With frenzied activity in the cryptocurrency markets in recent times, it helps to understand some of the cryptocurrency jargons and terms. In the earlier days of Bitcoin and other altcoins, many of these cryptocurrency jargons and terms were used largely on Reddit threads and jokes in chatrooms. But, with the proliferation of digital currencies they have become part of several discussions and other cryptocurrency material. We have therefore compiled a list of some these cryptocurrency jargons and terms that we come across nearly every day.
During the early days of bitcoin forums, someone erroneously wrote HODL in place of ‘hold’ in some messages posted and some readers in turn interpreted it as “Hold On For Dear Life”. With passage of time and proliferation in the cryptoworld this cryptocurrency jargon came into everyday use. Today when cryptocurrency prices are going through the roof, coin buyers say ‘HODL’.
FUD is defined as ‘fear, uncertainty, and doubt’. For instance, you may be advised to HODL even when there is FUD with people who are not part of the community
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Among cryptocurrency jargons, Sats represent Satoshi which is the least fraction of a bitcoin i.e. 0.00000001 that can be received or sent. Traders generally consider the sats instead of the dollar value of bitcoin.
Whale denotes people who hold large number of bitcoins. Since ownership of bitcoins is not entirely anonymous, you can find out who owns what. When a ‘whale’ decides to sell a large part of his/her holdings, it creates a glut in the market, pulling the price down.
- Pump and dump
Pump and dump means manipulating the market by buying up all floating stock individually or collectively and then wait for the prices to move up because of scarcity. Once the manipulators, or operators as they are generally known by achieve their target price, they gradually release their holdings till the supply is more than the demand. At this point, the prices start dropping though the manipulators have made their money.
People who buy cryptos or stocks at high prices expecting a further up move and getting stuck with such stocks because of a market crash are called bagholders. Remember that in December/January last, Bitcoin scaled the peak at $20,000 only to shed most of the gains and take it to about $6,000.
Mooning is a term generally used among cryptocurrency jargons in the social media circles to indicate that price of one or more coins is experiencing an upward momentum. Avid crypto watchers tend to get excited even with small movements in prices
- 51% attack
This term refers to a situation where over 50% of the computing power in a network is controlled by one individual or a concentrated group. Such a situation gives the individual/group absolute control over the network. The following are among the possibilities arising from such a situation:-
- Halt all mining
- Manipulate/halt interpersonal transactions
- Use the same coin multiple times
A coin address is similar to your office/home address. It provides the location from where you receive/send or hold the crypto currencies. Generally these addresses appear as a string of alphabets and numerical and can look something like this:- Bitcoin Address
A wallet address represents the public component of 2 encrypted keys essential for a person holding cryptos to verify or accept a transaction.
- ASIC Miner/ASIC
ASIC mining helps in mining different coins at a significantly faster rate compared to traditional laptop or desktop can. ASIC stands for ‘Application Specific Integrated Circuit’ and is a chip created specifically to execute a single task.
Block is a cryptocurrency jargon that we come across nearly every day. Blocks represent pages in record keeping books or a ledger. Blocks are files that contain data that cannot be altered and the network stores them permanently like eternity.
- Block Height
Block height represents the number of blocks behind the first block on a chain. The first block or a genesis block always has a zero height since nothing sits behind it. This is used as a metric employed in the programming world to have a bearing on the time and some of the other functions like betting and counter-party in crypto transactions. Assuming that every10 minutes a bitcoin is generated, one can infer certain information related to time when the total length of a chain is known.
- Block Reward
Block rewards are allotted for solving mathematical equations, also known as hashing related to a given block. Bitcoin awards 25 bitcoins for every block mined and keeps halving at every 210,000 blocks.
Fork represents permanent move to an alternate operating version than the current blockchain. Forks generally come into play when the program is affected by a bug or a 51% attack is detected, or the common reason when consensus rules are replaced by a new set. The height of the block determines a successful fork.
In simple terms, multisig is just multisignature and is used when a transaction needs more than a single signature for approval. This security feature is helpful for companies getting money in their BTC wallet. When a company wants to ensure that a single employee does not have exclusive access to a particular transaction, mutisig will ensure that the transaction is verified by two independent employees before it is completed.
These are the more commonly used cryptocurrency jargons, though there are many more in the cryptoworld.