Glossary

glossary

51% Attack is a situation where one single attacker has more than 50% of the total network processing power. In such case, the attacker could perform a double spend, amongst other things. Bitcoin (and most other cryptocurrencies) is designed with the belief that a single attacker will never have more than 50% of the total network processing power.

Altcoin generally means any cryptocurrency other than Bitcoin or Ethereum (although there are some people that still claim that Ethereum is an altcoin). For a Swedish explanation of the word “kryptovaluta” for the Swedes out there, see here.

ANN is short for announcement and most commonly refer to announcements of a new ICO or a new product or service on the forum Bitcointalk.

Arbitrage means taking advantage of a difference in price of the same commodity on two different exchanges. For instance, if a cryptocurrency is being sold for USD 10.00 at Exchange A, and being bought for USD 10.50 at Exchange B, the arbitrage opportunity would be to buy the cryptocurrency at Exchange A and then immediately sell it at Exchange B. The arbitrage profits would then be USD 0.50.

Ask Price is the price a seller is willing to accept for a cryptocurrency. Along with the price, the ask quote will generally also stipulate the number of units of such cryptocurrency willing to be sold at that price.

ATH means “all-time high”, as in “all-time price high.” In the context of cryptocurrencies, it refers to the highest price milestone that any given coin or token has ever achieved.

Bagholder means someone who is still holding an altcoin after a Pump and Dump crash. It can also just refer to someone holding a coin that is sinking in value with few future prospects.

A Bear is someone who thinks the market value will go down. A bear market is a prolonged period of falling prices.

Bear Trap is a situation where the price goes downward and then sharply back up “trapping” Bearish speculators who sold their positions.

When the market is bearish, it is expecting that the price is going to decrease.

Bid Price is the opposite of Ask Price. It is the price a buyer is willing to pay for a certain cryptocurrency and the number of units of such cryptocurrency to be bought at that price.

Block is a record of all or some of the most recent transactions in a certain cryptocurrency.

Block Reward is a reward given to miners. It is “new bitcoins” (not previously held by anyone but created for the purpose of the reward), provided each time a miner successfully publishes a block.

Blockchain is the classification of a technology. Blockchains are distributed ledgers, secured by cryptography. They are essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Instead of the data residing on a single centralized server, the data is copied across thousands and thousands of computers worldwide.

Bollinger Band (short for BBands) means a margin around the price of a crypto that helps indicate when a coin is overbought or oversold. The Bollinger Bands, developed by legendary technical trader John Bollinger

Bounty is a sum of money offered as a reward for completing a specific task. The reward is normally given to the first person to satisfactorily complete the relevant task. There are several different types of bounties. One usual type is the “bug bounty” given to a person finding a bug on a company’s website or in a company’s product etc.

Brain Wallet refers to the concept of memorizing a passphrase. Such passphrase will be used to generate all your private keys and addresses. It should be noted that if you forget your passphrase then your cryptocurrencies are lost forever.

Bull is the opposite of Bear. Bulls think the market value will go up. A bull market is a prolonged period of rising prices.

Bull Trap is an upwards trend in price that invites bullish speculators to buy before reversing suddenly and “springing the trap”.

When the market is bullish, it is expecting that the price is going to increase.

Client refers to the software application used to send and receive cryptocurrency transactions.

Cold Storage has nothing to do with temperature, but is the process of moving cryptocurrency ‘offline’, as a way of safekeeping your crypto-currency from hacking. There are a variety of ways to do this, but some methods most commonly used include: (i) Printing out the QR code of a software wallet and storing it somewhere safe, such as a safety deposit box, (ii) Moving the files of a software wallet onto a USB drive and storing it somewhere safe, or (iii) Using a hardware wallet.

Confirmations refers to the depth of the block containing your transaction in the blockchain. When a block is published it has a depth of 0 as it is the top block. As more blocks are published the previous blocks get deeper in the chain.

Dapp means Decentralized Application, which is an application that uses an Ethereum smart contract as it’s back-end code.

Deterministic Wallet is a wallet that you need to backup only once. It creates all your bitcoin addresses and private keys, from a random number called a “seed”. Your wallet can be recovered from the seed, if the wallet file is accidentally deleted.

Double-spending is successfully spending the same money more than once.

Exchange means a website where you can buy and sell cryptocurrencies. Step 1 when trading crypto is to choose the right exchange. To find the right exchange for you, use our Exchange Finder.

Faucet is a site that gives out free coins in order to get newbies started.

Fiat currency means currency that a government has declared to be legal tender, but it is not backed by a physical commodity. Examples of Fiat currency is USD and EUR. The value of fiat currency is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Fiat is Latin for “let it be done.”

FOMO means Fear Of Missing Out. In the cryptocurrency markets, the expression is most often used to describe the feeling that you need to get on the train when the price of something starts to skyrocket.

Fork means a situation where a blockchain splits into two separate chains. Forks generally happen in the crypto world when new ‘governance rules’ are built into the blockchain’s code.

FUD means Fear, Uncertainty, and Doubt. FUD is essentially negativity without cause that is spread intentionally by someone that wants the price of a cryptocurrency to drop.

FUDster means someone who is spreading FUD.

Gas is a measurement of how much processing that is required by the Ethereum network to process a transaction. Simple transactions, like sending ether to another address, typically do not require much gas. More complex transactions, like deploying a smart contract, require more gas.

Gas Price means the amount of ether to be spent for each gas unit on a transaction. The initiator of a transaction chooses and pays the gas price of the transaction. Transactions with higher gas prices are prioritized by the network.

The Genesis Block is the first block of the blockchain of Bitcoin ever released. It was released by Satoshi Nakamoto on 4 January 2009.

Git is a distributed revision control and source code management system focusing on speed. It enables software developers to work together as a team remotely from anywhere in the world. Git is a free software. For more information, see Git.

GitHub is a web-based hosting service for projects that use the Git revision control system. It is available here.

Going Long means a margin trade that profits if the price of the relevant cryptocurrency increases.

Going Short means a margin trade that profits if the price of the relevant cryptocurrency decreases.

Goxxed comes from the infamous MtGox, which was a bitcoin exchange that many claim was plagued with technical problems. The term goxxed refers to being impeded by technical issues.

GPU is an acronym for Graphics Processing Unit. It can be used to play games or mine cryptocurrencies.

Gwei is a denomination of ether. Gas prices are most often measured in Gwei. 1 Ether = 1000000000 Gwei. (109)

Hard Fork occurs when there are a sufficient number of clients on the network that disagree on the rules about how blocks are created and recorded in the blockchain. It leads to a split in the chain, one set of clients follow one branch and another set follows the other. To fix hard forks, some action must be taken by the holders of the relevant cryptocurrency.

Hardware Wallet means a device that can securely store cryptocurrency. Compare and review all cryptocurrency wallets in our Wallet List to find the best wallet for you.

Hash Rate is a unit of mining performance expressed as follows:
1 h/s = 1 hash per second
1 Kh/s = Kilohash per second. 1,000 h/s
1 Mh/s = Megahash per second. 1,000 Kh/s (1,000,000 h/s)
1 Gh/s = Gigahash per second. 1,000 Mh/s (1,000,000,000 h/s)
1 Th/s = Terahash per seond. 1,000 Gh/s (1,000,000,000,000 h/s)

HODL stands for Hold On for Dear Life, and describes the process of not selling cryptocurrency in spite of market movements.

HODLACL stands for Hold On for Dear Life And Complain a Little, and describes the process of HODLing while also complaining about e.g. volatility. The term was phrased by us here at Cryptowisser.

Hot Wallet is a wallet that is accessible via the web or another network connection. Hot Wallets are vulnerable to many online attacks and are not as secure as their Cold Wallet (Cold Storage) counterparts.

ICO means “Initial Coin Offering” and is similar to an “IPO” in the non-crypto world. Read more about the difference between ICOs and IPOs here. In an ICO, startups issue their own token in exchange for ether. This is essentially crowdfunding on the ethereum platform.

KYC is an acronym for Know Your Customer. It is legal requirements to make a reasonable effort to confirm your costumers true identity. This process is intended to help prevent money laundering.

Limit Order means an order placed by traders to buy or sell a cryptocurrency when the price meets a certain amount. They can be thought of as ‘for-sale’ signs. These orders are what are bought and sold against when traders place market orders.

Liquidity (or market liquidity) is an asset’s ability to be sold without causing a significant movement in the price and with minimum loss of value. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

MACD stands for Moving Average Convergence Divergence, which is a trend indicator that shows the relationship between two moving averages of prices.

Margin Call is a “call” made by a lender, broker or exchange to the person who has made the margin trade. The call is made when the margin falls below the minimum required to cover the credit risk of the lender, the broker or exchange. At such point, the position is automatically closed and the margin is lost.

Margin Trading means the act of adding leverage to your trades. When margin trading, you borrow money against your current funds to trade cryptocurrency “on margin” on an exchange. In other words, you borrowing money to increase your buying power (generally you pay interest on the amount borrowed, but not always).

Market Capitalisation (for short: Market Cap) is total value of a cryptocurrency. It is calculated by multiplying the total supply of coins by the current price of one such coin.

Market Order means a simple purchase or sale on an exchange at the current price. Market buys purchase the cheapest ETH available on the order book, and market sells fill the most expensive buy order on the books.

Mining is the process of trying to solve/create the next block. It requires large amounts of computer processing power to do effectively, and is therefore also rewarded with ether.

Mining Rig means a computer specially designed for processing proof-of-work blockchains. They often consist of multiple high-end graphic processors (GPUs) to maximize their processing power.

Mooning means – in the crypto world – the price of a cryptocurrency going up to astronomical levels.

Multi-sig is a system that requires multiple cryptographic authentication keys.

Node means a computer that possesses a copy of a blockchain and is working to maintain it.

Orphaned Blocks is the term for certain blocks following a Soft Fork or Hard Fork. Whenever a Soft Fork or Hard Fork occurs, the blockchain is split into two paths. One of these chains will eventually be considered the valid one, and the other will be the invalid chain. Blocks that are in an invalid chain are called Orphaned Blocks.

OTC is an acronym for Over The Counter. This is off-exchange trading that is done directly between two parties.

Paper Wallet is a way to store cryptocurrency. It is done by printing the addresses and private keys directly on a piece of paper (or any other material).

Ponzi Scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors.

Pool is a group of miners that all work together in order to improve their chances of solving a block.

POS stands for Proof of Stake (not Piece of Shit…) and is the proposed future consensus algorithm to be used by Ethereum. Instead of mining in its current form, people that own ETH will be able to ‘lock up’ their ether for a short amount of time in order to ‘vote’ and generate network consensus. The plan is that these stakeholders will be rewarded with ETH by doing so. Another famous POS blockchain is LISK.

POW stands for Proof Of Work (not Prisoner Of War…) and is the current consensus algorithm used by Bitcoin.

Premining is the procedure of mining certain altcoins before they are released to the public. This generates coins for the developers, who hope to profit from them in the future.

Pump and Dump means an altcoin getting a lot of attention, resulting in a fast price increase, which is then followed by a crash.

ROI stands for Return On Investment and is the percentage of how much money has been made compared to an initial investment (i.e., 100% ROI means someone has doubled their money).

Scamcoin is an altcoin created for the sole purpose of conning people out of their money.

Sell wall/Buy wall means the current limit buy and sell points, as presented in a depth chart. The graphical representation on the depth chart looks like walls.

SHA-256 stands for Secure Hash Algorithm. It is an algorithm that generates a hash when provided with input data.

Sharding is a scaling solution for blockchains. Every node in a blockchain network typically houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.

Shilling/Pumping means strongly advertising a cryptocurrency. If a cryptocurrency is promised to cure cancer or be the second coming of Jesus, it’s being shilled/pumped.

Sig (or Signature) is a cryptographic authentication key.

Smart Contract means a code that is deployed onto the Ethereum blockchain, often directly interacting with how money flows. Simplistically put, a normal transaction allows you to send money from A to B. Smart contracts allow you to send money from A to B, on the condition that C happens.

Sockpuppet is an online identity used for the purposes of deception.

Soft Fork is a situation where two or more competing blocks are published at the same height in the blockchain. These kinds of forks will solve themselves without any intervention from holders of the relevant cryptocurrency.

Software Fork is the procedure of splitting an open-source software project into two projects by copying the original project and developing it independently from that point onwards.

Software Wallet means a storage for cryptocurrency that exists solely as software files on a computer. Software wallets can be generated for free from a variety of sources. Compare and review all cryptocurrency wallets in our Wallet List to find the best wallet for you.

Solidity is one of the most popular languages that smart contracts can be written in on Ethereum.

Spread is the amount by which the Ask Price exceeds the Bid Price. This is essentially the difference in price between the highest price that a buyer is willing to pay for a cryptocurrency and the lowest price for which a seller is willing to sell it.

SPV Client stands for Simplified Payment Verification Client. It is a lightweight client that downloads only part of the relevant blockchain.

Stable Coin means a cryptocurrency with extremely low volatility that can be used to trade against the overall market. A “stable coin” is a cryptocurrency that is often pegged to another stable asset, like silver, gold or a fiat currency such as US dollar. It’s a currency that’s global, but not tied to a central bank and has a lower volatility than other cryptos.

Here are some examples on stable coins out circulating:

Havven
MakerDao
Basis
Tether

Stop Loss-order (or Stop Order) is an order designed to limit an investor’s loss on a security position. Setting a stop loss order for 10% below the price you paid will limit your loss to 10%. This strategy allows investors to determine their loss limit in advance.

TA stands for Technical Analysis (some call it Trend Analysis), and is the process of examining current price charts of e.g. a specific cryptocurrency in order to predict which way such cryptocurrency will move next.

The Flippening has nothing to do with iCloud leaks of celebrity photos but refer to a potential future event wherein Ethereum’s market cap surpasses Bitcoin’s market cap, making Ethereum the most ‘valuable’ cryptocurrency.

The Manipulator is a real or an imagined agent who controls the market value with his vast reserves of fiat currency and cryptocurrency.

Tokens mean the ‘currency’ of projects built on the ethereum network that have raised money via issuing their own tokens. There are thousands of tokens in the market.

TX stands for Transaction.

Wei is the smallest denomination of ether. 1 Ether = 1000000000000000000 Wei (1018)

Whale means someone that owns so much cryptocurrency that he/she has the power to alone substantially affect the price of such cryptocurrency (by e.g. issuing a sell order).

Zhoutonged is term coming from a man named Zhou Tong, who is the creator of Bitcoinica. Bitcoinica is a margin trading platform that no longer exists. Being Zhoutonged simply means loosing all your money.