Cryptocurrency Glossary

Highly specialized computing machines that are far more efficient for mining than CPUs and GPUs. Jihan Wu (a Chinese businessman) is responsible for creating and selling many ASIC Miners.

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

Alternative Coin. Bitcoin is known as the first and foremost cryptocurrency, so any cryptocurrency that is not Bitcoin is an altcoin.

Application Programmer Interface. A type of toolkit provided for developers for creating applications.

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

A unique, alphanumeric identifier used as destination for transferring cryptocurrencies. 

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

The exchange of one coin or token for another coin or token that takes place without the need for a third party. Atomic Swaps rely on smart contracts to ensure both parties hold up their end of the agreement.

A tool used to identify moments when an asset's price is relatively high or relatively low to inform trading decisions.

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

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

Optimistic about the future of a cryptocurrency’s price.

A regretful investor who bought a crypto (or cryptos) believing they would appreciate in value. Instead, the crypto decreased in value and the investor is left "holding bags."

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

Backtesting is the method of running your trading strategy on historical data to find out how well it would have performed.

A market in which most (or all) prices are rising.

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.”  

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

The original Bitcoin wallet, considered to be among the safest wallets available.

The first successful hard fork of Bitcoin that allows the protocol to grow and scale by removing its block size limit.

1 Bit is equal to 1/1,000,000 of a Bitcoin. Not to be confused with the computer science definition in which 1 bit equals 0.125 bytes.

The time it takes to mine a new block.

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.

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 largest distributor of ASIC miners, run by Jihan Wu.

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

a high-yield ponzi scheme in the cryptocurrency market, guarantee profits to investors. Customer losses are estimated to have exceeded $1 billion and was shut down in January 2018.

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

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

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

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

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

A general agreement among participants using and mining a cryptocurrency.

An asset, of any kind, that a lender will accept to secure a loan. If the borrower doesn't pay back the loan -- the lender keeps or sells the asset.

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.

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.

The volume of coins being held and spent at a given time for a given cryptocurrency.

The usage of remote servers (rather than personal computers) to store, manage, and process data.

A cryptocurrency that relies solely on its own technology to function.

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

DAA. A collection or portfolio of assorted cryptocurrencies. For example, one Digital Asset Array could contain BTC, ETH, and DASH.

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.

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

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

The act of selling cryptocurrency.

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

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

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

A famous problem that occurs when cryptocurrency is spent more than once. Miners and transaction finality ensure that double-spend cannot occur.

A metric for measuring bitcoin inactivity. Each day a Bitcoin remains unspent is another day added to its total number of Days Destroyed.

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

Software that allows its users the ability to store cryptocurrency on their personal computer.

A list of transactions that exists on every computer that elects to run blockchain software.

Distributed Apps. Applications without centralized control.

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.

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

A group of businesses and organizations working together to build a globally-accepted identity verification system. The DIF uses blockchain technology to create a system that doesn't require a centralized authority for purposes of identification.

An extremely secure messaging functionality offered by QRL.

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 token issued on the Ethereum platform.

A third party used to facilitate transactions and increase security.

Ethereum Virtual Machine. A testing environment on the Ethereum network for executing smart contracts and promoting security.

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.

A change in a cryptocurrency’s software that makes it incompatible with the original version. For example, any block size increase in the Bitcoin protocol constitutes a hard fork.

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

A website that sends users small amounts of cryptocurrency intermittently and make money by advertising other services.

A term used to describe the way that cryptocurrencies remove many of the inefficiencies and hassles inherent in alternative methods of transferring payment.

Paper money issued by governments as default currency. The US Dollar, Japenese Yen, Chinese Yuan, and Euro are all fiat currencies.

A fee which must be paid to execute network transactions.

APR stands for Annual Percentage Rate. It's the interest rate charged during a whole year. For example: borrow $1,000 at 10% APR means at the end of the year you'll pay back $1,100. The extra $100 may be split into 12 payments, once per month, if that is how the creditor asks for them.

DeFi stands for Decentralized Finance. DeFi is a new financial system based on the use of decentralized blockchains and smart contracts to create new types of financial products.

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 act of protecting an asset from risk. A hedge can protect against losses or even offset against gains.

A physical device that stores private keys.

The maximum amount of money a cryptocurrency’s founders will accept while raising money in exchange for early coins on their platform.

First made popular in a post by a drunken Bitcoiner who advocated buying but not selling Bitcoin, it is now a meme to intentionally misspell “hold.” Hodlers see huge potential in the future of a cryptocurrency and don’t plan on selling anytime soon.

A programming language used to develop several cryptocurrencies (including Cardano and Nanocoin).

Initial Coin Offering. An event in which a cryptocurrency project “goes public,” selling early coins in exchange for funds.

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).

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 popular programming language.

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.

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 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.

A series of words that can be used to recover an account or wallet.

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.

A node (device running the full software of a cryptocurrency) that fulfills more purposes than regular nodes - such as increasing privacy, providing instant transactions, and participating in governance.

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

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

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

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.

A cryptocurrency exchange led by Mark Karpeles that allegedly lost millions of dollars in user funds.

The ability of machines and computers to integrate data and learn from it without being programmed to do so.

Metamask is a Chrome extension which allows users to store and transact Ethereum and other ERC-20 tokens.

The total value of a cryptocurrency. Calculated by multiplying a coin’s price by its total supply.

A trade in which an investor sells their position to repay the lender of a loan.

The version of a protocol that uses real money. A cryptocurrency is generally considered to be “live” after the first Mainnet block (the genesis block) is mined.

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

John McAfee (the creator of McAfee antivirus) is a cybersecurity mogul who is known for promoting cryptocurrency and speculating about altcoins.

A popular framework for JavaScript code to be written in. 

The quality by which cryptocurrencies become more useful as more people use them.

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

Digital agreements between users on NEO's platform that are carried out automatically when their terms are met.

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.

Transfer of value that takes place outside of a blockchain for reduced fees and quicker transaction time.

Operations Security. Refers to how well assets are protected.

A term used to describe software that is made available online so that any individual can view its code and submit improvements.

Outputs of an algorithm that can be examined and verified. This term is commonly used in cryptocurrency gambling.

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).

Short for Price Down Limit. PDL is a price set by DeFi platforms. If the collateral crypto price decreases below the PDL set , customers' collaterals will be sold.

A situation that occurs when an asset's market value is far higher than it's actual worth, making a sharp drop in price imminent.

A portion of the total supply of a cryptocurrency reserved for its founders. These funds are often marked as funds to pay developers or fund future ventures, but cryptocurencies with premines are generally viewed as less legitimate and fair those without premines.

Permissionless refers to public blockchains (like Bitcoin) - anyone can generate an address and transact BTC.

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.

Proof of Stake. A consensus mechanism in which individuals use their holdings of a cryptocurrency to secure the platform in exchange for rewards.

Private keys are used to spend cryptocurrencies.

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

Any cryptocurrency that focuses on maintaining private transactions between users. Examples are Dash, ZCash, and Monero.

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

An address that individuals share with others to receive cryptocurrency.  

A physical piece of paper containing a private key, a public key, and often corresponding QR codes.

a fraudulent type of operation where a company attracts investors to send money, with expected profits in return. The company pays back investor profits using later investors’ money. Once the company can no longer attract new investors, then payments cannot be made to clients, the company collapses and investors lose money.

Decentralized networks in which individuals interact with each other directly.

A social attack in which a malicious individual masquerades as a trustworthy person in an attempt to fool the victim into giving up personal information (like passwords).

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.

A plan that sets goals and deadlines for a project's future development.

A feature of PIVX that allows users to complete transactions instantly without needing to wait for confirmations.

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.

A digital asset on the Steem blockchain that can be launched by any user for the purpose of monetizing online content and encouraging positive user participation.

A memory-intensive hash function designed discourage hacking attempts by requiring large amounts of RAM. It is used by Litecoin, as an alternative to SHA-256.

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

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.

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

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 programming language used to create smart contracts.

Typically a person posing as a legitimate user of a product but who is, in fact, being paid or otherwise compensated to promote said product.

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.

An altcoin that is marketed as technology with potential, but is really just sold to make money with no promise of a future use case.

A computer that is far more powerful than an ordianry computer due to its superior performance.

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

The minimum amount of funds that a cryptocurrency's founders wish to raise in an ICO. If an ICO does not meet its soft cap, it will often be canceled until a later date.

Smart Contract. An agreement between two parties that carries itself out once its terms are met.

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.

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

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.

A mathematical mechanism for combining a public address with a private address to ensure authenticity and prevent forging.

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

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

Transactions per second. A measure which describes how fast a cryptocurrency can handle its users' transactions.

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

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

A measure that describes the strength of association between an address and earlier transaction addresses.

A consensus method that allows users to transact anonymously and requires relatively little electricity. An alternative to PoW (Proof of Work) and PoS (Proof of Stake). 

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.

An individual who buys and sells cryptocurrency.

Software preprogrammed to buy, sell, short, long or execute other trading strategies and commands when the owner is absent. Trading while asleep or away from the keyboard.

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.

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. 

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

A highly respected programmer responsible for writing Ethereum's white paper and co-creating Ethereum's technology.

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

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.

Even millions of dollars worth of security won't protect an individual if someone threatens to hit them with a $5 wrench unless they give up their passwords. The best defense is keeping quiet about your cryptocurrency holdings.

Two Factor Authentication. A protective measure that uses one-time passwords to prevent keyloggers from gaining unauthorized access to accounts.

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