A Guide to Basic Cryptocurrency Terms
Ready to join the Crypto revolution but puzzled by all sorts of crypto jargons, phrases and terminologies?
Then you’ve come to the right place.
In this post, I’m going to explore and explain some of the most popular terms associated with cryptocurrency that you must know.
Like any beginner, when I first started, I felt overwhelmed and confused by the in-jokes and terms used in the cryptospace.
It’s not only until I spent some time learning these new terms that I’m able to understand what people mean, how the technology works and participate more fully in crypto discussions.
If you’re new to the world of crypto, it’s very important that you know these terms related to blockchain and cryptocurrency.
Here I give you a list of Bitcoin and cryptocurrency terms to help you make sense of the jargon and stay ahead of the game.
30 Cryptocurrency Glossary
- Altcoins
It refers to any cryptocurrency other than Bitcoin. As Bitcoin was the pioneer in the cryptospace, all coins created after it’s considered alternative coins to Bitcoin. As of writing now, there are more than 2000 altcoins listed on Coinmarketcap. Some of the popular altcoins are Ethereum, Ripple, Litecoin etc.
- ATH
ATH is an abbreviation of “all-time high”. It’s used to refer to the price of cryptocurrencies. For example, the ATH of Bitcoin is $20,000.
- Bitcoin
Bitcoin with a capital “B” refers to the overall concept of Bitcoin: protocol, payment system, software, technology and the ecosystem as a whole.
- bitcoin:
bitcoin with a lowercase “b” is used as a currency unit.
- DApp/ dApp/ Dapp
Common abbreviations for decentralized application. It refers to application that runs on a decentralized peer-to-peer network. No one has the power to control the app as it’s launched on a distributed ledger.
Most of the DApp in the market are hosted on Ethereum’s blockchain.
Here’s a list of 10 awesome decentralized apps that you won’t want to miss!
- Satoshi/ Sats
A Satoshi is the smallest unit of Bitcoin recorded on the blockchain.
Each bitcoin (BTC) is divisible to 8th decimal place. And a unit of Satoshi is equal to 0.00000001bitcoin.
- Exchange
A cryptocurrency exchange is a website that allows you to buy, sell or exchange cryptocurrencies for other digital currency like Bitcoin, ether and ripple or traditional fiat money like dollars, pounds and yens.
Here’s a list of some the best cryptocurrency exchanges.
- Fiat
It refers to traditional paper currency that is controlled, regulated and recognized by banks and central governments as legal tender. For example USD, EUR and GBP are all fiat currencies.
- FOMO
It stands for “Fear of missing out”. In cryptocurrency, FOMO refers to making an investment when the price is skyrocketing.
Oftentimes, it’s a mistake made by newbies who are rushing into crypto just to get rich quick.
- FUD
Stands for “fear, uncertainty and doubt”. It’s commonly used to describe when investors lose confidence in the crypto market. It can be either based on facts, rumors or gut feelings.
- Fork
If you’ve been in cryptospace for some time, you probably would have heard of Bitcoin fork.
A fork is normally used to describe a change in blockchain protocol or cryptocurrency’s rules.
As developers constantly improve and update the protocol, when there’s a disagreement about the future developments that can’t be resolved, a fork will happen.
There are two main types of fork, hard fork and soft fork.
- Hard Fork
Hard fork is an update that makes the old protocol incompatible with the new chain. This permanent split from the original chain will result in two separate functioning and competing blockchains (new vs old).
For example, the split between Bitcoin and Bitcoin Cash is a hard fork.
- Soft Fork
Soft fork is an update on the blockchain in which both the new and old chain is compatible. This means that the cryptocurrency still maintains its rules and works in a reversible manner.
- HODL
HODL is an acronym that stands for “hold on for dear life”.
In early Bitcoin forums, someone misspelled the word “hold” in the message and readers interpreted it as an abbreviation for “hold on for dear life”.
Now it turns out becoming a meme which means hold onto your cryptocurrency investment and ignore the sentiments despite extreme price volatility.
So I can say that I’m a long-term HODLER!
- ICO
ICO stands for “Initial Coin Offering”. Similar to IPO, ICO is a new way for companies to fundraise by creating and selling its own digital tokens to the general public.
- Mining
Mining is the process of creating new unit of a cryptocurrency.
For example during the Bitcoin mining process, computer hardware is used to solve some mathematical problems for the network to verify, confirm transactions and then combine them into blocks.
- Miner
People carried out the process of mining by using their computers or renting mining resources are called miners. They’re rewarded with coins for their contribution to the network.
- Moon/ Mooning
When a digital currency rises sharply in value, people will say the price is going to the moon.
- MCAP
It’s a short form for market capitalization. It’s an important metric when it comes to analyzing a coin. For example, Bitcoin, the father of cryptocurrencies has the biggest market cap since 2009.
- P2P
Peer to peer. With the P2P network, two or more users can connect directly to each other via the internet without the need of going through a central server.
A private key is basically an extremely large and secret number/alphanumerical characters (letters and numbers) that allows you to send or spend your Bitcoins.
- Public key
A public key is another set of number/alphanumerical characters, mathematically derived from your private key. With a public key, you can publicly receive funds from other Bitcoin users.
- Pump and dump:
This is a scheme in which a group of people will buy the coin at the same, creating a demand in the crypto market. Once the coin goes up in value, they will “dump” and sell the coin.
Most of them communicate using apps like Telegram. Beware of such massive buying and selling gimmick.
- Bag holder:
If you’re still holding a cryptocurrency after a pump and dump crash, then you’re a bag holder.
- Shitcoin
A crypto coin with no value or use. Even though shitcoins don’t have potential use or value, many people still buy shitcoins just to drive up the price and sell it with a huge profit later.
While some shitcoins lose its intrinsic value due to poor project planning.
- Wallet
Just like traditional paper currency, you need a wallet to send, receive and store your bitcoin and altcoins. There are many different types of cryptocurrency wallets in the market such as desktop wallets, mobile wallets, hardware wallets, and paper wallets.
Here’s a list of different types of Bitcoin/crypto wallets.
- Hardware wallet
Hardware wallet is generally the most secure option when it comes to keeping your crypto assets for the long term.
It’s a small, physical device that stores your public and private keys securely.
But make sure you only buy a brand-new hardware wallet directly from the official store.
We recommend reliable hardware wallets like Trezor and Ledger Nano S.
- Whale
In cryptocurrency, whale is a term used to describe a person who owns an enormous amount of cryptocurrency. And thus, a whale has the power to manipulate the market.
Most of the whales are early-adopter who manage to buy a large amount of Bitcoin and altcoins at a very low price.
- Minnow
As opposed to the whale, minnow is a newbie who holds a tiny amount of cryptocurrency and is easily swayed by the market movement.
- Whitepaper
White paper is a report that provides a detailed explanation regarding the purpose, problem and solution of a coin or blockchain project that’s trying to solve.
30. Satoshi Nakamoto
The creator of Bitcoin whose identity still remains a mystery.
Conclusion
For those who are interested to get involved with cryptocurrency, learning this terminology can be hugely beneficial.
As the crypto space is evolving, there’ll be more new terms, phrases and even funny words that you’ll encounter in the near future.
That said, I’ll constantly update this list with new terminologies on ThinkMaverick.
Do you have any crypto terms or jargons that I didn’t mention in this post? Do share with us in the comment below.
Here’s some helpful articles that you can read next:
- How to Secure your Cryptocurrency: Cold Wallet vs. Hot Wallet
- How to Setup a Ledger Nano S Hardware Wallet
- Crypto 101: The Ultimate List of Cryptocurrency Resource
- What is Bitcoin and why all the fuss with Cryptocurrency?
- How to buy Bitcoin and other Cryptocurrencies
- 7 Best Web Hosting Services that accept Bitcoin and Altcoins
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What a useful and highly informative post admin and You wrote a blog on such a superb topic
“A Guide to Basic Cryptocurrency Terms”, great all the sharing, Keep it up.
I’m glad you found it useful. Thank you
Cryptocurrency is currently taking over the world by storm resulting in frauds, fake exchanges, etc.
Agree, educate yourself and always do your own due diligence.