150+ Common Crypto Terminologies You Need to Know Before You Invest
Welcome to cryptomarketblog, the number one blog for crypto education. Here we explain the topics of cryptocurrency using examples so that anyone can easily understand them. In this article we are going to lean 150+ Common Crypto Terminologies you should know before invest.
Blockchain – blockchain is a series of blocks which contains information of transactions like who made the transactions to whom, the amount of trade in the form of a digital ledger that is distributed across the entire network making it more secure and impossible to hack or cheat. In blockchain each block is connected with the previous one chronologically.
Bitcoin (BTC) – Bitcoin is a first decentralized digital currency created by Satoshi Nakamoto. Bitcoin act as money to make payments outside of legal tender, there’s no president, CEO, group, or entity to control bitcoin, bitcoin is a most secure crypto in the world.
Bitcoin Maximalist – A person who believe that Bitcoin is the only true digital asset that will be needed now or in the future, all other cryptocurrencies are inferior and distractions to Bitcoin.
Satoshi Nakamoto – Satoshi Nakamoto is the individual or group of individuals who created world’s first decentralized digital currency Bitcoin. the identity of Satoshi Nakamoto remains anonymous.
Sats or Satoshis – Sats or Satoshis are the smallest unit of Bitcoin, One Satoshi is equivalent to 0.00000001 Bitcoin. In other words, there are 100,000,000 Satoshis in one Bitcoin. The name Satoshi is derived from Bitcoin creator Satoshi Nakamoto.
Wallet – Wallet is the place used by crypto holders to store their digital assets (coins, tokens and NFTs). Crypto wallets contain Address, seed phrase, keys to function properly. wallets provide an interface to interact with the blockchain. There are several types of wallets available, such as cold and hot wallets.
Paper wallet – A paper wallet is a piece of paper with your public and private keys are written or printed. It is a way to securely store your crypto assets offline.
Cold Wallet/Cold Storage – Cold wallets is a type of wallet that stores crypto assets offline (e.g., hardware wallets, paper wallets). These wallets are not connected to the internet so they are more secured to keep digital assets.
Hardware Wallet – Hardware wallet is a physical wallet that can be used to store digital assets offline (e.g., USB or Bluetooth device). Hardware wallets are one of the most secure ways to store crypto.
Hot Wallet – Hot wallet is a cryptocurrency wallet that is accessible online (e.g., Desktop wallets, Mobile wallets). They are connected to the internet, so not recommended to keep large amounts of crypto coin in a hot wallet.
Address (Wallet Address) – A wallet address is a unique identifier used to send, receive and store digital assets. Like a telephone number and bank account number every crypto wallet address is unique.
Public Key – public key is used to create a unique wallet address. public key is derived from the private key.
Private Key – A private key also known as a secret key is used to identify proof of ownership of a crypto wallet. private key acts much like a password, so never share your private key with anyone, if someone discovers your private key, they can access all your funds and can do whatever they want with it.
Seed Phrase – seed/recovery phrase is a series of words generated by your crypto wallet when setting it up. It can be used to access your wallet even if you delete or lose the wallet. Never share your seed phrase with anyone, anyone who knows your seed phrase can import a copy of your wallet onto their own device and can do whatever they want with it.
Public Ledger – Public Ledger is a place to store every transaction after confirmed by a miner or validator. Anyone can view list of transaction made on a blockchain. Every blockchain has its own ledger.
Genesis Block – The first block (block #0) in a blockchain network.
Block Height – Block height represents the number of blocks added to particular blockchain network in the entire history – from block #0 (genesis block) to until the most recent one.
Block Reward – block reward is an incentive issued to miners or validators when they successfully validate a new block. This Rewards vary from network to network, block rewards generally consists of a combination of newly generated coin and the transaction fees.
Smart Contracts – Smart contracts are computer program stored on a blockchain, that run automatically when predetermined terms and conditions are met. Smart contracts allow developers to build apps on blockchain.
Coin – Coins are the native asset of a Blockchain like Bitcoin (BTC), Ethereum (ETH) and Cardano (ADA). Coins stores value and acts as a medium of exchange, similar to traditional currencies.
Token – Tokens built on top of blockchain they aren’t native to a blockchain. for example, Ether is the native coin of Ethereum Blockchain. USDC, DAI and LINK are the tokens built on Ethereum blockchain.
Altcoins – Altcoin means all cryptocurrencies other than Bitcoin, Bitcoin is the first crypto coin, all other subsequent coins are called altcoins.
Bounty / Bug Bounty – The bug bounty program is an experimental rewards program to identify and report a bug in a software/crypto project.
Decentralized apps (dApps) – Decentralized applications (dApp) are open-source applications built on top of blockchain networks that use a smart contract backend and a user interface frontend. dApps are decentralized, transparent and trustless meaning they are free from the control of a single authority, anyone is free to use them. Hundreds of dApps exist today Uniswap, OpenSea, CryptoKitties, Brave and MakerDAO are some of the popular dApps.
Decentralized finance (DeFi) – Decentralized finance (DeFi) provide decentralized financial services to end users on blockchain network. With DeFi, you can do most of the things includes banking, earn interest, borrow, lend, money management, payment processing, buy insurance, trade assets, trade derivatives and more by eliminating the need for a third party.
Fiat – Fiat currency is a government-issued currency that is not backed by any commodity like gold or silver. The value of fiat currency depends on supply and demand and the stability of the issuing government. Fiat currency gives central banks greater control over the country economy. Examples of fiat currencies are the US dollar, euro, INR.
Gas – When you make a transaction on the blockchain, you have to pay a transaction fee. That fee is called as gas price. Gas fee are paid to network validators for their services. Gas prices depends on supply and demand of network’s validation requests.
Gwei – Gwei is a fraction of the Ethereum. 1 ETH = 1,000,000,000 Gwei.
Gas Limit – Gas limit refers to the maximum amount of gas you are willing to pay on a particular transaction.
Gas price – gas price refers to the amount of Gwei that user is willing to spend on each unit of Gas for processing transactions on the network. The unit of Gas Price is called Gwei.
1 Gwei = 0.000000001 ETH
For example, if the gas limit is 30,000 units and the gas price is 80 Gwei, the total network gas fee paid is: 30,000 gas * 80 Gwei = 2400000 Gwei = 0.024ETH
Initial Coin Offering (ICO) – Initial Coin Offering (ICO) is an innovative approach for projects and start-ups to raise funds through the use of cryptocurrencies. ICOs are similar to traditional Initial Public Offering (IPO).
Initial DEX Offering (IDO) – IDO is similar to an ICO, but in IDO coins/tokens offering takes place on a decentralized exchange (DEX) or launchpad.
Initial Exchange Offering (IEO) – IEO is similar to an ICO, But in IEO, coin/tokens sold to the general public on centralized exchanges.
Know Your Customer (KYC) – Know Your Customer refers to the process of gathering and verifying personal identification information from their customers before allowing them to access a products or services.
Mining – Mining is the process of creating new coins by verifying new transactions on a blockchain, new coins are verified and added to the blockchain network. For example, Bitcoin mining is the process by which new bitcoins are entered into circulation.
Non-fungible tokens (NFTs) – An NFT is a digital assets or tokenized versions of real-world assets like art, music, videos and in-game items etc. NFTs are unique, like other crypto tokens, they can be transferred between wallets but they can’t replicate.
Proof of Authority (PoA) – Few numbers of nodes are granted the authority to approve a miner’s ability to create a block and validate transactions in a blockchain network. PoA is a fast and scalable alternative to the proof-of-work model, but more centralized. VeChain (VET) is an example of a popular platform that uses a Proof of Authority algorithm.
Proof of Work (PoW) – Proof of work is a decentralized crypto consensus mechanism, first used by Bitcoin. In PoW miners use computational resources to solve an arbitrary mathematical puzzle, Proof-of-work blockchains are secured and verified by virtual miners around the world. The miner who solves it first gets a predetermined amount of crypto.
Proof of Stake (PoS) – proof-of-stake (POS) is a type of crypto consensus mechanism, In PoS validators need stake/lock certain amount of network coins in order to participate in the block validation process. The more coins a validator has locked/Staked, the better chances of getting the reward.
Whale – Crypto whales are individual or organization that holds a large amount of a specific cryptocurrency. A whale may also be defined as a person that holds enough coins or tokens to significantly influence market prices, either by buying or selling large amounts coins/tokens.
Testnet – A Testnet is the MVP (Minimum Viable Product) of a crypto project. It is built for developer to test new features without disturbing or breaking the core features of the product. By using testnet, projects gather feedback from developers and community members for the purpose of getting the community’s pulse on what the mainnet should look like. After testing the new feature or upgrade functions on the testnet, it can then be introduced to the mainnet.
Mainnet – Mainnet is a term used to describe fully functional and developed project which is accessible to the public to use. To interact with mainnet we need real money.
Airdrop – cryptocurrency airdrops are basically free coins dropped directly into your wallet (require a manual claim sometimes) it might sound unbelievable but it’s fairly common in Crypto. first of all, why would anyone give you free coins or tokens? there’s a few reasons, first and foremost reason is marketing strategy, giving away free coins is a great way to generate both awareness, interest and excitement on the crypto project, is there anything that gets people more excited than a free money? Most crypto startup projects airdrop their new token to reward early adopters of an application or protocol.
ATH (All-Time-High) – All-Time-High refers to the highest price that a coin/token reached since it’s listed. For example, Ethereum ATH is $4,878.
ATL (All-Time-Low) – All-Time-High refers to the Lowest price that a coin/token reached since it’s listed. For example, Ethereum ATL is $0.433.
Bitcoin dominance – Bitcoin dominance is the ratio between the market cap of Bitcoin to the total market cap of the rest of the cryptocurrencies.
Portfolio – A Crypto Portfolio is a collection of digital assets (Coins, tokens, NFTs) that you own. portfolio helps you to track your total investment in all types of digital assets.
DYOR (Do Your Own Research) – Do Your Own Research, this means before investing into a project you should do your own research on a project fundamental, team members and their track record. Don’t invest blindly by follow the word of others.
FOMO (Fear of Missing Out) – Fear of Missing Out refers to the feeling of fear and anxiety that trader or investor feel by missing out on a potentially lucrative investment or trading opportunity. FOMO in crypto leads you to buy assets at their highest prices or even sell them at their lowest price.
For example, if bitcoin is pumping and people are sharing a positive new then you get the feeling it’s gonna pump more, so you buy high, and if bitcoin is dumping and people are sharing a negative news then you get the feeling it’s gonna dump more, so you sell at low.
FUD (Fear, Uncertainty, Doubt) – FUD is a tactic used to manipulate the crypto investors mindset about specific cryptocurrencies or the crypto market in general by spreading negative, inaccurate, or misleading information.
Dollar-Cost Averaging (DCA) – Is a popular strategy where an investor divides the amount of money they would like to invest into a small unit over a regular period (e.g., weekly, biweekly, monthly) into a chosen asset regardless of price. Instead of investing all the lump-sum investment money at once. The goal is to take advantage of market drops without risking too much capital at once.
For example, If You are planning to buy a Bitcoin for 10000usd, instead of investing all 10000usd once, divides the amount in to small units and buy Bitcoin in regular intervals regardless of price. By buying regularly in up and down markets, investors buy more BTC at lower prices and fewer BTC at higher prices. Dollar-cost averaging is a proven and popular strategy in both traditional markets and crypto markets.
Ponzi – Ponzi schemes are crypto investment scams that promise high rate of returns with little risk to investors, in this scheme they use funds collected from new investors to pay fake returns to earlier investors.
Noobs – A person who is new to the technology.
Rekt – In the world of crypto, rekt is used to describe a situation when a trader loses most or all of their funds due to a bad investment or trade.
Halving – After every 210,000 blocks mined (takes around four years) the block reward given to Bitcoin miners are reduced to 50% this is called halvings. The Bitcoin network started with a 50 BTC block reward and currently, after 3 halvings, it is at a level of 6.25 BTC per block. The next halving is expected to occur in early 2024 after this the block reward will fall to 3.125. There will only ever be 32 Bitcoin halving events. There are only 32 Bitcoin halving events ever, Once the 32nd halving is completed, there will be no more new Bitcoins.
HODL (Hold On for Dear Life) – Hold is a term commonly used by crypto investors that refers to don’t sell your crypto, Whether crypto price go up or down. People who do this are called HODLERs.
Low Cap Gems – Low Cap Gems are cryptocurrencies with low market cap and high Potential to growth. This coin has a potential of 10x-100x return on investment.
Circulating Supply – Circulating Supply means number of coins or tokens that are publicly available to buy or sell or trade.
Market Cap (Market Capitalization) – Is the total value of all the coins that have been circulating. market cap used to measure the size of a cryptocurrency. It’s calculated by multiplying the number of coins/tokens in circulation by the current price of a single coin/token.
Market Cap = Current Price x Circulating Supply
For example, Optimism is trading at $1, and the present circulating supply is equal to 214,748,364 coins, the market capitalization for this cryptocurrency would be $214,748,364.
Total supply – Total supply is the total number of cryptocurrencies or digital tokens that are in existence, including both the circulating supply in the public market and coins that are locked or reserved. For Example, total supply of Bitcoin is 21 million.
Fully diluted market cap – It refers to market cap of a crypto project including both the circulating supply in the public market and coins that are locked or reserved.
fully diluted market cap = Current Price x Max Supply.
For example, Polygon is trading at $0.28, and the Max supply of this coins is 45,000,000,000, the fully diluted market cap of this cryptocurrency would be $11,949,146,964.
Bull market – Bull Market or Bull Run refers to a period when the prices of crypto assets are rising and continues to see an upward trend.
Bear market – A bear market is the reverse of a bull market, where the prices of crypto assets are falling continues to see a down trend.
Stop Loss – Stop Loss means “Stop” your current trades “loss” or “profit” whenever a market touches a specific price. Stop-loss protect traders with either long or short positions.
Fundamental analysis – Fundamental analysis is a process of studying information about purpose of the coin, token economics, the team behind crypto projects, fundamental analysis helps you evaluate whether the coin is undervalued or overvalued as an asset.
Technical analysis – Technical analysis is a process of studying price charts to identify the patterns and trends to predict how markets might move in the future using various market indicators.
White paper – whitepaper is a document that explains the purpose of a project, how it works to their potential users or investors. whitepapers usually contain an overview of the project, goals, tokenomics, roadmap, features, and information about the team. whitepaper is the best place to start doing research on a specific crypto project.
Pooling – Group of investors pool their money together to invest in a crypto startup.
Degen – A person who is doing a trading without due diligence and research about project.
Shitcoin – Shitcoin are the useless cryptocurrencies with no value and purpose.
Peer-to-Peer (P2P) – It refers to interaction between two parties without a third party or intermediary.
Centralized Exchange (CEX) – Centralized Exchanges are online platforms that allows you to buy, sell or trade cryptocurrencies, Exchanges acts like a middleman to conduct a transaction. In the crypto sector, some well-known CEXs are Binance, Coinbase, Gate and Kraken.
Decentralised exchange (DEX) – Decentralised exchange is a peer-to-peer crypto currency exchange that allows users to buy, sell or trade digital assets without a third party or intermediary. In the crypto sector, some well-known Dexs are Uniswap, pancakeswap, Curve and 1inch.
ERC20 – ERC20 is a technical standard used to implement tokens on the Ethereum blockchain.
BEP20– BEP20 is a technical standard used to implement tokens on BNB Smart Chain.
Rugpull – A rug pull is a type of crypto scam where development team suddenly abandons a project and sells or removes all its liquidity. To protect yourself from rug pulls, Do your own research on projects before investing.
Fork – A fork means a change in the Blockchain. Forks are two types Soft Fork and Hard Fork.
Soft Fork – A soft fork is a software upgrade that is backwards compatible with older versions. soft fork can be used implement new features and functions at a programming level.
Hard Fork – A hard fork occurs when there is a permanent split in a blockchain to form a new blockchain that runs parallel to the original. In simple terms, a hard fork splits a single cryptocurrency into two coins.
For Example, in 2016 Ethereum network hard forked into two blockchains: Ethereum and Ethereum Classic.
Total value locked (TVL) – Total value locked is a metric that is used to measure the total value of all assets locked into DeFi and yielding market. TVL includes all the coins in staking, lending, borrowing and liquidity pools.
Two-factor authentication (2FA) – 2FA is a security system that requires two separate components password and security token in order to access online accounts.
Laser Eyes – laser eyes means you are bullish on Bitcoin and other crypto assets.
Weak hands – Weak hands (panic selling) in crypto refers to traders who have low confidence, resources, or ability to hold their trading positions or to stick with their trading plans. This type of people does trade by emotions rather than logic.
Vesting Period – Vesting period, also called the token lockup period. Startup projects sell some percentage of tokens in the pre-sale, ICO stage and offers to partners and project team members with token lockup period. Crypto vesting is the process of slowly releasing project tokens into an open market.
Fear and greed index – Is a technical indicator that help to identify the market sentiment based on the prices of seven different crypto assets.
Flippening – The flippening is a term used to describe the moment when total market cap of Ethereum surpassing the total market cap of Bitcoin.
Futures – Futures are a type of derivative trading product. cryptocurrency futures enable traders to bet on a crypto coin’s future price, without actually owning them. currently, Bitcoin futures are the most popular type of crypto futures contracts.
Hedging – Hedging in crypto is a trading strategy used to protects them against the impact of a negative price movements. Taking a opposite position to the current open position in a particular asset is called Hedging.
Lightning network – The Lightning Network is a layer 2 solution built on top of Bitcoin network, that allows users to send or receive bitcoin payments faster and cheaper.
Market order – Market orders, also known as spot orders, which execute immediately at the best available price at that time.
Memecoin – Meme coins are cryptocurrencies inspired by memes and jokes on the Internet and social media, these coins are heavily community-driven coins. meme coins are highly volatile compared to major crypto coins like bitcoin and ether.
Pizza Day – on May 22, 2010 Laszlo Hanyecz spent 10,000 Bitcoin on two large pizzas. this is the first real world Bitcoin transaction. At bitcoin’s all-time high of $68,990 those 10k Bitcoins worth around $690 million.
Regulation – Regulation framework is a rule or directive made and maintained by an authority to protect investors and preserve financial stability while allowing innovation.
Launchpads – Crypto launchpads, also known as crypto incubators, are platforms that allow investors to buy tokens of new blockchain-based projects before the tokens are publicly released. Crypto launchpads are the best way to raise funds for startup blockchain-based projects.
Centralized Finance (CeFi) – CeFi is a financial activity in which users can earn interest, acquire loans, borrow money on their cryptocurrencies via centralized exchanges.
Decentralized Autonomous Organization (DAO) – A decentralized autonomous organization (DAO) is a community-led entity structure, where token holders participate in the management, decision-making, proposals and voting with no central authority. It is fully autonomous and transparent. DAOs use smart contracts, which are algorithms that run when certain criteria met.
Genesis Drop – Genesis drop is the first set of NFTs released by a creator.
Immutable – Immutable is one of the key features of Bitcoin and other blockchain technology, Immutable in blockchain refers to any records that have the ability to manipulate, replace and remain unchanged.
Hashing – A hash function is a mathematical function that takes an input data of any length and converts it to a string of a fixed size. In particular, the Bitcoin hash algorithm is SHA-256.
Layer 2 – Layer 2 is a separate blockchain that is built on top of an existing blockchain system. The main goal of layer 2 is to solve the transaction speed and scaling difficulties that are being faced by the major blockchain networks. Examples of layer 2 networks are Bitcoin Lightning Network and the Ethereum Plasma.
Metaverse – The term “meta” means “beyond,” “verse” references the universe means beyond universe. A metaverse is a shared virtual world where users can interact friends, visit buildings, buy goods and services, play games, and attend events. Metaverses used to create virtual worlds that mirror the real world or entirely new and imaginary worlds.
On-chain – On-chain transactions are transactions that take place on a blockchain, these transactions are recorded on the public ledger and can be used by anyone. On-chain transactions are validated and authenticated by the miners or authenticators. The blockchain network is updated every time when On-chain transaction occurs.
Off-chain – Off-chain transactions are transactions that occur outside the blockchain. The participants of the transactions deal with each other outside of the blockchain. If all the criteria are satisfied then a third party will handle validation and authentication of transactions. These transactions are performed and recorded on the blockchain.
Proof of attendance protocol is a unique non-fungible token (NFT) that proves you have attended an event either virtual or physical. The events can be a ceremony, private function, game, conference, seminar, concert or something similar.
Stablecoin – A stablecoin is a type of digital currency that is designed to maintain a stable market price. These coins pegged to a stable reserve asset like the U.S. dollar, even commodities, like silver or gold. Some stablecoins pegged to the price of other cryptocurrencies.
Tokenomics – Tokenomics is an amalgamation of two words token” and “economics”, it is basically token economics used to understand the supply and demand characteristics of cryptocurrencies.
Web3 – Web3 represents the next generation of the internet. Web3 can be understood as the read-write-own phrase of the Internet, Web 3.0 is built upon core concepts of decentralization, Trustless and permissionless, and greater user utility.
Whitelist – A whitelist is a list of registered and approved users who are allowed access to a certain service, product like initial coin offering, Presale etc.
Zero Knowledge – zero-knowledge proof or zero-knowledge protocol is a verification method that takes place between a prover and a verifier, In ZK protocol, the prover is able to prove to the verifier that they have the knowledge of a particular piece of information without revealing the actual underlying information.
Staking – Crypto staking is the way of earning rewards for holding or locking digital assets. For example, if you deposit money in your savings account then bank lends it out to others and shares interests with you, same way if you stake your crypto assets to participate in maintaining the security of a blockchain network in return you will earn rewards.
Unspent Transaction Output (UTXO) – An unspent transaction output (UTXO) refers to a transaction output that can be used as input in a new transaction, that means after a transaction is completed, any unspent outputs are recorded into a database that can be used as input in a new transaction. Bitcoin is the best example of cryptocurrency using this model.
Buy The Dip – Buying the dip is another way to say purchasing an asset when its price drops.
Crowd sale – Crowd sale is a public offering to invest in a new crypto project, where participants can purchase tokens before listing into public market.
Crypto derivatives – Crypto derivatives work like traditional derivatives, where buyer and a seller enter into a contract to sell an underlying asset. The underlying asset in crypto derivatives trading is cryptocurrencies. The most popular crypto derivatives are crypto futures, crypto options, and perpetual contracts.
Arbitrage – Crypto arbitrage trading is a trading strategy for investors who is looking to make profit with very low-risk returns. crypto arbitrage is the process buying a cryptocurrency on one exchange and quickly selling it on another exchange where the price is higher.
Atomic Swap – Atomic swap is a technology based on smart contracts that enables to peer-to-peer exchange of cryptocurrencies from different blockchains directly without the need for a centralized market or other intermediaries.
For example, mahesh holding 2 Bitcoins but he wants to convert those for ETH. Rajesh, who has ETH is willing to make the trade by using atomic swap technology. they are able to perform a peer-to-peer trade without relying on third party or centralized market. Here two different coins, which are running on separate blockchains are traded without any intermediaries.
Bridge – A blockchain bridge is a tool used to send cryptocurrency from one blockchain to another.
For example, you’re holding 200usdt in polygon network, if you want to send this usdt to BSC network by using crypto bridge you can easily move.
Block Explorer – Block explorer is a tool used to search the information about transactions, addresses, blocks, fees, block size, hash rates and more.
Burn – Coin burning is the process to remove tokens out of circulation to reduce the total supply of coin. Burning a coin helps to maintain the value of a cryptocurrency.
Deflationary – Deflationary cryptocurrencies are the ones where the total supply of coins would decrease over time. Binance Coin (BNB), Cronos (CRO) are the example of deflationary cryptocurrencies.
Inflationary – Inflationary cryptocurrencies are the ones where the total supply of coins would increase over time. Ethereum (ETH), Moonbeam (GLMR) are the example of Inflationary cryptocurrencies.
Death Coin – Dead coin refers to cryptocurrencies that don’t exist anymore due to a variety of reasons such as its development being halted, their website is down, no one trading or uses it.
Digital Currency – Digital currencies or Digital money is any form of money that’s available only in electronic form.
Double Spend – Double spending means same digital currency can be spent more than once, mostly occurs when there is no authority to verify the transaction.
Pump and Dump – pump-and-dump scam is a sort of fraud where an individual or group of persons buy a large quantity of coins when its price is low, they then start disseminating positive news and misleading information to raise the coin price. Once the price is fully pumped, then scammers dump all their tokens at high price to make big profits.
Dust Transaction – Dust is a very small amount of cryptocurrency, usually amount less than the minimum transaction fees. Dust occurs when a user makes multiple transaction or trades in crypto there is a small leftover number of tokens called dust. A transaction is considered dust when the value is lower than transaction fees.
Faucet – crypto faucet are websites or mobile app that distributes small amounts of cryptocurrencies as a reward for completing easy tasks. they are given the name faucet because the rewards are very small like drop of water from a leaky faucet.
Escrow – When making transaction in crypto assets it involves three parties, sender, recipient and escrow. When you send tokens to recipient, first tokens are transferred to a third-party smart contract called the escrow. The escrow safeguards tokens until the verification of certain conditions.
Protocol – Protocols are a basic set of rules that allow data to be shared across the network securely and reliably. Protocols are crucial components of Blockchain.
Script – Bitcoin Script is a stack-based programmed instructions that are recorded with every transaction made on the network.
ERC-721 – ERC-721 token is an Ethereum based non-fungible token (NFT). This means that each NFT is unique and not interchangeable.
EVM – Ethereum virtual machine (EVM) is a piece of software, or “computation engine,” used by developers to create decentralized applications (DApps), The EVM sits on top of Ethereum to execute and deploy smart contracts.
Anti-Money Laundering (AML) – AML for cryptocurrencies refers to rules, policies and rules put in place to prevent money laundering via cryptocurrencies.
Limit order – Limit order allows you to set price limit to buy or sell crypto assets. If the market of your crypto reaches your price limit, your order will be executed. if not, the order doesn’t execute itself.
Margin trading – Margin trading, also called leveraged trading, refers to the using borrowed funds provided by a third party to pay for a trade. Compared with regular trading accounts, margin trading accounts allow traders to open a position without having to pay the full amount from their own pocket. Margin trading positions can be opened as either a short position or a long position. short position means where you bet on the price of particle asset going down, long position means where you bet on the price particle asset going up.
Validators – validator are someone (miners in PoW, Stakers in PoS), who is responsible for verifying transactions on a blockchain.
Volatility – volatility describes how quickly and how much the price of an asset has moved up or down over time.
Bag Holder – Bag holder is a term used to describe investor or trader who continues to hold large amounts of a particular cryptocurrency for too long, regardless of its performance.
Confirmation/Block Confirmation – When you submit a transaction on blockchain, miners (validators) adds the transaction to blockchain. The block that your transaction is added becomes its’ first block confirmation. After that, each additional block added to the chain counts as another confirmation of that transaction. The more confirmations a transaction has, the more secure and harder to hack. That’s why most wallets and exchange platforms require multiple block confirmations before they accept a transfer.
Consensus – A consensus mechanism refers to protocols, algorithms, or other computer systems use to validate the transactions and maintain the security of the underlying blockchain. proof-of-work (PoW) and proof-of-stake (PoS) are two of the most widespread consensus mechanisms.
Public Blockchain – public blockchain also known as permissionless blockchains, where anyone is free to join and participate in the core activities of the blockchain network. This block chains are decentralized and does not have a single entity which controls the network. Bitcoin and Ethereum are both examples of public blockchains.
Private Blockchain – private blockchain is a permission and a restrictive blockchain that operates in a closed network. Private blockchain is a centralized network one or more entities control the network, Private blockchain are more scalable so they can process thousands of transactions every second. Ripple is the examples of private blockchains
Wrapped Ether – (WETH) is tokenized versions of crypto that pegged to the value of Ether (ETH) and can be unwrapped at any point. Both wrapping and unwrapping follow a 1:1 ratio, there is no extra fee apart from transaction fees. ETH created before the ERC-20 standard are implemented so ETH itself is not ERC-20 compatible, WETH is an ERC-20 tokens used in several platforms and DApps that support ERC-20 tokens.
API (Application Programming Interface) – Application programming interface is a set of rules that allows two applications to share information.
For example, Cryptocurrency exchanges provide APIs. Traders can use these APIs to supply real-time market data to trading bots, enabling them to make trades on behalf of the traders.
Oracle – Oracle is third-party services that connects smart contracts with outside world.
Node – Node is a device, usually a computer that run the blockchain’s software to validate transactions and keep the network safe.
Digital Asset – A digital asset is anything that exit and stored in digital form that has value. Ex: cryptocurrencies and NFTs.
Digital Signature – A digital signature is a mathematical technique used to validate the authenticity of digital messages or documents. Which is used as cryptographic proof systems that help to establish trust on the blockchain.
Distributed Ledger – A distributed ledger is a database that stores, share and synchronize transactions in their respective electronic ledgers which are accessible across different sites and geographies by multiple users.
Difficulty – Cryptocurrency difficulty is a measure of how difficult it is to solve a complex cryptographic puzzle to mine a block in a blockchain for a particular cryptocurrency. The difficulty of mining depending on the number of miners in the network.
Encryption – Encryption refers to technical processes of scrambling data so that unauthorized parties can’t understand the information. In Blockchain encryption used to safe the data in the blocks, so it can be decrypt only the users who has valid private key.
Nonce – Nonce is a 32-bit random number that miners use as a base for hash calculations. Miners compete with each other, trying to guess a valid nonce as they perform multiple attempts to calculate a block hash. The first miner who find a nonce that results in a valid block hash is granted the right to add the next block to the blockchain and is rewarded for doing this.
SHA-256 – SHA-256 stands for Secure Hash Algorithm 256-bit, SHA-256 refers to the hash function, which generates a unique 256-bit (32-byte) signature for a text. blockchains like Bitcoin, Bitcoin Cash uses SHA-256 hashing algorithms.
Relayer – A Relayer stores an off-chain order book. Using Relayer users can create, find and cancel orders, Relayers helps traders to find counter-parties and move orders between them cryptographically. A relayer can talk to another relayers and create a pool of orders to increase liquidity.
Hybrid Consensus Model – hybrid Proof of Work and Proof of Stake mechanisms utilize elements of both PoW and PoS models when determining transaction validation rights. hybrid aims to capture the benefits of the respective approaches and use them to balance each other’s weaknesses.
Liquidity – Liquidity in cryptocurrency measure of how easily you can convert digital currency or token into cash or another asset without impacting the price.
Liquidity Mining – Liquidity mining is a decentralized finance mechanism where crypto holders lend assets into liquidity pools to earn rewards. In this way, both crypto exchange and token issuer reward the users with fees and tokens based on their share of the total pool liquidity.
Yield Farming – Yield farming is a way of earning more crypto with your crypto holding. It involves you lending or borrowing crypto on a DeFi platform and earn interest in return for your services.
Transaction Fee – To make transactions on blockchain, users want to pay a fee called transaction fee. Transaction fees are flexible and vary based on how busy the blockchain is. Transaction fees used to reward miners or validators who help to verify transactions and protect network from spam attacks.
51% Attack – 51% attack, also known as a majority attack, occurs when a single malicious attacker or group of malicious attackers gains control of more than 51% of a cryptocurrency’s total hashing or validating power.
Solidity – Solidity is a high-level object-oriented programming language created by the Ethereum Network team for constructing and designing smart contracts on Blockchain. Solidity allows developers to create immutable, unstoppable programs that anyone can interact with it.
MultiSig (Multiple Signature) – Multisig is simply a type of wallet that requires more than one signature to access the cryptocurrency in the wallet, Multisig wallets are a highly secure crypto storage option for Organisations.
To the Moon – to the moon is one of the most common terms when the market is bullish, to the moon refers to a trader or investor has strong belief that a particular cryptocurrency is going to rise significantly in price.
Mint – Minting is the process of creating or generating something. In the blockchain, minting means, validating data, creating new blocks, and recording that verified information into the blockchain. For example, someone can mint an NFT or mint a new cryptocurrency.
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