A Glossary of all the Cryptocurrency Terms
If you’re just getting into cryptocurrencies, or even if you think you’ve got a good grasp on everything, the language used is important. It can all be a bit confusing and sometimes it might discourage you from getting involved. If you want to feel like an insider and not someone trying desperately to be part of the cool club without understanding anything, you need to get a handle on some of the jargon. It’s not as difficult as you might think. We’ve created a handy guide that you can refer to whenever you’re feeling a little lost. Some of these terms are specific to cryptocurrency, while others are general investment terms.
Each cryptocurrency coin has an address that says where it is on the blockchain, where its data is stored. They look different for different currencies but are generally a string of 30+ characters.
Any coin apart from Bitcoin is classed as an altcoin, whether its etherium, litecoin or bitcoin cash they are all alternatives to Bitcoin hence the name altcoin.
When there’s a difference in price for a commodity on two different exchanges, taking advantage of it is arbitrage.
ASIC (Application-specific integrated circuit)
A piece of hardware built purely for the purpose of mining cryptocurrency.
All-time-high – when the value of a currency is higher than it has ever been.
All-time-low – the lowest price a cryptocurrency has ever been.
Someone who is still in possession of a currency that is sinking or has sunk in value, especially after a “pump and dump crash”.
The most well-known cryptocurrency, which has even been accepted as legal tender in some countries, such as Japan. Bitcoin is often the cryptocurrency that serves as people’s introduction into the market.
A blockchain is a public and digital ledger. It’s a collection of digital records that are secured by cryptography, that anyone can access. Cryptocurrencies are built on blockchains.
These online tools allow the exploration of a blockchain to watch all the live transactions. They can help with analysis and provide useful information.
A technical analysis technique, a Bollinger Band suggests upper and lower margins that are designed to indicate when a currency is overbought or oversold.
This general investment term is used when the price of something is expected to decrease.
The opposite of bearish, the price in a bullish market is expected to increase.
When a cryptocurrency coin has been made unspendable.
The process that occurs when transferring one cryptocurrency to another.
Keeping cryptocurrency offline helps to keep it more secure when it’s not being used. Cold storage devices and software help to do this, keeping cryptocurrency safe from hacking.
When secure, encrypted text is turned back into plain text.
A chart that plots the requests to buy and sell on a chart. It shows the best time to make a transaction and have it accepted in a timely manner, as well as whether there are any buy walls or sell walls.
A type of wallet that uses a seed to make multiple keys. If the wallet is lost, the key can be used to recover the seed. Variations from the seed can be used for each transaction, instead of creating new keys each time, so the wallet is easier to store and transfer.
When someone tries to send coins to two different wallets simultaneously.
When someone sells all or a lot of their cryptocurrency at once.
One of the most popular cryptocurrencies – in the top three in the world. Ethereum allows developers to create dApps (decentralised applications) and write smart contracts.
Anywhere that you can buy or sell cryptocurrencies. In the UK, you can use Coinbase, Coinmama, GDAX, and many other websites.
Fundamental analysis – you can use this method to value a coin by researching financial and economic factors, as well as market opinion.
Currency that is issued and maintained by a government, such as British pounds. The Latin word “fiat” refers to an arbitrary order issued by a government or other authority.
Fear of missing out – a term used in other contexts but in cryptocurrency it relates to feeling like you need to buy into something when its price starts to climb so that you don’t miss out on potential profits.
When a blockchain splits into two chains, usually due to new rules being built into the original blockchain code.
FUD stands for fear, uncertainty and doubt, but specifically unwarranted negativity that someone spreads on purpose. That person is a FUDster, trying to encourage prices to drop.
On the Ethereum network, gas is the amount of computer power required to complete an operation. A full transaction is 21,000 gas.
Users can set their gas limit on the Ethereum network, which is the maximum they are willing to pay for a transaction. Higher prices will get transactions processed faster by miners.
Trading on a margin that will result in a profit when the price increases.
Trading on a margin that will result in a profit when the price decreases.
Gwei and wei
Denominations of ether on the Ethereum network.
Secure hardware devices can be used to store cryptocurrencies. Some of the most popular hardware wallets include the Ledger Nano S and Trezor, as well as the KeepKey.
Cryptocurrencies, of course, have their own memes too. “Hodl” was borne out of someone drunk making a typo on “hold” but is now sometimes used as an acronym for “hold on for dear life”. It’s used to refer to holding onto currency through its volatile periods.
Initial Coin Offering – this is when startups exchange their own tokens for ether when they launch. It’s a bit like a crowdfunding method.
Traders can place an order to buy or sell cryptocurrency when it reaches a certain price. This helps to reduce risk and ensure that the trader doesn’t miss out when the currency reaches their desired price.
Moving average convergence divergence – this trend indicator shows the relationship between two moving averages of prices.
A very risky method of trading that involves waging your existing coins to increase the intensity of your trades.
How much a cryptocurrency is worth – the number of coins currently on the market multiplied by the price of a single unit.
Buying or selling a cryptocurrency at the current price. Buys get the cheapest price available and sells are at the highest price.
This is the method used to verify cryptocurrency transactions and add them to the blockchain. A lot of computer processing power is necessary to use it, but it gets you currency.
When miners group together to combine their computing power. They share the reward of the completed transaction. Also known as group mining.
Mining rigs are computers that are set up for mining. They need to have a lot of power to work effectively, but it’s not difficult to set one up if you can afford it.
When the price of a coin suddenly increases in price.
Nodes are computers that maintain a copy of the blockchain.
Proof-of-stake – a concept that suggests that the amount of cryptocurrency someone holds dictates how they can mine or validate block transactions. The more they have, the more mining power they possess.
Proof-of-work – the current algorithm used by cryptocurrencies such as Bitcoin and Ethereum.
Pump and dump
When a currency gets a lot of attention, which causes quick increases in price followed by a crash.
A cryptocurrency/payment network that differs than others due to not using a blockchain to get consensus for transactions. The method it uses is faster, but might be less secure than Bitcoin and other currencies that use blockchains.
Return on investment – this is the profit you make on your initial investment (in any area of investment). Expressed in percentages, so 100% ROI means you make double the amount that you put in.
The smallest unit of Bitcoin, worth 0.00000001 Bitcoin. It’s named after the creator of Bitcoin.
Buy and sell limits that can be observed using a depth chart.
Advertising another currency, often in an over exaggerated way that won’t live up to its expectations.
Cryptocurrency storage that’s stored on your computer, as opposed to a hardware wallet, which is a removable hardware device. They are available for free from a number of places.
A stable cryptocurrency, as opposed to a volatile one, that is useful for trading against the overall market.
Trend analysis/technical analysis – predicting the market by looking at trends expressed as charts.
When the price of a cryptocurrency crashes – the opposite of mooning.
Startups issue tokens to raise money when they build their projects on the ethereum network.
A whale is Someone with a lot of cryptocurrency. They have been known to move markets with high volume buys and sells