Crypto is still a new concept, and while winning digital assets is fun, you first have to learn how the industry works. Whether you’re a newcomer to cryptocurrencies or looking for a refresher, understanding key cryptocurrency terms is essential for having a positive crypto journey.
By familiarizing yourself with crypto terms, you’ll feel more comfortable navigating the world of cryptocurrencies and communicating with others in the field. To help you survive and thrive in this space, here are some of must-know cryptocurrency terms that will enrich your vocabulary and enhance your comprehension of the subject.
Airdrop
The distribution of cryptocurrency tokens to the wallets of users. Airdrops are usually organized by blockchain-based startups, and they reward users with tokens in exchange for publicity (usually in the form of social media interaction).
Atomic Swap
A smart contract technology that helps a user exchange one cryptocurrency for another, without using an exchange.
Application-Specific Integrated Circuit (ASIC)
A circuit created with a specific purpose. In the case of cryptocurrencies, that purpose is mining.
Block Height
The number of total blocks in a blockchain.
Buy Wall
Is a concept that describes the situation when a wealthy trader or group (commonly known as whales) performs a huge buy order or multiple large buy orders at the same price. This action is done in order to control the market and set the buying price of a currency at a desired value.
Circulating Supply
The total number of a specific cryptocurrency that is publicly available at the moment.
Decryption
The process of transforming encrypted data back into a readable format.
Double Spending
The act of spending a coin more than once. This is usually caused by a 51% attack.
Eclipse Attack
When the majority of a network’s users are malicious and monopolize the network in order to abuse it for their own benefit.
Falling Knife
The action of purchasing an asset while its value is declining, with hopes that the price will rise after a while.
Finality
The assurance of guarantee that completed (cryptocurrency) transactions cannot be altered, reversed or canceled.
Flappening
The event when Litecoin (LTC) surpassed Bitcoin Cash (BCH) in market cap.
Flippening
The event when/if Ethereum (ETH) will surpass Bitcoin (BTC) in market cap.
Forced Liquidation
The involuntary sale of assets or securities to create liquidity.
Gas Limit
The maximum amount of gas a user is willing to spend on a particular transaction.
Halving
When the block reward of a crypto asset, such as Bitcoin, drops to one-half of what it was before; this is used to create a decaying rate of insurance to arrive at an eventual finite supply of a crypto asset.
Hard Cap
The maximum amount of funds a project aims to raise during their funding campaign (ICO/IEO/STO).
Hashed TimeLock Contract (HTLC)
Refers to a special feature that is used to create smart contracts that are able to modify payment channels.
Mainnet
The blockchain where the transactions are being made, verified, and recorded. The main network.
Masternode
A PC wallet or crypto coin node that is used as a Proof-of-Service algorithm to protect a real-time copy of the blockchain.
Merged Mining
The process of allowing two different cryptocurrencies to be mined simultaneously.
Mining Farm
A group of miners housed in a single location, dedicated to mining cryptocurrencies.
Multisignature
A technology used by certain wallets that require more than one party to authorize a transaction.
Off-chain
A transaction that is recorded and validated off the blockchain.
Orphan Block
An orphan or detached block is a valid block that is not part of the main chain. Orphan blocks usually happen when two miners produce a block at similar times.
Paper Wallet
A piece of paper which acts as a wallet, holding the public and private keys of a user.
Pegged Currency
Also referred to as a stablecoin, a pegged currency is a currency that has a value fixed to a designated asset. For example, 1 stablecoin = 1 USD.
Private Sale
An early investment stage targeted only to strategic partners and investors.
Race Attack
The attempt to make two transactions using the same funds at the same time.
Routing Attack
A malicious attack on ISP (Internet Service Provider) level that affects a user’s activity on the internet.
Security Token
Crypto token that passes that usually derives its value from a tradable asset. The security Tokens are subjected to federal securities and regulations.
Sell Wall
Is a concept that describes the situation when a wealthy trader or group (commonly known as whales) performs a huge sell order or multiple large sell orders at a specific price. This action is done in order to control the market and prevent sell orders from executing at a higher price than the desired value.
Store of Value
A commodity, currency, or asset with low volatility that can be traded at a future date without depreciation.
Sweeping
The process of transferring money from a paper wallet to a software wallet.
Token Lockup
Setting a time period in which the tokens or coins are not allowed to be sold or transferred, in order to prevent a drastic fall of the token price which happens shortly afterward the crowdsale.
Token Sale
A means of fundraising for crypto-currency projects by the trading a token for cryptocurrency, before it reaches the final stage and goes on the mainnet.
Total Supply
The total amount of tokens or coins that are either circulating or being locked.
Transaction ID (TXID)
Transaction identification code used for determining transactions in the blockchain. It’s also referred as transaction hash.
Utility Token
Digital token issued to fund the development of a cryptocurrency and that can be later used to purchase a good or service offered by the issuer.
* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
Source: https://coindoo.com/crypto-terms/