GLOSSARY
(A)
Address
Just as an email address is needed to send and receive an email, an address is needed to send and receive cryptocurrency. It can be shared publicly by text or in the form of a QR code.
Airdrop
An airdrop is a marketing tactic whereby a cryptocurrencyor token is distributed to an audience, usually in exchange for performing a simple task, like sharing news, referring a friend, or by virtue of owning a certain coin.
All-time-high
All-time-high refers to the highest point, in terms of price or market capitalization, that a currency has ever reached in its history.
All-time-low
All-time-low refers to the lowest point, in terms of price or market capitalization, that a currency has ever reached in its history.
Altcoin
Every cryptocurrency or token other than Bitcoin.
AML
AML stands for anti-money laundering, which constitutes a set of international laws poised to stop criminals from laundering their money.
Anti-virus software
Anti-virus software, sometimes referred to as anti-malware software, scans your device to detect and restrict the spread of malware.
API
API stands for Application Programming Interface. It is a tool that specifies how different software components should interact.
Arbitrage
Arbitrage is a practice where traders take advantage of the price difference of the same asset in two different markets.
Atomic Swap
An atomic swap is a way by which people can directly exchange one digital asset for another on a different blockchain, or off-chain, without any third party involved.
(B)
Backdoor
A backdoor is a gateway into your computer or mobile device through which hackers can connect to your machine to infect it with malware.
Bear
A bear refers to a person who is pessimistic about the future of a digital asset, expecting the price to decline. You can also say someone is ‘bearish’ about the market or price.
Bear trap
A bear trap is a technique used by a group of traders, to manipulate the market. It entails selling a large quantity of a currency at the same time, causing a selloff by other traders, and then quickly buying back in at a lower price. As the market recovers, they can make a profit.
Bearwhale
A bearwhale refers to a heavy trader who is pessimistic about the future of a digital asset, or selling large amounts of coins.
Benchmark
A benchmark is a measurement standard used to determine the performance of an asset, portfolio, or market.
BFT
BFT stands for Byzantine Fault Tolerance. It is a characteristic that defines a fault-tolerant system, capable of reaching consensus, in spite of a situation where communication between participating parties cannot be trusted or verified.
Bid price
The bid price refers to the value buyers offer for an asset.
Bid-ask-spread
The bid-ask-spread refers to the price difference between the lowest asking price and the highest bid price in an order book.
BIP
BIP stands for Bitcoin Improvement Proposal. It is a common procedure to propose changes and additions to the Bitcoin code.
Bitcoin ATM
A Bitcoin ATM, sometimes called a BTM, is a Bitcoin Automatic Teller Machine, where people can buy or sell Bitcoin for cash.
Bitcoin cash
In August 2017, a group of Bitcoin enthusiasts changed the consensus rules of Bitcoin. Since only a few miners and participants followed them, the network forked.
Block
A block, on the blockchain, is simply a collection of transactional records. Each block references the block before it, forming a long chain all the way back the first block.
Block reward
For each block that a Bitcoin miner finds, an amount of Bitcoin is created ‘from nothing’. The miner gets to keep these newly minted coins and is then free to sell them. In addition, the miner also gets to keep all of the transaction fees. In the future, when all 21 million Bitcoins that can ever exist have been mined, the sole incentive for miners to maintain the blockchain is to win transaction fees.
Bollinger Band
This refers to a tool used to recognize patterns in price movements, which may help to predict future price movements.
Bot
A bot, or trading bot, is automated trading software that can execute trading orders very fast, based on a preset of buy-and-sell rules.
Broadcast
When signing a transaction, or mining a block, the data is broadcast to the entire network, so that everyone can know what transactions have taken place on the blockchain.
BTC
BTC is short for Bitcoin.
BTM
BTM is a commonly used name for a Bitcoin ATM.
Bubble
A bubble describes a condition where a hype drives the market price up, way beyond its actual value. It is usually followed by a steep, rapid market correction downwards.
Bull
A bull is a person who is optimistic about the future of a coin, or market, expecting prices to rise, and trades accordingly. You can also say someone is ‘bullish’.
Bull market
A bull market describes a positive trend in market prices.
Bull trap
A false signal in the market where it appears as if an asset’s price is picking up, but actually doesn’t, leading bulls to make a loss.
Buy wall
A buy wall is created when a large buy order, or multiple buy orders at the same price, are placed, making it difficult for a price to move the wall’s value.
BTFD
An expressive call by supporters of a certain asset to buy when prices are at a low point.
Bitcoin Civil War
The Bitcoin Civil War refers to a dispute over block size increase. It resulted in the creation of Bitcoin cash and the activation of SegWit on the Bitcoin chain.
Byzantine’s General Problem
The Byzantine Generals’ Problem describes a situation where consensus needs to be reached, while communication between the parties involved cannot be trusted or verified.
(C)
Candlesticks
Candlesticks refers to a graphing technique to show price changes over time. Each candle provides information on the opening price, closing price, the high and low in a given time period.
Centralized exchange (CEX)
A CEX refers to an exchange platform maintained by a central entity that acts as a custodian to its users’ funds.
Circulating supply
The total number of coins circulating in the market and in the general public’s hands.
Close
Close refers to the closing price, exactly as it is used with regard to financial stocks.
Coin
A coin is a cryptocurrency that can operate independently from any other platform, and can be traded against other coins or currencies.
Coinjoin
A coinjoin refers to a technique where multiple transactions of different people are mixed together to make it impossible to see which inputs belong to which outputs.
Cold storage
Cold storage refers to any method, such as using a piece of paper or a hardware wallet, to store cryptocurrencies offline.
Cold wallet
A cold wallet is a wallet for digital assets that is not connected to the Internet.
Confirmation
When a transaction is included in a block by a miner, it is confirmed. Each subsequent block, which must always reference the block before it, adds another confirmation. After six confirmations transactions are generally understood to be irreversible.
Correction
A market correction is a significant reverse movement in a digital asset’s price or that of a market as a whole to adjust for over- or under-valuation.
Cryptocurrency
Cryptocurrency is a form of digital money secured by cryptography on a blockchain.
Cryptography
Cryptography is a technique by which information is hidden, secured and authenticated.
Custodial
Custodial, custody, or custodian, usually refers to the storage of keys with respect to wallets and exchanges. A custodial setup describes a situation where a centralized exchange holds its users private keys, while providing users a login account.
(D)
Dark wallet
A dark wallet is a Bitcoin wallet that relies on coinjoin, among other methods, to provide users with extra anonymity.
Days Destroyed
Days Destroyed is a measurement of coins that have not been used for a long time which are suddenly spent. For example, if 100 BTC is kept in a wallet for 365 days, it is counted as 100 x 365 = ‘36,500 days destroyed’.
Dead cat bounce
A dead cat bounce describes a temporary recovery in price after a significant decrease.
Decentralized applications (dApps)
A type of app that runs on a decentralized network.
Decentralized exchange (DEX)
A type of digital asset exchange that is peer-to-peer based, without intermediaries. On this type of exchange, users hold custody over their funds.
Deflation
Deflation refers to a reduction of the general level of prices in a market or economy.
Depth chart
A depth chart shows bids and asks, based on limit orders, indicating the point at which the market is most likely to accept a transaction.
Derivative
A derivative is a contract that gets its value from the performance of an underlying asset, index, or interest rate.
Deterministic wallet
A type of wallet that derives keys from a seed phrase. With this seed phrase, or mnemonic phrase, you are able to back up and restore any wallet.
DLT
DLT stands for Distributed Ledger Technology, and is the technology that underlies distributed ledgers.
Dolphin
A person with a substantial quantity of cryptocurrency, but not enough to qualify as being a whale.
Dominance
Dominance refers to the dominance of a certain asset over a market in terms of market share.
DoS
DoS stands for denial of service. It’s a type of attack where a website or network is purposely overwhelmed with automated server requests, causing a shutdown.
Double Spending
The double spending problem refers to a situation where the same money is, illegitimately, spent twice.
Dump
Dump refers the action of selling off all your coins. Dumping refers to collective market selloffs, causing the price to go down.
(E)
EMA
An EMA, or exponential moving average, is a tool for traders to understand trends in the market. It is a weighted moving average, which prioritizes recent price data.
Escrow
An escrow is an agreement whereby a third party collects and releases funds to facilitate a trade between two parties.
Exchange
An exchange is a market place where assets can be traded. Digital asset exchanges specialize in cryptocurrencies.
Explorer
An explorer, or blockexplorer, is a tool that allows anyone to see what’s been stored on a blockchain. It allows you to look up addresses, associated balances, pending and confirmed transactions, and metadata.
(F)
Fee
With Bitcoin, every transaction comes with a fee. All the fees associated with a block is given to the Bitcoin miner who has found the block. In the future, when all 21 million Bitcoins have been found, the transaction fees are the only incentive for miners to keep doing their work and maintaining the blockchain.
Fiat
Fiat currency refers to legal tender, backed by a government. It can come in the form of cash, or electronically in the form of bank credit.
Fiat pegged cryptocurrency
Fiat pegged cryptocurrencies, also known as pegged currencies, is a coin, token, or asset, pegged to the value of a fiat currency. Holders of these coins should always be able to redeem their coins for the same value in fiat.
Fish
A fish, or minnow, is someone who holds small amounts of cryptocurrencies.
FOMO
An acronym that stands for Fear Of Missing Out.
FUD
An acronym that stands for Fear, Uncertainty, and Doubt.
Fundamental Analysis
Fundamental analysis is a method by which people research the technology, team, and growth prospects in relation to a digital asset, as part of a decision-making process around potential investment or trading.
Futures
A futures contract is an agreement to buy or sell an asset or commodity at a predetermined price at a set time in the future.
(G)
Genesis block
A genesis block is the first ever block on a blockchain.
(H)
Halving
With regard to the Bitcoin blockchain, halving refers to the moment when the amount of newly created Bitcoin per block is cut in half. This happens every 210,000 blocks.
Hardfork
A hardfork refers to any change that widens the existing blockchain ruleset. Unless all participants upgrade their software and follow the upgrade, such a change leads to a chainsplit, also known as a fork.
Hardware wallet
A hardware wallet is a form of ‘cold storage’. It is a hardware storage device where private keys can be kept. It is safer than a ‘hot wallet’ because it is not connected to the Internet.
HODL
HODL is ‘hold’ misspelled. It is sometimes seen as an acronym for Hold On for Dear Life and simply refers to holding on to your coins as part of a long-term investment.
Hot Wallet
A hot wallet is a wallet that runs on a computer or mobile phone and is connected to the Internet.
(I)
Inflation
Inflation is the process whereby prices increase while the purchasing power of a currency decreases.
ICO
ICO stands for Initial Coin Offering. It is a type of crowdfunding.
(K)
KYC
KYC stands for Know Your Customer. It refers to the obligation financial service providers have to verify the identity of customers to prevent money laundering or other illegal activities.
(L)
Ledger
A ledger is a record of transactions and assets.
Leverage
Leverage refers to a loan offered by a broker on an exchange to increase the availability of funds during margin trading.
Lightening Network
The Lightening Network is built on top of the Bitcoin blockchain. By connecting to the network and depositing Bitcoin into smart contracts, transactions can be made with each other for low fees, without being limited by the Bitcoin blockchain.
Liquidity
Liquidity is used to describe how easily a cryptocurrency can be bought and sold without impacting the market, and also how easily a digital asset can be exchanged for fiat currency.
Long
Long stands for buying a digital asset with the expectation of selling it at a higher price later on.
(M)
Maker
A market maker is someone who places an order and waits for someone to fill the order.
Margin call
A margin call occurs when you are trading a coin with leverage and your loss reaches your collateral. When that occurs, you are margin called and your collateral is sold.
Margin trader
A form of trading where a trader uses borrowed funds from a broker to trade a cryptocurrency.
Market Capitalization
Market Cap, or Market Capitalization refers to the total value of an asset’s, or a market’s price.
MACD
MACD is an acronym for Moving Average Convergence Divergence. It is a technical analysis method.
Multisig
Multisig is short for multi-signature. It is a type of address that enables multiple parties to collectively control funds.
(N)
Network
A blockchain network is made up of nodes that may be mining or simply verifying.
Node
A node refers to a device running a Bitcoin client that verifies everything that happens on the blockchain, as well as pass on transactions and blocks to its peers.
(O)
Option
An option is a type of contract which gives a buyer the right, but not the obligation, to buy or sell an underlying asset at a set strike price.
OTC
OTC stands for Over The Counter. It refers to peer-to-peer transactions, often facilitated by an escrow service.
(P)
Pair
When two assets can be traded for one another. For example, BTC/USDT.
Paper wallet
A paper wallet is a piece of paper on which private keys or the seed phrase to an address, is written. It is a form of cold storage.
Peer-to-peer (P2P)
Peer-to-peer refers to the exchange of data or goods between two peers without any third-parties or intermediaries.
Permissioned Ledger
A blockchain designed to only allow people or organizations to access the ledger if they have permission to do so.
Phishing
Phishing refers to the attempt to steal personal information (such as your password). It is usually done by pretending to represent some official authority.
Pool
A mining pool refers to a group of miners collaborating to find a new block together. Once a block is found, the block reward is divided proportionally.
Portfolio
A portfolio is a collection of assets held by an investment company, hedge fund, financial institution, or individual.
Protocol
In crypto-economics, a protocol refers to the set of rules that determine what makes a valid transaction block, and also how nodes communicate with one another.
Public key
A public key, or wallet address, can be compared to an e-mail address. If someone wants to send you funds, or if you’re withdrawing your funds from an exchange into your wallet, the public key is used as the address.
(R)
Rekt
Rekt stands for wrecked. In relation to trading crypto, it basically means to lose everything.
Relative strength index (RSI)
A form of technical analysis which measures the speed and change of price movements.
(S)
Satoshi
One satoshi is equal to 100 millionth of a Bitcoin, the smallest unit of a Bitcoin. The Lightening Network, which is built to facilitate micro-payments, will allow satoshis to be further divided into milli-satoshis.
Seed
A seed usually consists of a string of words used when deriving keys for a deterministic wallet.
Sell wall
A sell wall represents a situation where a large limit order has been placed to sell an asset. It is sometimes used by traders to create a certain impression in the market, making it difficult for the price to rise above the sell wall’s value.
Short
Shorting is a trading technique where a trader borrows an asset in order to sell it, expecting a further decline in its price. When the price does decline, the short seller will buy the asset and return it to the lender, making the difference in profit.
SMASMA
An SMA, or simple moving average, is a popular technical analysis tool. It is used by traders to identify trend direction in the market.
Smart contract
A smart contract is an incorruptible agreement on the blockchain which performs pre-determined actions when certain conditions are met.
Softfork
A softfork is an update that tightens the rules of the blockchain network.
Spot
Spot refers to a contract or a transactional trade with settlement taking place immediately.
Stablecoin
A stablecoin is a type of cryptocurrency with its value pegged to another, usually highly liquid, stable asset.
Symbol
A symbol refers to the ticker of a currency. For example, Litecoin’s symbol is LTC.
(T)
Token
A token is most often used to represent deeds, contracts or physical objects. It is a digital unit with utility in mind, rather than being a store of value in its own right.
(V)
Volatility
Volatility refers to how much and fast the price of an asset changes.
(W)
Wallet
A digital assets wallet is used to send, receive, and store cryptocurrency. There are hot and cold wallets.
Wash trade
Wash trading refers to a form of market manipulation where investors create artificial movements in the markets by simultaneously selling and buying the same digital assets.
Whale
A person, capable of impacting the market by trading large amounts of cryptocurrency.
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