Crypto Glossary and Definitions: Dictionary of Cryptocurrency

Cryptocurrency has become a universe of it’s own since its emergence and popularity in 2016-17 so we will cover the relevant and important crypto glossary terms. In the crypto universe, there are lot of terminology that as a crypto enthusiast you must be aware of. In this article, we’ll be covering all the terms in crypto dictionary format from A to Z from basic cryptocurrency terms to advanced terms in the metaverse so let’s find out

Altcoins

Altcoins, short for “alternative coins,” are any cryptocurrency that is not Bitcoin. While Bitcoin was the first and is still the most well-known and generally recognized cryptocurrency, many other cryptocurrencies have been established since its birth. Altcoins are the aggregate term for these alternative cryptocurrencies.

The technologies, features, use cases, and market capitalizations of altcoins differ. Some altcoins seek to improve on specific parts of Bitcoin, while others offer novel features or applications.

Altseason

Altseason refers to the term in which altcoins outperform Bitcoin. This is a phase where investors see a significant increase in the prices of altcoins.

Airdrop

An “airdrop” inside the context of cryptocurrency refers to the distribution of free tokens or cryptocurrencies to active investors or addresses as a part of a marketing or promotional strategy with the aid of a blockchain project. Airdrops are used to create focus, incentivize participation, and inspire the adoption of a new cryptocurrency or blockchain platform.

Bitcoin

Bitcoin is a digital cryptocurrency that operates on a decentralized community known as a blockchain. It was invented in 2008 by using the pseudonym Satoshi Nakamoto and changed into added as open-source software in 2009. Bitcoin is often known as the primary and most well-known cryptocurrency.

Blockchain

A decentralized digital ledger that records all blockchain transactions. Blockchain technology enables users to acquire, trade, and invest in digital assets such as cryptocurrency.  A blockchain requires entries to be confirmed and encrypted using cryptography, a complex encryption technique that makes the entries extremely difficult to edit or hack.

Cryptocurrency

A sort of digital currency that operates solely on the internet.  Cryptocurrencies are neither insured nor controlled by central banks or other government entities.  Bitcoin and Ethereum are two such examples.

Cryptocurrency Exchange

Cryptocurrency Exchange is a platform where people can buy, trade, or sell their cryptocurrencies. These are the marketplace and essential aspects of the crypto world as with such a platform people will be able to buy and sell coins and also directly influence the ecosystem of crypto.

Cryptocurrency Mining

Cryptocurrency mining is the process of validating and recording transactions on a blockchain community by using computational strength to solve complicated mathematical puzzles. Miners, individuals, or entities, take part in this technique to keep the integrity of the blockchain and earn rewards within the shape of newly minted cryptocurrency cash or transaction prices.

Cryptocurrency Wallets

Cryptocurrency wallets a digital wallets where all of your crypto coins and digital assets are safely secured. A digital tool that allows users to keep, interact, and access control over their digital belongings.

Consensus

Consensus refers to the mechanism using which members of a decentralized network agree on the validity of transactions and the order in which they’re introduced to the blockchain. Consensus mechanisms are critical for preserving the integrity, safety, and functionality of distributed ledgers like blockchain.

Cold Storage

Cold storage in the context of cryptocurrency refers to the exercise of storing digital property offline, disconnected from the net, as a way to enhance their security and shield them from capability online threats. This approach is used to safeguard cryptocurrencies from hacking, cyberattacks, and unauthorized entry.

DApp

A DApp, short for “Decentralized Application,” is a software application that operates on a decentralized network, usually a blockchain. Unlike conventional programs that are hosted on centralized servers and controlled using a single entity, DApps are built on blockchain systems and leverage the allotted and consensus-based nature of the era.

DAO

DAO (decentralized autonomous organization) is based on a set of defined rules and protocols, without the need for centralized authority. It aims to reduce centralization as much as possible by being transparent and decentralized.

Decentralization Finance (DeFi)

Decentralized Finance, also called DeFi, is a revolutionary motion within the economic industry that targets to create an open and permissionless atmosphere of economic services and products using the blockchain era. DeFi leverages the ideas of decentralization, transparency, and automation to construct financial applications that operate without conventional intermediaries like banks, brokers, or coverage agencies.

Dilution

“Dilution” in the context of cryptocurrency and investments refers to the reduction in the ownership percentage or value of existing tokens or shares held by an investor due to the issuance of new tokens or shares.

ERC-20

ERC-20 is the most widely used crypto-token standard, and it is utilized on the Ethereum network. It makes it simple for developers to design digital currencies that are immediately interoperable with current infrastructure.

ERC-721

This is the Ethereum network’s non-fungible token (NFT) standard. It enables the manufacturing of one-of-a-kind, un-counterfeit tokens. It may be used to tokenize real-world unique goods or to create digital collectibles and game items.

Fork ( Hard and Soft Fork)

“Fork” is a term used inside the context of blockchain to describe an update or divergence in the protocol guidelines of a blockchain community. There are two sorts of forks: hard forks and soft forks.

Hard Fork

A hard fork is a fundamental and irreversible alternative to the underlying protocol of a blockchain community. It entails updating the guidelines of the network in this sort of manner so that nodes working on the old protocol are no longer compatible. This results in a permanent cut-up in the blockchain, developing two separate chains.

Soft Fork

Soft Fork refers to the update in which users can run old software even with the news updated.

Gas Fee

A gas fee refers to the cost required to carry out transactions or execute operations on a blockchain network. It is a fundamental thing of blockchain structures that use a Proof of Work (PoW) or Proof of Stake (PoS) consensus mechanism, where contributors are rewarded for validating transactions and retaining the community.

Gas Limit

The gas limit refers to the maximum amount that you are willing to pay to carry out transactions.

Halving

In blockchain networks, particularly those that use a Proof of Work (PoW) consensus mechanism. During a halving occasion, the block reward given to miners for validating and including new blocks to the blockchain is reduced by half.

Hardware Wallet

A hardware wallet is a specialized device designed to store and manage cryptocurrencies. It gives a high level of safety in opposition to online threats together with hacking, phishing, and malware attacks, making it one of the most secure strategies for storing and gaining access to virtual assets.

Hot Wallets

A hot wallet is a type of cryptocurrency wallet that is connected to the online and is used for holding and managing cryptocurrencies which can be actively traded or used for common transactions. Unlike cold wallets, which are kept offline for enhanced safety, hot wallets are online and effectively handy, making them convenient for daily use but additionally doubtlessly more susceptible to online attacks.

Hard Cap

Hard cap refers to the maximum amount of funds it aims to raise during its token sale. Investors can contribute until the hard cap is reached and it directly influences the total supply.

Initial Coin Offering

It is a method for raising funds for new projects in which companies sell their new cryptocurrency. It’s essential to observe that whilst ICOs had been a popular fundraising technique, their popularity has reduced due to regulatory concerns, scams, and the shift towards greater regulated and compliant fundraising strategies.

Immutable

“Immutable” refers to being unchangeable or not able to be altered. In the context of blockchain technology and databases, immutability is a fundamental characteristic that ensures facts, or transactions once added to the blockchain can’t be modified, deleted, or tampered with without leaving a clear and traceable document of the alternate.

Each block in a blockchain is connected to the preceding block through a cryptographic hash. Changing the contents of a block, even a single person, could result in a change within the hash. This linkage ensures that any exchange to a block might be without delay detectable.

Limit Order

A Limit order is a kind of order utilized in monetary markets, including cryptocurrency exchanges. It lets traders set a preferred fee at which they’re inclined to execute an exchange. A Limit order is best carried out if the market charge reaches or exceeds the desired fee level.

Market Capitalization

Market capitalization, abbreviated as “market cap,” is a normally used metric within the financial and investment world to assess the dimensions and relative value of a publicly traded organization or a cryptocurrency. It represents the full price of all amazing stocks of a business enterprise’s inventory or the total price of all units of a cryptocurrency in circulation. Market capitalization is a key indicator that offers insights into the perceived worth and scale of an entity within the marketplace.

Mooning

Mooning refers to the strong upward trend of the market or the belief that certain crypto prices would show an upward trend.

Memory Pool

A memory pool is an important component of blockchain. It is where unconfirmed transactions are stored before being added to the block. It acts as a holding area where transactions are confirmed by miners or validators.

Mining Pool

A mining pool is a collaborative group of cryptocurrency miners who combine their computational assets and processing strength to grow their probabilities of mining new blocks and rewards.

NFTs

NFTs are known as a non-fungible token and it is considered as a unique digital token. NFT proves the ownership of the asset it could be a painting, photo, video, or any digital item that is unique and does not have any other copy.

Oracle

Oracle acts as a bridge or third-party service between blockchain and outside data sources. Oracles play a crucial function in allowing blockchain systems to engage with and reply to actual external events and statistics, expanding the range of use cases and programs for blockchain generation.

Public and Private Key

Public and personal keys are cryptographic additives utilized in diverse safety protocols, inclusive of blockchain and cryptocurrency structures, to secure digital communique, verify identities, and offer statistics confidentiality and integrity. They are fundamental to making sure of steady transactions, authentication, and encryption.

P2P Network

P2P is also known as a peer-to-peer network. It refers to a decentralized community structure in which systems (“peers”) directly talk and interact without counting on a crucial server or intermediary. P2P networks enable the sharing of sources, information, and offerings among individuals.

Rekt

Rekt is a slang used by online communities to refer to a person in a humourous way who has suffered a loss or made a poor investment choice. Rekt is a misspelled word for  “wrecked” to add an informal element.

Rug Pull

A “rug pull” is used within the context of cryptocurrency and DeFi (Decentralized Finance) to describe a fraudulent or malicious act wherein the creators or operators of a project suddenly and intentionally withdraw funds from a task or platform, leaving investors or participants with huge monetary losses. In essence, a rug pull includes exploiting the faith and investments of customers for self-advantage.

Sharding 

Sharding is scalability in blockchain technology to improve the performance and throughput of a blockchain community. It involves breaking a blockchain’s information and transaction processing into smaller, more practicable pieces called “shards.” Each shard can process its transactions and clever contracts independently, allowing the blockchain to deal with a better extent of transactions concurrently.

Stablecoins

Stablecoins are a sort of cryptocurrency designed to hold a fixed price, often pegged to a specific outside asset with a fiat foreign money like the US Dollar (USD) or a commodity like gold. Stablecoins intends to offer the benefits of cryptocurrencies, including speedy and without boundary lines transactions, even as minimizing the fee volatility usually associated with different cryptocurrencies like Bitcoin and Ethereum.

Staking

Staking refers to the process in which Ethereum network users stake some of their coins to become validators. Staking entails participating inside the consensus mechanism of a proof-of-stake (PoS) or delegated proof-of-stake (DPoS) blockchain, wherein validators decide to create new blocks and affirm transactions based on the number of tokens they have staked.

Soft Cap

In the context of cryptocurrency fundraising, a “soft cap” refers to the minimum amount of price range that an undertaking or token sale targets to raise a good way to continue with its improvement plans. The soft cap is a critical threshold that indicates the minimal stage of financial assistance required for the task to be taken into consideration as possible and sustainable.

Security Token

Security Token refers to the digital assets that represent ownership or equity in the real-life world.

Whale

Whale refers to the individual or entity that holds the maximum share of coins or tokens. Whales are characterized by their large holdings, which can have a notable impact on the cryptocurrency market due to their ability to influence prices and market trends.

Wrapped Token

Wrapped tokens are used to enable the transfer of assets from one blockchain platform to another, allowing users to access and utilize tokens that are native to a different blockchain ecosystem.

Whitepaper

A whitepaper is an in-depth file that outlines the concept, era, motive, and capacity implementation of a task, product, or idea of a project. In the context of cryptocurrencies, blockchain technology, and other emerging technologies, whitepapers are usually used to introduce new cryptocurrencies, blockchain platforms, protocols, and decentralized applications (DApps) to the general public.

Yield Farming

Yield farming, also referred to as liquidity farming, is an idea in the cryptocurrency space in which buyers and customers lock up their cryptocurrency holdings in decentralized finance (DeFi) protocols to earn rewards in the form of extra cryptocurrency tokens. It involves providing liquidity to liquidity pools or lending platforms inside DeFi ecosystems in exchange for interest or rewards.

Zero Knowledge Proof

A zero-knowledge proof is a cryptographic approach that lets one party (the prover) prove to every other party (the verifier) that an announcement is true, without revealing any particular information. In other words, a zero-knowledge proof lets the prover convince the verifier of the reality of an assertion without disclosing the underlying stats that support it.