Glossary

Crypto Glossary

The glossary of useful crypto terms, clearly explained in understandable English.

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A

Atomic Swap

Smart contract technology that allows one cryptocurrency to be exchanged for another without the use of centralized intermediaries, such as an exchange.

B

Bag holder

In the crypto world, the word ‘bag holder’ refers to a person who usually owns a significant amount of a particular cryptocurrency.

Bear Market

A negative trend in market prices. The term is not only used in the cryptocurrency world, but also in traditional markets.

Bearish

During a bear market, investors are generally pessimistic about the future. People who have this feeling are called bearish.

Bear flag

A bear flag is a pattern on the chart that the market is likely to start a downward trend. This is the opposite of a bull flag.

Beta

An early version of a program for users to test and for a team to get feedback. The Beta phase comes after the Alpha-phase.

Bid Price

The value that buyers offer for an asset, such as a cryptocurrency.

Bid-Ask Spread

The difference in price between the lowest asking price and the highest bid price in the order book for a cryptocurrency.

Bitcoin

The first cryptocurrency created by the pseudonymous developer(s) Satoshi Nakamoto. It was initially described as a “Peer-to-Peer e-cash”.

Bitcoin Pizza

The first known Bitcoin purchase ever. At the time, two pizzas were bought for 10,000 bitcoins, which would be worth a fortune today.

Bits

The smallest unit of one Bitcoin. There are 1,000,000 bits in one bitcoin.

Block Explorer

An online Blockchain page that allows users to browse information such as blocks, transactions and transaction history.

Block Height

The number of blocks in the chain between the block itself and the first block (a.k.a. Genesis Block or Block 0) on the blockchain in question.

Block Reward

The sum of coins assigned by the blockchain protocol to cryptocurrency miners for each successfully validated block.

Block Size

Block size refers to the size of a block that is filled with transactions. For example, Bitcoin’s block size is 1MB – it fits 1MB of transactions in a block.

Blockchain

A decentralized, digitized ledger that records transaction information about a cryptocurrency in a chronological order.

Bots

Automated trading software bots that can execute trade orders extremely quickly, based on a preset algorithm of buy and sell orders.

Bubble

A bubble describes a situation in which market participants allow prices to rise above their value, which is usually followed by a steep and rapid fall in prices when the market corrects.

Bullflag

A bullflag is a pattern on the chart that the market is likely to start an upward trend. This is the opposite of a bearflag.

Bull Market

A positive trend in market prices. It is widely used, not only in the cryptocurrency world, but also in traditional markets.

Buy Wall

A large buy order or the composition of several large buy orders at the same price in the order book of a cryptocurrency.

Bullish

Bullish is the firm belief that the price of a cryptocurrency will rise. The term ‘Bull’ or ‘Bullish’ comes from the bull hitting his horns upwards, causing prices to rise.

C

Candlestick

Candlesticks (candles) are visual indicators of how an asset, such as the Bitcoin, has been moved within a certain period of time.

Central Proessing Unit (CPU)

The part of a computer that is responsible for interpreting instructions from computer programs and performing operations.

Chain Split

Another term used for ‘Fork’.

Circulating Supply

The estimated number of cryptocurrency coins or tokens publicly available and circulating on the market.

Coin

A cryptocurrency or digital money that is independent of a platform used as an exchange of value.

Cold Storage

Cold storage is a way to store and secure cryptocurrencies offline. Examples are on a hardware wallet or paper wallet.

Cold Wallet

A cold wallet is a wallet for storing cryptocurrencies where the private key is not exposed to the internet.

Confirmation Time

The time that has elapsed between a transaction being submitted to the network and its inclusion in a confirmed block.

Correction

A correction is a price movement (up or down) after the price has risen or fallen. This is caused by traders who want to take their profits. This happens with both long and short positions.

Cryptocurrency

A digital currency that is cryptographically secured to work as a means of exchange within a peer-to-peer (P2P) economic system.

Cryptography

The science of using mathematical theories and calculations to encrypt and decrypt information.

Custody

Owner of your own funds or assets; in crypto, keeping a wallet and your belongings also means keeping your own private keys and keeping the cryptocurrencies themselves safe.

D

Dead Cat Bounce

A brief recovery in the price of a declining cryptocurrency followed shortly afterwards by a continuation of the downward trend.

Decentralized Application (dApp)

Applications running on a P2P network of computers rather than on a single central computer. This allows the software to be run on the Internet without being controlled by a single entity.

Decentralized Exchange

An exchange in which users do not have to deposit their cryptocurrencies to start trading and therefore the exchange does not have the users’ money at their disposal. Instead, users trade directly from their own wallet.

Deflation

When the demand for a particular cryptocurrency decreases, the price may drop.

Delisting

Removing a cryptocurrency from an exchange, either as a request from the team behind the asset itself or as a decision of the exchange.

Dildo

A dildo is a long green or red candle in a chart which shows the price changes of a cryptocurrency.

Distributed Denial of Service (DDoS)

A cyber attack in which a malicious person bombs a server with traffic from multiple devices.

Diversification

The distribution of your portfolio over different types of assets to reduce the risks.

Do Your Own Research (DYOR)

Investigate a coin or token yourself instead of doing what others say.

Dollar Cost Averaging (DCA)

Investing fixed (dollar) amounts during regular periods, regardless of the price of the asset.

Dominance

Also known as the Bitcoin dominance. It is an index that compares Bitcoin’s market capitalization with the overall market capitalization of all other cryptocurrencies.

Double Spending

When a certain number of coins are issued more than once. This usually happens in case of a 51% attack.

Dump

The term used when selling all (or part) of a particular cryptocurrency.

Dumping

When many people sell their cryptocurrency at the same time, which causes a sharp downward movement in the price of the cryptocurrency.

E

ELI5

It stands for “Explain like I’m 5”, an explanation so simple that even a five-year-old can understand it.

Encryption

Converting information or data into a secure code to prevent unauthorised access to the information or data.

ERC-20

A technical standard used for issuing and implementing tokens on the Ethereum blockchain.

ERC-721

An Ethereum-based, non-fungible token. This means that each token is unique and therefore not interchangeable.

Exchange

A marketplace for cryptocurrencies where users can buy and sell coins. An example of an exchange is Binance.

F

Falling Knife

Refers to the action of buying a cryptocurrency while quickly falling in price, while expecting it to rise again.

Fiat

Money that a government has declared as legal tender.

Fear, Uncertainty and Doubt (FUD)

FUD is often distributed in the form of bad news on social media or mass media. FUD can cause the price of a coin to drop, not on the basis of the fundamental values of a coin, but on the basis of bad news that spreads through the media.

FUDster

Somebody that spreads FUD.

(Hard) Fork

A hard fork is a protocol change that makes older versions invalid. If the older version remains, they will end up with a different protocol and with different data set than the new version.

(Soft) Fork

A soft fork is a change in a protocol such as a cosmetic change without altering the structure. In this case the new blocks will be accepted by the old nodes and the same blockchain can continue to exist.

Full Node

A computer that implements the set of rules of an underlying blockchain network and fully controls and validates transactions and blocks on a blockchain.

Fundamental Analysis (FA)

Evaluating a project on the basis of its underlying characteristics as an attempt to determine the intrinsic value of the project.

Futures

A futures contract is a standardized legal agreement to, in this case, buy or sell Bitcoin at a predetermined price at a specified time in the future.

G

Gains

Gains refers to an increase in value or profit.

Gap

A gap is an area in the chart where the price of an asset rises or falls from the end of the previous day, without trading taking place.

Genesis Block

The first block registered on the relevant blockchain, also known as block 0 or block 1.

H

Halving

When the block reward of a cryptocurrency, such as the Bitcoin, drops to half of what it was before; this is used to create a decreasing output to arrive at a final finite stock of a cryptocurrency.

Hard Cap

The maximum number of funds a project plans to raise during their Initial Coin Offering (ICO) or alternative fundraising.

Hardware wallet

A wallet that can safely store cryptocurrencies. Hardware wallets are often considered the safest way to store cryptocurrencies.

HODL

Originated from a spelling error by a Bitcointalk user who wanted to type “Hold”. It’s also built in afterwards as an abbreviation for “Hold on for Dear Life” – keeping your cryptocurrencies and not selling them.

I

Index

A financial instrument used to track the price of a particular asset.

Initial Coin Offering (ICO)

A fundraising method whereby new projects sell their cryptocurrency to investors.

Initial Exchange Offering (IEO)

A fundraising method designed to reduce risk for investors by introducing a trusted intermediary between the project team and the user.

K

Know Your Customer (KYC)

A standard procedure in the financial sector that allows companies to identify their customers and comply with the Know Your Customer (KYC) and Anti Money Laundering (AML) law.

L

Lambo

Lambo is an abbreviation of Lamborghini, a fast Italian car. In the crypto world this is often used to ask when the price is going to rise sharply, so that the trader can pay for such a car. In general it is written: ‘When Lambo? An alternative is: ‘When Moon? A scale model does not count.

Latency

The time between the submission of a transaction to the blockchain network and the first confirmation of acceptance by the network.

Ledger

A physical book or digital computer file in which monetary and financial transactions are kept and recorded.

Liquidity

The ability to sell or buy a certain cryptocurrency without causing significant fluctuations in the market price of the cryptocurrency.

Listing

The addition of a cryptocurrency to an exchange, either as a request from the project team or as a decision by the exchange itself.

(Going) Long

A margin trade in which you profit from the price rise of an asset.

M

Mainnet

A blockchain protocol that is fully developed and implemented where transactions are sent, verified and recorded in the blockchain.

Maker

You become a “maker” when you place an order and it is not immediately fulfilled, leaving your order in the order book and waiting for someone else to fulfill it.

Market Capitalization

The total trade value of a particular coin, calculated by the number of coins multiplied by the current price.

Market Order

When a taker chooses the best available bid, he takes the price and quantity available in the order book.

Master Node

Nodes on a network that often require a minimum amount of a certain coin to access the rewards.

Maximum Supply

Reference to the maximum number of coins or tokens that will ever be created for a particular cryptocurrency.

Mining

Mining is the process by which cryptocurrency transactions are collected, verified and recorded in a digital ledger called the blockchain. The work of the miners is essential to maintain the integrity of the network and they are also responsible for introducing new coins into the system.

Mt. Gox

A Japanese Bitcoin exchange that collapsed in 2014 due to poor security and management of the exchange.

N

Node

A computer or device that connects to a cryptocurrency network and helps increase the resilience of the network.

P

Paper Wallet

A piece of paper on which the public and private keys of a cryptocurrency address are physically printed.

Pegged Currency

A currency where the price is designed to remain the same as a particular asset. For example: 1 USDT is pegged to 1USD.

Phishing

A malicious attack that attempts to obtain a user’s login details in order to gain unauthorized access to his account.

Ponzi Scheme

A scam in which the funds of new investors are used to pay returns promised to the previous investors. Do not invest in this.

Private Sale

An early stage investment round for investors with significant investment capital.

Pump and Dump

In a ” Pump and Dump ” several people work together to inflate the price of a cryptocurrency so that they can sell it when its value is artificially high. We strongly advise against participating in this.

Q

Quick Response Code (QR-Code)

Quick Response Codes are two-dimensional barcodes that can be read by smartphones or other devices. The QR code connects directly to, for example, a text, e-mail or website.

R

Ransomware

A type of malware that takes over the computer and threatens to destroy or reveal files unless ransom is paid.

Rekt

The term “rekt” is short for “wrecked”. This term is often used when a trader has lost a lot of money.

Resistance

A resistance level is the point in a price chart where a price rise is prevented by an overwhelming tendency to sell the cryptocurrency. The selling pressure will force the price to act as a ceiling, also known as the resistance.

Return on Investment (ROI)

A measure used to assess the efficiency of an investment. This is the ratio of net profit to net cost. 100% ROI means that someone has doubled their money.

Roadmap

A business planning technique that defines a company’s short- and long-term goals within a flexible estimated timeline.

S

Satoshi

The smallest unit when splitting a bitcoin, corresponding to 0.00000001 of a bitcoin.

Satoshi Nakamoto

The pseudonym of the creator or creators of the bitcoin protocol and whitepaper.

Sell Wall

A large sales order or a composition of several sales orders at the same price in the order book of a cryptocurrency.

(Going) Short

A margin trade in which you profit from the price drop of an asset.

Stablecoin

A particular type of cryptocurrency designed to maintain stable value rather than significant price fluctuations. An example of this is Tether.

Support

A support level is the point in a price chart where a price drop is prevented by an overwhelming tendency of the buyers to buy the cryptocurrency. The buying pressure will prevent the price from falling further and thus act as a floor, also known as the support.

T

Take Profit

Take profit is a trading order that automatically allows the profits to be taken once the price reaches a certain level. So it’s the point where you’ll take the profit of your trade.

Taker

A taker is someone who decides to place an order that is directly linked to an existing order in the order book.

Tank

The term taken from traditional markets and describes a significantly negative financial performance of a particular asset.

Ticker

The trading symbol or abbreviated name that refers to an asset on an exchange. For example: the ticker of Bitcoin = BTC.

Token Sale

The issue of tokens in exchange for another cryptocurrency. Also called an Initial Coin Offering (ICO).

Total Supply

Refers to the number of coins or tokens currently in circulation or locked.

Transaction ID (TxID)

Also called a Transaction-hash. This is a transaction ID used to refer to transactions on a blockchain.

Transactions Per second (TPS)

Refers to the maximum number of transactions a blockchain can process every second.

U

User Interface (UI)

The “UI” stands for user interface. The user interface is the graphical layout of an application.

V

Verification Code

Code sent to a second device to ensure someone’s identity. Also known as Two-Factor Authentication.

Volatility

The speed and quantity at which a cryptocurrency changes in price.

Volume

A measurement of the number of individual units of an asset traded at a given moment of the market.

W

Wallet

A wallet is used to store cryptocurrencies. There are different types of wallets, such as cold wallets, hot wallets, hardware wallets and paper wallets.

Weak hands

A term that refers to traders or investors who do not have sufficient confidence to hold their asset or follow their trading plan.

Whale

The term “Whale” is used to describe a trader who trades significant sums of money.

Wick

A (sharp) rise or fall in the price on the candle chart indicating where the price of the asset fluctuates in relation to its opening and closing prices. It’s the unfilled part of a candlestick.