Being new to cryptocurrencies could be a bit stressful as it is a completely new world that comes with its language and terms. Blockchain is a new technology which is getting a lot of popularity recently with more and more people joining in for different reasons. It doesn’t matter if you are just curious, you like to trade or you consider it to be a long-term investment it is important to learn the basic abbreviations used in the crypto space.
We have created a list with the most used terms that you’ll definitely need to know to have a better understanding of crypto currencies.
Altcoin – a cryptocurrency which isn’t Bitcoin. Includes Ethereum (see flipping), Litecoin, Ripple, Monero, Dash and about 800 others (see maximalist).
ASIC – Application Specific Integrated Circuit. These are the specialised silicon chips which process the SHA-256 algorithm to mine bitcoin and validate transactions.
ASIC Miners – this is the hardware which houses the ASIC silicon chip. Connected to the internet.
Bitcoin – Digital money which is based on cryptography, invented by Satoshi Nakamoto.
Bitpay – Bitcoin processing company who allow merchants to accept bitcoin as a payment method.
Blockchain – a distributed and peer to peer digital ledger.
Block Reward – this is the cryptocurrency reward that miners receive for successfully hashing a transaction block.
BTC – a symbol for bitcoin
Charlie Lee – creator of Litecoin.
Charlie Shrem – flamboyant and early bitcoin entrepreneur.
Coinbase – world’s most popular and reliable cryptocurrency web wallet.
Cold Storage – secure way of keeping cryptocurrencies off exchange.
Cryptocurrency – generic term for digital and cryptography based money.
DAO – now de-listed, the distributed autonomous organisation set the record in May 2016 for the largest crowdfunding in history.
Difficulty – the level of resistance encountered when trying to hash a new block in the bitcoin blockchain.
ETH – symbol for Ether, a token of the Ethereum blockchain.
Ethereum – a decentralised platform that runs smart contracts.
Exchange – where fiat money can be exchanged for bitcoin or altcoins.
Faucet – a reward system on a website that dispenses bitcoin in the form of a Satoshi (a hundred millionth of a bitcoin)
Fiat – the name for bank-issued money, derived from the Latin ‘let it be’.
Flippening – the name given for the event where a cryptocurrency who surpasses bitcoin in market capitalisation (yet to happen at a time of writing).
Forging – the name giving to the process in proof of stake blockchains where there is no block reward. Forgers keep transaction fees instead.
Fork – what happens when a blockchain diverges into two potential paths forward.
Genesis Block – the first block to be mined in a blockchain.
Halving – the rate at which the block reward creates new bitcoin, halving every four years.
Hard Fork – new blockchain software that is non-backwards compatible, causing a chain split.
Hard Wallet – device which allows cold storage of coins, for increased security.
Hash – the name for an algorithm which takes an arbitrary sized data set and converts it to a fixed length and composition. Bitcoin uses the SHA-256 algorithm (converting to 256 bit data sets).
Hash Rate – the number of hashes a miner can perform in a period of time.
HODL – crypto slang for hold your coins.
Initial Coin Offerings – cryptocurrency often (but not always) built on Ethereum which raise money on the basis of an idea.
Lightening Network – builds on networks like bitcoin and litecoin to allow off-chain settlements.
Litecoin – digital silver, created by Charlie Lee for high-frequency transactions. Uses the script hashing algorithm.
LTC – the symbol for Litecoin
Market Capitalisation – the value of cryptocurrency as determined by price (x) circulating supply of coins.
Maximalist – another crypto slang term for a bitcoin believer who is sceptical of altcoins.
Mining – the process used to create coins or tokens and verify transactions on a proof of work blockchain
Moon – optimistic price projection often used in the crypto-coin communities.
Nick Szabo – creator of bitgold, an unimplemented forerunner of bitcoin. Thought by some to be Satoshi Nakamoto, which he always denies.
OCD – Obsessive Cryptocurrency Disorder. Suffered by those who can’t stop monitoring the value of their coins.
Paper Wallet – a form of cold storage. These are public and private keys held on a piece of paper. A good designer can make them look like branded bank notes.
Poloniex – popular cryptocurrency exchange.
Private Key – a secret number that allows bitcoins to be spent.
Proof of Work – this is difficult and costly to produce, but easy to verify by others. The mechanism used in the bitcoin blockchain.
Proof of Stake – a blockchain where there is no block reward or mining, as the creator is determined depending on stake (see forging). Less energy intensive than proof of work.
Public Key – usually represented as a bitcoin address, this is the information needed to receive bitcoin.
Ripple – a pre-mined token used by banks for settlement, created and distributed by Ripple Labs.
Satoshi Nakamoto – the pseudonymous creator of bitcoin.
Scrypt – the hashing algorithm used by Litecoin.
Segregated Witness – is a proposed scaling solution for bitcoin involving a soft fork.
SHA-256 – the algorithm used for bitcoin hash creation (bitcoin’s proof of work).
Silk Road – the first modern dark net market, achieved notoriety. Subsequently shut down by the FBI who then auctioned confiscated bitcoins.
Smart contracts – applications that run as programmed, without external influence.
Soft Fork – new software that is backwards compatible, so the blockchain doesn’t split.
Solidity – the programming language used by Ethereum.
Vitalik Buterin – creator of Ethereum.
Wallet – the software that allows the spending, receiving and storing of cryptocurrency.
Winklevoss Twins – early proponents of bitcoin, tried to establish a bitcoin ETF (exchange-traded fund) which was rejected in March 2017.
XRP – a symbol for Ripple.