The Crypto Glossary Starter Kit
The exchange of trust for individual and institutional traders and investors.
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party”. Here are the words of Satoshi Nakamoto describing the fundamental principle of Bitcoin and the blockchain technology behind.
If you start looking into the crypto world, and when you dive deep in it, you may notice a real specific language and unknown terms unique to the crypto world. This article aims to be a database for all the specific terms to help you in your journey into the crypto world.
Address: Made of numbers and letters, it is the address you need in order to send and receive crypto payments. It works like a classic account number.
Example: BTC address
Airdrop: Marketing campaign that aims to promote the use of a cryptocurrency. Tokens (see below) are distributed either for free, either in return of actions such as downloading an app, sharing a link, etc.
Altcoin: Derived from "alternative coins", altcoins is the nickname often given to all cryptocurrencies other than bitcoins.
Example: “I use altcoins mainly to trade”
AML (Anti Money Laundering): International laws and regulations established in order to prevent the conversion of money from criminal activities by the use of cryptocurrencies.
API (Application Programmable Interface): A web API allows users to connect to specific services remotely in a client-server architecture.
Example: In the context of crypto, trading bots will connect to APIs to be able to trade on different exchanges.
ATH: All Time High. Means that a cryptocurrency has passed its price all-time record.
Example: “This token just broke its ATH! BCIO to the moon!”
Bear (market): Adjective used to describe the downward trend of a market. The word bearish can also describe a pessimistic feeling regarding a market price.
Example: “The market is in good dynamics, no need to be bearish”
BIP (Bitcoin Improvement Proposal): A technical document where suggested changes to the bitcoin protocol are submitted to the community. Proposals concern features, process or environment and are approved or rejected by the community.
Block: A digital file recording information of activities in a blockchain at a certain time, allows the chronical continuity of the “chain”.
Blockchain: (the fundamental technology behind all these crypto stories):
- A distributed database
- A ledger (chain) registering all transactions (block).
- Inability to change what is already registered in the chain: each block is made of information of the previous block, so full chain is continuously correct and is irreversible.
Note: There are different types of blockchains: public, like Bitcoin, where everyone can access and participate ; private where the access and participation are restricted to an approval or to a certain number of people.
Bot / Trading bot: Automated trading algorithm, executing orders at high speed. They are based on pre-programmed buy and rules.
Bullish: Expectation that price is going to increase. (Antonym: Bearish).
Example: “This token price might be stimulated by the market. All the altcoin market seems to be bullish.”
Centralised crypto exchange (CEX): Trading platforms that works like classical stock markets. In this case, a company that centralizes the order book, the transactions and the funds of their clients. Users do not have access to the private keys of their exchange account’s wallets.
Example: Binance, Coinbase, Bitfinex,....
Coin: Coins are developed on their own blockchain. Mining is crucial to have all transactions verified. We can divide coins based on the bitcoin blockchain from coins based on their own blockchain, for example the Ether on the Ethereum blockchain.
Cryptocurrency(ies): Designates digital assets relying on cryptographic technology.
Cryptography: Field of research aiming to study and develop solutions regarding encryption, privacy and security.
Decentralization: In an organization, it consists in distributing the key activities to different people in different places. Ownership is spread between the actors of the system.
Example : Typically on the Bitcoin network, the processing power, the history registering and transactions confirmations are ensured by any computing system registered as a node. Anyone with a good computing system can become a node.
Decentralized crypto exchange (DEX): In this case, the exchange is based on the blockchain technology, which means, no single point-of-failure exist. Moreover the DEX does not hold user’s funds or information. It only serves as a matching platform for trade orders.
Example: IDEX, DDEX, Uniswap...
Dip: Brutal but short downward movement in the price which quickly come back to its precedent level. This phenomenon presents good opportunities to buy.
Dump: Action of selling all (or a lot) of your coins.
Dumping: When a lot of people dump at the same time. Collective behavior causing a downward price movement.
Example: “ Wow! The market is dumping !”
Exchange platform: An online platform where traders and investors can buy and sell cryptocurrencies.
Example: “I subscribed to Paymium, an exchange platform that allows to turn fiat to cryptocurrencies”.
Fiat: Currencies issued by governments (Euro, U.S Dollars, British Pounds...).
FOMO (Fear Of Missing Out): In the context of trading, refers to the fear of missing a profitable investment. Driving the act of purchase, the FOMO can lead to a price increase.
Example: “FOMO is hitting, everyone is buying!”
Fork: Refers to an upgrade or a modification of a blockchain protocol. Can be led by anyone willing to update the primary version of the blockchain and be a consensual proposal among the community: a Soft Fork. Or not: a Hard Fork, leading to a split of the blockchain creating an alternative version of the network and the coin.
Note: A soft fork can simply corresponds to an upgrade of the blockchain when a Hard fork results in the creation of a new crypto. Typically Bitcoin Cash was created after a Hard fork in the Bitcoin blockchain.
Genesis Block: The first block of a blockchain network processed.
Halving: The event when the reward for mining blocks of a blockchain is halved. Regarding the Bitcoin, this occurs each time 210,000 blocks are mined (approximately every 4 years).
Hashrate: Speed at which a computer can turn data into a hash. Can also designate the total hash speed of all the computers of the network. It is calculated in Hashes/s.
Hash function: It is a program that translates data of any size into a fixed length serie of numbers and letters : into a hash. The information are secured and registered in hashes on the blockchain.
Hodl: From the verb "to hold". Originally an un-intentional mispelling from a member of the crypto community encouraging its fellow members to not sell their tokens.
Example: “Even if the market slows down, I'll HODL my tokens anyway.”
ICO (Initial Coin Offering): A fundraising conducted through the issuance of a token. Takes the form of a crowdfunding or a crowdsale campaign.
Note: It differs from a classical fundraising in this way that investors don’t acquires ownership in the company, they purchase tokens, speculating on the thriving future.
IEO (Initial Exchange Offering): An ICO conducted by an exchange platform or on an exchange platform.
Key (Public): Wallet address, shared publicly in order to receive funds and track transactions history.
Key (Private): The public and private key work through an asymmetric encryption process. The private key proves the ownership on the public address. It can be seen like : public key = id / private key = password.
Also known as the secret key.
KYC (Know Your Customer): Mandatory verification procedure conducted by exchange platforms on their new users. Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) measures.
Example: “I registered my KYC.”
KYT (Know Your Transactions): Set of measures took by exchanges in order to detect and sanction illegal transactions (darknet, scams,…).
Layer 1: Designate the first level of technology behind cryptocurrencies : the Blockchain.
Layer 2: Designate the second level of technology that would be implemented in the form of the lightning network system.
Lightning Network: With this proposed protocol came the distinction between 2 layers of technology in cryptocurrencies systems. It consists in a payment protocol implemented above the blockchain as a “second layer”. It was first designed to solve the scalability problem of Bitcoin.
Mining: It is the role of miners, which consists in setting up a computer hardware system (GPU or CPU) dedicated to solve complex cryptographic equations, verifying the transactions and ensuring the security of the system.
Moon: Used to express its optimism when the price of a cryptocurrency is expected to rise.
Example: “BCIO to the moon!”
Non Fungible token: Special type of Token, in this way that they have unique attributes, which makes their inner value different one another.
Example : “It is comparable to collectable items, such as stamp: they are all the same object and yet some are more valuables than others.”
Proof of Work: System of reward, in a blockchain organization, where the “miners”(computers securing, validating transactions and creating new blocks) are rewarded in function of how their hash rate power.
Proof of Stake: System of reward, in a blockchain organization, where the “validators”(computers securing, validating transactions and creating new blocks) are rewarded in function of how much they put “at stake” in the system.
Rekt: Intentional slang for “wrecked”. Designate a huge loss on the market. Similar to “being broke” or “being ruined”.
Example: “Beginners often get Rekt on the crypto markets”
Smart contracts: Works exactly like a normal contract but is fully digital and in the form of a program stored inside a blockchain. Thanks to the blockchain they are irreversible and distributed, which means they can not be falsified nor changed unwittingly.
They can be used to create a token, handle transactions and as register.
Stable Coin: Coins collateralized to another asset, like the U.S. dollar.
Token: A digital unit issued by a project and are different from coins as they do not use their own blockchain and so are not mineable. Ethereum is the blockchain that hosts the most tokens today. Most tokens can be classified in 3 main groups : Security token, Utility token and Equity token.
Wallet: A digital secured wallet, used to store cryptocurrencies. We distinguish two types of wallet:
- Hot storage wallet, connected to internet and allows quicker use of cryptocurrencies
- Cold storage wallet, not connected to internet, known to be safer. Usually hardware equipment.
Whale: Used to define the largest holders of coins and tokens. decisions of these cryptocurrency owners can have important consequences on the markets.
Example: “The market is suddenly bearish, the whales must be selling”
The exchange of trust for individual and institutional traders and investors.