One of the common things people say about cryptocurency and blockchain technologies is that it is too complex, hard, or difficult.
One big reason that puts people off is the use of words that many of us have never heard.
In this article, we seek to describe some of the most commonly used cryptocurrency terms. This helps, especially if you’re starting out, so that you won’t feel too lost.
SEE ALSO: How to Select a Cryptocurrency to Trade
Here we go:
- Airdrop – A marketing campaign that distributes a specific cryptocurrency or token to an audience
- All-Time High (ATH) – The highest point (in price, in market capitalization) that a cryptocurrency has been in history
- Altcoin – Used to describe any cryptocurrency that is not Bitcoin — an alternative digital currency. As Bitcoin was the original cryptocurrency, any cryptocurrency that was created after was treated as an ‘alternative’
- Burn – Cryptocurrency tokens or coins are considered “burned” when they have been purposely and permanently removed from circulation
- Buy the Dip – An enthusiastic exclamation by supporters of a cryptocurrency to buy while prices are at a low point
- Consensus Mechanism – An underlying technology behind the main functionalities of all blockchain technology, which makes them an essential operating feature of all cryptocurrencies
- dApps (Decentralized Applications) – A type of application that runs on a decentralized network, avoiding a single point of failure
- DAO (Decentralized Autonomous Organization) – A decentralized autonomous organization (DAO) is founded upon and governed by a set of computer-defined rules and blockchain-based smart contracts
- DEX (Decentralized Exchange) – A peer to peer exchange allowing users to trade cryptocurency without the need for an intermediary
- DeFi (Decentralized Finance) – A movement encouraging alternatives to traditional, centralized forms of financial services
- Dump – A sudden sell off of digital assets
- Fiat – A ‘legal tender’ backed by a central government, such as the Federal Reserve, and with its own banking system
- FUD – An acronym that stands for “Fear, Uncertainty and Doubt.” It is a strategy to influence perception of certain cryptocurrencies or the cryptocurrency market in general by spreading negative, misleading or false information
- Fungible – In cryptocurrency, fungibility is when a coin or token can be replaced by any other identical coin or token
- Gas – The fee paid on the Ethereum network in return for using the platform’s computational power. Activities that require gas include launching decentralized applications (DApps) and simple transactions like sending ETH between traders. The fee is paid using Ether (ETH), the platform’s native currency
- HODL – A type of passive investment strategy where you hold an investment for a long period of time, regardless of any changes in the price or markets. The term first became famous due to a typo made in a Bitcoin forum, and the term is now commonly expanded to stand for “Hold On for Dear Life”
- ICO – Short for Initial Coin Offering, an ICO is a type of crowdfunding, or crowdsale using cryptocurrencies as a means of raising capital for early-stage companies
- Laser Eyes – Laser eyes is a viral Twitter meme that is used by Bitcoiners attempting to push the price of Bitcoin (BTC) to $100,000, outlining the bullish outlook for crypto. This group is confident in the future of Bitcoin and likely to have diamond hands, meaning they are only looking to accumulate more BTC and HODL for the long term
- Mainnet – An independent blockchain running its own network with its own technology and protocol
- MemeCoin – The crypto analog of memes that came into being as a cheaper Bitcoin substitute. The first successful memecoin is DogeCoin. The famous Shiba Inu memecoin was also based on DogeCoin. Apart from DogeCoin, some of the most popular memecoins include Dogelon Mars, Shiba Inu, Floki Inu, Wakanda Inu, and Samoyedcoin
- Node – The most basic unit of blockchain infrastructure that stores data
- Peer to Peer (P2P) – The decentralized interactions between parties in a distributed network, partitioning tasks or workloads between peers
- Play to Earn – The play-to-earn business model supports the notion of an open economy and gives financial rewards to players who bring value to its metaverse
- Satoshi (SATS) – Like any other fiat currency out there, cryptocurrencies can also be divided into smaller units. Just as the U.S. dollar can be divided into cents and the pound into pence, the smallest available unit of Bitcoin is a satoshi – otherwise known as 0.00000001 BTC. The satoshi takes its name from Satoshi Nakamoto, the pseudonymous inventor of BTC
- Smart Contract – A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible
- Token – Tokens are a type of cryptocurrency that are used as a specific asset or represent a particular use on the blockchain
- Web 3.0 – The coming generation of the Internet
There you go, that’s a list of some pf the hottest terminologies out there as you start to deal in cryptocurencies.