This article includes simple definitions of many common cryptocurrency terms. A term inside a definition in ALL CAPS indicates another (rare) defined term. Common terms (like "crypto" or "fiat") are not put into caps whenever they appear.

ADDRESS: A unique string of letters and numbers "containing funds" on a particular cryptocurrency platform.

ALTCOIN: Any of 1000+ cryptos that is not Bitcoin, such as Ethereum or Dash.

AML: (Trading) Anti-Money Laundering. Along with KYC, Government regulation mandating exchanges collect personal information like real-world identity.

ARBITRAGE: (Trading) Taking advantage of a difference in price of the same crypto on two different exchanges.

ASIC: (Mining) Application-Specific Integrated Circuit, a highly-efficient and expensive microchip to mine a cryptocurrency.

ATH: (Trading) All-Time High. The highest-ever value of a cryptocurrency.

ATOMIC SWAP: When two parties implement a smart contract that executes both legs of the exchange, the two transactions either happen simultaneously or don't happen at all. It is no longer necessary to trust any centralized exchanges. Note this uses a definition of "atomic" related to databases, and has nothing to do with the usual "extremely small" senses.

BECH32: A very new Bitcoin address format. This is a valid Bech32 address: bc1qw508d6qejxtdg4y5r3zarvary0c5xw7kv8f3t4. Note it's all lower case or sometimes all upper case, never a mixture.[1]

BIP: Bitcoin Improvement Protocol. For example, BIP38 concerns the protocol for encrypting a PAPER WALLET.

BITCOIN: The first decentralized digital currency. The network is peer-to-peer and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.

BITCOIN CORE: The reference client (software) of Bitcoin. Initially named Bitcoin, it was later renamed to distinguish it from the network.

BLOCK: A unit of the code the comprises the blockchain. It is the record of transactions that have occurred since the last block was created and a confirmation to previous transactions. Each block links to the block before it, thus creating a full chain back to the original or “genesis” block.[2]

BLOCKCHAIN: A digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as "completed" blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central record-keeping. Each full node gets a copy of the blockchain, which is downloaded automatically.

BLOCK REWARD: A reward received by miners or MASTERNODE owners etc when a block is created, which incentizes mining.

BOT: (Trading) An artificial intelligence that has automated trading capability.

BUBBLE: (Trading) An extremely overbought market, usually followed by a crash.

BUY ORDER: (Trading) A request made on a crypto exchange to purchase crypto at a specific price.

BUY WALL: (Trading) The volume of people purchasing a specific crypto at a given time, represented on a graph as a wall, usually opposed by a sell wall. This helps to indicate if a pump is taking place.

CLOUD MINING: (Mining) An organisation offering their equipment from a remote location to use for mining. They offer services where customers purchase contracts that give them a specific amount of mining power.

COIN: A cryptocurrency or crypto platform or crypto token/asset.

COINBASE: 1. The transaction inside a block that pays the miner his BLOCK REWARD. 2. The largest Bitcoin broker in the world. It provides a platform for traders to buy and sell Bitcoin with fiat money.

COINJOIN: CoinJoin is an anonymization method for bitcoin transactions proposed by Gregory Maxwell. It is based on the following idea: "When you want to make a payment, find someone else who also wants to make a payment and make a joint payment together." When making a joint payment, there is no way to relate input and outputs in one bitcoin transaction and thus the exact direction of money movement remains unknown to third parties.[3]

COLD WALLET: Crypto storage that is not connected to the internet. Examples are paper wallets, hardware wallets.

CONFIRM: A transaction is confirmed when it is included in a mined block. After six confirmations, about an hour, a Bitcoin transaction is considered unchangeable.

CRYPTO: A cryptocurrency or crypto platform or crypto token/asset.

CRYPTOCOMMODITY: A coin or token backed by Gold, Silver, another precious metal, or other global commodity.

CURRENCY PAIR: (Trading) On an EXCHANGE, one can only trade one currency against another. So if one wishes to convert DASH into LTC, one might have to do so via BTC, i.e. trade the DASH/BTC and BTC/LTC currency pairs.

DAG: Directed Acyclic Graph, a distributed-ledger technology that links transactions together directly without miners or blocks.

DAY TRADING: (Trading) Short-term trading when positions are opened and closed the same day.

DECENTRALIZED: Not centralized, without a single point to fail.

DEX: (DECENTRALIZED EXCHANGE) Link is a list of decentralized exchanges of cryptographic assets (cryptocurrencies, tokens, derivatives, futures...) and their protocols, without a central entity. The architecture of these and their protocols can be quite different from one another. In some cases, they are built projects entirely open source. In other cases, they are closed in some aspects, but still implemented open or decentralized tools or mechanisms like smart contracts that are publicly verifiable.[4]

DIFFICULTY: (Mining) A number that determines how difficult it is to hash a new block. This gets adjusted so that the average block time stays about the same however much processing power is devoted to mining.

ENCRYPTION: The process by which information is protected from others and only accessible to someone with the key.

ERC-20: The ERC-20 token standard describes the functions and events that an Ethereum token contract has to implement.

EXCHANGE: (Trading) A place where you can buy, sell, and trade cryptos. Some exchanges allow fiat deposits and withdrawals, some only cryptos.

FAUCET: A place that distributes tiny amounts of a crypto, usually to new people. The Bitcoin Faucets page lists many old examples.

FIAT: National currencies such as USD, EUR.

FOMO: Fear of Missing Out. The overwhelming sensation that you need to get on the train when the price of something starts to skyrocket.

FUD: Fear, Uncertainty and Doubt. Baseless negativity spread intentionally by someone that wants the price of something to drop.[5]

GENESIS BLOCK/UNIT: The first block/unit in a blockchain/DAG.

HARD FORK: When a blockchain splits into two separate chains. At the time of the fork, a coin owner will automatically own coins on both chains.

HARDWARE WALLET: A small device, roughly the size of a memory stick, that functions as a crypto wallet. The essential security data like private keys never leave the device. The safest way to store crypto funds. Reputable examples are Trezor and Ledger Nano S.

HASH: A string of data related to a specific crypto. Mining performance is often measured in hash power. See next definition.

HASH FUNCTION: A hash function takes a group of characters (called a key) and maps it to a value of a certain length called a HASH. The hash value is representative of the original string of characters, but is normally smaller than the original. Hashing is also used in encryption. [6]

HODL: (Meme) A drunken misspelling of 'hold'. Sometimes Hold On for Dear Life, but that isn't its origin. It means 'Don't sell!'.

HOT WALLET: Crypto storage that is connected to the internet, and so more susceptible to being hacked than a COLD WALLET.

ICO: Initial Coin Offering. Pre-sale of an upcoming cryptocurrency or token, often a scam when not based on an existing product.

KYC: (Trading) Know Your Customer. Along with AML, Government regulation mandating exchanges collect personal information like real-world identity.

LAMBO: (Meme) When a crypto early adopter gets rich, he can now afford a Lamborghini, a highly-expensive sports car.


LIGHTNING NETWORK: A Bitcoin technology important in scaling, in which a multitude of transactions can be done off the main chain.

LIMIT ORDER: (Trading) An order to buy or sell when the price meets a certain amount. Compare MARKET ORDER.

MAINNET: A crypto's main operational chain, not one used for testing. Compare TESTNET.

MARGIN TRADING: (Trading) The act of "magnifying" the intensity of your trades by borrowing stocks/cryptos etc, or LEVERAGE. For example, a 5x leverage means a trade with 1 coin you own and 4 borrowed, that will produce a 5-coin gain or loss. Highly risky, and only available on certain exchanges.

MARKET CAP: Market Capitalization. The total value held in a cryptocurrency, calculated by multiplying the total circulating supply of coins by the current price of an individual unit.

MARKET ORDER: (Trading) An order to buy or sell immediately at the current price. Compare LIMIT ORDER.

MASTERNODE: In some cryptos, like Dash, these are computers that run a wallet and facilitate certain protocols like instant sending, private sending, and voting on budget funding.

MEMPOOL: Memory pool. In Bitcoin and similar platforms, it is a buffer of unprocessed transactions.

MINER: A person or entity that mines crypto.

MINING: Mining keeps the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block.[7]

MINING RIG: (Mining) One or more GPUs or ASICs set up to mine cryptocurrency.

MOONING: (Meme) A crypto going to astronomically-high levels, as in the expression "To the moon."

MULTIPOOL MINING: (Mining) The process of jumping around from crypto to crypto and mining the most profitable one at that moment in time. The miners will then mostly sell their mined currency back into Bitcoin, so depressing the price of the cryptocurrency they have just mined.[8]

NANOPAYMENT: See PROBABLISTIC TRANSACTION and Fractional payments article.

NODE: A point within a crypto network, often simply a wallet. Different node types perform different functions within the network. In Bitcoin, full nodes are nodes that maintain a full blockchain with all transactions. In the early years of Bitcoin, all nodes were full nodes and currently, the Bitcoin Core client is a full blockchain node.

OPEN SOURCE: Pertaining to or denoting software whose source code is available free of charge to the public to use, copy, modify, sublicense, or distribute.[9]

P2P: Peer to peer. Blockchain technology uses peer-to-peer transactions which are made between individuals without any interference or restriction from a third party.

PAPER WALLET: A printed public key and private key for a respective address, often containing QR Codes that can be scanned. BitAddress is a reputable paper-wallet generator.

PETRO: A proposed national cryptocurrency for Venezuela, "backed by oil, gas, gold and diamond reserves", announced by President Maduro in December 2017. [10]

POOL: (Mining) A group of miners combining their resources to work as a group and perform more efficiently. The Mining Pools article lists many.

PRIVATE KEY: A private address that is paired with your PUBLIC KEY. Private keys allow you to spend your coins. You can get your public key from a private key but you can not get a private key from a public key. Whoever holds the private key owns the value of the address.

PRIVATE TRANSACTIONS: Almost all crypto transactions are pseudonymous, the addresses and amounts forever visible in a public blockchain or DAG. A few cryptos obfuscate the transactions, such as Monero, Dash's PrivateSend protocol, and Byteball's Blackbytes.

PROOF OF STAKE (PoS): (Mining) A consensus algorithm, where each validator has a stake and you trust the chain with the highest collateral.

PROBABLISTIC TRANSACTION: (NANOPAYMENT) Alice makes a 0.0001 BTC nanopayment to Bob by signing a message not worth 0.0001 BTC, but by signing a message that has 1 in 10000 probability of being worth 1 BTC, and sending it to Bob directly. This message would function much like a share in a mining pool. Out of 10000 nanopayments, on average, 9999 will be worthless and 1 will not.[11]

PROOF OF WORK (PoW): (Mining) A consensus algorithm, where a miner can simply pick the longest valid chain with the highest amount of work as the correct chain.

PUBLIC KEY: A public address that is paired with your PRIVATE KEY. A wallet generates pairs of private/public keys. All transactions to and from a public address are visible in a block explorer like

PUMP AND DUMP (PND): (Trading) This is a popular term in todays crypto community. The term 'pump and dump' comes from the action of a group of buyers aggressively purchasing a specific crypto in order to boost its value. Once profits are made, everyone then sells the coin, resulting in massive profit but usually follows a dominant downtrend.

REPLACE-BY-FEE: (RBF) A Bitcoin protocol now adopted as default in version 0.16.0 allows users to replace slow-to-be-mined transactions with new transactions with higher fees.[12]

SATOSHI (Sat): This is the smallest Bitcoin unit, 0.00000001 BTC, named in honor of Satoshi Nakamoto, creator of Bitcoin.

SCHNORR SIGNATURES: A Bitcoin technology important in scaling, not yet implemented on MAINNET. Transaction inputs will only require one signature to represent all individual signatures, requiring much less space.[13]

SCRYPT: A simplified version of scrypt (pronounced ess crypt) is used as a proof-of-work scheme by a number of cryptocurrencies. The algorithm was specifically designed to make it costly to perform large-scale custom hardware attacks by requiring large amounts of memory.[14]

SEGWIT: Segregated Witness is the process by which the block-size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.[15]

SELL WALL: (Trading) The volume of people selling a cryptocurrency at a given time. This helps indicate whether a sell off is taking place for a specific crypto.

SHARDING: A scaling solution for blockchains. Instead of each (full) node having a full copy of the blockchain, each has only a partial copy, a shard.

SHILL: A person promoting a coin because they own it and want its value to moon.

SHITCOIN: A pejorative term for any crypto that is not Bitcoin. There are good ALTCOINs and bad altcoins, but considering all altcoins as shit results in missing the good ones early on.

SMART CONTRACT: In Ethereum and Byteball, code that allows conditional payments, transactions that only execute under certain conditions. Otherwise, you get your money back.

SPV: Simple Payment Verification. Applied to a crypto wallet, it means the wallet trusts someone else to verify that the transactions are valid. Full payment verification requires the wallet to have a full copy of the blockchain at hand.

STOP LOSS: (Trading) This is an order type which is completed on an exchange. It is designed to sell your coins automatically if the value of a coin reaches a certain level and avoids large losses.

SYBIL ATTACK: In computer security, an attack wherein a reputation system is subverted by forging identities in peer-to-peer networks.[16]

TECHNICAL ANALYSIS (TA): (Trading) Analysing crypto charts in order to determine trends and help predict which way the market will move next.

TESTNET: A crypto's testing chain, where it doesn't matter too much if something breaks. Compare MAINNET.

THIS IS GENTLEMEN: (Meme). Originally a typo for "This is it, gentlemen." Used to point out a positive event.

TRANSACTION FEE: 1. (Trading) A fee imposed by the exchange when trading a cryptocurrency, usually a small fixed percentage of the trade. 2. A per-transaction fee imposed by a cryptocurrency protocol to reduce spam and reward miners etc for helping the network.

WALLET: A node/device on a crypto network that allows the user to own private keys, own funds, and create transactions. There are Software wallets like Electrum and Mycelium, as well as HARDWARE WALLETs.

WHALE: (Trading) A person that holds a large portion of crypto or buys/sells a large portion of crypto.

ZERO-KNOWLEDGE PROOFS: Zero-knowledge proofs are an important cryptographic principle wherein the validity of a statement can be proven without knowledge of the underlying data. In cryptocurrencies their use is linked to privacy and fungibility, through providing a secure means of concealing sensitive transaction data on the public blockchain, such as input and output amounts.[17]

References[edit | edit source]


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