Glossary of Crypto Terms
Many terms exist within the crypto and blockchain space. Discover what they are to help expand your vocabulary.
The cryptocurrency space is quite vast and covers many different areas, ideas, and concepts. The following is a non-exhaustive, frequently updated list of crypto terms that you may come across or have questions on throughout your investment journey.
Active management comes into play when a portfolio of yours needs additional attention. Typically, a single manager can cover the bases, but occasionally an entire team is required for abnormally large accounts.
In the same way that street addresses and email addresses are public for anyone to send to, a cryptocurrency address is a sequence of characters where crypto assets can be sent or received between one another.
An airdrop is a method of providing a specific cryptocurrency community with access to free, or unearned tokens, usually to incentivize members or simply to display gratitude.
Algorithmic trading, also known as algo trading, is when computer software governs the trading activity of a portfolio, usually in an automated fashion.
The algorithmic stablecoin is a type of cryptocurrency that is backed by a set of rules and aims to remain pegged to the US dollar, or other reserve assets. An algorithmic stablecoin used to be considered a worthy concept until the Terra Luna incident.
The all-time-high, or ATH, is the exchange rate of a particular cryptocurrency at its highest peak that it has ever climbed in the past.
The all-time-low, or ATL, is the exchange rate of a particular cryptocurrency at its lowest valley that it has ever fallen to in the past.
An altcoin, or alternative coin, is literally any cryptocurrency other than Bitcoin. Ethereum, Litecoin, XRP, and Dogecoin are all considered altcoins.
Assets Under Management (AUM)
Assets under management is exactly what it sounds like. It is the entire value of the assets managed by a specific financial organization.
Augmented reality, also known as AR, is used in the current Web3 era to display artificial, tech-driven imagery onto physical landscapes.
Aurora ETH Strategy
Aurora ETH strategy is one of the strategies used by automatic trading bot, Stoic AI, that is designed to take advantage of the high volatility in Ethereum with a target return of 40% to 50% per year in USDT.
A bear market is a period of time when the exchange rates of crypto assets are falling or have fallen significantly. Market sentiment is down in a bear market, causing sellers to flood the market, and buyers to withhold capital from investing (unless you are a contrarian investor).
A beta launch is the launch of a product or service that is still in the assessment phase. Once it leaves beta, then it will be released to the public as a full-fledged product.
The bid price, or buying price, is the amount a trader is willing to pay for a particular asset.
Binance is a popular cryptocurrency exchange that offers a wide variety of services for retail and institutional investors. US customers are unable to use Binance.com and must use Binance.us.
Binance US is the version of Binance that can legally be used within the United States.
Bitcoin (link to article) with a capital B, refers to the permissionless Bitcoin network of nodes running a digital ledger known as the blockchain. Nodes verify transactions and keep the network secure by utilizing electricity and machinery to solve complex mathematical computations.
The word bitcoin, with a lowercase b, is used to describe a unit (or many units) of value on the Bitcoin network that is denominated by satoshis. One bitcoin is equal to 100M satoshis and is also the world’s first decentralized, peer-to-peer cryptocurrency.
A Bitcoiner is someone who is passionate about Bitcoin and wants to see it succeed long-term. A couple well-known, outspoken Bitcoiners in the crypto space are Anthony Pompliano and Andreas M. Antonopoulos.
A block explorer, typically a website, allows any user to view detailed information on blockchain transactions for a particular network(s).
A blockchain is a highly secure database containing a series of digital blocks. Each block contains transactional data from the block before it, as well as new data from current transactions which creates a chain. Hence the name.
A bull market is a period of time when the exchange rates of crypto assets are rising or have risen significantly. Bulls are known for their strong bodies and fast running legs, which is how the exchange rates act during a bull market.
A call option is when a buyer and seller come together for the sale of a particular asset at a predetermined price. The call option has a limited time though and must be executed before that time is up.
Capital is another word for money that investors use to fund their investments into various assets classes. If you’ve heard of venture capitalists, they take large amounts of money and invest in other businesses.
Capitulation deals with getting rid of your cryptocurrency while the price is down, causing you to lose out on capital you had invested.
Central Bank Digital Currencies
Central bank digital currencies, or CBDCs, are cryptocurrencies that are governed by the central banks of particular nations that play within the legislations of that region.
A centralized exchange, or CEX for short, is exactly how it sounds; an exchange that is owned by a central entity such as a company or organization.
Circulating supply refers to all the coins of a particular cryptocurrency that are currently being passed around on the open market.
Cindicator is a New York-based quant trading company founded in 2015, building predictive cryptocurrency analytics with a team of over 50 professionals in math, data science, quant trading, and finance.
Cloud mining is when cryptocurrencies are mined, but not with your own equipment. You can sign up to rent, or lease, equipment from a cloud company that owns the mining rigs, allowing for a hands-free approach to mining your favorite cryptos.
Coinbase has two main meanings:
1. During the mining process, coins are initiated from the software and distributed to miners. Coinbase here refers to the number of coins distributed to miners for their efforts.
2. The second meaning is the name of a centralized exchange where users can login and trade cryptocurrencies after passing the KYC regulatory compliance process.
A coinbase transaction is the very first transaction that is started inside of a new block in the blockchain. Miners can create such a transaction inside of the next new block in the chain.
A cold wallet is a cryptocurrency app that holds your private keys offline, not exposed to the internet. Cold wallets typically come in the form of physical devices to be accessed via USB or Bluetooth.
A correction refers to a sharp decline in price to either a specific crypto, or to the entire market in general.
Cryptocurrency is digital money that was born on the internet, for the internet. Bitcoin, Ethereum, and other coins on the market utilize a unique blend of cryptography and blockchain technology to form units of value that run on top of digital ledgers.
Cryptography is the process of encoding or decoding private information to either hide or uncover a message.
A contrarian investor is a person who invests capital into specific assets when market sentiment around that asset is down.
Day trading is placing manual trades on centralized or decentralized exchanges in the pursuit of making money on differences in exchange rates. In other words… sitting in front of a computer placing trades.
In trading, a death cross is an indicator that displays when the 50-day moving average drops under the 200-day moving average. A death cross is typically considered a bad sign in most situations, resulting in a mass sell-off of crypto assets.
The term decentralized means that a network is not tied down to a central entity but runs on a dispersed set of resources.
A decentralized exchange, or DEX for short, is a cryptocurrency exchange that is not run by a central authority, but multiple different computers from around the world. Decentralized exchanges do not require self-verification like centralized exchanges do.
Decentralized Finance, or DeFi, refers to unconventional forms of financial services that are distributed in nature such as lending, staking, investing, and borrowing.
Decryption is the method of taking information, or data, that has been scrambled and turning it into a format that is easy for a human to make out.
Delegated proof-of-stake, or dPOS, is a type of proof-of-stake consensus mechanism that allows users to delegate their cryptocurrency to a delegator, typically for returns in tokens.
Difficulty is pretty much what it sounds like. In blockchain technology, difficulty refers to how tough, or difficult, it is to mine a block. In other words, the higher the difficulty, the more work it takes to confirm said block.
A digital asset is simply an asset (cryptocurrency, NFTs, real estate, art, etc.) expressed in digital form.
A digital signature acts like a physical signature but is used to authenticate a digital transaction.
A dip, in crypto terminology, is when the market goes through momentary periods of decline.
Distributed Ledger Technology
Distributed ledger technology, or DLT, is a widespread database that multiple users can tap into from all around the world. DLT is a main component of blockchain technology.
Diversification is the act of splitting up your investments among multiple assets, or asset classes, to mitigate overall risk.
Emergence DAO is a gamified investment DAO, or decentralized autonomous organization, with the intention of saving wild bees from extinction.
Encryption is the method of taking information, or data, that is readable, and scrambling the message so that no one can interpret it.
ERC-20 stands for Ethereum Request for Comment 20. ERC-20 is the set of rules created specifically for fungible tokens running on Ethereum.
Ethereum is a blockchain network that runs smart contracts and applications using gas fees as the fuel to power transactions on the network.
Ether is the native cryptocurrency that runs on top of the Ethereum network. Miners work to solve complex mathematical problems, complete blocks, and earn Ether as reward.
An exchange is typically a corporation that owns trading platforms, allowing users to buy, sell, and trade cryptocurrencies. Exchanges can be used to cash out, turning cryptocurrency into cash money.
Fiat on-ramps refer to online services that take fiat currency and can transfer it into cryptocurrency. Typically, this is accomplished through centralized exchanges.
Fixed Income Strategy
Fixed income strategy is Stoic AI’s low-risk, above average return, algorithmic trading strategy that diversifies long positions in high market cap cryptocurrencies.
Flippening is a theoretical situation where an altcoin’s total market cap exceeds that of Bitcoin. Bitcoin has always been the dominant cryptocurrency up to this point.
FOMO is an acronym in the investing world that means, Fear of Missing Out.
A node, or computer that is running blockchain software, which contains all past transactions and actions taken up to the current moment.
Fun is considered an enjoyable experience that typically brings pleasure in the form of mental excitement, humor, or physical exhilaration. A good example would be getting started as a bee or a beekeeper in Emergence DAO.
Fungible describes cryptocurrencies that are replaceable. For example, Bitcoin and Ether are considered fungible, whereas an NFT is unique and cannot be replaced or replicated.
Futures are legally binding agreements whereas the pricing of an asset or commodity is agreed upon in advance, yet only lasts for a certain time period and then expires.
Gains are when an investment goes up and is worth more than the initial capital.
GameFi is a term that is short for Game Finance. GameFi represents Web3 games created with incentive to earn rewards in the form of cryptocurrency as they are played.
No, you cannot fill your vehicle with this. Instead, gas resides on the Ethereum network acting as the energy that helps run the network and keep hackers at bay.
In a similar way the beginning of time and space was created, a genesis block is the original block to be validated on a blockchain.
Just know that this is generally a good thing. When you see this indicator, exchange rates are likely to climb.
Governance is the community surrounding a particular network which aids in managing and voting on different issues.
A green candle is a good sign, or indicator, that the asset closed at a higher price that day than the opening price.
Halving is a predetermined, set time in which the reward distribution of a blockchain is cut in half.
A hard cap is the highest amount of a particular cryptocurrency. After that, no more are to come into existence.
A hard fork is when a significant change to the code occurs, normally resulting in the blockchain splitting into 2 separate chains that run simultaneously.
A hard wallet, also known as a cold wallet, is a physical device that can store cryptocurrencies safely on the blockchain without exposing private keys to bad actors.
Hash power is a term used in cryptocurrency mining that refers to the amount of computational energy necessary to operate a blockchain network.
HODL is an acronym that has come to stand for the phrase, hold on for dear life, which basically means to hold an asset for the long term no matter what anyone says or how the market decides to act.
A hot wallet is software created for the purpose of housing your cryptocurrency, making it readily available for sending to other addresses, typically in the form of a browser extension or app download.
Initial Coin Offering
Initial coin offerings, or ICOs, rose around 2017 when minting ERC-20 tokens and selling them to help fund crypto projects gained popularity.
Instamine is an event where investors get a sizable amount of a token’s hard cap following the initial release.
An institutional investor is not simply a single person, but an entire company or organization that places sums of capital up for cryptocurrency investment.
An interest rate, in positive terms, is a return earned based upon the size of the initial deposit. In negative terms, it refers to a charge based upon the size of the amount borrowed.
Internet of Things
Tech devices and programs synced with one another around the world.
Interoperability is being able to view and pass data back and forth across various blockchain networks.
Intrinsic value is an asset’s real-world value based on math, as opposed to its exchange rate.
Investing is the process of placing funds into a vehicle such as stocks, real estate, or cryptocurrency in hopes of increasing wealth.
A Jager is the smallest value of Binance Coin (BNB).
JOMO is an acronym for, “Joy of Missing Out”.
Know Your Customer
Know your customer, or KYC for short, is a way for exchanges to confirm the distinctiveness of the people who sign up. Essentially, they are making sure that you are who you say you are.
Large cap refers to cryptocurrencies whose market capitalization is high, usually at the billions level.
Layer 0 is the nuts-and-bolts system running underneath the layer 1 blockchain level including rules, miners, and other resources.
Layer 1 is the group of blockchain resolutions and improvements that help sustain and guide the underlying protocol.
Layer 2 is all about scaling. It is taking what makes layer 1 good, then adding features such as speed, lower costs, and so on.
A ledger is a record of account. This term was ushered into the blockchain world and is commonly used in the phrase, “Distributed ledger technology”.
Not light as in, “a bright light”. Instead, light as in weight since light nodes assist full nodes in confirming data on chain.
The Lightning Network is a layer 2 set of rules created for Bitcoin. The intention behind Lightning Network is to increase the amount and the speed of transactions that can be executed worldwide.
A limit order is an exchange action saying this… buy or sell a particular asset at this price or better.
LINK is the dominant and native ERC-20 token of the Chainlink network which runs on the Ethereum blockchain.
Liquidation is when an investor sells off all or a portion of their portfolio for cash. Cash is the most liquid form of money there is.
Liquidity is the ease in which a particular crypto asset can be traded on the open market and not interfere with major price movements.
Long only is one of Stoic AI’s automatic trading strategies that performs better than the crypto market on average.
A margin call is not generally seen as a good thing. If a margin call occurs, it means that a person’s investment account dips down underneath a specified margin value. This recently occurred to some investor’s portfolios during the great 2022 downturn.
Margin trading is not using your own funds to trade, but someone else’s, to then trade crypto assets with.
Market capitalization, or market cap, is the total number of coins of a particular cryptocurrency, multiplied by the current exchange rate of said coin.
A market maker is someone who executes an order on the open market. Someone on the other side of the transaction to complete it is known as a market taker.
A market order, or market buy/sell, is buying or selling a cryptocurrency at the most advantageous exchange rate.
Max supply is the total coins of a particular cryptocurrency to become available for trading. Once the max supply number is hit, that is it and no more.
A mempool is a mining term that refers to each node’s accumulation of transactions that are not confirmed yet.
MetaMask is a browser extension that serves as a cryptocurrency wallet, sending and receiving Ethereum-related tokens.
The metaverse is a fully immersive, 3-dimensional iteration of the internet.
Metcalfe’s Law is another way of saying, “The more the merrier”. Essentially, adding more participants to a network makes it bigger, stronger, and more valuable as time goes on.
A micropayment is a tiny online transaction, oftentimes displayed in fractions of a penny.
Miners are individuals or organizations in charge of holding down a blockchain network in terms of security and validation utilizing computing power and typically large amounts of energy consumption.
Keep this safe! A mnemonic phrase is a series of words, in order, that allow a user to gain access to their crypto funds in case a password is lost or forgotten. It serves as a backup to a hot or cold crypto wallet.
Move-to-Earn is similar to Play-to-Earn, or P2E, in that users are incentivized to move their bodies in a way that triggers the earn mechanism inside the app. An example of this is the Web3 app, STEPN.
Multi-signature, or multi-sig, is short for multiple signatures. Certain blockchain transactions demand additional security precautions and thus call for more than one signature to put it through.
A network, in blockchain, is the collection of computers, or nodes, that create structure which provides necessary transaction details.
Stay away from these people. Just kidding…. Kind of. No-coiners are people who supposedly have zero cryptocurrency to their name and are dead set on claiming that the crypto space will crumble.
A node is a necessary piece of the blockchain puzzle that keeps data stored and, depending on the type of node, verifies transactions on the network.
A non-fungible token, or NFT, is a unique token residing on a blockchain that cannot be replicated or replaced in any way. NFTs have the opposite properties of fungible assets.
A nonce is a term used in crypto mining when a random number is generated as a result of hashing a transaction.
Off-chain transaction is a fast and less-costly transaction that occurs outside the main layer 1 blockchain.
Offline storage is one of the best forms of storage, since the private keys that guard your cryptocurrency are kept on the device and away from the internet when signing transactions.
Well… on-chain transactions are the opposite of off-chain, as these take place on the main blockchain, and all nodes agree.
When something is deemed open source, it is referring to the transparency in the code or the information presented in the creation process. Anyone can access it at any time.
OpenSea is an online marketplace offering a variety of NFTs for sale to potential buyers.
Being an option in a relationship is never a good thing. An option in crypto allows an investor to trade at a determined price increment.
A pair is simply two cryptocurrencies that are entering a trade together such as Litecoin and Stellar. This pair would be displayed as LTC/XLM.
Passive income is money that comes in based on work or investments performed in the past, getting paid repeatedly.
A peer-to-peer transaction, or P2P transaction, is when one party initiates a transaction to send value directly to another party without the use of an intermediary 3rd party.
Permissionless is the absence of permissions within a network. In other words, anyone can participate in whichever way they see fit.
Nope, you don’t catch anything here, except maybe a virus or ransomware. Phishing is when a malicious actor tries to be sneaky and get a hold of private information that can either steal your identity, data, or value.
Play-to-earn, or P2E, is when an online game is played to earn tokens, or cryptocurrency, that can be used in-game or traded on the open market.
A portfolio is the assortment of cryptocurrencies being held either by an individual or a company.
Pre-sale is when a particular cryptocurrency goes on sale to qualified investors before the public launch.
Prediction markets are not based in real-time, but on time in the future where specific trading events take place.
Private keys are a string of characters that create the public keys for a crypto address. If someone grabs a hold of your private keys, they then have full wallet control to send and receive transactions of any size.
Profit and Loss Statement
A profit and loss, or P&L statement, is basically like a school report card, but for your finances. The P&L gathers all money earned and spent in a given time frame.
Proof-of-stake, or PoS, is a secure, accumulation-dense way that blockchain nodes can all agree on the validity of transactions on the network.
Proof-of-work, or PoW, is a secure, power-dense way that blockchain nodes can all agree on the validity of transactions on the network. PoW gained popularity due to Bitcoin being the first blockchain network to function on it.
A public address in crypto is like a physical mailbox in that value can be placed inside, but only the owner of the mailbox can take mail out.
A public key is the string of characters behind the public address that gives addresses the ability to receive cryptocurrencies into the account.
Quantitative analysis is studying the financial markets utilizing intricate calculations and arithmetical modeling.
Quantitative easing is another phrase for printing more money.
Quantitative trading, or quant trading, is using algorithms based on math to take advantage of various crypto trading opportunities.
Rebalancing is when assets within a portfolio get bought or sold to hold a dedicated amount and keep risk level in check.
A recovery seed, or seed phrase, is a randomly generated list of words allowing a wallet owner to restore their wallet for whatever reason necessary.
Regulatory compliance is remaining in line with the laws set by a country’s government for a specific industry.
Resistance is the peak value level of an asset over a specified amount of time.
A roadmap lays out the plans for a company or a project over a period of months and/or years.
A Satoshi is the minimum unit of value that can be sent over the Bitcoin network and is displayed as 0.00000001 BTC.
Satoshi Nakamoto is the person(s) who built Bitcoin
A scamcoin is a cryptocurrency created by bad actors who are looking to take people’s capital.
The secondary market is where assets can be traded with peers.
The SEC, or Securities and Exchange Commission, oversees regulations regarding United States securities, and stocks and options exchanges.
A security is identified as a financial instrument containing value and the ability to be traded. Mutual funds, bonds, and stocks are all considered securities.
Segregated witness, or SegWit, is a Bitcoin improvement proposal, or BIP, created to assist in transactional pliability.
A sell wall is simply a bigger-sized order that is triggered to sell when a crypto asset hits a desired amount.
A settlement in crypto is when a transaction has been sent and finalized, unable to be restored to a previous state. What’s done is done as they say.
A term used in the Bitcoin blockchain network to refer to the initiation of a 256-bit signature.
Though sounding like a term used in human bowel movements, sharding refers to a method of expansion to enable the breaking off of blockchain states to run in tandem with one another.
Shill, or shilling, is spreading the news with fervor about a particular cryptocurrency.
Short, or shorting, is borrowing an asset only to sell it.
A signal is an indicator to a trader or a trading bot to either buy or sell a crypto asset.
A smart contract is summed up in the phrase, “If this, then that”. Smart contracts are pre-programed sets of code that activate once a specific action(s) occurs on a blockchain network.
Spot trading is trading on the spot, or in real-time. It is a prompt exchange of value at a particular price point.
Stablecoins are crypto coins that have a stable value, typically tied, or pegged to another asset such as gold or the US Dollar. USDT, USDC, and BUSA are examples of stablecoins.
Staking is the process of taking tokens that you own, and either locking them or delegating them to a validator, to then aid the blockchain network’s various processes and get rewarded for it.
Stop Loss Order
A stop-loss order activates when the price a trader is willing to sell at gets hit, executing a sell order.
Swing trading is trading assets in the short term with the goal of earning profits during a specified time frame.
Technical analysis is the art of studying market characteristics and using them to fashion investing conclusions.
A ticker symbol is a crypto or stock displayed as 3 or 4 characters instead of spelling out the entire name for each asset.
A token is a virtual form of value that typically possesses utility on the blockchain it runs on.
TokenSets is a decentralized finance platform to manage crypto assets.
Total supply refers to all the coins available at the present moment of a particular cryptocurrency.
Total Value Locked
Total value locked, or TVL, is the entire sum of tokens presently staked, or locked, on a blockchain.
Trade volume, or 24hr volume, is how much cryptocurrency was traded on the open market over the last full day, or 24 hours.
A trading bot is code that executes trades based on specific market indicators. Trading bots replace the need for manual trading and can be more efficient and precise than traditional trading.
A transaction in cryptocurrency is sending or receiving value on or off the blockchain.
A transaction fee is an amount of value it costs for a transaction to be sent on a blockchain, typically dependent on how much crypto is being sent all at once.
Transactions Per Second
Transactions per second, or TPS, refers to the number of transactions a network can calculate within a second’s time.
Trustless in cryptocurrency is a network that has trust built into the protocol and does not require a 3rd party to verify the validity of transactions.
Unconfirmed is a point in the transaction lifecycle where it has been sent but is sitting in limbo awaiting validator approval to be written onto the blockchain.
A use case in cryptocurrency is when a particular project or coin is utilized in a real situation to demonstrate what it can do.
A utility token is a token on a blockchain that enables a user to perform an action(s) of some sort.
A validator, or node, authenticates the validity of a transaction and keeps a record of previous blocks on a blockchain.
The vesting period is a stretch of time when investors who purchased tokens during a pre-sale are unable to sell their portion.
Virtual reality, or VR, refers to experiencing worlds in a new digital manner, typically with the use of innovative headsets or glasses.
Volatility is the up and down price variations in the market
A wallet is a software program with a front-end designed to help crypto investors store their assets. Wallets are made to securely send and receive transactions on the blockchain.
Weak hands is a phrase used to describe an investor who tends to rapidly sell when they see or hear about the market prices going down.
Web 1.0 – Web 2.0 – Web 3.0
Web 1.0 was the first iteration of the internet that was read-only
Web 2.0 was the second iteration of the internet that allowed for read and write
Web 3.0, or Web3, is the third iteration of the internet that allows for read, write, and ownership capabilities.
A whale is the ultimate goal for many investors in the crypto space, which is to amass unusually large amounts of cryptocurrency in one wallet or amongst multiple wallets.
A whitepaper is a written document created when a new crypto project is formed, giving potential and existing investors the opportunity to read details on what the project is, what the token is, who the team behind it is, and what the mission or purpose is.
An X-ray is a non-crypto term that was placed here just to take up space in the X category.
Yield farming is when investors put crypto into DeFi markets expecting to earn interest.
Zero-knowledge proof is when a group or an individual can provide verification of a transaction without giving away private details about the transaction.
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Who is Cindicator?
Cindicator is a world-wide team of individuals with expertise in math, data science, quant trading, and finances, working together with one collective mind. Founded in 2015, Cindicator builds predictive analytics by merging collective intelligence and machine learning models. Stoic AI is the company’s flagship product that offers automated trading strategies for cryptocurrency investors. Join us on Telegram or Twitter to stay in touch.
Information in the article does not, nor does it purport to, constitute any form of professional investment advice, recommendation, or independent analysis.