51 Crypto Terms You Must Know !
If you’re just new to the crypto world, all those loose crypto terms can be very intimidating. To get you started, we’ve listed the most common crypto terms for you below. If there are any terms you’re missing, please let us know!
A 51% attack represents the situation where more than half of the computing power within a given blockchain comes from one person or one concentrated group. This ensures that this group gains complete control over this blockchain. They can then, for example, stop all mining, stop all transactions or issue every coin of this particular blockchain an infinite number of times.
A crypto coin address is the location where you keep your crypto coins and from where you send and receive these coins. You could compare it to your home address. This address usually consists of a whole row of numbers and figures, which looks something like this: 2ABihlUXRWFnfl10Pras6viiZ2OEiCJyYJZ. This address is the public part of the two encrypted keys) that are needed for the holder to verify a transaction.
This is a type of giveaway action by the founders of a cryptocurrency, giving away some of their tokens or coins. The action is for a short period of time. This is done to give the tokens name recognition and to distribute the tokens. Interested in Airdrops? You should definitely check ours!
This name is used for all crypto coins that are not Bitcoin (alternative coins).
This is the term given when money flows to altcoins faster than Bitcoin. In other words, when investors buy more altcoins than Bitcoin.
Ask Me Anything. A (usually) new crypto project holds a session for users to ask them questions about the project. Reddit and Discord are often used for this purpose.
This stands for an Automated Market Maker. That is, it is a kind of decentralized exchange platform (DEX). A mathematical formula is used to price assets. In a traditional stock market, it works differently, and assets are priced according to a pricing algorithm.
Buying and selling the same asset on two exchanges to take advantage of small price differences.
ASIC stands for Application Specific Integrated Circuit. This is basically a chip created specifically to perform one specific task. For this reason, ASIC mining allows you to mine coins much faster than an ordinary computer or laptop could. For Blockchain, for example, special ASIC miners have been created that only deal with solving the SHA-256 algorithm (the algorithm used to mine Bitcoins). However, crypto coins are now being created that are impossible to mine with an ASIC.
ATH means All Time High. This is the highest price a cryptocurrency has ever achieved.
A bag in the crypto world refers to the coins and tokens you hold as part of your portfolio. Usually, the term is used to describe a significant portion of a particular cryptocurrency. For example, a “moon-bag” is filled with the coins you currently hold that you think will make you rich.
A bear beats everything down with its claws. Therefore, a market in which the trend is in a downward direction is called bear market. Sentiment is then negative, and prices are predominantly falling.
A blockchain is a type of digital ledger of transactions that operates from a decentralized network. Thanks to cryptography, a ledger can be maintained by a large number of computers that together create the network. Each time a new transaction is made, it is added to the blockchain as a new block by the miners with date, size, etc. If you want to know more, read this post !
The blocks (or blocks) are the ‘pages’ in the digital ledger, the blockchain. These are files with immutable data that are permanently stored on the blockchain.
The block reward is the reward miners receive for finding a mathematical solution related to that block. With Bitcoin, this reward is 25 Bitcoins per block mined. This halfs every 210,000 blocks.
Buy the f*cking dip! This is shouted when the price of a cryptocurrency or the market is in a dip. People tend to get out because they are afraid of losses. But a dip offers opportunities to buy a coin or token cheaply before it rises again.
Coolest and most innovative project in the blockchain space 😉
Buy the Dip
Same as BTFD only without the strong words.
A bull stabs with his horns and throws you up. Therefore, a Bull Market is a market where the trend is in an upward direction. Prices are rising and sentiment is positive.
This involves storing cryptocurrency offline. You do this when you want to store coins safely for a longer period of time. A hardware wallet is an example of cold storage.
Also called secret writing. This focuses on techniques for hiding or encrypting information to be sent, so that someone who has access to the channel on which it is sent cannot possibly find out what kind of information has been sent.
A type of digital currency that is based on cryptography. This refers to Bitcoins and the other altcoins.
A DAO is a “decentralized autonomous organization” and can be described as an open-source blockchain protocol governed by a set of rules, created by the elected members, that automatically perform certain actions without the intervention of intermediaries.
These are decentralized applications (dApps) are digital applications or programs that exist and run on a blockchain or P2P network of computers rather than a single computer, and are beyond the reach and control of any single authority. If you are interested in dApps, then you should definitely check ours!
DeFi – Decentralized Finance
DeFi, or decentralized finance, is a new way of conducting financial transactions through applications. It excludes traditional financial institutions and intermediaries and is conducted through the blockchain. Think of it as removing brokers, exchanges, banks and other intermediaries from the equation.
A DEX is a Decentralized Exchange or a decentralized exchange. Decentralized exchanges are a type of cryptocurrency exchange that allows direct peer-to-peer cryptocurrency transactions to occur securely online without an intermediary. No identification is required on these exchanges.
Distributed & Central Ledger
A distributed ledger is an agreement of shareable, shared and synchronized data, which in this case is distributed across several networks. These networks are then distributed among many computers.
With a centralized ledger, the synchronized and shareable data is controlled by one network or individual.
This means that a particular crypto coin can be issued more than once. This stops the blockchain from working.
A transaction of extremely few coins that represents almost no value, but takes up space on the blockchain.
This stands for Elliptic Curve Digitial Signature Algorithm and is a lightweight cryptographic algorithm used to sign transactions on the Bitcoin protocol.
An ERC20 token is similar in some ways to Bitcoin, Litecoin and any other cryptocurrency; these tokens are blockchain technology-based assets. They have value and you can send and receive them. These ERC20 tokens are only issued on the Ethereum network.
A concept where financial assets are held in escrow by a third party to protect them during an asynchronous transaction.
A currency that is created out of thin air and only has value because people give it value.
“Fear Of Missing Out”). This often occurs when a crypto currency rises in value so quickly that people are afraid, they will miss the boat to riches, driving the price per coin even higher. Don’t miss our BKN Launch, its going to moon! (Example of FOMO)
“Fear, Uncertainty, Doubt.” This crypto term is often used to describe the volatility of the crypto market.
A fork happens when an alternative operational version of the current blockchain permanently separates itself. This can happen in three different ways:
Because of a 51% attack
Because there is a bug in the program, Because new substantial changes need to be made to the current blockchain.
The first-mined block in a blockchain
This means that the mineable reward is halved. This happens every time a certain amount of blocks are mined. For Bitcoin, for example, this occurs every 210,000 blocks.
A mathematical process that takes a variable amount of data as input and produces a shorter result of a set length.
This is the rate at which mathematical problems can be solved for given blocks. In other words, the speed at which a new block can be discovered. For example, ASIC mining causes the hash rate to go down.
Originally meant ‘Hold’, but in a tipsy mood a chat participant kept talking about how he was ‘hodling’ his coins. This very quickly became a meme and now it has become ingrained in the crypto world and means holding your crypto coins for the long haul. Sometimes ‘Hold on for dear life’ is also meant by it.
Stands for Initial Coin Offering. This is a particular form of crowdfunding, where the public can invest in a blockchain startup in advance. As a thank you for financial support, they are rewarded with a certain amount of coins.
An IDO refers to a project launching a coin or token via a decentralized liquidity exchange. This is a type of crypto asset exchange that depends on liquidity pools where traders can swap tokens, including crypto coins and stablecoins. Here in Brickken, we are launching our BKN utility token via an IDO. Read more!
This is an Initial Exchange Offering. It is a variant of initial coin offerings (ICO), which is directly managed by cryptocurrency exchanges.
This stands for “Know Your Customer. It refers to the verification process customers must go through to verify their identity and link it to a cryptocurrency wallet. Crypto exchanges gain a better understanding of the potential customer’s activities and can determine whether they are legal in nature. For many central exchanges (CEX) a legal requirement to allow customers on their exchange. If you want to know more about KYC process, head to our FAQ!
Mining / Mines
Mining is the crypto term used for looking for new block rewards. For finding and solving blocks, a reward is distributed to the miner.
When a cryptocurrency “goes to the moon,” it means that people think the price will rise exponentially.
Multisignature is a form of technology that ensures additional security is added to bitcoin transactions. Multisiganature addresses require another user to sign the transaction before it can be added to the blockchain.
An NFT is a Non-fungible Token. They are unique and non-exchangeable. They live on the blockchain.
A node is a computer connected to the Bitcoin network that uses a client whose job it is to validate and forward transactions. Each node receives a copy of the current blockchain, which is automatically downloaded when it joins the Bitcoin network.
This stands for peer-to-peer. A (crypto) term referring to computers that network directly with each other without a central server between them.
This is a class of cryptocurrencies that enable private and anonymous blockchain transactions by disguising their origin and destination. Some of the techniques used include hiding a user’s true wallet balance and address and combining multiple transactions together to circumvent chain analysis. Examples include Monero (XMR) and Zcash (ZEC).
A series of letters and numbers kept secret by the user. It is specifically designed to sign a digital transfer using a public key. In the case of Bitcoin, this is a private key that must work with a public key.
A string of letters and numbers that is public and therefore can be viewed by anyone. It can be used in conjunction with a private key to sign a digital transaction.
Pump and Dump
This is a crypto term used for the unethical practice of pumping and dumping a relatively cheap coin. The coin is first obtained very cheaply by a certain group of individuals who then “pump” it (increase its value significantly) by advertising it heavily. When the coin has increased in value sufficiently, they dump their coins for a large profit, while a large group is left with a loss.
Stands for Proof-of-Work. This is a system that links computer power to mining capacity. The more powerful your computer can mine, the more you are rewarded for this by the greater chance of finding Bitcoin.
Stands for Proof-of-Stake. This is a system that links the stake in a particular crypto currency to the mining capacity. This means that the more tokens you own of a particular crypto currency, the more you can mine of it.
The PoW and the PoS are both consensus algorithms. This mechanism allows you as a user, but also machines, to order in a distributed environment. All agents, the nodes of a blockchain, must agree on a single source of truth. Even if some of the nodes fail. This means that the system must be fault-tolerant.
Stands for Delegated Proof-of-Stake. This is a variant of Proof of Stake that uses supernodes or masternodes to approve transactions.
A coin created for the sole purpose of making its creator rich (usually by pump and dump).
This is often accompanied by a pyramid scheme. A pyramid scheme is a business model where members are recruited through a promise of payments or services for enrolling others in the scheme, rather than providing investments or selling products.
The cryptographic algorithm used for Bitcoin’s PoW system.
A signature is a mathematical process that allows someone to prove ownership of their wallet. This can be done, for example, by using a private key.
A two-sided smart contract is an immutable agreement recorded on the blockchain that contains specific logical actions, similar to a “normal” contract. Once signed, this contract can never be changed. A smart contract can be used to establish certain benchmarks that must be met in exchange for money. Read this blog post if you want to know more!
A whale is someone who owns a large percentage of a crypto currency. Often this also allows a whale to manipulate the price of this crypto currency.
A document that describes in detail the protocol of the cryptocurrency. Check ours!
Yield farming, this is also known as liquidity mining. Allows you to use cryptocurrency holdings to generate a way for rewards. In simple terms, this means locking cryptocurrencies and receiving rewards. This is done on DeFi projects.