Glossary of crypto-related terms

in #cryptocurrency2 years ago (edited)

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Here is a collection of crypto-related terms and their explanations. We will be adding to this list in the coming weeks.

Address: A secure identifier marked by a unique string of characters enabling payments to an individual via blockchain transactions.

Airdrop: A method of distributing a cryptocurrency among a number of people.

All Time High (ATH): The maximum historical price of an asset.

Altcoin: A cryptocurrency or a group of cryptocurrencies that are an alternative to bitcoin.

Arbitrage: Profiting from the difference in the price of an asset on two different markets or exchanges — internationally on most cases.

Bear: Someone who expects the market prices to go down.

**Bear Trap: **A false market signal where the rising trend of an asset appears to be turning down, but actually is not.

Block: A series of transactions that happen during a certain amount of time (10 minutes for Bicoin). The transactions are grouped in a block and added to the “blockchain”.

Block Height: Refers to the total number of blocks on a cryptocurrency’s specific blockchain — starting with the first block, also known as the Genesis Block (Height 0), and going up from there.

Blockchain: A decentralized, digital ledger where transactions are recorded publicly and chronologically . Once the information the block contains goes into the blockchain, it becomes part of the permanent database, connecting to other blocks in the blockchain like the links in a chain.

Bull: Someone who is thinks market prices will go up.

Bull Trap: A false market signal where the falling trend of an asset appears to be turning upwards, but actually isn’t.

Cold Storage: Safekeeping of the private keys which allow access to cryptocurrency funds on devices that are offline like hardware wallets, USB drives, and paper wallets.

Confirmation: Each time a new block is created it is considered a “confirmation” as each past block makes a transaction more irreversible because it stores them deeper in the blockchain.

*Cryptocurrency: A digital currency that uses computer code as a cryptography method and a decentralized system to make transactions without using a middleman such as a bank. Also known as a “digital currency”.

Decentralized: A state where there is no central control or power, hence no central point of failure.

Decentralized applications (dApps): Applications that function without the control of a central authority like a corporation or a government.

**Distributed: **A system, like most cryptocurrencies, that is not controlled and cannot be changed by a central authority (a person, a company, a government etc.).

Distributed Ledger: A computer database that is stored on many private computers simultaneously, instead of being stored in a single, central company server. Blockchains are also known as “distributed ledgers”.

**Encryption: **The use of mathematics and computer code to protect sensitive data.

Exchange: A place where buyers and sellers can trade cryptocurrencies.

Fiat: A term that is used to describe traditional government-issued currencies like Dollars, Euros, and Yen.

FOMO (Fear of Missing Out): Feeling of anxiety for missing out on a potentially profitable investment opportunity. Often resulting in buying an asses at peak prices.

Fork: A split that occurs in the blockchain, caused by a change in the underlying software, creating two versions of a blockchain with a shared history.

FUD (Fear, Uncertainty, Doubt): An acronym that stands for fear, uncertainty and doubt. It is a strategy to influence perception by spreading negative, misleading or false information about something, as opposed to reasoned criticism.

HODL: Internet culture term that stands for the resolve to hold assets over a longer period without selling. Became popular after an internet user misspelled the word hold.

Initial Coin Offering (ICO): A crowdfunded and public sale of cryptocurrency tokens to raise money for a project.

Ledger: A store of records that can only be appended (added to). It is immutable (unchangeable after the fact). Blockchains use decentralized ledgers as their core technology.

Miner: An important participant in the blockchain network — someone who bundles transactions and gets paid in new coins and transaction fees in return for helping the system to run.

Mining: The process where transactions are verified and added to a blockchain. It is also the process where new bitcoins or certain altcoins are created.

Private Key: A string of letters and numbers that are used for sending cryptocurrency. The private key should be kept secret because it enables spending with the cryptocurrency wallet.

Public Key: A string of letters and numbers that are used to receive cryptocurrency.

Satoshi: Named after the creator of Bitcoin, a Satoshi is the smallest unit of measure of the cryptocurrency. 1 Satoshi is 0.00000001 Bitcoin.

Satoshi Nakamoto: The mysterious creator of Bitcoin. Even though Bitcoin was created in 2008, to this day nobody knows his or her true identity.

Smart contracts: An automated mechanism involving two or more parties where digital assets are put in and redistributed at a later date based on some preset formula and triggering event.

Wallet: A store of digital assets such as cryptocurrencies.

Whitepaper: An informational document that generally informs the investors on the objectives, philosophy, and the technology behind a project.

Whale: An investor that holds a very large amount of an asset. For cryptocurrencies, whales are often early buyers of a coin or corporations who buy large quantities.

Watch this space for updates about our platform and don’t forget to hit the upvote button below if you enjoy our posts.

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