Cryptocurrency Terms you need to know

Cryptocurrency Terms you need to know

Since I dove in cryptocurrency topics, I’ve noticed that many people misunderstand (or don’t understand at all) slang terms applied.

After some research on Reddit, I’ve compiled the following glossary of terms, slang, expressions applied in cryptocurrency related discussions. Hope it helps.

Blockchain

General Terms

ICO

Initial Coin Offering, very similar to an IPO on stock exchange. Start-ups issue their token in exchange for Ether.

FIAT

Traditional currencies (US Dollar, EUR etc.)
https://en.wikipedia.org/wiki/Fiat_money

Altcoin

Any crypto-currency other than Bitcoin or Ethereum.

Exchange

Websites where you can buy and sell crypto-currencies. Here a great overview of 24-hour trading volume by exchange.

Cryptocurrency exchange by volume
Cryptocurrency exchange by volume

 

Tokens

ICO’s based on ethereum network. Examples:
TRX – Tron
PPT – Populous
BAT – Basic Attention Token

 

Market Cap

Value of crypto currency/token. Calculated by multiplying the total supply of coins by the current price of an individual unit.

This site shows a great run-down of each coin’s market cap: http://coincap.io/

 

Need-to-know cryptocurrency slang

Shilling / pumping

Advertising of someone’s crypto-currency. Basically, a viral campaign to promote potential of upcoming ICO.

Bollinger Band

Price margin indicating whether a coin is overbought or oversold. https://en.wikipedia.org/wiki/Bollinger_Bands

Pump And Dump

Generally, it is a completely transparent scheme used to drive coin price up (Pump) and sell (Dump).

The price of a coin is usually Pumped through recommendations based on false, misleading or greatly inflated statements.

Token / Coin Pump and Dump

Pump And Dump
Pump And Dump in Cryptocurrencies

 

General trading terms

ROI

Return on Investment.

ATH

All-Time-High.

Bullish

An expectation that price is going to rise.

Bearish

An expectation that price is going to decline.

Going long

Traditional purchase with an expectation that the price will increase.

Going short

A bet against current value of token, expecting it’s price to drop.

Margin trading

Essentially a short-term loan provided to you by your broker against your current coins/tokens/cash.

Limit order / limit buy / limit sell

Orders placed by traders to buy or sell a crypto-currency at a certain price.

Whale

Someone that owns large amounts of crypto-currency.

 

Blockchain specific Terms

Bitcoin mining

Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining.

Bitcoin mining  process

Bitcoin mining  process
Bitcoin mining  process

Mining Rig

A computer designed for processing proof-of-work blockchains, like Ethereum. It usually consist of multiple high-performance graphic processors (GPUs) to maximize processing power.

Bitcoin Mining Rig
Bitcoin Mining Rig

The amount of new bitcoin released with each mined block is called the block reward. The block reward is halved every 210,000 blocks, or roughly every 4 years. The block reward started at 50 in 2009, is now 25 in 2014, and will continue to decrease. This diminishing block reward will result in a total release of bitcoin that approaches 21 million.

Ethereum Specific Terms

Smart Contract

Smart contract Code is deployed onto the Ethereum blockchain, often directly interacting with how money flows. A normal transaction allows you to send money from A to B. Smart contracts allow you to send money from A to B, on the condition that C happens.

Smart contract example

Smart contract example
Smart contract example
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