An Easy Crypto Glossary For Beginners 2023 Updated
But fear not! Our crypto glossary is here to help you decode this digital dialect and empower you with knowledge.
We'll break down complex concepts into bite-sized, easily digestible explanations while maintaining a level of expertise that caters to both beginners and those looking to deepen their understanding.
From Bitcoin to blockchain, wallets to whitepapers, and HODL to FOMO, we've got you covered. Whether you're interested in investing, trading, or simply expanding your crypto vocabulary, our glossary will serve as your trusted companion on this exciting journey.
So, whether you're looking to demystify the buzzwords surrounding cryptocurrencies or you simply want to enhance your crypto knowledge, dive in, and start exploring our crypto glossary. Unravel the mysteries of this dynamic ecosystem, one term at a time!
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0x is an Ethereum-based protocol for decentralized exchanges (DEXs) launched in 2018. It allows developers to integrate P2P digital asset exchange into dApps, with ZRX as its governance token.
A situation in which a single entity or group of miners controls more than 51% of the network's mining power, potentially enabling them to manipulate transactions and the blockchain.
A distribution of free cryptocurrency tokens to the holders of a specific blockchain's cryptocurrency, often as a marketing or promotional strategy.
A set of rules or processes that a computer follows to perform a specific task. Cryptocurrencies use various algorithms for mining and security.
Algorithmic stablecoins achieve price stability without using fiat or crypto collateral, relying on algorithms and smart contracts to adjust token supply based on price targets.
Any cryptocurrency other than Bitcoin are called altcoins. Examples include Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).
A period in the cryptocurrency market when alternative cryptocurrencies (altcoins) experience significant price increases, often following or preceding a Bitcoin bull market.
Angel investors provide funding and support to startups, often in exchange for ownership, aiding their success by offering guidance, marketing help, and connections. In the blockchain sector, they frequently join private sales or pre-sales preceding ICOs.
Annual Percentage Rate (APR):
APR on a loan is the yearly interest cost expressed as a percentage of the outstanding balance. It shows how much a borrower pays annually for borrowing.
Annual Percentage Yield (APY):
APY is the yearly return rate on a deposit, factoring in compounding interest added periodically.
Aping in is when a crypto investor impulsively invests a substantial part of their wealth in a lesser-known coin without any research, often resulting in significant losses or even total investments.
Arbitrage involves profiting from price differences between markets, like buying Bitcoin at $40,000 on one exchange and selling it for $40,015 on another, yielding a $15 profit per BTC.
An ASIC miner is a specialized computer for much faster and more efficient cryptocurrency mining, like Bitcoin, surpassing traditional CPU and GPU mining. These miners are costly due to their tailored design and production.
ATH (All-Time High):
The highest price ever reached by a cryptocurrency.
ATL (All-Time Low):
The lowest price ever reached by a cryptocurrency
An atomic swap is a trustless P2P crypto exchange using smart contracts to swap assets across blockchain networks through secure locking and unlocking.
It is a vital process for reviewing blockchain code and smart contracts, detecting code errors, design flaws, security vulnerabilities, and enhancing overall efficiency. It's crucial to safeguard blockchain systems and related applications from potential threats.
Automated Market Maker (AMM):
An AMM is a decentralized exchange using automated algorithms to trade tokens from a liquidity pool, allowing trades at any time.
(Check out our article on Automated Market Makers)
Someone holding a significant amount of a cryptocurrency that has experienced a substantial loss in value. Often, they cling to the hope of a future recovery.
Baiting is basically tricking individuals into sharing personal information or downloading malware by luring them with fake promises of financial rewards.
Baking is similar to staking in Proof-of-Stake but in the Tezos blockchain, adds new blocks by signing and verifying them, requiring a collateral of XTZ for honest behavior.
The base currency is the initial currency in a pair, like BTC in BTC/USD, against which exchange rates are quoted.
The Beacon Chain, part of Ethereum 2.0, introduced Proof-of-Stake, enabling ETH holders to validate the network and coordinate assets since its December 1, 2020 launch.
A prolonged period of declining cryptocurrency prices and overall negative market sentiment, leading to selling and pessimism.
Bear trapping is when wealthy investors collaborate to flood the market with a specific asset, causing its price to drop, enticing others to sell. They then buy it back cheaply and profit when the price rebounds.
BEP-2 is the token standard for BNB Beacon Chain, featuring addresses starting with "bnb" and is one of Binance's two key blockchain networks, alongside BNB Smart Chain.
BEP-20 is the tokenization standard for BNB Smart Chain tokens, enabling seamless compatibility with Ethereum and potential interoperability with other blockchains like Cardano and Polkadot.
The first and most well-known cryptocurrency, created by an anonymous entity known as Satoshi Nakamoto in 2009. It serves as both a digital currency and a store of value.
Bitcoin Cash (BCH):
Bitcoin Cash, a Bitcoin network fork, offers a practical cryptocurrency, BCH, with lower transaction fees, making it suitable for everyday payments.
Bitcoin Genesis Block:
On January 3, 2009, Satoshi Nakomoto mined Bitcoin's first block, the genesis block, embedding a message about a banking crisis, possibly as a motivation to create a decentralized financial system.
A Bitcoiner is a passionate advocate and owner of BTC, considering it the foremost digital asset.
In blockchain, a block records transactions within a specific time, forming a chain of data known as a blockchain. Each block contains transaction details and must be confirmed by the network before new blocks can be added.
Block difficulty in Proof-of-Work blockchains adjusts to maintain stable block production, addressing factors like transaction speed and network capacity.
A block explorer is a user-friendly tool for accessing live blockchain data, offering transparency and open access to blockchain networks.
A block reward is a payment given for validating a new block, usually in the network's native coin. It plays a crucial role in incentivizing blockchain security, with miners in Proof-of-Work and stakers in Proof-of-Stake networks receiving these rewards.
Blockchain protocols consist of data blocks forming an ever-updating chain, with each block storing network transactions based on size or time set by the blockchain's governance.
Block trades involve significant securities transactions conducted privately, typically by institutions and hedge funds, outside of open markets, akin to over-the-counter (OTC) trading.
A distributed and immutable ledger that records all transactions across a network of computers. Each block contains a group of transactions, and they are linked together in a chain.
A blockchain bridge enables different blockchains to exchange crypto assets, including coins, tokens, NFTs, and more, with various options like custodial/non-custodial, one-way/bidirectional, and multi-chain compatibility, depending on the protocol used.
The Blockchain Trilemma poses the dilemma of balancing scalability, decentralization, and security in blockchain networks, where prioritizing one often comes at the expense of the others, challenging blockchain developers to find more effective solutions.
Bootstrapping involves building the blockchain, establishing the crypto ecosystem, and organizing fundraising for capital needs.
In technical analysis, a breakout is when an asset surpasses resistance or falls below support on a chart, often indicating a continued price trend. Higher trading volume during a breakout suggests a stronger trend, and breakouts can be triggered by patterns like flags, wedges, triangles, or head and shoulders.
Brute Force Attack:
In a brute force attack, the attacker tries all possible password combinations to gain account access, potentially revealing weak passwords in seconds. Strong passwords are a key defense against such attacks.
A bubble happens when an asset's price soars to unsustainable levels, rapidly collapses by 75% or more, and is usually recognized only after the burst due to its swift rise and fall.
A bug bounty program incentivizes external developers to report code issues, often offering financial rewards in the blockchain field, usually in the form of cryptocurrency tokens.
A playful twist on "build," emphasizing the importance of actively creating and developing blockchain projects, as opposed to simply trading or holding cryptocurrencies. Just like HODL and Shitcoin, BUIDL seems to have come from the bitcointalk forum, but the timeline is something no one can confirm. (Source)
A period of rising cryptocurrency prices and positive market sentiment, encouraging buying and investment.
A bull trap is a market signal where an initial price recovery in a declining asset is followed by a sharp decline, often orchestrated by investors who short the asset before selling it, aiming for significant profits, potentially involving market manipulation.
Many blockchain networks burn coins/tokens to encourage users to invest in protocol-specific assets, reducing the total supply and potentially boosting their value as an anti-inflation measure.
Buy the Dip:
'Buy the dip' in crypto means seizing a chance to purchase during price drops, seen as a discount for long-term investors aiming to lower their average entry cost through dollar-cost averaging (DCA).
Byzantine Fault Tolerance (BFT):
Byzantine Fault Tolerance (BFT) enables a blockchain to maintain consensus and function, even when some network nodes fail or provide incorrect data, resolving the Byzantine General's Problem in blockchain consensus mechanisms.
Byzantine General's Problem:
The Byzantine General's Problem in computing refers to the need for a unanimous strategy among system components to prevent network failure due to unreliable nodes, making a network Byzantine Fault Tolerant (BFT), a quality seen in many blockchain consensus mechanisms.
Candlesticks are used by stock and crypto investors which help depict historical and real-time asset prices, featuring open, high, low, and closing values. Green candles represent price rises, while red ones indicate price drops, making them a popular investor tool.
Central Bank Digital Currency (CBDC):
A central bank digital currency (CBDC) is a government-regulated digital form of national currency. It aims to improve transaction efficiency and cross-border settlements but lacks the decentralization and supply limits of blockchain. Critics argue it may not control inflation and raise concerns about financial privacy and censorship.
In blockchain, centralization means control and node distribution. Centralized setups limit access and profit sharing, potentially harming governance and promoting censorship.
Centralized Decentralized Finance (CeDeFi):
CeDeFi combines DeFi and CeFi elements to enhance financial services, enabling traditional institutions to access DeFi tools, expand product offerings, and navigate regulatory challenges for improved operations.
Centralized Finance (CeFi):
CeFi serves as a bridge between traditional finance and modern blockchain and FinTech apps, but relies on centralized control. It includes CEXs, asset custodians, and FinTech services, offering user-friendliness and regulation, yet faces a single point of failure due to centralization.
Centralized Exchange (CEX):
A CEX is a controlled platform for trading crypto, acting as a middleman for users and safeguarding their data and funds.
A chain migration in the blockchain world is like a DeFi project relocating from Ethereum to BNB Smart Chain, typically driven by factors like cost, performance, strategy, or tokenization standards.
Circulating supply is the current quantity of a cryptocurrency available in the market, including tokens in dApps, exchanges, and personal wallets, distinct from the total supply, which represents the maximum amount ever to be produced.
Cloud mining is the hassle-free way to mine cryptocurrency, where you rent computing power and enjoy rewards without the need for hardware ownership or manage mining rigs, like ASIC miners.
A coin mixer blends cryptocurrencies from multiple users for privacy, complicating transaction tracking. It's employed in both legal and illicit activities, enhancing anonymity on blockchain networks.
A coin swap or token swap is when you trade one cryptocurrency for another, or when a platform upgrades an existing coin/token to a new version.
A method of storing cryptocurrencies offline, typically on hardware wallets or paper wallets, to enhance security by reducing exposure to online threats.
A cold wallet stores cryptocurrency keys offline, making it more secure than hot wallets, which are internet-connected.
Collateral is an asset used to secure a loan in case of default, common in DeFi lending, where tokens are locked and returned upon loan repayment.
Collateralization in crypto involves using one asset to secure the value of another by storing and locking them within a blockchain protocol.
Commodity Futures Trading Commission (CFTC):
The CFTC is a U.S. regulatory agency overseeing derivatives markets, striving for transparency and fairness, established to safeguard market integrity and combat fraud in collaboration with the SEC and other regulatory bodies.
Commodity-backed stablecoins, such as PAX Gold (PAXG), are tied to tangible assets like gold, silver, or real estate, offering holders a direct stake in these commodities.
Continuous Order Book:
A continuous order book displays buyers and sellers, along with their desired quantities and prices for asset exchange, using a matching engine to facilitate transactions and real-time updates.
Copy trading, or mirror trading, involves using software to replicate the strategies of other traders, potentially boosting profits. It's accessible across various markets and devices, from mobile to institutional setups.
In stock trading and crypto investing, a correction indicates a significant drop in an asset's price from recent highs, typically followed by a rebound, but it can also signal a prolonged bear market.
Counterparty risk is the chance of a transaction participant not fulfilling their obligations, but blockchain-based smart contracts can help by automating execution upon meeting conditions.
A CPU miner is a computer processor used for cryptocurrency mining, though it's less efficient and cost-effective than specialized mining rigs. Different CPUs have varying prices and mining capabilities, and some cryptocurrencies are tailored for CPU mining.
A blockchain-based crypto loan uses cryptocurrency as collateral, returning it when borrowers repay through a smart contract.
Crypto-backed stablecoins use cryptocurrency collateral to ensure stability, allowing users to lock assets in a smart contract to mint stablecoins and redeem their collateral later.
Online platforms where users can buy, sell, or trade cryptocurrencies for other digital or fiat currencies.
A cryptocurrency faucet is like an online rewards platform, giving users small crypto amounts for tasks like sharing, viewing ads, and watching videos. Unlike airdrops, faucets offer modest rewards, with the concept originating in 2010 through Gavin Anderson's Bitcoin faucet to introduce new users to BTC.
Cryptojacking turns your device into a secret cryptocurrency miner, using your resources to earn rewards for attackers, whether through remote malware or physical access.
Cryptocurrency mining involves solving equations in a Proof-of-Work system to validate transactions and add blocks to the blockchain. Miners operate nodes and are rewarded with the blockchain's native cryptocurrency.
A period characterized by extended bearish market conditions, marked by declining cryptocurrency prices. The phrase is obviously inspired by the popular TV Series ‘Game Of Thrones’.
A custodial wallet relies on a third party to safeguard a user's private keys and crypto assets, commonly seen in web-based exchange wallets.
Custodians safeguard assets, like cryptocurrency, for institutions or individuals, mainly serving large-scale investors by providing secure storage and wallet services.
Dead coins are abandoned cryptocurrencies with no development, inactive webpages, and minimal trading volume; over 1,700 were identified by 2022.
A death cross is a bearish technical trading signal in which the 50-day moving average crosses below the 200-day moving average, typically triggering a major sell-off. It is the opposite of a Golden Cross trading signal, and has been evident prior to many of the largest stock market crashes in history.
The distribution of control and data across a network of nodes (computers) rather than a central authority. Cryptocurrencies are often praised for their decentralized nature.
Decentralized Application (dApp):
A dApp uses blockchain for various purposes like finance, gaming, and governance, replacing centralized servers with peer-to-peer transactions through wallet software and smart contracts on blockchain networks.
DEX (Decentralized Exchange):
An exchange platform that operates without a central authority, allowing users to trade cryptocurrencies directly from their wallets.
DeFi (Decentralized Finance):
A category of blockchain-based financial services and applications that aim to recreate traditional financial systems with decentralized technologies.
In blockchain and cryptography, decryption means converting encrypted data into readable plaintext, often done through unique codes or cryptographic keys.
Deflation means prices decrease, boosting currency's buying power due to reduced money supply, opposite of inflation caused by excessive printing.
Short for "degenerate," it describes high-risk, speculative trading behavior in the crypto market.
Delegation in DPoS blockchains involves users contributing their cryptocurrency to others for network staking, enabling broader participation and fair distribution.
Delegators in Proof-of-Stake (PoS) blockchains support network consensus by staking coins with validator nodes, sharing block rewards without running a full node.
Delisting is when a cryptocurrency is removed from an exchange due to factors like low trading volume, instability, fraud, or lack of development. Once delisted, the asset can't be traded on that platform, though rare exceptions exist for relisting.
Delisting is when a cryptocurrency is removed from an exchange due to factors like low trading volume, instability, fraud, or lack of development. Once delisted, the asset can't be traded on that platform, though rare exceptions exist for relisting.
People with "diamond hands" are traders who maintain their positions regardless of market turbulence. They exhibit a high-risk tolerance and a determination to hold until their investments reach their perceived full potential. “Diamond Hands” seems to have originated from a Reddit Community called r/wallstreetbets around 2018.
A digital asset encompasses a range of digital forms, from cryptocurrencies to digital stocks and collectibles, with cryptocurrencies being a subset of digital assets.
The 'digital dollar' refers to the potential creation of a US-based digital currency by the government, with research ongoing to assess its benefits and risks. A clear plan hasn't been determined yet.
In cryptocurrency, a digital signature uses a private key to authenticate transactions through public-key cryptography, ensuring the sender's identity and data integrity.
Distributed Ledger Technology (DLT):
A broader term encompassing technologies like blockchain, which distribute and record data across multiple nodes.
Do Your Own Research (DYOR):
DYOR advises blockchain investors to thoroughly research and analyze projects before investing to minimize risk and avoid potential capital loss.
Docking combines protocols, like transitioning from Ethereum 1.0 to Ethereum 2.0, to enhance their capabilities over time. This intricate process includes migrating data from older to newer protocols and can be time-consuming due to differences in network infrastructures
Dollar-Cost Averaging (DCA):
Dollar-cost averaging (DCA) involves regularly investing a fixed amount in an asset, helping to mitigate the impact of price fluctuations. It's a smart strategy for crypto due to its volatile nature. For instance, instead of a single $5200 BTC purchase, an investor might buy $100 worth of bitcoin every week for a year.
The double-spending issue in digital currencies occurs when the same funds are used more than once. Blockchain systems, like those in Bitcoin, prevent this by verifying transactions, reducing the risk.
Dust, a tiny fraction in cryptocurrencies like Bitcoin, consists of minimal satoshis and holds negligible value, resulting from trading and transactions.
A dusting attack involves sending tiny amounts of cryptocurrency to numerous wallet addresses, potentially to trace and de-anonymize them or perform network stress tests, and at times, to spam the network with a flood of low-value transactions.
EIP-1559, an Ethereum proposal from August 2021, enhances Ethereum's efficiency by introducing base fees and optional tips, reducing transaction costs, and improving the user experience.
Encryption safeguards data and systems, thwarting unauthorized access and ensuring private information remains indecipherable to those without permission. It transforms plaintext into ciphertext, allowing only authorized parties to decipher it.
Blockchains use epochs, a specific block count or time period, especially in Proof of Stake protocols, to achieve security, reward distribution, and validator assignment. Ethereum's epoch spans 30,000 blocks, whereas Cardano's lasts five days.
ERC-1155 revolutionizes Ethereum tokens by enabling a single smart contract to handle various token types, including NFTs, eliminating redundancy found in other standards like ERC-20 and ERC-721.
The ERC-20 standard sets the rules for Ethereum tokens, allowing them to work seamlessly on the Ethereum network. It enables the creation of digital assets that can be traded like cryptocurrencies, such as bitcoin and ether, using smart contracts for compatibility with Ethereum-based dApps.
The ERC-2222 standard builds on ERC-20, known as Funds Distribution Token (FDT), enabling tokens to represent claims on cash flow from loans, dividends, and fees. It's utilized by various blockchain projects for staking, liquidity pools, lending, and more.
ERC-223, proposed in 2017, aimed to improve upon the ERC-20 standard for Ethereum Classic but hasn't seen widespread adoption. It includes features to prevent token losses during transfers, setting it apart.
ERC-721, a tech standard for Ethereum NFTs, ensures interoperability and rarity, popular in digital collectibles, games, art, and luxury items.
ERC-777, like ERC-20, enhances fungible token functionality, streamlining token interactions and eliminating issues with decimals, minting, and burning. Its notable feature, the "hook," simplifies token transfers, reducing the chances of tokens getting stuck in contracts.
The second-largest cryptocurrency by market capitalization, known for its smart contract functionality and role in the development of decentralized applications (DApps).
Ethereum Consensus Layer:
Ethereum Consensus Layer (formerly Ethereum 2.0) is a comprehensive upgrade known as Serenity, transitioning from Proof-of-Work to Proof-of-Stake for enhanced scalability, efficiency, and global computational power through shard chains.
Ethereum Gas Limit:
The maximum amount of gas units that can be consumed in an Ethereum transaction, which determines the complexity and execution of smart contracts.
A cryptocurrency exchange facilitates the buying, selling, and trading of digital assets, offering enhanced security, regulatory compliance, and user-friendly features as the crypto market expands.
Exchange Coin (Exchange Token):
Exchange coins are digital assets introduced through Initial Exchange Offerings (IEOs) on crypto exchanges. They come in two forms: native coins from the exchange or tokens from other crypto companies. These assets can be tokens or coins, depending on their blockchain affiliation.
The value of one cryptocurrency in terms of another or in relation to fiat currency (e.g., BTC/USD).
In blockchain, an exit scam involves a deceptive company creating a fake blockchain project, luring investors to buy tokens, and then conducting an internal market sell-off to steal their funds before disappearing.
A fair launch ensures equal and open distribution of coins or tokens in a blockchain project, promoting decentralization and community engagement, unlike distributions favoring founders and early investors.
A Fan Token is a unique token representing sports teams, allowing users to vote on team-related decisions, like uniform design and team livery in motorsports.
Fan Token Offering:
An FTO, or Fan Token Offering, is a public sale where sports teams release their Fan Tokens with set supply and initial sale price. Socios shares essential information, such as start and end dates, opening price, and market cap, to aid user investment decisions.
Fast Exit Problem:
The fast exit problem delays fund withdrawals, affecting banks, blockchains, and networks, causing time and capital losses. Governments, enterprises, investors, and blockchain systems are working to resolve this issue.
Web services often offer free testnet or devnet coins, sometimes sourced from surplus owners or even valuable main blockchain protocols.
Traditional government-issued currency, such as the US dollar (USD), the euro (EUR), or the Japanese yen (JPY).
Services or platforms that allow users to convert fiat currency into cryptocurrency (on-ramp) or vice versa (off-ramp).
Fiat-backed stablecoins are digital assets pegged 1:1 to fiat currencies, reducing digital asset volatility and enabling easy participation in DeFi, but trust in off-chain collateral management is essential.
Someone overly skeptical or critical of cryptocurrencies and who prefers traditional fiat currency.
A fixed supply means that the total quantity of an asset remains constant, and its price fluctuates primarily due to changes in demand. With a fixed supply, the asset's price elasticity is essentially zero, as seen in Bitcoin's 21 million supply.
Flash Loans in DeFi allow quick, collateral-free borrowing and repayment due to Ethereum's data recording, with reversals if not repaid in one transaction.
The floor price is the lowest cost to buy something, determined by market dynamics. It's commonly mentioned in the blockchain world for the cheapest NFTs in a collection.
FOMO (Fear of Missing Out):
The anxiety or fear of missing out on potential profits in the cryptocurrency market, leading to impulsive buying.
Forging in blockchain involves creating new blocks using Proof-of-Stake, potentially earning rewards from transaction fees. Rules for participation vary among PoS networks.
A fork splits a blockchain into two when not all network nodes agree on a protocol update. There are two types: soft forks, which are backward compatible, and hard forks, which create two incompatible blockchains.
A humorous expression used when a cryptocurrency experiences multiple forks or chain splits in a short period.
An FPGA miner is a customizable crypto mining device that utilizes a field-programmable gate array for enhanced performance and flexibility, surpassing GPU miners but demanding greater technical expertise than ASIC miners.
FUD (Fear, Uncertainty, Doubt):
Spreading negative information or rumors to create fear and uncertainty in the cryptocurrency market.
The fee paid for processing transactions and smart contracts on blockchain networks like Ethereum.
The very first block in a blockchain, used as the foundation for the entire chain.
An event that reduces the reward given to miners for adding new blocks to the blockchain, typically occurring at regular intervals in cryptocurrencies like Bitcoin.
Another term for hardware wallet, a physical device used for secure storage of cryptocurrencies.
The computational power or processing speed of a blockchain network, often measured in hashes per second (H/s).
Hidden caps in blockchain fundraising conceal the upper funding limit, benefiting smaller investors, but facing criticism for contradicting blockchain's transparency values.
A misspelling of "hold," often used in the cryptocurrency community to express a long-term investment strategy rather than selling.
A humorous reference to the tendency of some crypto enthusiasts to hold their assets regardless of market conditions. It's a testament to unwavering faith.
Honest Geppetto Attack:
An Honest Geppetto Attack is when hackers create a network trust, then suddenly disconnect nodes to disrupt it. Prevent by having a large network to thwart this attack.
A hot wallet is an online cryptocurrency wallet, while a cold wallet is offline.
A hybrid blockchain network blends private and public blockchains, featuring a main public chain and private sidechains serving various purposes, all interconnected for public access.
An iceberg order, employed by major investment firms, uses software to split a large asset purchase into smaller limit orders, aiming to avoid price disruption. The term "iceberg" signifies that only a fraction of the order is visible, like the tip of an iceberg.
ICO (Initial Coin Offering):
A fundraising method in which new cryptocurrencies or tokens are sold to investors before they are officially launched, similar to an initial public offering (IPO).
In blockchain, immutability means data can't be altered, ensuring secure transactions and data integrity in various applications.
Impermanent loss happens when tokens in a balanced pool lose value compared to the market due to price swings, but it's temporary and can be recovered if the pool rebalances.
Initial Coin Offering (ICO):
ICOs use blockchain to raise funds by selling tokens for new digital projects, potentially classified as securities, subject to regulatory oversight in some countries.
Initial DEX Offering (IDO):
An Initial DEX Offering (IDO) is a blockchain project's way to launch its token via a decentralized exchange (DEX), providing a transparent and quick route to liquidity, attracting potential investors and building their brand through reputable DEX platforms, in contrast to more centralized and costlier options like IEOs and ICOs.
Initial Exchange Offering (IEO):
A fundraising method in which a cryptocurrency project launches and sells its tokens on a cryptocurrency exchange.
Intangible assets, like intellectual property, software, and blockchain components (DIDs, smart contracts), blur lines with cryptocurrencies and NFTs due to their mixed tangible and intangible characteristics.
Inter-chain communication enables different blockchain networks to interact and exchange tokens, improving interoperability. As blockchain technology advances, it's expected to become more efficient, potentially enabling data sharing among numerous blockchains.
Interoperability enhances blockchain networks by enabling cross-chain communication, allowing various protocols like Bitcoin and Ethereum to share data and assets, thus expanding the potential of interconnected blockchains.
Isolated Margin Trading (Derivatives Trading):
Isolated margin trading lets traders restrict potential losses to their initial margin, reducing risk for each position, unlike cross-margin trading.
The smallest BNB Chain denomination is 1 jager, equal to 0.00000001 BNB.
Slang term for small, lesser-known cryptocurrencies with low market capitalization.
JOMO (Joy of Missing Out):
A play on FOMO, signifying contentment with not participating in a particular investment or trend.
The kernel is the heart of an OS, bridging hardware and software for optimal device performance. It oversees CPU operation, memory management, software requests, and other essential functions.
A cryptographic key, unlike a memorized password, consists of bits used to transform encrypted data into plain text within a paired key access system.
A keylogger is a software that secretly records keystrokes, often used for stealing sensitive data like passwords or financial gain.
KYC (Know Your Customer):
Regulatory requirements that obligate cryptocurrency exchanges and businesses to verify the identity of their customers.
Short for Lamborghini, used humorously in the crypto community to describe the dream of making huge profits.
A "large cap coin" in the blockchain world means a cryptocurrency with a substantial market value, calculated by multiplying its price per coin by the number of coins in circulation. It's a subjective term with no fixed threshold for defining a large cap coin.
Last Irreversible Block (LIB):
The Last Irreversible Block (LIB) is the final unchangeable block confirmed on-chain through an Asynchronous Byzantine Fault Tolerant (aBFT) consensus mechanism, involving two steps: block proposal by producers and confirmation by a majority, ensuring transaction validation.
In trading, latency is the time between order placement and execution. High latency can harm trading strategies, especially for dynamic assets, due to delays that affect market price changes.
Law of Accelerating Returns:
Ray Kurzweil's 1999 theory, the "Law of Accelerating Returns," predicts a staggering 20,000-fold increase in technological progress in the 21st century, signifying an unprecedented acceleration in innovation, challenging traditional ideas like Moore's Law.
Law of Supply and Demand:
The law of supply and demand shapes market prices, where more availability lowers prices, and scarcity raises them. Equilibrium is reached when supply matches demand.
A Layer-0 blockchain acts as a foundational layer, enabling interoperability among Layer-1 and Layer-2 solutions. Polkadot and Cosmos are prime examples, facilitating security and connectivity for other blockchains, making them Layer-0 networks.
A Layer-1 blockchain, like Ethereum or Bitcoin, is the primary network to which Layer-2 scaling solutions, such as state channels and rollups, connect to enhance scalability. It's often called the parent chain or root chain.
Layer-2 Scaling Solution:
Layer-2 scaling solutions enhance Bitcoin and Ethereum by boosting transaction speed and cutting costs through technologies like sidechains and state channels. Notable examples are Lightning Network for Bitcoin and SKALE Network for Ethereum.
Leaf nodes, at the Merkle tree's bottom layer, signify crypto transactions as transaction hashes or TXIDs.
A ledger is a financial transaction record system, and blockchains are commonly called distributed ledgers.
A leg is a component of a complex derivatives trading strategy, where various options and futures contracts are used to capitalize on arbitrage, spreads, or hedge positions.
Lending pools enable peer-to-peer lending, requiring users to provide collateral. Users can borrow based on their collateral, while lenders earn interest, all managed by smart contracts with varying lending rates.
Leverage in investing is the practice of using borrowed money to amplify trading power. While it can boost potential gains, it also heightens the risk of significant losses, as a leveraged trade multiplies the impact of price fluctuations.
A light client in blockchain connects to full nodes, using them as intermediaries, allowing crypto transactions and balance verification, though less feature-rich than full nodes.
A limit order in trading specifies a fixed buying or selling price. Traders use buy limits below current prices and sell limits above to optimize their deals, unlike market orders, which execute at current market rates.
The ease with which a cryptocurrency can be bought or sold in the market without significantly affecting its price.
In DeFi, liquidity mining rewards traders for staking assets in a pool with interest in platform tokens.
In the crypto world, liquidity providers (LPs) deposit tokens into pools, earning LP tokens in return, which grant them a share of fees and crypto rewards.
Liquidity Provider Token:
An LP token is given to users who deposit assets in a liquidity pool, representing their ownership share. They earn a portion of trading fees and can be traded or staked.
Liquid Staking lets stakers create sFTM coins at a 1:1 ratio to their staked FTM, enhancing collateral for Fantom Finance, elevating the utility of their staked FTM.
A reserve of cryptocurrency assets locked in a smart contract on a decentralized exchange (DEX) used to facilitate trading.
Long Position (Longing):
Going long is when an investor buys an asset, like stocks or cryptocurrencies, with the expectation it will grow in value, in contrast to shorting, where they bet on its decline.
In day trading, the lowest price is a crucial data point, part of the OHLC quartet, representing the lowest price within the past 24 hours for cryptocurrency markets, which trade around the clock, in contrast to traditional stock markets closed on weekends.
Machine Learning Prediction:
An ML prediction is generated by analyzing historical data and can forecast future stock price movements when applied to new datasets.
A mainchain is the core, foundational blockchain in networks like Bitcoin or Ethereum, serving as the central hub for other blockchain protocols and applications. For instance, leading DeFi projects operate on Ethereum's mainchain.
A mainnet, or mainchain, is the mature, operational version of a blockchain network, while testnets are used for experimentation without affecting the main network.
A trading strategy that allows users to borrow funds to trade larger positions than their account balance, increasing both potential profits and losses.
Market Cap (Market Capitalization):
The total value of a cryptocurrency, calculated by multiplying its current price by the total circulating supply.
A market maker, also known as a liquidity provider, is a party that buys and sells assets to maintain market liquidity, benefiting traders with ample liquidity, minimal slippage, and faster order execution. They generate income by profiting from bid-ask spreads.
A type of cryptocurrency trade order in which the trader buys or sells at the current market price.
A cryptocurrency that gains popularity primarily through internet memes and social media, rather than its technical or financial merits. The Term “Memecoin” seems to have originated in 2013 when Billy Markus and Jackson Palmer created Dogecoin.
A mempool stores unconfirmed transactions before they get added to a block. It uses Replace by Fee (RBF) to prioritize transactions with higher fees, leading to congestion when many transactions wait, causing longer confirmation times. Nodes validate these transactions for correctness, avoiding double-spending and other issues.
A Merkle tree in blockchain creates a single hash to secure and verify all transactions in a block.
MetaMask, an Ethereum-focused wallet, enables users to access dApps and decentralized exchanges without the need for a full Ethereum node. It expanded to mobile in September 2020.
A metaverse is a shared virtual reality world.
In the blockchain world, "micro cap" denotes a cryptocurrency with a tiny market capitalization, determined by its circulating coins and price. This term lacks a specific market cap threshold.
In the blockchain world, a "mid cap coin" denotes a cryptocurrency with a medium market capitalization, determined by circulating coins and their price, without a specific threshold.
The process by which new cryptocurrency coins are created and transactions are verified on a blockchain network. Miners use powerful computers to solve complex mathematical puzzles.
A mining algorithm in a Proof-of-Work blockchain is a cryptographic puzzle demanding substantial computational power to secure the network and reward miners. Examples: SHA-256, SHA-3, Ethash, Scrypt, and Equihash.
A mining farm is a sizable facility filled with specialized computers for cryptocurrency mining, typically centered on bitcoin. Launching these farms is costly due to electricity demands and maintenance, but some use renewable energy for efficiency.
A mining pool unites crypto miners' hash power for more reliable returns and enables small operations to rival larger farms, usually charging 0-2% of block rewards.
A mining reward, also known as a block reward, is the native asset miners earn for validating transactions in a network, with Bitcoin's reward decreasing by 50% every 210,000 blocks.
A mining rig is a specialized setup for cryptocurrency mining, whether custom-built or a part-time mining PC.
Minting generates new tokens on a blockchain network, often managed by validator nodes. Unlike cryptocurrencies with set supply limits, minted ones depend on continuous growth for value, akin to traditional fiat money printing, necessitating controlled production to avert inflation.
Mixer (Crypto Mixer):
Cryptocurrency mixers, or tumblers, mix coins for privacy, making transactions harder to trace. They're used for various purposes, including cleaning "dirty coins" from criminal activity. While they charge 1-3% fees, their popularity is diminishing due to non-custodial alternatives.
A mobile wallet is a smartphone-based cryptocurrency wallet, often online.
When an asset rapidly surges in value, it's referred to as 'mooning,' a term commonly used in the cryptocurrency realm due to its volatile nature.
In 1965, Gordon Moore predicted that computer power would double every two years, thanks to advances in microchips, while costs would decrease.
Move to Earn (M2E):
Move to earn (M2E) is an adaptation of the web3 gaming concept play to earn (P2E), in which users are rewarded with crypto coins/tokens or other in-game assets in exchange for completing certain physical activities. As is the case with P2E, players completely own their in-game assets and in most cases are free to transfer or exchange their rewards for other crypto and/or fiat currency.
Moving Average (MA):
A moving average (MA) is a technique in financial analysis used to predict market trends and stock prices by calculating averages from various data subsets, such as Simple Moving Average (SMA), Cumulative Moving Average (CMA), and Weighted Moving Average (WMA).
Multi-Signature (Multi-Sig) Wallet:
A multi-signature wallet needs multiple keys to authorize transactions, unlike non-multi-sig wallets, which only need one signature.
Mutualized Proof of Stake (MPoS):
Mutualized Proof of Stake (MPoS) shares block rewards among the current and past nine block producers, with 10% going to the current producer and 90% held for 500 blocks to deter network attacks.
The consensus mechanism used in Bitcoin and other proof-of-work (PoW) cryptocurrencies, named after Bitcoin's pseudonymous creator, Satoshi Nakamoto.
A nested blockchain is a decentralized network that employs a primary blockchain to govern the broader network, utilizing interconnected secondary chains to execute tasks efficiently. This hierarchical structure enhances scalability by distributing workload away from the mainchain.
Network congestion happens when a network's performance is hindered by an excessive load, often triggered by unexpected spikes in activity or malicious actions like DDoS attacks.
Network latency is the time for data to travel from source to destination. It's vital for high-performance blockchains and computer networks as lower latency means faster data processing, making them ideal for large-scale enterprise usage and impacting transaction throughput and TPS.
NFT (Non-Fungible Token):
A unique digital asset that represents ownership or proof of authenticity of a specific item, often used for digital art, collectibles, and virtual real estate.
A device or computer that participates in the maintenance and validation of a blockchain network.
Non-custodial services in finance and blockchain grant users full control over their assets, including crypto, with self-management of private keys, while custodial services involve external entities responsible for asset management and transactions.
Non-leaf nodes link leaf nodes to the Merkle tree root via hashing functions.
A nonce, short for "number used once," is a unique number added to data in a block before hashing in Proof-of-Work mining.
Off-chain refers to transactions and processes occurring outside the blockchain network, such as governance decisions made by councils or committees to shape the ecosystem.
Off-chain governance involves face-to-face voting among key stakeholders to set rules and guide on-chain protocols, enhancing overall blockchain governance.
On-chain encompasses all blockchain network activities, including protocol governance, asset creation, and consensus, executed automatically through cryptographic code.
On-chain governance occurs within a blockchain's protocol, enabling automated rule-setting and community voting for upgrades, alongside off-chain governance, to enhance the evolving ecosystem.
Open source means freely accessible software code that allows users to use, modify, and share it openly. It's widely used in blockchain development for its trustless and censorship-resistant qualities.
An order book is a digital list of buy and sell orders, showing prices and quantities, which traders access online to enhance market transparency for a particular security or cryptocurrency.
Institutional investors split their large orders into smaller portions through order slicing, reducing market price swings, preserving privacy, and optimizing entry prices to safeguard their investments.
A block that is successfully mined but not included in the main blockchain due to a temporary fork in the network.
Overbought describes when an asset's price exceeds its perceived value, potentially indicating an upcoming price drop. While this condition can persist, technical indicators like RSI, Bollinger Bands, and trading volume help identify overbought assets.
Oversold describes when an asset's price is currently lower than its perceived potential for a near-term rebound. This condition can persist for a while, and technical indicators like RSI and Bollinger Bands help identify it.
A method of trading cryptocurrencies directly between buyers and sellers, typically for large quantities or institutional trading.
A direct interaction between individuals or entities without the need for intermediaries, often used to describe cryptocurrency transactions.
Paper Hands is the polar opposite of Diamond Hands, where traders immediately liquidate their positions when the market moves in either direction. Just like Diamond Hands, Paper Hands also seems to have originated from r/wallstreetbets around 2018-2019.
A paper wallet, an offline crypto storage method on paper, containing private and public keys, used for cold storage and transactions, although now less common due to more efficient hardware and software wallets.
A parent chain is a primary blockchain responsible for maintaining network consensus and hosting smaller sidechains.
Passive yield is income from long-term investments, often seen in blockchain and crypto when you earn interest by holding a cryptocurrency bought with your capital.
A passphrase, unlike a traditional password, is a sequence of words used to secure accounts and devices. Passphrases, composed of real words, are easier to remember and offer strong security, commonly used in the blockchain industry to safeguard cryptocurrency assets.
Pegs link the value of different assets on a 1:1 basis, enabling smoother trading across various blockchains. This offers cost-efficiency and faster transactions when swapping assets like BEP-2 Bitcoin for the original Bitcoin.
Permissioned Ledger (Permissioned Blockchain):
A permissioned ledger restricts network access to authorized parties using security keys or passwords, enabling predefined tasks for specific participants, distinguishing it from public blockchains like Bitcoin and Ethereum.
Permissionless Ledger (Permissionless Blockchain):
A permissionless blockchain is a decentralized, open network that doesn't require centralized permission. It's open, public, and operates in a peer-to-peer manner, while permissioned blockchains need special access.
A perpetual swap, or perpetual futures contract, lets investors trade assets without a set expiration date. It involves cash settlement and may involve payments based on the asset's price difference and leverage.
Phishing attacks deceive victims by posing as trustworthy entities to steal sensitive data like emails, private keys, phone numbers, and credit card details - a confidence trick rather than a hack.
Physical metal coins resembling Bitcoin with hidden private keys under tamper-proof seals can be bought pre-loaded with or without cryptocurrency. They were first popularized by Casascius Coins, with options for Litecoin and Bitcoin Cash. These coins facilitate blockchain transactions when exchanged, but are typically single-use and non-reusable once redeemed.
Play To Earn (P2E):
Play to earn (P2E) gaming lets players earn real-world value assets like Bitcoin and USD by participating and collecting NFTs within the game. Platforms like Axie Infinity, The Sandbox, and Illuvium are popular examples.
A Ponzi scheme is a fraudulent investment scheme that lures investors with high returns and low risk, paying earlier investors with funds from later ones, often disguising the source of profits as legitimate business income. It's akin to a pyramid scheme and typically collapses when new investment declines.
Post-mining generates new coins before public mining, often taking place between the crypto supply snapshot and platform code implementation, potentially raising concerns about founder influence on coin prices.
Post-trade encompasses processes following asset transactions, including clearing, settlement, custodial services, and regulatory compliance for optimal operation.
Pre-sales in blockchain occur after private sales but before the public offering, allowing institutions and missed private sale investors to buy coins. It's typically open to project insiders, friends, and high-net-worth individuals before ICO or IEO.
Price Movement (Price Action):
Price movement, known as price action, represents price changes over time in the market, essential for trading and charting.
The principal-agent dilemma arises when the interests of an authorized representative (agent) clash with those of the person or entity they represent (principal). This issue is prevalent in business, finance, and markets, and resolving it often involves adjusting reward systems to align the interests of both parties, a process known as incentive alignment.
A privacy coin is a cryptocurrency crafted to safeguard user and transaction privacy through techniques like Zero-Knowledge Proofs (ZKPs). Monero, Zcoin, and Zcash are leading privacy-focused blockchains.
A private blockchain is a controlled network for large organizations, offering access control and privacy, but lacking the decentralization and security of public blockchains like Ethereum or Bitcoin.
Public-key cryptography uses pairs of keys: public keys for sharing and private keys for access, relying on complex algorithms to generate them from mathematical problems.
A private sale provides early-stage blockchain startups with funding from major investors before the ICO, enabling them to secure the capital required for project development, despite concerns about centralization.
Proof of Authority (PoA):
Proof of Authority (PoA), designed by Ethereum co-founder Gavin Wood, is a blockchain consensus method based on identity and reputation, known for its scalability and transaction speed but criticized for its centralization.
Proof of Burn (PoB):
In Proof-of-Burn (PoB), miners destroy tokens to earn the right to validate blocks, reducing energy consumption compared to Proof-of-Work (PoW). Used by Counterparty, Slimcoin, Factom, and more blockchains.
Proof of Capacity (PoC):
Proof of Capacity (PoC) relies on miners' hard drive space to determine mining rights and transaction validation ability, storing potential mining solutions on the device's hard drive before mining starts, with larger drives accommodating more solutions. PoC addresses energy inefficiency and computational demands in Proof-of-Work (PoW) and potential crypto-hoarding issues in Proof-of-Stake (PoS).
Proof of History (PoH):
Proof of History (PoH) is a unique Solana blockchain technique that adds precise time measurement, boosting transaction speed by eliminating the need for complex timestamp handling.
Proof of Stake (PoS):
Proof of Stake (PoS) is a leading blockchain consensus method, where participants stake coins to validate transactions, enhancing security, scalability, and energy efficiency while allowing democratic governance through voting.
Proof of Validation (PoV):
Proof of Validation (PoV) is a distinct Proof-of-Stake consensus approach, where validators' influence is tied to their bonded coins, promoting consensus in blockchain networks. Validators' coins equate to their voting power and can be released at a later time.
Proof of Work (PoW):
Proof of Work (PoW), initially popularized by Bitcoin, secures blockchains through energy-intensive mining. While decentralized and secure, it faces scalability issues and energy consumption criticism.
A blockchain protocol defines rules for consensus, network participation, and transaction validation on a specific blockchain platform, like Bitcoin's protocol.
The protocol layer forms the core infrastructure of a blockchain, encompassing the consensus mechanism, nodes, and potentially Layer-2 systems like sidechains and virtual machines. It includes key components like node identification, error handling, network synchronization, and transaction processing.
Pseudonymity in blockchain refers to concealing one's real identity behind a false name, distinguishing it from full anonymity where a user cannot be identified at all.
A public address is a concise representation of a user's cryptographic key, facilitating transaction receipt in blockchain networks. It's often a substitute for a full public key.
A public blockchain is a decentralized, open-access system using cryptocurrencies to promote censorship resistance, while private blockchains are closed and require special permissions for use.
A public key is like your cryptocurrency receiving address, while the private key is your secret to unlock and prove ownership of the coins. Keep your private key secret and share the public key, which is often represented as an address.
A public ledger, in the blockchain realm, is a decentralized, permissionless database maintained by a network of nodes, eliminating the need for central authority, used for recording various data, akin to historical public record-keeping systems.
A public sale, also known as an ICO, is the last round of funding for blockchain startups, open to all with registration and KYC. ICOs gained fame in 2017 but have since transformed into IEOs and IDOs.
Pump and Dump:
An illegal scheme where the price of a cryptocurrency is artificially inflated (pumped) to attract investors, followed by a rapid sale (dump) by the manipulators to profit, causing a sharp price drop.
A quick response code that stores information, often used in cryptocurrency for easy wallet address sharing.
Qualitative analysis assesses a company's value and future growth potential through subjective evaluation, considering factors like management skills, R&D, industry trends, and other non-numeric data, complementing quantitative analysis in investment decision-making.
Quantitative analysis (QA) employs mathematical and statistical models to quantify behavior. It's vital in finance for predicting asset prices, GDP changes, and assembling financial data for regions worldwide.
Post-quantum cryptography, often called quantum-resistant security, is a cryptographic approach focused on defending against quantum computing threats. Ongoing global efforts by experts in cryptography and computer science aim to develop systems that remain secure in the face of potential quantum attacks on existing infrastructure.
A race attack is when two transactions are quickly sent, one confirmed on the blockchain, to buy something with an unconfirmed transaction and then invalidate it before confirmation, effectively obtaining "something for nothing" only if the recipient accepts unconfirmed transactions.
Malicious software that encrypts a victim's data and demands a cryptocurrency ransom for its release.
Rebase Currency (Price-Elastic Currency):
Rebase currencies adjust their supply based on price changes, unlike stablecoins, they use a rebase mechanism for this purpose.
Recovery Phrase (Mnemonic Phrase):
A recovery phrase, often called a "seed phrase," is a series of 12, 18, or 24 words used to recover access to a cryptocurrency wallet when the original access is lost. It corresponds to information in the wallet, unlocking the private key.
Recovery shares enhance security by allowing users to specify the number of shares needed to restore a wallet, making theft harder but wallet recovery a bit more complex.
A slang term used in the crypto community to describe significant losses or a bad investment outcome.
A term used by experienced crypto traders to describe newcomers or inexperienced investors who have suffered significant losses.
Relayers on the 0x DEX host order books, facilitate trade matching, and earn fees, serving as decentralized facilitators for traders.
A remittance is when money is sent from one location to another, often internationally, usually through online platforms or blockchain technology, offering faster and cheaper transfers compared to traditional banks. With mobile cryptocurrency wallets, sending large sums worldwide is now quick and cost-effective.
Sharding, known as horizontal partitioning, divides networks into multiple databases for better performance. Resharding adjusts shard numbers in response to network needs but can be challenging to maintain data availability and integrity, found in both decentralized blockchains and centralized networks.
A retail investor is an individual who trades stocks, cryptocurrencies, and more through brokerage firms, typically in smaller quantities than institutional investors.
ROE (Return on Equity):
ROE measures profit generated per equity dollar invested, excluding debt, aiding institutional investors in assessing company performance.
ROI (Return on Investment):
A measure of the profitability of an investment, calculated as a percentage of the initial investment.
A blockchain roadmap outlines a flexible plan for short- and long-term goals, guiding a project's development and attracting potential investors.
Roll-ups optimize smart contract transactions off-chain to reduce fees in response to rising DeFi demand, enhancing throughput but necessitating added on-chain hardware for finalization.
A rug pull is a deceptive move in the crypto world. In it, the creators of a sketchy blockchain project vanish with investors' money, often using decentralized exchanges to trick users into buying their worthless tokens.
Runtime is the phase when a computer program is actively running on a CPU, utilizing RAM. It also encompasses the period between opening and closing a program. Blockchains and networks incorporate runtime environments for execution models.
The smallest unit of Bitcoin, named after its pseudonymous creator, Satoshi Nakamoto. One Bitcoin is equivalent to 100 million Satoshis.
Satoshi Nakamoto, the mysterious creator of Bitcoin, introduced the cryptocurrency in 2008, mined the first block in 2009, and vanished from the community in 2011, leaving their true identity a puzzle with numerous unsolved theories.
Scalability in blockchain refers to its ability to enhance transaction speed and efficiency, alongside decentralization and security, key features of a mature blockchain network.
A scaling solution enhances Layer-1 blockchain efficiency by using Layer-2 protocols like sidechains and state channels, improving speed and transaction throughput.
Scalp Trader (Scalper):
A scalper is an investor who swiftly trades in minutes or seconds to profit from small price movements, often using high leverage. They're often backed by institutional firms with automation tools and substantial capital.
A type of cryptocurrency token that represents ownership in an asset, such as real estate or company shares, and is subject to securities regulations.
Secure Hash Algorithm (SHA):
SHAs, a family of cryptographic hash functions, safeguard data on computer networks. They involve unique compression functions and modular additions. Bitcoin relies on SHA-256 for mining and consensus.
Security tokens represent ownership stakes in valuable assets like businesses or real estate, recorded on a blockchain ledger. They're akin to corporate stocks, offering a flexible and secure means of transferring and storing value, including potential dividends.
Seed funding, also known as seed capital, is an initial investment that provides support to startups in exchange for ownership or tokens. Typically secured from sources like friends, family, seed VC funds, or angel investors, it kickstarts a business until it can secure more substantial funding.
A seed phrase, often called a "recovery phrase," is a 12, 18, or 24-word code used for backup access when a user loses their cryptocurrency wallet or private key, allowing them to regain access.
Seeding in P2P file sharing involves uploading downloaded content for faster downloads. It began with mp3 music files in the late 1990s and now includes videos, games, and software sharing.
A sell wall happens when a substantial limit order is set at a specific price to sell a significant amount of an asset, potentially leading to a price drop. This tactic can be seen as market manipulation when combined with a leveraged short position to profit from the asset's decline.
A sell-off often stems from market panic triggered by negative news, black swan events, or institutional investors' actions, leading to a rapid and substantial decline in asset prices.
Series B Funding:
Series B funding follows Series A and is for established companies worth over $30 million. It helps them expand, cover costs, or enter new markets, often bringing in over $10 million from investors in exchange for preferred shares.
In computer networking, service chaining is a sequence of actions that automates traffic flow, optimizing network resource usage for enhanced application performance, employing elements like service templates, virtual networks, service instances, and service policies.
Settlement is crucial for confirming transactions, impacting businesses economically. Longer settlement times lead to delays and costs, while shorter settlement times boost efficiency and reduce uncertainty.
SHA-256, part of the SHA-2 family, was developed by the NSA and gained prominence in the Bitcoin blockchain for its ability to create a secure 256-bit hash from input data, making it extremely difficult to reverse.
Shard chains divide a blockchain into smaller pieces, reducing the burden on validator nodes and improving network speed. Ethereum's upcoming upgrade, Ethereum 2.0, will feature 64 such shards, enhancing scalability.
Sharding splits a network into smaller parts to boost speed and efficiency, benefiting blockchain networks by distributing tasks across nodes and enabling faster, more secure transactions.
Shielded transactions use zk-SNARK cryptography to hide transaction details while preserving blockchain verifiability.
Short Position (Shorting):
Short selling is a strategy where an investor borrows and sells an asset in the hopes of profiting from its price decrease. If the asset's price falls, they can repurchase it at a lower cost, pocketing the difference. But if the price rises, they face potential financial losses.
A short squeeze happens when a shorted stock's value surges due to positive news or buyers forcing short sellers to exit their positions to avoid losses.
This derogatory term is used for cryptocurrencies with little to no perceived value or utility. Shitcoins are often the target of pump-and-dump schemes. Just like HODL, the term Shitcoin originated from the Bitcointalk Forums. (Source)
Individuals who claim to have special insight or the ability to predict the success of low-quality cryptocurrencies. They often tout such coins.
Slashing in blockchain with PoS penalizes investors for dishonest validator behavior, causing a loss on their initial investment.
In finance, slippage is the variation between the expected and actual trade prices, often happening on platforms with low liquidity. It occurs when the bid-ask spread is wide, leading to higher purchase costs or fewer assets acquired during execution.
In blockchain, a "small cap coin" is a cryptocurrency with a modest market value, determined by the public's available coins multiplied by the price per coin, without a fixed threshold.
Self-executing contracts with predefined rules and conditions that automatically execute when specific conditions are met. They run on blockchain platforms like Ethereum.
In blockchain, a "snapshot" captures the network's current state, including transaction history and user balances, often used for fair token distribution during events like airdrops or IEOs.
A soft cap is the minimum funding goal for a blockchain project's initial round, often subjectively set. It differs from a hard cap, which represents the maximum target. If the soft cap isn't met, funds may be returned, or development may persist, varying by project.
A soft fork in a blockchain allows new updates to work with the older system, while a hard fork requires new blocks to be valid, making soft forks less disruptive than hard forks.
A soft peg in the blockchain world helps stabilize stablecoins, maintaining a 1:1 value with a fiat currency while providing some financial flexibility for economic fluctuations.
A digital wallet, like a software wallet, safeguards your digital assets through stored keys on your device, offering convenience but also making it more vulnerable to cyber threats. Regular updates are crucial for security.
Solo mining involves mining cryptocurrency on the PoW blockchain without fees, but it's become outdated due to infrequent rewards. Miners typically join pools to combine hash rates for more consistent rewards.
Source code is the foundational code that dictates how a software program works. Programmers collaborate on it before releasing it publicly for open-source projects.
A source-code fork creates a new blockchain network by using existing source code, requiring all nodes to upgrade, and it's not reversible.
A Spartacus attack mimics trusted nodes in a decentralized network, stealing their identity to gain trust. It commonly happens during network bootstrapping, with the attacker copying the IDs of trustworthy nodes.
The spot market swiftly settles financial transactions at the purchase price, whereas physical goods may have a slight delay due to logistical reasons, in contrast to futures markets where delivery is later and prices fluctuate.
Spot trading involves direct asset buying and selling, with options like limit and market orders, making it less risky than derivatives trading due to the absence of leverage and liquidation risks.
A stablecoin is a digital currency designed to maintain a consistent value, often linked to a fiat currency or a tangible asset. It offers price stability and is primarily intended for practical use rather than investment.
The process of participating in a proof-of-stake (PoS) blockchain by locking up and holding a cryptocurrency to support network operations and earn rewards.
Staking derivatives, found in DeFi protocols, let you earn rewards by staking assets in a blockchain, often using PoS. For instance, "cTokens" on Compound stand for staked assets like ETH (cETH).
Staking pools on a Proof-of-Stake network let crypto holders merge their tokens, enhancing their collective power to validate blocks and boost rewards.
A stop-loss order safeguards traders by selling an asset if its price drops below a specified threshold, preventing unexpected losses.
A strike price is the price at which an investor can buy or sell an underlying asset in an options contract, typically based on the asset's current market value. For instance, a $20 monthly call option for Bitcoin at $75,000 sets the strike price at $75,000, allowing the investor to buy Bitcoin at that price before the contract expires.
A subnetwork, or subnet, is a distinct blockchain protocol operating within a Layer-1 blockchain like Ethereum or Bitcoin. Numerous subnetworks coexist and enhance the parent chain, each tailored to unique design parameters for specific real-world applications in various blockchain ecosystems.
Swap (Derivative Swap):
A swap is a financial agreement where parties trade cash flows or asset values without transferring the principal amount. It often involves fixed and variable cash flows, commonly used by major institutions and conducted over the counter.
A Sybil attack involves an attacker creating fake identities to overwhelm a network, disrupting it or gaining control by exploiting how nodes connect, particularly harmful in systems with easily created nodes.
Blockchain networks are tamper-proof, ensuring immutability and resistance to censorship, preserving data integrity and transparency without reliance on central authorities, making it resilient against malicious tampering and theft.
A technical indicator is a mathematical signal derived from historical price, volume, or open interest data, helping traders forecast future price movements in technical analysis.
Technical Resistance Level:
In technical analysis, a resistance level is a price point where a stock has struggled to move past before, causing potential price stall or reversal. Traders use various methods and indicators to identify these levels, and when reached, they often trigger a self-fulfilling prophecy as traders anticipate a trend reversal by selling the security.
Technical Support Level:
A support level in technical analysis is a price at which a stock or security typically doesn't drop below, often formed by multiple buyers purchasing the asset near that price. Traders use indicators like moving averages and trend lines to identify support, along with resistance levels, for effective risk management in trading and investing.
A testnet is a safe playground for blockchain development before a mainnet launch, used to check security and functionality. It's audited, improved, but isn't meant for real transactions like a mainnet.
Third-party storage is storage managed by external entities, like banks, crypto exchanges, or cloud services.
The TimeLock Key safeguards atomic swaps by refunding cryptocurrency if trades exceed the agreed timeframe.
A timestamp on a blockchain is an immutable digital record marking the exact moment of a transaction.
To The Moon:
When a cryptocurrency is said to be "mooning," it means its price is experiencing a significant and optimistic increase. "To the moon" expresses confidence in a token's future value. In 2017, a Reddit user by the name "u/Cryptorich13" took advantage of Reddit's crypto reward system to convert his stash of free tokens into Bitcoin. He Dumped 80,000 Moons for Dai at an average price of $0.08 to $0.13 per token and bought 0.93 $BTC which was worth around $23,736.
A unit of value issued by a project or platform built on a blockchain. Tokens can represent assets, access rights, or utility within a specific ecosystem.
A token basket is a diversified collection of digital or traditional assets, used for trading and managed by various financial institutions.
Token issuance involves creating a blockchain-based token, considering various aspects like business structure, token standard, deployment, and security for a balanced and sustainable approach within the ecosystem.
Token lockups, or vesting periods, prevent users from trading or selling their cryptocurrency tokens immediately after acquisition, aiming to stabilize the market by controlling asset selloffs and releasing tokens gradually.
A token sale involves selling tokens in stages: privately for big investors, pre-sale for smaller institutions, and publicly (Initial Coin Offering) for retail investors, with each stage serving specific funding needs.
Token supply refers to the quantity of tokens a blockchain protocol generates, encompassing maximum supply (the ultimate token count), circulating supply (tokens in public circulation), and total supply (all created tokens).
The process of exchanging one cryptocurrency token for another, often during a project
The process of representing real-world assets or rights as digital tokens on a blockchain, enabling easier trade and transfer.
Tokenomics combines "token" and "economics" to define the features shaping a cryptocurrency's usage within its project and its monetary policies during development. It encompasses diverse processes, from blockchain protocols to speculative concepts, influencing how users engage with the token.
Total supply in blockchain refers to the overall number of coins/tokens created at the project's start, including those allocated to the foundation, team, and advisors. It differs from circulating supply, which represents the coins available for purchase and fluctuates with the project's release schedule.
Total Value Locked (TVL):
TVL, or Total Value Locked, quantifies the combined worth of cryptocurrencies secured in DeFi protocols through smart contracts. Introduced by DeFi Pulse in 2019, it encompasses data dating back to DeFi's inception in 2017 and can be specific to particular protocols like Aave or Uniswap. Furthermore, TVL data can be dissected to gauge DeFi value locked by purpose, like lending or derivatives.
Traceability in blockchain projects varies: NFTs enhance it with ERC-721, while Monero prioritizes user privacy through obfuscation.
A trading bot is a tool that automates trades based on user-defined parameters, popular among traders and investors for tailoring to their unique strategies.
Trading Volume (Volume):
In capital markets, trading volume represents the quantity of a security traded in a specific time, a key consideration for investors' analysis.
Traditional Finance (TradFi):
TradFi encompasses legacy financial institutions like banks, operating in a centralized system, distinct from blockchain, cryptocurrency, and DeFi.
In blockchain, a transaction (TX) involves users exchanging data on a network, with speed and security levels varying. Commonly, users swap network-specific coins, like Bob sending Linda four ether (ETH) via Ethereum, and Linda reciprocating with an equivalent value in bitcoin (BTC) through the Bitcoin network.
Transaction fees cover the cost of processing transactions on a blockchain, rewarding network security providers, and vary based on supply and demand.
Transaction ID (TXID):
A transaction ID (TXID) is a unique digital record on a blockchain, allowing users to track and verify transactions using a blockchain explorer.
Transaction Settlement Time:
Settlement time is the duration between initiating a transaction and depositing assets in the recipient's account, varying based on network and organization structures.
Transactions Per Second (TPS):
TPS in blockchain measures the network's speed and scalability, crucial for widespread blockchain adoption by evaluating data transaction capacity.
In a trustless P2P blockchain system, participants rely on the technology, not central authorities, ensuring decentralized trust and transparency.
Tumbler (Crypto Tumbler):
Cryptocurrency tumblers, or mixers, mix users' coins for privacy, though it's not foolproof. They can be used for illegal activities but have faced crackdowns. With fees of 1-3%, they're losing favor to non-custodial alternatives.
Two-Factor Authentication (2FA):
Two-factor authentication (2FA) enhances account security by requiring users to verify their identity with a secondary code, reducing cybersecurity risks. Popular 2FA apps include Google Authenticator and Authy.
Two-Way Peg (2WP):
A two-way peg (2WP) is a blockchain protocol feature enabling tokens and data transfer between a mainchain and an independent blockchain network, often using bridges to facilitate bi-directional exchanges.
The 'unbanked' are people excluded from traditional banking due to limited internet access or living in underserved areas, hindering their participation in the global economy. FinTech, DeFi, and blockchain aim to promote global financial inclusion for them.
An Ethereum uncle block occurs when two blocks are mined simultaneously, only one becoming part of the ledger. Miners get rewarded in ether (ETH), unlike Bitcoin orphan blocks, which offer no BTC reward.
An unconfirmed transaction in blockchain is one that hasn't yet been added to the blockchain. It requires network confirmations for the recipient to receive the assets, with the number of confirmations varying by blockchain.
Underbanked individuals have limited access to full banking services due to income or other reasons, often turning to alternative financial options. Fintech, DeFi, and blockchain aim to promote global financial inclusion, including support for the unbanked.
A decentralized exchange (DEX) and liquidity pool protocol built on the Ethereum blockchain.
Unrealized Profit & Loss:
Unrealized profit and loss (P&L) tracks open trading position profits or losses on an exchange. It's crucial for institutional investors dealing with significant capital allocations.
Unstoppable Domains simplifies crypto transactions with user-chosen domain names instead of complex wallet addresses, supported by Ethereum and Zilliqa blockchains. It collaborates with wallet providers for seamless cryptocurrency storage.
User Experience (UX):
UX, or user experience, gauges how users perceive a product's ease, efficiency, and overall impression. A positive UX often leads to higher customer satisfaction and growth, especially in the digital realm, like blockchain, where improvements are seen in crypto exchanges and wallets, though they still have room for advancement compared to traditional financial systems.
User Interface (UI):
User interface (UI) is the way users interact with digital devices or software. A good UI, like UX, should be user-friendly, efficient, secure, and private, and can include Human-Machine Interfaces (HMIs).
A cryptocurrency token that has a specific use within a blockchain project's ecosystem, such as accessing services or products.
A cryptocurrency transaction that has been broadcast to the network but has not yet been included in a confirmed block.
In blockchain, validators verify and approve transactions, following unique criteria. Decentralized networks often use validator nodes for processing transactions in a distributed, permissionless way.
Value investing entails identifying undervalued stocks and conducting thorough research for long-term investments, ignoring short-term market fluctuations.
A vault in blockchain architecture securely manages various cryptocurrencies in DeFi, facilitating automatic asset exchange via smart contracts, and supporting stablecoin pegs by adjusting currencies based on market demand.
Venture Capital (VC):
Venture capital (VC) fuels high-potential startups with funds from investors like wealthy individuals, banks, and industry-focused companies, often offering expertise.
Vertical scalability involves enhancing a network or device's performance by adding extra resources, such as RAM or processing power, to accommodate increased demands. The approach to achieving it can vary based on the system's configuration and upgrade requirements.
In blockchain, vesting means releasing coins/tokens reserved for team, partners, and contributors after a set time, locked by smart contracts until conditions are met.
The degree of price fluctuations in the cryptocurrency market, which can be high compared to traditional financial markets.
Virtual Machine (VM):
A Virtual Machine (VM) is a cloud-based computer emulator enabling various hardware and software simulations, facilitating blockchain transactions, with Ethereum Virtual Machine (EVM) being a prominent example.
The co-founder of Ethereum, a prominent figure in the cryptocurrency space, and a major contributor to blockchain technology.
In the marketplace, volatility is how much an asset's price fluctuates compared to its average. Higher volatility means more frequent and significant price changes, measured with standard deviations of returns. Investors monitor this to spot trading opportunities but avoid excessive volatility if they prefer less risk.
Volume Weighted Average Price (VWAP):
VWAP is a key tool in technical analysis, determining the average price of an asset's day-long trading based on volume and price, aiding traders in timing entries and exits using support and resistance levels.
Vulnerability Rewards Program (VRP):
A VRP, also known as a bug bounty, encourages external developers to report code issues in blockchain or software projects by offering financial rewards, often in the form of the network's cryptocurrency.
A digital tool or software that allows users to store, send, and receive cryptocurrencies. Wallets can be hardware-based, software-based, or even paper wallets.
Wash trading involves deceptive practices in buying and selling assets to create false market perceptions and generate profits, often through collusion or self-trading, used by various entities including trading firms and cryptocurrency exchanges.
A watchdog organization, typically non-profit, oversees government or industry to prevent illegal or unethical conduct and informs the public about any discovered wrongdoing.
A web-based watchlist helps users track cryptocurrencies for research and store blockchain tools. For instance, on tradingview.com, users can easily access their favorite technical cryptocurrency charts for real-time investment assessment.
"Weak hands" in crypto describe investors who sell during market dips, often seen as an ill-advised strategy, as many believe long-term values will surpass initial investments despite corrections.
Web 1.0 (Web1):
Web 1.0 emerged in the 1990s as a static, read-only internet, losing its dominance to Web 2.0's interactive platforms in the early 2000s. Now, Web 3.0, powered by blockchain technology, promises a more user-centric, democratic online experience.
Web 2.0 (Web2):
Web 2.0, which emerged in the early 2000s, introduced interactive websites like Amazon and Facebook. While praised for innovation, it's criticized for centralization, profit focus, ads, surveillance, and privacy concerns. Web 3.0 aims to use blockchain to connect programs directly, changing the paradigm.
Web 3.0 (Web3):
Web 3.0 envisions a decentralized internet powered by technologies like blockchain, aiming to empower users, liberate data ownership, and foster a free, borderless, and open web through a P2P model.
A web application runs on a web server, not a device's OS, accessible through a browser with an internet connection, shaping online user experience.
A web wallet, often managed by crypto exchanges, is an online cryptocurrency wallet, categorized as a 'hot wallet' due to its internet accessibility.
WebAuthn is a secure online authentication method that replaces traditional usernames and passwords with public-key cryptography, enhancing security by keeping credentials on the user's device. It supports biometrics and safeguards various accounts, from Twitter to crypto exchanges.
Wei is the tiniest unit of ether (ETH), with 1 ETH equal to 10^18 wei.
A "whale" is an entity or individual with a substantial amount of a particular cryptocurrency. Due to their significant holdings, their transactions can influence market prices.
Notifications or announcements informing users of significant cryptocurrency transactions involving large amounts. Whales can significantly impact market prices.
In blockchain, "whitelist" means two things: 1) verifying potential investors for funding rounds, and 2) confirming withdrawal addresses to prevent fraud.
A whitepaper is an informative document that elucidates intricate issues within an industry, often presenting a business model and development strategy. In the blockchain realm, it serves as an essential tool for attracting investors, detailing technical aspects, token economics, team information, and more.
Withdrawal (Cryptocurrency Transaction):
A withdrawal involves moving funds between platforms, like crypto to fiat or bank account to on-ramp service, usually incurring transaction fees.
Wrapped Bitcoin (wBTC):
wBTC, an ERC-20 token, mirrors Bitcoin at 1:1 and boosts Ethereum DeFi liquidity through collaboration between Bit Go, Kyber Network, and Ren.
Wrapped Ether (wETH):
wETH, or Wrapped Ether, is an ERC-20 token representing ETH for seamless trading with other tokens. Converting ETH to wETH involves depositing it into a smart contract, which can later be reversed to ETH.
A wrapped token is a crypto asset tied to another cryptocurrency's value. It's stored in a specialized digital vault, enabling its use on different blockchains to expand its functional possibilities.
XBT, an alternate symbol for bitcoin (BTC) on certain exchanges, follows ISO standards, commencing with 'X' for supranational currencies.
The native cryptocurrency of the Ripple network, used for fast and low-cost cross-border payments.
Year to Date (YTD):
YTD, short for Year to Date, tracks financial or business performance from the beginning of the calendar or fiscal year to the present, aiding in trend analysis and performance comparisons in various industries, including blockchain and crypto investments.
In the blockchain realm, a yellow paper is a concise technical document detailing a system's intricate aspects, often serving as a condensed counterpart to white papers.
A yield curve is a graphical representation of investment yields over time, commonly associated with bonds but also relevant in crypto yield farming. It reveals the link between interest rates and asset maturity, with upward-sloping curves indicating growth and downward-sloping ones signaling economic decline.
A DeFi strategy in which users provide liquidity to a protocol in exchange for rewards or interest.
Yield sensitivity, or interest rate sensitivity, gauges how much a fixed-income asset's price changes with interest rate fluctuations. It influences both buying and selling, and high sensitivity means greater price swings. Important when choosing a fixed-income asset for resale on the secondary market, as interest rates and asset prices move inversely.
Zero Confirmation Transaction:
A transaction that has been broadcast to the network but is not yet included in a confirmed block.
A cryptographic method that allows one party to prove the authenticity of information without revealing the information itself.
Zero-Knowledge Rollup (zk-Rollup):
A Zero-Knowledge Rollup (zk-Rollup) is a Layer-2 scaling solution that enhances blockchain performance and privacy through cryptographic proofs like zk-SNARKs. It's used to reduce transaction fees, boost liquidity, and promote non-custodial crypto ownership.
Zero-Knowledge Scalable Transparent Argument of Knowledge (zk-STARK):
A zk-STARK is a cryptographic proof ensuring privacy in blockchain by verifying data ownership without revealing it, vital for zk-Rollups, and more trustless than zk-SNARKS.
Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK):
A zk-SNARK is a privacy-protecting cryptographic proof in blockchain, verifying data possession without revealing it, known for its use in Zcash, Monero, and similar privacy-focused blockchains.
From Bitcoin to DeFi, our glossary covers a wide range of topics with clarity and expertise. Whether you're an investor, trader, or simply curious, let our glossary be your trusted companion on this exciting journey.
So, dive in and start decoding the crypto language, one term at a time. Knowledge is your key to success in the crypto ecosystem.
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