C ryptocurrency has hit the headlines for its remarkable spike and hurtles in a way early investors of bitcoin might never have expected. But in the middle of all this, many get caught up in the middle of bizarre terminologies and crypto jargons (from hot wallet to ICOs) only known by those who’ve been in the industry. It is completely fine for any newbie to feel scared by many of these terms. Here’s a list of the most popular cryptocurrency lingos that anyone will probably meet out there while trading in crypto and BTC.
51% Attack –is a situation where more than half of the cryptocurrency networks computing resources are controlled by one system member or a group of people. In theory, such a computational resource power volume can negatively affect a cryptocurrency by halting mining, stopping or changing transactions, and reusing coins.
Address – is used to send and receive cryptocurrency. Usually, the address is a line of letters and numbers. Also, it is a public key used by bitcoin-owners for the transaction digital signature. For example, Bitcoin address consists of alphanumeric strings that start with a 1 or 3; Ethereum addresses begin with ‘0x’.
Altcoin – is a common name for all other cryptocurrencies except for the bitcoin that aim to replace it as a standard one.
ASIC – is a special circuit optimized for the cryptocurrency mining, and it copes with this function more efficiently than computer GPU and CPU.
Bitcoin Cash (BCH) – is a virtual currency that was created in August 2017 and basically, it is an imitation of the Bitcoin Blockchain with increased block size capacity to solve the scaling issue.
Block – refers to a bunch of data that is related to transactions. It holds a historical database of all cryptocurrency transactions made until the Block is full. It’s a permanent record, like a bag of data that can be opened and viewed at any time.
Blockchain – The blockchain is a digital ledger of all the transactions in a particular cryptocurrency ever made. It comprises of individual blocks that are chained to each other through a cryptographic signature. Every time a block’s capacity is reached, a new block is added to the chain. The blockchain is frequently copied and saved onto thousands of computers all around the world, and always matches with each other. Since there is no master copy stored in one location, it’s considered decentralized
DASH – A form of digital currency that is based on Bitcoin software but has an anonymous feature which makes it impossible to trace transactions of an individual.
Decentralized – A condition where there is no fundamental control (i.e. not one single entity has control over all the processing) authority or function and no central point of the crash.
Decentralized applications (dApps) – It is a kind of software program whose mechanism is based on P2P network rather than a single computer. DApps have existed since the advent of P2P networks. This software has been designed to exist on the Internet in a way that is not controlled by the single body. It can have any number of participants on all sides of the marketplace & it does not have to be financial. Ethereum is a trendy development platform for creating dApps.
Digital Signature – is a code generated by a public key cryptosystem. It is a combination of public and private cryptographic keys that are used to confirm the transaction genuineness and sender identification. The code is attached to electronic documents for checking their content and sender identity verification.
ERC-20 – It is a kind of token standard for Ethereum which needs to be met in order for a token to be accepted. The standard regulations apply to all ERC20 tokens because these regulations are required to interact with each other on the Ethereum network.
Ether – is the minimum unit of Ethereum, the second cryptocurrency after bitcoin by capitalization in the world.
Ethereum – Ethereum is a decentralized software platform that is based on blockchain technology created by Vitalik Buterin in 2013. It runs contracts on a custom built blockchain that allows developers to build markets, store registries of debts, and so on.
Fiat money – It refers to currencies that have nominal or no intrinsic value themselves (i.e. they are not supported by commodities like gold or silver) but it is defined as an authorized tender by the government, like paper bills and coins.
Flipping – A kind of investment strategy that is popular among real estate investing where you can buy something with the goal of reselling for a profit later, usually in a small period of time. From ICO point of view, flipping refers to the approach of investing in tokens before they are listed on exchanges & again selling them for a profit as they are trading in the secondary market.
FOMO – An acronym that stands for fear of missing out, the sharp rise in the value of cryptos catch the attention of investors and they invests in it and the feeling of anxiety refers to miss out a potentially profitable investment opportunity & regretting on it afterward.
Fork – is a creation of an alternative successful version of the blockchain. The fork is often called a new cryptocurrency, which is based on the protocol of the existing one. For example, Litecoin (LTC) is a Bitcoin fork (BTC).
FUD – An acronym that stands for fear, uncertainty, and doubt. It is an approach to control perception by spreading negative, deceptive or bogus information about something, as conflicting to logical criticism.
Genesis block – The first block of data that is processed & authenticated to form a new blockchain, often referred to as block 0 or block 1.
Hard cap – The maximum amount that an ICO will raise. If an ICO attains its hard cap, they will stop collecting more capital.
HODL – A type of inactive investment strategy where you hold an asset for a long period of time, in spite of market instability. The term was made prominent by an error made in a bitcoin forum.
Initial coin offering (ICO) – It is an unregulated method by which a cryptocurrency venture, usually at the premature stage can raise money from supporters by issuing tokens. It is frequently referred to as a crowd sale because ICO members can potentially earn a profit on their investments. At present Ethereum is the most renowned platform for launching ICOs.
IOTA (MIOTA) – It is a kind of cryptocurrency & the name of an open source distributed ledger that was founded in the year 2015 and it works on the new technology called Tangle. It proposes features like scalability, fast and secure transactions, zero fees, and so on. It is focused on the Internet of Things.
Lightning Network – It is a protocol for scaling and speeding up blockchains. While it was designed to solve some of the technical limitations of the Bitcoin blockchain, it can be implemented on top of any blockchain.
Litecoin (LTC) – In 2011 former Google employee Charlie Lee created a cryptocurrency that offers features like the Lightning Network and Segregated Witness which allows for faster processing at inferior cost.
Market capitalization (market cap) – In cryptocurrency investment, it refers to either value increased by the circulating supply (i.e. free float market capital) or price multiplied by the total supply (i.e. fully diluted market cap).
Maximum supply – An evaluation of the maximum number of tokens or coins that will ever exist for a cryptocurrency or crypto asset.
Mining – A process where transactions are verified & added to a blockchain. It is also the procedure where new Altcoins or Bitcoins are created. Anyone with the necessary hardware & proper access to the internet can be a miner & earn a profit, but the cost of industrial hardware & electricity has restricted mining for bitcoins & definite altcoins today to large-scale operations.
Monero (XMR) – In 2014, this cryptocurrency was created & its main focus was on scalability and privacy and runs on platforms like Mac, Linux, Windows & Android. Transactions on Monero are designed to be untraceable to any particular client or real-world identity.
NEM (XEM) – The term refers to a cryptocurrency & the name of a platform for managing variety of assets like supply chains, currencies, ownership records. It comes up with additional features to blockchain technology like encrypted messaging, multi-signature accounts.
NEO- The name stands for China’s first open source blockchain & the cryptocurrency that was founded in 2014 by Da Hongfei. It is analogous to Ethereum in its capability to carry out smart contracts or dApps but has some technical differences like programming language compatibility.
Pre-sale – A sale that takes place before a token is made accessible to the common people to contribute.
Proof of Stake (PoS) – An algorithm that reward participant who solves tricky cryptographic puzzles to achieve distributed consensus. Unlike PoW or proof of work, a person can validate transactions & create new blocks that is based on their individual wealth, for example, the total number of coins owned. One of the significant advantages that PoS have above PoW is low energy consumption.
Proof of Work (PoW) – An algorithm that rewards the first person who solves a computational problem (i.e. mining) to achieve distributed consensus. Miners fight to solve tricky cryptographic puzzles sequentially to add the next block on the blockchain.
Pump and dump scheme – A scheme in which the development team hypes up a project with no fundamental basis in order to pump up the value of the tokens provisionally and after that sells their holdings immediately after launch to earn a profit.
Ripple – Refers to the name of an open source payment platform and crypto asset. The idea for the platform is to enable real-time global payments anywhere around the globe. The Ripple payment protocol was developed by Open Coin which was found in 2012.
SegWit (Segregated Witness) – The process where the block size limit on a blockchain is increased by eliminating digital signature information & moving it to the end of a transaction to free up capacity. Transactions are fundamentally split into two segments the original data segment & the signature segment.
Smart contracts – An automated mechanism that involves two/more parties where virtual assets are put in and redistributed later that is based on some predetermined formula & triggering experience. It can be run involuntarily without any downtime, censorship, fraud or third party intrusion.
Soft cap – Generally it is referred as the minimum amount that an initial coin offering (ICO) needs to raise. If the ICO is incapable to raise that amount, it may be canceled & the collected funds return to participants.
Token – Crypto tokens facilitate the creation of open, decentralized network & offer a mode to incentivize contributors in the network (with both network expansion & token approbation).
Total supply – The total number of tokens or coins in existence, it includes that coins which are circulating in the open marketplace & that are reserved or locked.
Wallet – A store of virtual assets like cryptocurrencies, similar to a digital bank account. Crypto wallets can be divided into two categories hosted wallets (e.g. wallets store on exchanges/ third-party servers) and cold wallets (e.g. hardware wallets like the Ledger Nano S, paper wallets & desktop wallets).
White-list– It is the list of an authorized entity or privileged members who have an exclusive access to contribute in an ICO or to participate in pre-sale.
Whitepaper – An authoritative guide or report that usually describes the philosophy, technology, and objective of a project or initiative. Whitepapers are often presented before the launch of a new coin or token.
Zcash – is an anonymous cryptocurrency created in 2016, which hides sender and recipient identity, as well as the amount of the transaction.