Glossary of terms commonly used in the world of blockchain and cryptocurrency:
2 Factor Authentication (2FA)
2 Factor Authentication is a double layer security measure. Most crypto exchanges use it. In order to log in, you not only need to enter a password, but also a code that you receive from the Google authenticator for example.
A ‘51% attack’ refers to a possible attack on a blockchain by a group of ‘miners’, who hold more than 50% of the hashrate. In such a situation the ‘miners’ have the possibility to deliberately not confirm transactions or to issue transactions twice (double-spend).
An address is comparable to a bank account number. It is a unique collection of numbers and letters. This identification code is required to carry out a blockchain transaction and is unique for each owner.
An affiliate link is a specific URL that contains a special and mostly unique identification. This URL can be obtained when a websites offers an ‘affiliate program’. Sharing an affiliate link makes it possible for the website to record the traffic you generated. This is usually compensated with money, credits or coins.
An airdrop is a way to distribute coins. End users can generally get coins for free or in exchange for a small task, such as subscribing to a newsletter, sending a tweet or inviting other people via a personal affiliate link.
AMA is the abbreviation for ‘Ask Me Anything’. This refers to a set of questions that can be asked to a person or team. Within the crypto world this is a commonly used method to answer questions from the community. The answers can be given via a Youtube live stream, but also in writing in a blog post or on Reddit.
Anonymous refers to anonimity. Within the blockchain world this is an important topic. Bitcoin transactions are anonymous to a certain extent, but the transactions are permanently visible in the blockchain. Eventually it will be possible to link it to a person. This has led to the creation of privacy focussed coins, such as Monero and PivX. Anonymous can also refer to an international group of activists and ‘hacktivists’, who in recent years have committed several (DDOS) attacks on websites of agencies and governments.
Anti-Money Laundering [AML]
AML is the abbreviation for ‘anti-money laundering’. AML stands for policy and legislation on money laundering. This prevents illegally acquired funds from being converted into a legal variant. Within the crypto world, it is no longer unusual for AML techniques to be used by exchanges and wallets. This term is often used as AML/KYC, where KYC stands for ‘Know your customer’.
ASIC (Application Specific Integrated Circuits) Miner
ASIC is the abbreviation for ‘application-specific integrated circuit’. These are microchips or processors, designed to perform a very specific task very well. The Bitcoin ASIC is a very popular one, which makes it possible to mine Bitcoins very efficiently, making it impossible to mine them on a normal computer. ASICs are also developed for other coins, but they can become useless after a protocol upgrade, that makes the blockchain ‘ASIC-resistant’.
Asymmetric Key Algorithm
AKA stands for Asymmetric Key Algorithm. This is a cryptographic system that uses a ‘pair of keys’, the so-called ‘public key’ and the ‘private key’. The public key is needed by both parties to execute a transaction. The private key is only known to the owner and acts as an authentication method for accessing the coins stored on the public address.
ATH is the abbreviation of ‘All Time High’ and means the highest price ever paid for a particular coin. ATH is also often used to indicate that someone’s total portfolio has reached the highest value ever.
ATL stands for ‘all-time-low’ and is the opposite of ATH, or ‘all-time-high’. ATL is used to indicate that the price of a coin or the entire wallet of a person is at the lowest level ever in terms of value.
An audit is an official examination of an organisation’s accounts. The organisation’s records are examined and checked to ensure that they fairly and accurately reflect the transactions that have been made. This is normally carried out by an independent body. If it is done by employees themselves, it is called an internal audit.
Bear / Bearish
A bear trap is the opposite of a bull trap. This is when there are false signals on the price chart that a downtrend is coming. This can be a trigger for traders to take a short position. However, the price will rise again and the traders are lured into the trap and lose money with their short positions.
A ‘bear whale’ is someone with a very large position in a coin, but with a ‘bearish’ vision. The bear whale will take every opportunity to sell parts of his position, which prevents the price from rising significantly.
Bech32 is a Bitcoin ‘Segwit’ address format. These addresses always start with ‘bc1’ and therefore ‘bech32 addresses’ are also known as ‘bc1 addresses’. The format has not yet been implemented very widely in wallets, so it is not recommended to use it until that situation changes.
BIP (Bitcoin Improvement Proposal)
BIP is the abbreviation of ‘Bitcoin Improvement Proposal’. This is a standardized way to introduce functions and other issues, such as design issues. Because of the decentralized nature of Bitcoin and therefore the lack of a formal structure, this system is used to improve Bitcoin in a well-founded and consensus-driven way.
Bitcoin (unit of currency)
The bitcoin is the very first cryptocurrency invented in 2008 by an anonymous developer named Satoshi Nakamoto. It can be divided up to 8 digits after the comma. The smallest one is called a satoshi (0.00000001 BTC).
Bitcoin Cash (BCH)
The result of a so-called ‘Hard Fork’ of Bitcoin. Bitcoin Cash makes it possible to generate more transactions per second than Bitcoin. In November 2018, Bitcoin Cash itself also had a ‘Hard Fork’, from which ‘Bitcoin Cash SV‘ and ‘Bitcoin Cash ABC‘ emerged.
Bitconnect is a cryptocurrency with the ticker BCC. It was a very popular altcoin in 2017, because it promised a daily yield of 1%. They said they could live up to this due to a very successful trading bot. It used a ‘multilevel marketing’ method to attract new buyers. The company behind this coin was suspected of Ponzi fraud and was investigated by the American regulators. Eventually the company could not provide any evidence and closed its doors in January 2018. The price of the coin plummeted dramatically afterwards and it is now no longer tradable.
Bitpay (Bitpay.com) is a US-based bitcoin payment provider. It enables (online) stores to accept Bitcoin and Bitcoin Cash as a means of payment without the risk of price fluctuations. This is achieved by converting the payments directly and automatically to fiat money.
De ‘block size’ staat voor de grootte van elk ‘block’ in een blockchain. In een blockchain block worden o.a. transacties opgeslagen. Bij Bitcoin is dit gelimiteerd tot 1MB. Er kunnen meer transacties worden opgeslagen als er grotere ‘blocks’ zijn. Dit is bij veel altcoins het geval. Er kleven ook nadelen aan grote blocks, zoals opslagruimte, vereiste blockchain upgrades. Daarnaast kan minder aantrekkelijk worden voor miners als de transactievergoedingen te laag worden hierdoor.
The blockchain is a technique that makes it possible to safely store data in a decentralized way. This data can be money, but it could be other data as well. Also read this extensive explanation about blockchain.
Bollingerbands is a tool for a crypto or stock trader. The bollingerband consists of three lines, usually based on a ‘simple moving average’. The middle line is a ‘simple moving average’ and the outer lines are a multiplication of the middle ‘simple moving average’. A detailed explanation can be read in this article about ‘Technical Analysis’.
A ‘bot’ is an autonomous program on a network, such as the Internet, that can interact with systems or users. It is often designed to automate certain manual tasks. Bots are often used in Telegram chat groups to prevent spam.
Brute Force Attack (BFA)
A brute force attack is an attack performed by a hacker on a password or pin number. An automated script tries to execute as many different combinations as possible as quickly as possible, until the password or pin number is guessed.
A ‘candlestick chart’ is a way of representing the price of a tradable effect. One candlestick stands for a certain period (a day, an hour, a quarter of an hour, etc.). The ‘body’ of the candlestick represents the opening and closing price. The peaks indicate the highest and lowest price in the time span.
Centralised means that one particular organisation has control. For example, governments and companies are centralised. The opposite of centralised is decentralised, such as the Internet and the blockchain.
A new transaction on a blockchain must first get a confirmation before it has been definitively processed. This is done by one of the consensus mechanisms, such as proof-of-work and proof-of-stake. The more confirmations, the greater the chance that the transaction is valid and a double spend is no longer possible.
Someone who advocates a broad use of cryptography and technology to promote privacy with the aim of social and political change is called a ‘Cypherpunk’. These people form an active community that has been around since the 1980s. It is possible that Bitcoin was developed by ‘Cypherpunks’.
DCA (Dollar cost averaging)
DCA is the abbreviation for Dollar-Cost averaging. This is an investment technique, where a fixed amount in dollars is used to make an investment. Not the entire amount is used in one time, but according to a fixed schedule, no matter what the price is. With this method you can never buy on the top, but also not on the bottom. Within crypto the term is also used to indicate that someone buys low after a huge price drop of a coin.
DEVCON stands for ‘Developers Conference’. This is a meeting of software developers, usually organized by a company. The latest developments are discussed here. At Apple it is called WWDC (the Apple Worldwide Developers Conference). Within blockchain, the annual Ethereum Devcon is best known.
A digital identity refers to information used by computers to represent a real world entity, like a person or an organisation. It could also represent an application or device. It can be seen a set of attributes related to the entity. This digital identity is used to for authentication and verification in order to access systems on a network, such as the Internet. There are several developments going on in the blockchain world where a digital identity plays a crucial role. For example in the Elastos ecosystem.
A dildo, in crypto terms, refers to a large rise in the price of a coin. At the moment that a sudden rise in the price takes place, a ‘candlestick’ in a ‘candlestick chart’ shoots up. According to some people this phenomenon looks like a dildo.
A ‘Dip’ is a rapid decrease in the value of, for example, a cryptocurrency or an entire market. It is less strong than a ‘crash’ and can also quickly recover to the old price level. Also read this extensive explanation about a ‘dip’.
DYOR is a term, which you often see in disclaimers and in chat groups regarding the cryptocurrency market. It stands for ‘Do your own research’. It is a quick way of saying that no financial advice is given and you have to do your own research before you make an investment.
The EEA (Enterprise Ethereum Alliance) is a partnership as part of the Ethereum Foundation. It connects Fortune 500 companies, start-ups, academics and technology suppliers with experts regarding Ethereum.
The term ‘Emission’ is in relation to blockchain, often used as ‘Emission Rate’. This is the speed at which new coins are released and thus increases the ‘circulating supply’. This speed is known in advance by the design of the blockchain and can be shown in a graph, the ‘Emission Curve’.
ETF is an abbreviation for ‘Exchange-Traded-Fund’, or a listed fund on a stock exchange. This is a tradable product (security) that follows the price of an underlying asset. Examples are an equity index, a basket of certain securities, bonds and commodities. There are several applications for a Bitcoin ETF, but none of these have yet been approved by the SEC in the United States of America.
An exchange is a place where you can buy and sell different kinds of cryptocurrencies and tokens. These coins can then be deposited back to a wallet, which supports the coin. Sometimes it’s also possible to convert it to dollars. This is an overview with all exchanges.
FA is the abbreviation of ‘Fundamental analysis’. It is a method of evaluating an investment, such as a cryptocurrency, by looking at its intrinsic value. Related economic and financial factors are also examined.
The term ‘futures’ comes from the financial markets. It is a financial contract, which obliges the buyer to buy a security or the seller to sell it. This has to be done on a predetermined date and price in the future. It is a trading instrument on the stock exchange and is used for various underlying instruments, including Bitcoin nowadays. Some contracts require the physical delivery of the underlying instrument and others are settled in cash.
Gas’ or ‘Wei’ is used to execute a transaction on the Ethereum blockchain. The used ‘gas’ can be seen as ‘fee’ for the ‘miners’. The more ‘gas’ you set, the faster your transaction will be completed. Because of the higher reward, more miners will be incentivized to process the transaction earlier.
HODL is a wrong spelling of ‘hold’. This spelling mistake was once made by someone accidentally or intentionally on a forum. Since then, this term has been used to indicate that you keep or should be holding your position.
Initial Coin Offering (ICO)
An ‘initial coin offering’ (ICO) can be compared a bit with an IPO. Investors get an opportunity to invest in a certain coin for the first time. The difference with the stock market however is that a company has to meet all kinds of requirements before the IPO can take place. The market of ICO’s is much less regulated. Therefore, it happens more often that an ICO is fraudulent.
KYC is an abbreviation for ‘Know Your Customer’ and was created to combat money laundering via cryptocurrencies. At almost every ICO currently it is mandatory to prove that you are who you say you are. This is also regularly requested at crypto exchanges.
Lambo is an abbreviation of Lamborghini, a fast Italian car. In the crypto world this is often used to ask when the price is going to rise sharply, so that he can pay for such a car. In general, it is written: ‘When Lambo? An alternative is: ‘When Moon?
A ‘Ledger Blue’ is a Hardware wallet in the shape of a small tablet and is made by the French company Ledger SAS. It is the successor of the popular Ledger Nano S.
Ledger Nano S
A ‘Ledger Nano S’ is a popular Hardware wallet in the form of a usb stick, made by the French company Ledger SAS.
With a ‘limit order’ you give the order to the stock exchange to buy an x number of coins for price x. When ‘filling’ the order, the price can’t differ with the order you gave. The number of coins can however differ, but never more than the order.
MACD stands for ‘Moving Average Convergence/Divercence’ and is a tool traders use to see what the trend is in a price. The instrument consists of 2 parts. An exponential moving average (EMA), which is subtracted from another EMA (usually 26 and 12 days) and an EMA which is calculated with a less number of days (usually 9), this last EMA is also called the signal line. A common trading signal is that as soon as the signal line breaks the other line from below, a buy order is placed and as soon as the line is broken from top to bottom, a sell order is executed.
The marketcap shows the total value of all coins together. Many beginners make the mistake to only look at the unit price of a coin to decide if the coin in question is worth much or little. The marketcap is a more suitable instrument for this.
With a ‘marketorder’ you give the order to buy or sell a coin at the best price at that moment. The chance that an order will be executed is almost 100 percent, because there are almost always buy or sell orders. With coins with little volume the marketorder is a dangerous order because your coins may be sold at a very low price, or the opposite happens: you buy your coins at a very high price.
This is the maximum number of coins that will exist for a token or cryptocurrency. If there is a max supply defined, no more coins can be created. ‘Burned’ coins are part of this supply, so therefore it is always larger than or equal to the total supply. For the maximum is set to 21 million.
Een ‘miner’ is een persoon of organisatie, die rekenkracht (CPU, GPU of ASIC) inzet om de zeer complexe rekensom van een blockchain transactie op te lossen. Zodra deze som is opgelost, wordt er een nieuwe ‘block’ gegenereerd, waar een aantal transacties permanent in worden opgelsagen. De miner wordt beloond met het vooraf gedefinieerde aantal cryptocurrencies. Meestal wordt dat aangevuld met de transactiekosten, die door een gebruiker betaald zijn.
Mt. Gox (or Mount Gox) was the largest and most important exchange for Bitcoin in its early years. However, it went bankrupt on February 28, 2014. The cause, according to the company, is a hack, in which Bitcoins worth hundreds of millions of dollars were stolen.
An ‘Orphan’ or ‘Orphan block’ is a block in the blockchain that is not further built on. Blockchain blocks are usually generated by ‘mining’ or ‘staking’; occasionally two blocks are created simultaneously by different computers. Only one of the two can be valid on the blockchain, so the other expires and becomes an orphan block.
A paper wallet is an alternative to a hardware or software wallet. It is in fact a piece of paper or a PDF containing the information to access the cryptocurrency in that wallet. It normally consists of a ‘public key’ and a ‘private key’.
Permissioned blockchain / ledger
Anyone can mine Bitcoins, because it is a public blockchain. This is not the case with a permissioned blockchain. There is a layer above it that determines which entity is allowed to write transactions in a block. The
Phishing is when hackers try to get a user to give up personal information such as login and password or credit card details. This is often done using a fake website or application, which is very similar to the original. This is common in cryptocurrency, because only the private key is enough to steal all coins.
PoA (Proof of Authority)
PoA stands for ‘Proof of Authority’. This is a validation method to process transactions and blocks in a blockchain only by approved accounts. These are known as ‘validators’ and run specific software to store the transactions in blocks. Since the identity is linked to the system, it can contribute to more trust.
PoB (Proof of Burn)
PoB stands for ‘Proof of Burn’. This is a method to invest in a new cryptocurrency by destroying coins of an existing one, which has been given the term ‘Burning’ in the crypto world. This is done by sending coins to a special, unusable address. That’s the usually the only way to destroy coins within a blockchain. This method can also be used when a coin gets a relaunch with a new team and a new coin.
PoD (Proof of Developer)
PoD is the abbreviation for ‘Proof of Devloper’. This can be any verification that can serve as proof that a cryptocurrency was created by a real software developer. This method is mainly used when launching a new cryptocurrency to prevent scams.
A ‘Pre-sale’ the phase of an ICO before the ‘Public-sale’. During this phase it is possible for investors to make a first investment. The tokens often have a lower price than during the public sale. The money raised is generally used for further development, financing of the public sale and as a method to explore the market’s enthusiasm. It is possible that the ICO itself is not successful and a ‘refund’ is not always guaranteed. This also makes a pre-sale more risky than a public sale.
A QR code is a type of barcode in the form of a square. The letters QR stand for ‘Quick Response’. The code contains many dots, a few small squares and sometimes a small logo in the middle. This is different from most other barcode types, which are rectangular with lines. A QR code can therefore contain much more information. Within the crypto world it is often used to make a ‘wallet’ address scannable. This speeds up the process of transferring crypto and prevents errors.
Reddit is a social media platform that is used intensively in the crypto community. The website has pages per topic, which is called a subreddit. Visitors can post messages and respond to it. Coins often have their own subreddit for the community to converse and for the team to post (development) updates.
ROI is an abbreviation for ‘Return on Investment’. This is an indicator to show the ratio between your initial investment and the return on it. The formula is ((current value – investment) / investment) x 100. Example: if 1 Ether deposit in an ICO total has become worth 1.6 Ether, then the ROI is 60%.
Satoshi Nakamoto is the alias of the creator of Bitcoin, who wants to remain anonymous. Nobody knows who it is. It could be a person, a group, a company or even a government. It is quite likely that it is a person, because there are people who have communicated with him or her via e-mail.
Segregated Witness (SegWit)
SegWit is a solution to make Bitcoin more scalable with the goal of faster transactions at lower costs. The use of SegWit required a ‘soft fork’ which took place on 21 July 2017. Altcoins like Litecoin, Digibyte or Vertcoin have also implemented SegWit in their Bitcoin-based blockchain.
Shilling is when someone is promoting a coin or ICO in a subjective way. This is sometimes just out of enthusiasm and sometimes just to convince as many buyers or investors as possible to join in with the aim of having as much profit as possible when the price goes up.
A Shitcoin is any coin, which is badly rated by the one who talks about it. So it can be any altcoin, but also Bitcoin. The reason given could be a lack of innovation, poor communication, slow development or another coin is considerably better according to that person.
A ‘Stable Coin’ is a coin with extremely low volatility and tries to peg to fiat money, such as the US dollar, or commodities like gold. A stable price is also the purpose of these coins to temporarily deposit money or to keep the price of blockchain services the same for the buyer. It is also widely used by ‘traders’ to benefit from the price volatility of coins.
Staking is het proces dat hoort bij ‘Proof-of-Stake’
Steemit is a social media platform that runs entirely on the Steem blockchain. The coins give the user the opportunity to promote messages. The coins can be bought on an exchange, but can also be earned within Steemit by actively contributing in the form of new messages or reactions to existing messages.
TA stands for technical analysis. This is used to analyze the graph of a cryptocurrency or stock with different indicators. This gives an investor or trader more justification for the choice to buy or sell. The different indicators are explained in this post about TA.
Tanking stands for a decrease in value. If a cryptocurrency ‘tanks’, the price drops considerably. This can have several causes on a fundamental level or when an important cross in a technical analysis is formed.
The Tether is often abbreviated as USDT on exchanges. This is a non-government regulated ‘stablecoin’ with a value of around 1 US dollar. The company behind this coin claims that every Tether in circulation is covered with real dollars on their bank account.
A ‘Ticker’ is an abbreviation of, among other things, shares on the stock exchange. It consists of a few letters. In the crypto world this system is also used. In the case of shares, a unique ID has also been developed, the so-called ISIN code. Such a system does not yet exist for crypto. It happens a ticker exists several times for different coins. Therefore it is extra important to check the name before placing a buy or sell order.
To the moon
This expression is common in cryptocurrency chat groups and forums. It is used to communicate the desire for a huge price increase. For that purpose they say ‘When Moon?’. It is also used at times when the price of a coin is rising rapidly. In those cases the phrase ‘To the moon!’ is common.
TOR is an abbreviation for ‘The Onion Router’. Onion routing is a method to send data anonymously over the Internet. The TOR Network consists of thousands of proxy servers on the Internet run by volunteers , which enables the routing. There are already cryptocurrencies that support ‘nodes’ on the TOR network.
The ‘total supply’ indicates the amount of coins already in circulation, supplemented with the coins that are not tradable yet. So it only applies to coins already in existence. Thjis is different from the ‘max supply’, in which future coins are included. The total supply is greater than or equal to the ‘circulating’ supply’. It can consist of tradable and non tradable coins, such as reserved or not yet released coins for the team or investors.
The ‘transaction fee’ is the amount that has to be paid to execute transactions on the Blockchain. This fee is usually paid to the ‘Miners’, but sometimes they are burned. There are also a number of cryptocurrencies, where you don’t have to pay a fee.
All transactions in the Blockchain, such as the amount, the address of the sender and recipient and the date of transfer, are provided with an identification, which is publicly accessible in the ledger of the Blockchain. This is the ‘Transaction ID’.
The Trezor is a popular ‘Hardware Wallet’, which supports multiple blockchains.
See Tether for the meaning of USDT.
UXTO is the abbreviation of ‘Unspent Transaction Output’. The total balance of bitcoins on an address can be spread over multiple blocks in the blockchain. The unspent bitcoins have a UXTO attribute. By searching the blockchain for the UXTO’s, which belong to a ‘wallet’ address, the total spendable balance can be determined. This is displayed by the wallet when it is fully synchronised.
Vaporware (aka Vapourware)
Vaporware is a term that comes from the software world to indicate announced, but not released or cancelled software. In the cryptocurrency world this also happens, but the term “Shitcoin” is more common.
A ‘wallet’ is a place to store cryptocurrencies encrypted. There are several variants, such as a paper wallet, hardware wallet or software wallet. Each coin has one or more supported wallets. See here all wallets.
A ‘whitepaper’ is a document that is almost always written for the launch of a new coin by means of an ICO. All aspects of a coin should be explained here: how it is used, for what and sometimes also the price expectation. After the ICO new versions can be released if the situation changes.
Dit is over het adres dat op gegeven moet worden om een cryptocurrency op te ontvangen bij een terugstorting (withdrawal). Deze term wordt over het algemeen door exchanges gebruikt. Meestal geef je hier je persoonlijke wallet address op, maar het kan ook het ‘deposit address’ zijn van een andere exchange.
Zerocoin, also known as Zerocoin protocol, is originally a proposal to give Bitcoin a privacy function. It is currently implemented by, among others, the coins Zcoin and PivX. Read more about this in this detailed description of zerocoin.