If you're new to the crypto world, you may be feeling a little overwhelmed. Don't worry, you're not alone!
Cryptocurrency is a complex topic with its own unique vocabulary. In this article, we will define some of the most common crypto terms so that you can join the conversation!
The Most Common Crypto Terms & Definitions
Airdrop: crypto slang for a free distribution of coins or tokens.
Altcoin: any crypto coin other than Bitcoin.
Bear market: a period of time in which crypto prices are falling.
Bitcoin: the first and most well-known cryptocurrency, created in 2009.
Blockchain: a digital ledger of all crypto transactions.
Bull market: a period of time in which crypto prices are rising.
Centralized exchange: a type of crypto exchange where trade orders are processed by a company or organization.
Cryptocurrency: a digital or virtual currency that uses cryptography to secure its transactions.
Cryptojacking: the unauthorized use of someone else's computer to mine crypto.
Crypto lending: the practice of lending crypto to earn interest income.
Crypto wallet: a digital or physical storage device for cryptocurrency.
dApp: a decentralized application that runs on a blockchain.
Decentralized exchange: a type of crypto exchange where orders are processed directly between users, without the need for an intermediary.
Decentralized finance (DeFi): financial applications, often built on Ethereum, that are running on the decentralized web.
Distributed ledger: a digital database that is shared across a network of computers.
Ethereum: a blockchain platform that runs smart contracts.
Ether: the native crypto token of the Ethereum network.
Exchange: a platform where users can buy and sell cryptocurrency.
Fiat currency: traditional government-issued currency, such as the US dollar.
Governance token: crypto tokens that give holders voting rights on a blockchain protocol.
HODL: crypto slang for holding onto your coins or tokens for a long-term investment.
Initial Coin Offering (ICO): a fundraising event in which a coin becomes available to purchase for the first time
Know Your Customer/Anti-Money Laundering (KYC/AML): the process of verifying the identity of a customer and preventing money laundering.
Liquidity: the ability of an asset to be bought or sold quickly and easily.
Market cap: the total value of all coins or tokens in circulation.
Mining: the process of verifying and adding crypto transactions to the blockchain.
Mooning: crypto slang for a sharp increase in price.
Private key: a secret piece of code that allows crypto holders to access their funds.
Public key: a piece of code that allows crypto holders to receive funds.
Security token: crypto token that represent an investment in a company or project.
Smart contract: a self-executing contract written in code that lives on a blockchain.
Stablecoin: a crypto coin that is pegged to a fiat currency or asset to minimize price volatility.
Staking: crypto slang for holding crypto in a wallet to support the network.
Synthetic crypto: crypto tokens that are backed by real-world assets.
Token: a unit of value on a crypto platform, such as Ethereum.
Trading pairs: the two cryptocurrencies or tokens that are being traded on an exchange.
Utility token: crypto tokens that give users access to a product or service.
Pump and dump: crypto slang for artificially inflating the price of an asset followed by selling it.
Non-fungible token (NFT): a crypto token that represents a unique, indivisible asset.
Wrapped crypto: crypto tokens that are backed by another cryptocurrency.
Whales: large crypto investors who can influence the market.
Whitelist: a list of people who are allowed to participate in a token sale.
51% attack: a type of crypto hacking in which an attacker controls more than 50% of the network.
Hopefully this article has helped you feel more confident about exploring the world of crypto for yourself. Remember, there is no such thing as a stupid question – so don't be afraid to ask!
Ready to start investing in crypto? Read these guides first >>>
- How to Invest in Cryptocurrency
- Best Crypto Sign-Up Bonuses 2022
- Is It Too Late to Invest in Cryptocurrency?
Readers: what crypto terms do you hear most often? What's another definition we should add to the list?