Great dictionary of cryptocurrencies - words you have to know
If you follow us on social media, you surely have come across a word or term that you have not known yet. To make it easier for you to enter the world of cryptocurrencies, we have prepared a glossary of terms related to cryptocurrencies and blockchain.
The number of new words and phrases that must be ‘grasped’ when entering the world of cryptocurrencies can be frightening.
That is why we have prepared a cryptocurrency dictionary – a place where you will learn all the most important phrases related to cryptocurrencies. The dictionary will be updated on an ongoing basis.
Enjoy reading 😉
AIRDROP – This is a marketing activity that allows you to get a token or cryptocurrency for free, for your time or work (usually the rules of a given airdrop are specified – it is an invitation to friends, activity in social media, etc.).
ALTCOIN – cryptocurrency other than Bitcoin (BTC). It consists of the words: alternative and coin. Examples: Etherium, Binance Coin, Litecoin, Dogecoin
AML – anti money laundering. The procedure related to the introduction of funds from illegal sources to the legal market.
ATH – An abbreviation that means the highest recorded price so far, the rate of a cryptocurrency in the history of its existence.
BEP2 – A token standard in the Binance Smart Chain.
BEP20 – Token Standard Found in Binance Smart Chain.
BEAR MARKET – In trading slang, this means a bear market, a market that records drops in prices and rates.
BINANCE – currently the largest and most extensive exchange, providing the most cryptocurrency pairs and the most additional opportunities. The founder and CEO of Binance is Changpeng Zhao, a Chinese-Canadian entrepreneur.
BSC – Binance Smart Chain, a blockchain network created by the Binance exchange.
BLOCK – We call this a package (set) of transactions, data in the blockchain network, which is created at a different time for each blockchain. You can imagine the block as a piece of paper of a transaction record that has limited space, and we continue to write on the next page. In the case of blockchain, it looks the same.
BOUNTY – A time-limited process by which a new cryptocurrency is made public and distributed to people who invest time and skills in cash rewards in the new cryptocurrency, such as translating its documentation or marketing. Unlike an ICO where you can buy coins, in Bounty you can only get them for commitment.
CONFIRMATIONS – this is the number of blocks following the block with our approved transaction. The greater the number of confirmations, the greater the certainty that the transaction cannot be changed.
BULL TRAP – “bull trap”, that is for investors who actively buy data in the belief that the trend has reversed and is heading upwards, while it is just a trap, a temporary reversal of the trend, sometimes caused intentionally.
BULL MARKET – In trading slang, this means hosse, a market that records increases in prices, odds.
CRYPTOCURRENCY WALLET – Software, hardware or QR code in which cryptocurrencies are stored. You can also send and receive digital currencies using the wallet. Wallet has an “address” through which it is possible to accept payments. The wallet address is public, however, the wallet is assigned a set of security keys.
DAPPS – (Decentralized Applications) – decentralized applications operating in a distributed blockchain network, performing various tasks on the blockchain in an automated manner, often using smart contracts.
DAYTRADING – daily trading, trading (short-term trading). Traders in this mode (Day Traders) perform operations, orders – they buy and sell every day.
DEFI – Decentralized Finance is a concept that assumes the possibility of transferring every currently available financial service, such as saving, loans, trading or insurance, to the blockchain
DEX – Decentralized exchange, i.e. one that is not managed by a third party, company, person or institution. Users in the event of such exchange, exchange of goods, assets exclusively among themselves
DUMP – a word that defines the sale of an asset in small intervals by a large number of people – this leads to a decrease in the price/rate.
DYOR – (Do Your Own Research) – that is, check what you invest in, do your own research before buying a given digital currency. A popular term in the cryptocurrency world that warns new investors.
ERC-20 – a standard of tokens on the Ethereum network.
ERC-721 – standard of NFT tokens on the Ethereum network. Each token is unique and different from another.
EXIT-SCAM – project escape with investors’ money.
EXCAVATOR – a specialized device that uses its power to mine cryptocurrencies. It is usually based on graphics cards (GPU) or specialized dedicated systems (ASIC).
FEE – commission, transaction fee to be paid by each user who makes the transaction. This fee goes to people who confirm the transaction in a given network and its cost depends on the blockchain network.
FIAT – fiat money, a traditional form of money that everyone knows today – e.g. USD, PLN, EURO
FOMO – (fear of missing out) – fear of missing opportunities on the market. Investors buy without in-depth analysis, based on information about large increases. Often times, you end up losing a large portion of your invested capital
FUNDAMENTAL ANALYSIS – Investment analysis based on market data of a given project related to its potential, solutions implemented by the project and its commercial use.
GWEI – Name, 10-9 Ethera. 1 Gwei = 0.000000001 Ether. It is a denomination, like 1 grosz = 0.01 zloty.
HALVING – halving of thecryptocurrency, cyclical reward for mining a block, the reward is given to miners dealing with ‘mining’. In Bitcoin, halving takes place every 4 years.
HOLD – long-term investments focused on profits deferred in time.
HODL – HOLD or keep, In cryptocurrency enthusiast parlance, this means holding a given cryptocurrency no matter what the circumstances. The genesis of this password is a typo once committed by one of the users of the Bitcoin forum.
ICO – initial sale of tokens, cryptocurrencies aimed at potentially interested investors who, after launching the project, get tokens before everyone else.
IEO – (Initial Exchange Offering) – a form of initial public offering for cryptocurrencies and tokens, differs from ICO in that it is organized through a cryptocurrency exchange.
KYC – (Know Your Customer / Client) – user verification based on personal data. It usually occurs on exchanges that are combined with standard fiat currencies, e.g. USD or PLN.
LEVERAGE – we talk about it when an institution or the stock exchange allows you to trade funds that we do not have. For example, with PLN 100, we can trade assets worth PLN 1,000 on the leverage x10. It involves a high risk.
LIQUIDITY MINING– enabling asset holders to earn money just by storing cryptocurrencies. The risk borne by the owners is minimal, because most often the tokens do not leave the private key, but are temporarily placed in a smart contract.
MEMO – an additional string of characters required when sending tokens in some networks, e.g. BEP2 or Stellar.
NFT – Non-fungible token, a cryptographic token whose main feature is the uniqueness of each piece – ithas individual value, is not equal to another NFT token and cannot be copied. In other words, each NFT token is unique to the rest of the tokens in the chain.
POS (Proof-of-stake) – a consensus mechanism in which the extraction of new network blocks takes place on the basis of the number of coins held, not the computing power used.
POW – (Proof-of-work) – proof of work. A consensus mechanism in which the computing power used determines who and how often extracts network blocks (with a certain dose of randomness). Generally considered to be much safer than PoS, although much more energy-consuming.
HARDWARE WALLET – term used in cryptocurrency to define wallets in “physical” form. Examples of such portfolios are products of brands such as: Ledger, Trezor or KeepKey.
RUG PULL – a dangerous maneuver in which developers abandon a given project and disappear with investors’ money. This is possible on DEX-type exchanges, where tokens can be added without prior audit.
SATOSHI – The smallest unit of Bitcoin as we know, 1 BTC = 100,000,000 Satoshi, or 0.00000001 BTC.
SATOSHI NAKAMOTO – The creator / creator of the world’s first implementation of the blockchain network in DLT technology, i.e. Bitcoin. Satoshi Nakamoto is completely anonymous.
SCAM – a project that is a fraud from the very beginning and an attempt to extort money frominvestors
SEED – a string of words (usually 12 or 24) from which private keys to individual addresses are generated.
SHITCOIN – a token that does not yet have a greater use (utility) or investment value, and its value on the market is very small. Investing in them carries a high risk of losing money. Such tokens are purchased in an amount from several million to even several hundred billion pieces. Most tokens of this type are active mainly on DEX exchanges. Tokens of this type are used by other blockchain networks such as Ethereum or Binance Smart Chain.
SMART CONTRACT – a piece of code that performs programmed functions. The most popular platform for this type of contact is Ethereum. Once the contract is put into motion, it cannot be changed (except for minor exceptions), therefore errors in contract coding are expensive and irreversible.
STAKING – Participation in the Proof of Stake (PoS) system, consisting in depositing your stake (a set of coins of a given PoS cryptocurrency) in to enable the validation of blockchain transactions and receive the award. The stake is deposited in the blockchain and used as collateral to guarantee the block
STOP LOSS – A stop-loss order is a transaction that will be automatically executed when the price of the measure reaches a certain point.
SWAP – exchange of one cryptocurrency for another using the DEX type exchange, which has a given cryptocurrency thanks to the so-called liqudity pools, provided by users in exchange for an attractive% of profits. Popular platforms where you can make the so-called swaps include Uniswap or Pancakeswap.
TECHNICAL ANALYSIS – This is an analysis of the market behavior on a chart. The purpose of technical analysis is to present recurring market behavior in the form of figures on a chart. People using technical analysis, thanks to it, try to predict future market behavior.
TRC-10 – a standard of tokens in the TRON network. The MONx token is based on this standard.
TRC-20 – a standard of tokens in the TRON network.
TRON – a cryptocurrency founded by Justin Sun, founded in 2017. TRON is characterized by a very cheap transmission fee, and in addition, transactions are performed at the rate of 2000 transactions per second. USDT (tether) on the TRC-20 network is one of the most popular stablecoins.
UTILITY – utility tokens are useful tokens, i.e. those that have specific utilities on a given platform, and thus users of a given platform need these tokens to use the services and products contained on it.
WHALES – the so-called whales, this is how people who have very large amounts of Bitcoin or other cryptocurrencies are defined in the world of cryptocurrencies. The cryptocurrency market closely monitors the movements of such people, as they can shake the market. On Twitter, there is a profile that follows the movements of whales – @whale_alert