If you are a newcomer in the crypto world then I can bet you are lost and pretty confused in understanding its terminology let alone this world! Cryptocurrency Jargon is very unique in a way because its terminology is not used in the outside world. But in order to understand and make informed decisions it is imperative to know these terms which include acronyms, slang, and technical terms as well.

Therefore, stop right there because I know you are about to get overwhelmed! Read this article very thoroughly because in this article I have attempted to describe the cryptocurrency jargon in simpler and easy-to-understand words. Do not miss any part of this guide before starting investing in cryptocurrency because it will be your ultimate asset in decoding cryptocurrency jargon key terms for beginners.

Cryptocurrency jargon is a language on its own therefore below are common terms used in it:

Altcoin: 

Cryptocurrency started with the inception of Bitcoin. After that, many cryptocurrencies are developed which are collectively called Altcoins. Some popular examples of Altcoins are Ethereum, Ripple, and Litecoin. Each altcoin comes with its unique sets of features and works on different underlying technologies. They offer a diverse range of functions from enhancing the speed of transactions to enabling smart contracts and much more. 

Blockchain: 

A blockchain is a digital ledger that is decentralized and tamper-resistant. Blockchain as the name suggests is a chain of blocks interconnected with each other, each having a list of transactions. It stands out due to being upheld by a network of computers known as nodes. Since it is not run by any central authority therefore it is the most transparent, secure, and immutable as it can be. These factors make it an essential and foundational element of many applications beyond finance such as smart contracts.

Hash Rate: 

Hash rate refers to the computational power or speed at which a mining machine or network of machines can solve complex mathematical problems (hash functions) to validate transactions and secure the blockchain. A higher hash rate indicates a greater level of computational power, which typically leads to increased security and efficiency in processing transactions on the network.

Bitcoin Maximalist: 

An individual who strongly believes that only Bitcoin is the ultimate store of value and all other coins, typically altcoins are inferior to it is called a Bitcoin Maximalist. He emphasizes the security, decentralization, and abundance of features bitcoins have, while downgrading other coins.

Blocks: 

In common words, blocks are just like the pages of a ledger. Each block stores a collection of transactions and after reaching its storage limit, it is added to the chain in chronological order. These blocks however make the alterations of information incredibly challenging. This feature helps the block to create a reliable record of transactions in a transparent and decentralized way.

BTFD: 

BTFD means “Buy The F***ing Dip” which is of course a slang term. It means to buy a Cryptocurrency when its price experiences a significant dip or drop before it rises again. It is done with the exception of future price recovery in mind. 

DApps: 

DApps or Decentralised applications are basically software applications that are built on blockchain technology. They are very difficult to tamper with because they are operated on networks of computers. Smart contracts are often used within the DApps to automate them.

DeFi: 

DeFi or Decentralised Finance is a set of Financial services and applications. DeFi is built on blockchain technology whose main purpose is to revolutionize traditional financial systems. With the help of DeFi, one can trade, lend, or borrow cryptocurrencies without any middleman.

Yield Farming:

Yield farming, a technique employed in DeFi, enables users to earn rewards from their cryptocurrency holdings. Essentially, it entails lending out your crypto assets to others via smart contracts, powered by computer programs. Consider it as leveraging your digital assets to generate additional growth.

Liquidity Pools:

Liquidity pools, another vital concept in the crypto world, consist of tokens collectively held within a smart contract. They serve to enhance trading by offering liquidity and serve as a fundamental component of numerous DeFi platforms. Participants contribute funds to these pools, earning a share of transaction fees corresponding to their contribution proportion.

RWA:

RWA stands for “Real World Assets.” These are physical or tangible assets, such as real estate, commodities, or other types of traditional assets, that are tokenized or represented digitally on blockchain networks. RWA tokenization allows these assets to be traded, managed, or utilized in decentralized finance (DeFi) applications, bringing traditional assets into the realm of cryptocurrency and blockchain technology.

Fiat: 

In Cryptocurrency, Fiat is the term used for any currency issued by the central government like US dollars. Fiat is used to distinguish centralized money from decentralized counterparts like Bitcoin, Ethereum, etc. Unlike fiat currency which is backed by the government, cryptocurrencies operate on decentralized blockchain technology Without being monitored by a central authority.

Fork: 

Any blockchain-based network including cryptocurrency when broken down into two sub-projects is called a “Fork ”, with each having its code, nodes, miners, and operational principles. There are two types of forks

• Soft fork; in which both subprojects work on a single blockchain
• Hard fork: in which both sub-projects have new chains.

Gas: 

To execute operations of transactions on the Ethereum blockchain, an amount of computational effort is required. Gas is the unit used to measure this computational effort whereas the gas prices are denoted by small fractions of Ether( ETH) called Gwei. Whereas, the product of gas limit and gas price determines the total transaction fee. 

Halving: 

Halving marks as one of the most prominent events for Bitcoin. This event makes sure that the quantity of Bitcoin does not cross a certain limit. In this process, when around 210,000 blocks are mined, the rewards of mining Bitcoin are slashed or halved.

HODL:

Hodl is another slang in crypto jargon. It all started when an early crypto enthusiast mistyped it in a chat forum on the internet to tell other investors to stay loyal to Bitcoin and not sell their tokens irrespective of its huge dip. To this day, the Hodl is used to show that one is loyal to Bitcoin. It also shows that even after a huge dip, Bitcoin will eventually rise again.

FOMO (Fear of Missing Out):

This term refers to the fear of missing out on a potentially lucrative investment or trend within the cryptocurrency sphere.

FUD (Fear, Uncertainty, and Doubt):

Often used to describe false or misleading information spread about a specific cryptocurrency to make its price go down.

ICO: 

An initial coin offering or ICO is a fundraising method used in cryptocurrency projects to raise funds for their projects. In ICO, new Cryptocurrency tokens are provided in exchange for existing coins or fiat currency. However, some countries have set limitations for this process and some have straight forward banned it because of the risks it involves.

IEO: 

An Initial Exchange Offering (IEO) is a type of ICO where, rather than the startup selling tokens directly to the public, an exchange manages the token sale process. The exchange evaluates the project and makes the token available for trading right away. IEOs offer investors an additional level of trust, making it a crucial concept to grasp.

STO: 

A Security Token Offering (STO) is a form of public offering where digital securities, called security tokens, are sold on cryptocurrency exchanges. STOs adhere to regulatory standards for token issuance, offering investor protection against fraudulent practices. Essentially, an STO is an ICO conducted in compliance with regulations.

Mining:

Mining is the process of adding transactions to the blockchain after validating them. In the validation of transactions, robust and powerful computers are used to solve complex mathematical problems that validate and group transactions into blocks. Here miners compete to solve these complex mathematical problems and whoever wins can add the next block to the blockchain.

NFTs:

NFTs or non fungible tokens are unique digital assets that use smart contracts and confer ownership of different virtual goods like music, art, etc. Through this, creators can monetize their digital content. It even allows the trade of unique digital items on different marketplaces.

Pump and Dump:

It is a process or scheme where the price of a Cryptocurrency is manipulated and boosted or pumped by false claims, just to sell its assets at higher rates.

Satoshi: 

Satoshi Nakamoto was the anonymous creator of cryptocurrency who just vanished. In the Field of Cryptocurrency, Satoshi is also a unit of exchange i.e., 0.0001 Bitcoin.

Stablecoin: 

A stablecoin is any blockchain-based token that is pegged to a fiat currency to facilitate the cross-border Transaction.

Token: 

a token is a digital asset that typically operates on a blockchain platform. These tokens can represent various assets or utilities, such as a unit of currency, a stake in a project, voting rights, or access to a specific service or product within a decentralized application (DApp).

To the Moon: 

Whenever someone uses the phrase ‘’To The Moon’ or posts an emoji of a rocket then it means he believes that the price of Cryptocurrency is going to be hugely increased.

Mooning:

When the price of a cryptocurrency is rapidly rising, it’s called ‘mooning,’ showing a significant increase in value.

Rekt:

Whenever any trader loses a substantial amount in crypto trading then the slang Rekt is used which is a slang used for Wrecked.

Wallet: 

A crypto wallet is a place to store cryptocurrencies. There are two types of digital wallets.

• Hot wallets; online wallets, easy for trading but more susceptible to hackers
• Cold Wallets; offline wallets, are more secure but are difficult to trade.

Private Keys: 

In the realm of cryptocurrency, a private key serves a similar purpose to your PIN or password in traditional banking. It’s a distinctive, intricate combination of letters and numbers that grants access to your crypto assets. Safeguarding your private key is crucial, as its loss could result in the forfeiture of your digital holdings.

Public Keys: Your Crypto Address

On the other hand, your public key is comparable to your bank account number. It’s the identifier you provide to others for receiving funds. Although safeguarding your private key is essential, you can share your public key without concern. 

However, it’s important to note that anyone possessing your public key can view your account balance and transaction history, thus exercising caution is recommended.

Whale: 

The giants whether individual investors or big firms in the crypto world are called Whales. They can even move the prices of Cryptocurrencies with their single trade.

Genesis Block: 

The first ever block of a said blockchain is called Genesis Block. It always holds a special value because all other blocks follow it. For instance, the Genesis Block of Bitcoin was created by Satoshi Nakamoto in 2009.\

Market Capitalization: 

Market capitalization or market cap is the total value of a Cryptocurrency which is gained by the product of total tokens in circulation and current market price. Understanding the market cap is essential because a high market cap suggests well-performing crypto.

Liquidity: 

If a Cryptocurrency has a greater number of buyers or sellers then it is said to be more liquid. In common words, liquidity refers to the ease at which one can sell or purchase cryptocurrency.

Bull & Bear Markets: 

These are the terms that typically refer to the trend shown by the crypto market. If the market is performing well then it’s called a Bull Market where more crypto is bought than that is sold.

Bear market on the other hand refers to the negative performance of the market where the selling outperforms the purchase of Cryptocurrencies.

Bottom Line

Cryptocurrency is an ever-evolving world where new currencies are being created every once in a while. But what remains constant is the basic knowledge of its jargon. In this article, common key terms of Cryptocurrencies were decoded for beginners so that they can make an informed decision.