This page provides a beginner-friendly explanation for common terms used within the crypto ecosystem. This includes the blockchain, cryptography, investing and cultural memes.
Someone who has a net worth greater than $1,000,000 and meets certain additional income requirements. Qualifying individuals may file with the SEC to obtain this status. Only accredited investors may invest in hedge funds, venture capital funds, and other "advanced" forms of investing.
A blockchain project giving away tokens or coins for free. A simple condition may need to be met, such as having a certain existing balance in your wallet or registering before a deadline. Teams may elect to do this to raise awareness of a project, or ensure that a cryptocurrency is not consolidated among too few people.
A device that has never been (and will never be) connected to an unsecure network, such as the internet. A strategy to keep cryptocurrency stored safely.
The highest price an asset has ever been sold for.
A set of regulations designed to prevent the practice of illegally generating income.
Baking is the process that Tezos uses to append new blocks of transactions to its blockchain. It is a kind of delegated proof of stake. Bakers receive rewards for each block baked, similar to how Bitcoin miners receive rewards for discovering a new block. A baker is more likely to bake a block if they have a larger number of rolls (groups of 10,000 XTZ). Accounts must be registered as a delegate in order to partake in the baking process, and can bake on behalf of other accounts who do not meet the 10,000XTZ requirement.
A long-term downward trend in a market.
A collection of computers infected with malicious software and controlled remotely without the owners' knowledge.
A period of unsustainable growth in a market due to irrational exuberance, which eventually "pops" causing the market to crash.
A reward offered to those who help find and fix vulnerabilities in computer software. This often applies specifically to security-related bugs.
A long-term upward trend in a market.
A specific type of DAG (Directed Acyclic Graph) first introduced by the Nano cryptocurrency. Each account has one blockchain which is controlled by the account's private key, and each blockchain is replicated to all peers in the network. This arrangement is called a block lattice.
The characteristic of a system that is able to tolerate the failures belonging to the Byzantine Generals’ Problem. The problem is a thought experiment that is intended to illustrate the difficulty of reaching consensus in a distributed system. there is no central authority to remedy any wrongs in the event of a Byzantine failure. In the problem, a group of generals, each commanding a portion of the Byzantine army, encircle a city. These generals must now develop a plan to either attack or to retreat from the city. Some generals may want to attack, whilst others may want to retreat, what is necessary is that every general reaches a collective decision. If a unified decision is not reached, and some generals decide to attack, whilst others choose to retreat, then the uncoordinated attack or retreat will fail. The generals are also physically separated from each other, and must communicate their decision to either attack or retreat via messengers. There is a possibility that these messengers may fail to deliver votes, or worse, may forge votes, which would result in an uncoordinated decision taking place. The problem is further complicated by traitorous generals who may send mixed messages about their preferences, leading some generals to believe that they will attack, and others to believe that they will retreat.
The number of coins or tokens that are circulating in the market and in the hands of the general public.
Keeping a cryptocurrency stored offline, as a security precaution to prevent theft.
A transaction is considered to be confirmed once it has been written to the blockchain. If a transaction has multiple confirmations, it means that additional blocks have been mined after the block that contains the transaction in question. The higher the confirmation number, the more certainty that a coin has not been double spent.
An time limited event where people can purchase tokens of a cryptocurrency.
A blockchain-based virtual game that allows players to purchase, collect, breed and sell various types of virtual cats. It famously clogged the Ethereum network at the height of its popularity. A single a CryptoKitty has been sold for over $100,000.
The study of encryption.
A digital currency in which encryption techniques remove the need for a trusted third party (such as a bank).
Someone advocating the widespread use of cryptography and other privacy-enhancing technologies as a route to social and political change.
Creator of the cryptocurrency platform BitShares, co-founder of the blockchain social platform Steemit, and is CTO of EOS.
A small price recovery after a large crash, giving an indication of false hope for a dead asset. Comes from the phrase, "Even a dead cat bounces once."
Invented by Daniel Larimer, it is an alternative consensus mechanism to Proof of Work. People in a particular cryptocurrency community vote for Witnesses to secure their computer network. Coin holders to vote for “delegates”, who are then responsible for validating transactions and maintaining the blockchain. Used as consensus mechanisms in various cryptocurrencies such as BitShares, Lisk, EOS, Tezos, Ark, Nano, Cardano
A group of companies allied with the goal of making Ethereum work for large scale business purposes.
A decentralized service which allows Ethereum addresses to be replaced with human-readable names.
An asymmetric memory-bound proof of work system that is based on the generalized birthday problem. Its memory intensive nature can be used to prevent ASIC mining. ZCash and its numerous forks are the most notable cryptocurrencies that use the Equihash algorithm. Developed by Alex Biryukov and Dmitry Khovratovich at the University of Luxembourg.
A standard format for tokens to follow in order to work with the Ethereum ecosystem. Refers to the 20th "Ethereum Request for Comment" proposal.
A security that tracks another asset, such as a commodity, group of assets, or an index. It can be traded like a common stock on a stock exchange.
The runtime environment for smart contracts in Ethereum. It is sandboxed and completely isolated from the network, filesystem or other processes of the host computer system. Every Ethereum node in the network runs an EVM implementation and executes the same instructions.
A marketplace where cryptocurrencies and other financial instruments are traded.
A free source of a cryptocurrency (typically a very small amount). It may be in exchange for completing a trivial task.
A government issued currency.
A meme referring to a day when the Ethereum market cap overtakes the Bitcoin market cap.
A change in a given blockchain protocol.
The primary reasons an asset falls in price or causes someone to panic sell.
A methodology of analyzing a potential intrinsic value of an asset based on both qualitative and quantitative factors such as economic metrics, competition and their product.
An asset where each unit is essentially identical and interchangeable with one another.
The internal pricing for running a transaction or contract in Ethereum.
Governance refers to the method by which certain cryptocurrencies evolve over time. Certain coins have explicit "on-chain governance", which outlines a specific process by which proposed changes are voted on.
A computer optimized for computing visual display information. It is typically also much better at mining cryptocurrencies better than a CPU.
A change in a blockchain protocol that is not backwards-compatible, and requires all members involved to upgrade their software.
A meme derived from the misspelling of the word "Hold". A mindset that encourages people to hold on to their cryptocurrencies and have faith in the longterm prospects of the industry. Often given the incorrect bacronym "Hold on for Dear Life".
Any mathematical function that can be used to map data of arbitrary size to data of fixed size. In crypto, a one-way function that cannot be reverted. Used to mine cryptocurrencies.
A patented (and therefore not open source) "next-generation" consensus protocol that could theoretically render the blockchain obsolete. It features a "gossip protocol" where every node can spread signed information (events) on new and received transactions to randomly chosen neighbors. Neighbors will then aggregate received events with information received from other nodes into a new event, and then send it on to other randomly chosen neighbors. This system can reportedly achieve an astonishing quarter million transactions per second.
A method of raising money by selling a newly created cryptocurrency.
An object that cannot be changed once it is created, such as a transaction once it has been written to the blockchain.
Creator of Mt. Gox, founder of Ripple, and co-founder of Stellar.
A series of laws and regulations which require businesses to know the identity of their customers.
Using borrowed money to increase the potential gains or losses of an investment.
The availability of an asset to be bought and sold easily, without affecting its market price.
Buying an asset with the expectation that it will rise in value.
The act of using borrowed funds from a financial institution to trade in a leveraged manner.
Price of a coin multiplied by the circulating supply of that coin.
A full node or wallet that keeps the full copy of the blockchain, but also performs additional functionality that is specific to a given cryptocurrency (such as participating in governance, or facilitating instant transactions). Someone who runs a full node typically needs to own a certain amount of tokens to qualify, and may in turn earn passive income from it.
The maximum amount of coins or tokens that will ever exist in the lifetime of a given cryptocurrency.
An important data structure commonly used within blockchains (as well as BitTorrent and Git). It allows for fast and secure verification of the contents of large data structures. Is used to test whether a transaction is included in a set or not.
To increase drastically in value.
A technical analysis indicator which takes the average of a specific number of previous data points in order to calculate its present value.
The nature of the computational work that must be performed by a miner in order to discover the next block on a blockchain. This is only applicable in proof of work style blockchains.
Also called tumbling, it is the randomizing of pool of cryptocurrencies in order to obscure the funds of their original source.
A Bitcoin exchange based in Japan which got hacked and went bankrupt in February 2014. The original name is short for "Magic: The Gathering Online Exchange", which is what the site was originally intended for. It later became the first widely popular crypto exchange.
A "number only used once", which may have different meanings in contexts both in and out of crypto. A cryptographic nonce is often used to ensure that old communications cannot be reused in replay attacks.
A valid block that is not part of the main chain. May occur when two miners produce a block at the same time, or caused by an attacker attempting to reverse transactions.
Software that has source code which is freely available to modify, fork, or redistribute.
Ouroboros is the name of Cardano's staking algorithm. In a staking algorithm, a node is selected to generate a new block based on the relative economic stake they have in the network. Time is divided into "epochs", and further subdivided into "slots". Slot leaders are chosen.
A computer network which does not require a third party to operate. Instead, a user interacts directly with another user.
A sale event that runs prior to the proper crowdsale in an ICO. There is usually a low cap to the funds raised, and they are often sold in bulk or in a discount.
An increase in the price of an asset over a length of time. Could refer to short or long timeframes.
A blockchain consensus algorithm first introduced by NEM. Proof of Importance is the mechanism that is used to determine which nodes are eligible to add a block to the blockchain (this process is known as "harvesting" in NEM. It is different than proof of stake in that factors one’s overall support of the network into account, not just the current moment in time. vesting, transaction partners, and number and size of transactions in the last 30 days.
The ability to mine cryptocurrency by simply holding coins in a wallet that is connected to the network. The more coins in the wallet, the more mining power.
A coordinated manipulation of the price of an asset. A whale or group of people all start buying a cryptocurrency causing the price to drastically increase very rapidly. This often causes wild speculation and others start buying it out of excitement. The original actors immediately sell everything they originally bought causing the price to come tumbling back down.
It is a price that a given asset typically has trouble reaching above. If it does reach above that level, it will likely climb even higher now that this level was broken.
Getting "wrecked". Losing a lot of money on an investment.
A technology used by Monero in order to obfuscate the input of a transaction. A message signed with a ring signature appears to be endorsed by any person within a certain group of people. It is computationally infeasible to determine which of the group members actually produced the signature.
The percentage gain/loss on an investment.
The smallest atomic unit that a Bitcoin can be divided into. 1 satoshi = 0.00000001 BTC
Also called a shitcoin, this refers to a token that provides little or no value, and is simply propped up on hype and false promises.
A federal government agency responsible for protecting investors by regulating securities markets. The mission statement of the SEC is to "promote a market environment that is worthy of the public's trust".
Someone trying to spread hype about something by endorsing the product in public. Typically has negative associations.
A method of encryption. Secure Hash Algorithm. Is involved in the mining process for Bitcoin.
A method of scaling a blockchain (increasing how many transactions can be processed per second) by splitting up which miners are working on what at a given time.
A kind of address used by ZCash that is highly private. They are not visible in the blockchain and offer strong privacy against transaction graph analysis. The value transferred is private if both the sender and receiver are shielded. Shielded addresses are not supported in every ZCash wallet.
A method of betting on an asset decreasing in value. When someone shorts an asset, the investor borrows the shares of stock from the investment firm to sell to another investor at a lower price later.
A change in the protocol that is backward-compatible, and generally does not require users to upgrade their wallets or take any other action.
A way of sending cryptocurrency by giving additional privacy to the recipient. By using a stealth address, you ask payers to generate a unique address in such a way that you can deduce the corresponding private key. So although a single "stealth address" can be visible in public, the blockchain sees all incoming payments as going to separate addresses.
A store of value is the function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. More generally, a store of value is anything that retains purchasing power into the future.
It is a price that a given asset typically has trouble falling below. If it does fall below that level, it will likely fall much lower now that the support level was broken.
A methodology of valuing the price of an asset based on studying market data, such as patterns in price and volume.
A type of DAG (directed acyclic graph) used by IOTA. It is a network consisting of nodes which issuing and validate transactions. A qualifying node must choose two other transactions to approve, ensure approved transactions are not conflicting, and solve a cryptographic puzzle. A "coordinator" is currently used as a centralized consensus mechanism to prevent attacks on the network, and is scheduled to be shut down once the network is stable enough.
A alternate blockchain meant for testing purposes. Coins on this chain have no value.
A cryptocurrency that relies on another cryptocurrency (frequently Ethereum) in order to operate.
Another way of describing an ICO (Initial Coin Offering).
Open-source software designed to protect a user from internet surveillance by routing their traffic across a randomized set of proxy servers.
A line that can be drawn (either horizontal or diagonal) in which the value of a given asset or indicator can frequently bump into but not cross. If a trend line is crossed, a larger price movement often follows.
A system that minimizes the amount of trust required from any single person or entity in a system by distributing it among many agents within it.
A somewhat unique identifier for a given transaction.
An address that you choose yourself, or at least partly. Different blockchains have different capabilities around this.
A co-founder of Ethereum and a prominent voice in the cryptocurrency community.
A measure of how rapidly and unexpectedly an asset has historically changed in price.
The number of coins or tokens traded on an exchange in a given period of time.
People who panic sell when the price of an asset begins to plummet.
A very wealthy person who can single-handedly manipulate the price of an asset.
An informal currency code for Bitcoin. You can sometimes use this on your stock ticker app to track the price of BTC.
A method that lets someone prove possession of certain information (such as a secret key), without revealing that information, and without any interaction between the prover and verifier.
An implementation of a Zero Knowledge Proof used by ZCash among other cryptocurrencies.