Cryptocurrency (crypto) pretty much got its start in 2009 with the creation of Bitcoin. Early adopters saw the advantages of the genius technology behind Bitcoin, but for the most part cryptocurrency laid dormant for several years. Due to media attention, word of mouth, and social media, cryptocurrency saw an influx of activity in 2017.
People from all walks of life, living all over the world took notice as the market capitalization of cryptocurancy began to rise. Wide-eyed and eager to make money, people began investing without understanding what this “new” fangled blockchain technology was. To their credit, there are a lot of confusing words, terminology, acronyms, and definitions that get thrown around in the crypto space, which can be difficult to keep up with.
Much like the stock market, the crypto market is a place where investors can see some serious gains or losses depending on how they invest. There is always a risk when investing money, but even more so when one does not understand the space they are operating in.
Our goal is to help educate people who are just entering crypto by putting the most commonly used verbiage into one easy to locate area. This is something we wish was available when we first started lurking around.
Keep in mind, these are basic definitions, not full historical or technical break downs of how the technology works. There are numerous articles out there that explain in depth that type of information. To make life simpler for you, we have compiled a list of informative articles, which we found extremely helpful. (click here to see our list).
Nonetheless, this is a good starting point.
Cryptography: The art of writing or solving codes.
Hash Function: Any function used to map data of arbitrary size to data of fixed size.
Cryptographic Hash Functions: Take data of any length as input and output a shorter, fixed length hash, which can be used for a digital signature.
Cryptocurrency: A digital asset, which works as a medium of exchange that uses cryptography to secure transactions, control creation of additional units, and validate asset transfers.
Blockchain: A digital database, similar to an open ledger.
Nodes: Network containing many computers.
Consensus: Group agreement among nodes through mining.
Mining: When nodes verify transactions/data, they are rewarded for their work, usually a predetermined/specific amount of currency native to that blockchain.
Block: When nodes verify a transaction, the information/data is added to a block (hence the term Blockchain) and protected using cryptography.
Symmetric Cryptography: Sharing a key between sender and receiver (cryptography techniques).
Wallet: A means (online/hot/mobile or cold storage) to store and protect digital assets with the use of keys.
Public Key: A key that is public and allows for receiving digital assets only (think of it as your email address).
Private Key: A key that is private/secret and allows the sending of digital assets (think of it as the password for your email address).
Smart Contract: A computer protocol which digitally facilitates, verifies, or enforces the negotiations or performance of a contract.
Coin: A digital asset native to its own blockchain (NEO, Bitcoin, Litcoin, ect.)
Token: A digital asset created on existing blockchains (ETH/ERC-20 or NEO/NEP-5)
Alternative Coin: Anything other than Bitcoin.
Store of Value: An asset that can be saved, retrieved, or exchanged at a later date and be predictably useful when used.
Peer-to-Peer: A distribution application architecture that partitions tasks or workloads between peers within a network.
Market Capitalization: Total dollar market value of a company’s shares or assets. Also known as Market Cap.
Bull Market: Trending up.
Bear Market: Trending down.
Purgatory Market: Limbo, not moving that much in either direction.
Exchange: A place to purchase or trade cryptocurrency.
Fiat Currency: Legal tender whose value is backed by the government who issued it.
Pump and Dump: An asset that within a short time has been deliberately manipulated by certain investors with the intention to increase price (pump). Once the value is raised, they quickly sell, causing the asset price to fall rapidly (dump).
Moon: When a coin or token takes off and the value skyrockets. Could be the result of natural or popular growth or due to a “pump and dump”.
Bag/Bags: Left holding a bag or bags of poo after buying an asset or assets when it was high and now it is worth much less.
Altcoin: Anything other than Bitcoin.
DApps: Decentralized Applications
ICO: Initial Coin Offering (similar to a Initial Public Offering on the stock market)
KYC: Know Your Customer (typically used by ICOs or exchanges as a way to verify their investors)
ROI: Return on Investment
P/E Ratio: Price-Earning Ratio (sometimes referred to as the price multiple or the earnings multiple is a calculation to help determine the amount of money an investor is willing to pay for current earnings)
TA: Technical Analysis
DCA: Dollar Cost Averaging (spreading buys and sells over a period of time to reduce portfolio volatility
ATH: All Time High (pertains to the highest price/market cap an assets has reached)
ATL: All Time Low (pertains to the lowest price/market cap an assets has reached)
FUD: Fear, Uncertainty, and Doubt or Disinformation (news, real or fake, that could or does causes sell off of an asset or assets)
FOMO: Fear of Missing Out (rushing into an investment while its on the rise). Could lead to holding bags
HODL: Hold On for Dear Life or Hold (don’t sell/long term/ride it out)
IoT: Internet of Things (a network of devices and other items equipped with software and other electronics that allow objects to connect and exchange information)
DLT: Distributed Ledger Technology (a consensus of digital data spread across multiple platforms)
PoW: Proof of Work (measure to deter service attacks and abuse by requesting and requiring work from the user/computer/network)
API: Application Programming Interface (set of subroutine definitions, protocols, and tools for building application software)
Dev Team: Development Team
New Oxford American Dictionary
Disclaimer: I am not a financial advisor, nor am I giving suggestions, recommendation, guidance, advice, or tips. I am simply stating my opinion and giving my observations of the market, Cryptocurrency, or other related topics. If you decide to act on or follow any of the information provided (past, present, or in the future) you are doing so on your own free will and not on my recommendation.
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Baker and Ashlie are the owners of Bourn Adventure. They enjoy traveling and meeting new people. Each of them has a different and unique background, which helps to shape their articles.