Are you confused by some of the terms used on Cryptocratist? To get you started, here is the beginning of our crypto glossary for cryptocurrency, fintech and markets terms.
A virtual location where cryptocurrency can be sent to and from. It consists of alphanumeric characters and can be shared publicly in the form of text or QR code. Cryptocurrency address is not intended to be permanent, as it represents itself a token, designed for a single transaction use only.
A method of distributing tokens and coins to a large number of wallet addresses. Airdrop campaigns are usually initiated by cryptocurrency creators to increase the popularity of a token or coin. Creators can distribute their tokens either by selecting recipients at random, or by publishing the event in airdrop-related bulletin boards or newsletters.
The highest peak of coin’s price for the whole period of its existence, according to market capitalization rate. (Opposite term: All-Time-Low)
The lowest peak of coin’s price for the whole period of its existence, according to market capitalization rate. (Opposite term: All-Time-High)
Any digital cryptocurrency similar to Bitcoin falls under the term “altcoin” (“alternative to Bitcoin”).
Anti-Money Laundering (AML)
Any policy or piece of legislation that is aimed at preventing money laundering activities and corruption. In crypto world it mostly regulates laundering money through cryptocurrencies into real-world cash.
API stands for Application Programming Interface. It represents itself a set of routines, protocols, and tools for building software applications. Basically, an API specifies how software components should interact.
Cryptocurrency arbitrage is a practice that allows you to take advantage of differences in price by buying a crypto on the exchange where the price is low and then immediately selling it on another exchange where the price is high.
A phenomenon when one loses all the invested capital by shorting Bitcoin. The term comes from a well-known case, when a Romanian cryptocurrency investor insisted upon shorting BTC, reffering to such successful experience in the past, but lost all his capital when the price of BTC rose from USD 300 to USD 500.
An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially unwise in some countries and setups.
Short version of the term “Application Specific Integrated Circuit”. Stands for a microchip designed for a special application, such as a particular kind of transmission protocol or a hand-held computer. In crypto sphere it represents itself a little computer built specifically for mining a certain coin or a set of coins.
A very strong marketing tool, which is though used for the wrong reasons. A deceptive practice where a sponsor is masked or hidden, making it seem as though a marketing message came from and is strongly supported by the community when it is not.
A smart contract technology that enables the exchange of one cryptocurrency for another without using centralized intermediaries, such as exchanges.
An account book designed to provide evidence of individual transactions, which is normally used to verify that a transaction has been carried out, or to verify the authenticity of products or transactions.
A quantity of a specific cryptocurrency is called a “bag”.
A bagholder is someone who holds bags of cryptocurrency. The term majorly refers to those who hold big amounts of a specific cryptocurrency instead of selling them, when its price is rapidly declining.
A person who expects the price of cryptocurrency to decline and stays pessimistic to market volatility.
A trap initiated by a group of traders for the purpose of manipulating the price of a cryptocurrency. It works like this: traders sell big amount of a specific cryptocurrency in order to artificially bring about its price decline. Other traders, fooled by their trap, sell their assets, thus diving the price down, after which the initiators of bear trap buy them again. When the price rebounds, the initiators receive high profits.
Bitcoin is a form of electronic money independent of traditional banking, bitcoins started circulating in 2009 and have become the most prominent of several fledgling digital currencies. For more details see bitcoin guide.
A machine that allows a person to purchase Bitcoin by using cash or debit card.
Bitcoin Improvement Proposal
A design document for introducing features or information to Bitcoin. This is the standard way of communicating ideas since Bitcoin has no formal structure.
The controversial business license issued for cryptocurrency companies in New York State. Created and provided by the New York State Department of Financial Services (NYSDFS).
A business license of virtual currency activities, issued to cryptocurrency companies in New York by the New York State Department of Financial Services (NYSDFS).
A constituent part of Bitcoin. There are 1,000,000 bits in one Bitcoin.
A container or collection of transactions proceeding on a blockchain. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).
An online browser which allows to view all transactions that has taken place on the blockchain, as well as the transaction histories and balances of addresses.
The number of blocks in the chain between any given block and the very first block in the blockchain.
The reward given to a miner which has successfully hashed a transaction block. This can be a mixture of coins and transaction fees, depending on the policy used by the cryptocurrency in question, and whether all of the coins have already been successfully mined. Bitcoin currently awards 25 bitcoins for each block. The block reward halves when a certain number of blocks have been mined, 210,000 in bitcoin’s case.
The new bitcoins that are used for rewarding eligible cryptocurrency miners for each block they mine successfully as a motivation for miners to continue acting in the best interest of the blockchain by legitimately taking part in the process.
The blockchain is distributed; to independently verify the chain of ownership of any and every bitcoin amount, each network node stores its own copy of it. Approximately six times per hour, a group of accepted transactions, a block, is added to the block chain, which is quickly published to all nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, which is necessary to prevent double-spending in an environment with no central authority.
A decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks. Blockchain technology eliminates the third party from the process of proceeding transactions, thus, providing high security and speed levels to both sender and receiver.
a technical analysis tool developed by Bollinger, that is used for characterizing the prices and volatility over time of a financial instrument or commodity, using a formulaic method.
A trading software tool based on a preset algorithm of buy-and-sell rules that allows users to automate their crypto trading strategy.
Brute Force Attack (BFA)
An attack which is used to generate codes, keys or passwords by using the trial-and-error methods. It works like this: an automated software generates and tries a large number of possible combinations in order to allow you to access the system.
The term that refers to a specific situation on crypto market, when market participants initiate the prices to rapidly increase, after which causing their rapid drop as the market corrects.
A special program offered by many websites, organizations and software developers, that allows individuals to receive recognition and compensation for reporting bugs, especially those pertaining to exploits and vulnerabilities.
“Bull” or “bullish” usually refers to a person, who strongly believes that the prices are going to increase.
A false signal, that refers to a declining trend in a stock, index or other security that reverses after a convincing rally and breaks a prior support level. The move “traps” traders or investors that acted on the buy signal and generates losses on resulting long positions.
A process of eliminating the coins by rendering it unusable or unspendable.
A situation where a large limit order has been placed to buy when a cryptocurrency reaches a certain value. Sometimes such method is used by traders who seek to create a certain impression in the market or to prevent a cryptocurrency from falling.
Byzantine Fault Tolerance (BFT)
A situation, when the two nodes can communicate safely across a network, knowing that they are displaying the same data.
Byzantine Generals’ Problem
A situation where spread out units need to coordinate their behavior or action but cannot trust each other to get organized.
Candlesticks have a wick and a body. The wick is the line, and the fat green or red portion is the body. Based on price movements, the candlestick will display trading activity. They show price action and tell you what happened to the price of an asset in a given time frame.
Physical fiat currency, such as paper money or coins.
A general ledger that contains all the accounts for recording transactions relating to a company’s assets, liabilities, owners’ equity, revenue, and expenses.
Central Processing Unit (CPU)
A central processor, or main processor, is the electronic circuitry within a computer that carries out the instructions of a computer program by performing the basic arithmetic, logic, controlling, and input/output (I/O) operations specified by the instructions.
An organization structure in which a small number of nodes is in control of an entire network.
A synonym to the term “fork”.
In a system called Unspent Transaction Output, Bitcoin transactions are proceeded in the form of inputs and outputs. The difference between the whole output and input is sent back as change.
A kind of fraud related to credit cards, when a paying customer asks the issuing bank to reverse a transaction made with a merchant.
An algorithm for performing encryption or decryption in order to convert information into cipher or code.
A much reliable metric than Total Supply for defining the market capitalization. The term refers to the amount of a stock or currency that is on the market. This is related to other measurements of tokens supply.
A local desktop computer or workstation that is capable of accessing and processing blockchain transactions.
The term usually refers to closing price in financial stocks.
The process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware.
A private owner or an enterprise, that partially controls a cryptocurrency wallet.
Any cryptocurrency that operates on the market.
The content of the ‘input’ of a generation transaction. While regular transactions use the ‘inputs’ section to refer to their parent transaction outputs, a generation transaction has no parent, and creates new coins from nothing. The coinbase can contain any arbitrary data.
Cold storage, or the synonym – cold wallet, represents itself the hardware device for storing Bitcoin or other altcoins in the offline mode. It is currently considered to be the most secure way to store cryptocurrency.
The term “confirmation” in crypto industry usually refers to the transactions, which are included in a block of blockchain. Each separate block represents itself only one confirmation. According to a specific number of confirmations defined and required by different exchanges, the transaction can be identified as final.
A specific order and content of blocks, as well as transactions contained in those blocks, which the participants of the network have agreed on.
A privately operated blockchain in which a consortium shares information not readily available to the public, while relying on the immutable and transparent properties of the blockchain.
A negatively colored term that refers to reverse movement of at least 10% in a cryptocurrency or general market, to adjust for over- or under-valuations.
A kind of cyber attack in which a hacker hijacks a target’s processing power to mine cryptocurrency on the hacker’s behalf.
An asset class that consists not only of decentralized cryptocurrencies, but also of commodities, digital goods and services that combine the technologies and markets.
A digital asset that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
Cryptographic Hash Function
A hash function which takes an input (or ‘message’) and returns a fixed-size string of bytes. It is extremely easy to calculate a hash for any given data.
A way of protecting information and communications through the use of codes so that only those for whom the information is intended can read and process it.
A custodial set-up is one in which private keys are being held by the service provider while they provide a login account
Any activist advocating widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change.
Some Internet content kept on darknets, the access to which requires special software, configurations or authorization. Such content cannot be indexed by search engines, so it is majorly used for criminal activities.
Date of Launch
The official start of token sale during the ICO event.
Dead Cat Bounce
The term is used when the prices rapidly go up after a long period of decrease.
The process of distributing and dispersing power, which is not controlled or managed by any central authority. The principles of decentralization stand for transparency, security and high speed of transactions proceeded between sender and receiver, while totally eliminating any necessity for third party interference.
This number determines how difficult is it to hash a new block. It is related to the maximum allowed number in a given numerical portion of a transaction block’s hash. The lower the number, the more difficult it is to produce a hash value that fits it. Difficulty varies based on the amount of computing power used by miners on the computing network. If large numbers of miners leave a network, the difficulty would decrease.
The very first block in the chain. Modern versions of Bitcoin number it as block 0, though very early versions counted it as block 1. The genesis block is almost always hardcoded into the software of the applications that utilize its block chain.
A spin on the investing lingo ‘hold’ — Hold On for Dear Life. A crypto trader who buys a coin and does not see himself selling in the foreseeable future is called a hodler of the coin.
Initial DEX Offering (IDO)
IDO is known for Initial DEX Offering, the updated version of the Initial Exchange Offering (IEO) but now on DEX Exchange. The first IDO was conducted on June 17, 2019 by Raven Protocol (RAVEN) on Binance DEX exchange.
Nonce is a random string of data used as an input when hashing a transaction block. A nonce is used to try and produce a digest that fits the numerical parameters set by the Bitcoin difficulty. A different nonce will be used with each hashing attempt, meaning that billions of nonces are generated when attempting to hash each transaction block.
A valid block which is not a part of the main chain, but which was instead part of a fork that was discarded.
Paper Wallet is a physical piece of paper you print out that stores your altcoins in a secure, offline environment. Paper wallets are inherently impervious to hacking and other forms of internet theft but vulnerable to acts of nature (fire and flood), burglary, and human error (simply losing your wallet). Basically, all a paper wallet contains is a printed public key and private key for a respective address. The data is NOT stored on a computer. Often a paper wallet has a QR code of the public and private keys to make it easy when you need to get the key values on your computer or phone — you just scan the paper instead of manually typing the keys out.
Private Key is a private address that is paired with your public key. Private keys allow you to spend your coins or take them out of your wallet for using. The private key looks very similar to a public key but it’s slightly longer. You can get your public key from a private key but you can not get a private key from a public key. It is the key to the balance of the address. Whoever holds the private key owns the value of the address.
Proof of Concept (PoC)
Proof of Concept (PoC) is a realization of a certain method or idea to demonstrate its feasibility, or a demonstration in principle, whose purpose is to verify that some concept or theory has the potential of being used. A proof of concept is usually small and may or may not be complete. PoC is also known as proof of principle.
Proof of Concept in software development describes distinct processes with various objectives and participant roles. It may also refer to partial solutions involving a small number of users acting in business roles to establish whether a system satisfies certain requirements.
A proof-of-work (PoW) system (or protocol, or function) is an economic measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer.
Public Key is like the bank account for your personal digital currency. It is where you store your coins. If you have multiple types of coins, you must have a separate wallet for each type. A wallet is a collection of public keys. So a wallet can contain one public key or one hundred. How much you decide to put in each is up to you and there is no cost. An example of a Bitcoin public key : 14euyjBip1t2aWax5ZSg5YGHR8WW34CnEj. Anyone can send you coins or you can transfer coins to other address as long as you have the private key.
Satoshi is the smallest possible fraction of cryptocurrency available for transactions. It refers to 0.00000001 Bitcoin, and is named after Satoshi Nakamoto, the enigmatic creator of the first publicly-available digital currency.
Electronically transferring money from one person to another. Commonly used to send and retrieve fiat currency from bitcoin exchanges.