Enhance your vocabulary on the blockchain industry! Learning these jargons might help you understand the fundamentals of blockchain technology, providing you with a better insight and gain the confidence for you to trade, exchange or perform any activity related to cryptocurrency.
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The purpose of the cryptocurrency address is to send and/or receive transactions on the network. A cryptocurrency address is usually in the form of a string of alphanumeric characters and differs to which token/coin you are using.
Example of BTC address: 3LoJFcGiBgCzy235poxmq8uZGFGSK3ZbJN
Airdrop is a jargon used in the blockchain industry that shares the same meaning as “giveaway”. Tokens are distributed by the operators of a cryptocurrency network to users for free or as a reward for completing tasks, typically for the purpose of promoting.
ASIC or Application Specific Integrated Circuit is similar to GPUs but are specially made for mining and offer significant power savings.
Altcoin originates from the word “Bitcoin alternative”. Altcoins are forks of Bitcoin with usually minor changes to the proof of work (POW) algorithm of the Bitcoin blockchain.
Example of Altcoins: Litecoin, Ethereum, EVR token etc.
Mathematic instructions coded into and implemented by computer software in order to produce the desired outcome.
The highest price to ever achieved by a cryptocurrency.
Example: The all-time high for Bitcoin is $20,089.00 USD which was on Dec 17, 2017
The lowest price to ever achieved by a cryptocurrency.
Example: The all-time low for Bitcoin is $65.53 USD which was on Jul 5, 2013
AML or Anti Money Laundering is an international law to prevent criminal organisations or individuals laundering money through cryptocurrencies into real-world cash.
There are multiple exchanges at any given time trading in the same cryptocurrency, and they can do so at different rates. Arbitrage is the act of buying from one exchange, and then selling it to the next exchange if there is a margin between the two that is profitable.
A way of letting people directly and cost-effectively exchange one type of cryptocurrency for another, at current rates, without needing to buy or sell.
API or Application Programming Interface is a set of routines, protocols, and tools for building software applications. APIs specify how software components should interact, such as what data to use and what actions should be taken.
Bitcoin is the first decentralised, open-source cryptocurrency that runs on a global peer to peer network, without the need for middlemen and a centralised issuer.
Blocks are packages of data that carry permanently recorded data on the blockchain network.
A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
Block explorer is an online tool to view all transactions, past and current, on the blockchain. They provide useful information such as network hash rate and transaction growth.
The number of blocks connected on the blockchain.
A form of incentive for the miner who successfully calculated the hash in a block during mining. Verification of transactions on the blockchain generates new coins in the process, and the miner is rewarded a portion of those.
If the price of a cryptocurrency has a positive price movement.
If a coin in any particular cryptocurrency has been made unspendable, it is said to be “burned”.
Automated trading software bots that execute trade orders extremely quickly, based on a preset algorithm of buy-and-sell rules.
Candlesticks or “candles” for short, is a graphing technique used to show changes in price over time. Each candle provides 4 points of information: the opening price, closing price, high, and low.
A ledger maintained by a central agency.
An organization structure in which a small number of nodes is in control of an entire network.
Chain linking is the process of connecting two blockchains with each other, thus allowing transactions between the chains to take place. This will allow blockchains like Bitcoin to communicate with other sidechains, allowing the exchange of assets between them.
The name given to the algorithm that encrypts and decrypts information.
A security measure for storing cryptocurrencies in an offline environment. These can be a storage device (such as a USB flash drive) or a paper wallet.
The successful act of hashing a transaction and adding it to the blockchain.
Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the ledgers are exact copies of each other.
Also known as tokens, cryptocurrencies are representations of digital assets.
Example: Bitcoin, EVR, Litecoin etc.
Cryptographic Hash Function
Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 computational algorithm is an example of a cryptographic hash.
The process of encrypting and decrypting information.
Cryptovirology is the study of how cryptology is used to create dangerous malware.
A decentralised application (Dapp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivised in the form of cryptographic tokens and operates on a protocol that shows proof of value.
Decentralised Autonomous Organizations can be thought of as corporations that run without any human intervention and surrender all forms of control to an incorruptible set of business rules.
Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. A distributed ledger does not have to have its own currency and may be permissioned and private.
A type of network where processing power and data are spread over the nodes rather than having a centralised data centre.
This refers to how easily a data block of transaction information can be mined successfully.
A digital code generated by public-key encryption that is attached to an electronically transmitted document to verify its contents and the sender’s identity.
Digital Currency / Digital Commodity
An intangible, hard to get an asset that is transferred electronically, and has a certain value.
Decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a global goal.
Double spending occurs when a sum of money is spent more than once.
The term used to describe selling all (or a lot) of your cryptocurrency.
Minuscule transactions that flood and slow the network, usually deliberately created by people looking to disrupt it.
Ethereum is a blockchain-based decentralised platform for apps that run smart contracts and is aimed at solving issues associated with censorship, fraud and third-party interference.
The standard to which each Ethereum token complies. It defines the way that each token behaves so that transactions are predictable. Other cryptocurrencies also use the ERC-20 standard, piggybacking on the Ethereum network in the process.
A token standard for non-fungible Ethereum tokens. An Ethereum Improvement Proposal introduced in 2017, it enables smart contracts to operate as tradeable tokens similar to ERC-20 tokens.
The platform through which cryptocurrencies are exchanged with each other, with Fiat currencies and between entities. Exchanges can vary widely on the currency conversions they enable, and their fee structures.
The Ethereum Virtual Machine (EVM) is a Turing complete virtual machine that allows anyone to execute arbitrary EVM Byte Code. Every Ethereum node runs on the EVM to maintain consensus across the blockchain.
A cryptocurrency reward system usually on a website or app, that rewards users for completing certain tasks. It is mostly a technique used when first launching an altcoin to interest people in the coin.
Refers to money recognised as legal tender by governments, such as the US dollar, pound, Euro and Indonesian rupiah.
Forks create an alternate version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network.
If there is no transaction cost and no restraints on trading, then the system is considered Frictionless.
A method through which you can attach value to a coin, by looking at similar economic and financial factors, and researching the underlying motives of the creators and market opinion.
A term used on the Ethereum platform that refers to a unit of measuring the computational effort of conducting transactions or smart contracts, or launch dApps in the Ethereum network. It is the “fuel” of the Ethereum network.
A term used on the Ethereum platform that refers to the maximum amount of gas the user is willing to spend on a transaction.
A term used on the Ethereum platform that refers to the price you are willing to pay for a transaction. Setting a higher gas price will incentivize miners to prioritize that transaction over others.
The first or first few blocks of a blockchain.
A type of fork that renders previously invalid transactions valid, and vice versa. This type of fork requires all nodes and users to upgrade to the latest version of the protocol software.
The act of performing a hash function on the output data. This is used for confirming coin transactions
Measurement of performance for the mining rig is expressed in hashes per second.
A hybrid PoS/PoW allows for both Proof of Stake and Proof of Work as consensus distribution algorithms on the network. In this method, a balance between miners and voters (holders) may be achieved, creating a system of community-based governance by both insiders (holders) and outsiders (miners).
Is a wallet managed by a third-party service.
Initial Coin Offering (ICO)
ICOs are types of crowdfunding mechanisms conducted on the blockchain. Originally, the main idea of an ICO was to fund new projects by pre-selling coins/tokens to investors interested in the project.
Initial Token Offering (ITO)
Similar to ICOs, but the focus is on the offering of tokens with proven (or unproven) intrinsic utility in the form of software or usage in an ecosystem.
Initial Bounty Offering (IBO)
An Initial Bounty Offering or IBO is the limited-time process by which a new cryptocurrency is made public and distributed to people who invest time and skill into earn rewards in the new cryptocurrency, such as doing translation or marketing. Unlike an Initial Coin Offering where you can buy coins, an IBO requires more mental commitment from the receiver.
KYC; Know-Your-Customer or Know-Your-Client is a protocol that goes hand-in-hand with AML to prevent identity theft, money laundering, terrorism financing, and other illegal corruption schemes from using the service, by identifying and verifying the identity of the customer.
A computer on a blockchain network that only verifies a limited number of transactions relevant to its dealings, making use of the simplified payment verification (SPV) mode
A digital log of all of the transactions which took place on a certain blockchain network. Copies of the ledger are stored across the network and are constantly updated to match each other, so transactions can be verified by anyone on the network.
A loan of sorts, offered by a broker on an exchange during Margin Trading
A “second layer” solution, designed to greatly increase the speed of transaction processing time on a blockchain network. The Lightning Network creates a P2P network to process transactions, before broadcasting them to be logged on the underlying blockchain public ledger.
The ease with which a certain cryptocurrency can be converted into cash. Liquidity is dependent on many factors, including supply and demand and transaction processing times.
If a transaction request comes with a rule delaying when it can be processed to a certain time or certain block on the blockchain, that is referred to as the Lock time.
A situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later.
This is defined as the total number of coins in supply multiplied by the price. CAP = SUPPLY x PRICE
The best approximation of the maximum amount of coins that will ever exist in the lifetime of the cryptocurrency.
Mining is the act of validating blockchain transactions. The necessity of validation warrants an incentive for the miners, usually in the form of coins. In this cryptocurrency boom, mining can be a lucrative business when done properly. By choosing the most efficient and suitable hardware and mining target, mining can produce a stable form of passive income.
A construct created by a group of miners in order to process more transactions and receive more fees. The funds are then split between the pool’s members.
Multi-signature addresses provide an added layer of security by requiring more than one key to authorize a transaction.
A term used to describe a major price movement upwards. For example, Ripple is mooning.
A network refers to all the Nodes committed to helping the operation of a blockchain at any given moment in time.
A copy of the ledger operated by a participant of the blockchain network.
A no-coiner is someone who has no cryptocurrency in his or her investment portfolio and firmly believes that cryptocurrency in general will fail.
The act of storing cryptocurrencies in devices or systems not connected to the internet.
The act of storing cryptocurrencies in devices or systems connected to the internet. Online storage offers more convenience but also increased the risk of theft.
The price at which a cryptocurrency opens at a time period, for example at the start of the day; the price at which a cryptocurrency closes at a time period, for example at the end of the day. In general, these terms were more useful in traditional financial markets as there are fixed hours of the day in which trading occurs.
Oracles work as a bridge between the real world and the blockchain by providing data to the smart contracts.
Over The Counter
Over The Counter is defined as a transaction made outside of an exchange, often peer-to-peer through private trades. In jurisdictions where exchanges are disallowed or where amounts traded will move the markets, traders will go through the OTC route.
Trade between one cryptocurrency and another, for example, the trading pair: BTC/ETH.
Peer to peer / P2P
Peer to Peer (P2P) refers to the decentralized interactions between two parties or more in a highly interconnected network. Participants of a P2P network deal directly with each other through a single mediation point.
A cold storage solution, which is considered one of the safest ways of storing cryptocurrencies. The paper wallet can be printed out on any printer and includes that user’s unique public and private key, encoded as QR codes. When users wish to gain access to their funds, all they need to do is scan their paper wallet.
A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
A private blockchain is a blockchain where write permissions are kept centralized to one organization. Read permissions may be public or restricted to an arbitrary extent. Likely applications include database management, auditing, etc. internal to a single company, and so public readability may not be necessary in many cases at all, though in other cases public auditability is desired
The set of rules that define how data is exchanged across a network.
Proof of Authority (PoA)
A Proof of authority is a consensus mechanism in a private blockchain which essentially gives one client(or a specific number of clients) with one particular private key the right to make all of the blocks in the blockchain
Proof of Stake
A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.
Proof of Work
A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with.
A machine-readable label that shows information encoded into a graphical black-and-white pattern. For cryptocurrencies, it is often used to easily share wallet addresses with others.
A ring signature is a cryptographic technology that could provide a decent level of anonymisation on a blockchain. Ring signatures make sure individual transaction outputs on the blockchain can’t be traced.
The smallest unit of Bitcoin, equal to 0.00000001 BTC
A person or group of people who created Bitcoin. In 2008, Nakamoto published a paper on The Cryptography Mailing list at metzdowd.com describing the bitcoin digital currency. In 2009, they released the first bitcoin software that launched the network and the first unit of the bitcoin cryptocurrency, called bitcoins.
Scrypt is a type of cryptographic algorithm and is used by Litecoin. Compared to SHA256, this is quicker as it does not use up as much processing time.
SHA-256 is a cryptographic algorithm used by cryptocurrencies such as Bitcoin. However, it uses a lot of computing power and processing time, forcing miners to form mining pools to capture gains.
Smart contracts encode business rules in a programmable language onto the blockchain and are enforced by the participants of the network.
A public market in which cryptocurrencies are traded for immediate settlement. It contrasts with a futures market, in which settlement is due at a later date.
A soft fork differs from a hard fork in that only previously valid transactions are made invalid. Since old nodes recognize the new blocks as valid, a soft fork is essentially backwards-compatible. This type of fork requires most miners upgrading in order to enforce, while a hard fork requires all nodes to agree on the new version.
Solidity is Ethereum’s programming language for developing smart contracts.
A cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency.
A block which was successfully mined but not included on the current longest blockchain, usually because another block at the same height was added to the chain first.
The ticker of a cryptocurrency; for example, Bitcoin’s symbol is BTC.
A test blockchain used by developers to prevent expending assets on the main chain.
Using a trading tool to look at historical data on a cryptocurrency in the hope of forecasting its future.
A collection of transactions gathered into a block that can then be hashed and added to the blockchain.
The value of cryptocurrency if moved from one entity to another on a blockchain network.
All cryptocurrency transactions involve a small transaction fee. These transaction fees add up to account for the block reward that a miner receives when he successfully processes a block.
Turing complete refers to the ability of a machine to perform calculations that any other programmable computer is capable of. An example of this is the Ethereum Virtual Machine (EVM).
The total amount of coins in existence right now, minus any coins that have been verifiably burned.
An abbreviation used to uniquely identify cryptocurrencies.
Is the amount of cryptocurrency that has been traded in the last 24 hours.
The fluctuation in an asset’s prices is measured by its Volatility. Cryptocurrency prices are notoriously Volatile compared to other assets as dramatic price shifts can happen quickly.
A file that houses private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for.
Example: The Everus Wallet.
Whisper is a part of the Ethereum P2P protocol suite that allows for messaging between users via the same network that the blockchain runs on. The main task of whisper will be the provision of a communication protocol between dapps.
A document which serves as a report or guide to a complex issue. In the cryptocurrency world, white papers are used as a means of conveying a blockchain network or a crypto’s structure, plan and/or vision.
A term used to describe extremely wealthy investors or traders who have enough funds to manipulate the market.
A watchlist is a feature of the website where users can create their own lists of cryptocurrencies to follow. Alternative definition: A watchlist is a set of pages a user has selected to monitor for changes.