Greetings Crypto enthusiasts! Are you looking to build a more substantial Crypto vocabulary with which to converse with fellow traders and HODLers? If you find yourself puzzled and in a bit of a quandary because you don’t understand the discussion, don’t feel alone! The answer to “what the heck did they just say?” is there, let’s pull some definitions into one place so we can learn them, and therefore understand and use them!
Below is not a complete list but enough to begin to build a primary platform of verbiage. Perhaps print out and learn a couple of words per day. In no time, you will learn these common words and phrases and then add more to your repertoire as you grow.
ATH (All time high) – this refers to the highest price a Crypto coin has reached. For example, Bitcoin’s ATH was $19,800 (in USD), and this value reached its high on December 26, 2017. The amount took a plunge shortly after reaching this height. As of the writing of this document 7/22/2020, it is back up to $9350 (less than half of its ATH.) An ATL (all-time low) is, of course, the opposite of ATH.
Altcoins – Bitcoin isn’t the only Crypto available on the markets now. Since its introduction, there have been many other Cryptocurrencies that have made their debut—each unique and some more popular than others. Bitcoin remains the most valuable, however. These other Cryptocurrencies or “coins” are all classed as Altcoins. Some have “flashed out” and lost their value while some are still here and increasing in value.
Bitcoin Maximalist – This is a person who believes only in Bitcoin and won’t entertain that any Altcoin is worth buying, holding or trading. They feel any coin that isn’t Bitcoin is a “shitcoin” and unworthy or useless.
Block Reward – Remember reading my Blog on Mining? Well, a block reward is a compensation a Bitcoin miner receives when he successfully validates transactions and adds them to the blockchain.
Blockchain – A Blockchain is a ledger or file of all successful and valid Bitcoin transactions ever made and recorded.
Centralized exchange (CEX) – a Centralized Crypto exchange is an online platform where you can buy, sell and in most cases will only allow swaps of Crypto to Crypto; Some of the larger Exchanges do allow trading Crypto for Fiat. A Centralized exchange is owned, operated and controlled by a specific entity. Some of the centralized exchanges are Coinbase, Binance, Kracken, BitFinance and BitStamp.
DAO (Decentralized Autonomous Organization) – is a decentralized organization usually run by its shareholders. It has no central governing authority and has a clear set of rules which are coded on a Computer program. A hacker back in 2016 found a weakness in the code and managed to gain access and steal over 3.6 Million ETH in just a few hours. This theft caused ETH to experience a drop in the value of over 30% in one day.
dApps – stands for “decentralized Applications” which are built on Blockchain Technology. Since they are decentralized, they have no governing authority.
Decentralized Exchange (DEX) – is a decentralized exchange where no one central authority governs. Crypto’s are bought, sold, and exchanged and security is much harder to breach than with a CEX.
DeFi (Decentralized Finance) – Another blog I authored was on this very subject and a very exciting subject to write about!! DeFi is an alternative decentralized monetary system run on the public blockchain. Alternative because it is not a traditional centralized centrally controlled institution. Watch this one!!
Digital Address – A digital address is a wallet address that is unique to the receiver the same way as his/her home address is unique to them. Composed of 27 to 34 letters and numbers; it allows crypto funds to be sent straight to the receiver’s Crypto Wallet.
Digital Wallet – These wallets are created to store mainly Bitcoin, but some can store other cryptocurrencies. They can be mobile apps, Desktop apps, remote servers and even hardware wallets. The most secure wallets are the cold storage wallets. These include paper wallets or hardware devices such as a Trezor or Ledger. All make use of public the public digital address which you share to those sending funds to you. Never ever, give anyone your private keys.
Fiat – is a currency backed by country or state-owned currency. I.E USD, Euro, CAD, etc.
F.O.M.O. – This acronym stands for Fear Of Missing Out. This fear generally refers to missing out on a trade deal of some sort, and we act without thinking it through. Most often we make a bad choice because of being fear led and not using our common sense.
FUD – This is another acronym meaning Fear, uncertainty and Doubt. If we succumb to Fud, we are again allowing FEAR to control our emotions and thereby tend to make bad judgements.
Hodl – this is an off spelling of the word Hold which Bitcoiners use to mean the same thing – hold. If I remember correctly, someone misspelt HOLD with HODL and it was adopted. Bitcoin owners and some other cryptocurrency owners “Hodl” through fat and lean price times. This practice started in the Crypto Bubble pop of December 2013.
ICO (Initial Coin Offering) – The practice of raising capital from the public for Crypto projects. ICO Investors only hold the tokens and do not have voting rights or hold any equity. The ICO bubble lasted from October 2017 to March 2018 when hundreds of successful ERC-20 type based on Etherum. .ICO’s are very risky as most turned out to be scams, and investors lost their money. Binance was the first successful IEO (Initial Exchange Offering)
IEO (initial exchange offering) – Much the same as ICO’s high-risk wise. IEO’s are fundraisers for new coin creation on exchanges. The first IEO was for GIFTO a new token created by Binance in 2018. They successfully raised thirty million on Binance exchange for GIFTO.
KYC (Know your customer) – These are identity checks required by regulatory commissions which require users to provide proof of identity with passports, drivers licenses, proof of address and webcam versification.
Market Cap – Market capitalization is the current price on the market of a cryptocurrency multiplied by the total number of coins in the market or circulation supply. Bitcoin holds the highest place in market capitalization.
Mining and Miners – Mining is the creation of new bitcoins which are earned by the first miner to solve a difficult equation who receives the reward for the transaction (fee) and add it to the block. Every ten minutes a block is added to the huge distributed public ledger. Today most of the mining is done by big companies such as the Chinese-based Bitmain. Mining is not limited to Bitcoin, but any PoW (proof-of-work) type cryptocurrency.
To the Moon! – This describes an asset whose value rises notably and quickly. “Bitcoin to the Moon!”
PoS (Proof of Stake) – A consensus algorithm used by some cryptocurrencies. PoS cryptocurrencies are faster and can handle more transactions therefore per second than PoW (Proof of Work) cryptocurrencies but are less proven. Many Cryptocurrencies are switching over to this Algorithm because of having less impact on the environment. Validators with larger stakes generally are selected to create the next blocks even though these choices are designed to be random.
PoW (Proof of Work) – is a consensus algorithm which is designed to secure transactions without 3rd party input. Miners compete with each other to be first to solve difficult puzzles. The first to solve earns the Bitcoin reward. This work builds on previous puzzle solutions and serves as a way to verify current and past solutions. The main goal of PoW protocol is to stop cyber attacks such as DDoS (denial of Service) which results in shutting down a computer’s resources by sending in tons of fake requests. Both PoW and PoS are checking against double-spending.
Private Keys and Seeds – Major cryptocurrencies function by using three fundamental pieces of information derived from the Seed or recovery phrase. The address is generated after the private key (the private key gives ownership of the funds) From there a known algorithm is used to generate the public key. The address is a shortened representative version of the public key and can be used for sending and receiving funds. Think of the seed as the root of the tree. It is never exposed and supports the whole wallet. Never give this 12-word seed phrase nor the private key to anyone!
P & D (Pump and Dump) – Be aware that the value/price of a Cryptocurrency can be manipulated to artificially raise the value with intentions of selling it quickly to make lots of money. This action gets fueled by F.O.M.O. The psychological fear of missing out of a deal. Do your due diligence and keep your mind and eyes open.
Satoshi – Besides being the alias first name of the creator of Bitcoin (Satoshi Nakamoto) a Satoshi is also the smallest unit of Bitcoin. 1 Satoshi = 0.00000001 ฿.
Shitcoin – This is a cryptocurrency with little or no value. Coingecko evaluates Shitcoin like this: ShitCoin price today is $0.00000000 with a 24-hour trading volume of $0.727584. SHIT price is up 22.6% in the last 24 hours. It has a circulating supply of 0 coins and a max supply of 1 Trillion coins.
TOT (Total Market Cap) – The total cryptocurrency market cap is calculated by adding together the market capitalization of all of the cryptocurrencies listed.
Bitcoin Whale – this is a person or entity who owns such a large amount of Bitcoin that if they sold it or bought mass amounts, the affect could change the Bitcoin value/price in the markets.
WP (Whitepaper) – These are reports or guides that explain with authority about a problem and provides the solution. Marketers create Whitepapers to outline or to educate their audience about a particular issue or illustrate and promote a specific methodology or new cryptocurrency.