Crypto Glossary
Crypto Words
Altcoin
An alternative coin, or altcoin, is a word to describe any currency that is not Bitcoin.
Not to be confused with a fork, an altcoin operates on a completely separate network. Some popular altcoins include Ethereum and Litecoin. You can read more about altcoins here.
Bearish
Thought to describe the way a bear attacks by bringing its paws down, bearish refers to the price decreasing.
Bitcoin (BTC)
A digital currency that was first proposed by Satoshi Nakamoto in 2008. Today, Bitcoin is the most traded cryptocurrency. You can learn more about Bitcoin here, and purchase BTC here.
Bitcoin Address
A Bitcoin address is a long string of letters and numbers that represents a destination on the Bitcoin network, i.e. a destination for a bitcoin payment. An address associated with a user’s wallet is required to send cryptocurrencies from one account to another (for receiving bitcoin). It works similarly to an account number for a bank account. However, even though Bitcoin addresses do not expire, it is usually recommended to use a Bitcoin address only once and to generate a new, unique address for each Bitcoin transaction.
Bitcoin Cash (BCH)
A hard fork within the Bitcoin blockchain created the new cryptocurrency, Bitcoin Cash. This currency increases the size of blocks, in order to process more transactions.
Bitcoin Core (BTC or XBT)
A software program that ensures users only process valid transactions on the blockchain. On the other hand, Bitcoin Core is sometimes used to describe Bitcoin as opposed to Bitcoin Cash (BCH).
Bit Gold
A precursor to Bitcoin created by Nick Szabo.
Bitcoin Protocol
“Bitcoin protocol” refers to the way in which Bitcoin operates at its basic level.
The initial Bitcoin Protocol was proposed in Satoshi Nakamoto’s Bitcoin White paper but, because Bitcoin isn’t centrally controlled, the protocol can be (and occasionally is) changed through a consensus of miners and developers.
Changes to the protocol occur through “forks”.
Block
“Blocks” are collections of data within a blockchain. In the case of Bitcoin, blocks are transactions that have been verified by other users.
Blockchain
The underlying system which Bitcoin and other cryptocurrencies are built upon. With the launch of Ethereum, blockchain is increasingly becoming a technology that is applied to improve existing business models. You can learn more about blockchain here.
Bullish
Thought to describe the way a bull attacks by pushing its horns up, bullish refers to the price increasing.
Candlestick Chart
A popular financial chart used for cryptocurrency where each rectangular ‘candle’ represents one day of trading.
Cold Storage
A completely offline way to store your cryptocurrency that can come in the form of a hardware wallet, paper wallet or a computer disconnected from the internet.
Confirmation
Confirmation is the process of approving cryptocurrency transactions as a legitimate part of the blockchain.
Cryptocurrency
With cryptography the art of writing or solving codes, cryptocurrency refers to currencies that are based on computer codes. You can read more about cryptocurrency here.
DApps
Decentralised applications, or DApps, are the foundation upon which currencies like Bitcoin and Ethereum are built. They are open-source, decentralised, have an inbuilt consensus mechanism and offer some form of incentive to self-sustain. You can read more about Dapps here.
Double Spending
Double spending is the process where digital currencies are fraudulently spent more than once. This is one of the key issues that Satoshi Nakamoto sought to address through their introduction of Bitcoin.
Decentralisation
The process of removing the authority of a third-party or central power, like a bank. This is the theory that underpins Bitcoin and the entire blockchain network.
Desktop Wallet
Downloadable on your laptop or desktop, these wallets store your cryptocurrency directly on your computer. These wallets are ideal for storing small amounts of cryptocurrency.
Ethereum (ETH)
Created by Vitalik Buterin, Ethereum is one of the largest altcoins. Running on a completely separate blockchain to Bitcoin, Ethereum is not only a currency but also a network that hosts a wide range of decentralised applications known as dApps.
Fiat Currency
This refers to a currency that is controlled and authorised by a government. Including AUD, USD or GBP, fiat currency works on the centralised model that cryptocurrency sought to change.
Forks
A fork is an event in the blockchain that causes it to split into two separate chains. Including hard forks and soft forks, this event occurs when there is a split in consensus or change to the protocol rules within the network. You can read more about forks here.
Genesis Block
The very first block mined on the Bitcoin blockchain. The Bitcoin genesis block was mined on 3rd January 2009, likely by Satoshi, and included a block reward of 50 Bitcoin.
Hard Fork
An upgrade to the software that requires all users to upgrade in order to continue validating and verifying transactions. Recently, this saw the creation of Bitcoin Cash when the blockchain was split in two in 2017.
Hardware Wallet
An offline way to store cryptocurrency. This is the most secure way to store your digital currency. Popular hardware wallets include Trezor and Ledger.
Hash (Rate)
“Hash” is a unit of encrypted information. The “hash rate” is a speed of encrypting or de-encrypting information which, in cryptocurrency, has to do with confirming blocks and mining coins. In cryptocurrency, hash rate is typically expressed in terahashes per second (TH/s).
In cryptocurrency, hash rate can be used to express the speed of a mining rig, or the hash rate of the whole network can be used to understand interaction volume.
Hot Storage
An online way to store your digital currency. This can include storage on a mobile wallet or a desktop wallet.
ICOs
Often used by start-ups, an Initial Coin Offering (ICO) is a way that companies can fundraise through cryptocurrency.
Incentive
The process where miners are rewarded with cryptocurrency, including Bitcoin, when they validate or process transactions on the blockchain. This process replaces the role of a mint by allowing the currency to circulate and is essential to upholding the network.
Keys – Public & Private
A public key allows users to receive cryptocurrency transactions. It is a cryptographic code that’s paired to a private key. A private is like a password that keeps your wallet safe and allows users to access their funds. It is imperative that you keep your private key stored securely to protect your wallet from being accessed by other people or hackers.
Litecoin (LTC)
Created in October 2011, Litecoin is an altcoin of Bitcoin created by Charlie Lee. Litecoin was created in order to address some key issues associated with the Bitcoin network.
Mining
Made up of a group of people called “miners”, mining is the process of finding Bitcoin or other cryptocurrencies within blockchain. Miners are rewarded with these digital currencies when they validate transactions within the blockchain, a process called incentivisation.
Mining Rig
The term “mining rig” can be used to describe any device used to mine cryptocurrency.
While a mining rig can be a custom-built machine dedicated to mining crypto, some people also convert old computers into mining rigs, or even use their main computer to mine crypto during off-hours.
Mobile Wallet
Downloadable on your laptop or desktop, these wallets store your cryptocurrency directly on your computer. These wallets are ideal for storing small amounts of cryptocurrency.
Node
When a computer connects to the Bitcoin network, it is called a node.
Paper Wallet
Completely offline and printed on tamper-proof paper, paper wallets are secure but a less practical way to store your cryptocurrency.
Proof of Stake (PoS)
“Proof of Stake” refers to an incentive program in which participants are rewarded for being able to prove that they invested in a product.
The most familiar example of PoS systems are conventional stocks and bonds for which the holder gains or loses based on their initial buy-in but the holder isn’t actively contributing to maintenance or production.
The most common alternative to PoS systems are Proof of Work systems.
Proof of Work (PoW)
“Proof of Work” refers to an incentive system in which participants are rewarded for being able to prove that they contributed to a product.
Bitcoin and other cryptocurrencies that reward miners with new coins are examples of PoW systems.
The most common alternative to PoW systems are Proof of Stake systems.
Pump and Dump
The practice of encouraging others to purchase a certain cryptocurrency (pump) before selling when the price dramatically increases (dump).
Satoshis (“Sats”)
While most people talk about Bitcoin on a coin level, specifically regarding price, Bitcoin can (and usually does) operate in terms of fractions of coins. The smallest unit of a bitcoin, one one-hundred-millionth, is called a “satoshi” (“sat” for short) in honour of Bitcoin’s anonymous founder Satoshi Nakamoto.
That may sound like a sarcastically small number, and even at all-time-highs, a single satoshi has only been worth fractions of a cent. However, because there are a limited number of bitcoins that will ever exist, and value tends to go up with adoption, large-scale mainstream adoption of Bitcoin would make satoshis significantly more important for daily use of bitcoin.
Further, the divisibility of bitcoin is often used to encourage small dollar-amount buy-ins against the common misconception that bitcoins have to be purchased and spent in whole number amounts. The most commonly iterated slogan for this mentality is the rallying cry “stack sats”.
Smart Contracts
Smart contracts are simply small programs stored on a blockchain that run when predetermined conditions are met. They are automate the execution of an agreement to produce an immediate and certain outcome without the involvement of an intermediary.
Stablecoin
A Stablecoin is a type of cryptocurrency that is backed by collateral and designed to hold a stable value of a 1:1 ratio, meaning one stablecoin can be exchanged with one unit of currency. They are pegged to assets such as fiat currencies, gold, or other cryptocurrencies. The most popular stablecoin is Tether, which is pegged to the US dollar and claims to hold $1 of USD for every Tether token.
Soft Fork
An upgrade to the software that does not require all users to upgrade in order to continue validating and verifying transactions. Examples include a change to Bitcoin’s signature validation, known as BIP 66.
Timestamp
A way to accurately record and keep track of all transactions on the blockchain by stamping the time they were processed.
Token
A token is a synonym for cryptocurrency, however, can be applied to different contexts. It can be used to describe a unit of value (Jane has 10 bitcoin tokens), the way that data is encrypted (tokenisation) or a digital asset (Bitcoin is a cryptocurrency token). You can read more about tokens here.
Wallet
The way that digital currencies like Bitcoin are stored. This can include hardware wallets, desktop wallets or even paper wallets. Check out our Wallets Guide to learn the ins and outs of storing crypto.
Whitepaper
Written by Satoshi Nakamoto, this famous document marks the beginning of the Bitcoin universe. Check out our beginners guide here.
Key People
Andreas M. Antonopoulos
Author of Mastering Bitcoin and The Internet of Money, Andreas is a prominent figure within the crypto space.
Charlie Lee
The founder of Litecoin, a prominent altcoin in the crypto world.
Craig Wright
An Australian computer scientist who falsely claimed to be the real Satoshi Nakamoto.
Jimmy Song
Bitcoin educator, developer and entrepreneur who often features on Medium.
Nick Szabo
Considered the founder of smart contracts and bit gold, a precursor to Bitcoin. Spectators often suspect Szabo to be the real Satoshi Nakamoto.
Satoshi Nakamoto
Satoshi is an individual or group of people responsible for the creation of Bitcoin. Beginning with the original whitepaper on October 31st 2008, the identity of Bitcoin’s creator still remains unknown today. You can read more about Satoshi here.
Tim Draper
An American venture capitalist who is known for his accurate predictions on the value of Bitcoin. Check out his website to keep up to date on Draper’s projects or follow his Twitter to see if his next prediction is correct!
Tyler & Cameron Winklevoss
Often known as the “Facebook twins”, the Winklevoss brothers are American identical twins known for the wealth they acquired through Bitcoin and other cryptocurrencies. They currently own their own Bitcoin exchange, Gemini. You can keep up to date by following Tyler and Cameron on their Twitter accounts.
Vitalik Buterin
Creator of the altcoin Ethereum, Vitalik is a Russian-born Canadian computer programmer.
Crypto slang
Bag Holder
When an individual is left with a coin with little value, after failing to sell when the market was high.
HODL
Originating as a typo for ‘hold’, HODL now refers to the practice of holding cryptocurrency as opposed to selling. It is also an acronym for Hold On for Dear Life.
FUD
Meaning Fear, Uncertainty and Doubt, this acronym is often used to describe negative rumours towards Bitcoin within the media.
Mooning
When the price of a coin is experiencing a spike in price and therefore, ‘heading to the moon’.
Rekt (Wrecked)
When a cryptocurrency falls in value to such an extent that an individual or investor is left with nothing.
Whale
An individual or entity who owns a large amount of cryptocurrency.
