The Complete Beginner’s Guide to Cryptocurrency Terms and Slang

Crypto Terms and Slang
Crypto Terms and Slang

The cryptocurrency market is full of new terms and slang. As a beginner, it is important for you to know these terms and their meaning to ease your blockchain and crypto adventure. Understanding the meaning behind each term, slang, will further improve your knowledge about what the crypto sphere is all about. In fact, there’s no quicker way to know about blockchain and cryptocurrency than understanding the terms, acronyms, and slang used in the cryptocurrency space. You will come across this terms when you are on social media sites, cryptocurrency forums on Reddit, bitcointalk or reading a cryptocurrency whitepaper. The list is just inexhaustible.

This guide contains 50 crypto terms and slangs alongside their meaning as used in the cryptocurrency market.

General Cryptocurrency Terms

BTC: is the acronym for bitcoin; a peer to peer electronic cash

Satoshi Nakamoto: is the pseudo-anonymous name used by the person or group that invented bitcoin in 2009. Satoshi minted the first unit of bitcoin, authored the whitepaper and deployed bitcoin’s original reference implementation before his disappearance from the public.

Satoshi: the first name of the pseudo-anonymous creator of bitcoin is also used to refer to as the smallest fraction of the digital currency. 1 Satoshi = 0.00000001 BTC and 100,000 000 Satoshi = 1.0 BTC

Miners: these are individuals who mine cryptocurrency like bitcoin they’re also involved in validating transactions on the cryptocurrency blockchain.

Mining: involves the process of adding, validating new transactions on the blockchain using special software to solve complex maths problems. Creation of new unit of cryptocurrency is done through mining.

Digital Assets: a new class of assets that are used as a medium of exchange uses cryptography to secure financial transactions.

Token: also referred to digital assets however they are utility coin, which can be tradable on exchanges. These coins are created on a blockchain. Ethereum blockchain accounts for over 70% of tokens created in the crypto sphere.

Hard Fork: it’s a term used when a single cryptocurrency split into two. This result due to changes in protocol or when the blockchain diverges. Hardfork also occurs when two or more blocks have the same block height.

Hash ID: also referred to as transaction hash, it’s a string of random numbers and letters used to identify a transaction on the blockchain. Each transaction initiated on the blockchain has its own unique hash id.

Altcoin (ALT): is a term used for alternative Cryptocurrencies, all crypto coins invented after bitcoin are generally referred to as altcoin.

Cryptocurrency Exchange: these are websites where users can buy and sell crypto coins in exchange for other digital currency or a stablecoin. Examples of cryptocurrency exchanges included Binance, Bittrex, and Poloniex.

Crypto Wallet: as the name suggests is a cryptocurrency wallet that is used to store digital currencies, tokens. It acts as a bank for the individual who can send and receive coins using the wallet. (Similar to a bank account where you can deposit and receive fiat). A cryptocurrency wallet can be either hardware or software. Hardware wallets, however, are more secure than software wallet.

2FA: known as Two Factor Authenticator is an additional layer of security that further secures the account of users aside from the normal username and password. 2FA comes as a mobile security application that generates random numbers for users to verify their identity before granting them access to their account or services.

P2P Exchanges: Peer to Peer exchanges unlike cryptocurrency exchanges allows individuals to buy and sell cryptocurrencies sometimes without disclosing their personal information. Examples of P2P exchanges include LocalBitcoins, Paxful.

Private Key: in the context of cryptocurrency is a string of cryptography code that allows users to have access to their cryptocurrency. Private key gives only the original user the authorized access thereby protecting the coins from theft. It should be kept safely.

Public Key: related to private keys, the public key is a random numbers and letters cryptography code often changes from time to time. Allow users to receive cryptocurrency into their wallet. Just like your bank account number.

Stablecoin: as the name suggests are cryptocurrency that is backed with a 1:1 ratio with reserve assets such as US Dollars, gold, oil.

ICO: is an acronym for initial coin offering, crypto version of IPO (initial public offering): a new model of fundraising often used in the cryptocurrency market to raise money for a new project.

Whitepaper: is proper document officially released by blockchain/crypto project which contains all the important details of the cryptocurrency this often includes the technical aspects, products, and the problem it’s intended solving. The whitepaper virtually all the cryptocurrency in the market has its own whitepaper.

KYC: apart from the term related to bank and anti-money laundering regulations, Know Your Customer (KYC) comprises of important details required by crypto exchanges, wallet and new crypto start-ups for identity verification before the user can take part in their ICO.

Gas: is the name of the transaction fee on the ethereum blockchain, the fee varies, and is often decided by miners on the network who set a gas price for transactions.

GWEI: is the smallest fraction of ether (ETH), the cryptocurrency used on the ethereum network. 1ETH = 1,000,000,000 GWEI.

CoinMarketCap (CMC): is a crypto resources website where all the cryptocurrency in the market are listed. It’s a very useful website for crypto investors as it contains some of the important details about a particular coin such as current and past price, 24-hour volume, circulating supply, numbers of exchanges where it’s listed among other details.

Airdrop: is a term frequently used to refer to as free distribution of coins or digital tokens to the crypto community in exchange for some details. Just like ICO, airdrop is also a new model used by blockchain project.

DEX: Decentralized Exchanges (DEX) as the name implies are platforms where users can trade, buy, sell and exchange cryptocurrency with other crypto coins in a decentralised way. One major difference between decentralize exchange to the normal exchanges is it does not requires any KYC or registration process. Investors trade on this market freely with little or no restrictions and there’s no intermediary that manages or controls users funds.

Blockchain Related Terms

Blockchain; is the technology that underlies bitcoin and many cryptocurrencies. The blockchain is a distributed public ledger used to continuously records and update transactions without a third-party.

Blocks: the block contains data of value (digital piece of information) that is cryptographically stored on the public ledger (blockchain). Data stored on the block includes transactions, date, time).

Dapps: abbreviated form of decentralized application. Dapps are built on another blockchain, for example, the ethereum blockchain has over hundreds of Dapps built on it.

POW: refer to as Proof of Work is a consensus mechanism. The POW algorithm is primarily designed to prevent and secure the network from cyber attack. POW involves the use of miners who confirm and validate transactions. Proof of work consumes a large amount of energy as it requires large computational power. Bitcoin is an example of cryptocurrency that makes use of POW.

POS: is another popular consensus mechanism used by cryptocurrencies. Unlike POW, miners in POS stake a large portion of their coins on a transaction block to claim rewards, the more of their coins they stake the more their chances. To become a miner several factors are involved such as the number of coins owned and how long they have owned them for. Compared to POW, proof of stake require less computational power and is more efficient. NEM is a cryptocurrency that makes use of the POS algorithm.

Transaction/Miner’s Fee; is an expense fee that is attached when a user intends to send cryptocurrency. This fee is collected by the miners in order to include and validated transactions on the blockchain. Transaction fee varies depending on the wallet provider.

Consensus Method: behind every cryptocurrency is a consensus mechanism, is a decision-making process whereby participant of the blockchain network comes to an agreement to support a decision. Examples of consensus mechanism include Proof of Work (PoW), Proof of Stake (POS).

Node: refer to an individual computer that connects to a network. They make up (larger data structure) to form the blockchain network. Each cryptocurrency has its nodes which help to maintain transactions records and validation.

Masternode: similar nodes, masternode is computer full node or wallet that keeps the full blockchain copy real-time. However, masternode performs a different function which makes it different from normal nodes. Some of the functions include, improve the privacy of transaction on the blockchain network, and participate in governance voting amongst others.

DAO: an acronym for Decentralize Autonomous Organization sometimes referred to as Decentralized Autonomous Cooperation (DAC). It’s an organization that is transparent and not controlled by a central government rather they follow rules encoded in a computer program.

Testnet/Mainnet: Every blockchain has a testnet and mainnet. A testnet is a different blockchain, transaction blocks, and coins however the specifications and mode of operation are same to a mainnet. The difference between the two is a Testnet shows the working prototype of the blockchain while Mainnet is the end product that is launched and available for public use.

Cryptocurrency Trading Terms

Hodl: is slang used in the cryptocurrency market, this simply means holding a cryptocurrency for a long time instead of selling quickly.

FOMO: an acronym which means Fear of Missing Out. It’s a slang used by crypto traders in the market. FOMO is driven by emotions and often leads traders into buying the hype. It’s a huge factor to consider when trading cryptocurrency.

FUD: yet another acronym and slang used in the crypto market to as Fear, Uncertainty, and Doubt. FUD too often occur due to misleading information in the market. Investors are left with fear and doubt of selling or holding.

Whale: is a term used in the crypto sphere to describe an individual who owns a large portion of a cryptocurrency.

Bear/bearish: is a term used to in crypto trading to refer as negative price movement. A bear is an individual who believes the price of coin or token will decline, due to this they enter the market with a sell. Traders who are said to be bearish believe the price of a coin will keep going downward.

Bull/bullish: in a similar vein, referred to as positive price movement, a bull is simply an individual who enter the market with a buy believing the price of coin why rise. Traders who believe the price of a coin will increase are said to be bullish.

TA: an acronym which means Technical Analysis, it involves reading and analysing the chart of a cryptocurrency to predict the future price movement.

FA: refer to as Fundamental Analysis. Unlike TA, the fundamental analysis predicts the future price of a coin using news, partnership and other details.

DYOR: a slang which means ‘Do Your Own Research’ frequently used by crypto traders in the market as a form of disclaimer on the information they are sharing with other traders imploring them to do their own due diligence on the info provided before taking any decisions.

OTC: simply means Over the Counter trading.  Is another way of buying and selling cryptocurrency? But this requires a broker as orders are not listed. This form of trading is often employed by individuals and mostly financial institution who intends to buy cryptocurrency without anyone knowing.

Shitcoin: is a term used to refer to coins or tokens that are worthless. A coin can be termed a shitcoin based on some reasons; when its result to an exit scam, when interest fails to materialize or when the price is purely pump and dump.

Moon: is another slang that is used when a coin is experiencing a positive price movement in the market. It’s one of the slang popularly used by traders on social media sites like Twitter and Facebook.

Pump and Dump: is an act often orchestrated by dubious crypto traders to pump the price of a coin (most time a shitcoin) and when others who are unaware get in and buy, they dump it on these traders who are left to bag hold those coins. Many times you find them form groups on Telegram and WhatsApp just for this purpose.

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Passionate about the fintech space in Africa, blockchain enthusiast, cryptourrency advocate, freelance writer, open to learning new innovations #InnovateAfrica