurrency as a whole, this is important in crypto because unlike when evaluating a company's worth you can't rely on sales or asset data.
When working out if a cryptocurrency is investable you want to ensure the market capitalization is healthy when compared to the existing circulation of coins or tokens as this allows you to see if a coin has room to grow.
Masternodes - Masternodes were initially an idea from the Dash ecosystem as a way of rewarding those unable to mine the coin. A master node is essentially a server that is maintained by the owner and used to anonymize transactions. In return the person who owns the masternode is financially compensated for this work.
Since Dash many other coins have adopted the Masternode feature which typically requires that you own a certain number of coins to setup the masternode. The minimum needed for Dash is 1000 coins.
Mining - Mining in the context of cryptocurrency involves using your CPU or GPU to solve complex cryptography puzzles as a means of Proof of Work (PoW) to help secure a specific cryptocurrency from attacks. Those who mine a particular currency earn coins for their efforts.
Mining Pools - Mining can take up a lot of resources and power and due to the increased difficulty in mining, it's often easier to get consistent block rewards by sharing the fruit and combining your hash power together.
Once a mining pool earns a block reward the members of the mining pool divide the coin and transaction fee equally.
Moon - When the price is going to the moon, literally the price is skyrocketing. Commonly used in the crypto community on Reddit, in Slack channels and on Telegram.
Moving Average / MA - Moving Average is a commonly used indicator in technical analysis that allows you to smooth out the price action by filtering the noise introduced by random price fluctuations and volatility.
There are many types of MA and the most common application is to work out the general trend direction and to calculate the support and resistance levels.
Multisig - Multisig or multi-signature refers to requiring two or more signatures to approve a particular transaction. This increased level of security is ideal for allowing businesses that require the approval of two or more directors to complete a transaction.
Node - A node is a computer or device connected to the blockchain that supports the network by validating transactions and maintaining a full copy of the ledger.
Peer-to-Peer - In the context of the internet p2p or peer-to-peer refers to applications and processes where there is an absence of a third party or middleman. In cryptocurrency, this refers to the exchange of currency or data that goes directly from one user to another without any external interference.
Pre-Mine - When a portion or the entire initial supply of a coin or token is generated automatically by the original developers prior to public launch rather than being generated organically over time by the wider community. This is a pre-mine.
They can be used to legitimately assist in crowdfunding development via an ICO or to put a fund together for future developments however they can also be dumped onto the market to make quick money before letting the project die.
Proof of Work - Also known as PoW, is an economic measure designed to deter denial of service attacks and usually requires processing power. Proof of work in crypto typically involves mining as a form of securing the blockchain.
Proof of Stake or PoS - An additional or alternative function to proof of work, proof of stake is a type of algorithm used in cryptocurrencies that rewards people who hold coins in their wallets relative to the amount being held.
Public Address - Your public address acts like an email address and you can publish it anywhere online unlike private keys that should never be shared. A public address is a cryptographic hash of a public key.
Pump and Dump - When a group of whales uses astroturfing to manipulate the price of a coin before dumping all of their bags onto the willing participants and people FOMO'ing into the coin.
Private Key - Refers to a string of data that allows access to the coins or tokens in a specific wallet. This means they work like a password and should be kept hidden at all times. Always take precautions with your private key and keep it safe. Never under ANY circumstances should you share this with anyone.
QR Code - is a two-dimensional graphical block containing a monochromatic pattern representing a sequence of data. These are used in cryptocurrency as a graphical version of your public address. This makes it easier to pay people and
This makes it easier to pay people and receive payments than typing out a long address, many wallets and apps support QR code's as a way of sniffing the address before a payment is processed. Always check the first and last characters of the address after it's been grabbed from the QR code to be on the safe side.
Rekt - Online slang purposefully misspelled that simply means "Wrecked" and has been adopted by the crypto world as well as the gaming world as there are many synergies between the two communities.
Relative Strength Index (RSI) - RSI is a momentum indicator developed by technical analyst Welles Wilder that compares the magnitude of recent gains and losses over a specified period of time to allow you to measure speed and changes in price movements of a particular asset. It's used to identify when something is overbought or oversold in the markets and is commonly used in cryptocurrency due to the frequent volatility.
Satoshi - The smallest denomination of Bitcoin, named after Bitcoins creator. One satoshi is 0.00000001 bitcoin. Bitcoin is divisible to the 8th decimal place meaning a single bitcoin can be split into 100,000,000 satoshis. This is a big difference between Fiat currency, where one dollar can only be broken up into 100 cents and one pound sterling can only be divisible by 100 pence.
Satoshi Nakamoto - Actual identity is unknown but this is the pseudonym of the creator of Bitcoin & the first blockchain technology.
Shill - A lot of people ask me "What is a Shill" and while not specifically a crypo term it has been popularly used in the same way it's used generally as a person who is attempting to promote something by spreading buzz and endorsing a product online or offline with a false pretense because they have vested interests or are being paid. A shill is the kind of person who would spread astroturf (fake news for marketing purposes).
Shitcoin - Refers to a coin with no real use case scenario, purpose or future. A derogatory term used to refer to poor projects in the crypto space.
Staking - Same as PoS or Proof of Stake, this involves staking your coins in your wallet as a way to earn coins as a reward for not selling and destabilizing the price.
Smart Contracts - Smart Contracts are digital contracts where the contractual clauses can be partly or fully self-executing, self-enforcing or both and have mostly been used in cryptocurrencies. The Ethereum blockchain is the most prominent smart contract implementation to date.
Solidity - This is the software used for developing smart contracts and ERC20 or ERC721 tokens for Ethereum. They named it this because the dictionaries definition is the quality or state of being firm or strong in structure or the quality of being reliable in character.
TA - An acronym that's short for Technical Analysis.
Technical Analysis - Technical analysis is a trading tool that attempts to forecast the future price movement of a stock or asset by analysing charts and statistics gathered from previous trading activity, volume and other indicators and while important in cryptocurrency trading also it's not as important as the fundamentals.
Testnet - This is like a blockchain sandbox for developers to do testing and roll out new changes without impacting the real blockchain which could slow things down. A testnet is also used before a blockchain is released to the public which is called a mainnet.
Transaction Block - Refers to a collection of transactions that are gathered into a block that can be hashed and added to the blockchain. Often when you check your transaction in a Block Explorer you will notice it is compiled with lots of other transactions.
Transaction Fee - All crypto transactions involve a small transaction fee. If you are sending Bitcoin then some of the satoshi's will be used to pay for the transfer. The same is true for other cryptocurrencies. This essentially pays the miners for their work maintaining the blockchain and processing the block.
SegWit - Short for Segregated Witness and is the process by which the block size limit of a particular blockchain is increased by removing signature data from the transactions. When certain parts of the transaction data are removed it frees up space or additional capacity to add more transactions to the chain.
Segregate refers to separation and witnesses are the transaction signatures, therefore segregated witness in brief means to separate transaction signatures.
Wallet - A cryptocurrency or bitcoin wallet is a place where you can store your private keys for different currencies. We have written an in-depth article on this at Cryptocurrency Wallets.
Whitepaper - A whitepaper is not exclusive to cryptocurrency, however, is a vital component anyone investing should be aware of. Most cryptocurrencies, blockchain projects and ICO's release a white paper that acts as their thesis for their project.
Before investing heavily in any altcoins and projects it's important to do your due diligence and read the whitepaper and the development roadmap if available.
Whitepapers make for a tough read at times and include technical information that may take some digesting.
Whales - Someone holding large amounts of cryptocurrency. Tend to be market movers and active on the exchanges. Top of the food chain! The exact amount of Bitcoin one needs to own to qualify as a whale is open to debate.
Vaporware - A project or software that doesn't actually exist and may never end up being built. A lot of ICO's are essentially just "vapourware", a good idea but nothing more.