Clueless About Crypto ? (crypto vocabulary) 

Bolster your crypto vocabulary with a some key terms: 

A

• Address: A unique string of letters and numbers used to send and receive cryptocurrencies. Similar to an email address, but instead of messages, it directs digital coins or tokens.
• Airdrop: A promotional event in which a cryptocurrency project distributes free tokens or coins to users, often as a marketing strategy or to encourage early adoption.
• Altcoin: Any cryptocurrency other than Bitcoin. Examples include Ethereum, Litecoin, and thousands of others, each with distinct features and use cases.

B

• Bear Market: A market environment where prices consistently fall over a period, often leading to negative investor sentiment.
• Bitcoin (BTC): The first and most well-known cryptocurrency, introduced by the pseudonymous Satoshi Nakamoto, operating on a decentralised network.
• Blockchain: A decentralised, digital ledger that records transactions across many computers so that the record cannot be altered retroactively without altering all subsequent blocks. It provides security, transparency, and trust without a central authority.
• Bull Market: A market environment where prices rise or are expected to rise, often characterised by investor optimism and positive sentiment.

C

• Cold Storage: The practice of storing cryptocurrencies offline (e.g., on a hardware wallet or paper wallet) to protect them from online hacks.
• Consensus Mechanism: The method by which nodes in a blockchain network agree on the state of the ledger. Common mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).
• Crypto Exchange: An online platform where users can buy, sell, and trade cryptocurrencies. Some are centralised (CEX), while others are decentralised (DEX).

D

• dApp (Decentralised Application): An application that runs on a blockchain network rather than a single server, ensuring it is open, resistant to censorship, and transparent.
• DeFi (Decentralised Finance): A movement to recreate traditional financial services, like lending and borrowing, using blockchain technology without intermediaries like banks.
• DYOR (Do Your Own Research): A common phrase reminding investors to thoroughly investigate a project before investing.

E

• Encryption: The process of converting information into code to prevent unauthorised access. Blockchain relies heavily on cryptographic techniques to secure data and transactions.
• Ethereum (ETH): A blockchain platform known for introducing smart contracts and enabling the development of thousands of decentralised applications and tokens.

F

• Fiat: Government-issued currency, like AUD or USD, which is not backed by a physical commodity but by the government that issued it.
• FOMO (Fear of Missing Out): When investors feel pressured to buy a coin quickly due to its rising price and hype, often without proper research.
• Fork: A change to a blockchain’s code that creates two separate versions of the blockchain. “Hard forks” can produce entirely new currencies (e.g., Bitcoin Cash from Bitcoin).
• FUD (Fear, Uncertainty, and Doubt): Negative information or rumors about a cryptocurrency or project that may not be fully justified, often causing panic selling.

G

• Gas: A fee required to execute transactions or run smart contracts on certain blockchains like Ethereum. The gas cost helps maintain network security and proper functioning.
• GPU (Graphics Processing Unit) Mining: Using computer graphics cards to mine crypto. This was once common for mining certain altcoins due to GPU efficiency.

H

• Halving: An event in which the block reward given to cryptocurrency miners is cut in half. Bitcoin’s halving occurs roughly every four years, reducing the rate at which new coins enter the market.
• Hash: The output of a cryptographic function that takes any data as input and returns a fixed-size string. Hashes are used to secure the blockchain’s data.
• HODL: A slang term originating from a typo of “hold.” It means holding onto your cryptocurrency rather than selling, often used during market downturns.

I

• ICO (Initial Coin Offering): Similar to an IPO (Initial Public Offering) in the stock market. A crypto project sells a new token to raise funds for development, often trading established cryptos like Bitcoin or Ethereum for these new tokens.
• Immutable: A characteristic of blockchain transactions and records, meaning once they are added, they cannot be changed or removed.

J

• JOMO (Joy of Missing Out): The opposite of FOMO. Being content with not participating in a particular crypto trend or frenzy, avoiding potential losses from hasty decisions.

K

• KYC (Know Your Customer): A regulatory process requiring cryptocurrency exchanges and platforms to verify the identities of their users, helping prevent fraud and money laundering.

L

• Ledger: A record of financial transactions. In crypto, a blockchain is a type of decentralised ledger.
• Liquidity: The ease with which a cryptocurrency can be bought or sold without significantly affecting its price. High liquidity means lower price volatility and easier entry/exit from a position.

M

• Market Cap (Market Capitalisation): Calculated by multiplying the total number of coins in circulation by the current price per coin. It gives an indication of a cryptocurrency’s size and market value.
• Mining: The process of using computing power to verify transactions on a blockchain. Miners are rewarded with newly created coins.
• Moon/Mooning: A colloquial term used when a cryptocurrency’s price rapidly increases, as if it’s going “to the moon.”

N

• Node: A computer connected to a blockchain network that stores a copy of the blockchain and helps validate and relay transactions.
• NFT (Non-Fungible Token): A unique digital asset that represents ownership of a specific item (often art, collectibles, or virtual real estate). Unlike cryptocurrencies, NFTs are not interchangeable.

O

• Oracle: A service or mechanism that feeds off-chain data (like weather info or sports results) into a blockchain for use in smart contracts.
• Over-the-Counter (OTC) Trading: Trading crypto directly between two parties, often for large volumes, without using a public exchange order book.

P

• Private Key: A secret piece of data that grants the holder access to their crypto funds. If someone obtains your private key, they control your crypto.
• Public Key: The publicly shareable counterpart to a private key. It’s used to receive crypto and to verify digital signatures.
• Proof of Stake (PoS): A consensus mechanism where validators “stake” their coins to confirm transactions and produce new blocks, using less energy than Proof of Work.
• Proof of Work (PoW): A consensus mechanism where miners compete to solve complex mathematical problems to validate transactions and secure the network (e.g., Bitcoin).

Q

• QR Code: A machine-readable code that can store data such as a crypto address. Scanning a QR code allows for easy and error-free fund transfers.

R

• ROI (Return on Investment): A measure of the profitability of an investment. It’s calculated by dividing the net profit by the initial cost of the investment.

S

• Satoshi: The smallest unit of Bitcoin (0.00000001 BTC), named after the creator of Bitcoin, Satoshi Nakamoto.
• Scamcoin: A derogatory term for a cryptocurrency with little to no value or a project that is suspected to be a scam.
• Smart Contract: Self-executing contracts with the terms directly written into code. They automatically execute actions when predefined conditions are met.
• Stablecoin: A type of cryptocurrency whose value is pegged to a stable asset like the US dollar or gold, reducing price volatility.

T

• Token: A digital asset built on top of an existing blockchain (e.g., ERC-20 tokens on Ethereum). They can represent value, services, or even rights within a particular project.
• Transaction Fee: A charge for processing a crypto transaction. Fees can vary by network usage and are paid to miners or validators.

U

• Utility Token: A token that provides access to a product or service offered by a cryptocurrency project, rather than representing a stake in the project.

V

• Validator: In Proof of Stake systems, a node that participates in the validation of transactions and creation of new blocks by staking their tokens as collateral.
• Volatility: The degree of variation in crypto asset prices over time. Crypto is known for higher volatility compared to traditional markets.

W

• Wallet: A software program or hardware device that stores public and private keys and interacts with blockchain networks to allow users to send and receive cryptocurrencies.
• Whitepaper: A document outlining a cryptocurrency project’s concept, technology, purpose, and roadmap, helping investors understand what the project aims to achieve.

X

• XRP: The native digital asset of the Ripple network, designed for global payments and remittances.

Y

• Yield Farming: The practice of earning passive income on crypto holdings by lending them out or providing liquidity to DeFi platforms, often rewarded with additional tokens.

Z

• Zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge): A cryptographic technique that allows one party to prove that they know certain information without revealing the information itself. Used in privacy-focused blockchains.
• Zero Confirmation Transaction: A transaction broadcast to the network but not yet confirmed by miners/validators. Such transactions carry risk since they could still be reversed.