Cryptocurrency Terminology – Acronyms & Slang

2018-01-29T12:54:41+00:00

If you’re just getting started in the world of cryptocurrency, you may be overwhelmed and confused by the jargon used in message boards and the financial media. I’ve pulled together a list of some of the most relevant and interesting terms associated with cryptocurrency for reference.

This is by no means a comprehensive list, as new words and phrases pop up frequently. Be on the lookout for Volume Two of this glossary sometime in the future.

Address — An online location (presented in a random string of numbers and letters) where Bitcoin and other cryptos can be sent to and from.

Alt-coin — A cryptocurrency alternative to Bitcoin including Litecoin, Ethereum, Dogecoin, XRP (commonly referred to as Ripple), and more.

Blockchain — An online ledger containing records (also known as blocks) of every crypto transaction. The blockchain is public and decentralized, and is maintained by a peer-to-peer network of computers.

Cold storage — Keeping a reserve of crypto offline for security reasons. This could be a private key written on a piece of paper or stored on a USB flash drive. Obviously, this holds the potential for tremendous risk as the physical storage method can be lost, stolen, damaged or thrown out.

DYOR – “Do Your Own Research.” Cryptocurrencies are highly speculative and a potential buyer should be prepared to lose their entire investment. It’s essential to do your own research before committing resources to any investment vehicle, especially one as volatile as cryptos.

Fiat currency — A currency that is usually backed by a government or group and whose value is tied to the investing public’s confidence in the government that backs it. The United States dollar changed from a fixed currency (backed by gold) to fiat in the 1970’s. Cryptocurrencies are fiat currencies that are not backed by any government — their value is determined by those who trade them and the confidence that the value will increase over time.

FOMO — “Fear Of Missing Out.” An emotion experienced by those who haven’t bought any cryptocurrency and see prices continually rising. Can lead to irrational buying at inflated prices.

Fork — Splits in the blockchain are possible when two separate computers create a block at the same time. Since both blocks are authentic, new blocks can then be built on the resulting split, known as a fork.

FUD — “Fear, Uncertainty, Doubt.” Three powerful emotions that can lead to irrational trading decisions.

FUDster — Someone who spreads FUD

HODL — “HODL” is derived from a drunken typo on a message board and has become a folksy rallying cry for those who have held onto Bitcoin throughout its extreme volatility. Though it was initially a misspelled version of “HOLD,” an ensuing acronym was created: “Hold On for Dear Life.”

ICO — “Initial Coin Offering.” Similar in theory to an Initial Public Offering (IPO) of a stock, an ICO occurs when someone plans on creating a new cryptocoin and wants to start selling it to the public.

LAMBO — Abbreviation for Lamborghini. As in, “I’m going to buy a Lambo with all of my profits trading Bitcoin.”

Mining — The process of creating blocks for the blockchain, which requires an inordinate amount of energy. As reported by CBS News, “Nearly 10 U.S. households can be powered for one day by the electricity consumed for a single bitcoin transaction, according to figures from The Bitcoin Energy Consumption Index.”

Mooning — When the price of a coin rapidly increases in value, it’s “shooting up to the moon” or “mooning.”

PoW — “Proof of Work.” According to Decryptionary, “with proof of work, computers compete to solve a tough math problem. The first computer that does this is allowed to create new blocks and record information.” The miner is then usually rewarded via transaction fees.

Satoshi — The smallest unit of Bitcoin, named after the creator of Bitcoin, Satoshi Nakamoto. One Satoshi is worth 0.00000001 Bitcoin.

Tank — The opposite of “mooning.” When there is a crash in a crypto, it is said to be “tanking.”

Wallet — A place to securely lock away your cryptocurrency private keys.

Culled from Forbes

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