Address – A numerical string which represents the unique ID of a wallet on the blockchain. Think of it as an account number.
ATH – All time high, the highest the price has ever been.
Blockchain – A digital ledger in which transactions made in bitcoin or other cryptocurrency are recorded chronologically and publicly.
Certain coins‘ blockchains, such as Ethereum’s, also record the execution state of applications on the platform.
Cold Storage – Storing crypto away from the internet. Meaning on a paper wallet, in a hardware wallet, or on an air-gapped machine.
Confirmation – A transaction is confirmed when it has been verified by blockchain miners.
Crowdsale/ICO/Token Sale – ICO stands for Initial Coin Offering. They are the cryptocurrency equivalent of an IPO. Either all or some of a currency is sold at a certain time to raise money for development. Other features and characteristics differ depending on the ICO. It is important to be weary of ICOs however, as many of them are unfounded and bear poor future prospects – ensure you have undergone a proper assessment before buying into an ICO.
Exchange – The serviced used to buy and sell your traded commodity. In our case: GDAX, Bittrex, Poloniex, Kraken, etc.
Fiat – Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. For example dollars, euros, pounds etc.
The Flippening – The speculated point at which Ethereum’s market cap, and overall block chain dominance, overtakes Bitcoin’s.
Fodl – A play on the word fold, typically meaning to sell your currency for a different one.
FOMO – Fear of Missing Out. The term used to describe the act of purchasing a commodity while it is on a bull run. It often carries a negative connotation, in that FOMO may cause the price to be artificially increased and indicate that a(bearbeitet)
correction will soon follow.
FUD – Fear, Uncertainty and Doubt. This term is used to describe the malicious spread of negativity. This is often done with the goal of causing inexperienced members to sell, or possibly cause a temporary dip in price.
Hardware Wallet – a cryptographically secure piece of hardware designed to keep wallet information secure. E.g. Trezor wallet, ledger nano, etc.
Hodl – The act of buying and holding. A play on the word hold. Oh, the memes.
ICO – Initial Coin/Token Offering. When a new coin is being sold at a base price before the launch of the service it is associated with.
Mining – The act of contributing processing power to a blockchain network to help determine the next block. Incentivized by the blockchain providing a reward for doing so.
Paper Wallet – A printed document containing the information linked to your wallet. I.e. your private key, public key, etc.
Private Key – This is the key that will unlock your wallet and everything inside it for whatever transaction you (or whoever has it) choose. As the name suggests, this key is never to be shared with anyone.
Public Key – Your wallet address. This is the key you will share with people in order to have Ether sent to you or requested from you.
Smart Contract – A piece of code that can be broadcasted to the blockchain and executed. Used to write applications that run distributed across the platform.
Staking – In a Proof of Stake system, this generally means leaving your coins in your wallet to increase their stake in an
attempt to net rewards from block creation.
Arbitrage (Arbing) – The act of purchasing currency on one
exchange and selling them on another. The trader is exploiting a price difference between exchanges.
Bear Market – A prolonged downward trend of a traded commodity. This is the opposite of a bull market.
Bull Market – A prolonged upward trend of a traded commodity. This is the opposite of a bear market.
Correction – A correction is a reverse movement, usually negative, a fall in price of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation. Corrections are generally temporary price declines interrupting an uptrend in the market or an asset.
Liquidation – Most exchanges employ a policy of forced liquidation in the event your collateral does not cover your current loss on margin trades (see margin trading). What this means is that your loan/margin will be closed and the collateral is used to pay the loss.
Long Position (A long) – Making a purchase with the hope that the item will increase in value so it can be sold for a profit. This is what most investors do.
Margin Short (Shorting) – This is the act of selling currency loaned to you with the hopes of buying back later at a dip.
Margin Trading – Trading on money that has been loaned to you by an exchange. A deposit of capital must be placed to receive said loan.
Market Order – Placing either a buy or a sell order on the market with no regard for price. The market will buy or sell $x.xx/yy, for the best price currently available.
Technical Analysis (TA) – financial analysis that uses patterns in market data to make predictions base of indentifying trends.
Stop Buy – An order which is triggered by the act of a traded commodity going above a price set by the trading party.
Trade Volume – This is the amount of trade done on a currency.It is an important metric as it can show you the amount of interest there is versus other coins. It also shows that trade is actually being done with the currency.(bearbeitet)
Stop Loss – An order which is triggered by the act of a traded commodity falling below a price set by the trading party.
Volatility – This refers to a currency’s degree of price fluctuation. The opposite of price volatility is stability.
Whales – Traders possessing massive amounts of the currency being traded. They are able to sell and buy in quantities large enough to manipulate the market price in the short term.
Proof of Work (PoW)
Proof of Work is the system by which most cryptocurrencies, including Bitcoin, manage their blockchains. Typically it consists of a piece of data that is difficult to produce, but easy to verify. Through a process known as mining, individuals contribute processing power to solve arbitrary and time consuming calculations as well as validating calculations to determine what the next block in the blockchain should be. Whenever a new block is added to the chain, the entity producing the block is rewarded with some amount of currency. The difficulty of these calculations can be determined by the devs behind the currency to control the rate at which new coins are dispersed into the economy. The reason for all this demanding activity is to secure the network by making it difficult for an attacker to start adding invalid blocks to the universally accepted chain – in this system, the attacker would need to generate over 50% of the processing power in the entire network to have their malicious validation be accepted. A higher-level way to think about this is that processing power is what creates scarcity and is proportional to the odds of you getting the next reward. This has the unfortunate side-effect of giving a disproportionate amount of power, in regards to both reward and blockchain validation, to miners that control a large portion of the mining hashrate.
Proof of Stake (PoS)
Proof of Stake rewards are distributed proportional to the “stake” that validators have in the economy as opposed to the work you can do. Your stake increases proportionally to the amount of currency in your wallet and the time it’s been there. The greater your stake, the higher the odds are that you will receive a reward for the creation of the new block on the chain. In contrast to PoW where scarcity comes from processing power, in PoS, the scarcity comes from the currency itself.
One prominent example is Ethereum, which has been using a proof of stake system since 2017.