When you step into the world of cryptocurrency (“crypto”), it could feel as though you are speaking and hearing another language. In fact, it can be quite confusing if you don’t understand some of the common terms, slang, and vocabulary. To help you join conversations in the crypto space, we have identified some common terms and slang to help you maneuver through the crypto world.
A blockchain is a data system that allows for the creation of a distributed digital ledger of transactions in a non-centralized network. Blockchains can be public (open to anyone to join) or private (restricted access/invite only). Transaction data is permanently recorded in files called “blocks.” The blockchain is comprised of “blocks” and is constantly growing as each new record, datum, or block is added onto the ledger, also known as “chain” for everyone to see. A copy of the full ledger is recorded on each node, or computer, in the network. The purpose of a blockchain is to allow fast, secure and transparent peer-to-peer transactions.
Cryptocurrency is a digital or virtual currency that uses cryptography for security. Because of this security feature, cryptocurrency is difficult to counterfeit. Cryptocurrency is not issued by any central governmental authority nor tied to a specific country. Cryptocurrencies are used for many reason including an exchange medium or store of value.
Most coins or tokens are regarded as cryptocurrencies, even if most of the coins do not function as a currency or medium of exchange. While “coin” and “token” are often used interchangeably, a crypto coin is generally meant to indicate it can be used as a means of payment, while a token has other functionalities or use cases.
Short for alternative coin. This is generally used to describe any cryptocurrency other than Bitcoin (“BTC”) Altcoins can commonly be a variant (fork) of Bitcoin’s computer code, built using the Ethereum blockchain app platform or built with original codebase to help foster innovative ideas.
Cryptocurrencies don’t have a central computer or server that confirms transactions. They are “decentralized” - distributed across a network of a number of computers or nodes.
A node can be any active device that helps support the network by maintaining a copy of the blockchain. In some cases, nodes process transactions.
Cryptocurrency Trading Platform/Exchange
This is typically an online platform that allows customers to buy or sell cryptocurrencies or digital currencies for other assets. These platforms function as a marketplace for cryptocurrency holders to discover fair pricing for their digital assets, as well as help foster more participation to incubate innovation projects within the blockchain ecosystem. They also serve as secure distribution centers for blockchain-based tokens and coins.
While there are many trading platforms to choose from, we’re obviously partial to Bittrex’s lightning-fast trade execution, dependable digital wallets, industry-leading security practices, and commitment to transparency in our token listing process.
When first used in an early bitcoin forum, it was supposed to be written as “hold” but was misspelled and since then has taken a life of its own. When the industry is going on a wild ride, it means to hang in there. It’s also a very common meme.
A digital wallet is a software program that stores private and public keys and interacts with various blockchains to enable users to send, hold, and receive digital currency. If you use cryptocurrency, you will need to have a digital wallet.
This is a crypto-currency with relatively low volatility. It has price stability characteristics e.g by representing a fiat currency. By holding them you can insulate yourself from market volatility.
This is the system of moving cryptocurrency offline, as a way of safekeeping from hacking.
This is a computer process of recording and verifying information on public ledger known as the blockchain. In this process, nodes verify transactional data and are rewarded for their work with the release of a new cryptocurrency coin or token.
Fiat money is currency that a government has declared (by “fiat”) to be legal tender. The U.S. dollar, the euro, the Japanese yen, and the Mexican peso are examples of fiat currency.
The value of fiat currency is derived from the relationship between supply and demand rather than the value of material from which the fiat money is made. It can take the form of physical dollars, or it can be represented electronically, such as with bank credit.
A public key is a cryptographic key that can be utilized by any party to encrypt a message. Another party can then receive the message and use the private key that is only known to that individual or group, to decode the message. A private key will open your wallet. And both keys are used in cryptocurrency transactions.
A fork represents a change in the underlying programming protocol, or code, resulting in a split of the original blockchain into a new blockchain. There are multiple types of forks such as hard fork, soft fork or accidental fork. A fork results in the creation of a new coin often due to competing philosophies or protocol upgrade.
This commonly used acronym means “fear of missing out.” In crypto trading, it is often used to describe an impulsive decision to buy a coin as it rises or hold on to it during a decline.
“Fear, uncertainty and doubt.” It’s a common term in the crypto world to see someone spreading fear, uncertainly or doubt about a blockchain project.
“All-Time High.” This acronym is used when a cryptocurrency or coin has surpassed past records and reached its highest value ever recorded.
“Initial Coin Offering.” Using blockchain coins or tokens as a means of getting a new project off the ground.
“Two-Factor Authentication” also known as 2FA is an extra layer of security that is known as “multi-factor authentication” that requires not only a password and username but also a second layer of security to access an account or system.