Vocabulary

• Cryptocurrency – A digital or virtual form of currency that uses cryptography for security.
• Blockchain – A decentralized technology or distributed ledger that records transactions across multiple computers.
• Bitcoin – The first and most well-known cryptocurrency, created in 2009.
• Altcoin – Any cryptocurrency other than Bitcoin.
• ICO (Initial Coin Offering) – A type of crowdfunding, or crowdsale, using cryptocurrencies as a means to raise capital.
• Wallet – A digital place where you store your cryptocurrencies.
• Mining – The process of validating new transactions and recording them on a global ledger.
• Decentralization – The transfer of authority from a single, central authority to a distributed network.
• Fiat money – Legal tender whose value is backed by the government that issued it.
• Exchange – A platform where cryptocurrencies can be bought, sold or traded.
• Liquidity – The ease with which an asset, or security, can be converted into ready cash without affecting its market price.
• Volatility – Indicates how much and how quickly the value of an investment, market, or market sector changes.
• Bull Market – A market condition in which the prices of securities are rising, or are expected to rise.
• Bear Market – A condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.
• Token – A representation of a particular asset or utility, that usually resides on top of another blockchain.
• Smart Contract – A self-executing contract with the terms of the agreement directly written into code.
• ROI (Return on Investment) – A measure of the gain or loss made on an investment relative to the amount of money invested.
• Pump and Dump – A fraudulent practice where the prices of a cryptocurrency are artificially inflated to attract unsuspecting buyers, after which the fraudsters sell off their holdings causing the price to plummet.
• HODL – A term derived from a misspelling of "hold" that refers to buy-and-hold strategies in the context of bitcoin and other cryptocurrencies.
• FOMO (Fear of Missing Out) – A form of social anxiety where one is worried that they'll miss out on a potentially profitable investment opportunity and rushes to invest.
• DeFi (Decentralized Finance) – An umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries.
• Staking – The process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain.
• Peer-to-Peer (P2P) – A decentralized form of platform, application or system, designed to enable users to transact directly with each other without an intermediary.
• Private Key – A sophisticated form of cryptography that allows a user to access his or her cryptocurrency.
• Public Key – A cryptographic code that allows a user to receive cryptocurrencies into his or her account.
• Ledger – An append-only record store, where each new transaction is written once and cannot be modified retroactively.
• Cold Storage – The process of moving cryptocurrency 'offline', as a way of safekeeping your crypto from hacking.
• Dapps (Decentralized Applications) – Applications that run on a P2P network of computers rather than a single computer.
• Fork – A situation where a blockchain splits into two separate chains in consequence of the use of two distinct sets of rules trying to govern the system.
• Gas – A measurement roughly equivalent to computational steps.
• Hash – A function that converts an input of letters and numbers into an encrypted output of a fixed length.
• Node – Any computer that connects to the blockchain network.
• Satoshi – The smallest unit of Bitcoin, equivalent to 0.00000001 Bitcoin.
• Stablecoin – A type of cryptocurrency that is designed to have a stable value, as opposed to a typical cryptocurrency whose value can fluctuate dramatically.
• Whitepaper – A document prepared by a company to encourage or inform customers about a product or service.
• KYC (Know Your Customer) – The process of a business verifying the identity of its clients and assessing their suitability, along with the potential risks of illegal intentions towards the business relationship.
• AML (Anti-Money Laundering) – A set of procedures, laws and regulations designed to stop the practice of generating income through illegal actions.
• ERC-20 – A standard for tokens issued on the Ethereum blockchain.
• Market Cap – The total value held in a cryptocurrency.
• Scalability – The capacity of a system, network, or process to handle a growing amount of work.
• Sharding – A method for splitting a database to spread the load.
• Layer 2 – A secondary framework or protocol that is built on top of an existing blockchain.
• Whisper – A protocol for communication between nodes in the Ethereum network.
• Cryptography – The practice and study of secure communication techniques in the presence of third parties.
• Halving – The reduction of mining rewards by 50%, which happens in Bitcoin approximately every four years.
• Double Spending – The risk that digital currency can be spent twice.
• Consensus Algorithm – An algorithm used by blockchain networks to achieve general agreement on the state of the ledger.
• Digital Signature – A mathematical scheme for presenting the authenticity of digital messages or documents.
• Genesis block – The first block of data that is processed and validated to form a new blockchain, typically referred to as 'block 0' or 'block 1'.
• Dusting Attack – A type of malicious activity where hackers and scammers try and break the privacy of Bitcoin and cryptocurrency users by sending tiny amounts of coins to their personal wallets.