Beginners Guide to Cryptocurrency Lingo

Cryptocurrency isn’t just any old investment… it’s an entirely different world compared to the old run of the mill stocks and bonds. Living in the world of Meme Coins and Twitter especially, you are probably becoming used to seeing more acronyms, new and ever-changing technologies, and even for trained or experienced pros, going back to the basics of the cryptocurrency terms may take some time.

Read up on a few of the most popular terms in the Crypto Dictionary and though new words and acronyms are evolving before our eyes every day, we figured this was a good start.

 

Altcoin

Ultimately… all cryptocurrency coins aside from the ever famous Bitcoin. Dogecoin, Shiba Inu and Ethereum are among the few mainstream titles you may recognize though there are also thousands of alternative coins with minimal market value. Experts say you should stay close to the household cryptocurrency titles for investment.

 

Bitcoin

Launched back on January 3, 2009, Bitcoin was the very first and still the most valuable cryptocurrency. Its value has seen wild fluctuations in the duration of its life, but it continues to flourish and climb. Including the last few months, the price of Bitcoin has fluctuated from below $30,000 up to exceeding its all time high in the $60,000 range.

 

Block

Data grouped within a blockchain. On cryptocurrency blockchains, as users buy or sell coins, transaction records are what build these blocks, and each block can hold only a certain amount of information. Once it reaches that limit, a new block is formed to continue the chain.

 

Blockchain

Record book keeping in digital form, Blockchains are the underlying technology behind cryptocurrencies. A blockchain is the result of sequential blocks that build upon one another, creating a permanent and unchangeable ledger of transactions or other data.

 

Coin

A representative store of digital value that lives on a given blockchain or cryptocurrency network. Some blockchains have the same name for both the network and the coin, like Bitcoin. Others can have different names for each, like the Stellar blockchain, which has a native coin called Lumen.

 

Coinbase

The most popular centralized cryptocurrency exchange. History books were noted as Coinbase recently became the first cryptocurrency exchange to ever go public on the Nasdaq.

 

Cold Wallet/Cold Storage

Though most of cryptocurrency is utilized and stored on the internet, you can also securely store your cryptocurrency completely offline. Many cold wallets (or hardware wallets) are physical devices that look similar to a USB drive. This kind of wallet can help protect your crypto from hacking and theft, though losing it (along with your crypto) become additional risks and responsibilities.

 

Cryptocurrency

A type of currency that’s digital and decentralized. Cryptocurrency can be used as a long-term store of value or to buy and sell things.

 

Decentralization

The principle of distributing power away from a central point. Blockchains are traditionally decentralized because they require majority approval from all users to operate and make changes, rather than a central authority.

 

Decentralized Finance (DeFi)

Financial activities conducted without the involvement of an intermediary, like a bank, government, or other financial institution.

 

Decentralized Applications (DApps)

Applications designed by developers and deployed on a blockchain to carry out actions without intermediaries. Decentralized finance activities are often completed using decentralized apps. Ethereum is the main network supporting activities in decentralized finance.

 

Digital Gold

Experts sometimes compare specific cryptocurrencies to real gold based on the way it can store and increase in value. Bitcoin is commonly referred to as digital gold.

 

Ethereum

The second largest cryptocurrency by trade volume, Ethereum is a crypto network and software platform that developers can use to create new applications, and has an associated currency called ether.

 

Exchange

A digital marketplace where you can buy and sell cryptocurrency.

 

Fork

When a blockchain’s users make changes to its rules. These changes to the protocol of a blockchain often result in two new paths — one that follows the old rules, and a new blockchain that splits off from the previous one.

 

Gas

A fee that developers have to pay to the Ethereum network in order to use the system. Gas is paid in ether, the native cryptocurrency of Ethereum.

 

Genesis Block

The first block of a cryptocurrency ever mined.

 

HODL

Stands for “Hold On for Dear Life” though the term originated from a user typo on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.

 

Halving

A feature written into Bitcoin’s code in which after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. The halving can have an impact on Bitcoin’s price.

 

Hash

A unique string of numbers and letters that identify blocks and are tied to crypto buyers and sellers.

 

Hot Wallet

A software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.

 

Initial Coin Offering (ICO)

A way that funds are raised for a new cryptocurrency project. ICOs are similar to Initial Public Offerings (IPOs) of stocks.

 

Market Capitalization

For cryptocurrency, market cap refers to the total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins.

 

Mining

The process whereby new cryptocurrency coins are made available and the log of transactions between users is maintained.

 

Node

A computer that connects to a blockchain network.

 

Non-fungible Tokens (NFTs)

Non-fungible tokens are units of value used to represent the ownership of unique digital items like art or collectibles. NFTs are most often held on the Ethereum blockchain.

 

Peer-to-peer

Two users interacting directly without a third party or intermediary.

 

Public Key

Your wallet’s address, which is similar to your bank account number. You can share your public wallet key with people or institutions so they can send you money or take money from your account when you authorize it.

 

Private Key

The encrypted code that allows direct access to your cryptocurrency. Like your bank account password, you should never share your private key.

 

Satoshi Nakomoto

The pseudonymous creator of Bitcoin. No one knows the true identity of Nakomoto — or if it’s more than one person.

 

Smart Contract

An algorithmic program that enacts the terms of a contract automatically based on its code. One of the main value propositions of the Ethereum network is its ability to execute smart contracts.

 

Stablecoin or Digital Fiat

A stablecoin pegs its value to some other non-digital currency or commodity. A digital fiat represents a fiat, or government-backed currency on the blockchain. (Example: Tether, which is pegged to the U.S. dollar)

 

Token

A unit of value on a blockchain that usually has some other value proposition besides just a transfer of value (like a coin).

 

Vitalik Buterin

Programmer who invented Ethereum in 2015.

 

Wallet

A place to store your cryptocurrency holdings. Many exchanges offer digital wallets. Wallets may be hot (online, software-based) or cold (offline, usually on a device).

 

 

Additional resource: time.com

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