A Quick Guide to Cryptocurrency Terms
Here is a quick guide to cryptocurrency terms. We define technical terms, slang, acronyms, and other jargon related to cryptocurrency. That said, DYOR.
A list of Every Cryptocurrency Term I Can Think of
Address: An “address,” or a wallet address, is a string of letters and numbers that works as an account number for crypto transactions. Addresses can be shared publicly. Addresses are network-specific, so you need an address for each type of crypto asset. For example, all Ethereum-based tokens can be sent to a single Ethereum address you own, but only Bitcoin can be sent to a Bitcoin address. See custodial wallets and private keys below for some important and related terms.
Airdrop: The term airdrop is sometimes used to describe the process of distributing tokens to wallets. For example when the network of an ICO or fork goes live the newly created token might be airdropped to wallets of existing coin holders.
AMM: Automated market-making, like Uniswap. Where algorithms make the books, and anyone can add to the pool by pooling tokens.
Altcoin / Alt: An altcoin (sometimes just called an “alt”). Any coin that isn’t Bitcoin.
Alt Season: The part of the overarching cryptocurrency market cycle where many altcoins “moon” (go up quickly in price) against the dollar and Bitcoin at once (for example, late December 2017 – early January 2018).
All Time High (ATH): The highest price a given cryptocurrency has seen so far. Not the ideal place to buy an asset.
Bags: Cryptocurrency holdings, especially when bought higher than the current price. One who holds bags is a bag holder.
Bart: A chart pattern that looks like the hair of a famous cartoon character.
Bearish / Bullish: A bear market is when the price trend is stagnant or downward. A bull market is when the price trend is upward. Those terms are used in different ways, but as a general rule: bull means “up,”and bear means “down.” A bull charges forward, a bear mauls your face, eats your picnic basket, and then hibernates in a cave for months.
Bitcoin: Bitcoin is decentralized and distributed software that allows for trustless peer-to-peer global financial transactions and record keeping. It can be described as a blockchain based smart contract system with a native cryptocurrency token.
Block: A block is a group of transactions recorded at the same time. On the blockchain transactions are recorded in sequential timestamped blocks connected by cryptographic codes.
Blockchain: A database protocol. In cryptocurrency, a blockchain is a distributed digital public ledger where transactions and balances of a given cryptocurrency are recorded in sequential blocks. It is secured using cryptographic hashes. Not every cryptocurrency is blockchain-based. One should note that blockchains can do more than act as ledgers of transactions, they can store any sort of data in sequential blocks (their potential, and the potential of other distributed hash-based systems, is endless as far as the potential of this new type of database goes).
Block Height: Blocks are added to the blockchain sequentially. The current block number is called the block height.
Block Size: Block size describes the amount of data that can be added to a given block on the blockchain. Bigger blocks allow for more transactions to be stored in blocks, but as a trade-off, more hash power is required to mine a block. This makes transactions faster, but one can argue centralizes mining. In crypto, almost everything is “a trade-off,” just like IRL (In Real Life).
Bots: Almost all exchanges let users program or use a pre-programmed software that can interact with crypto platforms via an API. One type of software, a type that can execute trades on exchanges, is called a “trading bot” (often referred to as simply a “bot”). It may seem like cheating, and in certain hands, it can sure feel like it, but bots are important in many ways too. They can help implement strategies like trailing stop losses for you, and they can help “make markets” (all those little buys and sells that prevent wide spreads in a given market are generally “market maker” / “accumulation” bots). Like people, bots aren’t good or bad, they are neutral and depend on the ethics of the user.
BTFD: An acronym for “Buy the Frickin Dip.” This is good advice for a bull market, as for bear markets… whole thing is kind of one big dip, no?
Buy Low, Sell High / Buy High, Sell Low: To not lose money, you should aim to Buy Low, Sell High. Try not to Buy High, Sell Low. Remember to set stop losses and when all else fails, HODL.
Buying the Dip: If you are going to average into a coin, can’t do better than buying the dip (especially in a bull market, in a stagnant market, or at what you think might be the end of a bear market). This means buying when the price goes down. For building a long-term position, it works much better than buying when the price goes up. It also helps the market as you are part of the force stopping the dip instead of part of the force causing the run-up.
Centralized/Decentralized: If a single person or organized group of people control something, it is centralized. If no one person or group controls something, it is decentralized.
Coinbase: Coinbase is the name of a popular crypto company, but that company gets its name from an element of data found in every Bitcoin block. The “coinbase transaction” is the first element of a block and it is the only required transaction in the block. The coinbase’s output is used to send the block reward and can contain arbitrary text (for example the Bitcoin genesis block uses a clever timestamp that says, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”). See: What is the coinbase?
Confirmations: A tally of how many blocks were added to the blockchain after a transaction was confirmed. The more blocks confirmed, the more confident one can be that everything went smoothly.
Correction: After hitting a high, a coin will likely enter a period of correction where it steadies out at a given price before rising again (ideally it rises again from there, sometimes a correction simply spurs on a long “bear market”). In cryptocurrency coins often hit all-time highs and then enter correction periods. In these correction periods we may see “corrections” of 10% or even “crashes” of 20% or more.
Crypto: A general term that refers to everything cryptocurrency.
Cryptocurrency/ Coin /Cryptocurrency Token / Token: In simple terms, a cryptocurrency can be called a token, where each token is simply 1 unit of value of that cryptocurrency. The ownership of cryptocurrency tokens is recorded on a digital ledger (generally a blockchain).
NOTE: Sometimes the term token is used to specifically refer to tokens that are created on distributed platforms like Ethereum. ERC-2o tokens exist on the Ethereum network alongside the native token, Ether. Despite the term token sometimes being used to refer to ERC-20 tokens (and other tokens of this sort), all cryptocurrencies are technically tokens in that they are “value tokens” and in that transaction can be represented by a string of encrypted data called a “token.”
Crypto Assets: Since some cryptos aren’t meant to be used as monies, for example, non-fungible collectible tokens, one more may broadly call digital assets based on cryptography “crypto assets.”
Cryptography: The art/science of encoding and decoding. It is at the core of cryptocurrency to an even greater extent than the concept of currency is.
Cryptocurrency Wallet: Software that allows you to create cryptocurrency transactions and see balances associated with cryptocurrency addresses. Or more specifically, in wallets where you control your private keys, cryptocurrency wallets are software that lets you access balances associated with your private and public keys and create a transaction using your private keys (see “keys” below for an explanation). NOTE: Some wallet types, like custodial wallets on exchanges, are controlled by a third party. Custodial wallets don’t have you managing your private keys directly and instead just show a public address and a balance. NOTE: Some wallets are token specific, like the Bitcoin Core wallet, others can hold wallet addresses from multiple coins like TREZOR.
CT: An acronym that stands for “Crypto Twitter.”
Cypherpunk: Exactly what it sounds like. People who are into cryptography as a means of social change. They were the computer nerds who gave life to cryptocurrency before Bitcoin by gathering in online groups and sharing ideas related to how digital forms of cryptography could change the world (AKA how encryption could help things like open source). It’s an identity, and it’s a term that describes a type of person regardless of whether or not they identify with it. If you have a paper published from the 1990s on nakamotoinstitute.org that describes the future of cryptography and digital currency, you are probably a Cypherpunk.
DAO: A Decentralized Autonomous Organization. An organization where programmed rule-sets replace most centralized parts of a traditional company. For example, DASH is a DAO as all decisions are made by those who run masternodes and anyone across the world with enough DASH can run a masternode.
DApp: A decentralized application, often stored on a blockchain (with its backend code stored on a blockchain at least). It’s not hosted on a private server; it is hosted on many distributed servers. For example, Cryptokitties (a blockchain-based game that exists on the Ethereum platform where you collect digital cats).
DCA: Dollar-cost averaging. Instead of going all-in at once, one might want to dollar cost average into a volatile asset like a cryptocurrency to buy the average price over time to create a long position. There are a number of forms of “averaging,” dollar-cost averaging is one of the more popular.
DeFi: Decentralized Finance. Borrowing, lending, and other aspects of finance, but using decentralized applications (for example on the Ethereum network).
DEX: A Decentralized EXchange (a peer-to-peer exchange with no middleman). Many DEX exchanges exist on the Ethereum platform as Dapps. One example is EtherDelta.
Digital Asset: Not every cryptocurrency is meant to be a currency. If it is a digital store of value, it can be called a digital asset (both Cryptokitties and Ether are digital assets, but only Ether is a cryptocurrency token). Digital assets can be fungible or non-fungible. Cryptokitties are represented by non-fungible tokens (meaning unique tokens that can’t be replaced and still retain value; sort of like handcrafted one-off artworks) unlike Ether which is fungible tokens (all Ethers are equally valuable, there is no specific unique Ether that is worth more or less than other Ethers; like how dollars work).
Digital Ledger Technology (DLT): This is a class of technology that describes the technology behind distributed ledgers like blockchain. Bitcoin’s blockchain is a type of blockchain, a blockchain is a type of Digital Ledger Technology.
Distributed: If something is distributed it is in many locations and not a single location. For example, Bitcoin’s blockchain is distributed on many computers across the world.
DYOR: Do Your Own Research. Listening to the person on the internet is step 1, step 2 is doing your own research and making your own investment choices. A Reddit thread is not your fiduciary. For example, I have no specific certification that qualifies me to write a list of crypto acronyms. If you did your DD (Due Diligence), you would know that.
EMA: Exponential Moving Average. A line based on price action over time that helps traders to spot trends.
EW: Elliot Wave. A pattern that the price movement of assets tends to make. Used in technical analysis.
Fibonacci: Fibonacci brought modern mathematics to the west in many ways. He also popularized a set of ratios that are commonly used in trading to find support and resistance levels (Fibonacci retracement levels); they pair nicely with EW.
Fork (Cryptocurrency Forks): Like a “save as” for software. When an update is made to the software, a new version and old version are created. Soft forks are meant to be updates to the existing software (generally a blockchain or software that interacts with the blockchain in cryptocurrency). Hard forks are meant to create two identical versions of the software which can both change after the hard fork occurs. Anyone who owns tokens on one blockchain owns tokens on the new one in most cases when a fork occurs. There are other types of forks, but that is the gist. Bitcoin forks have names like Lightning, Segwit, Bitcoin Cash, etc. I can’t get into every funky name here, but they are all either soft forks are hard forks meant to upgrade the chain or create a new one.
FOMO: The Fear Of Missing Out. The emotional response that makes people impulse buy tokens at their all-time high. Try to not react to FOMO.
FUD: Fear, Uncertainty, and Doubt. The emotion that people try to invoke in others when they want to bring the price of a coin down or drum up headlines. It can be smart to react to FUD, as one can’t stop widespread FUD from spurring on a correction, especially after a coin just hit an All Time High. FUD is what causes economic depressions. It is what makes bubbles burst. FUD can be warranted or not.
Gas: The Ethereum network requires one to pay “gas” to send a transaction or otherwise execute a smart contract. Gas can be paid in ether (but it is calculated in GWEI, where a GWEI is 1/1000000000th of an Ether.
Genesis Block: The first block in a blockchain.
Governance Token: The voting token of a DAO. A token that is used to vote on changes to a cryptocurrency.
Hash: A hash algorithm turns a large amount of data into a fixed-length hash (a string of characters that acts as a cryptographic key). The same hash will always result from the same data, but modifying the data in any way will completely change the hash. In cryptography most data is encrypted using hash algorithms, they are at the core of cryptocurrency tokens and blockchains. Bitcoin specifically uses SHA-256, SHA stands for Secure Hash Algorithm.
Hash Power: The rate at which a given piece of hardware can mine a coin (mining is the cracking of cryptographic codes). It is like horsepower but refers to how fast hardware can decrypt hashes.
HODL: A misspelling of “hold” pronounced “HOD-L” based on a forum post from 2014 that some in the crypto community have decided now means “Hold On for Dear Life.” This is what you have to do when coins enter their common 20% – 80% corrections if you want to come out the other end still owning coins.
ICO: An initial coin offering. A process that involves creating a new token and raising money for it. The process is often done using smart contracts on the Ethereum network. After a new token is created, it then has to be distributed. Sometimes to give a token value, to distribute it, and simply to help the devs raise money an initial coin offering is used.
Keys (Cryptographic Keys): Cryptocurrency is largely based on public-key cryptography. The concept is that one key can be known publicly (the public key) and the other can’t (the private key). The public key is encrypted from and linked to a private key that can’t be known. In cryptocurrency, your public address is a hash of your public key. It lets people send you crypto. Meanwhile, your public key is a hash of your private key. Your private key lets you access the crypto associated with a public address. To resume, a public address is the public account number people can send coins to; it a has a public key, which is a hash of a private key. Meanwhile, the private key is like a unique personal password that lets you access an associated address in your wallet and send coins from it by creating a signature (a signature essentially an encrypted version of your private key). Never share your private keys, as they are the root of all the information needed to access one’s crypto!
Laddering: Setting incremental buy or sell orders.
Lambo: Lambo is short for Lamborghini. A Lambo is sort of a status symbol, goal post, and/or meme. Somehow everyone’s cognitive dissonance kicks in and there is this assumption that everyone who owns any amount of any tokens will somehow be driving a Lamborghini within the next 6 months. While it isn’t impossible, the only real bit of insanity here is trading in your coins for a physical object like a car [even a very cool car]. SAD!
Leverage: Borrowing against crypto or the dollar to increase your position size. See margin trading.
Liquidity: In terms of order books, the dollar amount of orders on the order books, especially pertaining to orders near the market price. In terms of trading volume, a reference to the amount of trading volume done in a price range or period of time. In terms of a company or person, capital that entity has freed up to use.
Liquidity Pool: Tokens “pooled” (locked into a contract) for automated market making.
Long / Short: Going long means betting on the price going up, going short means betting on the price going down.
MA / EMA / MACD: Moving Averages (MA) track help people understand the trend of a coin over time. Moving Average Convergence Divergence (MACD) shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day Exponential Moving Average (EMA) from the 12-day EMA. When these lines cross, they can tell us about the general trend of the asset. We would be looking for Death Crosses and Golden Crosses. Feel free to Google those terms, specifically check out Investopedia.
Main Net: The main network a cryptocurrency and its blockchain live on, as opposed to the Test Net (test network where developers and users can test transactions).
Maker/Taker: Maker fees are fees associated with limit orders. Taker fees are fees associated with market orders. This only applies to exchanges that use a Maker/Taker model and is only relevant when one fee type is lower than the other. GDAX is an example of an exchange where this matters. On GDAX maker orders have no fees, but taker orders do.
Market Price: the price an asset is currently going for in general. Should be roughly the average of the last price paid on all exchanges (especially high volume exchanges with liquidity).
Masternode: Masternodes are nodes that have voting rights. Masternodes generally get a cut of mining rewards and require locking up a large amount of a given crypto while running the node.
Mempool: With Bitcoin, the mempool is a pool of pending unconfirmed transactions on the Bitcoin network waiting to be confirmed an added to the blockchain by miners. This pool can have different names on different networks.
Mining: Running software that cracks cryptographic puzzles and rewards you with coins for solving the puzzle. Mining is how transactions get added to the ledger.
Moon: Where you want your coin to pass by on its way to Mars. Mooning is when a coin goes on a “run” (AKA bull run). That is when the price goes up quick. The opposite is a crash, correction, or dip. Can’t get a Lambo without mooning, can’t see the moon if you don’t HODL. NOTE: You’ll make old school more virtuous crypto nerds cry if you say “Lambo, moon, and HODL” in the same sentence. So try to be polite and say “Tesla, Stratosphere, and Laddering” when appropriate.
NFTS: Non-Fungile Tokens. They are unique crypto tokens that can represent anything from artwork to an insurance contract.
Node: Any computer that hosts the blockchain. The blockchain isn’t stored in one place; it is distributed, each node running it plays an important role in verifying the ledger.
Order Types: Market orders buy limit orders on the books. Stop orders trigger when price conditions are met. Learn more about types of orders you can place while investing / trading.
Panic Selling: Selling in a panic at a low because the price is going down and one fears it might go lower.
Peer-to-Peer: A network where participants communicate directly.
PoS: A proof-of-stake system (Pos). It is where mining is done by those who hold coins. The result is a bit like getting paid interest for holding coins.
PoW: A proof-of-work system (PoW). It is where mining is done by those who have the hash power, time, and energy. The result is that time and energy is traded for rewards.
Pre-mine: When developers mine blocks for themselves (to fund the project or pad their pockets) before taking a chain live.
Privacy coins: Some cryptos are focused on being purely anonymous. They allow, for example, private messages and transactions. These privacy-focused cryptos are called “privacy coins.”
Protocol: A set of rules. In crypto a protocol is a set of rules for a network.
Pseudo-anonymous: Most blockchain-based ledgers are pseudo-anonymous. In other words, every transaction is public but identifying information about who made the transaction is private.
Pump and Dump (PND): People get together on telegram groups and then pump coins to the moon. Sometimes what looks like natural growth in crypto is a “PND.” If you don’t have a why, don’t buy. Try not to get FOMO and buy into the giant green candle. Pump and Dumpers who spoof to gather coins and then Pump and Dump a coin help in that they help raise prices of coins over time. Otherwise, they are just a symptom of free markets and cause a lot of the instability you see in crypto. They are a less grey area and more toward being black hat. Most exchanges ban pump and dumps and other manipulation tactics as a rule of thumb, but let’s be honest, the track record of actually stopping these is not great.
QR Code: Like a barcode you can scan with your phone. In crypto QR codes can be scanned instead of having to copy and paste or write down wallet addresses, thus they are useful for transactions.
ROI: A return on investment. What you would ideally like to happen.
RSI: The relative strength index (RSI) is a momentum indicator that compares the magnitude of recent gains and losses over a specified period to measure speed and change of price movements. It is smart to enter a coin when it has a low RSI.
SAFU: An acronym that stands for Safe As “FUdge” (TIP: we don’t use curse words on this site). For example in a sentence, “don’t worry about your funds on our exchange, they are Safe As FUss.”
Satoshis (Sats): The smallest fraction of a Bitcoin is called a Satoshi (in other words, a satoshi represents one hundred millionths of a bitcoin). Its named after Satoshi Nakamoto. Bitcoin is in many ways the center of the crypto economy. Thus, traders often speak of Sats.
Satoshi Nakamoto: A persona created by the person or people who created Bitcoin. Satoshi may or may not exist and may or may not be alive. He/She sacrificed fame (and potentially a fortune) to remain anonymous.
Shhh Coin: No one says “shhh,” but the alternative is not something I want to write on the site. This is what people call altcoins they don’t like.
Slippage: when a market order chews through orders on the order book and fills higher or lower than the first limit order in line.
Smart Contract: Software that acts as a contract. It can do anything you can imagine a digital contract doing. Ethereum’s network made the concept popular, but the reality is Bitcoin’s platform is essentially a blockchain-based smart contract system with a native cryptocurrency token (just like Ethereum and Ether).
Snapshot Block: Forks occur at specific block heights. The block height you have to be in a coin by to qualify for a fork is called a snapshot block. It is the block at which a snapshot of the ledger will be taken to determine the balances of the ledger of the fork.
Spread: the gap between the highest bid (buy limit order) and lowest ask (sell limit order).
Spoofing: When a person or people with a lot of money and coins buy and sell to themselves in a set range to create the illusion of volume. People also decided there is a person named “spoofy” who single-handedly manipulates the markets by spoofing (pretty sure this is an urban legend).
Stop Loss: If a certain price is hit, a market order will be triggered. If you are going short in a coin that is on a run, you should consider setting a stop loss (or laddering stop losses).
Strong Hands / Weak Hands: Strong hands HODL during a correction, weak hands sell whenever the going gets rough. When too many new investors (in a given coin) invest in a coin the coin can be said to be “in weak hands.” Long-term investors who have built a position in a coin they love tend to HODL when the going gets rough (and thus they have “strong hands”), new investors with weak hands tend to get “weak knees,” and “panic sell” in a correction.
Technical Analysis (TA): Technical Analysis is the art/science of trying to predict future trends from historic price and volume data. You don’t need TA as a casual investor, but you should learn the basics if you trade. See tradingview.com. That said, even though crypto can be speculative and see a lot of emotional trading, and thus TA tends to help, it is vital to do some Fundamental Analysis (FA) and other analysis types as well. A chart can only tell you so much; you also need to understand factors like demand, supply, tech, upcoming upgrades, the news, etc. Don’t make the mistake of thinking a coin “has to” go to X support level just “because TA,” sometimes good news, bad news, or a software update can be the main driver of a coins price (and that won’t always be clear from a chart).
Ticker Symbols: Every coin has a trading symbol or ticker symbol. For Ripple, it is XRP, for Bitcoin BTC, for Litecoin LTC, for Ether (ETH), etc. People often refer to coins by their ticker symbol and not their name.
Tokenization: If you just sent unencrypted data across the internet it would not be secure. So instead of doing that information is tokenized. It is encrypted and turned into a string of data. That string can then be sent and stored. Data sent between wallets and stored on the blockchain is tokenized. This is why the term cryptocurrency tokens is used.
Transaction (sometimes abbreviated TX): To send crypto one must broadcast a transaction containing inputs and outputs, that data gets added to the blockchain.
Transaction Fee: To send a transaction a fee must be paid (with most cryptos). This fee is a reward for miners. In Ethereum it is called “Gas,” it might have a unique name for a given cryptocurrency.
A Transaction Number or Transaction ID. This allows you to track a transaction. If you are freaking out because your transaction is taking too long, you probably just have to wait longer… check a block explorer and track the transaction number!
Wallet: In cryptocurrency, a wallet is software that allows you to store “keys” and create cryptocurrency transactions. It is essentially where you store cryptocurrency addresses that can receive cryptocurrency and where you send cryptocurrency from. Also, sometimes people call cryptocurrency addresses “wallets.”
Whales: Whales are cryptocurrency investors with many coins or dollars. These investors can help move markets, or they can help stop markets from moving. When you see a 250 BTC buy wall or sell wall, that is a Whale. When the price goes down quickly and it makes you sad, or it shoots up and liquidates your short position, you can curse your semi-mythic nemeses “whales.”
Yield: The percentage you make on your staked or lent tokens.
Yield Farming: Pooling a token pair and then staking it for governance tokens and then selling the governance token to capture the yield.
NOTE: I will update his list over time. If you think we should add something to this list or think you can explain a term using more efficiently, please comment below.
- A Guide to Cryptocurrency Terminology – Acronyms & Slang
- Bitcoin Wiki
- This is a glossary of terms related to Bitcoin and Coinbase. Coinbase.com.