When Satoshi Nakamoto first released Bitcoin as an open-source software in 2009, people thought it was just another trend that would fade out in no time.
Most people didn’t see the potential of cryptocurrency. Some even thought it was crazy for anybody to digitize their cash and keep it in a random wallet stored in the cloud. LOL.
I once read a story of Laszlo Hanyecz - the first person (on record) to buy physical goods using bitcoin. He bought two Papa John’s Pizza for 10,000 BTC.
What the heck!!!!
Well! Let's leave that story for another day.
Back to our original conversation.
13 years later, there are over 9000 different cryptocurrencies in the marketplace. And more than 70 of these cryptos have a market capitalization exceeding $1billion.
What does that tell you? It’s simple - cryptocurrency is the future.
And this is the right time to start learning about cryptocurrency and how it works.
If you are a beginner who has been struggling to understand frequently used cryptocurrency slang, you will find this article helpful.
When I started learning about crypto, everything was so strange. And my friend @ozohu will use terms like DYOR, Hard fork, Altcoin, HODL, blah blah blah.
Gosh! It was so frustrating.
But the good thing about our generation is that we have information at our fingertips.
It took me a few weeks to familiarize myself with some of these cryptocurrency terms.
I hope you find them helpful..
NB:I edited the Image with Canva after downloading it from Pixabay.
Address (Wallet Address)
Wallet address is a unique identifier represented by alphanumeric characters or scannable QR code. You use a wallet to transact upon a blockchain network.
In a simpler term, wallet address and bank account numbers perform almost the same functions.
While businesses and banks use a bank account number to identify your bank account, your wallet address is used to identify your crypto wallet in the blockchain.
While you use your bank accounts to hold money, lend money, and control money, cryptocurrency wallets are used to hold crypto, lend crypto, and of course, control cryptos.
Airdrop
A crypto airdrop is more of a promotional activity block-chain based startups use to bootstrap their cryptocurrency project.
The whole essence of a crypto airdrop is to create massive awareness about the crypto project, thus getting more people to trade about it when listed on an exchange as an initial coin offering (ICO).
Altcoin
Altcoin is the term used to describe any other coin other than Bitcoin. It can be any coin from HBD to Enthereum…
It may interest you to know that every Altcoin has its set of rules, specific use cases, and of course, properties.
All Time High (ATH)
All time high describes the highest price that any coin or asset has ever been.
All Time Low (ATL)
Similarly, all time low describes the lowest price any coin or asset has ever been.
Bag Holder
Bag holder is a precarious trading situation in cryptocurrency. It describes an investor or trader who holds on to a particular cryptocurrency with the hope of selling at a higher price but the market moves faster than expected.
And they end up having a coin with a significantly lower value than they paid for it.
But you can avoid being a bag holder by frequently checking in on your cryptocurrency portfolio and investigating coins that declined over time and aren’t recovering.
Block
Block refers to groups of data within a blockchain. Blocks in cryptocurrency are all transaction records as users buy and sell coins.
There’s a limit to the amount of information a block can hold. And once that limit is exceeded, a new block will form to continue the blockchain.
Blockchain
Blockchain is arguably the most frequently used cryptocurrency term. Funny enough, most people don’t even know what it means.
Anyway, blockchain is a digital ledger containing all the transactions ever made in a particular cryptocurrency.
Block Height
Block height is a term used to describe the number of blocks connected within a blockchain. And guess what? The first block in every blockchain is called a genesis block.
Block Reward
Whenever miners or validators create blocks in a crypto network, they get rewards. This reward is described as a block reward.
It comes in different forms. But most times, block rewards take the form of newly minted crypto so as to keep the blockchain running.
Bull Market
Bull market is a period in which the market price of a coin or asset is trending upward. During this period, the public perception about the coin is positive, the demand outweighs supply, and most investors are buying.
Bear Market
Bear market is a situation where the market price of coins or assets is trending downward and the public perception about the coin is negative.
During a bear market, supply outweighs demand as most investors sell off their assets.
Bounty/Bug Bounty
Just like we have bounty hunters out there in the real world, there are bug bounty hunters in the digital space.
Basically, a bug bounty refers to any task assigned to a community in exchange for a reward upon completion.
Bug bounties usually involve identifying the security vulnerabilities of a software and reporting it to the owner before internet bad guys exploit these vulnerabilities.
And cryptocurrency businesses like protocols, wallet operators, and exchanges offer bug bounties.
Bug bounty is more like a competition between two ethical hackers.
Coin
Coin refers to any digital asset created by an independent blockchain.
Cold Wallet or Cold storage
When you use a wallet to store digital assets offline, it’s called a cold wallet. It could be hardware, paper wallet, etc.
Confirmation
Block confirmation in cryptocurrency refers to a network verification of the blockchain transaction.
In most cases, when a transaction has enough confirmation, it’s not prone to reversal or double spend.
Consensus
Consensus is the backbone of all cryptocurrency blockchains. I mean, they are what make these blockchains secure and safe.
Basically, consensus uses a trustless voting process to ensure strict adherence of proposed data (blocks) to distribution ledger (blockchain).
Cryptocurrency
Cryptocurrency is a virtual or digital currency that’s secured by cryptography, making it impossible to counterfeit or double-spend.
Cryptography
Cryptography is an important concept in cryptocurrency and blockchains. It’s responsible for keeping information secure and safe.
It uses the SHA-256 one-way algorithm to secure blockchains and cryptocurrencies.
DAO
DAO is an acronym for Decentralized Autonomous Organization, it’s a business entity that has representation as transparent rules in smart contracts.
dApp
dApp is an acronym for Decentralized Applications. These are programs designed to operate on blockchain networks and provide trustless tools and services for end users through smart contracts.
Decentralized
Any technology that uses distributed systems in order to increase security and redundancy, and reduces the reliance on governing bodies and centralized intermediaries is described as decentralized.
DeFi
DeFi is an acronym for Decentralized Finance. It aimed to remove middlemen from our everyday finances.
It’s a general term for a variety of financial applications in the blockchain tailored towards disrupting financial intermediaries.
DYOR
DYOR is an acronym for Do Your Own Research. It’s an everyday cryptocurrency slang crypto influencers use to warn other investors.
It’s a reminder that regardless of the information you read about a particular cryptocurrency, it’s better to do your own research.
Whoever is giving you that information may have their incentives and goals. So, if you want to be successful in the world of blockchains and cryptocurrencies, always search for factual and unbiased information.
Fiat
Fiat refers to any type of money within the traditional financial system.
Fork
Fork is a term used to describe a situation in which a change in the blockchain protocol produces two parallel chains.
So, Forks whenever crypto developers or communities decide to update or change the protocol.
FOMO
FOMO stands for Fear of Missing Out. It means making rash decisions to buy or trade a cryptocurrency without conducting due diligence.
It also means watching the tokens you do not own go through a rapid upward price movement.
FUD
FUD is an acronym for Fear Uncertainty and Doubt. It’s a term that describes any information that will make people have a negative perception of the market.
Fundamental Analysis
Fundamental analysis is a complete evaluation of a particular cryptocurrency asset. During such analysis, important factors like the innovative value and technology of the product, those who develop it, the token distribution model and its use cases.
Gas
Gas is the fee you pay whenever you perform an operation on the Ethereum network. It could be sending transactions or deploying and interacting with smart contracts.
Regardless of the operation, you will have to pay a fee priced as Gas ( a fraction of Ether).
HODL
HODL stands for Hold on For Dear Life. The slang means to buy and hold a cryptocurrency indefinitely.
The HODL action is always in opposition to the prevailing market trend.
ICO
ICO is an acronym for Initial Coin Offer. It’s how funds are raised for a new cryptocurrency offering.
ICO is the cryptocurrency’s space equivalent of an Initial Public Offering (IPO). Companies use ICOs for raising funds to create new coin, app, or services.
Ledger
Ledger in cryptocurrency refers to the transaction history of a particular coin or cryptok; and it’s stored on the blockchain.
Liquidity
Liquidity measures the ability to easily convert a crypto asset into cash or another asset.
Limit order
Limit order is an order placed on an exchange to buy or sell a crypto asset at particular price or better. A limit order can be a buy order or a sell order.
Buying orders are executed at the target price or a bit higher while selling orders are executed at a certain price or lower.
Market Cap
It’s a short form of Market capitalization. And it refers to the total value of a cryptocurrency. And it’s calculated by multiplying the price of the cryptocurrency by the number of coins in circulation.
Mining
To a layman mining is a way of creating new coins. But that’s not entirely true.
It actually refers to contributing computing resources to a blockchain network so as to create new blocks.
Mining prevents cryptocurrency assets from being overspent on a distributed network. Cryptocurrency miners always earn a reward.
NFT
NFT means Non-Fungible Token. It's an Ethereum token. They are not so much different from other tokens.
You can transfer NFTs between wallets and use them for smart contracts.
However, they are not fungible - that is, you can’t replicate or subdivide NFTs. Every unit is unique.
Node
Node is an important component of the blockchain. It’s a decentralized ledger used to keep track of cryptocurrencies.
Private Key
A private key is a secure code used to identify the owner of a particular cryptocurrency wallet. It’s like a password to your crypto wallet.
Proof-of-Stake (PoS)
Proof-of-Stake is a consensus mechanism blockchains use to ensure that accuracy of data stored to the blockchain.
SHA-256
SHA-256 is a one way cryptographic algorithm that converts input into a random string of a fixed length.
Smart Contracts
A smart contract is a program that’s stored and operated by a blockchain network.
Every smart contract platform allows developers to create dApp (decentralized applications) that are compatible with cryptocurrencies.
The essence is to provide transparent financial tools and services to users.
Ethereum is a good example of a smart contract platform.
Solidity
Gavin Wood (co-founder of Ethereum) founded Solidity. It’s a high programming language developers use to create smart contracts.
With Solidity, developers can create immutable, unstoppable, and interactable programs.
Token
A token is a virtual currency or a denomination of a cryptocurrency.
Token represents a tradable asset that resides in its own blockchain.
When you hold a token, you can invest or use it for other economic purposes.
Validators
Validators are blockchain networks’ participants who verify incoming transactions. They keep the blockchain network secure and maintain its integrity.
Volatility
Volatility refers to how often the price of a particular cryptocurrency asset changes over time.
Wallet
A cryptocurrency wallet is a device or program that helps you store your cryptocurrency keys and allow you to access your coin.
Whale
Whale is a slang term used to describe the big players in the cryptocurrency market. They are wealthy individuals, institutional investors, and hedge funds.
Whitepaper
Whitepaper is a document a crypto project release to give investors technical information about the project, its concept and the roadmap on how to make the project successful.
Whew!
It’s been a long read. But I’m sure it's worth your time. So, do you know any other cryptocurrency slangs you would like to share?
Kindly drop it in the comment section. Don’t forget to share this post, you may be helping someone to understand the world of cryptocurrency better.