Last updated on 20. August 2018
Bitcoin, Altcoins, Hard Fork, Soft Fork, Pump and Dump, Blockchain, Crypto coins and tokens, fomo HODL what does this all mean?
Crypto, isn’t that something to do with a graveyard?
Every major technological development brings with it an enormous slew of special new terms which are meaningless to those who aren’t familiar with the developments. Cryptocurrency has certainly added a couple of new pages to the dictionary with terms like “blockchain” “hard fork” “soft fork” “block height” and many more. What makes it more confusing is that a number of the words used in the crypto world are old words with new meanings. Ever since the early 1300’s people have taken the word “miner” to mean a burly, probably bearded person covered in dirt who crawls into the ground and removes precious metals. Now we find that it just as often refers to a skinny person with a Tinder account full of fake pictures who possesses a large number of circuit boards. A faucet, up until recently, was an object which dispensed water. Now it’s also a website that gives you “satoshis” for playing little games. A wallet was an object, usually made of fake leather, which was bought at department stores for 80% off and usually empty.
All of these things now have new dual meanings in the crypto world. Understanding them is a necessity before you research, buy and trade crypto. Otherwise, you’ll end up leaning into your computer screen with a disconcerted expression and a slight sense of cerebral inadequacy, which you’ll have to overcome with hostility and pride in the idea that you may not know what a hash rate is, but at least you know to change and properly maintain spark plugs. Don’t end up like that, start your entry into the crypto space right. Below is a glossary of crypto-related terms which everyone interested in the market should know.
- Bitcoin. A bitcoin is a unit of digital currency which uses encryption technology to generate coins and confirm transactions. It is not regulated by a bank or central authority and users can send and receive it without a middleman.
- FOMO. Fear of Missing Out. Refers to the panic and rush to buy when a particular coin is rising through the roof. You will get it at some point, breathe deeply and relax when it happens.
- Exchange. A website that allows you to buy and trade cryptocurrencies. Here is a list.
- Hard Fork. When slightly misspelt, a fun part of good sex. When correctly spelt it’s a term that very important to understand. You will primarily hear the term in relation to a new coin splitting form an existing chain. Bitcoin cash hard forking from Bitcoin is an example. Hard forks are important to understand as you will often get free coins from the hardfork. For example, if you held Bitcoin when it hardforked to Bitcoin cash you received free Bitcoin cash.
Hardforking.com will help you through Hardforks and Bitcoin and Crypto info gaps you may have.
- Satoshi. A further subunit equal to one-hundred-millionth of a Bitcoin. One satoshi is worth 0.00000001 Bitcoin. When an amount of Bitcoin is stated in Satoshi, the abbreviation is mBTC.
- Pump and Dump. Something a gentleman would never do. Here it refers to buying and selling enormous amounts of cryptocurrency pumping the price then selling/dumping it and often screwing other investors.
- BTC. The most common abbreviations for Bitcoin, in the same way that USD is an abbreviation of a United States Dollar. BTC is the most common.
- ICO. Short for “initial coin offering.” ICOs are in the news at the moment as many are scams. The US government is also looking at whether many are in fact securities and therefore in breach of US law. Companies give you a token for your investment, usually via Bitcoin or Ethereum deposits with them. You don’t own shares in the company but you own tokens that might go up in value if the market thinks its a good project. Many have gone up 1000’s of percent making a lot of people rich. There are also many great ICO’s, figuring out whats good and bad should be your focus if you decide to invest in one. Do a lot of research.
- Broker. A website which only sells cryptocurrencies, usually via card payments or bank transfers. Coinmama is a good example of a broker. Check them out
- Blockchain. A digital ledger in which all transactions are publicly recorded. There are private blockchains also, they are pretty boring though. You can read more about Public and Private blockchains on this site.
- Altcoin. Cryptocurrencies other than Bitcoin. Examples of Altcoins are Litecoin, Ripple, Monero, Stellar Lumens, etc. You usually need to buy Bitcoin first then buy altcoins on an exchange that offers the one you want with your Bitcoin. Binance has one of the largest altcoin offerings.
- Hardware wallet. A piece of hardware (like a USB stick) that lets you store your crypto offline.
Hardware wallets are used by many people and seen as a must have by most in the industry.
Read more about Hardware Wallets.
- Cryptography. A field of computer science which involves creating and solving codes. In the case of cryptocurrency, the codes are what confirms transactions.
- Confirmation. To confirm something (duh.) In the case of Bitcoin and cryptocurrency, a confirmation means that a transaction has been approved by the coin’s network and is final.
- Mining. The process by which computers release new cryptocurrencies and add new transactions to the public blockchain.
- Soft fork. When slightly misspelt, something inexperienced teenagers do. When correctly spelt, a soft fork is a less extreme change in a blockchain and nodes running the older version will still be valid.
- Transaction ID. A long string of letters and numbers used to identify Bitcoin transactions on the public blockchain.
- Transaction fees. A reward that people running mining software is given for using their computers to process blocks and confirm transactions. Transaction senders pay the fee in Bitcoin/altcoin.
- Block. A bunch of pending transactions bundled together which have to be verified by miners.
- Hash. A great way to relax. In cryptocurrency terms, a hash is a cryptographic algorithm which changes large amounts of data into a fixed length.
- Proof of Stake. An algorithm which determines that a person can mine (i.e. validate) blocks depending on how many coins they have.
- Fiat. Normal regulated national currencies, i.e. USD, EUR, GBP, JPY, AUD etc.
- Faucet. A website that pays you in cryptocurrency for completing captcha phrases or playing games.
- Block Height. The number of blocks that came before a particular block on the blockchain. The first block would be zero, the second block would be one, the third block would be two, etc.
- Hash Rate. The unit of measurement used to calculate processing power in the Bitcoin network. It refers to the number of hashes (see above) that can be completed in every second. Therefore 10 Th/s would mean ten trillion hashes per second.
- P2P. Peer to Peer. Usually used to refer to a platform like LocalBitcoins where individual people sell Bitcoins directly to each other.
- Web Wallet. A cryptocurrency wallet which stores your coins online.
- Software Wallet. A computer program that lets you store your crypto on your computer or mobile phone.
- Private Key. An alphanumeric code which identifies your wallet. You use it to send crypto to other people. Its hugely important as it is essentially your password to your coin.
- Public key. A long alphanumeric code which you give to other people, who use it to send coins to you.
- Seed. A random assortment of words assigned to a particular wallet which you can use to recover the balance if the wallet is lost or deleted.
- Satoshi Nakamoto. The creator of Bitcoin. There are numerous theories about who he might be, but so far he remains anonymous. We know this is not him though, the press that invaded his house thought so though, same name, wrong guy! Whoops…
- Limit order. An automated order to buy or sell cryptocurrency. It’s used by traders on exchanges to acquire or dump their coins depending on price fluctuations.
- Bullish. As with trading traditional stocks and bonds, this means the market is going up.
- Bearish. Means the market is going down.
- Whale. Used to mean gamblers who placed extreme bets. In the crypto world, it refers to a trader with enormous amounts of a particular currency who could manipulate the market by buying or dropping it in huge increments.
- ATH. All Time High. Used when a coin reaches a new record price.
- FOMO. Fear of Missing Out. Refers to the panic and rush to buy when a particular coin is rising through the roof.
- FUD. Fear, uncertainty and doubt about what a certain coin or the entire market is going to do.
- FUDster. Somone who disseminates FUD among traders and investors by spreading potentially bad market news or their personal opinion.
- To the Moon. When the price of a coin is going up and up and up. Usually results in FOMO.
- Bag Holder. Someone who’s still holding onto a particular coin after a major crash.
- HODL. Hold On for Dear Life. Means don’t dump your coins, no matter what all the FUDsters are saying.
- ASIC Miner. A device made primarily of integrated circuits, used specifically to mine crypto. It is controversial as it has given certain miners an advantage over others.
- Halving. A reduction by half in the reward for mining blocks. Happens after a specific number of blocks are mined.
- Proof of Work. An algorithm which crypto blockchains use to agree that a new block should be added to the blockchain.
- Block reward. A payment (in crypto) to miners of a certain coin for adding new blocks to the blockchain.
- Cold Storage. When you keep your crypto offline, i.e. in a hardware wallet.
- Whitepaper. A report or summary of what the creators of a new coin intend it to do.
- Going Long. A crypto trade that increases in value if the price goes up.
- Going Short. A trade that increases in value if the price goes down.
- Shilling. Playing up a crypto coin, usually a new one, by making idiotic, over the top, or otherwise excessively enthusiastic promises about it.
- Market Cap. The total value of a particular cryptocurrency. The amount of money the all the combined coins are worth based on the current price.
We hope this terminology page on cryptocurrencies helps you to find your way around easier. Bookmark this page so you can easily find your way back here. For more information check out our Beginners Guides where Bitcoin and Cryptos are covered in detail.
Wallets must be understood also. Get more info here.
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