HODL? FUD? DAOs? Fork? Mooning? Rug Pulls? Private Keys?
The list of crypto buzzwords is growing by the day. Here is a guide of all the jargon you need to know.
51% attack – an attack on a blockchain such that one or more entities can take over the blockchain network by retaining more than 50% of the power (mining). Such power would give the attacker the potential to manipulate the blockchain.
Address – an entity that can receive, send and hold a crypto asset such as Bitcoin, Ethereum and so on.
Bitcoin (capital B) – the first peer-to-peer electronic cash network created, inspired by Satoshi Nakamoto’s white paper.
bitcoin (lower case b) – the first cryptocurrency with a supply of 21 million bitcoin that can be bought, sold or held on the Bitcoin network (blockchain)
Blockchain – a ledger (typically decentralized) of transactions on a network of computers. Such ledger lives simultaneously on copies of the same transactions that are time-stamped on a global network of computers (“nodes”) open to anyone.
BTC – Bitcoin ticker used by exchanges, wallets and similar to reference Bitcoin.
Cold storage – considered one of the most secure mechanisms to store cryptocurrencies offline, typically through hardware devices (wallets) such as Trezor, Ledger, BitBox and others.
consensus – the state of a blockchain where all nodes in the network agree on the transactions to be included on the blockchain and in what order.
Community – referred to as the groups and clusters of people, fans and investors supporting any given token and its purpose. Community members are often referred to as members of the “fam” (short for family).
Cryptocurrency (also referred to as “crypto” or “coin”) – a digital asset operated and maintained on a blockchain with the properties of fungibility, divisibility and transportability and whose movements can be easily tracked.
Cypherpunk – a person advocating strong privacy preserving technologies (such as encryption) often to evade government scrutiny and oversight.
DAO – decentralized autonomous organization managed through voting on a blockchain.
DeFi – short for Decentralised Finance, describes financial services such as lending and savings accessible through decentralized protocols and smart contracts directly on the blockchain without the need for financial intermediaries.
exchange – a business that enables the trading of one digital asset to another, including the conversion of traditional (“FIAT”) currencies into cryptocurrencies and vice versa.
ETH – Ethereum ticker used by exchanges, wallets and similar to reference Ethereum.
FIAT currency – traditional currencies such as USD, EUR, GBP issued and controlled by central governments.
Fork – in blockchain technology terms refers to the copying of open source code or data in order to create a modified version of it. Effectively this process seeks to create a parallel version of an existing technology in order to adopt existing code and then process alterations to the new code without affecting the existing one. Many cryptocurrencies are forks of the original Bitcoin blockchain.
FUD – Fear, uncertainty and doubt. A term largely referred to in twitter and other media platforms to dismiss the legitimacy of information or criticism issued against a cryptocurrency, project or similar
Gas – the fee paid to have transactions processed on the ethereum blockchain.
Hashrate – a measure of the security of a blockchain expressed as the amount of computing power on a blockchain network.
HODL – “Hold Onto Dear Life”. Originally a misspelling of the word “hold” with respect to the holding of a digital asset (as opposed to speculating and selling it prematurely).
Hot wallet – a wallet to secure cryptocurrencies online. Considered somewhat less secure that cold (offline) wallets as they are more vulnerable to online attacks.
Howey test – determines what qualifies as an “investment contract” and would therefore be subject to U.S. securities laws. A mechanism for cryptocurrencies to assess whether they may be considered securities and subject to relevant laws.
ICO – Initial Coin Offering, in short the equivalent of a financing round via “coins” or tokens for a blockchain / crypto related project.
miner – a person or entity running cryptocurrency software whose purpose is a) to win new coins minted by such software; and b) provide security to the network through the computing power provided to it.
mint – creation (aka, minting) of new units of cryptocurrencies.
multisig – a security feature for crypto wallet that requires the majority of a pre agreed number of signatures to sign a transaction, eg. 2 out of 3, 3 out of 5 and so on. Avoids the “single point of failure” should a private key end up in the wrong hands as such person would be unable to make a transaction without controlling the majority of the keys.
node – a computer that runs the software of a cryptocurrency and maintains a historical copy of the blockchain network upon which such cryptocurrency resides.
Off Ramp – referred to as a venue (eg. crypto broker or exchange) where cryptocurrencies such as BTC or ETH can be re-converted into traditional currencies (eg. USD, GBP, JPY etc).
On Ramp – referred to as a venue (eg. crypto broker or exchange) where traditional currencies (eg. USD, GBP, JPY etc) can be converted into cryptocurrencies such as BTC or ETH.
Private key – in cryptocurrency it is the equivalent to a “password” to your bank account, except far more complex and difficult to crack as it consists of a cryptographic string of letters and numbers. For any given public address (think of it as the public “account number”) there is a private address (i.e. the “password”).
Proof of Stake – refers to the method of securing and appending new data to a blockchain by having computers (referred to as validators) on the given network to lock in (hence “stake”) a certain amount of tokens in exchange of the right to participate in the process of agreeing on which data is to be appended to the blockchain. Validators receive rewards in the form of tokens in exchange for participating in this process. This mechanism is a significantly less energy intensive mechanism than proof of work (read below) and relies in having users in its network put skin in the game via the staking process as a mechanism to keep the network safe. Were any validators looking to corrupt the data on the blockchain, they could run the risk of losing their staked tokens.
Proof of Work – refers to the method of securing and appending new data to an existing blockchain through a process that requires computers to carry out energy intensive complex mathematical calculations. Miners compete with one another by devoting computing processing power (CPU) miners put towards solving such cryptographic calculations in exchange for the chance of earning a reward, for instance in earning bitcoins on the Bitcoin blockchain. The cost of energy required for this processes is designed to discourage “attackers” from attempting to corrupt the blockchains with incorrect data.
Protocol – refers to the set of rules defining how computers on any given blockchain should behave. These will be different for any given blockchain eg bitcoin, ethereum, litecoin, polygon, and so on.
Public Address / key – is the string of alphanumeric characters equivalent to your bank account number where cryptocurrencies can be sent, received or held. Like private keys, public keys or addresses are expressed as a cryptographic string of letters and numbers
Pump – indicates a significant uptick in price of a token. When the price of a token is moving upwards very quickly you would refer to it as “pumping”
Pump and dump – the deliberate act of influencing a steady upward move in the price of a token to then sell the token at a high before the price collapses at the detriment of other token holders.
Smart Contract – a software program capable of automatically executing a contract between two or more contracting parties.
TradFi – refers to in general Traditional Finance
Wallet – a device in physical (hard wallet, paper wallet) or digital form that is designed to keep user’s crypto assets safe and capable of interacting with the relevant cryptocurrencies’ originating blockchains where they can be traded and exchanged.
