Cryptocurrencies and their terms are now common in media and online groups. However, even if you know about these digital currencies and their technology, the technical words can make them more complex.
From Bitcoin and Blockchain to DeFi to NFTs, find an extensive dictionary of cryptocurrency terminology and acronyms here. This guide breaks down the complex terms used in the crypto world so that you can better understand the terms and concepts of digital currencies and blockchain technologies.
This will help new people learn all the basics of cryptocurrencies. Here is a guide to help you know everything you need about crypto.
A
Altcoin:
Altcoins are any cryptocurrency other than Bitcoin (BTC). Bitcoin and Ethereum serve as the basis for most cryptocurrencies. People see altcoins as any cryptocurrency, not including Bitcoin or Ethereum. Each altcoin has its own method for ensuring transactions and creating blocks. Some altcoins aim to stand out by offering unique features.
ASIC (Application Specific Integrated Circuit):
An “Application-specific integrated circuit,” or ASIC, is a unique type of chip. It’s designed for a specific task and excels at it, setting it apart from general logic chips or programmable devices. ASICs can be smaller and consume less power. However, creating them can be expensive, especially for small batches.
B
Bitcoin (BTC):
Bitcoin (BTC) is a digital currency that operates on a decentralized network, eliminating the need for a central authority or intermediaries. It facilitates peer-to-peer (P2P) transactions globally, providing users financial autonomy and privacy.
A public ledger called a blockchain keeps records of all Bitcoin transactions. This ledger uses cryptography to keep the transactions safe and open. Bitcoin was the first cryptocurrency, leading the way for many other digital currencies and blockchain-based apps to come along.
Buy the Dip:
When you buy an asset after its value has decreased, you are “buying the dip.”
You can buy a coin or token whose price has temporarily or permanently decreased.
Investors who buy during this dip hope the price will surge and then sell the asset at a higher price, often called “selling the top.”
Blockchain:
A blockchain is a distributed, unchangeable ledger that records transactions and tracks assets within a business network.
You can have tangible assets like a house, car, cash, or land or intangible assets like intellectual property, patents, copyrights, or your name. A blockchain network makes tracking and selling almost any valuable thing possible, lowering risk and costs for everyone.
C
Coin:
A colloquial term for a cryptocurrency.
Cold Wallet:
It’s possible to keep cryptocurrency in a cold wallet that doesn’t connect to the internet or deal with smart contracts.
Cold wallets are safe from online dangers like malware and spyware because they are not linked to the Internet. Smart contracts keep them safe from malicious decisions by remaining separate from them. In their most basic form, cold wallets are only used to send and receive assets.
Cryptocurrency:
Cryptocurrencies are Digital or virtual money locked by cryptography to guard security and stop forgery. Cryptocurrency coins and tokens are exchanged between people via wallets with public and private keys, allowing transactions to be started and confirmed.
Cryptography:
To ensure safety, you can scramble information into codes only you can read with the right key.
D
dApp (Decentralized Application):
Decentralized apps (dApps) are computer programs that run on a blockchain or a peer-to-peer network of computers instead of a central server. They differ from regular apps because they are spread across the network and managed by all users. dApps are usually made on platforms like Ethereum, and people can use them for many things, like digital wallets, exchanges, game platforms, personal finance tools, and social media platforms.
DeFi (Decentralized Finance):
A growing financial ecosystem called “Decentralized Finance” or “DeFi” uses blockchain technology to bypass standard middlemen like banks, brokers, and exchanges.
To reach this goal, DeFi works on a peer-to-peer (P2P) network that lets people use and give a wide range of financial services directly to each other. These services include loans, borrowing, insurance, and evident asset trading, creating a decentralized and open financial environment for everyone.
DAO (Decentralized Autonomous Organization):
Under a distributed autonomous organization (DAO), every member helps to make decisions without a central power. Though they are not free from online threats, DAOs usually use blockchain technology for security and openness. To grasp DAO operational dynamics, investigate their benefits and drawbacks.
Use an all-in-one security and privacy tool to protect your digital activities thoroughly.
Distributed Ledger:
A distributed ledger is a database that multiple users can access and work to share and keep in sync across different places, institutions, or countries.
With this method, everyone can see transactions. Every network member can see and keep a copy of the records shared. If you make changes or improvements to the ledger, they are quickly updated and sent to everyone else within seconds or minutes.
Double Spend:
This blockchain technology answers the issue of spending the same cryptocurrency more than once.
E
Exchange:
An exchange is a place where financial items like commodities, stocks, and cryptocurrencies can be traded. People can buy and sell stocks on it, and private and public companies and other groups use it.
Ether (ETH):
The Ethereum platform’s native coin.
Ethereum:
Ethereum is the second-largest cryptocurrency in terms of market capitalization.
Encryption:
Encryption refers to the process of securing digital information to prevent unauthorized access.
F
Fiat Currency:
Fiat currencies are backed by the government, like traditional currencies like the U.S. dollar or the euro.
Fork:
A new blockchain version is made when the blockchain system is changed.
G
Gas:
A Gas fee in Ether is paid for activities on the Ethereum network.
Graphics Card:
Graphic cards are a very powerful part of computers used to handle blockchain activities.
H
Hash:
A hashing method takes data and turns it into a unique string of letters and numbers.
Hot Wallet:
An online place to store cryptocurrencies that only users with the right passwords can access. This keeps hackers from stealing the coins.
I
ICO (Initial Coin Offering):
A strategic way for new crypto projects to raise money, like an IPO in the real world.
J
Jager:
Jager is the amount people buy for a minimal amount of Binance Coin (BNB).
K
KYC (Know Your Customer):
Crypto companies ensure that the people who use their services are who they say they are.
L
Ledger:
A list of all the activities banks and blockchain networks monitor.
M
Market Capitalization:
The total market value of a cryptocurrency.
Mining:
Crypto mining uses proof of work to verify transactions. Computers solve a complex hash in many ways. More power allows for more guesses and increases the chances of earning new currency.
Meme Coin:
A “meme coin” is a type of cryptocurrency named after a character, person, animal, piece of art, or anything else that can be copied. People who trade and watch these coins online usually like them, and they’re meant to be fun and lighthearted. Although meme coins may be fun, they are also hazardous investments that may not be worth much.
N
Node:
A gadget or computer is used to verify transactions and carry a copy of a blockchain.
NFT (NonFungible Token):
NFT stands for “non-fungible token.” Something is non-fungible if it is special and can’t be changed. On the other hand, crypto and real money are fungible, which means they can be traded or swapped for each other. Each NFT has a digital stamp that makes it unique. NFTs are digital assets, like photos, movies, audio files, and other digital files. Comic books, sports memorabilia, playing cards, games, and other things are all NFTs.
O
Onchain:
A transaction that takes place on a blockchain and is recorded in the public log.
Onledger Currency:
The cryptocurrency that is used on a blockchain ledger.
Orphan Block:
A block that the network doesn’t accept or add to the blockchain.
P
P2P (Peer-to-Peer):
Peer-to-peer (P2P) refers to a decentralized network architecture where participants, known as peers, interact directly with each other without relying on a central authority or server. In a P2P network, each participant functions as a client and a server, allowing them to share resources and services directly with peers.
Private Key:
A Private Key is an encrypted password for accessing crypto holdings.
Public Key:
A crypto wallet’s public address is where you can send and receive money.
Proof of Work (PoW):
Proof of work, first used by Bitcoin, is the original consensus method used in cryptocurrencies. Proof of work and digging are two ideas that go hand in hand.
The word “proof of work” comes from the network requiring a lot of computer work. In proof-of-work blockchains, virtual miners worldwide fight to solve hard math problems. The first miner to figure out the puzzle confirms and adds the latest transactions to the blockchain. As a reward, the network gives that miner a set amount of cryptocurrency.
Proof of Stake (PoS):
Proof-of-stake is used to process transactions and make new blocks to reach an agreement on the blockchain. A consensus method keeps a distributed database safe by ensuring correct entries. In the world of cryptocurrencies, this list of records is called a blockchain, and the consensus process keeps it safe.
Q
Quantum Computing:
A branch of computing that uses quantum mechanics to handle data more quickly.
R
Regulated:
A place where people have to follow specific rules.
S
Satoshi Nakamoto:
The alias used by the author of Bitcoin.
Smart Contract:
Smart contracts are digital contracts saved on a blockchain. They trigger without exception upon fulfillment of specific conditions and terms.
SHA256:
A hashing method that Bitcoin uses to make sure that data is correct.
Seed:
A cryptocurrency wallet makes up a set of words to let you in.
Stablecoin:
Stablecoins are cryptocurrencies whose value is pegged or tied to the value of another currency, commodity, or financial instrument. The goal of stablecoins is to offer an alternative to the high volatility of the most well-known cryptocurrencies, such as Bitcoin (BTC), which has made investments in cryptocurrencies less valuable for daily transactions.
T
Tether (USDC):
Tether (USDT) is the largest stablecoin in terms of market value. Crypto traders use stablecoins like Tether to move funds between cryptocurrencies or convert investments into or out of normal currencies.
The value of USDT is tied to the value of the U.S. dollar so that it stays fixed when the dollar’s value changes. The idea is that Tether won’t be affected by big changes to other coins, like Bitcoin (BTC).
Terahash:
It is a way to measure how fast a computer or network hashes.
Token:
A “token” is usually any cryptocurrency that isn’t Bitcoin or, less commonly, Ethereum. The word “altcoin” (alternative coin) is often used instead of it. The word “token” refers to a crypto-asset that works on a blockchain platform as a “non-native token.”
U
USD Coin (USDC):
A stablecoin that is linked to the dollar.
V
Volume:
The whole amount of cryptocurrency that was sold during a specific time.
Validator:
A person or entity that checks that transactions on a proof of stake blockchain are valid.
Volatility:
The unpredicted market swings.
W
Wallet:
It’s important to understand how crypto wallets work. A traditional wallet holds cash and credit cards. On the other hand, a crypto wallet is a digital storage system that keeps your digital currency safe. You own a public key and a private key on the Bitcoin (BTC) system when you buy Bitcoin (BTC).
The public key is like your bank account number: other people can see it, but they can’t get to your money. The secret key is like your bank account password. If you give it to someone, they can steal your money.
Wei:
The very tiny amount of Ether.
X
XRP:
Arthur Britto and David Schwartz created the XRP Ledger using a blockchain. After that, McCaleb and Britto started Ripple, which used XRP to make transfers easier on its network. There are a few different reasons to buy XRP: to invest, trade for other cryptocurrencies, or help the Ripple network handle transfers.
Y
Yield:
Yield is the profit from an investment beyond the initial amount. It usually involves bond interest or stock income. Most of the time, yield is given as a percentage based on the investment’s market value or buying price.
Z
Zero Confirmation:
When a transaction has not yet been approved on the blockchain, it is not yet part of it. This is called a “zero-confirmation transaction.” It is a transaction that has been started but hasn’t been checked by the miners on the network yet.
Final Thoughts
Navigating the complex waters of digital assets and blockchain technology requires an awareness of the language of cryptocurrencies. This cryptocurrency glossary is helpful since it breaks the jargon and offers precise definitions, enabling novice and experienced investors to make wise selections.
