
The Crypto Glossary
- Posted by Kevin Wippermann
- Categories Crypto Education
- Date January 24, 2023
- Tags Acronyms, Crypto, Cryptocurrencies, Glossary, Terms
The Crypto Glossary aims at providing an exhaustive list of the key terms used in the Crypto space. We will continuously updated it as terminology evolves. We do our best to be accurate, so if you see any errors please let us know on twitter @CryptoCollegeCC or email us at info@CryptoCollege.cc, thank you.
A
ASIC: Stands for “Application-Specific Integrated Circuit.” It is a type of specialized hardware designed for a specific computing task or application, often used in cryptocurrency mining to perform the complex calculations required to validate and add transactions to a blockchain. ASICs are highly efficient and powerful for their intended purpose but cannot be easily reprogrammed for other tasks.
Address: A wallet address refers to a unique alphanumeric string of characters that serves as a destination for sending and receiving digital currencies. It is essentially a digital identifier or account number associated with a specific cryptocurrency wallet. It is important to note that wallet addresses are specific to each cryptocurrency and should be carefully managed to ensure the security and integrity of one’s digital holdings.
Altcoin: Any cryptocurrency other than Bitcoin, such as Ethereum, Cardano, and Solana
APR: Annual Percentage Rate. It is a standardized way to represent the cost of borrowing money, expressed as a yearly rate. The APR includes not only the interest rate charged on a loan, but also any other fees and charges associated with the loan, such as origination fees, closing costs, and other finance charges.
APY: Annual Percentage Yield. It is a financial term used to describe the total amount of interest earned on a deposit account, such as a savings account or staked crypto, over a one-year period. APY takes into account the effect of compounding interest, which means that the interest earned on the account is added to the principal balance, and then the interest is calculated based on the new, higher balance.
Airdrop: A marketing strategy in which a blockchain project distributes free tokens to a large number of people in order to increase awareness and adoption of the project.
B
Bag or Bag holder: in cryptocurrency refers to a collection of a specific coin or token that an individual or group holds. The term is often used in the context of a market downturn, where the value of a coin or token has decreased significantly and the holder is now “stuck with a bag” of that coin.
Bear/Bull market: A market that is characterized by falling prices is called a bear market, while a market characterized by rising prices is called a bull market.
Bear trap: A situation in which investors mistakenly believe that the value of a cryptocurrency is going to decrease and sell, causing the value to actually increase.
BIP: Bitcoin Improvement Proposals. A set of proposals that members of the bitcoin community have submitted to improve bitcoin. For example, BIP-21 is a proposal to improve the bitcoin uniform resource identifier (URI) scheme.
Bitcoin: The first and most well-known cryptocurrency, created in 2009 by an individual or group using the pseudonym Satoshi Nakamoto.
Blockchain: A decentralized, digital ledger of transactions that is used to record transactions across multiple computers.
Bull trap: A situation in which investors mistakenly believe that the value of a cryptocurrency is going to increase and buy, causing the value to actually decrease.
C
CBDC: stands for Central Bank Digital Currency. It refers to a digital form of fiat currency issued and regulated by a country’s central bank. Unlike traditional physical cash or commercial bank deposits, a CBDC is a digital representation of a nation’s currency that is directly issued and backed by the central bank. CBDCs leverage blockchain or other distributed ledger technologies to enable secure and efficient digital transactions. They aim to provide the benefits of digital payments, such as increased speed, accessibility, and transparency, while still maintaining the stability and control associated with a central bank.
CEX: Centralized exchanges are cryptocurrency trading platforms that are operated by a centralized entity. They have control over user funds and operate as intermediaries in trades, matching buy and sell orders on behalf of users.
Cold storage: A method of storing cryptocurrency offline in a hardware wallet, such as a USB drive, to protect it from hacking or theft.
Core Code (Bitcoin): Bitcoin Core code refers to the open-source software implementation of the Bitcoin protocol. It is the primary software used to run and maintain the Bitcoin network and includes the full node software, wallet functionalities, and other essential components for validating transactions and blocks on the Bitcoin blockchain.
Cryptocurrency: A digital or virtual form of currency that uses cryptography for secure and decentralized transactions and is typically based on blockchain technology. It operates independently of traditional banking systems and is known for its transparency, immutability, and potential for disrupting traditional financial systems.
D
DAO (Decentralized Autonomous Organization): A decentralized organization that is run by a set of rules encoded in smart contracts and operates on a blockchain.
Dapps: Short for decentralized applications, are software applications that run on a decentralized blockchain network, rather than on a single centralized server. They use smart contracts to manage and execute their functionality and are open-source and transparent, allowing anyone to access and contribute to their development.
Decentralized Finance (DeFi): A movement in the cryptocurrency industry that aims to use blockchain technology to create decentralized financial services and products, such as lending and borrowing platforms, decentralized exchanges, and stablecoins.
DEX: Decentralized exchanges are cryptocurrency trading platforms that operate on decentralized networks such as blockchain. They allow users to trade cryptocurrencies directly with each other without the need for intermediaries. Users have control over their funds, and trades are executed through smart contracts.
Dump: Refers to a sudden and significant drop in the value of a particular cryptocurrency or the entire cryptocurrency market
DYOR (Do Your Own Research): A reminder for investors to research and evaluate the potential risks and rewards of a cryptocurrency investment before making a decision.
E
EIP: Ethereum Improvement Proposal are upgrades to the Ethereum blockchain. Some can have very big impacts and ETH and its features. More information on the EIPs here!
Epoch: Epoch refers to a specific period in the Bitcoin blockchain’s history, which is characterized by a fixed duration of time during which certain rules or parameters are in effect. It is often used to describe the time between two significant events, such as halving events or major upgrades, that bring about fundamental changes to the Bitcoin network and its operation. Each epoch represents a distinct phase in Bitcoin’s evolution, impacting its supply, security, and overall functionality.
Exchange: A platform where cryptocurrencies can be bought, sold, and traded for other cryptocurrencies or fiat currency.
F
FED Fund Rate: The federal funds rate is the interest rate at which depository institutions, such as banks, lend or borrow funds from each other overnight to meet their reserve requirements set by the Federal Reserve. T
Fiat Currency: Traditional government-issued currency, such as the US dollar or Euro.
FOMO (fear of missing out): The feeling of missing out on potential gains in a rapidly appreciating market, causing investors to buy in at a high price.
Fork: A split in the blockchain network, resulting in two separate versions of the cryptocurrency.
FUD (fear, uncertainty, and doubt): Negative or misleading information spread in order to reduce the confidence and drive down the price of a particular cryptocurrency.
G
Gas fee: A small fee paid in cryptocurrency, usually Ether, to execute a transaction on the Ethereum blockchain.
Gwei: The denomination used in defining the cost of gas. Set a gas price of 20,000 Gwei, for example.
H
Halving: Bitcoin halving is a process that takes place every four years and involves reducing by 50% the reward that Bitcoin miners receive for adding a new block to the blockchain network.
Hard fork: A permanent divergence in the blockchain that occurs when non-upgraded nodes can’t validate blocks created by upgraded nodes, leading to the creation of two separate blockchains.
Hash: A digital fingerprint of some binary input.
Hash rate: A measure of the power of a cryptocurrency mining rig, usually measured in hashes per second.
Hedge: An investment made in order to reduce the risk of loss in another investment.
Hodl or Hodling: A term used to describe the act of holding onto a cryptocurrency for a long period of time, rather than selling it.
I
ICO (Initial Coin Offering): A fundraising method in which a new cryptocurrency project sells a certain number of tokens to early investors in exchange for established cryptocurrencies like Bitcoin or Ethereum.
J
JOMO: The opposite state of FOMO stands for “Joy of Missing Out.”
K
KYC (Know Your Customer): A process of verifying the identity of a customer before onboarding them as a client, typically including the collection and verification of personal information such as name, address, and government-issued ID.
L
L1 or Layers Ones: is a term used to refer to the underlying blockchain protocols or networks that provide the basic infrastructure for decentralized applications (dApps) and smart contracts. These protocols are also known as “base layer” or “main chain” protocols.
L2 or Layer Two: Refers to a secondary protocol or system built on top of an existing blockchain or network. It aims to address scalability and performance issues by moving some of the computational processes or transactions off-chain.
Lambo: A reference to the luxury car brand Lamborghini, often used in the cryptocurrency community as a symbol of wealth and success. It is also used to signal potential uptrends in the crypto market.
Ledger: A crypto ledger is a digital record or database that stores all transactions made using a particular cryptocurrency, such as Bitcoin, Ethereum, or Litecoin. It is essentially a decentralized and distributed database that is maintained by a network of computers that participate in the blockchain network.
LFG: is short for ‘Let’s f–ing go! ‘ and is used to express excitement about a project
Lightning Network: Is a layer-two scaling solution built on top of the Bitcoin blockchain networks. It is designed to enable faster and cheaper transactions by creating a network of off-chain payment channels.
Liquidity: The ease with which an asset can be bought or sold without significantly affecting the asset’s price.
M
Mainnet: Refers to the main and live version of a blockchain network where real transactions occur. It is the operational blockchain network that allows users to send, receive, and validate transactions using the native cryptocurrency or tokens of that particular blockchain. The mainnet is typically open to the public and serves as the primary network for decentralized applications (dApps), smart contracts, and other blockchain-based functionalities.
Metaverse: Is a collective virtual shared space, created by the convergence of physical and digital environments, where users can interact with each other and digital objects in real-time, often through avatars, using a combination of augmented reality (AR), virtual reality (VR), and other immersive technologies.
A Merkle tree: Also known as a hash tree, is a data structure used in computer science and cryptography to efficiently verify the integrity and consistency of large amounts of data. It is constructed by recursively hashing pairs of data elements (usually chunks of data or cryptographic hashes) until a single root hash is obtained, known as the Merkle root.
Meme coin: Is a type of cryptocurrency that derives its value and popularity primarily from internet memes and online communities. These coins often have no practical use or underlying technology but are created as a form of social commentary, entertainment, or parody. Meme coins typically have low barriers to entry and are often characterized by their humorous or unconventional branding. They often gain attention and traction through viral marketing campaigns and social media engagement. However, it’s important to note that meme coins are highly speculative and can be volatile investments due to their lack of fundamental value or utility beyond their meme-based appea
Mining: The process of using specialized software and hardware to verify and record transactions on a blockchain.
Mnemonic phrase: A set of words that can be used to restore access to a wallet or account in case of loss of the original login credentials.
Moon: A term used to describe a major price movement upwards. For example, Ripple is mooning.
Multi-sig: Short for “multi-signature,” is a digital signature scheme that requires more than one signature to authorize a transaction or an action. It is a security feature that is often used in blockchain-based systems to prevent unauthorized access and ensure that transactions are executed only with the approval of multiple parties
N
NFT (Non-Fungible Token): A digital asset that represents ownership of a unique item, such as a digital art piece or collectible. NFTs are stored on a blockchain and can be bought, sold, and traded like other cryptocurrencies.
Node: A node is a device or computer that participates in the network by processing, storing, or transmitting data and facilitating communication between other nodes.
Nonce: A nonce in the Bitcoin blockchain is a random number used in the process of mining to find a valid block hash that meets the network’s difficulty target. Miners continually change the nonce until the desired hash is found, allowing them to add a new block to the blockchain.
Not your keys, not your cryptos: Is a phrase that emphasizes the importance of maintaining control over the private keys that are used to access and manage one’s cryptocurrency assets. In other words, if you don’t control the private keys to your cryptocurrency, you don’t truly own the assets. It is a reminder that it is important to store your own private keys in a safe and secure place, rather than relying on a third-party service or platform.
O
Off-chain: Transactions that occur outside of the blockchain.
On-chain: Transactions that are recorded on the blockchain.
Open Source: Open source refers to software or projects that are made freely available to the public, allowing anyone to view, use, modify, and distribute the source code. This open approach encourages collaboration and community-driven development, fostering innovation and transparency in the software industry.
Ordinals (Bitcoin): Bitcoin is the process of inscription of digital content (Art) to Bitcoin’s small denomination the Satoshi or Sats. (Readour full article here).
Over The Counter (OTC): Trading refers to the process of trading financial assets directly between two parties without the involvement of a centralized exchange. In OTC trading, buyers and sellers negotiate and execute trades privately, often facilitated by brokers or dealers.
P
Peer to Peer: A peer-to-peer (P2P) network is a type of network in which each node, or computer, on the network can act both as a client and a server. This means that every computer on the network can both request and provide services or resources to other computers on the network without the need for a central server or authority.
Ponzi scheme: Is a fraudulent investment operation where the operator pays returns to existing investors using funds obtained from new investors, rather than from actual profits or legitimate business activities. The scheme usually promises high returns with little or no risk, enticing new investors to join. As the scheme relies on a constant influx of new investors to sustain itself, it eventually collapses when there are not enough new investors to pay the promised returns, resulting in significant financial losses for those involved.
Private key: A secret code that allows a user to access and manage their cryptocurrency in a wallet.
Proof of stake (PoS): A consensus algorithm used in some blockchain networks, in which users can validate transactions and create new blocks by holding and “staking” a certain amount of the cryptocurrency.
Proof of Stake pools: Are collective groups formed by cryptocurrency holders who combine their staked tokens or coins to increase their chances of being selected as validators in a PoS blockchain network. In PoS-based cryptocurrencies, validators are chosen to create new blocks and validate transactions based on the number of tokens they hold and are willing to “stake” as collateral.
Proof of work (PoW): A consensus algorithm used in some blockchain networks, in which users must use computational power to solve a complex mathematical problem in order to validate transactions and create new blocks.
Public key: A public address that can be shared with others to receive cryptocurrency.
Pump and Dump: A manipulative tactic in which a group of investors artificially inflate the price of a cryptocurrency by buying large amounts, then quickly selling off their positions to unsuspecting investors at a higher price.
Q
Quantum computing: A type of computing that uses quantum-mechanical phenomena, such as superposition and entanglement, to perform operations on data.
R
REKT: Shorthand slang for “wrecked” and a term used to describe a bad loss in a trade.
Remittances: Are the transfer of money or financial assets by migrants or expatriates to their home countries, typically to support their families or contribute to the economic development of their home communities. These payments are often sent through various channels, such as electronic transfers, money orders, or cash, and play a significant role in many countries’ economies, providing a vital source of income and financial support for recipients.
Reward or Blockchain reward: Refers to the compensation given to the participants of a blockchain network, such as miners or validators, for contributing to the maintenance and security of the network. This can include the creation of new coins through mining or the receipt of transaction fees
Rug Pull: A rug pull refers to a scam in which a project or individual behind a cryptocurrency or decentralized finance (DeFi) project suddenly and unexpectedly withdraws all of the funds from their project, leaving investors with worthless tokens and no means of recover.
S
SATS or Satoshi: This is the smallest unit of bitcoin, which is 0.00000001 BTC. The name SATS is shorthand for Satoshi Nakamoto, which is the fake name used by the creator of bitcoin.
Seed phrase: also known as a recovery phrase or mnemonic phrase, is a set of words that can be used to restore access to a wallet or account in case of loss of the original login credentials. It serves as a backup of the private key and can be used to recover the funds stored in the corresponding wallet.
SHA – Secure Hash Algorithm: The Secure Hash Algorithm or SHA is a family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST).
Shadow fork: Is a type of fork in software development that is created without the knowledge or permission of the original project or its maintainers. It is called a “shadow” fork because it is often developed in secret, with little or no communication with the original project’s community.
Shadow forks can be created for various reasons, such as disagreement with the direction or management of the original project, or a desire to add features or make changes that are not being considered by the original project. However, in some cases they can be use to run some tests that are then merged back into the original project.
Smart contract: A computer program that automatically executes the terms of a contract when certain conditions are met. Smart contracts are often used in blockchain technology to facilitate, verify, and enforce the negotiation or performance of a contract.
Stablecoin: A type of cryptocurrency that is pegged to the value of an asset such as a fiat currency or commodity, in order to reduce volatility.
Staking: Is the process of holding cryptocurrency in a wallet or smart contract for a certain period of time to support the operations of a blockchain network and receive rewards in return.
Sub-Primes: Subprime refers to a type of loan, often a mortgage, that is made to borrowers with a lower credit score or a history of financial difficulties. These borrowers are considered higher risk because they may have a higher likelihood of defaulting on their loan payments.
T
Testnet: is a simulated blockchain network used by developers to test and experiment with new features, smart contracts, and applications without using real cryptocurrency. It allows developers to identify and fix potential issues before deploying them on the mainnet, the live and operational blockchain network.
Tokenomics: Refers to the economic principles and mechanics governing the creation, distribution, supply, demand, and overall value of a cryptocurrency or blockchain-based token. It encompasses various factors, including token utility, circulation, governance, and incentives, that shape the token’s ecosystem and impact its market behavior.
Transaction hash: Also known as a “tx hash” or “transaction ID,” is a unique string of characters that identifies a specific transaction on a blockchain network. It is a digital fingerprint of a transaction that confirms that the transaction has been added to the blockchain
Turing-complete: The ability for a programming language to be able to perform any calculation that can be described as an algorithm, allowing for the creation of smart contracts on some blockchains.
U
UTXO (Unspent Transaction Output): A record of a bitcoin transaction that has not yet been spent, representing the amount of bitcoin that can be spent in a future transaction.
V
Validator: also known as a validator node, is a participant in a blockchain network that is responsible for verifying the transactions that occur on the network. Validators play a crucial role in ensuring the security and integrity of the blockchain by ensuring that transactions are valid and not fraudulent.
Volatility: The degree to which the value of a cryptocurrency can fluctuate in a short period of time.
W
Wallet: A decentralized digital wallet based on the blockchain technology used to store, send, and receive cryptocurrencies.
Wallet (Hot): A hot wallet refers to a digital wallet that is connected to the internet and accessible for immediate transactions. It is typically used for storing and managing cryptocurrencies that are actively being traded or used for frequent transactions. Hot wallets offer convenience and quick access to funds, but they are more vulnerable to security risks due to their online connectivity.
Wallet (Cold): A cold wallet, also known as a cold storage wallet, is a physical device or offline storage solution used for securely storing cryptocurrencies. Cold wallets are not connected to the internet and therefore offer enhanced security against hacking and unauthorized access. They are commonly in the form of hardware wallets or paper wallets. Cold wallets are ideal for long-term storage of cryptocurrencies and provide an additional layer of protection against potential cyber threats.
Wallet (Paper): A paper wallet is a physical, offline method of storing cryptocurrency. It involves generating a pair of cryptographic keys (public and private keys) for a digital wallet and then printing or transcribing these keys onto a physical piece of paper. This paper serves as a secure way to hold and safeguard the keys, keeping them disconnected from the internet and potential online threats. The keys on the paper can be used to access and manage the associated cryptocurrency funds when needed.
WAGMI: Is an acronym commonly used in cryptocurrency communities and online forums. It stands for “We Are Gonna Make It” and is often used as an expression of optimism and confidence in the potential success or profitability of a particular cryptocurrency investment. WAGMI is used to convey a belief that the value of the cryptocurrency will rise, leading to financial gains for those who hold or invest in it. It has become a popular rallying cry among cryptocurrency enthusiasts to encourage positive sentiment and camaraderie within the community.
Web 3.0: Also known as the decentralized web, is the next generation of the internet that aims to create a more open, transparent, and user-centric digital environment. It is a paradigm shift from the current web, which is dominated by centralized entities that control user data and online interactions.
Whale: An individual or entity that owns a large amount of a particular cryptocurrency, potentially having significant influence over the market.
White Paper: A detailed explanation of a cryptocurrency, designed to offer satisfactory technical information, explain the purpose of the coin and set out a roadmap for how it plans to succeed. It’s designed to convince investors that it’s a good choice ahead of an ICO.
X
XBT: Is a currency code that is used to represent the cryptocurrency Bitcoin. The code XBT is used by some exchanges and trading platforms as an alternative to the commonly used symbol BTC (Bitcoin), as the ISO 4217 standard, which sets codes for currencies, does not include a code for Bitcoin. However, it’s worth noting that XBT is not as widely used as BTC and some exchanges or platforms may not recognize it.
Y
Yield farming: The practice of lending or staking a cryptocurrency in order to earn a return, often through interest or rewards.
Z
Zero-knowledge proof: A method by which one party can prove to another party that a statement is true without revealing any additional information, used in some privacy-focused cryptocurrencies.
#
0x (ZRX) is an open-source protocol built on the Ethereum blockchain that allows for the decentralized exchange of ERC-20 tokens. The 0x protocol provides a standardized way for decentralized applications (dApps) to interact with decentralized exchanges (DEXs) in order to facilitate the buying and selling of tokens.
51% attack: A type of attack on a blockchain network in which a group of miners control more than 50% of the network’s mining power, allowing them to manipulate the blockchain and potentially double-spend coins.
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Tag:Acronyms, Crypto, Cryptocurrencies, Glossary, Terms
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26 Comments
Thank you for this excellent article It was very helpful and informative.