What to Know About Crypto Lingo
By Lynn Bodnar October 19, 2023
- Understanding terms like cryptocurrency, blockchain, wallet, bitcoin, altcoin, mining, fork, HODL, exchange, fiat currency, private key and public key are essential for newcomers
- Market-related terms like market cap, ATH (All-Time High), whale, dapp, token, FOMO and being "orange-pilled" are important for navigating the crypto market
- Technical terms such as proof-of-work (PoW), proof-of-stake (PoS), stablecoin, ICO, gas, DEX, DeFi, smart contract, and DAO enhances understanding
- Knowing the acronyms for popular cryptocurrencies (BTC, ETH, LTC, XRP, ADA, XLM, EOS, BNB, USDT), as well as terms like NFT, CEX, and AMM, helps
What to Know About Crypto Lingo
Every industry has its terminology and uses phrases that are specifically pegged and recognizable to their world - and crypto is no different. Half the challenge of learning something new certainly lies in grasping the vocabulary. It seems with tech - and crypto especially, there is the penchant to create acronyms wherever possible. That's a lot of decoding for a newbie…
The following is a list of common terms in the crypto world and their acronyms
- Cryptocurrency (crypto) : Digital or virtual currency that uses cryptography for security and operates independently of a central authority, such as a government or bank.
- Blockchain : A decentralized and immutable digital ledger that records all cryptocurrency transactions across a network of computers.
- Wallet : A software or hardware tool that allows users to store, manage and transact cryptocurrencies securely.
- Bitcoin : The first and most well-known cryptocurrency, created by an anonymous entity known as Satoshi Nakamoto, often referred to as digital gold.
- Altcoin : Any cryptocurrency other than bitcoin; examples include ether, litecoin and dogecoin.
- Mining : The process of validating and adding transactions to a blockchain using computer power and receiving cryptocurrency rewards in return.
- Fork : A divergence in a blockchain's protocol, often resulting in two separate chains, sometimes due to disagreements among developers or network upgrades.
- HODL: A humorous misspelling of "hold," indicating a long-term strategy of keeping and not selling cryptocurrencies despite market fluctuations.
- Exchange: An online platform where users can buy, sell and trade cryptocurrencies with other users or through the exchange itself.
- Fiat Currency: Traditional government-issued currencies like the dollar, euro or yen, used as a reference point for cryptocurrency values.
- Private Key: A secret alphanumeric code that allows access to a cryptocurrency wallet and authorizes transactions. Thought of as a password.
- Public Key: A cryptographic address associated with a cryptocurrency wallet, used to receive funds and verify transactions. Thought of like a username.
- Market Cap : The total value of a cryptocurrency, calculated by multiplying its current price by the total supply of coins or tokens in circulation.
- ATH (All-Time High): The highest price ever reached by a cryptocurrency in its history.
- Whale: An individual or entity holding a significant amount of a specific cryptocurrency, capable of influencing the market due to their large holdings.
- Dapp (Decentralized Application): Software application built on blockchain technology, typically not controlled by a single entity.
- Token: A digital asset representing ownership or access rights on a blockchain, often used in crowdfunding, gaming or within specific ecosystems.
- FOMO (Fear of Missing Out): The fear that one might miss out on potential profits in the cryptocurrency market, leading to impulsive buying.
- Orange-Pilled: Refers to belief in and adoption of Bitcoin and its principles as a decentralized, non-governmental store of value and the future of money.
- Proof-of-work (PoW): Used in blockchain networks, where participants solve complex computational puzzles to validate and add new blocks to the blockchain, requiring proven work via computational power as a measure of security
- Proof-of-stake (PoS): Used in blockchain networks, where participants validate and receive rewards determined by the amount of crypto a participant holds and "stakes" in the network, rather than relying on computational power (as in proof-of-work).
- Stablecoin: A type of cryptocurrency designed to maintain a stable value, often pegged to a fiat currency like the US dollar, to reduce price volatility.
- ICO (Initial Coin Offering): A fundraising method where new cryptocurrencies are sold to investors in exchange for established cryptocurrencies.
- FUD (Fear, Uncertainty, Doubt): The spread of negative information or rumors in the cryptocurrency community to create fear and uncertainty among investors.
- DYOR (Do Your Own Research): A reminder for individuals to conduct research and due diligence before investing in cryptocurrencies.
- Pump and Dump : A scheme where the price of a cryptocurrency is artificially inflated (pumped) to attract investors, followed by a coordinated sell-off (dump) to profit at the expense of others.
- Gas: The fee paid for processing transactions on blockchain networks like Ethereum, used to incentivize miners and maintain network security.
- Decentralized Exchange (DEX): An exchange platform that operates without a central authority, allowing users to trade cryptocurrencies directly with one another while retaining control of funds.
- Decentralized Finance (DeFi): A financial ecosystem built on blockchain technology with lending, borrowing and trading, in a decentralized manner - eliminating intermediaries like banks.
- Smart Contract: Self-executing contracts with the terms of the agreement directly written into code, automatically enforcing and executing when predefined conditions are met.
Fun with Acronyms
- BTC: Bitcoin - The first and most well-known cryptocurrency.
- ETH: Ether - Cryptocurrency for Ethereum blockchain platform that enables the creation of smart contracts and decentralized applications (dapps).
- LTC: Litecoin - A peer-to-peer cryptocurrency created as a "silver" counterpart to bitcoin, designed for fast and low-cost transactions.
- XRP: Ripple - A digital payment protocol and cryptocurrency known for its focus on facilitating cross-border payments.
- ADA: Cardano - A blockchain platform that aims to provide a more secure and scalable infrastructure for the development of smart contracts and dapps.
- XLM: Stellar - A blockchain platform designed for fast and low-cost cross-border transactions and asset issuance.
- EOS: EOS.IO - A blockchain platform that aims to provide high-performance infrastructure for decentralized applications.
- BNB: Binance Coin - The native cryptocurrency of the Binance exchange, often used to pay for trading fees and services on the platform.
- USDT: Tether - A stablecoin that is pegged to the value of a fiat currency, such as the US dollar, to minimize price volatility.
- DeFi: Decentralized Finance - An ecosystem of financial applications and services built on blockchain technology, aiming to provide open and permissionless access to financial products.
- NFT: Non-Fungible Token - A unique digital asset that represents ownership or proof of authenticity of a specific item, often used for digital art and collectibles.
- DEX: Decentralized Exchange - An exchange platform that operates without a central authority, allowing users to trade cryptocurrencies directly with one another.
- CEX: Centralized Exchange - A cryptocurrency trading platform operated by a centralized organization where users can trade various cryptocurrencies, typically with a high level of liquidity but with centralized control over user funds.
- DAO: Decentralized Autonomous Organization - An organization represented by rules encoded as a computer program that is transparent, controlled by organization members and not influenced by a central government.
- AMM: Automated Market Maker - A decentralized exchange (DEX) mechanism that uses algorithms and smart contracts to facilitate cryptocurrency trading without the need for traditional order books, relying on liquidity pools and predefined pricing formulas.
It takes time to understand the complex and intricate cryptocurrency universe. Having a quick guide to otherwise confusing and certainly unknown terms helps along the way. Or, at the least, helps to sound pretty knowledgeable at the next party or social gathering when crypto comes up.