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.
A thought experiment that is intended to illustrate the difficulty of reaching consensus in a distributed system. In the problem, a group of generals who each command a portion of the army, surround a city. These generals must develop a plan to either attack or to retreat. Every general must reach a collective decision (if a unified decision is not reached, and some generals decide to attack, while others retreat, then the uncoordinated attack or retreat, the army will fail). Generals must coordinate via messengers (whom may lie) and generals themselves may be traitorous.
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.
A time-limited event where people can purchase tokens of a cryptocurrency.
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. A cryptocurrency that uses DPoS votes for a "witnesses" to secure their computer network. Coin holders to vote for "delegates", who are then responsible for validating transactions and maintaining the blockchain. It's used as consensus mechanisms in various cryptocurrencies such as BitShares, Lisk, EOS, Tezos, Ark, Nano and Cardano.
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 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.
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.
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, it is a one-way function that cannot be reverted. It's the kind of mathematical work used to mine cryptocurrencies.
A patented (closed 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.
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.
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.
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.
Also called "tumbling", it is the randomizing of pool of cryptocurrencies in order to obscure the original source of funds.
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. It was founded by Jed McCaleb.
A "number only used once", which may have different meanings in contexts both in and outside of crypto. A cryptographic nonce is often used to ensure that old communications cannot be reused in replay attacks.
Software that has its source code publicly available to modify, fork, or redistribute.
A computer network which does not require a third party to operate. Instead, a user interacts directly with another user.
An increase in the price of an asset over a length of time. Could refer to short or long time frames.
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 it factors one’s overall support of the network into account, not just the current moment in time. Vesting, transaction partners, number and size of transactions are all factors.
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 has been 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 member of the group actually produced the signature.
The percentage gain/loss on an investment.
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 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 that asset and immediately sell it, hoping to buy it back when it is cheaper.
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.
An asset that can be reliably saved, retrieved, exchanged and predictably useful. Anything that retains these qualities as time passes is a good store of value.
A price that a given asset typically has trouble falling below. If it does fall below this 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's a network consisting of nodes that issue 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.
Open-source software designed to protect a user from Internet surveillance by routing 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 (mostly) unique identifier for a given transaction.
A measure of how rapidly and unexpectedly an asset has historically changed in price.
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.
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.