Are you trying to keep up with all the young people out there on social media talking about HODL, mooning and NFTs? Understanding the crypto lingo is not always easy, here is your guide to learning what all these cryptic words mean!
Cryptocurrency
Cryptocurrency is a new and growing world still in its relative infancy. Although the general public is just starting to learn about it, there are already well-established communities of crypto enthusiasts and investors. Cryptocurrency is unique among digital assets. The jargon surrounding cryptocurrency and blockchain can be confusing to new users.
Address
An address is a location on the blockchain where an individual’s cryptocurrency is stored. The address is what you type into your wallet to send and receive cryptocurrency, and the address is what you show to the taxman when you file your taxes. Every address on a blockchain is associated with a private key.
Altcoin
An altcoin is a cryptocurrency other than bitcoin. There are thousands of altcoins, and they vary in terms of their purpose, utility, and potential. Some altcoins are based on bitcoin’s blockchain, but they have been forked and usually have additional features.
Bitcoin Maximalist
Bitcoin maximalists tend to focus on the price and fundamentals of the bitcoin blockchain and be deeply concerned with the future value of cryptocurrencies. A bitcoin maximalist believes that only bitcoin is an actual cryptocurrency.
Blockchain
A blockchain is a digital, decentralized, and publicly accessible ledger that contains records of transactions. Transactions are verified and added to the blockchain through a consensus process.
Blocks
Blocks are the data that are added to the blockchain. Mining is how new blocks are added to the blockchain through consensus. Mining is a distributed process where miners compete to solve complex mathematical equations. When a miner solves these equations, they get to place a block on the blockchain.
BTFD
This refers to the acronym “buy the fucking dip.” It is used to describe an investment pattern where you buy a token when the price is low and sell it when it is high. This is often used humorously in the cryptocurrency world. It is widely believed that this phrase was coined by a trader named Titus Frost.
dApps
A Decentralized Application is built on a distributed network that runs its operations without a centralized authority. It could run on the blockchain of Ethereum or a blockchain built on Hyperledger or any other many blockchains that are being developed.
Fiat
Fiat is money that a government declares to be legal tender, and the government’s authority backs that. For example, the U.S. dollar is fiat currency. Some cryptocurrencies are backed by fiat. Bitcoin and some altcoins are not fiat. Many cryptocurrencies function as a type of digital commodity that is traded on a digital platform.
Fork
A blockchain forking event occurs when a blockchain’s users decide to create a new blockchain with the same blockchain history and token ownership as the original blockchain. This new blockchain is usually forked from the original blockchain at a predetermined block height, often following the release of a new version of the blockchain software.
Gas
Gas is a cryptocurrency token used to pay for the operations of a protocol, such as the transfer of assets. It is similar to the pay-per-view concept, except that it applies to all blockchain functions, not just one.
Halving
A halving reduces the miners’ reward for finding new blocks. This happens about every four years. The first halving was in July of 2016. The reason miners receive a reward is to incentivize them to continue to verify the blockchain. With fewer rewards, they have a greater incentive to verify the blockchain.
Hash Rate
The hash rate is the number of calculations per second that a miner performs. The higher the hash rate, the more difficult it is to find a block, as there are more chances of a false lead. A higher hash rate usually means a lot of money on the line.
Hodl
Hodl “hold on for dear life” is a term that refers to the practice of keeping a cryptocurrency, even when it is not in the best interest of the user’s investment portfolio.
ICO
ICO stands for “initial coin offering” or “coin offering.” This is how a new cryptocurrency project sells its coins to fund its development. The tokens are usually sold at a discount, and the funds are used to support the project’s development.
Mining
Mining is how new blocks of transactions are added to the blockchain. The reward for mining is a block reward, which is usually reduced over time, called “halving.” The current block reward is around 12.5 ETH.
NFT
NFT stands for “non-fungible token,” short for a digital token used in certain blockchain-based games and virtual assets. An NFT is usually a digital asset that can be traded, who owns it, and has a price. A digital asset that only has a value to the owner is called a “fungible token.”
Pump and Dump
Pump and dump is a scheme used by bad actors in the cryptocurrency market. It involves many people who create a fake wave of publicity to hype a cryptocurrency, thus “pumping” up the price. Once the price rises, most bad actors take their profits and leave the market, leaving behind a “dumped” cryptocurrency.
Satoshi
Satoshi Nakomoto is the original founder and creator of Bitcoin. Satoshi is also the name that can specify the value of 0.0001 bitcoins.
Stable coin
A stable coin is a type of cryptocurrency that has a stable value. This is usually achieved through collateralization, which means that a percentage of the coin is backed by an asset or a fiat currency such as the U.S. dollar. The collateral can be anything, but typically it is a government bond.
Wallet
A wallet is a software that stores the user’s cryptocurrency. You can usually download a wallet on your smartphone and use it to store the cryptocurrency. Some wallets also allow you to store other digital assets, such as tokens. Before you start trading and investing in cryptocurrency, you need to download a wallet.
Token
A token is a digital asset used to purchase something, like a good or service. In cryptocurrency, tokens can be used to buy goods and services, or they can be used to purchase access to a digital service. Consumers often use tokens to pay for subscription services, like Netflix or Spotify. Other tokens are used to buy goods and services, like a flight or a hotel room. And then, there are utility tokens used to hold value, like the Santiment token.
To the moon
This phrase describes the potential for a token to rise in value. It is often used in the context of a token that is not yet widely used, as this could lead to widespread adoption and a rise in value. Can be symbolized by the rocket emoji.
Rekt
In the cryptocurrency world, when something is rekt “wrecked” it is referring to a trader a large amount of his money.
Whale
Whales are the big investors who are often the driving force behind a price movement. Cryptocurrency investors often refer to these “whales” to describe large investors who control a large share of a token.
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All the best,