Cryptocurrency Glossary

Artificial Intelligence. As machines advance in intelligence, they are capable of learning from their environments and completing more complex tasks.

Wealthy individuals who contribute significant funds (usually over $1,000,000) to emerging projects.

The practice of buying and selling the same coins on different exchanges at the same time to take advantage of price differences.

A famous advocate of Bitcoin who has given speeches and presentations about Bitcoin all over the world.

An investor who has a net worth of over $1 million and/or an annual salary over $200,000-300,000.

A process for solving a mathematical problem. In blockchains consensus algorithms are used to verify transactions.

All-Time High. The highest price a cryptocurrency has ever reached.

The payment given to a miner for securing a blockchain that uses POW (Proof-of-Work) consensus

A condition that affects cryptocurrencies when the data stored reaches very large sizes due to increasing numbers of users and transactions. When blockchain bloat gets severe, transaction speed suffers.

The total number of blocks on a blockchain since the genesis block (first block) was mined.

A mechanism that destroys an amount of coins or tokens, thereby decreasing the total coin supply of a cryptocurrency. 

Bitcoin’s ticker symbol.

Bitcoin Improvement Protocol. New feature proposed for Bitcoin are BIPs.

A short drop in a cryptocurrency’s price that makes investors think the price will continue falling. Instead, the price rises significantly following the drop, fooling the “bears.”  

Pessimistic about the future of a cryptocurrency’s price.

The amount of data that can be stored in one block of a given blockchain. For example, the Block Size limit of Bitcoin is 1MB. Larger block size allows for more transactions per block. Thus, it’s not that transactions are “faster” or “slower”. It’s that transactions may be seemingly faster because the network is handling more transactions at a time.

The time it takes to mine a new block.

A term used to describe cryptocurrency projects that facilitate programmable transactions rather than simply acting as methods to store and transfer value. Projects like Ethereum are known as Blockchain 2.0 contracts because they allow their users to create and execute smart contracts and develop decentralized apps.

The first blockchain-based peer-to-peer protocol that allows its users to store and transfer wealth.

The first blockchain-based cryptocurrency, launched in 2009. Bitcoin remains the most influential and widely recognized coin. All other cryptocurrencies are known as "altcoins," simply because they are not Bitcoin.

BNB (Binance Coin) is an ERC20 token that lives on the Ethereum blockchain. The token has multiple forms of utility, essentially being the underlying gas that powers the Binance Ecosystem. Most important, it can be used to pay for trading fees on the exchange, obtaining the equivalent of a 50% discount on trades during the first year, 25% during the second year and so on.

A blockchain scaling solution in which every user account has its own blockchain. Block lattices reduce blockchain bloat by storing transaction data separately from a cryptocurrency's main blockchain.

A new version of the Bitcoin Protocol devloped using the Javascript programming language.

A Bitcoin wallet that gives its users an aesthetically pleasing interface while still employing the core Bitcoin protocol.

Komodo's Decentralized Exchange which connects all of its independent blockchains and allows atomic swaps.

A short rise in a cryptocurrency’s price that makes investors think the price will continue to rise. Instead, the price falls significantly following the rise, fooling the “bulls.”  

The amount of money one has available to him/her.

A segment of data recorded on the blockchain that can contain transactions and other information.

A company led by cypherpunk Adam Back that promotes second layer scaling solutions for Bitcoin.

A trade on a popular cryptocurrency exchange.

An offline wallet for holding cryptocurrencies. Considered more secure than hot wallets.

A general agreement among participants using and mining a cryptocurrency.

Advocates of using strong encryption to evade government spying. Cypherpunks were heavily involved in the early development of Bitcoin.

A paper written by Eric Huges that outlines Cypherpunks’ philosophy and vision. This Manifesto was a big influence on many early cryptocurrency enthusiasts.

No longer in production, these were physical coins created by Mike Caldwell that have private Bitcoin keys.

Controlled by one group or within one certain area.

Addresses created to hold the remaining balance when users spend less than a full input. Mostly used in hierarchical deterministic wallets that can create an unlimited number of addresses.

Digital currency that uses cryptography. Bitcoin & Altcoins are all types of cryptocurrency. 

An irreversible list of all transactions that have ever occurred on a platform.

A method of encoding inputs to create unique outputs, especially for creating digital fingerprints.

Uses nodes spread out across many different locations to achieve decentralization.

Any non-physical object of value, like a document, an audio file, or a logo, that can be owned and controlled.

A set of data used to represent an entity on a network or on the Internet.

Decentralized Autonomous Organization. An organization governed by smart contracts founded to allocate funds to cryptocurrency projects.

Distributed amongst its users rather than controlled by one group or within one certain area.

A consensus mechanism that uses professional nodes to broadcast a version of the blockchain. If two thirds or more of the nodes agree, that block is written onto the chain. 

An application created to run on a user's PC.

DPoS. A consensus mechanism that has a blockchain's nodes vote on the correct version of the blockchain. 

Decentralized exchange. A platform (which isn't controlled by any single authority) that allows users to buy and sell cryptocurrencies.

A measure of how much hashing power (computing power) is required to find the next block on a blockchain. Difficulty increases over time on blockchains.

A unique, encrypted output that cannot be duplicated. Useful for creating digital identities and confirming authenticity.

A network that requires special software (like TOR) to access. Websites on the Darknet are much more difficult to shut down than normal websites. The Darknet was one of the first communities to use cryptocurrencies for transactions.

Dynamic Proof of Work (dPoW) is currently in the early stages of development. Not many new blockchain projects are experimenting with it.

Directed Acyclic Graphs. Also referred to as “Tangle.” DAG is an alternative to the “chain of blocks” architecture used in many crypto projects.

An organization that operates to earn profits for its shareholders (coin holders) by creating value for the free market.

Distributed Denial of Service Attack. A means by which a malicious individual shuts down another individual's internet connection by overloading it with requests.

A feature which allows KyberNetwork to maintain high levels of liquidity. The DRP keeps reserves of cryptocurrencies and establishes rates of exchange between them, allowing any user to easily trade one crypto for another.

Parts of the Internet that are not accessible through ordinary means, like search engines.

A cryptocurrency created by Vitalik Buterin that runs on Ether (ETH). Ethereum was the first blockchain-based technology to make smart contracts and decentralized applications possible.

A third party used to facilitate transactions and increase security.

Transforming data into unrecognizable code that can only be decoded with the exact decryption key.

Exchange Traded Fund. A group of assets that can be bought or sold as a single asset.

An extremely secure messaging functionality offered by QRL.

A change in a cryptocurrency’s software that does not make it incompatible with the original version.

The analysis of the economic and political factors that affect the intrinsic value of an asset

A change in the original code of a software.

A hypothetical society in which no one is forced to do anything against their wishes and all actions are voluntary.

Fear of Missing Out. Investors with FOMO buy cryptocurrency (emotionally rather than logically) for fear of missing out on profits.

A CNBC show on which cryptocurrencies are frequently discussed.  

The idea that all units in a money supply are exactly equal. Fungibility is considered to be an essential aspect of effective currencies by many economists.

An open-source database for developers to create and share computer coding with a large community.

The first block mined on a blockchain.

LTV stands for Loan-to-value. The ratio expresses the amount of a loan compared to the value of an asset. For example: taking a $1,000 loan and putting up $2,000 worth of Bitcoin as collateral = 50% LTV. The loan is worth 50% of the bitcoin collateral securing it.

Graphics Processing Unit. Hardware that can be used for mining some cryptocurrencies.

A physical device that stores private keys.

The power of a mining rig. Similar in concept to the Horse Power of a vehicle.

The number of hashes a miner performs over a given period of time.

An online wallet for storying cryptocurrencies. Considered less secure than cold wallets.

A consensus mechanism that employs both Proof of Stake and Proof of Work algorithms.

Someone who does not sell, but holds on to his coins. "HODL"  was originally a typo but it gained the status of a funny backronym: “Hold on for dear life”.

The process of increasing a cryptocurrency's supply, which usually drives its price down.

Internet Protocol Address. A series of numbers and periods used to identify computers communicating through a network.

Initial Public Offering. An event in which a company “goes public,” selling early shares of their business in exchange for funds.

A request for communication from one node to another node.

The term used to refer to blockchains to describe the way in which blocks cannot be changed after they are recorded.  

When an asset (i.e. coin) cannot be easily bought or sold due to a lack of buyers or sellers in a market. If there are only a handful of buyers or sellers the price may be substantially higher (due to few sellers charging a premium) or substantially lower (due to a few buyers demanding discounts).

A feature of Komodo that offers its users private payments. Jumblr works by exchanging the cryptocurrency being used for payment and mixing it among other cryptos prior to the making an anonymous transaction.

Know Your Customer. Information gathered by cryptocurrency exchanges in compliance with AML (Anti Money Laundering) laws.

An algorithm used to adjust mining difficulty so that all miners are given a fair chance at earning block rewards.

A type of exchange used to make it easier for individuals to exchange assets for usable currency.

A network layer that functions on top of the Bitcoin blockchain and allows for a huge number of low-fee microtransactions.

Cryptocurrency that has had its origins intentionally obscured to hide evidence of illegal activities.

A cryptocurrency forked from Bitcoin known primarily for its decreased block time, which (theoretically) allows for faster transactions.

A group of people online who agree to combine their mining rigs into one for more collective mining power. They split rewards evenly based on each person's mining power.

The practice of borrowing money to buy and sell assets.

The process of allowing two different cryptocurrencies using the same consensus algorithm to be mined simultaneously. 

A very small payment made possible with digital currencies.

A mathematical problem that is solved by participants of a blockchain to verify transactions in exchange for block rewards.

An agreement that allows individuals to sell their computing power for the purposes of verifying transactions on a blockchain.

The process by which users on a PoS blockchain verify transactions and receive new coins for their participation.

A sub-unit of Bitcoin: 1000 mBTC equal 1 BTC.

A mining rig is a computer used for mining cryptocurrencies. The rig might be a dedicated computer or it could be a computer that fills other needs too.

When a blockchain features several levels for scalability and encryption purposes, it can be said to be "Multi-Layered."

A fee paid to voluntary participants for using their computing power to verify transactions. When a miner mines a block they get a block reward as well as all the transaction fees in it.

A feature that requires several keys to authorize a single transaction, especially for dividing responsibility among separate parties.

Software that allows individuals to store their cryptocurrencies on handheld devices.

A method of intentionally obscuring the source of illegally-obtained funds.

A popular online wallet that supports Ether and most ERC20 tokens.

A cryptocurrency that allows data (and transactions) to be written onto its blockchain.

Near-Field Communication. Enables devices located close to each other to transmit data without the need for internet connection.

A computer that runs a cryptocurrency’s software and validates transactions.

An individual that trades cryptocurrencies but does not have a high net worth or high salary, and is not elgiible for certain investment opportunities.

Cardano's Proof-of-stake algorithm. It is used to randomly pick the next node to produce a block in. Ouroboros divides physical time into epochs, and then slots. Slot leaders have the sole right to produce one block and are chosen from the group of stakeholders.

A block that is no longer a part of the original blockchain because it was not verified by the majority of miners.

A grouping of addresses that receive coins in a cryptocurrency transaction.

The initiator of communication on a cryptocurrency network.

A third-party entity capable of transmitting reliable information to a blockchain so that smart-contracts can be executed.

A cryptocurrency that uses both PoW and PoS in its consensus mechanism to offer increased security.

A cryptocurrency's main blockchain which connects its sidechains or subchains.

Private keys are used to spend cryptocurrencies.

Similar to a password but often longer. Where a password is generally a single word -- a passphrase can be a combination of words.

The consensus algorithm introduced by Bitcoin. PoW requires miners to compete against each other to add new block and earn rewards.

An address that individuals share with others to receive cryptocurrency.  

A rapid rise in a cryptocurrency’s price.

Occurs when a cryptocurrency’s price shoots up and then quickly crashes. Pump and dumps are often coordinated manipulations of the market by groups of individuals for profit.

Decentralized networks in which individuals interact with each other directly.

If you are running a full node, a “peer” is some else also running a full node.

Proof-of-Importance is a consensus algorithm similar to PoS. Nodes "vest" currency to participate in the creation of blocks. Unlike PoS, Proof-of-Importance quantifies a person’s support of the network. NEM is using Proof-of-Importance.

A consensus mechanism for verifying a blockchain in which miners send coins to an unspendable address

PoP for short. A consensus mechanism used by DigixDAO to track the movements of physical assets, identify their ownership, and ensure their security.

A process of storing information that cannot be changed or deleted.

PoI stands for Proof-of-Importance. It is a new consensus algorithm that requires users to stake currency to participate in the consensus. Compared to PoS, it adds importance to staking. Thus, it takes into account one’s involvement in the network. PoI was introduced by NEM.

PoS. A method of minting new coins and securing a platform by allowing users to stake their coins and receive more coins as a reward. Introduced as an energy efficient alternative to PoW (Proof of Work).

QRTs. Customizable tokens that can be created using Quantum Resistant Ledger. QRTs are resistant to attacks from quantum computing.

A method of increasing monetary supply (and lowering interest rates) by introducing new money to the market from a central authority.

An individual that contributes their tokens to Kyber Network's Dynamic Reserve Pool to improve the platform's liquidity.

A site that aggregates a nearly endless range of topics. Subreddits exist within Reddit to focus on specific topics.

A platform that connects banks, payment providers, and digital asset exchanges to provide frictionless transactions.

RNG refers to 'Random Number Generator," which is the technological device responsible for producing random results, based on a game's established Return to Player (RTP) percentage. It is designed to avoid bias.

Secure Hash Algorithm 256. An algorithm used by some Proof of Work consensus mechanisms (most notably, Bitcoin's).

Agreements between two parties that self-execute when their terms are met and automatically cancel when their terms are not met.

A programming language used to create smart contracts.

A blockchain that runs separately from a cryptocurrency's main blockchain, using the native currency to carry out transactions. Subchains help scalability by reducing the amount of data stored on a cryptocurrency's main blockchain, often called the "parent chain."

A financial instrument (stock, bond, etc) that has monetary value and can be bought, sold, and traded.

The pseudonym of the original creator(s) of Bitcoin. Also the smallest sub-unit Bitcoin can be divided into: 1 Satoshi = 1/100,000,000 of a Bitcoin.

The process by which a full database is split into smaller databases called shards. Sharding helps with the scalability of cryptocurrencies.

An alternative to mining rewards. Staking rewards are earned by putting a certain amount of your cryptocurrency up as a 'stake' to confirm transactions. Rewards are given for doing this.

A fraudulent endeavor. In the cryptocurrency world, this often refers to the practice of fooling investors in some way.

The Securities and Exchange Commision. A regulatory US agency responsible for the investigation and shut down of several cryptocurrency-related projects.

An indication of support for a feature, often sent out by miners to inform the general public of their opinion.

A block that has been worked on by a miner but is not included in the blockchain because another miner successfully completes another block first.

A platform that functions alongside an existing blockchain protocol, allowing transactions to occur off of the main blockchain. Sidechains can be customized to allow features like faster transaction time and increased anonymity.

An individual that volunteers to lock some of their coins or tokens up to verify transactions on a blockchain in exchange for staking rewards.

All processes involved in delivering products and services from their providers to their customers.

An online black market on the Darknet best known as a place individuals could buy and sell illegal goods and services. One of the first communities to use Bitcoin as currency.

An individual who predicts future prices of assets and makes bets based on their predictions.

A popular exchange service created by Eric Voorhees that allows individuals to trade most altcoins anonymously for a small fee.

A derogatory term used to describe altcoins that are based on faulty technology or have little promise for the future.

Price-stable cryptocurrencies that achieve stability through pegging their value to another asset, like the US dollar.

A computing system that can perform a whole set of computational functions is considered “Turing Complete.”

Transaction.

A measure of how frequently and how heavily a cryptocurrency is bought and/or sold during a given time period. 

Commonly known as 2FA. A measure of security used for protecting accounts. 2FA requires users to have not only a username and a password to login, but an extra piece of information, as well.

The ability of a system to be trusted without the need of trusting the individuals with which you are transacting.

A cryptocurrency created using another platform (like Ethereum). Tokens operate by using the technology of the platform on which they were created.

An individual who buys and sells cryptocurrency.

A measure that describes how many coins of a given cryptocurrency can exist (after all mining is completed, if applicable).

A sequence of numbers used to identify the moment in time that a transaction occurred.

The practice of creating digital assets that represent real-world physical assets.

Transmission Control Protocol/Internet Protocol. A set of protocols that allow multiple computers to communicate.

Unspent transaction output. For example, if an individual receives 1 BTC and holds it, they possess a UTXO.

An adult person without an account at a bank or other financial institution. 

Software that changes an environment irreversibly after its release. For example, once Bitcoin’s code was launched and distributed amongst many machines, it virtually could not be stopped.

Addresses that hold cryptocurrency. Instead of random alphanumeric strings, however, users with vanity addresses can choose specific words and phrases for their addresses, similar to vanity license plates,

An individual that invests in an emerging project with the hopes of earning a large return on their investment when the project succeeds.

A measure used to describe the rate at which currency is exchanged from transaction to transaction.

The filename which stores public and private keys for a full node.

A technical document that outlines a project’s features, technology, and vision.

An electronic transaction in which value is sent from one party to another.

The native currency of Monero.

A formula that uses data to make predictions about how financially secure businesses are.

Payment that has been broadcast but is still pending inclusion on a blockchain.

A cryptocurrency that uses the Bitcoin protocol but offers increased anonymity in transactions.