Cryptocurrency and blockchain are new and emerging technologies and the pace of development has been very fast. New terminology, words and culture have all sprung up around cryptocurrency and blockchain which can make understanding it difficult for newcomers.
We at the institution have put together a glossary of cryptocurrency and blockchain terms and words to help explain in plain english the culture and inner workings of blockchain and cryptocurrency. Each word in this glossary links to a separate page which explains the terminology.
This glossary is currently a work in progress, expect to see lots of updates as the days go by.
2FA – 2 factor authentication
address – Also called a public key, these are a bunch of alphanumeric characters, which are created uniquely for each individual or account. These addresses are then used to send or receive cryptocurrency.
altcoin – a cryptocurrency term for coins other than Bitcoin.
ATH – an acronym for “All Time High,” which is often used to indicate the highest price of a token or a currency.
ASIC – an acronym for “Application Specific Integrated Circuit.”
bag holder – an investor who is hodling a cryptocurrency for a long time but its value has decreased and become almost worthless.
Bear market – refers to a market that is in decline.
BIP – an abbreviation for “Bitcoin Improvement Proposal.” Anyone with an idea on how to improve security, transaction speed , energy efficiency et al .of Bitcoin’s network can submit their idea and it is voted upon for implementation or rejection.
Bitcoin – The first decentralized crypotocurrency. Developed by the mysterious Satoshi Nakamoto. It is the most popular, most valuable and highest marketcap of anu cryptocurrency as of now. more info can be found on bitcoin.org
block reward – Is the reward given for work performed by a miner for hashing an algorithm in a Proof of Work blockchain or cryptocurrency.
blockchain – an incorruptible digital ledger for economic transactions that can be programmed to record anything of value. The record of the transaction that was made can be fully public for public blockchains or private in the case of private blockchains.
blocks – blocks are packs or packets of data or information that form the building blocks of the blockchain. It is similar to a page of a ledger that contains records of transactions.
Bollinger band – Bollinger bands are a tool that is composed of two upper and lower bands reflecting standard deviation and a center line which represents a moving average.
Bull market – Opposite of a bear market, refers to a market with prices of shares, commodities or tokens that are constantly or steadily rising leading to a long-term upward trend.
central ledger – also known as a general ledger where all the records are stored and controlled by a singular network or an individual; it is the backbone of any accounting system.
cold storage – refers to the storage of reserved cryptocurrency away from the internet to keep it safe from hacking or theft
confirmation – a state where a process or transaction has been encoded or written onto the immutable ledger called the blockchain; requires miners to validate a transaction.
consensus – is when all participants of the network or blockchain come into terms on the validity of the transaction, making sure that all ledgers pertaining to a certain transaction are the same.
Crowdsale – the act of offering tokens for sale to the general public. Crowdsales usually have lower minimum purchase requirements than presale but lower discounts.
DAO – is short for “Decentralised Autonomous Organization”. These are organizations or corporations governed by a set of rules written in code that run with little if any human involvement which decreases the chance of the influence human error inside the DAO.
dApp – an abbreviation for Decentralized Application.
Double spend – A double spend is an attack where one or multiple coins are sent to two people or addresses at the same time. This can be done by sending two transactions to different people or addresses at exactly the same time
distributed ledger – a ledger that is shared across networks and CPUs since the data is agreed upon to be shared and replicated.
Escrow – also known as an escrow agreement is when one party deposits an asset with a third party who then turns in the said asset to another party when a certain term or condition is reached. This effectively lessens the risk that one party will not perform as per agreement and will just run off with the payment.
exchange – online cryptocurrency exchanges are websites where you can buy, sell and trade cryptocurrency for other cryptocurrencies and currencies (USD, EUR, etc.).
fiat money– is government-approved legal tender or currency that is not backed by precious metals or commodity.
The Flippening – refers to a possible future event when Ethereum or any other cryptocurrency overtakes Bitcoin to become the most valuable, highest hash rate, or highest market cap cryptocurrency. During the 3rd week of November 2017, a Flipping event was attempted by miners of Bitcoin Cash which almost dethroned Bitcoin.
FoMo – is an abbreviation of “Fear of Missing out.” One feels anxious when he or she doesn’t want to be left out of the success that others are experiencing from an investment. FoMo is said to be an investor’s worst enemy since it is a counter-productive thought that can lead to irrational decision-making.
FUD – is an abbreviation for Fear, Uncertainty and Doubt. It can come to us naturally or it can also be pushed onto us by others seeking to undermine the price of a certain stock, token or commodity.
fork – is what happens when a blockchain diverges into two potential paths. The most famous example is when Bitcoin Split into Bitcoin and Bitcoin Cash on August 1, 2017.
fifty-one percent attack (51% attack) – is a potential attack against the Bitcoin or any crypto blockchain where an organization or group of miners can somehow control more than half of the mining power (hash rate).
gas – Ethereum introduced a novel concept of paying for transaction costs and work done on the blockchain by introducing the concept of Gas. Just like gas is used to power a car, Gas on the Ethereum blockchain is used to fuel transactions, computations, smart contracts and other functions. Basically gas is a measure of work done on the Ethereum blockchain paid for in ETH just as one would pay for gasoline for your car in USD or whatever the local currency is.
gas limit – the maximum amount of gas units that a user is willing to spend on a given transaction.
gas price – the cost of each unit of gas
genesis block – is the very first block in a block chain.
GPU – is short for Graphic Processing Unit; traditionally used to enable PCs to display advanced graphics for gaming but they have also been repurposed for use to mine cryptocurrency.
halving – Each time a new block is added to the bitcoin network, bitcoins are awarded to miners that discover that new block. Initially, the reward was set to 50 BTC but it was reduced to only 25 BTC in 2012. Roughly every four years or exactly every 210,000 blocks, this reward will continue to halve. This event is called halving.
hard fork – a drastic change in the blockchain environment that often entails switching over to a new version of a blockchain and disregarding the old one.
hardware wallet – a special type of wallet that stores a user’s private keys in a hardware device to avoid getting hacked of sensitive information. Some popular hardware wallets are Trezor, Ledger Wallet and Keepkey.
hash rate (or hashrate) – the strength in which a miner’s rig can dish out to mine for Bitcoins; the measurement for the processing capability of the Bitcoin network.
HODL – an intentional misspelling of the word “hold” that originated from a 2013 Bitcoin forum. Investors that suggest hodling keep their coins for a long time with the belief that it will have a higher value one day. HODL is also now (humorously) known as “hold on for dear life.”
hot wallet – a type of wallet that is constantly connected to the internet. It is not recommended that hot wallets hold big amounts of cryptocurrency because they can be hacked. Instead just leave enough cryptocurrency for your daily needs or trades in the hot wallet.
ICO– an abbreviation for initial coin offering. This is the cryptocurrency equivalent of an initial public offering (IPO) or crowdsourcing. ICOs sell their currency or tokens to fund a project. Before buying into an ICO, some rules apply, which vary from ICO to ICO. Due diligence is recommended before buying in.
IOTA – the open source distributed ledger that does not make use of blockchain; may also refer to the cryptocurrency.
Lambo/Lambo land – short for Lamborghini; means making it big in Crypto. It is sort of a meme in the crypto community where if you earn enough money to buy a Lambo you have made enough profits to live a very comfortable life.
long or going long – the state of owning a particular cryptocurrency token, coin or a share of stock also can refer to holding a stock or token for a long time.
MACD – an acronym for Moving Average Convergence Divergence. Is a visual indicator that presents the relationship of 3 exponential moving averages. The 26 day exponential moving average is subtracted from the 12 day exponential moving average and a signal line which is the 9 day exponential moving average is plotted across. Much deeper info is available on Investopedia.
market cap – the total value of a cryptocurrency determined by the total supply of coins multiplied by an individual unit’s price.
market order/buy/sell – any order/purchase/sale at the current price executed on an exchange.
margin trading – a highly risky strategy of borrowing coins and paying interest to increase the invested amount without actually holding any assets; only permitted for investors that meet rigid criteria.
mining – if Bitcoin or other forms of coins are being compared to gold due to their limited supply, mining is the process of obtaining them. However, instead of using heavy machines to burrow underground, computing power or hashing power of GPUs, ASICs or CPUs are used to validate blockchain transactions, provide proof of work and run code.
mining rig – computer equipment built with the purpose of mining cryptocurrency.
multi-signature – also known as multisig; refers to requiring more than one key to authorize a transaction or a withdrawal from a wallet.
moon – a term used by the crypto community when projecting an increase in a coin’s value. Also synonymous with go up.
moon mission – a term used when multiple people have a collective goal of increasing the value of a commodity, token or coin.
node – a crypto wallet software that maintains a complete and up-to-date digital ledger that matches the current state of the blockchain. The more nodes in a blockchain, the safer it is from attacks.
oracles – a third-party data feed containing outside information used to support smart contracts.
paper wallet– a document containing all the data needed to generate a private key. It is also used as a way to store tokens or coins outside a computer. Some good sites for generating paper wallets for bitcoin are: walletgenerator.net, bitcoinpaperwallet.com and bitaddress.org
permissioned ledger – a type of ledger that requires access details from any user; access is limited to certain users due to data privacy.
private key – the key to an online wallet. Holding a private key is as good having complete control over a wallet. A good example of this is a QR code, some online wallets make you print out your unique QR code in order for you to access or recover your online wallet in the future.
Proof of Work (PoW) – a type of algorithm where miners are rewarded for the amount of work done. PoW is like working per hour where one gets rewarded for the amount of work performed for a particular period. It utilizes a system where it is difficult to forge the amount of work done but is easy to check if the work done is authentic.
Proof of Stake (PoS) – an algorithm where rewards and consensus is based upon the number of tokens or coins you hold. Where the more tokens or coins you hold for a longer time, the more valuable your node is because there is a higher chance of your node finding the correct block.
public key – a wallet address that one can share with people in order to send payments to an address or payments to theirs. This is similar to an email address on Paypal where you can give your email to a person that would be sending money over to your account.
public ledger – a type of ledger that is distributed to all online users, an example of which is Bitcoin’s ledger.
pump and dump – a type of market manipulation that involves inflating the price of a stock or a token/coin with the intent of immediately selling it for a huge profit. Pump and dump schemes usually start with increased buy activity and volume for the particular token/coin in order to give the illusion that a bull run is taking place. T
Presale – is an ICO tokensale held before a crowdsale. The tokens/coins sold in a presale are usually discounted more so than in crowdsale.
Private sale – is similar to a presale in terms since it is held before a crowdsale. The difference is that in a private sale, the ICO usually offers tokens or coins to wealthy or well-known people or organizations. Private sales are usually not open to the public and the ICO chooses who to sell its tokens to.
rekt – a misspelling of “wrecked”. Used to describe an investor who has suffered from losses due to a reduction in the value of a particular cryptocurrency.
satoshi – the smallest unit of Bitcoin at 0.00000001 BTC
Satoshi Nakamoto – the creator of Bitcoin, not much is known about him/her/them.
STO – STO stands for Security Token Offering. It is a tokensale that has tokens registered as securities.
Sharding – is a scalability technique that allows partial copies of the entire blockchain to be spread out to improve network performance.
short or going short – trading by margin where the investment earns a profit when the price of a cryptocurrency or stock decreases.
signature – a mathematical operation used to indicate ownership by an individual to a coin, wallet or data; these are private and known only by the owner.
soft fork – refers to adding in new capabilities or commands onto an existing blockchain without invalidating older transactions or splitting the blockchain.
software wallet – a software file or program that acts as cryptocurrency storage.
smart contract – is a set of rules for business or economic activity written in code that is processed by the blockchain to achieve a desired outcome. Smart contracts usually function without need for human intervention.
Stablecoin – a cryptocurrency with designed in low price volatility. Typically pegged 1:1 with the USD.
staking – the act of owning or holding particular tokens or coins to generate profits, and help validate blocks. This applies in general to a Proof of Stake system.
TCP/IP – an acronym that stands for Transmission Control Protocol or Internet Protocol. This a standard that specifies how data is exchanged over the internet.
Technical Analysis (TA) – or Trend Analysis; the art and science of analyzing patterns in the market to make predictions about future movements. Where if future market performance can be predicted, one can make a profit out of this knowledge.
This is it gentlemen – a phrase that denotes, “This is it, gentlemen,” which is stated to signify optimistic events in the cryptocurrency industry.
token – the term for any project’s currency that is built on a blockchain; tokens are issued to fund the project.
total supply – the maximum number of tokens or coins existing.
transaction fee – paid out to facilitate the transfer of money or cryptocurrency from one wallet to another. In Bitcoin, this transaction fee is deducted by miners from the amount being sent, which constitutes to a lesser amount for the recipient. Ethereum decoupled the transaction fee by implementing the Gas which is the amount of ETH paid to miners to transfer ETH from one wallet to another.
Turing complete – a system that is capable of performing calculations and transactions that any computer can accomplish. Ethereum is described as a Turing complete system and is often said to be a “World Computer.”
Vitalik Buterin – the most popular co-founder of Ethereum who also serves as an advisor to several ICOs.
volatility – refers to the amount of instability in a market. Periods of high volatility mean that prices of a certain token or currency may swing up and down by huge amounts. Low volatility means that prices of a certain token or currency trade within a tight range.
wallet – is a file, application or device that stores public, private keys and your cryptocurrency.
wallet address – a public portion of two encrypted keys used by a holder to verify or accept a cryptocurrency transaction.
Wei – the smallest denomination of Ether with a value of 1 Ether = 1000000000000000000 Wei (1018)
whales – people or organizations that have a huge supply of money, tokens, coins or capital; they are typically bullish on the price of a cryptocurrency.
whitelist – participants in an ICO that are granted exclusive access, especially during a presale.