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Cryptocurrencies

25 Terms that Every Cryptocurrency Trader Should Know

Need to brush up on your cryptocurrency terminology? Even if you’re already caught up on regular trading terms, there are still some new concepts you’ll need to understand if you don’t want to get lost while navigating crypto trading, so stay with us to learn all the new terms that you need to know.

  1. Bitcoin – This is the number one contender in the cryptocurrency field. It was created to eliminate the government and central banks from being involved in transactions and was described as a “peer to peer payment system”. Bitcoin has risen and fallen in value since it was first introduced in 2008, but savvy investors should know that the price has risen to all-time highs in just the past few years. 
  2. ICO/ITC – The abbreviation stands for Initial Coin Offering (ICO) or Initial Token Offer (ITO). It refers to the first shares of a new company being listed on the stock exchange, typically before the currency has been fully released. The goal is for a certain amount of the stock to be purchased before release in order to help fund further development efforts. 
  3. Fiat Currencies – A fiat currency is issued by the government and helps banks gain greater control of the economy because they can decide how much to print and release to the public. The US Dollar is an example of a fiat currency. 
  4. Fear, Uncertainty, and Doubt (FUD) – Negative opinions about cryptocurrency contribute to FUD because it can lead investors to fear crashing prices when they read about it online. Typically, these posts are misleading and are sometimes used by competition to sabotage prices. 
  5. Fear of Missing Out (FOMO) – This term refers to fears that make investors think they are missing out on a good opportunity, often causing anxiety and other psychological issues.
  6. Blockchain – The blockchain is the network where cryptocurrency transactions are maintained and linked through a peer to peer system. Each record of a transaction is stored on a block and are then linked together into a list, called a chain, before being confirmed by several computers on the internet.  
  7. Mining – The process of verifying transactions and adding them to the public record on the blockchain. 
  8. Wallet – Following the concept of a traditional wallet, this common term refers to the online digital wallet that holds each user’s cryptocurrency. 
  9. Address – An address is made up of a series of letters and/or numbers and specifies where cryptocurrency is going to be sent. 
  10.  Altcoin – Stands for “alternative coin” and is used to refer to any cryptocurrency that isn’t Bitcoin. (i.e., Litecoin, Ethereum, Ripple, and so on.)
  11.  Exchange – Where people buy, sell, and trade cryptocurrency. Coinbase is an example of an online exchange. 
  12.  Market Capitalization – The complete value of all of all cryptocurrencies, including the overall supply and the supply that has actually been released. 
  13.  Hashing – An algorithm used on the blockchain that must be solved for blockchain transactions. 
  14.  Pump & Dump – Investors or creators of a cryptocurrency set up a time when people should buy and sell their currency in order to pump up the price. Then, the investors usually sell once they are happy with the price, leaving the other investors with a currency that has deflated in value.  
  15.  Whale – A person or institution that owns a large percentage of Bitcoin or another cryptocurrency, enough so that they could attempt to manipulate the currency’s value by selling. 
  16.  ATH – An abbreviation that stands for “all-time highs”. This refers to the maximum value a cryptocurrency has ever reached before. Many cryptocurrencies will exceed their previous ATH multiple times throughout their lifespan.
  17.  Cryptography – Cryptocurrencies rely on this process of encoding and decoding information that helps to keep others from viewing any information about their transactions. 
  18.  Fork – A fork can be soft or hard and involves changes in rules or formality for a specific currency.  In some cases, miners may not agree on which blockchain to use, which can lead to the creation of two versions of the blockchain. 
  19.  HODL – This abbreviation stands for “hold on for dear life” and refers to holding onto cryptocurrency until market volatility passes. The acronym was originally a misspelling of the word hold but became the more common term that refers to holding onto an asset. 
  20.  Moon – A sharp rise in value for a cryptocurrency, also called mooning. 
  21.  Public Key – This refers to the address where a user can receive money and should be shared with others if you need to receive it, unlike the private key, which is only for the individual. 
  22.  Satoshi Nakamoto – The alias used by the creator of Bitcoin. To this day, the true identity of the creator has never been revealed. Several people have claimed to be Satoshi, but it has never been proven. 
  23. Token – One unit of digital currency, for example, one Bitcoin. 
  24.  Private Key – A string of letters and/or numbers that can be used to access one’s digital currency. This is meant to be kept private, as others can steal your currency if it is shared.
  25. Consensus – occurs when the network’s nodes can agree and verify that a transaction has taken place.