Cryptocurrency Terminology

Cryptocurrency Terminology

The cryptocurrency market is constantly developing – new projects and coins appear, words and phrases that are understandable in the crypto community. This is a natural process that will not stop. But understanding this does not make it easier for a novice trader. He just doesn’t understand what we are talking about.

Therefore, today we will make a course for a young crypto-fighter who will be 100% verbally savvy.

Sit back, cadets, it will be interesting.

General concepts in Cryptocurrency

Cryptocurrency is the currency of the XXI century, based on cryptographic encryption (blockchain technology). Decentralization, anonymity and reliability are the three pillars on which the new currency is based.

Fiat / fiat money is traditional money, that is, national currencies that we use every day. A fiat currency is a state-legalized currency that is officially used as a means of payment.

Blockchain-the term in English means “chain of blocks”. This is a technology for recording, structuring and storing data, which is based on copying and synchronizing a common database with multiple devices. Due to a clear sequence of blocks, it is impossible to forge and distort the data recorded in the registry.

A transaction is a transfer of a token from one wallet to another.

Decentralization-implies the absence of a supervisory authority and a decision-making center. If the systеm is decentralized, it is resistant to external attacks.

Capitalization is the total value of all the coins of the project or the cryptocurrency market as a whole. It is calculated as the product of the exchange rate for the issue.

The issue is the total number of coins on the market. It can be limited (you can’t get more than the specified number of coins) or unlimited.

Volatility is the degree of instability of the value of a coin. If it is volatile, the exchange rate jumps up and down. This indicates the lack of linking the project to something real, and low capitalization.

Coinmarketcap, coinmarketcap is an information site about cryptocurrencies. On the site, you can find data about any coin and developing projects.

A cryptocurrency exchange is a trading platform where you can buy and sell coins, rent them out to receive passive income.

White Paper, “White paper” is a document where project managers describe the idea, technology and business plan of their offspring. Without working through the document, no one will give money for the ICO.

Roadmap, Roadmap – a “road map” or a project development plan, scheduled for several years ahead. The document describes what and how developers will do to achieve this goal.

A scam is a “scam” when developers held an ICO in order to receive investments and not to further develop a cryptocurrency project.

A smart contract is a logical “if-then” function that stores a digital code (an agreement between users) in the blockchain. You can’t erase it or edit its contents.

A fork is a change in the source code of the cryptocurrency, and the algorithm of the block chain. The blockchain during the form is copied with a change in the rules. At the same time, the parent network can continue working if it is supported by miners in time.

A hard fork is a type of fork in which the rules change dramatically. The new network can no longer sync with the old one.

A soft fork is a fork with small changes to the main network, which does not fundamentally change anything.

Swap is a kind of fork, in which one coin is changed to another. As a rule, the old ones are simply destroyed, or the developers change them for new assets at the exchange rate.

Concepts of cryptocurrencies

Bitcoin, “grandfather”, “cue ball”is an analogue of gold in the cryptocurrency market, and the first coin with which new electronic money started.

Ethereum, ether, “kefir” is the second coin by capitalization on the market. On the basis of its blockchain, everyone can create their own project.

Altcoins are all coins, except Bitcoin. This is a collective image, implying an “alternative coin” from the main crypto assets.

“Shit coins”, slagocoins – – a trader uses the phrase “shit coin” to say about the uselessness of an asset. We are talking about technological value, not capitalization, exchange rate or trading volumes.

USDT, tezer, tezer-dollar is a cryptocurrency analog of the dollar, which is provided with a fiat reserve. The exchange rate of coins at the same time is 1-2% of 1 USD.

Stable coin, stablecoin is a general definition for fixed-rate cryptomonets that are tied to some asset or secured by it. As a rule, there is a binding to the dollar.

A token is a vague concept that means the same thing as a crypto coin. However, some experts say that a token is something that is bought at an ICO, and the word “coin” is used for an asset only after it is listed on the exchange.

Tokenization is the digitization of real objects, that is, the creation of an electronic image for use in the blockchain.

DeFi, Defi is “decentralized finance”, that is, the transfer of payment systems and other tools to the blockchain plane.

NFT, an NFT token is a unique token that exists on the market in a single instance. They are used to confirm the ownership of a real estate object or an art object.

Airdrop is a free distribution of tokens for registration on the site.

A bounty hunter is a person who participates in a bounty program, that is, attracts and advertises a cryptocurrency project, receiving a reward for it.

Cryptocurrency cranes are sites with free distribution of cryptocurrencies. The user receives them for solving a captcha or watching commercials.

Bitcoin cranes are sites that distribute exclusively BTC shares.

A cryptocurrency wallet is a wallet for storing digital assets. It can be virtual (a website, an application for a smartphone) or hardware, that is, made in the form of a flash drive.

The public key is the details of the wallet, like a bank card. To transfer tokens to you, another user specifies exactly this sequence.

A private key is a code that gives full control over the internal storage, that is, viewing the balance, transfers. This key cannot be shown to an outsider.

A passphrase, seed phrase is a tool for restoring access from a stolen or lost wallet. It, like the private key, cannot be changed or restored.

STO, Security token is the right of the owner of coins to participate in the management of companies, receive dividend payments and a share of the company’s profits. All the rights of participants are recorded in a public smart contract. The turnover of these tokens is controlled by private entities.

IEO is the release of a new token to the market on the initiative of the exchange. This option is more reliable, since the exchanges guarantee the quality of the promoted project.

ICO – the release of a new token to the market by developers. The procedure is rapidly losing popularity due to the abundance of scam projects, that is, “kidalova for money”.

Concepts of actions and investment cryptocurrency terms

FUD is the level of fear and uncertainty in the market. The higher it is, the less attractive the coins are for investment, and their rate begins to fall. The network has tools for tracking the level of fear.

FOMO is the fear of missing out on a good deal. This state is typical for impulsive investors and traders.

HODL is the purchase and retention of a digital asset in an investment portfolio “until the last”. This is what investors do when they bet on a long-term perspective.

BUIDL is a work on improving the crypto project even in the most difficult periods of development. Often this action echoes the desire to show not only the speculative nature of cryptocurrencies, but also their importance in the world of the future.

SAFU is a secure asset storage, which was first established by the Binance exchange. She has created a reserve fund, and regularly replenishes it with 10% of trading fees.

ROI is a well-known term for return on investment. It is also an indicator of net profit to the value of an investment instrument.

Stop loss is a parameter for insuring an asset when buying or selling cryptocurrency. This is the lower limit, which is critical for the investor. If the price falls below, the transaction will close at the established border.

Take profit is the same parameter, but it sets the limit of the profit that the investor wants to get from the sale.

Mining Terms

Mining is the discovery of new blocks in the chain due to the solution of a cryptographic cipher by computing devices (processor-video card). The owner of the equipment receives a reward for each block.

A miner is a person who creates new blocks of cryptocurrency. Now most people use farms (assemblies of productive devices), since the complexity of mining is already high.

A farm is a set of devices for mining. It consists of a hard disk, a cooling systеm and video cards. The equipment is extremely demanding to the room temperature in order to avoid overheating.

Cloud mining is the rental of computing power for mining. The service is expensive, but sometimes it is more profitable to buy your own equipment.

Hashrate is the number of operations that the equipment generates in 1 second. The higher the characteristic, the faster the mining will be.

An ASIC is an integrated circuit that increases the mining performance of certain coins.

A pool is a service where miners jointly mine cryptocurrency.

The complexity of the network is a gradual decrease in the performance of coin mining due to the complexity of cryptographic ciphers. To maintain the same efficiency, you need to improve the farm.

Landing is the rental of cryptocurrency at a percentage. In the landing page, coins are usually accepted by exchanges that receive more than they pay the owner.

Leasing is the rental of cryptocurrency controlled by the owner. The tenant specifies a specific purpose, that is, what he needs coins for.

Slang terminology

A bull is a trader who makes a profit on the growth of the cryptocurrency exchange rate.

A whale is an investor with a large capital that directly affects the exchange rate of a coin.

The bear trader always bets on the fall of the exchange rate, and sells coins through short positions.

Scammer is an unscrupulous member of the network.

Hamster is a novice trader.

Ask is an acceptable price for the owner of the sale of the coin.

< p>Bid-the rate acceptable to the buyer.

Spread – the difference between the two previous parameters.

Sideways is a smooth direction of the trend movement without fluctuations up and down.

A cobra throw is a sharp change in quotes.

Bucket-an order for a decline in the exchange rate with a deferred effect.

Dump – an artificial depreciation of the exchange rate due to the sharp sale of a large package of coins.

The bottom is the minimum pricing point, after reaching which growth begins.

Kefir is what some people call Ethereum.

A cutlet is a large amount of money.

A moneyhold is a situation when a user cannot top up an intra-exchange wallet or withdraw funds to a bank account. This is due to failures in the operation of the trading platform or hacking.

Dog-this is how the cryptocurrency is called-the Dogecoin meme.

Tuzemun – a sharp jump in the value of the asset to record levels, which has already been repeatedly shown by Bitcoin.

Output

There are a lot of users from different cultural groups on the cryptocurrency market, so terminology and slang are intertwined with each other. Over the years of the existence of the crypto community, a certain dictionary has already been derived, which makes it easier to understand the processes taking place there.

It will be difficult for a novice trader (hamster) to get used to strange terms at first, but time will pass, and the phrases will become fixed in his head. Therefore, study, trade and earn!

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26.11.2022, 19:03