Cryptocurrency words and phrases fill the cryptosphere like shiny baubles. For the uninitiated, they can feel quite threatening and certainly disconcerting. However, they need not be. This quick guide will give you the low down on the top 34 cryptocurrency words and phrases you need to know.
An altcoin is defined as any cryptocurrency except for Bitcoin. ‘Altcoin’ is a combination of two words: ‘alternative Bitcoin’ or ‘alternative coin’.
‘ATH’ is an abbreviation of ‘all-time high.’ This term can be quite helpful to know for tracking the digital currency markets. The ATH is certainly a time when you want to be selling your cryptocurrency, but invariably you will miss the mark. On the bright side, this always makes for a good story over a beer with friends.
‘Bears’ believe that an asset, for example, Bitcoin, will decline in value.
Blockchain is the underlying technology of cryptocurrency that keeps the system secure.
Blocks make up a blockchain. Within each block, there are a series of transactions.
The opposite of decentralised. Centralised means that there is a central point.
This is often disliked in cryptocurrency as it may mean that the central point holds a lot of power and can also mean it’s more vulnerable to attack.
7. Cryptography (or cryptology)
The act of creating or solving codes. Cryptography is used to keep cryptocurrency secure.
In cryptocurrency, decentralised means that there is no central point of the network. Instead, it is spread over a series of users (nodes).
9. Distributed Ledger
A distributed ledger is a system of recording information that is distributed to many different devices. The blockchain, for example, is a distributed ledger that was created to keep track of all bitcoin transactions.
10. Fiat currencies
Government-issued currencies such as the British Pound or the US Dollar that are not backed by anything physical. Most currencies today are fiat currencies.
The term ‘FOMO’ stands for the phrase “fear of missing out.” When you start out in crypto, flocking to a quickly appreciating asset can lead to copious amounts on financial blood loss. It’s best to pass through the FOMO stage with speed.
A fork is a change in a digital currency’s rules or protocol. Developers update a cryptocurrency’s protocol from time to time. A fork can be either a hard fork or a soft fork. A hard fork is a change to a digital currency’s protocol that makes blocks created using the old protocol incompatible with the new chain.
Fear, uncertainty and doubt can be summed up using the term ‘FUD’. E.g. ‘Alan was spreading some serious FUD on Bitcoin today.’
‘Alan, stop engaging in bearish FUD, or you’ll get the next round of beers in.’
Fungible is a positive quality where two or more of the same thing have identical value. That is to say, one of a group of things can be a substitute for another and it won’t change the value.
15. Hardware Wallet
A hardware wallet is a specially designed device to lock away access to your cryptocurrency.
The device is extra secure because it is disconnected from the Internet and other computers and is virtually virus-proof. Examples of a hardware wallet or Trezor or Ledger Nano.
HODL is defined as a misspelling of ‘hold’. It has evolved into a shortened form of ‘Hold On for Dear Life’.
After buying crypto, a person who is HODLing intends to keep it even as prices go up and down.
Being able to HODL, without losing one’s head, is the hallmark of a seasoned crypto trader.
17. Initial Coin Offering
An initial coin offering (ICO) represents the first time that an organisation offers digital tokens to the public to raise money. Companies frequently hold these offerings so they can finance projects.
These digital token sales have often been likened to initial public offerings (IPOs), where companies sell more traditional assets such as stocks and bonds to raise money.
ICOs are to be treated with a good dose of caution – do your research!
These financial protocols help companies comply with laws and regulations. KYC is always present on regulated cryptocurrency exchanges.
Mining is the process for creating new units of a digital currency.
For example, the Bitcoin network releases new bitcoins every time a block is mined. In this instance, mining involves confirming transactions and combining them into blocks.
This verification requires hardware and electricity, and miners are rewarded with digital tokens for contributing these needed resources.
When a digital currency moons, it goes up in value rapidly. This is when you attempt to sell at the ATH and break out the champagne. Try not to HODL too long. Although, you will still be able to wear a HODLER’S badge with pride even if your wallet will not thank you.
Imagine you boot up your favourite first-person shooter game, you instantly spawn on the map and you are subsequently blown to pieces without getting a shot off.
This is being a Noob in crypto. Everyone is one at some point. Don’t sweat it. Just try to get through this stage quickly and minimise financial pain.
22. Paper Wallet
A paper wallet is a piece of paper containing the information needed to access and spend your cryptocurrency.
23. Private Key
A private key is a string of letters and numbers known only by the owner that allows them to spend their cryptocurrency.
If you give this out instead of your public key, then this would be a painful ‘noob error’. Guard it with your life!
24. Public Key
A public key is a string of letters and numbers that allows cryptocurrency to be received. However, public keys are not considered as safe to use as public addresses.
25. Proof of Stake (PoS)
Another highly common algorithm that requires users to stake some of their cryptocurrency to validate transactions.
Some believe that this algorithm is much more efficient than Proof of Work.
26. Proof of Work (PoW)
POW is an acronym for ‘proof of work,’ which is a system of proving that a digital currency’s transactions have been verified.
Many digital currencies, including bitcoin, use POW. Under such a system, miners must-do ‘work that is difficult for them to contribute, but easy for the broader network to verify
Miners are usually rewarded for verifying transactions by receiving units of a digital currency.
27. Pump and Dump
A ‘pump and dump’ is a type of investment scheme where a market participant—or several—work together to inflate the price of an asset so they can sell it when its value is artificially high.
Unethical, illegal but nevertheless commonplace. Watch out for this trap.
The term “rekt” is crypto trader slang for “wrecked.” For example, if you get sucked into a pump and dump, you will likely get rekt.
Satoshi Nakamoto is the founder and creator of Bitcoin, the most popular cryptocurrency. The smallest amount of bitcoin (0.00000001) was also named after him, it is called a Satoshi.
A digital token is a unit of a digital currency, such as a bitcoin. It is worth noting that some of these tokens are used for specific ecosystems, and those are frequently referred to as utility tokens.
Other digital tokens are essentially securities.
A wallet is software or hardware that interacts with the blockchain and lets users receive and send their digital money.
The term ‘whale’ is used to describe a trader who makes sizable bets.
One day you may too become a whale!
34. White Paper
The developers who create digital currencies usually provide white papers for these assets.
These documents generally offer comprehensive information on the digital token in question, as well as its underlying technology.
These papers can be informative both to spot opportunities and to sniff out a scam project.
And that’s our 34 cryptocurrency words and phrases you need to know. I hope this list has given you a great start on recognising some of the most used terms in crypto. If you have some more great suggestions, we’d love to hear them in the comments below.