How Well Do You SPEAK CRYPTO? (Beginner Cryptionary A-L)

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I am not a crypto expert... yet.

I have been in the crypto world for about three months. In that time, I have absorbed a lot of info. In fact, about a university course’s worth.

And one of the things that was most challenging for me was all the ‘jargon’ people were throwing around without explanation.


Imagine you traveled to Egypt, then hiked to an ancient Egyptian tribe. Some people there welcome you, while others warn you of environmental dangers. But you have no clue what's happening. It's all just overwhelming chaos because...

...You don't speak the language.

That's what it was like for my friend Harry when he tried to join Hive. Since he knew nothing about crypto, blockchains, or voting etiquette, he floundered hard. And I get that, because it was the same for me.

When I joined Hive, it felt like everyone spoke another language, which made learning crypto even trickier, as I struggled to make sense of each term or phrase.

So I googled around for glossaries, indexes, and dictionaries, and there's plenty out there. But they were either:

1. Too overwhelming.

Some glossaries I found were way too big. Nearly 100 pages divided up by letter and covering irrelevant terms I was never likely to come across.

2. Too convoluted.

These glossaries used complex concepts I didn't understand to explain other complex concepts I didn't understand.

3. Too small.

These glossaries explained 5 to 10 crypto terms and then ended. They were vaguely helpful but didn't prepare me (or anyone) for the complex crypto world.

So I decided to make a better ‘cryptionary’ to help other newbies like me.

I wanted something I could link to friends new to cryptocurrency, decentralized finance, and blockchain dApps for themselves. Something for people who weren't even sure what terms to google.

So this glossary is aimed to be not too big, not too small. It uses clear, 'explain-like-I'm-five' language. (Or at least tries to.) This means the definitions in this index...

Intentionally skip nuances & details that experts include because it's for beginners.

Hopefully you find it 'just right' for your crypto journey.

One more thing, like many glossaries, each term here has a definition and an in-use example. But I've added a star rating as well to indicate how common each is. Three stars mean the term's pivotal or commonly used. One star means it's peripheral or less likely to crop up. This way readers can focus on learning commonly used '3-star' terms or dig deeper into more obscure '1-star' phrases.

Note: This rating system isn't perfect. It's a rough guide to get you into the crypto world.

If you want a friendly, casual dictionary that gives you the broad strokes needed to start navigating the world of crypto, this may be great for you. I’ve done my best to balance accuracy with simplicity.

If you want master-stroke technical accuracy & high-level language straight out of an Ethereum whitepaper, this isn’t the glossary for you.

(Also, this is my first post in LeoFinance, please be gentle.)

With all that said...

Let's go!


#

2FA (Two-Factor Authentication) ⭐

DefinitionExample
2FA (2-Factor Authentication) is an extra layer of security ensuring that people accessing an account are who they say they are. Factor one asks for a username and password. Then, rather than instantly gaining access, factor two beings. In factor two, the user must provide another piece of information. The extra information can take many forms, such as 'secret' questions, a piece of ID, or even fingerprints.“Man, I hate having to jump through all these hoops for 2FA, but at least I’m sure my crypto is secure.”

51% Attack ⭐

DefinitionExample
An attack on a blockchain by a group of miners who control more than 50% of the network's 'mining hash rate' (computing power.) A successful attack would let perpetrators halt new transactions, reverse transactions during their network control, and even double-spend coins.“I know it’s unethical, but I kind of want to convince some other miners to try a 51% ATTACK on Bitcoin with me.”

A


Address ⭐

DefinitionExample
Unique ‘addresses’ are long codes used to send, receive, and store crypto data or funds. Each user’s (or wallet’s) address is special.“Hey Emma, please send the funds to my ADDRESS, it’s 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy, and I’ll confirm receipt, thank you.”

Altcoin ⭐⭐

DefinitionExample
Altcoin: Any and all cryptocurrencies that are not Bitcoin.“I’ve been a bitcoin purist for so long that now I’m scared to even read about ALTCOINS.”

Airdrop ⭐⭐

DefinitionExample
An airdrop is a 'giveaway' of coins/tokens, usually by the developers. (The air-droppers often set up some criteria to qualify as an airdrop receiver as well.)“Emma, check this out! Because I got in early for this new crypto, I get a sweet AIRDROP from the devs of thousands of tokens!”

00230A - Airdrop.png

Anti-Money Laundering (AML) ⭐

DefinitionExample
AML are rules & processes that combat money laundering, identity fraud, and other financial crimes.“Have you heard about the new blockchain? Apparently it’s got way better AML than either Bitcoin or Ethereum.”

ASIC ⭐

DefinitionExample
An acronym for 'Application Specific Integrated Circuit.' An ASIC is a processor designed to do one thing efficiently. CPUs do many general calculations, GPUs do graphics calculations, and ASICs do purely crypto & mining calculations.“I made decent money by mining with a PC, but now that I’ve upgraded to an ASIC, I’m raking in the currency.”

ATL / ATH ⭐

DefinitionExample
All-Time Low is the lowest price point an asset has traded at. All-Time High is the highest price point an asset has traded at.“Dude, I’m a literal billionaire, I bought Bitcoin at it’s ATL, and sold it recently when it hit it’s ATH.”

Automated Market-Maker (AMM) ⭐

DefinitionExample
Market-Makers began as people who kept an inventory of certain stocks. They were always ready to buy or sell (within a given price range). This gave traders someone available in the market to accommodate their trades instantly. This is called providing 'liquidity' because it enables traders to quickly liquidate their holdings. In crypto, we have ‘Automated’ Market-Makers for certain assets which do a similar thing... but it's not a person, it’s a program (funded by someone) doing the buying/selling/holding of the assets. (Note: In AMMs, formulas determine the price of assets, which means the price of the assets in an automated market-maker moves only when a trade occurs, so it may be less susceptible to external manipulation.)“All the exchanges I use have AMMs so I’m never worried about being caught with my pants down.”

B


Basket ⭐

DefinitionExample
Crypto baskets are kind of like a mutual fund for crypto coins/tokens. They’re ‘bundles’ that allow traders to acquire multiple digital assets in one go without the need to manage them independently.“I didn’t want to spend forever doing research so I just bought a BASKET.”

Bagholder ⭐

DefinitionExample
Bag-holding means holding a stock despite taking a significant loss on it. A bagholder is left 'holding the bag' while other shareholders are selling & fleeing from a sinking ship.“Everyone calls me a BAGHOLDER for believing in Enron, but I’ll hold for a few more years and then they’ll see who the real bagholders are!”

Bear / Bearish ⭐⭐⭐

DefinitionExample
A bear market is a market heading downward (falling stock prices). It means that stocks are plunging downward, like the swipe of an attacking bear’s claws.“Pessimistic Emma is clearly BEARISH about this situation, she believes Dogecoin’s value is going to plummet in a month.”

00230C - Bear.png

Bitcoin ⭐⭐⭐

DefinitionExample
Bitcoin is a virtual (or digital) currency. It is the main reason blockchain technology was invented/popularized. Like Ethereum, Bitcoin has its own blockchain (the Bitcoin blockchain), along with its own cryptocurrency (Bitcoin or 'BTC'). At the time of writing, Bitcoin holds the highest market value of any cryptocurrency.“Everyone’s bragging about their latest token, but I’ll stick with BITCOIN. The original is best.”

Block ⭐

DefinitionExample
A block is like a page in a 'record-book.' Each block connects to make up an entire ‘blockchain.’ Whenever someone sends money (or data) on a blockchain, it's called a transaction. And like any transaction, it must be verified, stored, tracked, and so on. Once verified as truthful, a 'hash' of the transaction is made. (A hash is like a secret code that you can only remember if you combine a few other words you always know.) Each transaction is packaged within some notes about its hash. These notes are called 'blocks.' When blocks are linked together, it creates a chain of hashes with links that are impossible to replace without going back and re-doing all the other blocks and hashes. This is virtually impossible, so transactions and blocks are not able to be faked or undone.“I’m new to mining but I’d really love to win the chance to verify a BLOCK on the chain.”

Blockchain ⭐⭐⭐

DefinitionExample
Blockchain is the tech behind crypto. It's basically a 'digital record-book,' recording every transaction or piece of data sent, received, or stored. It's meant to be 'decentralized' and 'immutable.'“Emma, since I paid you in crypto, receipt of your funds is stored permanently on the BLOCKCHAIN, and no corporation can touch it.”

00230B - Blockchain.png

Block Size ⭐

DefinitionExample
The 'size' of a block limits the number of transactions that a particular blockchain is capable of. When blocks fill, the network becomes congested, and transaction fees rise dramatically. Different blockchains often have different block sizes.“My favorite chains are slowing down, so I’m searching for one with a bigger BLOCK SIZE.”

Blue Crypt ⭐

DefinitionExample
Blue Crypt is a play on 'blue-chip' stocks. They're huge, long-running companies with a great reputation and dependable earnings. Coke, IBM, and Boeing are good examples. Blue crypts are cryptocurrencies with similar traits. They're sizable, value-based, long-running cryptocurrencies with a great reputation.“I love that you’re investing in different coins, honey, but you may want a BLUE CRYPT like Bitcoin in your portfolio.”

Bots ⭐⭐

DefinitionExample
Crypto bots are programs designed to automate crypto trading. Bots automate analysis and interpretation of market stats and data. They can calculate the risk, then execute buy/sell orders. Bots can do other things as well, but this is their most common use.“I wanted to make some vital trades for my portfolio, but I was on vacation, so all I could do was set up a BOT to take care of it for me.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

Bull / Bullish ⭐⭐⭐

DefinitionExample
A bull market is a market heading upward (soaring stock prices). It means that stocks are surging upward, like the thrust of an attacking bull’s horns.“Optimistic Cassie is clearly BULLISH about this situation, she believes Dogecoin’s value is going to skyrocket in a month.”

BT(F)D ⭐⭐

DefinitionExample
'Buy The (F--king) Dip.' BTD or BTFD is used as a call-to-action when an asset has declined in price (dipped) but has the potential to recover from its current 'dip' position. It's basically a method of 'buying low, selling high.'“Everyone’s worried about the recent market drop after Elon Musk tweeted, but I’m just going to BTFD!”

Burning ⭐

DefinitionExample
Burning is the process of permanently eliminating cryptos from circulation, although the practice reduces inflation.“The devs have agreed to BURN a bunch of coins off the chain, reducing supply and raising the value of everyone’s coins.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

C


CBDCs (Centralized Bank Digital Currencies) ⭐

DefinitionExample
A Central Bank Digital Currency is a cryptocurrency backed by a nation's official bank. This means the government 'holds the liability.' (As decentralized currencies like bitcoin have become popular, many nation's central banks are getting into the crypto game using CDBCs.)“I really want to ‘fight the power’ and embrace DeFi freedom and all, but I have to tell you, I’m really interested in CBDCs.”

Censorship Resistance ⭐

DefinitionExample
Something that has 'censorship resistance' is something no party can prevent participation in. On a blockchain, censorship resistance means rules of the network apply to all users equally. The rules are unchangeable for personal gains. Censorship resistance is related to the amount of decentralization in a network. Decentralized data is widely distributed, uncontrollable by a single, corrupt entity, so censorship is difficult to achieve. Note: Many people view blockchains as freedom from the oppression of current systems, but the reality is that censorship of a blockchain is difficult, but not impossible. (See Also: Trustlessness.)“Emma, if you’re tired of being banned on social, give Hive a try, their social blockchain is big on CENSORSHIP RESISTANCE.”

Centralized ⭐⭐⭐

DefinitionExample
Centralized data is stored with a single entity, like Google, the govt., or banks.“Emma, Facebook basically owns your data, it’s all stored on their CENTRALIZED network, and they can delete it at will.”

CeDeFi ⭐

DefinitionExample
'Centralized decentralized finance' blends the best of both systems. It combines Centralized Finance with Decentralized Finance. CeDeFi aims to merge decentralized exchanges, liquidity pools, and more, but with low transaction fees and traditional regulation compliance.“Many corporations support CEDEFI, but many crypto-purists will settle for full DeFi or nothing.”

CEX (Centralized Exchange) ⭐

DefinitionExample
Centralized exchanges typically allow trades with an 'order book.' Each trade is an 'order' and CEXs aggregate orders from traders, then execute them. In these exchanges trade orders are processed by an internal closed system.“I’m a huge fan of crypto, but when I’m trading stocks I still use a CEX.”

Circulating Supply ⭐

DefinitionExample
Circulating Supply is the best guess at the number of a certain coin/asset circulating in the market (in the general public's hands.)“Some of these newly launched coins have a ridiculous CIRCULATING SUPPLY.”

Claimdrop ⭐

DefinitionExample
A claimdrop is like an airdrop, but for 'forked' currencies. In a claimdrop, the token/coin being received isn't owned by anyone to be given away. Instead, the amounts given (or 'claimed') mirror the amounts token-holders possessed from the pre-forked currency. Think of it as redeeming your old pre-fork tokens at a 1:1 ratio in a new post-fork currency. (See also: Fork.)“I was claim dropped over 7000 SPK tokens just because I held a similar amount of HIVE, you should check your balance to see how much the CLAIMDROP gives you too.”

Cold Wallet ⭐

DefinitionExample
A cold wallet is a device not connected to the internet. (Seen as more secure, but inconvenient.)“When I was new to crypto, I didn’t realize the importance of storing my keys in a COLD WALLET.”

Consensus / Consensus Mechanism ⭐

DefinitionExample
Since blockchains are distributed, decentralized, permissionless networks, every transaction that occurs on them --and the order each transaction occurs-- must be agreed upon by all the participating nodes of the network. When all nodes agree upon a transaction's validity, this is called ‘consensus.’ A consensus mechanism refers to various methods of verifying transactions and securing a blockchain across all its (decentralized) nodes.“I’’m honestly not sure which CONSENSUS MECHANISM I prefer, Proof Of Work (PoW), Proof Of Stake (PoS), or Delegated Proof Of Stake (DPoS), it’s so hard to choose!”

Cryptocurrency ⭐⭐⭐

DefinitionExample
Cryptocurrencies are a type of digital (or virtual) money. They're a subcategory of ‘crypto assets,’ which is short for cryptocurrency-related digital assets. The original intention of the term ‘cryptocurrency’ was closer to ‘blockchain-based digital asset intended for use as an alternative to fiat money,’ but now commonly refers to any crypto- or blockchain-based digital asset. (This often causes confusion.)“I have so many different digital assets and commodities in my crypto portfolio, but honestly, I just call them all CRYPTOCURRENCIES.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

00230E - Cryptocurrency.png

Crypto ATM ⭐

DefinitionExample
A Cryptocurrency ATM is a physical terminal that allows users to buy BTC, ETH, and other cryptos using a bank card or cash.“Back when I didn’t have proper ID, I could only buy my crypto through a CRYPTO ATM.”

Crypto Coin ⭐⭐

DefinitionExample
A digital asset that has its own blockchain.“It’s cool how Binance’s BNB Token upgraded to its own blockchain, becoming a true CRYPTO COIN like Bitcoin & Ethereum.”

Disclaimer: The use of terms in the crypto world isn't always clear-cut because the blockchain industry is young and language is evolving quickly. For example 'coin' and 'token' are often used interchangeably, but most industry insiders agree that a 'coin' is basically 'currency' with it's own blockchain, while a ‘token’ is every other 'digital asset', usually without their own blockchain.

Crypto Pair / Trading Pair ⭐

DefinitionExample
In the crypto world, 'cryptocurrency pairs' ('trading pairs') are assets that can be traded for one another on an exchange, such as a Bitcoin/Litecoin pair or an Ethereum/BitcoinCash pair. They exist because a) some cryptocurrencies can only be bought with other cryptocurrencies, so understanding crypto pairs is vital for expanding your crypto holdings beyond most common coins, and b) trading pair knowledge lets wise crypto investors profit via arbitrage. Not to be confused with ‘Key Pairs.’“I keep a close eye on the Bitcoin/Ethereum TRADING PAIR, because that’s where I make a lot of my profit.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

D


DAO (Decentralized Autonomous Org) ⭐

DefinitionExample
A decentralized autonomous organization (DAO) is basically an investment fund used to invest in different projects. It's controlled by software rules & smart contracts instead of people and is stored on a blockchain. DAOs aim to be open platforms where members control their identities and personal data completely. (Note: Many DAOs exist, but the most popular one is named 'THE DAO', making it sound more important and confusing people who are simply referring to A DAO.)“The best part about the projects I run is that they funnel a lot of funds right back to our DAO.”

dApps ⭐⭐⭐

DefinitionExample
Most apps store data on a centralized server (Amazon's cloud, for example), to operate. A 'decentralized app' (dApp) does not store data on such 'central' servers. A dApp avoids using centralized servers and instead connects to a distributed, peer-to-peer, 'unowned' network (usually a blockchain) for its data storage and operations. (Commonly used networks for dApps are things like IPFS or Swarm.)“The best thing about the Hive Blockchain is all the amazing DAPPS that are freely available.”

Decentralized ⭐⭐⭐

DefinitionExample
Decentralized means that your data is stored across a wide variety of devices (nodes), and not controlled by a single entity such as Google, the govt., or banks. A ‘blockchain’ is decentralized because anyone can add a new page to the blockchain’s ‘record-book’, and there is no central authority.“Emma, now that you’re part of DeFi, even if someone wanted to tamper with your data, they couldn’t because backups of it are stored all throughout the DECENTRALIZED network.”

DeFi ⭐⭐⭐

DefinitionExample
‘DEcentralized FInance’ is an umbrella term for various blockchain-based financial apps & projects aimed at disrupting traditional 'centralized' financial middle-men and entities.“You may want to look into Uniswap, Emma, it’s one of the biggest DEFI projects around.”

00230F - DeFi.png

Deflation ⭐⭐

DefinitionExample
It's when stuff costs less. More accurately, deflation is a fall in the general prices and a reduction of credit and available money in a market. It's caused by increased demand for money (or a decreased supply of money.) And also by an increased supply of goods (or a decreased demand for goods). Note: A concern regarding deflation is that a 'deflationary spiral' is hard to stop. Profits lower, forcing companies to cut jobs, and jobless people are tight-fisted, so they won't spend, which means profits get even worse, and repeat.)“People keep telling me DEFLATIONARY currencies are great, but I don’t really get it, because the universe is based on infinite expansion. Markets and currencies seem meant to expand. Why would I want a currency that keeps dwindling in supply?”

Delegation ⭐

DefinitionExample
Delegating cryptocurrencies involves a coin-holder transferring duties of validating transactions on the blockchain. (Note: May has other meanings on Hive.)“I DELEGATED my stake to others and let them handle the validation.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

Deposit Address ⭐⭐

DefinitionExample
In crypto, a 'deposit address' is a 'public address.' It never expires, so you can copy it and use it to receive cryptocurrency from other wallets. You also have the option to generate new deposit addresses from your private/public key pair. Multiple addresses add extra security.“I wanted to deposit some crypto into my account, and I’m embarrassed to say I didn’t realize it’s best to generate a new DEPOSIT ADDRESS.”

Dev ⭐

DefinitionExample
A nickname or short form for Software Developer, App Developer, Programmer, or Coder.“I have huge respect for the DEVS who create all the apps I use on the blockchain.”

DEX (Decentralized Exchange) ⭐⭐⭐

DefinitionExample
Decentralized exchanges don't rely on their own servers. They operate on a network of computers. Decentralized exchanges usually use smart contracts or second-layer networks of trusted nodes.“My favorite DEX is Bittrex because they have excellent global support for multiple currencies and multiple nations of residence.”

00230F - Dex.png

Diamond Hands ⭐⭐

DefinitionExample
'Diamond Hands' is when a trader is determined to hold on to their assets quite long to achieve significant profits. They believe in their trade so much that they'll hold assets until profit is gained.“Everybody I know sold during that last recession, but I have DIAMOND HANDS.”

Digital Asset ⭐

DefinitionExample
A digital asset is anything that has value that can be stored in a digital medium. They are a ‘digitally secure store of value.’ An MP3 song that you purchase via some online store is a digital asset. A nice photo that you took using your camera is a digital asset. The thing is, it has to have value, real, honest, market value. A virus, for example, isn't a digital asset, it's a digital liability. Most irrelevant useless files aren't likely to qualify as a digital asset either. The most common digital assets are: Movie Files, Music Files, Games & Apps, E-Books, and Cryptocurrencies.“I never expected myself to stop caring so much about collecting and antiques and start caring more about DIGITAL ASSETS, but here I am.”

Digital Currency ⭐⭐

DefinitionExample
See Crypto Currency.“I guess DIGITAL CURRENCY is basically the same as cryptocurrency.”

Distributed Ledger / Public Ledger ⭐

DefinitionExample
A distributed ledger is a database that exists across several locations or among multiple participants. By contrast, most companies use a centralized database. A blockchain is a type of distributed ledger. (See Also: Blockchain.)“This project is going to impress people because we’re using a DISTRIBUTED LEDGER.”

Dogecoin ⭐⭐

DefinitionExample
Dogecoin is a cryptocurrency (DGE) with its own blockchain. It began as a mockery of bitcoin, and its name plays off the popular 'doge' meme. At the time of writing, Dogecoin is the 5th most valuable cryptocurrency on the market. This is due to it getting a boost in popularity from Elon Musk's open support of the cryptocurrency.“Elon Musk seems obsessed with DOGECOIN, but I don’t really get it.”

Dollar-Cost Averaging (DCA) ⭐⭐⭐

DefinitionExample
'Dollar-cost averaging' means spreading out your stock or currency purchases and buying at regular intervals, in roughly equal amounts. Since you're investing a fixed amount of money each time you buy, you'll get more shares when the stock's price is lower, and less when it's higher. It tends to 'average out' to a 'better deal' for the investor over time.“One of the smartest investing approaches you can use is DOLLAR-COST AVERAGING.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

Double-Spend ⭐

DefinitionExample
One of the hardest problems for a decentralized digital currency is that any user should be able to spend their balance at will. They need to be able to create a ‘spend’ transaction. Then everyone else needs to accept/reject that transaction. This is extra hard because a ‘bad actor’ could make two transactions where either one is valid but not both; this is called a ‘double spend’, and is basically the digital equivalent of counterfeiting.“The hackers tried to DOUBLE-SPEND their coins and clean up.”

DPoS ⭐⭐

DefinitionExample
In this system, 'stakeholders' (active users) vote for witnesses and delegates. Voting means placing tokens on a candidate’s name to represent the stakeholder on the chain. Stakeholders with more tokens have higher voting strength. Witnesses compete for votes and to create and validate blocks on the chain. 'Delegates' hold network maintenance duties. They can propose useful changes for the chain, like changes to block size, fees, rewards, and more. It's then up to stakeholders to decide whether the changes get applied or not.“I’ve seen a lot of different blockchain mechanisms, but DPoS is my favorite.”

00230F - DPoS.png

DYOR ⭐

DefinitionExample
An acronym for ‘Do Your Own Research.’ (The process of researching before investing.)“The first thing someone told me when I joined Hive was ‘DO YOUR OWN RESEARCH.’”

E


ELI5 ⭐

DefinitionExample
An acronym for ‘Explain Like I’m Five.’ Refers to the process of explaining something to someone else as if they have minimal prior knowledge. Explanations like this tend to use simple, plain language, everyday analogies and remove many details and nuances that would overwhelm a new learner. (It does not mean explanations aimed at ‘literal five-year-olds.’) This glossary leans towards ELI5 methods for the most part, but since crypto is so complex, it’s not always reasonable.“Crypto is so complex, I’d really appreciate it if you ELI5.”

ERC20 Token ⭐

DefinitionExample
An ERC20 token is a blockchain-based asset with similar functionality to bitcoin and ether. It can hold value, be sent, and be received. The main difference between ERC20 tokens and other cryptocurrencies is that they are hosted only on the Ethereum Blockchain, whereas bitcoin's coin/token has its own blockchain, and Hive Engine's tokens are all hosted on the Hive blockchain. ERC20 tokens are managed using ethereum addresses, transactions, and 'gas.'“I love how easy it is for anyone to create an ERC20 token, to me this is one wayEthereum is really helping move crypto into the mainstream.”

Ethereum ⭐⭐⭐

DefinitionExample
Ethereum is a blockchain with its own cryptocurrency (ETH). It also has its own programming language, called Solidity. The network's users can create and use 'dApps' on the platform, monetized with its 'Ether' cryptocurrency. At the time of writing, Ethereum is second only to Bitcoin in market value.“My friends swear by Bitcoin but I believe ETHEREUM is the future.”

Exchange Fees ⭐

DefinitionExample
Cryptocurrency exchanges make money by charging a fee on every trade done on their platform. Typically, they’ll also charge for deposits and for withdrawals.“Man, I gotta find a new DEX, these EXCHANGE FEES are killing me.”

F


Faucet ⭐

DefinitionExample
A crypto faucet is an app or a website that distributes small amounts of cryptocurrencies as a reward for completing easy tasks.“I couldn’t do anything on Hive until I went to a FAUCET and got a trickle of crypto gifted to me.”

Fees ⭐⭐

DefinitionExample
Transaction fees are paid when cryptocurrencies are transferred to another wallet. Processing transactions on a blockchain takes effort. Fees are used to compensate the miners & validators who help keep the blockchain running smoothly, and they also prevent spammers from abusing the blockchain. (See Also: Exchange Fees, Gas Fees.)“It’s pretty easy to use the blockchain but there are FEES for various things that are worth paying attention to.”

Fiat ⭐⭐⭐

DefinitionExample
A ‘fiat’ currency is the official money of a country. It's readily exchangeable for goods and services. A currency is made fiat ‘by decree’, and it can be ‘backed’ by some tangible value like gold, or ‘unbacked’ by anything tangible.“Emma, your crypto is just data on the blockchain, if you want to buy something at a store you may need to swap it for a FIAT currency like U.S. Dollars or Mexican Pesos.”

00230G - Fiat.png

FOMO / JOMO ⭐

DefinitionExample
Fear Of Missing Out / Joy Of Missing Out. In the stocks or crypto markets, people often fear ‘missing out’ on the next big thing or potential profits. Other times they experience the joy that they ‘missed out’ on a scamcoin or rug pull or some other unpleasant market movement.“I don’t even get crypto, I just invest because of FOMO.”

Fork ⭐⭐

DefinitionExample
A fork is when an existing codebase, software, or protocol is ‘copied’ and then developed separately from the original it was copied from. It can apply to practically any software or code, but in the crypto world, people are usually talking about a fork of the software that runs a particular blockchain, such as a Bitcoin fork or an Ethereum fork.“I heard that Litecoin is really just a FORK of Bitcoin.”

FUD ⭐⭐⭐

DefinitionExample
An acronym for ‘Fear, Uncertainty, Doubt.’“I’m not gonna invest for a while. All this FUD makes the whole market act crazy.”

Fundamentals ⭐

DefinitionExample
'Fundamentals' refers to the innate value of an asset. Fundamental analysis is generally a ‘long-term’ approach. It assumes that over the long term, prices will always move toward an asset's intrinsic value.“I don’t get caught up in charts, I focus on the FUNDAMENTALS.”

G


Gains ⭐

DefinitionExample
Gains refer to the profit claimed from an appreciation in value. If you sell an asset at a higher price than you bought it, you've taken 'gains.'“Yo, did you see that spike in Bitcoin recently? I’m making mad GAINS.”

Gas / Gas Fees ⭐⭐

DefinitionExample
In the crypto world, 'gas' is basically a unit of measure for 'computation work' on a blockchain, because every transaction does take up some computation power. A 'gas' fee is the cost necessary to perform/verify a transaction on the network. For example, say you send Bitcoin out of your address to another address. This transaction, like all blockchain transactions, costs gas fees. Some blockchains have higher gas fees, some have lower ones, and if you don’t have enough funds in your account to cover the gas fees, your transaction may be denied.“I wanted to post a simple comment on a social blockchain, but I didn’t even have the GAS for something that small.”

Governance ⭐⭐⭐

DefinitionExample
'Governance' on a blockchain is a system for managing and implementing changes to that blockchain. In this type of ‘On-Chain’ Governance, rules for carrying out changes are encoded into the blockchain software. Coders (or 'devs') propose changes through code updates, then each node votes on whether to accept or reject the proposed change. On some chains, holding more 'governance tokens' means a user has higher 'voting power' or influence.“I just want to buy some crypto, do I really have to get involved with all this blockchain GOVERNANCE?”

00230H - Governance.png

Governance Tokens ⭐⭐

DefinitionExample
Governance tokens are kind of like 'voting rights' in a publicly-traded company, but for the blockchain. On an insignificant blockchain, governance tokens aren't very valuable. It's like having voting rights in a tiny Mom-&-Pop company. But on a giant blockchain like Ethereum, governance tokens are quite valuable. It's like having voting rights on how Nike or Apple launches their next product. The more value a blockchain controls, the more valuable voting power on how that value is managed becomes.“OK, so I want to decide what happens on-chain, so I guess I’ve got to get some GOVERNANCE TOKENS.”

H


Hash / Hashing ⭐⭐

DefinitionExample
'Hashing' something, or creating a 'hash' from something mostly just means ‘encrypting’ it. (Technically there's a lot more to it than that, but it'll do.) For example, often when you type in your password, a website will 'hash' the letters you typed in, thus encrypting or encoding your password into a long string of 'random' letters and numbers in their database, so that no hacker can read it, and your password is 'safe.' The same thing is done with all kinds of data in the crypto world, not just passwords. Most importantly, every blockchain 'transaction' gets 'hashed' (encrypted). To sum up, hashing something is just performing an operation on data, that gives an encrypted result, and it is used to keep your data, passwords, keys, and transactions safe and secure on the blockchain.“The guy tried to defraud me by hacking the blockchain, but his SHA-256 HASHES didn’t check out, so he was immediately caught.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

Hard Fork ⭐⭐

DefinitionExample
A hard fork is changing blockchain software in a way that breaks consensus rules from older clients. Some hard forks are just a minor protocol update. Other hard forks are major splits into entirely new blockchains, coins, or tokens.“Yeah, this chain updates often, the devs are rolling out another HARD FORK as we speak.”

Hash Rate / Power ⭐

DefinitionExample
The 'hash rate' or 'hash power' of a blockchain is just the total number of hashes being computed worldwide for that blockchain. (Usually measured in PetaHashes or ExaHashes per second.) Since it's expensive to run 'hashing computers' (mining rigs), when the price of a cryptocurrency goes up, people (miners) are more willing to turn on their mining hardware, compute hashes, and try to win their mining rewards. (Note: If the hash rate or computing power on a blockchain drops quickly, it might negatively affect the price of that cryptocurrency.)“I’ve been looking at Nano or Iota, since they have a much better HASH RATE than Bitcoin.”

HODL ⭐⭐⭐

DefinitionExample
Often used just to mean 'hold,' but can also be used to mean ‘holding strongly, for a long time.’ It originates from this forum post (https://bitcointalk.org/index.php?topic=375643.0). If a person buys a stock, they become a shareholder, someone who owns part of a company. They would then 'hold' stock. If they decided to sell all that stock, they would no longer be a shareholder, they would no longer be holding (or 'hodling.') Some now take it to stand for 'Hold On For Dear Life.'“The market is pretty rough right now, but I know if I HODL, I’ll win in the end.”

00230H - HODL.png

HODLer ⭐⭐

DefinitionExample
Can simply mean ‘holder.’ But others claim that the biggest difference between someone who 'HODLs' a cryptocurrency and one who simply 'holds' crypto is their ideology. HODLers are often seen as coin-holders to a high degree. That is, they're 'holders' who won’t sell their investments for a profit now because they believe that cryptocurrency is the literal 'future of finance.'“Unlike these day-traders, I’m a HODLer. That’s my style. That’s my way. That’s my life.”

Hot Wallet ⭐

DefinitionExample
A hot wallet is stored on a device that is connected to the internet. (Seen as less secure, but convenient.)“Meh, I just use MetaMask, it’s a HOT WALLET but I don’t care, I barely own any crypto.”

I


ICO (Initial Coin Offering) ⭐⭐

DefinitionExample
When a company launches on the stock market, they often create an IPO (Initial Public Offering) to let the public invest and become shareholders. A company might take on a few million in investment from venture capital firms, but to really grow they may need the hundreds of millions that can be gained through an IPO. Since crypto coins/tokens behave similarly to stocks, when a new coin enters the market, they may create an ICO (Initial Coin Offering) for similar reasons. An ICO is basically crowd-funding hype & investment from the public towards a newly launched cryptocurrency.“I’m launching my own coin, and if you want in on the ICO let me know now.”

Immutable ⭐

DefinitionExample
Immutability is the ability of a blockchain to remain unchanged, unaltered, and indelible. Immutable data is data that can't be altered.“I posted my blog on-chain and then I couldn’t delete it because it’s IMMUTABLE.”

Inflation ⭐⭐

DefinitionExample
Inflation is when stuff costs more. More accurately, inflation is a significant rise in overall prices in a market, caused by an increase in the volume of money circulating around, and resulting in devaluing of the currency. Generally, a bit of inflation is seen as a sign of a healthy, growing economy. Too much, or too little is seen as a bad sign. Ultimately whoever controls a certain currency is able to affect inflation through various financial mechanisms.“All these stimulus checks are gonna be hell for INFLATION.”

IoT (Internet Of Things) ⭐

DefinitionExample
The 'Internet Of Things' is the idea that technology has advanced to the point where we can stick a CPU w/ wifi into anything. Because of this, all 'things' can be internet-ready 'smart-devices.' Whereas old thermostats need someone to adjust them by hand, Internet-Of-Things thermostats can be adjusted from anywhere on your phone. Whereas old deliveries need you to be home to sign for packages, Internet-Of-Things deliveries lets you use any internet browser to see when the Amazon delivery guy rings your bell, then press a button and remotely unlock a 'storage box' for him to place your parcel in. (The downside is that 'internet-things' are often poorly designed devices, with little attention paid to security.)“I love this whole INTERNET OF THINGS, it finally let me set up my smart home.”

IPFS (InterPlanetary File System) ⭐

DefinitionExample
IPFS is a distributed system for storing and accessing files, websites, applications, and data. Instead of storing files on a central server owned by say… Amazon or Google, IPFS stores the file in multiple pieces and multiple copies on a wide variety of participating people’s computers. This type of file system is more resilient, harder to censor, and can speed up the web for far-away or disconnected users. (This is similar to how the peer-to-peer BitTorrent works.)“I’m done storing my files on central servers, it’s IPFS for me from now on.”

K


Key Pair ⭐

DefinitionExample
Keys usually come in pairs. (ie: Public Key / Private Key). When coins are sent somewhere, the blockchain only knows that coins were sent to Public Key (or Address) X. But that address is just a long string, it’s not as if that address (or Public Key) is registered somewhere. So the only way to retrieve the coins that are sent to Address (or Public Key) X is by accessing it using Private Key X. (A crypto wallet is basically a ‘key pair.’)“Emma, Your KEY PAIR is the most important thing you have in crypto. It’s what lets you control your accounts as well as send, receive, and perform transactions on the blockchain.”

00230H - Key Pair.png

KYC ⭐⭐

DefinitionExample
'Know Your Client' (KYC) is a standard in the finance industry that ensures financial services know key information about their clients' financial position. It's meant to protect both clients and financial service providers. Clients are protected by verified account recovery. Financial service providers are protected by background checks on scammers, fraudsters, etc. (Note: Many crypto-users don't want regulations breathing down their necks, so to them, sharing personal data as part of KYC goes against the basic premise of cryptocurrencies. That said, as the crypto market matures, increased KYC procedures seem likely to take hold.)“I wanted to do some anonymous trading but every exchange I try has KYC requirements.”

L


Layer 1 ⭐⭐

DefinitionExample
Layer-1 describes the underlying main blockchain architecture. It refers to the primary blockchain network code, rules, and protocols.“The devs are making some major LAYER-1 changes that will affect every dApp on the chain.”
Help: I appreciate anyone kindly clarifying this definition for readers and myself.

Layer 2 ⭐⭐

DefinitionExample
‘Layer-2’ is an overlaying network that lies on top of the underlying blockchain. For example, Bitcoin is the layer-1 network, and the Lightning Network is built on top of it, as 'layer-2.' Or Hive-Engine’s complex operations are built on Layer-2, leveraging the already-developed blockchain technology of Hive.io’s Layer-1.“Don’t worry, the app I’m making is LAYER-2, it’s not going to affect any core parts of the blockchain.”

Liquidity ⭐⭐⭐

DefinitionExample
Some assets are 'liquid', meaning easily spent or exchanged. Other assets are 'illiquid', meaning not easily spent or exchanged. For example, even though your house is a valuable asset, you can't buy a car using your house directly. Instead, your house would need to be 'liquidated' into cash first. Any time we convert an asset --like property, jewelry, or stock-- into currency, we're liquidating it. Houses aren't very liquid. Stocks are somewhat liquid. Cash is extremely liquid. Liquidity describes how 'spendable' or ‘tradeable’ something is.“I’m torn, storing my funds as gold sees them going up in value quite a bit, but I can’t spend them. I’m thinking I’ll move my investments to crypto because they seem to have higher LIQUIDITY.”

Liquidity Pool ⭐⭐

DefinitionExample
These are 'pools' of tokens that are 'locked' in a 'smart contract.' They provide 'liquidity' allowing traders to buy and sell certain tokens instantly. They're most commonly used by 'digital exchanges', because those exchanges serve many traders who are eager to trade quickly and often, so having a liquidity pool of certain tokens is very helpful in such a case. Most simple liquidity pools hold two tokens, known as a ‘crypto pair’, ‘trading pair’, or ‘token pair.’ The pool acts as an Automated Market Maker for the tokens contained within it. A popular liquidity pool is 'Uniswap.' (See Also: Automated Market Maker.)“I love using the Uniswap exchange because they have fantastic Ethereum LIQUIDITY POOLS such as Eth/Blt, Eth/LCX, and Eth/WBtc.”

00230I - LiquidityPool.png

Liquidity Provider ⭐⭐

DefinitionExample
A liquidity provider (or 'market maker') is a person/entity that constantly offers an inventory of a certain asset for buying & selling. By doing this, they have created a 'market' and have made that asset 'liquid' (easily tradeable.)“I have some cash sitting around so I’m going to become a LIQUIDITY PROVIDER for Ether/USDC. Why? Because it’ll help a market that can use the liquidity, plus I’ll make a nice profit as traders pay fees on their trades.”

Litecoin ⭐⭐

DefinitionExample
Litecoin is a cryptocurrency (LTC) with its own blockchain. It's very similar to Bitcoin but with a higher coin circulation, lower market value, and shorter block times/intervals. This results in Litecoin having faster transactions and lower fees than Bitcoin, but at the time of writing Bitcoin continues to dominate the market in popularity.“Sorry bro, I used to be a Bitcoin fan, but when it forked I totally switched my holdings to Litecoin.”

This concludes part one, but part two is on it's way!

(J-Ryze takes a deep breath…)

Phew! That’s the important crypto/blockchain terms from A to L. Unfortunately, Hive's character-limit makes me chop up this glossary into two piece, lol. (That's what I get for writing 100,000+ characters.) Still, I hope you found this first half helpful and of value. Part two contains the remaining letters, M to Z, and will be launching shortly, so please stay tuned. :)

Thanks so much for reading, and if you got value from this post, I’d appreciate any votes, comments, and shares you feel like giving, I’m so grateful for any support and encouragement, truly.

Note: If you have a ‘simple,’ ‘beginner-friendly’ correction/improvement to make to these definitions...

...please share them kindly in the comments and I’ll aim to update this glossary, because as I said earlier, I’m only three months into the crypto world, and this was an ambitious project for me. There may be mistakes.

THIS IS THE LINK TO PART TWO!

Much love, #KeepRyzing !

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