The Crypto Dictionary

51% attackWhen a group of miners control more than 50% of a network’s computing power. This gives them control over the transactions which go through the network
AddressA bunch of numbers and letters, where crypto can be sent to/from. It will look something like this: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2. Think of it as the BSB/Acc number for crypto
AirdropA method of distributing / earning crypto in exchange for performing a number of tasks, usually organized, and paid out by a company. For example: Fill in a form, sign up to a mailing list, download an app and follow on Twitter, for $20 of crypto. Similar to the central banks printing helicopter money & giving it away to everyone. Some would say it’s socialist
AlgorithmIn it’s purest form, an algorithm is a set of instructions to complete a task. For example, a recipe to make spaghetti is a form of algorithm. However, the term is more commonly used in the world of computing, where an algorithm is a set of instructions given to a computer to perform a task
AML (Anti-money-laundering)A set of rules/regulations/laws, purposed at minimizing money laundering
API (Application Program Interface)The method of exchanging requests, and responses, between two computing systems. An analogy would be, I’m in a restaurant, ordering spaghetti. The waiter receives my order, gives it to the Kitchen, and brings me the meal. In this case, the waiter is the API, the request is to make the spaghetti, and the response is to deliver it
ArbitrageBuying something at a price, and selling it in a different market at a higher price
Asset classesSomething which you can invest in, with a value that will change according to a market. Examples among others are cash, property shares, and crypto
ASIC/ASIC Miner (Application Specific Integrated Circuit)A super powerful computer chip designed to complete a specific task. Applicable for mining cryptocurrency, because it can allow for up to 100,000x the computation power of an everyday computer
Bank-xietyUneasiness, distress and mental apprehension over the interaction and use of banks. If pain persists please visit your local Bitcoin practitioner
Atomic swapThe trading of one cryptocurrency for another, without the use of a middleman
BIP (Bitcoin improvement proposal)A suggestion to improve the way Bitcoin works
BitA simple unit of information used in computing which can only be in two states: 0 or 1
BitcoinA decentralized consensys network, hard money, grandfather of all cryptocurrency, and the thing that the word “blockchain” came from (Bitcoin came first)
Bitcoin LaundryA method of making bitcoin transactions anonymous and untraceable
Blockchain (Private)A segregated database that uses some cryptography & timestamping to attempt to make information more secure
Blockchain (Public)Technical: A public network that uses some form of consensus mechanism (proof of work / proof of stake), a segregated database, cryptography & timestamping to attempt to make information more secure
Blockchain (Public)Non-technical. A really, really, really expensive way to store data publically… Also known as a rube-goldberg machine when used outside of Bitcoin
Block heightThe number of blocks in the chain between it and the genesis block
Block rewardThe payout made to the miner for mining the cryptocurrency
BondsA form of loan taken out by a company, between an investor
Burning/Coin burnA method of deflating a currency, where you are destroying some of it, and thus increasing the value of that currency in circulation
Centralized, CEX (Centralized exchange)A ‘centralized’ cryptocurrency exchange is a trading platform where you can deposit, withdraw and trade fiat currency and crypto for one
CensorshipThe act of hiding information with the purpose of achieving a goal
Censorship resistantSomething transparent, that is not vulnerable to the act of censorship. Cryptocurrency is considered censorship resistant, as you can send and receive it without government interference. This is contrary to fiat currencies, where governments have control over the transactions made
CleptocurrencyJust about all cryptocurrencies. First coined by @AleksSvetski in Why Bitcoin Matters.
ConfirmationThe action of a Bitcoin currency being verified by blocks, for it to be deemed legitimate. The purpose of confirmation is to prevent double
ConsensusA feature used in the blockchain system to verify transactions
cRippleAnother name for Ripple or XRP
CryptocurrencyA digital, decentralized currency that uses cryptography for security
CryptographyThe use of sophisticated mathematical equations for securing information
DAO/DAC (Decentralised autonomous organization/Company)An organization which uses similar technology to block chain, where rules for the organization are enforced digitally
DAPP (Decentralised application)A piece of software application which uses similar technology to block chain, where rules for the software application are enforced digitally
DDos (Distributed Denial of service)A type of attack on a computer, where the attackers send mass amounts of data, causing the computer to break
DecentralizedNot controlled, owned or managed by a single person or authority
Deep/dark webA separate part of the internet which is only accessible with a TOR browser (privacy focused web browser)
DeflationWhen the price of products goes down, typically due to a weak economy
DerivativesA term which refers to a range of different financial investments. Typically, it’s a contract between two parties, where the investment has special conditions attached to it
DifficultyA unit of measurement for how hard it is to find a new bitcoin block
DLT (Distributed ledger technology)A database technology, where data is distributed across multiple servers, and kept in sync by a set of ‘verified’ operators who each have a copy of the ‘ledger’. Very similar to redundant databases, just more expensive and ‘modern’
Dollar cost averagingAn investment strategy, which involves buying a fixed amount of a particular investment on a recurring schedule
Double spendingUsing the same digital currency more than one, by reproducing the digital information
DYOR (Do Your Own Research)A recommendation to undertake due diligence before acquiring/investing in any crypto project
ERC-20Tokens designed and used on the Ethereum platform, which follows a set of rules so they can be shared and exchanged for other tokens
ERC-223A new token standard for Ethereum which prevents tokens from being lost in unhandled transactions
EscrowA financial arrangement between two people where a middle man holds the payment until the obligation is fulfilled
FaucetA system which rewards bitcoin in exchange for the completion of a task
Fiat money/MoneyMoney issued by “the state” or a “government” that has value because they said so. In other words “value by decree”. Fun Fact: every form of fiat money in history has failed. Catastrophically failed
FOMO (Fear of Missing Out) investingPurchasing an asset which is at a peak in value, so you don’t miss out on the potential to make a profit
ForkA technical event where the majority agree on introducing a new rule to a blockchain network
FUD (Fear, Uncertainty, Doubt)The spread of negative information about an asset, causing investors to sell, and resulting in a change in price
FungibilityInterchangeability of a unit or asset. It’s able to be bought/sold on one market, and bought/sold to another. One of the core tenets of a good money
GASThe internal pricing for running a transaction or contract in Ethereum
Genesis blockThe genesis block is the first block in any blockchain-based protocol. It is the foundation on which additional blocks are sequentially added to form a chain of blocks, resulting in the term, blockchain being coined.
GPU (Graphics processing unit)The processing unit of a computer, used to mine cryptocurrencies
HalvingThe concept of the mining reward of bitcoin halving in value, approximately every 4 years
Hard MoneyA money that is characterised by a high stock to flow ratio. AKA Sound Money. AKA Bitcoin
HashingA function that converts an input of letters and numbers into an encrypted output of a fixed length
Hash rateUnit of measurement of a networks processing power
HedgingAn investment strategy used to lower the risk of your portfolio
HODL (Hold On for Dear Life)A spin on the investing lingo of ‘Hold’, which describes people who do not sell their cryptocurrency despite changes in price
HODLerIt is someone who does not sell but rather holds on to Bitcoins or other cryptocurrency.
ICO (Initial Coin Offering)When someone offers coins for a crypto currency for sale, to assist in the funding of the coin
ImmutableMeans ‘not able to be changed’. Usually used in the context of data
InflationWhen the general level of prices goes up, meaning you need more money to pay for something
KYCKnow Your Customer. A process where companies are forced by the state to verify their customers identity to help prevent or lower the risk of money laundering
Lightning networkA network built on top of bitcoin, which allows you to facilitate frequent and rapid payments of Bitcoin
Micro-transactionsA transaction, usually under $1, which is too small to be processed individually
MoneroA privacy focused, public blockchain network, similar to bitcoin which basically works like a tumbler when funds are sent between participants on the network. Helps with increasing fungibility
Moneysomething generally accepted as a medium of exchange, a measure of value, or a means of payment
MiningUsing your computer to solve maths problems, until the winning equation is solved, the block is unlocked, and you are rewarded in Bitcoin
Mining poolWhen a group of miners work together to mine Bitcoin, whilst distributing the rewards between the participants
Memory PoolA group of unconfirmed transactions, which are stuck on the bitcoin network
Money launderingProcess of transforming illegal money into legal money
NFC (Near Field Communication)A piece of technology which allows you to transfer information/data from device to device
NodeA connection point on a network. Can be a node on Bitcoin, or a Node on Lightning, a node on the internet
Off chain transactionsA transaction made outside the blockchain. This is usually an unofficial agreement and transaction which does not make use of Bitcoin’s security
Open sourceA program where the source code is available to the public, for use, modification, and distribution
OptionsA financial contract which gives the buyer the right, but not the obligation,to buy or sell an asset at a specified price
Paper walletA method of storing Bitcoin where you write or print out the private key and bitcoin address on a piece of paper
Permissioned NetworkA network where participants are required to have permission to either access the network, operate a node, or perform any function. Kind of like cRipple, or “private blockchains”
Permissionless NetworkA network (such as Bitcoin) which doesn’t care who or what you are, where you can participate anywhere, anytime in whatever capacity you want
Proof of KeysAnnual event held on 3rd January to encourage the bitcoin community to take possession of all bitcoins held by trusted third parties on their behalf
Protocol tokenA cryptographic token which is required to access services that the underlying protocol provides
Private keyThe key used in a public cryptographic interaction, which proves ownership of an address
PrivacyA Human Right. Nobody likes to leave the door open when they’re in the bathroom, the same way nobody enjoys having somebody watching over their shoulder all the time or having ol Zuckerberg peeking into all their messages. Privacy is also extremely important for money as it ensures it remains fungible. One of the core tenets of a good money
Public keyThe key used in a public cryptographic interaction, which is shared with the public in order to receive funds
QR code (Quick response)A square barcode which stores data, which can be read by pointing a smartphone camera at it
RippleA company that owns a lot of XRP
XRPA token with no actual value that’s been sold to potentially millions of people around the world
SafuAlternate term for safe when referring to coins/funds
SatoshiThe smallest possible unit of Bitcoin. One hundred millionth of a bitcoin, or .00000001 BTC
Satoshi NakomotoThe name used by the unknown person who developed Bitcoin, and authored the whitepaper outlining how it works
Scamcoin/ShitcoinA term used for a coin/project which is garbage
ScarcityAn attribute of an asset, where it is limited in supply
SecuritiesBlanket terms for tradable assets such as a stock, bond or option
Smart contract/Self executing contractAn transaction between two people in the form of computer code, kept on the blockchain. The transaction will usually be contingent on a condition. The transaction only happens when the conditions of the agreement are met
Sound MoneyA form of “money” that is not easily inflated, manipulated, confiscated or able to be issued by a state or central party. Gold was the old world example. Bitcoin is the new world example
SECSecurities and exchange commission. The U.S.governing body responsible for upholding financial and economic integrity through a legal framework
SegWit (Segregated Witnesses)An improvement on the Bitcoin code which allows it to handle more transactions
Side chainsSeparate blockchains attached to the main blockchain, through the use of a two-way peg
Silk RoadA notorious online black market on the deep web, best known for selling illegal drugs. It is commonly recognised as the first real world use case of Bitcoin
Stacking Sats (#stackingsats)The act (or art) of accumulating satoshis in small/regular amounts
Stock to flow ratioA ratio between how much “stock” of a unit (could be money) one has versus how much is being created / produced, ie; it’s “flow” or “supply”. A high stock to flow ratio means that new supply has a limited impact on the overall stock, and is therefore a desirable attribute for money, and in fact, necessary for Sound Money
SpoofingWhen a group of people with significant resources behave in unusual ways in the market, to control the cost of the coin, keeping it at a specific price
SPV (Simplified payment verification)A method for verifying if particular transactions are included in a block without downloading the entire block
Security TokenA government regulated token which usually represents a share in a company
Soft forkA software update to the blockchain which is backward compatible with previous versions of the software
TCP/IP (Transmission control protocol/Internet protocol)A standard which defines how network interact with each other
TestnetAn alternative Bitcoin blockchain where developers can test and experiment with the code
TimestampDigital record of the time of occurence of a particular event
TOR NetworkThe Onion Routing Network. It has a TOR Browser which allows you to surf the web completely privately
Tokenomics (Token/economics)The study of how cryptocurrencies work within the broader ecosystem
TORA tool used to anonymously surf the web, and access the deep/dark web
Total supplyThe maximum amount of cryptocurrneych that can be produced
TPS (Transactions per second)Term used in relation to cryptocurrencies, and how many transactions that currency can process per second
TumblerAn online tool which “mixes” or “tumbles” bitcoin transactions together so that their origin is obfuscated. Helps with increasing fungibility
TrustlessNot needing to trust a 3rd party to verify and complete a transaction. Blockchains are not trustless. Rather, the trust is distributed across a large network of people
Utility tokenA digital token of cryptocurrency, which can later be redeemed for a good or service offered by the issuer
WalletA device, physical medium, program or a service which stores the public and/or private keys and can be used to track ownership, receive or spend cryptocurrencies
Weak handsA term used to describe people who cannot handle volatile markets, causing them to sell preemptively
White-paperA document explaining the purpose of a technology. All coins and crypto related technologies will have a whitepaper
ZeroCoinA project purported to / attempting improve upon privacy elements of public blockchain networks such as Bitcoin
Zero Confirmation Transaction/Unconfirmed transactionAn exchange that has not yet been recorded and verified on the blockchain

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