Cryptocurrencies offer all the nuances of trading in the financial sector along with complexities of computer programming and cryptography. Crypto forums and subreddits can be an intimidating place at first, even with a technical or financial background. Bitcoin BTC 4.45% and Ethereum ETH 3.48% have not only created a breakaway financial system, but they also seem to have created a breakaway language all their own.
Don’t worry though – it’s not as complicated as it may seem. Once you get your head wrapped around some of the foundational terms (and memes), you’ll find it much easier to follow along. This resource is intended to help you get up to speed with the lingo quickly. Feel free to bookmark this page for future reference as well…
51% Attack — If more than half the computer power on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means this entity has full control of the network and can negatively affect a cryptocurrency by halting mining, stopping or changing transactions, and reusing coins.
Address — Every cryptocurrency coin has a unique address that identifies where it sits on each blockchain. It’s this location that the coin’s ownership data is stored and where any changes are registered when it is traded. These addresses differ in appearance between cryptocurrencies because they are on different blockchains but are usually a string of more than 30 characters.
Airdrop — This is a marketing campaign that refers to the expedited distribution of a cryptocurrency through a population of people. It usually occurs when the creator of a cryptocurrency provides its coin to low-ranked traders or existing community members in order to build their use and popularity. They are usually given away for free or in exchange for simple tasks like sharing news of the coin with friends.
Algos — Mathematic instructions coded into and implemented by computer software in order to produce the desired outcome. These instructions are often coded into trading bots used on exchanges with the goal of making a profit.
Altcoin — Any cryptocurrency that isn’t Bitcoin.
Arbitrage — Taking advantage of differing cryptocurrency prices of the same coin on different exchanges. For example, Bitcoin has seen large price differences between exchanges during wild fluctuations or bull runs.
ASIC — An acronym that stands for Application-Specific Integrated Circuit. Specialized silicon chips which process SHA-256 algorithms in order to mine cryptocurrency and validate transactions.
ASIC Miners — The actual hardware which is used to house the ASIC silicon chip which is inherently connected to the Internet.
ATH — All-Time High. When a cryptocurrency breaks its current record with regard to price.
Bagholder — Someone holding onto a coin that has dropped in price, with the intent of holding onto it until it increases back close to the purchase price.
Bearish — An expectation that the price is going to decrease.
Bitcoin — The godfather of all cryptocurrency that launched on January 3rd, 2009. While there were previous proposals for similar cryptocurrencies (see Bit Gold by Nick Szabo in 2005), Bitcoin is the very first cryptocurrency that has been widely adopted and proven itself over time.
Bitconeeeccccttttt — Bitconnect (BCC) was an open-source cryptocurrency which has been described as a high-yield investment program and as a Ponzi scheme. During a conference back in 2017, a man by the name of Carlos gave an “enthusiastic” testimonial and a few months later the company went belly up.
Blockchain — Distributed online ledgers that are secured by cryptography. Look at them like public databases that anyone can access and read, however the data can only be updated by the owners. Also note, the data is copied and resides across thousands of computers worldwide.
BTFD — Acronym for “Buy The F$%king Dip”.
Bullish — An expectation that the price is going to increase.
Circulating Supply — The total number of coins in a cryptocurrency that is in the publicly tradable space is considered the circulating supply. Some coins can be locked, reserved, or burned, which makes them unavailable to public trading.
Cold Storage / Paper Wallet — Storing your wallet code (your private key) on a physical document makes it a paper wallet. It’s also sometimes referred to as cold storage.
Cryptography — The study of making ordinary information unreadable. The purposes of cryptography can include proving that the sender actually sent the message, keeping the information confidential until an approved identity is provided, or Preventing theft and alteration. With cryptocurrencies, we hide money and the people who sent them in a scrambled, unreadable form. The information can be unlocked and made readable using a code also known as a key. The key is made up of a string of letters and numbers.
Cryptocurrency — Electronic money that uses technology to control how and when it is created and lets users directly exchange it between themselves, similar to cash.
Digital Signature — Used to confirm that a document being transmitted electronically is authentic. They generally appear as a code generated by a “public key” encryption.
Distributed Ledger — A ledger that is stored in multiple locations so that any entries can be accessed and checked by multiple parties. In cryptocurrency, this refers to the blockchain being held on multiple nodes (computers) on the network, all of which are checked simultaneously.
ERC-20 — The standard to which each Ethereum token complies. It defines the way that each token behaves so that transactions are predictable. Other cryptocurrencies also use the ERC-20 standard, piggybacking on the Ethereum network in the process.
Exit Scam — Traditionally a term for darknet markets and vendors that, after building up a good reputation, accumulate bitcoins and disappear; exit scams are also feared by ICO participants who worry that once they’ve raised hundreds of millions in hard-to-trace money, the developers will take the money and run.
Fiat — Currency issued by the government, like the US dollar.
Flippening — An event where a cryptocurrency (altcoin) surpasses Bitcoin in market capitalization. This is unlikely to happen anytime soon.
FOMO — Fear of missing out. This is yet another term for greed, where you have the overwhelming emotional need to purchase a cryptocurrency when the price starts for has been skyrocketing.
Forging — The process in proof of stake blockchains where there is no block reward for crypto miners. Forgers, however, are able to keep transaction fees instead, as a reward.
Fork — Where a blockchain splits into another separate chain (AKA — splitting into 2 separate cryptocurrencies). These typically happen when new rules or updates to the blockchain’s code are built.
FUD — Fear, Uncertainty, and Doubt. Another negative based emotion spread intentionally by the media or a group of people within the crypto sphere that is typically looking to cause a price to drop, in hopes that they can purchase the cryptocurrency at a discount.
FUDster — Anyone who is intentionally spreading FUD.
Futures — This is a pre-approved contract between two entities to fulfill a transaction when the value of cryptocurrency hits a certain price. It’s different than a limit order in that the buyer and seller are already nominated and bound. A future contract becomes relevant when a buyer wants to go short and a seller wants to go long on the asset.
Gas — 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.
Genesis Block — The first block to be mined in a blockchain.
Going Long — A margin trade where you profit from the price increase.
Going Short — A margin trade where you profit from the price decrease.
Halving — The rate at which the block reward creates a new Bitcoin being cut in half.
Hard Fork — New blockchain software that is non-backward compatible. This causes a cryptocurrency to split into 2 separate currencies.
Hash Function — This process happens on a node and involves converting an input – such as a transaction – into a fixed, encrypted alphanumeric string that registers its place in the blockchain. This conversion is controlled by a hashing algorithm, which is different for each cryptocurrency.
Hashing Power — The hash rate of a computer, measured in kH/s, MH/s, GH/s, TH/s, PH/s or EH/s depending on the hashes per second being produced. 1,000 kH/s = 1 MH/s, 1,000 MH/s = 1 GH/s and so forth.
Hash Rate — Measurement of performance that reveals how many hashes per second your computer is capable of producing. Each hash is an attempt to find a block by creating a unique block candidate and testing it against the network.
HODL — Contrary to popular belief (and CNBC), hodl is not an acronym meaning “hold on for dear life”. Rather, it comes from a misspelling of the word “holding” that first appeared in the title of a drunken 2013 bitcointalk.org forum post during a particularly difficult time for Bitcoin. The title: “I AM HODLING”
I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.— Game Kyuubi
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
(but only if it’s payable in BTC)”
ICO — Acronym that stands for Initial Coin Offering. This is basically crowdfunding for the crypto world. These startups issue their own proprietary token in exchange for your fiat investment. You’re hoping that the exchange will result in the tokens (altcoin) gaining value once the ICO has been released.
Lambo — Thanks to a rash of crypto millionaires publicly spending their Bitcoin on Lamborghinis, the “Lambo” has become the outward symbol for crypto bro culture. “When Lambo?” has since become the shorthand for crypto success.
Lightning Network — A payment protocol which is operational on top of the blockchain which is capable of millions to billions of transactions per second across the entire network. Has been touted as one of the most potent solutions to the cryptocurrency scaling issue.
Limit Order — These types of buy/sell orders can be thought of as “for sale signs”. You request a specific buy or sell price to be met so that the exchange buys or sells the cryptocurrency at your requested price. The only issue with these types of orders is that the buy or sell price may never be met, thus leaving you with an unfilled order.
Market Orders — These types of buy/sell orders will happen as soon as you submit the order. Often times you will pay a slightly higher fee for market orders than limit orders, but it could still make sense to use them when the market is rapidly increasing and you believe there will be no significant pullback for limit orders to get triggered.
Market Cap — The total value held within a cryptocurrency. This is calculated by multiplying the total supply of the currency by the current price. Coinmarketcap is where most crypto junkies check on the latest market caps.
Mining — The process of where a computer is trying to solve the next block in a blockchain via cryptography. This process requires an immense amount of computer processing power but is rewarded with coins.
Mining rig — A computer specifically designed to process blockchain’s (like BTC, ETH, NEO, OMG, etc). It often consists of multiple high-end graphics processors(GPU) in order to maximize its processing power.
Moon — Optimistic term used when cryptocurrency is or about to increase in both price and volume. Used often within cryptocurrency communities.
Node — A single computer that possesses a copy of the blockchain and is working to maintain it.
OCD — Obsessive Cryptocurrency Disorder. For those who can’t stop monitoring their cryptocurrency daily.
POW — An acronym that stands for Proof of Work. The current algorithm utilized by cryptocurrency.
Private key — A private number that allows you to open your cryptocurrency wallet. Without this key, you’re screwed, so keep it in a safe place.
Proof of work — In order to receive a reward for mining a cryptocurrency, miners must show that their computers contributed effort to approve a transaction. A variable is added to the process of hashing a transaction that demands that effort before a block can be successfully hashed. Having a hashed block proves the miner did work and deserves a reward – hence proof of work.
Proof of stake — Another alternative to proof of work, this caps the reward given to miners for providing their computational power to the network at that miner’s investment in the cryptocurrency. So if a miner holds three coins, they can only earn three coins. The system encourages miners to stick with a certain blockchain rather than converting their rewards to an alternate cryptocurrency.
Public key — Typically referred to as a Bitcoin or crypto address, this is a string of numbers and letters that you need in order to send or receive cryptocurrency from an exchange or wallet.
Pump and Dump — This is typically when an altcoin gets a ton of attention leading to a very quick price increase, then followed by a massive crash. These can be both coordinated and uncoordinated. Beware of pump and dump groups.
Rekt — Wrecked. “I never sell because of #FUD, and I never buy because of #FOMO. That’s the easiest way to get #Rekt”
ROI — Return on investment. How much money you have made compared to your initial investment (net profit). Example: an ROI of 100% means that you just doubled your money.
Satoshi Nakamoto — The anonymous creator of Bitcoin. It is unknown whether it was a person or a group of people. The first person to accept Bitcoin from Satoshi (Hal Phinney) passed away due to ALS. The rabbit hole goes deep with this one if you want to kill a few hours researching.
SATS — “Sats” is short for “satoshis,” a term derived from the first name of, Satoshi Nakamoto. It refers to the smallest fraction of a Bitcoin that can be sent, which is 0.00000001 of a Bitcoin. Instead of looking at Bitcoin in terms of a dollar value, “real traders look at sats, or satoshis,” says Saddington.
Segregated Witness (SEGWIT) — The processes of separating digital signature data from transaction data. This lets more transactions fit onto one block in the blockchain, improving transaction speeds.
Sell Wall/Buy Wall — When looking at an exchanges order book, and then “depth chart” tab, you’ll find a graphical representation of what current buy and sell orders are. Walls occur when there is a buildup of orders at a specific price.
Sharding — A solution for scaling blockchains. Every node within a blockchain utilizes a complete copy of the blockchain. Sharding allows nodes to include partial copies of the entire blockchain in order to effectively increase the overall network performance and speed.
Shilling (AKA — pumping) — Someone purposely and overtly advertising a cryptocurrency coin for their own personal gain because they have currently invested in it.
Shit Coin — It’s a term used to describe a cryptocurrency not expected to have a positive future.
Silk Road — The first modern-day, underground marketplace where goods such as firearms, drugs, and other illegal items were bought and sold. It was later shut down by the FBI who auctioned off the confiscated Bitcoins.
Smart contracts — Applications that run without any sort of external influence.
Soft fork — Cryptocurrency that is backward compatible so that the currency doesn’t split (the splits are often known as a hard fork).
Software wallet — Storage of cryptocurrency that exists as software files on your computer software wallets can be attained free from a variety of different sources. MyEtherWallet and Exodus are among a few of the popular choices.
Stable coin — Any low volatility cryptocurrency (stable), which is typically good to be traded against a cryptocurrency pair (Crypto pairs — BTC/NEO, ETH/NEO, USDT/NEO) one of the most stable coins to trade against, at this time, is tether (USDT).
TA — Acronym for Technical Analysis. The process of examining trading charts in order to predict which way the market or particular cryptocurrency will move next.
Test Net — When a cryptocurrency creator is testing out a new version of a blockchain, it does so on a test net. This runs like a second version of the blockchain but doesn’t impact the value associated with the primary, active blockchain.
Tokens — A type of currency, built upon the ethereum network, that has raised money issuing their own inclusive currency (tokens). These are essentially what an altcoin is called when it’s in its ICO stage (startup stage) before released to the general public and traded on popular exchanges.
Vitalik Buterin — Creator of Ethereum. He’s still alive and in the public spotlight.
Weak Hangs — People that can’t stomach the volatility of cryptocurrencies and typically sell for a loss.
Wei — The smallest denomination of ether. 1 Ether = 1000000000000000000 Wei (1018).
Whale — A whale is someone who owns a lot of cryptocurrencies,” Saddington says. “According to statistics and the addresses that you can find online — because Bitcoin isn’t truly anonymous; you can actually find the whales — these are the people who own a ton of Bitcoin. We’re talking about like hundreds of thousands of Bitcoin or more.
White Paper — A detailed explanation of a cryptocurrency, designed to offer satisfactory technical information, explain the purpose of the coin and set out a roadmap for how it plans to succeed. It’s designed to convince investors that it’s a good choice ahead of an ICO.
Did we miss any? Leave a comment and we’ll be sure to add your word to the list!