Crypto Glossary: Blockchain Vocabulary Term Definitions
The bitcoin, blockchain and greater cryptocurrency vocabulary world can be confusing if you are not hip to the latest ‘crypto’ terms and definitions. Here is a complete user review guide dictionary to use:
1hr: As the name suggests, the term ‘1hr’ implies a time window during which data related to a particular technology (such as a digital currency, platform, etc) is monitored and aggregated.
24hr: As with the aforementioned example, ‘24h’ implies the collection of data that is associated with a particular digital technology over the last twenty-four hours.
51% Attack: In case a majority (i.e. more than fifty percent) of computing power or mining hash rate on a specified network is governed by one individual (or a single group), it implies that a 51% attack is underway. This is because a singular governing entity now has complete control over the system’s native ecosystem and has full power to take over the platform’s mining operations, internal transactions, etc.
Address: An address can be thought of as a digital locator (usually in the form of letters and numbers) that allows users to send/receive cryptocurrencies in a streamlined, hassle-free manner. Additionally, it also bears mentioning that users can share their cryptocurrency addresses publicly either in the form of a text or a QR code.
Airdrop: It is essentially a marketing tactic that is commonly used by a number of startups in order to build hype as well as increase the popularity of particular cryptocurrency produce (such as a coin, platform etc). Most airdrop campaigns make use of the same formula, i.e. they provide their users with tokens in exchange for simple tasks such as sharing certain information, onboarding new recruits, facilitating additional referrals, etc.
Algorithm: It is a set of rules that have been designed by the developer of a particular digital platform, computer or device in order to solve niche’ calculations or operations.
All-Time-High (ATH): As the name clearly implies, ATH refers to the highest price point (in terms of overall market capitalization) particular cryptocurrency witnesses during its entire life cycle.
All-Time-Low (ATL): All-Time-Low is the exact opposite of what the term ATH represents — which is the lowest price point of a particular cryptocurrency during its entire life cycle.
Altcoin: Since Bitcoin is widely credited as being the world’s first cryptocurrency, all other digital assets that have followed since are now referred to as altcoins (short for the term ‘alternative coins’).
Anarcho-capitalism: This is a philosophy (or school of thought) that does not believe in the concept of centralized ownership of assets. In this regard, it bears mentioning that a number of people who adopted Bitcoin in its infancy are referred to as anarcho-capitalists — since they believe that cryptocurrencies help in giving complete ownership of one’s assets to the owner.
Anti-Money Laundering (AML): The term AML refers to a set of intl. rules and regulations that have been devised in order to curtail criminal activity related to money laundering (crypto to cash and vice versa).
API: API is short for ‘Application Programming Interface’. Simply put, it refers to a set of protocols and operational tools that are required by developers to build software applications. From a more technical perspective, we can see that APIs also help govern the way in which internal software modules interact and behave with one another.
Arbitrage: It is a common practice that seeks to help day traders take advantage of price variations (that exist in relation to a particular commodity) between different cryptocurrency exchanges at any given time.
Ashdraked: It is a situation where an individual ends up losing all of his/her money shorting bitcoin. The term is based on a true incident wherein a Romanian trader continued to short BTC after it went from $300 to $500 — based on the fact that he had made a profit from doing so historically.
ASIC: ASIC (Application Specific Integrated Circuit) refers to mining equipment that has been designed specially to acquire a particular cryptocurrency. When compared to GPUs, these devices are highly specialized since they offer a number of computational and memory-based advantages to their owners.
Astroturfing: This is a practice that is considered shady by the digital currency market at large. In its most basic sense, Astroturfing entails a company marketing its project as being backed and supported by the global crypto community even though it is not.
Atomic Swap: It is a technique that allows crypto owners to trade one asset for another (on a different blockchain or off-chain) without the use of an exchange, trading platform or middleman.
Attestation Ledger: As the name seems to suggest, an attestation ledger is basically a record block that helps provide users with evidence related to individual transactions that they might have performed in the past.
Bag: The term bag signifies a fixed quantity of cryptocurrency. In this regard, it should be pointed out that the term bag holder basically describes a person who possesses a large volume (aka bags) of a particular digital asset.
Bear: This term is used to describe a person who is not confident about the future of a particular market (eg. cryptocurrencies) and expects its value to decline in the coming future.
Bear Trap: This is a technique that is sometimes used by a group of traders in order to manipulate the price of a particular cryptocurrency. This is achieved by selling a large amt. of a certain asset while tracking the market to believe that a decline is on the horizon. This results in other traders offloading the token in question at reduced rates — thereby allowing the initial group to make a handsome profit form the entire transaction.
Bitcoin ATM (BTM): This is a machine that allows crypto holders to withdraw Bitcoin.
Bitcoin Improvement Proposal (BIP): A BIP refers to a technical document that seeks to either propose new features, processes or other technical enhancements to Bitcoin’s existing protocol.
BitLicense: As the name clearly suggests, a Bitlicense refers to a business license that is required by cryptocurrency firms in New York to dabble in BTC trading. The document is difficult to acquire and is issued only by the New York State Department of Financial Services (NYSDFS).
Bits: It is a basic unit of BTC — i.e. a total of 1,000,000 bits constitute one bitcoin.
Block: It is basically a data container that holds details related to transactions occurring at any given time on a particular blockchain.
Blockchain: A blockchain refers to an ever-growing list of records that are linked to one another using a host of cryptographic techniques.
Block Explorer: This is a tool that allows its users to view all of the transactions that have taken place on a particular blockchain. Not only that, but it also allows users to monitor other specific information such as network hash rate, transaction growth, etc.
Block Height: The term refers to the total number of blocks present in a chain at a given point of time.
Block Reward: It is the financial incentive that is provided to a miner in lieu of him/her successfully calculating a valid hash in a block. Additionally, the reward also makes sure that crypto miners act in the best interest of the blockchain rather than trying to hack it.
Bollinger Band: It is a tool that helps users recognize systematic patterns that may arise in the price history of different digital currencies.
Bots: These are trading tools that have been automated to execute orders using a host of algorithmic processes (such as pre-designed buy-and-sell protocols).
Brute Force Attack (BFA): A BFA can be thought of as a trial/error tool that is used by an automated software to crack someone’s password or base security layer.
Bubble: In financial terminology, a bubble refers to a particular situation wherein the participants of a particular market have driven the value of a particular well over its actual price. Once the bubble reaches its apex, the price of the commodity proceeds to drop at a rapid rate — an event that is referred to as a market crash.
Bug Bounty: This is a reward that is offered to developers, white hat hackers who are able to find any vulnerabilities, threats or other similar issues in a particular computer code. A bug bounty is usually offered by crypto startups to identify potential loopholes before they are exploited by third-party miscreants.
Bull: A common term used when referring to an individual who is optimistic about the future of a particular market (be it stocks, cryptocurrencies, bonds, etc).
Bull Trap: As the name suggests, a bull trap is a false market signal where a declining trend associated with a particular asset seems to be changing for the better but does not materialize.
Buy Wall: It refers to a situation wherein a large limit order has been placed when an asset becomes of a certain value.
Burned: This concept is employed when a particular crypto asset has been rendered permanently unspendable or unusable.
Byzantine Generals’ Problem (BGP): BGP refers to a situation wherein all the members of a particular group need to come to a consensus on a single strategy about a specific digital platform.
Byzantine Fault Tolerance (BFT): BFT can essentially be thought of as a property that is associated with ‘fault-tolerant distributed computing systems’ that aim to reach consensus even though one or more components of the system may be prone to operational failures.
Candlesticks: This is a technique that is commonly used to create graphs that help users visualize price changes related to a particular asset over a fixed period of time. From a technical standpoint, we can see that each candle formation provides its users with 4 points of information including opening price, closing price, high, and low.
Cash: Cash is money in its physical iteration. It comes in various forms including bank notes, coins, etc.
Centralized: The concept of centralization refers to a network that is controlled by a small group of nodes.
Central Ledger: As the name clearly implies, it is a ledger system (used to keep track of various financial tx’s) that is maintained by a central governing authority.
Central Processing Unit (CPU): The CPU can be thought of as the core operational component of a computer system. Additionally, it also helps in maintaining the native functionality of various other parts associated with the machine. The speed of the CPU is measured in gigahertz.
Change: When BTC transfers are facilitated, they are done so as a whole output. The remaining funds are sent back to the user as change.
Chargeback: It is a request sent forth by a credit-card operator to a retailer to compensate for any losses that may have been incurred as a result of a fraudulent/disputed transaction.
Chain Split: This term is routinely used in place of a hard/soft fork.
Cipher: This is a term that is commonly used in digital cryptographic circles in order to describe an algorithm that can be used to encrypt or decrypt certain information.
Circulating Supply: It is a term that is commonly used to describe the total number of coins (related to a particular cryptocurrency) that may be circulating in the market at a given point in time.
Client: It is a software that can be used to gain access (as well as process) to certain blockchain transactions on a local device. A common use-case of such a software is an altcoin software wallet.
Close: The term ‘Close’ alludes to a financial concept called closing price.
Cloud Mining: It refers to a style of crypto mining that is carried out through the use of remote processing power (acquired by companies operating in countries where electricity costs are low).
Coin: It its most basic sense, a coin represents a cryptocurrency that can be used to facilitate monetary transactions independently.
Coinbase: A Coinbase is essentially a digital transaction that is mandatorily added to the block of a particular cryptocurrency. In regards to the BTC ecosystem, the flagship currency’s coinbase has an input size of 100 bytes.
Cold Storage: A cold storage entity is an offline crypto wallet that has minimal contact with devices that are connected to the internet 24/7. As a result of this, these devices are able to offer their owners with a high level of asset security and privacy.
Confirmations: The concept of ‘confirmation’ comes into play when a transaction has to be added to a particular blockchain. In this regard, it should be pointed out that different trading platforms require a varying number of confirmations to finalize cryptocurrency transactions.
Consensus: Consensus, as the name suggests, is when all of the participants of a particular network come to an agreement in regards to the system’s overall order and content.
Consortium Blockchain: It is a blockchain ecosystem that is owned by a private entity whose contents are not available to the public.
Correction: A correction can be thought of negative value movement (of at least 10%) that takes place in relation to a particular cryptocurrency.
Co-Signer: It refers to a person who has partial control over a digital currency wallet.
Crypto asset: These are digital stores of value that make use of cryptographic techniques, distributed ledgers and other p2p technologies to function.
Cryptocurrency: It is a digital transaction medium that makes use of cryptographic techniques to secure one’s monetary transfers.
Cryptography: It is a branch of studies that deals exclusively with the securitization of sensitive data.
Cryptographic Hash Function: In their most basic sense, one can think of cryptographic hashes as digital avenues that help in the production of a fixed-size/unique hash value from a transaction input that might be variable in its size function.
Crypto-jacking: This is a technique that is commonly used by hackers to mine cryptocurrencies using somebody else’s computer without their permission.
Custodial: A custodial set-up is one where a user’s private keys are held by the service provider himself.
Cypherpunk: A cypherpunk is a digital activist who strongly supports the use of cryptographic solutions/ technologies for the promotion of various social and political causes.
Deep Web: This is a side of the internet that is not indexed by search engines and can only be viewed through the use of specialized tools (such as the Tor browser).
Date of Launch (DOL): The term refers to a specific time and date when an ICO project puts up its tokens up for public acquisition.
Dead Cat Bounce: It is a concept that signifies a temporary recovery in the value of a particular cryptocurrency after it has undergone a massive price drop.
Decentralized: The term refers to the property of a digital system which is governed by a distributed set of nodes and not by some centralized authority.
Decentralized Applications (dApps): As the name clearly suggests, dApps are digital applications that make use of a decentralized operational network.
Decentralized Autonomous Initial Coin Offerings (DAICO): It is a fundraising method for decentralized projects that makes use of concepts related to Decentralized Autonomous Organizations (DAOs) and Initial Coin Offerings (ICOs).
Decentralized Autonomous Organizations (DAO): It is a digital organization that is governed purely through the use of smart contracts.
Decentralized Exchange (DEX): A peer-to-peer exchange that allows users to buy and sell cryptocurrencies (as well as other similar assets) without the use of a central intermediary body.
Decryption: The process of transforming data that has been rendered unreadable (through various encryption-related processes) back to its unencrypted form.
Deflation: It is a financial term that deals with the general reduction in the price of a particular commodity.
Delegated Proof-of-Stake (dPOS): It is a consensus protocol that allows network participants to vote for delegates that have been tasked with producing blocks on a particular blockchain.
Depth Chart: It is a graph that is plotted using buy bids and sell requests based on limit orders. In layman’s terms, the chart seeks to showcase the point at which the market will accept a particular monetary transaction.
Derivative: Another commonly used term within the world of global finance, a derivative can be thought of as a contract that acquires its value from the financial performance of an underlying asset.
Derivatives Market: It is a public market where financial products such as derivatives, futures contracts, options are bought and sold.
Deterministic Wallet: It is a type of digital storage unity that makes use of a seed phrase that can be used by individuals to backup and restore their holdings in a streamlined, hassle free manner.
Difficulty: It is basically a relative measure of how tough it is for miners to discover a new data block. From Bitcoin’s POV, the currency’s native difficulty quotient is routinely adjusted in relation to the system’s overall hashing power.
Digital Commodity: It is an intangible asset that has certain monetary worth and can only be transferred via the use of an electronic medium.
Digital Currency: It is an electronic form of money that allows its owners to facilitate instantaneous, cross-border transactions in a highly streamlined manner.
Digital Identity: The term represents personal information related to a person such as one’s name, address, social security number etc. However, all of this data is digitized and can be used to facilitate ID verifications in an extremely fast and secure manner.
Digital Signature: It is an electronic code that is created by a key encryption protocol and is attached to an electronically transmitted document. It can be used for a variety of different purposes including the verification of data packets as well as id validation.
Directed Acyclic Graph (DAG): A DAG essentially represents a graph that is based on unidirectional + non-repetitional properties.
Dildo: A dildo is candle like bar formation that is either green or red in color (depending upon the price action of the cryptocurrency in question).
Distributed Consensus: It is a concept that deals with various computers in a network working together to arrive at a common consensus without the use of a central governing entity.
Distributed Denial of Service (DDoS) Attack: It is an attack method used by hackers to make a machine’s native resources unavailable to its owners. Not only that, DDoS attacks also serve to disrupt the services of its host machine by overloading the system’s native request pool.
Distributed Ledger: It is a ledger in which data is saved across a wide array of decentralized locations (or nodes).
Distributed Ledger Technology (DLT): This is the underlying framework of distributed ledgers that allows them to function as well as they do.
Distributed Network: It is a digital ecosystem whose processing power and information are distributed across a set of nodes. Such a network does not require the use of a central governance protocol.
Dolphin: The term refers to an individual who owns a decent quantity of crypto assets. However, when compared to a whale, these holdings are considered to be quite miniscule.
Dominance: Sometimes referred to as BTC Dominance, the term basically compares the total capitalization of BTC with other digital currencies available in the market at any given point in time.
Double Spending: It is a situation wherein a particular sum of money gets spent twice in an illegitimate manner.
Dump: It is the act of selling all of one’s digital assets in one go. Similarly, the term dumping refers to a major market sell-off (something that usually results in the downward price movement of a particular asset).
Dust Transactions: These are extremely small transactions that are initiated by nefarious individuals who are looking to disrupt the normal tx flow of a particular network.
DYOR: It is basically an acronym for the phrase “Do Your Own Research”. It means that people should look into something closely before taking a decision which might impact them adversely later down the line.
ELI5: It is an acronym for the phrase “Explain Like I’m 5”, which basically entails the dissemination of a concept in its most simplified sense.
Enterprise Ethereum Alliance (EEA): It is a consortium of ETH developers, startups and other firms that seek to help in the widespread adoption of Ethereum for business applications across the globe.
Emission: It is basically the rate at which a crypto project creates and releases its native tokens. The term is also commonly referred to as Emission Curve and Emission Schedule.
ERC-20: It is a token governance standard that is associated with the Ethereum project. ERC-20 coins are designed to be compatible with smart contracts and are used defined by a certain number of rules.
ERC-721: Much like ERC-20, this is a token standard that has been designed primarily for non-fungible Ethereum tokens. The standard was introduced to the world via an EIP that was implemented back in 2017. Additionally, it also bears mentioning that this token standard allows smart contracts to operate as tradeable tokens.
Escrow: It is a term that is commonly used by members of the finance industry. In its most basic sense, an escrow can be thought of as a contractual arrangement in which a third-party entity receives and disburses money or documents related to all of the primary person involved in a certain deal (depending upon the pre-designed conditions of the agreement).
Ether: It is the central digital currency that is used to facilitate transactions throughout the Ethereum ecosystem.
Ethereum Improvement Proposal (EIP): As the name suggests, an Ethereum Improvement Proposal (EIPs) is a document that seeks to alter some of the core tenets (such as protocol specifications, API, etc) of the Ethereum platform.
Ethereum Virtual Machine (EVM): Technically speaking, it is a Turing-complete virtual machine that can execute programmed codes exactly as they were intended.
Exchange: A cryptocurrency exchange (also referred to sometimes as a digital currency exchange) is a platform that allows users to trade their crypto assets for fiat currencies (and vice versa).
Exchange-Traded Fund (ETF): It is a security that has been created to track the performance of various different financial assets (including stocks, crypto, bonds). An ETF, however, can be traded as a single entity, thereby providing owners with a lot of flexibility.
Faucet: It is a reward system (related to cryptocurrencies) that is usually promoted through websites and other apps.
Fiat: In finance lingo, a fiat currency refers to legal tender that is backed by a central agency (such as a local government) which makes use of its very own banking system. Additionally, it also bears mentioning that fiat money can be represented physically as well as in a digital form.
Fiat-Pegged Cryptocurrency: As the name clearly alludes to, a pegged crypto is one where the asset in question is backed by a bank-issued currency — which basically means that the asset always has a specific cash value.
Fish: A fish refers to an individual who holds an extremely small amount of crypto and is often at the mercy of those who own substantial sums of digital assets.
Flippening: The term refers to an envisioned situation where Ethereum will someday cross the total market cap of Bitcoin.
Flipping: It is a basic investment strategy wherein an investor buys a particular good with the sole aim of selling the asset later down the line for a sizeable profit. The time window involved with such a deal is usually quite small.
FOMO: It is basically an acronym which when expanded reads as ‘fear of missing out’. From an investment standpoint, FOMO refers to a feeling that many investors may face in regards to them missing out on a profitable investment opportunity.
Fork: Also referred to as a chain split, a fork can essentially be thought of as a process that allows for the creation of an alternate version of the parent blockchain. Additionally, a software fork is one where independent devs make use of existing source code to create an entirely new project (eg. Litecoin from Bitcoin).
FUD: The acronym stands for “fear, uncertainty, and doubt”. It can be thought of as a strategy that is designed to influence the general perception of a certain crypto asset, project through the systematic dissemination of false information.
Full Node: The term refers to nodes that contain the entire history of a particular blockchain at one specific location.
Fundamental Analysis (FA): A method using which an individual can research the underlying value of an asset. This is done by employing several indicators such as the tech being offered, the team behind the platform, the platform’s future growth prospects, etc.
Futures: It is a legal agreement that entails the buying/selling of a particular commodity at a price that has been fixed beforehand.
Gains: It is a common term that refers to an increase in the value of a certain asset (be it fiat or crypto-based) over a certain period of time.
Gas: The term is commonly used in relation to the Ethereum platform — since it talks about the total computational effort that is required in conducting ETH based transactions.
Gas Limit: It is a term that signifies the ‘gas threshold’ an individual may be willing to expend in relation to a particular ETH-based transaction.
Gas Price: The term basically refers to the total price an individual may be willing to pay to process an Ethereum transaction. On the subject, it should be pointed out that a higher gas price usually means that miners are provided with more incentive to finalize the transaction at hand.
Genesis Block: As the name seems to suggest, it is the first data block to be processed and validated in relation to any new blockchain ecosystem.
Gold-Backed Cryptocurrency: It is a crypto asset that is backed by real gold — such that each unit of the purchased digital currency has an equal representation of physical gold stored somewhere.
Graphical Processing Unit (GPU): It is commonly referred to as a graphics card. The device is conventionally used by computer systems to process 3D images but in recent times, more and more crypto enthusiasts are making use of it for mining purposes.
Group Mining: It is a term that is used interchangeably in place of the “mining pool”.
Gwei: It is a monetary denomination that is used to represent the cost of an Ether-based transaction.
Hacking: A common term that describes the process of using a device to illegally gain access to a third-party individual’s computer.
Halving: The term refers to an event wherein the total rewarded bitcoins per confirmed block is reduced to half of its former size.
Hard Cap: It is the total amount of money that a particular ICO seeks to raise by the end of its scheduled lifecycle.
Hard Fork: The term Hard Fork refers to a change in protocol that essentially validates all of the transactions that were previously considered to be invalid and vice versa. From a technical standpoint, it should be pointed out that this type of fork requires all of the nodes and users of a particular network to upgrade to the latest version of the forked protocol. Following the conclusion of the process, a cryptocurrency splits into two.
Hash Function: It is any digital function that can be used to map data of arbitrary size to a more fixed one.
Hash Power: Also referred to as Hash Rate, it is a term that is used to measure that total computing power used by a blockchain network to work in an uninterrupted, continuous manner.
Hierarchical Deterministic Wallet (HD Wallet): It is a type of a storage solution that makes use of a master seed that comprises of 12 mnemonic phrases.
Hidden Cap: It refers to an undisclosed sum of money that ICO projects elect to raise through their backers.
HODL: A common term used by crypto enthusiasts to describe a strategy wherein an investor holds on to his/her crypto assets for a long period of time (irrespective of any price fluctuations that may take place during the intervening period).
Hosted Wallet: It is a crypto wallet that is managed by a trusted third-party entity.
Hot Storage: It is a type of online storage system that makes use of private keys to allow users to gain quick access to their digital holdings.
Hybrid PoW/PoS: It is an operational protocol that makes use of a Proof-of-Stake as well as Proof-of-Work consensus mechanism. The approach is highly useful in bolstering the overall security of a digital platform.
Hyperledger: It is a project launched by the Linux Foundation in 2015. It comprises of a number of open-source blockchains and other similar tools.
Immutable: The term refers to a system’s property in relation to it being unchanged even after a long period.
Inflation: A finance term that signifies a general increase in prices and fall in the purchasing value of money.
Initial Coin Offering (ICO): It is a crowdfunding medium that allows individual businessmen and startup owners to raise money for their envisioned ventures.
Initial Token Offering (ITO): Much like ICOs, ITO’s too allows their users to raise money, however, their focus is more on providing investors with crypto tokens.
Instamine: It describes a short period of time (typically just after a currency has been launched) during which a huge volume of mineable coins or tokens are acquired and distributed to the investors of a particular project.
Intermediary: He/she is a person who serves as a middle-man to facilitate an agreement in the smoothest manner possible.
JOMO: It is quite literally the opposite of what the term FOMO stands for. When expanded, JOMO reads “Joy of Missing Out”.
KYC: It is an acronym for the term “Know Your Customer”. The process usually entails a financial institution gathering key data related to its clients so as to prevent issues of money laundering cropping up in the future.
Ledger: It is a record database that contains details of various financial transactions related to a particular crypto platform. The data cannot be altered in any way but can be appended with newer transactions.
Leverage: A loan offered by a broker on an exchange during margin trading to increase the availability of funds in trades.
Lightning Network: It is a second layer payment protocol that works atop the existing Bitcoin framework. In its core essence, it allows for monetary tx’s to take place in a faster, more scalable manner.
Limit Order: The term refers to orders that have been placed by traders so as to buy/sell a particular crypto asset after it reaches a pre-determined price. In this regard, it bears mentioning that market orders are where a crypto asset is sold at its best available price.
Liquidity: It is the ease with which a particular cryptocurrency can be bought and sold without the asset’s overall market value being affected in any major way.
Long: It is a situation where a person acquires a particular digital currency with the hope of selling it later (hopefully for a decent profit margin).
Mainnet: It is an independent blockchain that can run its network as well as governance protocols.
Market: It is a general term that is used to delineate various financial domains (such as cryptocurrencies, stocks) which investors regularly operate within.
Market Capitalization: It is the measure of a currency’s total market worth — i.e. the more the capitalization of an asset, the more valuable it is.
Market Order: It is the best available sale price of a particular cryptocurrency.
Margin Call: The concept of margin call comes into effect when an investor’s account falls below a certain price threshold. It is at this time a broker starts to demand additional money so as to maintain a minimum maintenance amount for the investor to continue buying/selling digital assets.
Margin Trading: It refers to a practice wherein a crypto trader makes use of borrowed funds to facilitate his/her digital purchases.
Masternodes: A masternode refers to the central server associated with a particular project that is maintained directly by the owner of the project. Additionally, one can also envision masternodes as being full nodes but with extra features such as the power to anonymize tx’s, clear certain monetary transfers, etc.
Max Supply: As the name quite clearly implies, the term can be thought of as the total number of tokens that will ever exist in relation to a particular cryptocurrency during its entire life cycle.
Merkle Tree: It is a tree-like structure commonly used in cryptography to describe a particular digital ecosystem. As part of the diagram, a single leaf signifies the hash info of a native data block whereas every non-leaf component alludes to a cryptographic hash of the labels of its child nodes.
MicroBitcoin: It is simply a fractional denomination of Bitcoin (one millionth or 0.000001 BTC to be exact).
Microtransaction: It is a biz structure wherein small monetary payments can be facilitated by an individual to acquire a host of different digital goods and services. The concept is widely used across a variety of domains including gaming, online retail, marketing, etc.
Mineable: It is a property of certain cryptocurrencies that can be acquired by miners through the acquisition of certain information codes as well as through the creation of data blocks.
Miners: These are individuals that contribute to the growth of a particular blockchain via the process of mining. It also bears mentioning that miners can either choose to work independently or in conjunction with an established large-scale organization.
Mining: A common term that is used to describe the process by which data blocks are added to a particular blockchain ecosystem through the verification of individual transactions. In a similar vein, ‘mining’ also describes the process through which BTC, as well as certain other altcoins, are created.
Mining Contract: It is a term that is used interchangeably in place of ‘cloud mining’.The technology entails the renting/investing of mining capacity via a host of various different digital online avenues.
Mining Pool: A mining pool is basically a setup wherein a group of miners comes together to combine their computing power so as to mine crypto assets together. The rewards of such an activity are usually distributed as per certain predetermined agreements to avoid a conflict of interest later down the line.
Mining Reward: It is an incentive that is doled out to an individual in return for his/her contributions — primarily computing resources — for processing blockchain transactions related to a particular crypto ecosystem. Additionally, it should be pointed out that such rewards consist of newly issued coins as well as previously acquired tx fees.
Mining Rig: It is a computer setup that is used for the sole purpose of acquiring digital currencies via the process of mining.
Minnow: It is a common term that is used to refer to a person who possesses an extremely small amount of crypto.
Mixing Service: Also referred to as a Tumbler, it is a platform that seeks to enhance the overall privacy/anonymity associated with a cryptocurrency transaction — primarily through the mixing of potentially identifiable digital currencies with those that are either nascent or do not have a tainted past attached to them.
Mnemonics: These are memory aids that can help users recall certain phrases. In this regard, it should be pointed out that a mnemonic phrase is one that consists of a list of words that can be used by a person to access his/her cryptocurrency assets.
Money Transmitter: As the name alludes to, a money transmitter is a person/biz entity that allows people to transfer their money (be it fiat assets or cryptocurrencies) to others in a highly streamlined manner.
Moon: From a crypto standpoint, the term refers to a situation wherein a steady upward movement in the price of digital currency is observed for an extended period of time.
Moving Average Convergence Divergence: Commonly referred to as MACD, it is basically an analytical tool that is commonly used by crypto enthusiasts to establish a relationship between two separate price moving averages. From a technical standpoint, we can see that a MACD calculation is carried out by subtracting the 26-day EMA of a particular asset from its 12-day EMA.
Mt. Gox: It was one of the world’s first cryptocurrency exchanges to allow crypto enthusiasts to freely trade Bitcoin in a totally straightforward manner. In 2014, the platform was forced to shut down after it came to light that hackers were able to make their way with over 850,000 BTC of the company’s holdings.
Multi-Signature: Also referred to as multisig addresses, these unique identifiers help in providing users with an extra layer of security.
Network: A common term that refers to a collection of all the nodes that may be present within a particular crypto ecosystem at any given time.
Node: It is essentially a blockchain component that comes replete with a complete copy of the system’s ledger info.
No-coiner: A no-coiner is an individual who does not own any digital assets in his/her financial portfolio and is of the opinion that the crypto market is destined to implode shortly.
Non-custodial: It is a term that is commonly used when talking about the storage of wallet keys. In this regard, a non-custodial setup is one where the private keys associated with a particular account are held by the owner of the assets and not by some third party entity.
Nonce: The term nonce is commonly employed when a certain tx has been hashed by a miner.
Off-Ledger Currency: It is a digital asset that has been devised outside of a specified blockchain ledger.
Offline Storage: It is a concept that deals with the storage of crypto assets on a device that is not actively linked to the internet in any way. This allows users to be better protected against third party hacking attempts.
On-Ledger Currency: It is a digital asset that is created as well as used on the same blockchain system. Bitcoin is a perfect example of such a currency,
Online Storage: It is a means of storing one’s digital holdings on a device that is linked to the internet. While such platforms are convenient to use, they are usually more susceptible to third-party intrusions.
One Cancels The Other Order: Commonly abbreviated as OCO, it is a scenario wherein a couple of buy orders are placed together for the same cryptocurrency.
Open/Close: Open refers to a time window when the price of bitcoin (or any crypto asset) is opened to the public for regular trading. Similarly, close delineates a window of opportunity that is exactly the opposite of what the term ‘open’ represents.
Open Source: It is a type of software that can be freely altered, distributed and studied by anyone for any reason that he/she may see fit.
Option: In its essence, an ‘option’ is basically a contract that provides investors with permission to buy or sell an underlying asset at a specific strike price. In this regard, it should be pointed out that there are American and European options — with the former being available for use at any time before its expiry while the latter can only by employed at the time of its expiration.
Options Market: It is a public trading platform where options can be exchanged freely. Not only that, an options market provides buyers with the opportunity to buy/sell crypto assets at specified strike values (that too on or before a preset date of exchange).
Oracles: These are digital entities that are entrusted with the responsibility of finding and verifying specific blockchain-related data.
Orphan: In digital lingo, the term basically alludes to a valid data block on a certain blockchain that is not affiliated directly with the main chain. Such entities usually come into existence when two miners produce a block at the same time or when a bad actor tries to reverse transactions in an illegal manner.
Overbought: A commonly used term that refers to a currency that has been acquired by an increasing number of investors over a certain period of time.
Oversold: As the name clearly implies, the term oversold comes into effect when a cryptocurrency has been sold by more and more investors over a certain period of time — with the price of the asset decreasing during the aforementioned duration.
Over The Counter: Commonly abbreviated as OTC, the term is used to describe a transaction that is facilitated independently (mainly in a P2P manner) without the use of an intermediate cryptocurrency exchange. This mode of transfer is commonly used in countries, regions where digital trading platforms are not legal.
Pair: In its most basic sense, a pair refers to a trade that takes place between two distinct financial assets (example BTC/USD, BTC/ETH).
Paper Wallet: It is a basic physical crypto storage solution that contains a user’s private key.
Peer to Peer (P2P): It is a decentralized mode of interaction that takes place between two parties operating within a distributed network.
Permissioned Ledger: As the name clearly implies, it is a ledger system that comes pre-built with certain restrictions so that only a few people with the required authorization can access it.
Platform: It is a vague term that may be used to describe a specific digital service, a cryptocurrency exchange or any other medium related to a host of defined technological domains.
Ponzi Scheme: It is a fraudulent scheme that has been perpetrated by a company or startup. It entails investors being promised handsome rewards/incentives for onboarding new recruits.
Portfolio: It is a collection of digital currencies that are held either by an individual or an investment collective (such as a hedge fund).
Pre-mine: The term pre-mine is used when a fraction (or entire amount) of a project’s token supply is generated before its public launch. The practice is usually employed for purposes such as crowdfunding and marketing.
Pre-sale: As the name suggests, it is a sale that is facilitated before an ICO is made available to the masses.
Private Key: It is a digital code that is generated through the use of various asymmetric encryption processes. A private key, when used in conjunction with a public key, can be used to decrypt certain sensitive data.
Proof-of-Authority: Referred to as PoA within crypto circles, it is a consensus mechanism that is known to provide users with fast tx speeds (while making use of the participant’s identity at stake).
Proof-of-Burn: PoB is a consensus mechanism that seeks to bootstrap one blockchain to another by making sure that a certain cost is levied during the native token burning process.
Proof-of-Developer: It is a blockchain consensus protocol that provides users with evidence of a real, living software developer being involved in the creation of a particular cryptocurrency.
Proof-of-Stake (PoS): One of the most commonly used blockchain consensus mechanisms in the world today, the PoS protocol makes use of a novel operational framework wherein a block creator is chosen through a random selection of certain key factors including wealth, age of staked coins, etc.
Proof-of-Work (PoW): It is a blockchain consensus mechanism that requires users to solve certain mathematical puzzles and codes to validate native transactions (as well as for the creation of new blocks.)
Protocol: It is a common term that seeks to define a set of rules that are used to govern particular interactions on a specific digital ecosystem. From a crypto standpoint, a protocol entails the use of certain consensus mechanisms, tx validators, etc.
Pseudonymous: It is an english term that describes the use of an anonymous identity by an individual for various privacy related reasons (example: Satoshi Nakamoto)
Public Address: It is a digital location that allows users to facilitate a payment request in a streamlined, hassle-free manner. From a more technical standpoint, we can define a public address as being a cryptographic hash that is associated with a particular public key.
Public Blockchain: It is a blockchain network that can be accessed by any person irrespective of his/her security authorization and clearance.
Pump and Dump Scheme: It is a form of fraud in which the price of a cryptocurrency is artificially inflated so as to make it seem as though the asset is surging. After the market perception of the currency has been altered, the involved parties then proceed to dump the asset for a higher price.
QR Code: It is a digital label that can be interpreted by an IR machine so as to acquire a host of important data related to the commodity in question. In relation to cryptocurrencies, QR codes are most commonly used to share wallet addresses between users.
Raiden Network: It is a popular scaling solution that works completely off-chain. From a technical standpoint, it should be pointed out that the Raiden network allows for near-instant tx’s to take place while charging users minuscule processing costs
Replicated Ledger: It is basically a copy of a network’s native distributed ledger.
Rank: The term refers to a crypto asset’s relative market position in relation to its total market cap.
REKT: A common slang that is a shortened version of the word ‘wrecked’. It is commonly used when an investor incurs massive losses because of his/her poor investment choices.
Reverse Indicator: A reverse indicator refers to an individual whose market choices are so poor that he/she can be used as an example of how not to invest one’s assets.
Ring Signature: It is a digital protocol that fuses inputs related to multiple signers with those of the original sender so as to increase the system’s overall security.
ROI: Also referred to as “Return on Investment”, the term basically alludes to the ratio that exists between net profit and cost of investing.
Relative Strength Index: RSI is a technical chart that allows users to measure the speed and price movements associated with various cryptocurrencies. Additionally, it should be highlighted that the analysis tool was devised by J. Welles Wilder.
Satoshi: It is the smallest possible denomination of Bitcoin. Each Satoshi represents a value of 0.00000001 BTC.
Satoshi Nakamoto: The pseudonymous creator of Bitcoin whose real identity has not been confirmed till date.
Scam: A fraudulent scheme that makes use of a fake cryptocurrency or fundraising avenue (such as an ICO.)
Scrypt: It is a PoW based algorithm that serves as a perfect alternative to the SHA-256 protocol that is widely used for Bitcoin mining. From a technical standpoint, it bears mentioning that the algorithm is primarily dependant on a computer’s memory rather than its processing power.
Second-Layer Solutions: These are various solutions that have been devised atop existing public blockchains so as to improve their existing scalability potential as well as overall efficiency. Lightning Network is a perfect example of such a tool.
Securities and Exchange Commission: The SEC is a United States-based regulatory agency that seeks to enforce local laws related to the securities and stock/options market.
Seed: It is considered to be the starting point where an individual seeks out to gain access to his/her wallet (deterministic wallet to be exact). In this regard, it should be pointed out that a seed phrase comprises of a set of words that allow users to either backup or restore one of their existing wallets.
Segregated Witness: It is a Bitcoin Improvement Proposal (BIP) that was designed to solve the issue of tx malleability that plagued the Bitcoin network for a long time in the past. From a more technical POV, SegWit sought to change the “witness” information related to individual data blocks by segregating signature and block content.
Selfish Mining: As the name clearly alludes to, Selfish Mining refers to a situation where a miner acquires data related to a new block without transmitting this information to other network participants.
Sell Wall: A sell wall refers to a situation where a massive limit order (in regards to the selling of a particular crypto asset) has been achieved. The tactic is used by traders to make it seem as though the demand for a particular crypto asset is not all that much even though in real life the currency might be extremely popular and sought after.
Side Chain: It refers to a decentralized ledger system that runs in unison with a primarily blockchain. However, a key point worth noting here is that the side-chain is able to operate independently of the central blockchain using its own set of protocols and operational mechanisms.
Simplified Payment Verification: It is a non-memory intensive client that can be used to verify blockchain transactions without the need for data acquisition related to block headers and PoI’s.
SHA-256: It is a hash function that makes use of a 256-bit cryptographically secure signature. The basic framework for this algorithm was devised by the NSA.
Sharding: A concept that seeks to help in the optimal scaling of a blockchain ecosystem by dividing its containing states and transaction history — so that both of these entities can be processed parallel with each other.
Shilling: It refers to the act of a single person or group promoting a particular crypto project over-enthusiastically.
Shitcoin: A cryptocurrency that has no apparent use case related to it.
Short: A technique that is commonly employed by traders in which they borrow an asset with the sole goal of selling it. However, in order for the setup to actually work, the value of the asset in question needs to continue to decline.
Silk Road: A popular deep web marketplace that was shut down by the FBI a couple of years back ago. Using Silk Road, a number of bad actors could facilitate their online transactions using BTC (as well as a host of other digital assets).
Smart contract: A smart contract is a computer protocol intended to facilitate, verify, or enforce a contract on the blockchain without the need of a third-party intermediary.
Soft Cap: It is the minimum amount of money that an ICO project wishes to raise. On the subject, it should be pointed out that incase an ICO fails to reach this threshold, the project may be scrapped altogether.
Soft Fork: It is a protocol upgrade where older valid transactions associated with a particular platform are made invalid. However, in order for such a change to be enforced, a majority of miners affiliated with a particular crypto ecosystem need to upgrade their mining software simultaneously.
Solidity: It is the name of a programming language that is used by Ethereum-based developers to devise unique smart contracts.
Spot: It is a contract which involves the buying/selling of cryptocurrencies. In this regard, a spot market refers to a public trading platform where crypto assets can be traded for immediate settlement.
Stablecoin: A crypto asset that has its value pegged to a real-world asset such as a fiat currency or precious metal. As a result of this, a stablecoin has extremely low volatility.
Staking: It is a method that involves an individual putting his/her tokens on the line to serve as a validator for a particular blockchain ecosystem.
Stale Block: A data block that has been successfully mined but not included in the current longest blockchain. This usually happens as a result of another block (of the same height) being added to the primary chain.
State Channel: Another popular second-layer scaling solution that helps reduce the total number of on-chain transactions associated with a particular blockchain ecosystem.
Symbol: It is the digital ticker associated with a particular cryptocurrency. For example Bitcoin’s symbol is BTC.
Taint: It refers to the total percentage of cryptocurrency that is held in a particular account (which in turn can be traced to another account.)
Tangle: It is a blockchain alternative that has been devised by IOTA. The system makes use of DAGs (directed acyclic graphs) and is quantum-computing resistant.
Testnet: The term ‘Testnet’ refers to an alternative blockchain that is commonly employed by developers for testing purposes only.
Technical Analysis: It is a method of evaluation that makes use statistical data related to the activity of a particular market sector. Using TA related tools, users can isolate certain specific patterns which can then be used to make well-informed investment decisions.
Think Long Term: It is a mindset where an investor thinks in terms of months or years (rather than days) in relation to his/her investment.
Ticker: It is an abbreviated symbol (ed BTC) that is commonly used in relation to cryptocurrencies for identification purposes.
Timelock: A preset condition that seeks to push forth a transaction only after it has attained to a certain block or if a certain time window has been reached.
Timestamp: A module that allows for id-data related to a particular transaction to be viewed seamlessly.
Token: It is a digital unit of exchange that is designed to possess certain transactional qualities and can be used within a larger crypto ecosystem. Additionally, it should be pointed out that a token does not intrinsically have the potential to serve as a store of value but can be used to create novel software solutions around it.
Token Generation Event: A time when a token is issued and made available to the masses for acquisition.
Tokenize: It refers to the process by which real-world assets can be converted into digital entities. This allows for physical commodities to be offered to different owners in a completely straightforward, streamlined manner.
Tor: A free software that allows users to surf the web in a highly secure and private fashion. The tor browser makes use of a network of volunteer relays in order to hide a host of location/cookie-related data associated with its users..
Total Supply: As the name quite obviously implies, the term ‘total supply’ refers to the maximum number of coins related to a project that may be in existence at any given point in time. However, the sum does not include any coins that may have been verifiably burned.
Trade Volume: It is the total amount of crypto-related to a particular project that has been traded over the course of the last 24 hours.
Transaction: Abbreviated as tx, it is the act through which two crypto holders can exchange digital assets with one another.
Transaction Fee: A small payment that needs to be made in order for a transaction to be processed within a blockchain.
Trustless: It is the property of a blockchain platform to facilitate transactions without any of the participants having to trust one another.
Tumbler: It is another term used to describe a ‘mixing service’.
Turing-Complete: Turing-complete is a concept that deals with the ability of a device to perform certain calculations that no other machine is capable of handling. The Ethereum Virtual Machine is a prime example of such a device.
Unconfirmed: It refers to a state in which a particular monetary tx has not yet been appended to the blockchain.
Unpermissioned Ledger: Another term that basically refers to a blockchain that is completely public in nature.
Unspent Transaction Output: UTO is an output associated with a blockchain transaction that has yet to be spent, therefore, it can be used as an input protocol for newer tx’s.
UTC Time: It is the time standard that most businesses around the world make use of so as to facilitate their global communications in a systematic manner.
Validator: An individual who is involved in the validation of data blocks (for incentive acquisition purposes) within a PoS blockchain ecosystem.
Vanity Address: It is a public wallet address that makes use of custom letters and numbers that have been picked out by the owner of the storage solution.
Vaporware: A project that never sees the light of day.
Venture Capital: A type of private equity that is usually doled out to startups and other small firms deemed to have a bright future ahead of themselves.
Virgin Bitcoin: A Bitcoin that is pristine and has never been used to facilitate any monetary transaction (be it illegal or otherwise).
Volatility: The term refers to a currency’s innate potential to witness intense price swings over a given period of time.
Volume: The total amt of crypto that has been transacted over a certain period of time (eg: 24 hours, 7 days, etc.). From a technical standpoint, we can see that volume reflects the direction in which a particular asset (or the market as a whole) may be heading.
Wallet: It is a digital storage device that can be used to store cryptocurrencies. Not only that, a wallet can also be used to send/receive digital assets in a seamless, hassle free manner. They can primarily be split up into two central categories, namely hosted and cold wallet.
Wash Trade: A market deception tactic through which investors are able to establish artificial activity by selling/buying certain digital assets at the same time.
Watchlist: As the name suggests, a watchlist refers to a small set of crypto assets that a user would like to follow on a day-to-day basis These days, the feature has been incorporated into a number of famous crypto trading platforms and websites.
Weak Hands: A person who is known to panic sell anytime a price decline appears on the horizon.
Wei: It is the smallest divisible unit of an ETH token. One Ether is equal to 1000000000000000000 Wei.
Whale: A common term that is used to describe an investor who owns a massive amount of crypto — so much so that he/she can easily manipulate the market with one major sell.
Whitelist: It refers to a collection of individuals taking part in an ICO with the intention of purchasing a decent amount of tokens.
Whitepaper: A technical document prepared by the members of a crypto startup so as to present to the world a clear vision of what their project seeks to achieve in the short, medium and long term.
YTD: It is an abbreviation for the term “Year-to-Date”.
Zero Confirmation Transaction: It is a concept that can be used interchangeably in place of the term “unconfirmed transaction”.
Zero Knowledge Proof: It is a concept that is commonly used in cryptography. Simply put, a ZKP seeks to facilitate tx’s between two parties without the sender having to reveal any of the contents of the transfer.
I’m Aziz, a seasoned cryptocurrency trader who’s really passionate about 2 things; #1) the awesome-revolutionary blockchain technology underlying crypto and #2) helping make bitcoin great ‘again’!
The post Crypto Glossary: Blockchain Vocabulary Term Definitions appeared first on Master The Crypto.
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