25 Cryptocurrency Terms You Need to Know

This term is a good one to know because market participants with the ability to execute very large transactions can potentially manipulate the market—or “make waves in the ocean.” Newcomers are frequently described as “noobs” by industry insiders. While simply buying digital currency is one example of taking a long position, there are other methods available. FXCM is a leading provider of online foreign exchange trading, CFD trading and related services. Cryptocurrencies continue to grow, with new currencies cropping up all the time, and are here to stay. Their rising popularity is driven by the proven reliability of the top cryptocurrencies, Bitcoin and Ethereum. BitIRA facilitates the purchase of Digital Currency, nothing more, and charges a fee for the service it provides . No fiduciary relationship, broker dealer relationship, principal agent relationship or other special relationship exists between BitIRA and its customers.

• In the Bitcoin network, the difficulty of mining adjusts every 2016 blocks.
• FinTech Magazine focuses on fintech news, key fintech interviews, fintech videos, along with an ever-expanding range of focused fintech white papers and webinars.
• But there are thousands of them, each having different value and supply limits.
• The Metaverse is a virtual space where users are able to interact with each other in a computer generated environment.

The right, but not the obligation, to buy a security or cryptocurrency at a given price within a given time frame. When components of a distributed computer system – such as a blockchain – may fail and there is imperfect information as to whether a component has failed or not. The name given to a significant volume of Bids at a specific price that creates the impression of a wall on the Depth Chart for a given cryptocurrency. Connect buyers with sellers to exchange cryptocurrency, charging a few for their service. A unit of measurement used to compare the sizes of different blockchain transactions. Weight measurements are relative to the maximum size of a block. As of 2016, each weight unit for Bitcoin represents 1 / 4,000,000 of a block. The reward given to a Miner for successfully mining a block, containing a subsidy and fees for transactions contained within the block. For Bitcoin the subsidy halves every four year and is currently set at 6.25 BTC.

Bitcoin NFTs

These schemes are often orchestrated through apps like Slack or Telegram, he adds, and advises curious chatroom readers to beware of such gimmicks. An investigation into “pump and dump” schemes by Business Insider found the practice to be an “open secret among many cryptocurrency traders.” “Pump and dumpers are people who often say, ‘Hey, let’s all of us together pump this coin,’ which means buy the coin, create the demand in the market, the coin will go up in value,” Saddington says. In early bitcoin forums, someone posted a message that spelled the word “hold” wrong, and readers interpreted it as an acronym “hold on for dear life,” Saddington explains. “Now, it’s become a meme of sorts, so that when the prices are highly volatile, bitcoin buyers say ‘HODL!'” Saddington describes himself as “a long-term HODLER.” A unit of value used for various purposes within a crypto ecosystem. Tokens can represent any asset, from commodities like gold or coffee beans, to loyalty points, real estate, or even other cryptocurrencies.

More information to our fee structure can be found in the NETELLER Cryptocurrency Terms of Use. The word “altcoin” is a portmanteau of “alternative” and “coin” and basically refers to all cryptocurrencies other than Bitcoin. As of February 2022, there are more than10,000 active altcoinsin existence, of which the largest by market cap are Ethereum , Tether , and Binance Coin . Although the coins may enable a user to perform a certain action, many buyers are only interested in flipping them for a profit. To this end, in some cryptocurrencies, the number of units of currency is limited. In the case of Bitcoin, the system is organized so that no more than 21 million bitcoins can be issued. Cryptocurrencies have gained popularity in the investment world due to the significant appreciation seen by some coins since they were first introduced. More recently, cryptocurrencies have seen significant declines as the Federal Reserve raises interest rates, which has impacted the most speculative investments particularly hard.
A type of computer chip adapted to perform a very specific function, in the case of Bitcoin, ASIC chips are adapted solely for the mining process. All services and products accessible through the site /markets are provided by FXCM Markets Limited with registered address Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda. FXCM Markets Limited (“FXCM Markets”) is incorporated in Bermuda as an operating subsidiary within the FXCM group of companies (collectively, the “FXCM Group” or “FXCM”). FXCM Markets is not required to hold any financial services license or authorization in Bermuda to offer its products and services. Trading Station, MetaTrader 4, NinjaTrader and ZuluTrader are four of the forex industry leaders in market connectivity. Bitcoin , Ethereum , Litecoin , Bitcoin Cash and Ripple are leading cryptocurrency products. The term “whale” is used to describe a trader who makes sizable bets.

Coin

With it, crypto terms have entered into mainstream media, investing publications and family dinners. Used to describe the behaviour of traders who have made an emotional and/or negative decision that has led to poor performance in the markets. Can also describe someone who doesn’t have faith in a particular position in a market as opposed to Strong Hands. Describes an irrational perception that owning whole units of cheaper cryptocurrencies is preferable to fractions of more expensive ones.
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform. The event in which a single entity is able to obtain control of the majority of a network’s hash rate. In the crypto world, this is someone who promotes an altcoin so they can personally benefit. A measurement that gauges a protocol’s ability to increase performance relative to costs and market demand. The pseudonymous individual who assisted in the creation of the Bitcoin core protocol. And a satoshi is the smallest fraction of a bitcoin, worth one hundred millionths of a Bitcoin. An address that can be shared and used publicly to verify a digital signature. A wallet that requires multiple digital signatures in order to attain access. The chief network where real transactions and consequences take place.

Pantera Capital and Fortress Investment Group are examples of well-known whales among investors. In addition, it is said that Satoshi Nakamoto mined over a million Bitcoins, which makes him another popular-although widely speculated-whale. It is also relevant to remember that digital currencies also enable instantaneous and seamless cross-border transactions. For example, it is possible for persons located in the United States to send payments in digital currency to their counterparts located in Singapore, as long as they are connected to the same network.

Secondary Market

Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. DApps, or decentralized applications, are programs that run on top of blockchain networks and use smart contracts to provide trustless tools and services for end users. The most widely adopted smart contract platform today is the Ethereum protocol, where hundreds of dApps exist today. Symmetric-key cryptography is used by various blockchain networks for transfer of cryptocurrencies. Blockchain addresses generated for wallets are paired with private keys that allow transfer of cryptocurrency. In decentralized blockchain systems, transactions that are added to a network blockchain by anonymous miners and validators are added and validated as they are done. In a sense, this is the basis for any technology-based on blockchain transactions.
For example, an individual dollar is considered fungible as we can trade dollars with one another. Artwork is usually deemed non-fungible as paintings, sculptures, or masterpieces are likely to be unequal in quality or value. A non-fungible token is a type of token that is a unique digital asset and has no equal token. This is in contrast to cryptocurrencies like ether that are fungible in nature. Any computer connected to the blockchain network is referred to as a node. A full node is a computer that can fully validate transactions and download the entire data of a specific blockchain. In contrast, a “lightweight” or “light” node does not download all pieces of a blockchain’s data and uses a different validation process. Hyperledger is an ecosystem of open-system tools, libraries, and products designed to enable and support enterprise-grade blockchain technology.

A type of hype where someone heavily promotes a cryptocurrency by using social media or their influence to draw attention towards it, often with no regard for the quality of the said coin. An alternative proof-of-work algorithm designed by Colin Percival for Tarsnap online backup service in an effort to make it more difficult to perform large scale custom hardware attacks . It’s been adopted by many altcoins since then due to the increased cost involved when using ASICs rather than GPUs/CPUs, including Litecoin and Dogecoin. A slang term used to describe a situation where an investor becomes “wrecked” by losing all their money due to trading or other factors within the market. A proposed upgrade to the Bitcoin protocol, consisting of a number of separate changes which aim to improve privacy and scalability without compromising on the latter. One main change it introduces is Confidential Transactions, which allows for both amounts and other metadata from transactions to be hidden. It was first suggested by Tom Elvis Jedusor (the alias of Harry Potter’s nemesis Voldemort) in 2016. A digital currency that doesn’t have any inherent value and is used for social media purposes. An economic condition where the general level of prices for goods and services is rising and the purchasing power of a currency falls. Initial decentralised offering, which is similar to an ICO but lets users interact with the project before it goes live.
A contract to buy or sell an asset at a later date with the price agreed upon today. Investors use these as both a hedge against risk and a tool for profit. The moment when a cryptocurrency’s market capitalisation surpasses that of another crypto. The selling of coins, especially by whales who hold large amounts to stabilise prices and avoid crashing them.

An individual or group of people who use their computing power to confirm transactions on the blockchain network, receiving rewards in exchange for this service. The process of offloading large quantities of coins onto exchanges all at once which drives down prices because there is more supply than demand for that particular cryptocurrency. A form of digital asset that uses cryptography as its main security measure to control the creation of additional units and verify transactions on its https://www.beaxy.com/market/btc/ decentralised network. A type of monetary incentive provided by cryptocurrencies whenever an individual mines a block successfully. Still, rather they must have gone through mining first before being awarded as such since it requires computational resources and electricity costs to mine them effectively. This is how miners make their profits, doing the work necessary in ensuring proper security measures are put in place so that these tokens cannot easily be hacked or stolen from them.

Hot Wallets are convenient for transacting and trading but are more susceptible to the threat of hacking. Examples are hot wallets are Mobile Wallets and Web Wallets. A slang term used within the crypto community meaning to steadfastly hold on to your crypto assets especially through big price dips. Hodling is a mentality driven by belief in the underlying use case for crypto. A fund that gives an investor exposure to a basket of securities or assets without actually owning them.

How cryptocurrency works

Mining on blockchains through rented processing power rented from companies that host the physical equipment. Tokens which have been sent to addresses whose private key are not known, effectively becoming unusable. A strategy where investors buy a currency in a market and sell it at a higher price in another market to gain profit. Bitcoin’s circulating supply will increase further, till the total stock of 21 million coins are mined. Over time, you will determine which one suits your financial goals, personality, and trading profile. A trader may want an asset’s price to fall to either short it successfully or buy in at a lower price and increase their chance of generating again.

A collection of transactions on a blockchain network, gathered into a set or a block that can then be hashed and added to the blockchain. State channels are part of the set of tools and platforms involved in scaling Ethereum and enabling Layer 2. A decentralized file storage and referencing system for the Ethereum blockchain. IFPS is an open source protocol that enables storing and sharing hypermedia in a distributed manner without relying on a single point of failure. This distributed file system enables applications to run faster, safer and more transparently.

When someone buys or sells using cryptocurrency, another entry is made on this virtual ledger. A representative store of digital value that lives on a given blockchain or cryptocurrency network. Some blockchains have the same name for both the network and the coin, like Bitcoin. Others can have different names for each, like the Stellar blockchain, which has a native coin called Lumen. A trader would sometimes use funds borrowed from a broker to actually engage in cryptocurrency trading. Cryptocurrencies also carry special risks not generally shared with official currencies or goods or commodities in a market. While proponents have a good story to tell about digital currencies such as Bitcoin, these currencies are not without serious risks, at least as currently configured. That doesn’t mean you can’t make money on them by selling it to someone else at a higher price than you paid.

These are the points at which an investor decides to buy or sell a particular coin/token. Anti-Money Laundering, a legal framework used by governments worldwide to stop financial crimes like money laundering, terrorist financing, fraud, and more. The block will then be ‘mined,’ or validated, by randomly selected validators. The method uses a random system to determine who gets to “mine” rather than using a mechanism based on competition like proof-of-work.

Here are the largest cryptocurrencies by the total dollar value of the coin… But if an outright ban is not on the table, at least in some jurisdictions, government regulation may help create a more level playing field that’s less subject to fraud and malfeasance. Such a scenario may allow market participants to develop greater trust in the system and have clearer legal recourse if something unfortunate does happen. This kind of regulation helps tame the “Wild West” nature of cryptocurrency, making crypto safer for those who want to use it honestly. Government regulation may drastically curtail the viability of cryptocurrencies, if regulation consists of outright or de facto bans. A ban could make a cryptocurrency effectively useless within a given country, if not subject individuals to criminal sanctions, depending on the laws.

For example locking ETH in a MKR DAO smart contract to generate DAI. Read more about eth calculator here. The ETH can be released once the DAI has been paid back plus interest and a stability fee paid in MKR. Permanently removing tokens or coins from the circulating supply. Coin burning is usually done to restrict total supply and thereby control inflation. When buyers set a maximum acceptable price to buy, and sellers set the minimum satisfactory price to sell a security on an exchange. Matching buyers and sellers in this process increases liquidity and decreases volatility.
A rollup that assumes the validity and good faith of transactions, and only runs a fraud proof in the case of fraud being alleged. ConsenSys Mesh is a network of loosely coupled, tightly aligned teams, products, and investments advancing the Ethereum ecosystem and the arrival of Web 3.0. A group of Ethereum core developers, startups, and large companies working together to commercialize and use Ethereum for different business applications. A type of database which spreads across multiple sites, countries, or institutions. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.

Making sure you account for whales in your buying and selling decisions will enable you to profit. Some digital currency exchanges have suffered DDoS attacks from nefarious parties looking to cripple these marketplaces and hopefully take advantage of this vulnerability to steal cryptocurrency. While efforts to steal digital assets may not work, an exchange’s users could become unhappy simply because they cannot make trades through the marketplace. Proof-of-work, or PoW, is another consensus mechanism that leverages a network of computers called miners that verify transactions in exchange for crypto rewards. Anyone can become a miner, competing to create new blocks by using computing resources to solve a cryptographic puzzle called a hash. The first to do this earns the right to append their new block to the blockchain. This is particularly problematic since all cryptocurrency transactions are permanent and irreversible.

The time taken for a new block of transactions to be confirmed and added to the end of a blockchain. The time taken will depend on the Consensus Mechanism employed. A Bitcoin block confirmation takes roughly 10 minutes, while for Ethereum it is around 15 seconds. Locking cryptocurrency in a smart contract as collateral against the issue of a stablecoin.