WORDS of COIN: An A-Z Glossary of Crypto and Blockchain Terms and Jargon
The term “altcoin” is a shorthand for “alternative coins” and simply means cryptocurrencies other than Bitcoin. These other currencies claim to be better alternatives to Bitcoin regarding features and functionalities (e.g. faster confirmation time, lower price, improved mining algorithm, higher total coin supply). There are hundreds of altcoins, including Ether, Ripple, Litecoin and many many others.
Similar to a bear market, this refers to holding a pessimistic view of a market or asset’s value. If you are bearish on a certain cryptocurrency, you believe its value will decrease over time. Those who are bearish may be referred to as bears, sometimes purposely misspelled as beras.
A type of distributed ledger, written on open source software. It is a growing database of time-stamped transactions that cannot be altered. Each new transaction is verified by a network of computers and added as a “block” to the chain.
Each block is ‘chained’ to the next block using a cryptographic signature. Ethereum is a public blockchain, open to the world; its digital ledger is distributed, or synced, between many nodes; these nodes arrive at consensus regarding whether a transaction is valid before encrypting a number of transactions into a block.
Similar to a bull market, this refers to holding an optimistic view that a market or asset will rise in price. If you are bullish on Bitcoin, you believe that its value will continue to rise over time.
Also called hardware wallets or cold storage, it's a secure method of storing your cryptocurrency completely offline. Many cold wallets are physical devices that look similar to a USB drive. This kind of wallet can help protect your crypto from hacking and theft, though it also comes with its own risks – like losing it, along with your crypto.
Decentralized Finance (DeFi)
An umbrella term for a collection of cryptoasset projects that aim to conduct financial services without the involvement of an intermediary-- like a bank, government, or other financial institution.
A place to trade cryptocurrency. Centralized exchanges, operated by companies like Coinbase and Gemini, function as intermediaries, while decentralized exchanges do not have a central authority.
A split in the blockchain, resulting in two separate branches, an original and a new alternate version of the cryptocurrency-- and are often enacted intentionally to apply upgrades to a network. As a single blockchain forks into two, they will both run simultaneously on different parts of the network. For example, Bitcoin Cash is a Bitcoin fork.
Any operation takes computing power to complete it, so everything you do on the network comes with a cost. The money is used to reward blockchain participants who process your transactions. When you make a transaction on the blockchain, you have to pay a fee called a gas price. You are basically paying a miner to go out and receive crypto for you. Prices can rise and fall depending on demand.
A type of passive investment strategy where you hold an investment for a long period of time, regardless of any changes in the price or markets. The term first became famous due to a typo made in a Bitcoin forum, and the term is now commonly expanded to stand for “Hold On for Dear Life.” Hodling is not simply about keeping crypto-investments no matter how low they fall. It also reflects a fervent belief in the inevitability of a return to profitability and a rejection of both the fickle day trader and the short-sighted crypto-sceptic.
A software-based cryptocurrency wallet connected to the Internet. It is kept online which means it is easier to access and enables users to trade more quickly. While more convenient, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets (cold wallets/cold storage) — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.
An Initial Coin Offering (also called ICO) occurs when a new cryptocurrency sells advance tokens in exchange for upfront capital. Typically, ICOs are unregulated and so there’s a lot of risk associated with them. Before buying in, an investor needs to make sure a startup really has a working idea or product. These have been a vehicle for fraud and scams, and as such are subject to ever-evolving regulation and legislation.
Cryptocurrency market capitalization refers to the total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins.
A computer that connects to a blockchain network.
A stablecoin is a digital currency that is pegged to a “stable” reserve asset like the U.S. dollar or gold. Stablecoins are designed to reduce volatility relative to unpegged cryptocurrencies like Bitcoin.
A digital currency token or a denomination of a cryptocurrency (such as Bitcoin or Ether coin) that represents a tradable asset or utility on its own blockchain and enables the holder to use it for investment or economic purposes.
Web3 / Web 3.0
Web3, or Web 3.0, are terms used synonymously with “the decentralized web” and are often used to refer, broadly, to the blockchain and decentralized technology ecosystems as a whole.