CRYPTO TERMS EXPLAINED: Breaking Down Popular Crypto Jargon

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.

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SEE ALSO: How to Select a Cryp­tocur­ren­cy to Trade

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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 – Ssed 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. 

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RECOMMENDED READING: Top 10 Cryp­to Mis­takes to Avoid as a Begin­ning Trader

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