Explore the Most CommonCrypto-Related Terms
For those of you who are just entering or taking interest in the cryptocurrency market, it can be a bit confusing to read an article or a post including many new vocabularies. This is why we have compiled a list of the most used terms and phrases for you!
Frequently Asked Question
Cryptocurrency
It is a virtual currency secured by cryptography to ensure the safety of the transactions. Most of the cryptocurrencies are decentralized, which means they’re immune to government interference.
Fiat Money
Traditional currencies (EUR, USD, CZK) as opposed to cryptocurrencies (BTC, ETH, XRP). Fiat currencies are government-issued and function as a medium of exchange.
Altcoin
Low market capitalization cryptocurrencies that make-up nearly half of the total cryptocurrency market capitalization. It originated as a term to describe all coins other than Bitcoin.
Stablecoin
These cryptocurrencies are designed to be pegged to another cryptocurrency, fiat money, or commodities. Examples: Tether (U.S. dollar), PAX Gold (gold), Dai (cryptocurrency collateral).
Dead Coin
Cryptocurrencies that have been abandoned and there is nearly no demand for them. These coins usually vanish due to hacks, scams, or just lack of interest as they don’t offer anything special.
Memecoin
A cryptocurrency that is associated with or inspired by memes (internet jokes). Dogecoin was inspired by the “wowest” meme of a doge and Shiba Inu is dubbed to be the “Dogecoin Killer”
Shitcoin
According to Urban Dictionary, shitcoins are a great way to lose your money. This title is given to cryptocurrencies that are useless and have no utility or value (Dogecoin, Shiba Inu, SafeMoon).
Centralized Money
Centralized currencies are controlled and regulated by financial institutions (government), transactions are not anonymous, and there is a possibility of your funds getting frozen.
Decentralized Money
Decentralized currencies allow you to avoid government entities and take control over your money. You can make transactions without having to pay high fees to the intermediaries.
ICO
Abbreviation for Initial Coin Offering. ICOs are usually done by startups to raise funds and skip the time-consuming capital-raising process. Some ICOs yield massive returns for investors.
Blockchain
Simply, it is an unchangeable public record of all transactions happening on the network. It’s called blockchain as it consists of “blocks” that contain the information of every transaction.
Block
Each block contains a hash of the previous block, its own cryptographic hash, a timestamp, and transaction data. We have prepared a simplified illustration for a better understanding.
Blockchain Forking
There are two types of blockchain forks (soft fork and hard fork). This happens when two or more blocks have the same block height and the blockchain diverges into two paths forward.
Mining
Miners have to solve an extremely complex puzzle to receive cryptocurrencies. Once the puzzle is solved and a new block is successfully created, miners receive a block reward.
Mining Difficulty
Measurement of how difficult the cryptographic puzzles are. The level of difficulty can increase or decrease over time based on the number of miners (computing power) in the network.
Block Reward
It is a certain amount of coins given as a reward for each mined block. Example: In 2021, for each Bitcoin block added to the blockchain, miners received 6.25 Bitcoins as a reward.
Gas Fee
Let’s preface this by saying, this fee has nothing to do with gas. You have to pay for the computing energy required to validate transactions and that transaction fee is called a gas fee.
Bear Run
During this time the supply is greater than demand and the value of the cryptocurrency is falling, encouraging selling. The average length of a cryptocurrency bear run is 289 days.
Bull Run
During this time the demand is greater than supply and the value of the cryptocurrency is rising, encouraging buying. The average length of a cryptocurrency bull run is 991 days.
Adoption Curve
This curve indicates the adoption of new technology (or cryptocurrency) by the masses. In the illustration, you can see the cryptocurrency adoption curve compared to other inventions.
All-Time High (ATH)
ATH is an abbreviation that stands for “all-time high”, the highest point that a cryptocurrency has reached (whether it’s in price or in market capitalization) since its listing or inception.
All-Time Low (ATL)
ATL is an abbreviation that stands for “all-time low”, the lowest point that a cryptocurrency has reached (whether it’s in price or in market capitalization) since its listing or inception.
Metaverse
A network of online 3D virtual worlds (similar to those in online games like Minecraft or VRChat) where users can hang out, work, play, etc. There are even Metaverse NFT galleries you can visit.
Non-fungible Token (NFT)
NFTs are unique digital works of art. You can buy, sell, or simply just keep them. But why would anyone bother buying an NFT when you can just take a screenshot of it? Taking a screenshot of NFT doesn’t make you the rightful owner or grant you copyright over the use of the artwork. Ownership of each NFT is recorded on the blockchain and no one can modify this record.
Smart Contracts
They are programs stored on a blockchain to simplify trades. They are typically used to exchange anything that has a value and perform the functions of a middleman in these transactions.
Staking
The practice of earning rewards (on average 5% to 20% APY) by putting your cryptocurrencies to work. During staking your cryptocurrency assets are locked until the staking period is over.
Yield Farming
The practice of lending cryptocurrency assets to generate returns in the form of additional cryptocurrency. Yield farming is popular due to its sizable profits in the range of 1% to 1,000% APY.
Fear of Missing Out (FOMO)
This refers to someone feeling like they’re missing out by not owning a certain cryptocurrency when others are gaining profits from the said cryptocurrency investments.
Fear, Uncertainty, and Doubt (FUD)
FUD can cause the value of a particular cryptocurrency to drop. These feelings are not based on real data, it is a general pessimistic mindset that spreads through mass media.
Hold On for Dear Life (HODL)
This acronym is used by investors who refuse to sell their cryptocurrency despite the price increasing or decreasing as they expect the value of the cryptocurrency to continue rising.
Pump and Dump
An act of someone pumping the price of a cryptocurrency up in order to sell and gain profit. This tactic is mostly used with shitcoins which are deemed worthless once dumped.
To the Moon
A cryptocurrency can be described as going “to the moon” when it is believed to be under a strong upward market trend. Many also often use this phrase to pump a shitcoin.
