When you’re investing in cryptocurrency, it’s important to arm yourself with the right knowledge. That’s why we’ve put together this cryptocurrency glossary – a list of all the important terms you need to know. From blockchain to decentralized finance, we’ve got you covered! So whether you’re just starting out in the cryptocurrency world or you’re a seasoned pro, be sure to bookmark this page and come back whenever you need a refresher course.
Table of Contents
- 1 Airdrop
- 2 Altcoins
- 3 Bullish
- 4 Blockchain
- 5 Bitcoin
- 6 Block
- 7 Bullish
- 8 Bearish
- 9 Capital Gains
- 10 Cold Storage
- 11 Cryptocurrency
- 12 Dollar Cost Averaging
- 13 DApp
- 14 DAO
- 15 Decentralized Finance (DeFi)
- 16 Ethereum
- 17 Ether
- 18 ERC20 Token
- 19 Fiat Currency
- 20 Gas Fees
- 21 Hardware Wallet
- 22 Hot Wallet
- 23 HODL
- 24 Hard Fork
- 25 ICO
- 26 Liquidity
- 27 Mining
- 28 Market Capitalization
- 29 Pump and Dump
- 30 Private key
- 31 Public key
- 32 Stablecoins
- 33 Smart Contract
- 34 Soft Fork
- 35 Seed Phrase/Passphrase
- 36 Software Wallet
- 37 Tokens
- 38 Wallet
- 39 Conclusion
Airdrops are a way of distributing cryptocurrency tokens to the community. They usually occur when a new cryptocurrency is launched, and involve giving a percentage of the total tokens to early adopters and holders. The way an Airdrop works is that the cryptocurrency team will choose a blockchain, usually via an announcement on social media. To receive free cryptocurrency tokens in an Airdrop, send cryptocurrency to the address listed by the cryptocurrency team. This can be done from exchanges or wallets with support for receiving cryptocurrency using a QR code.
Altcoins are cryptocurrencies other than Bitcoin. These include all of the major ones like Ethereum, Litecoin and Ripple, as well as many smaller ones.
Bullish is an adjective used to describe someone with positive expectations for cryptocurrency investment. It comes from analogies between.
Blockchain technology uses cryptography to keep records secure and decentralized. This technology is what powers cryptocurrency and allows for secure, transparent transactions.
The first and most well-known cryptocurrency, Bitcoin is a digital asset and payment system that uses cryptography to control its creation and management.
Blocks are immutable collections of transactions on cryptocurrency blockchains that contain all data related to those transactions and how they were executed.
A bullish market sentiment is when investors are optimistic about the future price of a cryptocurrency and believe that it will increase in value over time.
A bearish market sentiment is when investors are pessimistic about the future price of a cryptocurrency and believe that it will decrease in value over time.
The profits you make from cryptocurrency investments. These are often taxed by the government just like investments in other assets. It’s important to keep track of your capital gains and losses so you can accurately report them when it’s tax season.
Cold storage is any cryptocurrency that’s stored on a device disconnected from the internet and therefore cannot be hacked remotely by hackers over the network or through malware attacks on computers connected online at all times such as desktop computers and laptops.
A digital or virtual currency that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.
Dollar Cost Averaging
A method used to lower the average cost of cryptocurrency investments by spreading them out over time. For example, you might invest $100 in cryptocurrency every month instead of investing it all at once. Famous investors like Warren Buffet use dollar cost averaging to minimize their risk.
A decentralized application (Dapp) is a cryptocurrency protocol that uses smart contracts and blockchain technology to run an application with no central authority controlling it.
A decentralized autonomous organization (DAO) is a cryptocurrency protocol that allows users to make decisions about how cryptocurrency projects are run. These organizations come in all shapes and sizes, but they have one thing in common: they’re decentralized and autonomous!
Decentralized Finance (DeFi)
Decentralized finance refers to financial applications and products that are built on top of decentralized cryptocurrency blockchains such as Ethereum.
A cryptocurrency and decentralized computing platform, Ethereum is a blockchain network that allows developers to create and run decentralized applications (dApps). It also provides the cryptocurrency Ether for use on its network.
Ether is the cryptocurrency used on the Ethereum blockchain. It’s often referred to as “the oil of the Ethereum network” due to its important role in keeping the network running.
An ERC20 token is a cryptocurrency that’s based on the Ethereum blockchain. These tokens use standard protocols to allow them to be traded and exchanged easily.
Exchanges: cryptocurrency exchanges are websites where you can buy, sell or trade cryptocurrency for other digital currencies like bitcoin or ethers.
Fiat currency refers to any government-backed money, like the US Dollar (USD) or British Pound Sterling (GBP).
Gas fees are cryptocurrency transaction fees paid by users to miners for processing cryptocurrency transactions on the Ethereum blockchain.
A cryptocurrency wallet designed to store cryptocurrency offline. Hardware wallets are physically separate from your computer, making them much more secure than software wallets.
A cryptocurrency wallet that’s always connected to the internet. Hot wallets are often used for day-to-day cryptocurrency transactions due to their convenience, but they’re more vulnerable than cold storage options like hardware wallets because they can be hacked remotely over networks or through malware attacks on computers connected online at all times such as desktop computers and laptops.
This term originated as an intentional misspelling of “hold.” It’s used when investors are planning on holding cryptocurrency long-term instead of selling it right away.
A hard fork is a cryptocurrency protocol change that splits the blockchain into two different chains. Forks can be planned or unplanned, and often result in a cryptocurrency split.
An initial coin offering (ICO) is a means of crowdfunding cryptocurrency projects. Investors purchase tokens or coins from the project team in exchange for ether or bitcoin.
Liquidity refers to how easily cryptocurrency can be bought and sold in the open markets at any given time without affecting its price by much if at all due to high or low demand.
Mining is the process by which blocks are added to cryptocurrency blockchains. Miners are rewarded with cryptocurrency for their efforts by earning new coins as well as transaction fees.
Market capitalization, or market cap, is a measure of the value of a cryptocurrency. It is calculated by multiplying the total number of coins in circulation by the current price of one coin. This gives you a rough idea of how much money has been invested in a particular cryptocurrency. Market capitalization also takes into account the total value of all coins in circulation, not just those that are actively traded.
Node: In cryptocurrency, a node is a computer that connects to the network and helps verify transactions.
Pump and Dump
A pump and dump is a type of cryptocurrency scam. A group of people collude to buy a cryptocurrency, artificially inflating its price. They then sell it off at the new higher price and make a profit while leaving other investors holding the bag.
A private key is a piece of data used to cryptographically sign cryptocurrency transactions. Private keys are stored on cryptocurrency wallets or exchanges as public addresses which allow users to receive cryptocurrency from other people.
A public key is a piece of data used to cryptographically sign cryptocurrency transactions. Public keys are stored on cryptocurrency wallets or exchanges as private addresses which allow users to send cryptocurrency to other people.
A stablecoin is a cryptocurrency that is designed to maintain a stable value. Unlike other cryptocurrencies, which can be subject to dramatic fluctuations in price, stablecoins are meant to provide a more stable investment option. There are a number of different types of stablecoins, but all share the goal of stability.
Stablecoins also provide a way to hedge against cryptocurrency price volatility. When the prices of other cryptocurrencies are falling, investors can buy stablecoins in order to avoid losses. Conversely, when the prices of other cryptocurrencies are rising, investors can sell stablecoins in order to take advantage of the increase.
A smart contract is a computer protocol that helps to facilitate, verify, or enforce the negotiation or performance of a contract. They are powered by blockchain technology and are often used to create decentralized applications.
A cryptocurrency protocol change that does not split the blockchain. Instead, it’s a backward-incompatible upgrade to existing cryptocurrency protocols.
A seed phrase, also called a recovery phrase or passphrase, is a list of words used to restore cryptocurrency wallets in the event that they’re lost or stolen.
A cryptocurrency wallet that’s installed on a computer or mobile device. Software wallets are often used for day-to-day cryptocurrency transactions due to their convenience, but they’re less secure than cold storage options like hardware wallets because they can be hacked remotely over networks or through malware attacks on computers connected online at all times such as desktop computers and laptops.
Tokens are digital assets built on top of cryptocurrency blockchains. They can be used to represent a wide variety of things, from digital assets and securities to loyalty points and voting rights.
A cryptocurrency wallet is a digital storage space for your cryptocurrency assets. It allows you to send and receive cryptocurrency and store it in a secure way. There are many different types of cryptocurrency wallets, including hardware wallets, software wallets and cold storage options.
So there you have it – our cryptocurrency glossary! We hope this helps you to better understand all the important terms related to blockchain and cryptocurrency. Be sure to bookmark this page and come back whenever you need a refresher course. And if you’re looking for more in-depth information, be sure to check out our other cryptocurrency articles. Thanks for reading!