A list of Most Used Terms With Cryptocurrencies
ALT: An altcoin. Any coin that isn’t Bitcoin.
ATH: All time high. The highest price a given cryptocurrency has seen so far.
Bearish / Bullish: A bear market is when the price trend is stagnant or downward. A bull market is when the price trend is upward. Those terms are used in different ways, but as a general rule: bull means “up” and bear means “down.” A bull charges forward, a bear mauls your face, eats your picnic basket, and then hibernates in a cave for months.
Blockchain: In cryptocurrency, a distributed digital public ledger where transactions and balances of a given cryptocurrency are recorded. It is secured using cryptographic hashes. Not every cryptocurrency is blockchain-based. One should note that blockchains can do more than act as ledgers of transactions, they can store any sort of data in sequential blocks (their potential, and the potential of other hash-based systems is endless).
Block Height: Blocks are added to the block chain sequentially. The current block number is called the block height.
Block Size: Block size describes the amount of data that can be added to a given block on the block chain. Bigger blocks allow for quicker transactions, but as a trade off more hash power is required to mine the block. This makes transactions faster, but centralizes mining. In crypto almost everything is “a trade-off” just like IRL (In Real Life).
Bots: Almost all exchanges let users program or use a pre-programmed API AKA a bot. The bot can trade for you. It may seem like cheating, and in certain hands it can sure feel like it, but bots are important in many ways too. They can help implement strategies like trailing stop losses for you, and they can help make markets (all those little buys and sells that prevent wide spreads in a given market are generally bots). Like people, bots aren’t good or bad, they are neutral and depend on the ethics of the user.
Buy Low, Sell High / Buy High, Sell Low: To not lose money, you should aim to Buy Low, Sell High. Try not to Buy High, Sell Low. Remember to set stop losses and when all else fails, HODL.
Buying the Dip: If you are going to average into a coin, can’t do better than buying the dip. This means buying when the price goes down. For building a long term position it works much better than buying when the price goes up. It also helps the market as you are part of the force stopping the dip instead of part of the fork causing the run-up.
Cypherpunk: Exactly what it sounds like. People who are into cryptography as a means of social change. They were the computer nerds who gave life to cryptocurrency prior to Bitcoin. Its an identity, and its a term that describes a type of person regardless of whether or not they identify with it. If you have a heady paper published from the 1990s on nakamotoinstitute.org that describes the future of cryptography and digital currency, you are probably a Cypherpunk.
Correction: After hitting an all time high, a coin will generally enter a period of correction where it steadies out at a given price before rising again (ideally, sometimes a correction simply spurs on a “bear market”). In cryptocurrency coins often hit all time highs and then enter correction periods.
Crypto: A general term that refers to everything cryptocurrency.
Cryptocurrency/ Coin /Cryptocurrency Token / Token: Cryptocurrency Tokens AKA “Coins” AKA “Tokens” are digital representations of something, in this case of a digital asset. The ownership of cryptocurrency tokens are recorded on a digital ledger (generally a blockchain). NOTE: Sometimes the term token is used to specifically refer to tokens that are created on distributed platforms like Ethereum. ERC-2o tokens are all tokens that exist on the Ethereum network including Ether. Still, all cryptocurrencies are technically tokens.
Cryptography: The art/science of encoding and decoding. It is at the core of cryptocurrency to an even greater extent than the concept of currency is.
Cryptocurrency Wallet: Software that allows you to store your cryptocurrency tokens. Or more specifically, in wallets where you control your private keys, software that let’s you store your private and public keys (see “keys” below for an explanation).
DApp: A decentralized application, often stored on a blockchain. Its not hosted on a private server, it is hosted on many distributed servers. For example, Cryptokitties (a blockchain-based game that exists on the Ethereum platform where you collect digital cats).
DCA: Dollar cost averaging. Instead of going all in at once, one might want to dollar cost average into a volatile asset like a cryptocurrency to buy the average price.
Digital Asset: Not every cryptocurrency is really meant to be a currency. If it is a digital store of value, it can be called a digital asset (both Cryptokitties and Ether are digital assets, but only Ether is a cryptocurrency token).
DYOR: Do Your Own Research. Listening to the person on the internet is step 1, step 2 is doing your own research and making your own investment choices. A Reddit thread is not exactly the same as your fiduciary. For example, I have no specific certification that qualifies me to write a list of crypto acronyms. If you did your DD (Due Diligence) you would know that.
EW: Elliot Wave. A pattern that the price movement of assets tend to make. Used in technical analysis.
Fork (Cryptocurrency Forks): Like a “save as” for software. When an update is made to software, a new version and old version are created. Soft forks are meant to be updates to the existing software (generally a blockchain). Hard forks are meant to create two identical versions of the software which can both change after the hard fork occurs. Anyone who owns tokens on one blockchain owns tokens on the new one. There are other types of forks, but that is the gist. Forks have names like Lightning, Segwit, Bitcoin Cash, etc. I can’t get into every funky name here, but they are all either soft forks are hard forks meant to upgrade the chain or create a new one.
FOMO: The Fear Of Missing Out. The emotional response that makes people impulse buy tokens at their all time high. Try to not react to FOMO.
FUD: Fear, Uncertainty, and Doubt. The emotion that people try to invoke in others when they want to bring the price of a coin down or drum up headlines. It can be smart to react to FUD, as one can’t stop widespread FUD from spurring on a correction, especially after a coin just hit an All-Time-High. FUD is what causes economic depressions. It is what makes bubbles burst. FUD can be warranted or not.
Hash: A hash algorithm turns a large amount of data into a fixed-length hash (a string of characters that acts as a cryptographic key). The same hash will always result from the same data, but modifying the data in any way will completely change the hash. In cryptography most data is converted via hash algorithms, they are at the core of cryptocurrency tokens and blockchains.
Hash Power: The rate at which a given piece of hardware can mine a coin (mining is the cracking of cryptographic codes).
HODL: A misspelling of “hold” that now means Hold On for Dear Life. This is what you have to do when coins enter their common 20% – 80% corrections if you want to come out the other end still owning coins.
ICO: An initial coin offering. After a new token is created, it then has to be distributed. Sometimes to give a token value, to distribute it, and/or simply to help the devs raise money an initial coin offering is used (often using a smart contract to distribute the token).
Keys (Cryptographic Keys): A public key or public address is your wallet’s public address. It lets people send tokens to your wallet. A private key is unique personal password that lets you access an address in your wallet and send coins from it. Never share your private keys!
Laddering: Setting incremental buy and sell orders.
Lambo: A status symbol goal post / meme / literally a reference to a Lamborghini / invokes this mashup of a lamb and Rambo. Somehow everyone’s cognitive dissonance kicks in and there is this assumption that everyone who owns any amount of any coin will somehow be driving a Lamborghini within the next 6 months. While it isn’t impossible, the only real bit of insanity here is trading in your coins for a physical object like a car [even a very cool car]. SAD!
MA / EMA / MACD: Moving Averages (MA) track help people understand the trend of a coin over time. Moving Average Convergence Divergence (MACD) shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day Exponential Moving Average (EMA) from the 12-day EMA. When these lines cross they can tell us about the general trend of the asset. We would be looking for Death Crosses and Golden Crosses. Feel free to Google those terms, specifically check out investopedia.
Maker/Taker: Maker fees are fees associated with limit orders. Taker fees are fees associated with market orders.
Mining: Running software that cracks cryptographic puzzles and rewards you with coins for solving the puzzle. Mining is how transactions get added to the ledger.
Moon: Where you want your coin to pass by on its way to mars. Mooning is when a coin goes on a “run.” That is, when the price goes up quick. The opposite is a crash, correction, or dip. Can’t get a Lambo without mooning, can’t see the moon if you don’t hold. NOTE: You’ll make old school more virtuous crypto nerds cry if you say Lambo, moon, and HODL in the same sentence. So try to be polite and say Tesla, Stratosphere, and Laddering when appropriate.
Node: Any computer that hosts the blockchain. The block chain isn’t stored in one place, it is distributed, each node running it plays an important role.
POS: A proof-of-stake system. It is where mining is done by those who hold coins. The result is a bit like getting paid interest for holding coins.
POW: A proof-of-work system. It is where mining is done by those who have the hash power, time, and energy. The result is that time and energy is traded for rewards.
Pump and Dump (PND): People get together on telegram groups and then pump coins to the moon. Sometimes what looks like natural growth in crypto is a “PND.” If you don’t have a why, don’t buy. Try not to get FOMO and buy into the giant green candle. Pump and Dumpers who spoof to gather coins and then Pump and Dump a coin help in that they help raise prices of coins over time, otherwise they are sort of just a symptom of free markets and cause a lot of the instability you see in crypto. They are less grey area and more toward being black hat. Most exchanges ban pump and dumps and other manipulation tactics as a rule of thumb, but let’s be honest, the track record of actually stopping these is not great.
ROI: A return on investment. What you would ideally like to happen.
RSI: The relative strength index (RSI) is a momentum indicator that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements. It is generally smart to enter a coin when it has a low RSI.
Satoshis (Sats): The smallest fraction of a Bitcoin is called a Satoshi (in other words, a satoshi represents one hundred millionth of a bitcoin). Its named after Satoshi Nakamoto . Bitcoin is in many ways the center of the crypto economy, thus traders often speak in terms of Sats.
Satoshi Nakamoto: A persona created by the person or people who created Bitcoin. Satoshi may or may not exist and may or may not be alive. He/She sacrificed fame (and potentially fortune) to remain anonymous.
Shhh Coin: No one says “shhh,” but the alternative is not something I want to write on the site. This is what people call alt coins they don’t like.
Smart Contract: Software that acts as a contract. It can do anything you can imagine a digital contract doing. Ethereum’s network made the concept popular, but the reality is Bitcoin’s platform is essentially a blockchain based smart contract system with a native cryptocurrency token (just like Ethereum and Ether).
Stop Loss: If a certain price is hit, a market order will be triggered. If you are going short in a coin that is on a run, you should consider setting a stop loss (or laddering stop losses).
TA: Technical Analysis. Do you even do TA?! No real need to, but you should learn the basics if you trade. See tradingview.com. That said, even though crypto can be speculative, it is vital to do some Fundamental Analysis (FA) and other analysis types as well. A chart can only tell you so much, you also need to understand factors like demand, supply, tech, upcoming upgrades, the news, etc. Don’t make the mistake of thinking a coin “has to” go to X support level just “because TA.”
Transaction Fee: To send a transaction a fee must be paid (with most cryptos). This fee is a reward for miners. In Ethereum it is called “Gas,” it might have a unique name for a given cryptocurrency.
TX: A transaction number. This allows you to track a transaction. If you are freaking out because your transaction is taking too long, you probably just have to wait longer. Try tracking the TX.
Weak Hands: When too many new investors (in a given coin) invest in a coin the coin can said to be “in weak hands.” Long term investors who have built a position in a coin they love tend to HODL when the going gets rough, new investors with weak hands tend to get “weak knees” and panic sell in a correction.
XRP: Every coin has a trading symbol. For Ripple it is XRP, for Bitcoin BTC, for Litecoin LTC, for Ether (ETH), etc. Not many things start with X, and X is greater than W, and I didn’t want to end the page on a negative concept like weak hands so. Yeah, I mean, could have filed this under trading symbols… but like.