The cryptocurrency space has only been around for a little over a decade, since the first coin was introduced. Many people are still unaware of digital properties, but as the industry becomes more mainstream, more people are becoming involved.
If you're new to cryptocurrency, you'll almost definitely come across terminology you've never heard before. When all you see is language, let alone the advanced technologies behind cryptocurrencies, it can be daunting. This is a detailed glossary of the most widely used words in the crypto world.
Cryptocurrency– Cryptocurrency is a form of digital money that uses blockchain technology to regulate how and when miners produce it, as well as allowing users to trade it with one another.
Stablecoin- A stablecoin is a cryptocurrency that is connected to an asset, such as another cryptocurrency, fiat money, or a physical asset. It is a form of cryptocurrency that was created to fix the issue of cryptocurrency volatility.
Blockchain- Blockchain refers to the technology that underpins cryptocurrencies. It is made up of an interconnected network of distributed ledger nodes that validate cryptocurrency transactions. Transactions are registered in the blockchain, which is made up of interconnected and immutable blocks.
Nodes– The blockchain infrastructure of a distributed ledger is made up of a network of computers known as nodes.
Cryptography–Cryptography is the method of encrypting and decrypting data such that only the intended recipients can understand it.
Bitcoin- Satoshi Nakamoto launched Bitcoin as the first cryptocurrency in 2008.
Altcoin– is a concept used to describe any cryptocurrency that is not Bitcoin.
Fiat– The currency that a government issues and accepts as legal tender.
Mining– The practise of using high computing power to solve encrypted codes in order to validate cryptocurrency transactions on a block in exchange for a fraction of the cryptocurrency transacted.
Mining Pool- The number of transaction verifiers or miners who pool their computing power to verify the number of transactions needed to open a new block in the distributed ledger is referred to as a mining pool.
Consensus Algorithm– A consensus algorithm is a method for organising the activities of miners in a block and achieving an agreement. When verifying transactions, it ensures that all nodes in a block agree on a single fact.
Hashing Power– Hashing power refers to the amount of computational power used by computers to solve various algorithms.
Proof of Work (POW) is the first and most commonly used consensus algorithm, which entails using a large amount of computational power to verify transactions in a block.
Proof of Stake (PoS) is a more effective mining or consensus algorithm in which miners stake their cryptocurrency holdings in order to verify new cryptocurrency transactions.
Wallet- A wallet is a virtual space where cryptocurrency owners store their digital properties. The wallet address is a collection of alphanumeric characters that uniquely identify each wallet.
Private Keys– Your wallet's passcode is your private key. The private keys can only be identified by the wallet's owner.
Public Keys– These are keys that are identical to bank account numbers and that wallet owners share with others in order to receive crypto coins in their virtual wallet.
ICO (initial coin offering)– ICO stands for initial coin offering. It's an unregulated way of raising funds for a new cryptocurrency by selling the coin or token to investors at a discount in return for another cryptocurrency or fiat currency.
DeFi is the abbreviation for Decentralized Finance. It refers to a form of finance that is not governed by a central bank or regulated by a brokerage firm.
Fear of Missing Out (FOMO) is a term that refers to the fear of missing out on something. It's a psychological phenomenon in which cryptocurrency investors feel that if they don't buy a specific coin, they'll lose out on a lucrative opportunity.
Token– A token is the smallest unit of an asset, whether it is a cryptocurrency or a physical asset defined by a digital coin.
HODL is an acronym that stands for "hold on for dear life." It's a misspelling of the word "keep" invented by cryptocurrency investors. It refers to the practise of storing cryptocurrency in wallets rather than selling or exchanging it. is the abbreviation for Decentralized Finance. It refers to a form of finance that is not governed by a central bank or regulated by a brokerage firm.
Dapps- Decentralized applications are referred to as Dapps. It is a type of application software that operates in the same way as mobile apps or websites and uses blockchain technology to communicate and control a network.
DYOR: The acronym DYOR stands for "do your own studies."
ERC-20 is a norm that all Ethereum tokens conform to. The norm is also adopted by other cryptocurrencies on the Ethereum blockchain.
Fork- After a new blockchain is developed, a fork occurs, resulting in two blockchain variants. Both blockchains are involved at the same time.
Smart Contract– A smart contract is a transaction protocol that uses a collection of agreed-upon principles to automatically monitor, handle, and execute acts.
Market Capitalization- A cryptocurrency's market capitalization is determined by multiplying its price by the total number of coins in circulation.
Exchange- An exchange is a website that enables people to purchase, sell, and swap cryptocurrencies.
51% attack- The 51 percent attack is a hypothetical attack in which organisations with 51 percent of the network's hash power will perform double spends and other malicious activities.
Moon– A word used to define a scenario in which the price of a cryptocurrency increases dramatically.
Conclusion
Every industry has its own lexicon. The cryptocurrency terminology are not shocking because the terminologies are unique to the industry. However, when you reach the cryptosphere, it is vital that you comprehend them. Some of the phrases may have different definitions in other contexts, but you must understand them in the context of cryptocurrency.
This article compiles a glossary of words used in the crypto industry that people can use to familiarise themselves with and confidently enter the market.
