Common Crypto Terms – Glossary

Starting with cryptocurrenices can seem a little daunting. You have to find good exchanges to buy crypto from, get to grips with all the wallet stuff, private keys, etc. And to top it all off, there are a lot of common crypto terms, specific to this niche.

As we still remember how it felt at first, we decided to help you out a bit by explaining all the most common crypto slang here in one place. Feel free to bookmark the page to turn back any time you encounter something you are not sure about. Also, all recommendations for additional words are welcome.

We are going to divide the terms by using a few distinct categories. Still, there are many words that can fit into a few sections, so you can use the CTRL+F function to find something you are looking for more easily.

Crypto Trading Terms

Let’s start out by explaining the words mostly relating to crypto trading.

A long position – Also, simply known as longing, this term refers to buying a cryptocurrency with an expectation that it will rise in value in a certain time frame. That will allow to sell it with a profit.

A short position – Again, a shorter term exists – shorting. Definitely one of the most common crypto terms. It means selling your position with the expectation that the crypto will drop in value shortly. This will open up the opportunity to buy in again at a later time to profit. Shorting is rather an advanced strategy. Professional traders also use the option to borrow bitcoins in order to sell them on the market. Buying back in later, they can do so at a lower price. Thus, they can pay back the coins in full to the lender while keeping the monetary profit from the trade. But please be aware, that this is not for beginners!

Altcoin markets – All trading markets regarding cryptocurrencies other than Bitcoin.

Arbitrage – A way of trading by buying and selling the same cryptocurrency simultaneously on different exchanges. The point here is that the prices may differ on the exchanges, resulting in a low buy-in price on one and a higher selling price on another. Arbitrage trading is legal for stocks, for example. But the same does not apply for the cryptocurrency space.

Ashdraked – Meaning to lose all your initial investment while shorting crypto. Again, see our warning about the necessity of experience when shorting.

ATH – All time high. Refers to the highest market price a coin has achieved during its lifetime. ATH is often brought up in price discussions as a reference point as how high a cyrpto price can go. We would advise you to be careful about such predictions, because historic prices in this space often mean little.

ATL – All time low. Basically the opposite of ATH.

Bagholder – A term for people who have bought in at a premium and still holding onto their crypto at a considerable loss. A strong negative connotation to the word, as bagholders tend to refer to ATH as a reference for where the price-point may get back to in the future.

Bear – Someone who is confident that the market price will fall. Therefore, bears are looking to short the market.

Bear market – A downtrend in the cryptocurrency market.

Bear trap – Large-scale market manipulation where people with significant sums start selling in the midst of a market in an upwards trend. The sudden drop can trigger stop-loss orders and make others sell in a fear of an even larger downwards trend. The manipulators can then buy back in at a lower price while releasing the downwards pressure by removing the sell orders.

Bollinger band for trading
Bollinger band

Bollinger band – A technical analysis tool that shows the simple moving average with two accompanying bands 2 standard deviations away from the average over a 20-day period. The band shows 2 things – when the average is close to the upper one, the market is overbought and vice versa.

Bubble – Bubbles, like many of the other terms here, relates to different assets. It means that the market is overpriced by speculation and the prices do not reflect the real value of product. For example, the 2017 crypto bubble took off at the end of the year and exploded after a few months with rapid price decrease.

BTD – Buy the dip. Indicating that the market is dipping only to recover from it shortly. This can open up a good buying opportunity for selling at a premium later.

Bull trap – The reverse of a bear trap. During a down trend, a quick push upwards that could be considered as a reversal of trend. Actually, the downtrend just continues after a short pump.

Bulls – People who are excited about the market sentiment, seeing that an increase in value is looming.

Bull market statue
Bull statue on Wall Street

Bull market – The opposite of bear market. The whole market is making movements toward higher levels.

Buy area – A predefined range using technical analysis that makes for a good spot for buying.

Buy wall – A large number of buy orders starting at a price point that exceeds the selling orders. Means that it is difficult for the price to drop below the price where the buy wall lies and may be an indication of an upward price movement.

Candlestick – A bar on trading view is a candlestick. It has four components – open, close, high and low. Represent a trading session in a timeframe with prices that trading started and ended as the main parts of the candle. The thin strips represent the extremums for price.

Day trading – Using the volatility of crypto throughout the day to pocket any % increases in value through constantly selling at higher positions and buying back in lower. One of the most common ways of making money with cryptocurrency.

Exchange – A website to buy and sell cryptocurrencies. Look here for more info on the most popular crypto exchanges.

FA – Short for fundamental analysis. Uses methods to determine an asset’s intrinsic value rather than base the decisions on market behavior.

FIAT – Regular government-backed money like USD or GBP. Not every place allows for FIAT transactions, so if you are looking to buy some crypto with it, look for a suitable exchange.

FOMO – Stands for fear of missing out. The volatility of crypto assets makes people especially vulnerable to FOMO, as a coin can easily rally 20% in 24h. FOMOing in often results in being late to the party and just buying in high while the price is just starting to fall.

FUD – Fear, uncertainty and doubt. Negative narratives regarding the development, founding team or something else relating a crypto project can result in FUD. The market may respond by selling, hence bringing about a drop in price.

HODL – Originally a misspelling of “hold”, it has now transformed into an acronym for “hold on for dear life”. Refers to the sentiment of crypto owners who are looking to invest in long-term and are not swayed by market fluctuations.

KYC – Know your customer. Usually relates to exchanges, as many want to verify a user before allowing them to trade with larger sums, or trade at all. The process encompasses ID verification, address verification, etc.

Leverage – Margin trading uses leverage to increase the potential return of a trade by borrowing money. Leverage shows how much of the trading money comes from the trader and how much is borrowed as a ratio, for example 1:10.

Limit buy – Setting a predetermined price you are willing to pay for a coin on an exchange. If someone is selling even lower, the trade will still happen.

Limit sell – Setting a predetermined price you are looking to get for the coins you are selling on an exchange. If someone sets a higher limit buy order, it will still trigger your selling order.

Liquidity – The availability of an asset on an exchange. The higher the liquidity, the less impact buying and selling have on the market price. Low-liquidity coins that are only tradeable on a few exchanges can be easily manipulated.

MACD – An acronym of Moving Average Converge Divergence. A trend indicator often used in trading. Learn more about MACD crossover.

Market cap – The total value of all the coins in circulation. The maths behind are simple – a multiplication of price per coin X total circulation equals market cap, or market capitalization for long.

Make sure you understand market cap before anything else. A common rookie mistake includes comparing 2 coins for price and making buying decisions on that. This is absolutely meaningless unless these 2 have the same circulating supply.

Margin trading – Trading with borrowed funds. Leverage, another common crypto term we explained above, shows how much of the money is borrowed and how much belongs to the trader. Can substantially increase the return but the same applies to losses, that can exceed the initial input of the trader. Definitely not suitable for a beginner at trading.

Market buy – Setting a buy order that will activate against the lowest selling order. An alternative for limit buys and suitable if you are just looking to buy in quickly rather than at a predefined price point.

Market sell – Similarly to the last point, market selling means selling to the highest buying bids on the market. A quick way to sell your stack.

Moon – “To the moon” is common crypto slang describing someone’s belief that a coin’s value will rise rapidly. Was especially popular during 2017’s crypto bubble.

OTC exchange – Over-the-counter exchange. This kind of exchanges do not use an intermediary in trading, meaning also less restrictions.

Pump and dump – A sudden increase in value followed by a quick fall-off. Pump and dump is common for smaller cryptos with less liquidity and listings on different exchanges. If so, someone with enough money can buy into the selling orders continuously to move the price upwards. As the market takes notice and assumes somebody is buying massively based on some kind of insider insights, they start buying in and may move the price even more upward. Then the selling starts by whoever started the pump, leading to an eventual dump.

Price surge – A quick rise in value.

ROI – Return on investment. Shows the progress of your initial investment in percentages. For example, a 10% ROI means that your have gained $20 on your initial $200 investment.

RSI – Relative strength index. A common term in cryptocurrency trading which uses technical analysis to show if the market is overbought or oversold. It bases the assumptions on the magnitude of recent price changes.

Scalping – A form of trading that uses technical analysis to detect suitable points of entry to sell at a premium. Needs experience and a lot of investment, as this trading method uses marginal gains for selling. Therefore, generating a significant income usually involves using leverages. Depends heavily on speed.

Shilling – Actively promoting a certain coin to bring in more buying. Often done by community members who are holding a coin to increase its value through increasing demand. Shilling has a negative connotation to it because shillers are often viewed on par with sports team supporters, turning a blind eye to the weak sides of a project.

Shitcoin – Sometimes used as derogatory term for all altcoins or a specific coin, suggesting it has no future or intrinsic value.

Swing trade – Swing trading tries to capitalize on the volatile nature of cryptocurrencies by buying in low and selling higher. Usually based on TA, it does not require constant monitoring but rather uses limit sells while applying a stop-loss for potential failure.

Technical analysis – Involves many different methods of analysing the market trends to pinpoint spots where to buy in or sell.

Tanking – A sudden and steep fall in price.

Volatility – The tendency of quick price movements in both directions. While volatility often brings both euphoria and FUD in a short span of time, this side of crypto can make day trading profitable even with quite small investments.

Whale – Someone with a large amount of fiat or cryptocurrency who has the ability to influence the market prices. Whales can be responsible for pump & dump schemes and sudden price movements for their own gain.

Crypto Mining Slang

ASIC – Stands for application-specific integrated circuit. This is a chip that is not intended for general use. Rather, it has a specific purpose. ASIC miners refer to hardware that has the purpose of maintaining the blockchain through mining.

Block reward – The mining operation writes data but also creates new coins. The latter goes towards miners. This is how crypto generation takes place.

Mining difficulty – The necessary computer power to take part in the mining process. For example, the mining difficulty for bitcoin increases after a set time period, making more powerful hardware necessary.

GPU – Stands for graphics processing unit. Originally meant for playing computer games that require great capacity for displaying the graphics. GPUs are more powerful than CPUs, so they find use in crypto mining.

Halving – Refers to halving the reward for mining a cryptocurrency. They reward for mining bitcoin was initially 50, then 25, etc. In the bitcoin network, a halving takes place every 4 years.

Hash rate – The speed which a mining rig operates at. Higher hash rates mean more power.

Miner – Someone who is contributing computing power to maintain the blockchain network to gain block mining rewards.

Mining – Solving complex mathematical puzzles in the process of adding new blocks of data onto the blockchain. Mining requirements are constantly rising in terms of computational power.

Mining algorithm – The mathematical algorithm in use to sign transactions on the blockchain. Different blockchains may use a variety of algorithms.

Mining contract – An agreement whereby someone pays a mining farm, for example, for mining services. It allows someone without any necessary hardware or access to cheap electricity to take part in the crypto mining business.

Mining pool – A number of miners who strike an agreement to share their mining rewards. Winning rewards happen in intervals, so such a scheme ensures a steadier and continuous income.

Mining rig – A computer system for mining cryptocurrencies. Often uses more than one computer to increase the overall power, therefore also enhancing the chance of getting mining rewards.

Mt Gox – A popular crypto exchange back in the day that got hacked in 2014. In total, 850,000 bitcoins were stolen.

Nonce – An abbreviation of “number used only once”. Every block on the chain includes a nonce. Miners are rehashing these blocks to increase security. When solving the mathematical puzzles, nonce is the answer a miner who solves the puzzle gets. Finding the nonce results also in acquiring the block reward.

Storing Cryptocurrencies

Address – This is the address of your crypto wallet. Every time you generate a new wallet, it comes with a separate address. Therefore, if you want to send coins to a specific wallet, you need to use its address. You can also access the same wallet from different devices (e.g. Nano Ledger or a desktop wallet) if you set it up with already existing private keys.

Hardware wallet – A physical device that can help you securely store your private keys and allow you access to the addresses you own. Ledger, Trezor, etc are front-runners in this space.

Mobile wallet – A mobile app that stores your private keys on the phone, so you can access your coins on the go. Mobile wallets are available for both Androids and iPhones.

Paper wallet – A fancy name for a piece of paper that contains your private keys and mnemonic phrase. Quite a safe way to store your necessary details offline, unless the paper gets lost.

Wallet – Comes in many forms as evident above. Essentially a way to store your private keys.

Blockchain Terms

Algorithm – A mathematical term that finds a lot of use in the cryptocurrency landscape. Algorithms are behind creating the hashes for storing data.

Bitcoin – The leading cryptocurrency that was founded in 2010 during the financial crisis. The main idea is that the generation rate of new bitcoins is set in code, eliminating the risk of “printing money” during times of recession.

Block – All the information on blockchain comes in blocks. Every project writes its block after a certain time-frame. For bitcoin, the generation rate is 10 minutes. Therefore, every 10 minutes, the data is written onto the chain and is immutable from that point on.

Blockchain – A distributed ledger technology, meaning that many different sources have all the historic information saved. Thus, nothing previously written on blockchain can be changed without causing an alarm. Every new block is minted on top of the others, relating the data to each other.

Block explorer – A kind of search engine for blockchain projects. Google “yourcoin explorer” to find a specific one. It shows activity on the blockchain, latest transactions and you can also view a certain address’ balance when searching for the address. Yes, public blockchain means that this info is publicly available, including the latest transactions of this certain address. But there is no information about the owner of the address.

Blockchain platform – The foundation on which decentralized applications, or dApps, ca be built. Even if the dApps have their own currency, making transactions needs the currency native to the platform itself. For example, a dApp working on the Ethereum platform requires all transactions paid in ETH.

Block height – The total number of blocks before a specific block.

Consensus – All the nodes that share the ledger have to reach consensus – they all have the same data. Therefore, a bad actor can be spotted by having different data than the rest.

Cryptocurrency – A digital currency used on a blockchain to transfer value or pay for data transactions. The use depends on the blockchain project.

Cryptography – Combining disciplines of mathematics to encrypt data on the blockchain.

dApp – An application, similar to anything you can download for your phone, that runs on the blockchain. Using blockchain opens up new possibilities, like identifiable unique digital products that are verifiable on the blockchain.

DAO – Stands for decentralized autonomous organization. An organization that is controlled by rules of code, rather than a central government.

Decentralization – The very core principle of blockchain. It means that the is no central body who governs over the data. Everything is shared between a network ensuring its immutability.

Desktop wallet – A digital wallet that holds your private keys on your computer. A better way of storing your coins than an exchange, but still prone to malware.

Distributed ledger – A ledger is something that holds information regarding financial transactions. In the cryptocurrency space, distributed ledger means that a network of nodes holds identical data to ensure the truthfulness of the ledger.

Double spending – The act of spending the same digital currency twice. Possible in theory but in reality, all transactions are timestamp and shared between nodes, making this impossible in the bitcoin network.

Fungible – Means that two pieces of the same thing have identical value. Hence, 1 bitcoin equals 1 bitcoin.

Genesis block – The very first block to be minted on a blockchain.

Hash – A cryptographic function that translates data into a sequence of numbers and letters, ensuring the immutability of data.

Microtransaction – A financial transaction so small that a regular bank transaction would render it pointless, as the fees may be larger than the financial value itself. Many currencies are trying to achieve a viable way to minimise transaction fees and therefore make microtransactions a feasible way of sending money.

Mnemonic phrase – Also known as recovery key, recovery phrase, etc. It is a mix of 12 to 24 random words that are generated when creating a new address. This phrase helps to recover the private keys, should they ever get lost. The sequence of these words is important.

Multi signature – Having a second layer of confirmation before accepting a transaction on the blockchain for security purposes. Also known as multisig.

Node – A computer that is part of the blockchain network. It shares to whole ledger to ensure the accuracy of data across all the network.

P2P – Peer-to-peer. Not in any way restricted to blockchain, but also a common term in crypto slang. Especially in the sense that all transactions take place from human to human without any 3rd party intervention, like a bank.

Private key – Essentially the password for accessing your wallet. The wallets themselves are no more than a virtual UI to make for a better experience when managing your funds as wallets DO NOT hold your cryptocurrencies. They are on the blockchain and anyone who has the private keys of an address can access it through different means. It is essential to keep your private keys safe from outsiders.

Public key – This is the address of your account. Basically the same thing as your bank account number. Sending money to another address requires the public key.

Smart contract – A set of rules for executing a contract on blockchain. Mathematical formulas that can take outside data into account, making or breaking a transaction. For example, a smart contract may say that on the arrival of goods, a certain amount has to be paid. But only if the temperature of the products (e.g. food) remained in a predetermined range. As the info about the temperature is recorded onto the blockchain by smart sensors during transportation, the info is available. At the last point of scanning, the information is taken into account and the smart contract is executed with a decision based on data regarding initiating a payment or not.

Timestamp – A piece of data showing when the related information was written onto the blockchain.

TX – Short for transaction.

Glossary for Blockchain Projects

Altcoin – Altcoin is short for alternative coin. Bitcoin was the first in the space, hence every other project is an “alternative coin to Bitcoin”. Altcoins include a lot of different types of cryptocurrencies.

Airdrop – A marketing ploy where crypto is sent for free to your wallet. The idea behind is that the ones receiving the funds may start promoting the project because they now own some coins. This can also be triggered by a certain event, like sharing the company’s posts on social media.

Angel investor – An angel investor is someone looking to invest money in early-phase startups. Many blockchain projects are just that, resulting in funds from angel investors in order to kick-start the development process.

chainlink circulating supply vs total supply
The difference between circulating and total supply for Chainlink

Circulating coin supply – The amount of coins in circulation. The total supply may exceed the circulating supply and can be injected onto the market at a later stage for funding, for example. Market caps are usually calculated based on the circulating supply. So it is wise to check the ratio between circulating supply vs total supply before jumping to buying a coin.

DYOR – Do your own research. Mostly used in the context of blockchain projects when new people are coming in and asking for investment advice. Always DYOR rather than relying on information from a group of strangers on the internet, as this space is notorious for scams.

Ether – Short for Ethereum. Also, just ETH is common.

Ethereum – A blockchain platform that can accommodate dApps and smart contracts.

Fork – Updating the current blockchain by implementing new changes.

Hard cap – A term that relates to ICOs. The team may determine a hard cap, saying that they will only accepts a certain amount of money in exchange for a certain amount of their tokens.

Hard fork – Creating a new blockchain based on an existing one. The reason for forking often lies with discrepancies in the developer community, as one part wants to make some changes and the other does not. For example, all the different Bitcoin variations are forks of the original Bitcoin.

ICO Initial coin offering. Happens when a new project creates its own coin and is selling it publicly. ICOs are basically a funding instrument for blockchain projects.

Litecoin – One of the most popular cryptos alongside Bitcoin. Another project that’s intent is to serve as a currency, rather than provide a blockchain platform for dApps.

Mainnet – The primary blockchain of a project. Alternative is testnet which does not write data onto the “real” blockchain.

nfc tag
NFC tag

NFC tag – Near field communication tags are used with blockchain projects that concentrate on product authenticity and supply chain management. NFC tags can be used for reading data, which in this case, is on the blockchain.

Open source – Similar meaning here as it is for any other computer program. Some blockchains are open source, meaning that anyone can see the source code, make changes or hard fork it to his own. Making changes to the original code requires the consensus of developers, though. You can read more here about the ways consensus for new changes is reached.

Pre-mining – Mining of coins by the founding team before releasing it to the public. An important aspect to look at before buying into an ICO. If a large part has been pre-mined, it can be viewed as a red flag, as a lot of coins may be in the hands of a few.

Privacy coin – Usually everybody can check an address and see how much coins it is holding. For example, if you send your friends bitcoins, he can see the address these coins came from and view your wallet. Privacy coins do not allow that.

Token burn – Some projects burn their tokens, or secondary tokens, which are paid for transactions. This means that every transaction leaves fewer tokens in the circulation. An example would be Vechain blockchain, where the VTHO token is used for paying for transactions. 70% of the paid VTHO gets burned, the other 30% goes to nodes.

Proof of Stake – A mechanism whereby new coins are distributed among coin holders based on the amount they have. Thus, a lot less energy is necessary for mining coins but at the same time, there is a limit of reward which one cannot surpass without having more coins.

Proof of Work – The most common method for mining crypto that uses computational power for solving complex mathematical puzzles. This process creates new blocks onto the blockchain and the one who completes the mining gets the reward.

QR code – Another common crypto term that is actually in everyday use elsewhere. QR codes can lead to dApp pages that show data that is on the blockchain. For example, Walmart China has products on shelves with QR codes showing their origin and info about their journey, all on the VechainThor Blockchain platform.

Ripple – Another blockchain project among the most popular ones out there. Ripple, or XRP, is a quick way to transfer funds on the blockchain.

Satoshi – The smallest amount of Bitcoin worth 0.00000001 BTC. Derives from the founder of BTC named Satoshki Nakamoto. Finds a lot of use in trading as comparing the price of a coin against BTC is common. Displaying the values in Satoshis makes it more easily readable because the prices would otherwise usually be in decimals.

Scalability – In crypto terms, it refers to the ability to a blockchain project to withstand heavy use without delays and a major increase in the price per transaction. A common problem in the blockchain sphere, as shown during the 2017 bubble when the number of transactions jumped suddenly. Pushing through a BTC transaction quickly required around $15 at its highest point.

Sharding – A mechanism whereby all the node holders have a partial copy of the blockchain. Could help some projects in terms of speed and therefore scalability.

Sidechain – A separate blockchain that has its own protocol but is tied to the same blockchain, for example Bitcoin. Using sidechains can scale the throughput.

Soft cap – This term refers to the smallest amount of capital a crypto project is aiming to raise. If not reached, investors who have marked their interest will usually get their money back.

Solidity – Ethereum’s programming language.

Stablecoin – A cryptocurrency that is usually intended for trading. USDT, TUSD and others are some examples. The value of such coins is pegged to fiat currency, for example USD. Can be backed by commodities, fiat or cryptocurrencies.

Testnet – An alternative blockchain to the mainnet which uses the same logic. Can be used for testing out dApp concepts without paying for transactions or new implementations to the blockchain by the development team of the project.

Token – Often used interchangeably with cryptocurrencies. These two are not the same, though. While cryptocurrency is the native currency of a blockchain, tokens can be used as representations of value for new projects and dApps on an existing blockchain. For example, Golem has its own token but uses the Ethereum blockchain.

Total coin supply – The whole number of coins minted on a blockchain. Not all may be in circulation, as the founding team may be holding some for future partnerships or funding, for example.

Transaction fee – The cost of a transaction. Many blockchain allow to increase the fee you are paying in order to bring your transaction to the fore for miners, so it will go through quicker at times of congestion.

Utility crypto – A cryptocurrency that has a specific use-case besides being used in financial transactions. These tokens can be spent on services.

Vaporware – A blockchain project that is not doing much besides collecting money from investors. Not meeting deadlines and roadmap objectives can result in getting the tag of vaporware.

Whitepaper – A comprehensive document showcasing a project’s technical solutions and future plans in writing.

What Next?

So, you now know the terminology in the crypto sphere. But you want to keep on learning. First, you can head on to the common questions & answers about blockchain tech and cryptocurrencies section. You’ll get the basics from there.

We know why you are here, though – to make money. So remember to check out the article about the different ways of creating an income with cryptocurrencies.