Crypto Glossary
CoinTrendz Crypto Glossary is list of common blockchain and cryptocurrency-related words and their definitions. In this glossary, we try to explain all the crypto slang you must know and show which words are most being used by crypto traders, investors and others. Hopefully this helps you to understand the crypto markets better and gives you a great start.
Airdrop
An Airdrop is an unsolicited distribution of a cryptocurrency token, usually for free, to numerous wallet addresses. Airdrops are often being utilized for marketing purposes, to incentivize users for doing special tasks and using a certain blockchain or protocol.
Altcoin
Altcoins are basically all cryptocurrencies other than Bitcoin. As Bitcoin was the first big cryptocurrency that captured the publics interest, all other coins are called "alternative coins" aka "Altcoins".
API
API stands for Application Programming Interface. It is a set of routines, protocols, and tools for building software applications. APIs specify how software components should interact, such as what data to use and what actions should be taken. API are also being used to connect to cryptocurrency exchanges and trade automatically for example. You can get all kinds of data from an API, such as price, volume and trading data.
Arbitrage
Arbitrage is the practice of quickly buying and selling the same asset on different exchanges/markets to take advantage of price differences between the markets.
ATH
"All-Time High" (ATH) refers to the highest price (or market cap) that an asset has reached since its listing or inception. ATH is also often used as a metric to indicate if someones total portfolio has reached its highest value ever.
ATL
"All-Time Low" (ATL) refers to the lowest price (or market cap) that an asset has hit since its listing or inception. ATL is also often used as a metric to indicate if someones total portfolio has reached its lowest value ever.
Bear Market
When prices of assets in a market are declining for a prolonged time, we are talking about a bear market. As a result, investor's confidence is low and the market turns pessimistic.
Bearish
Bearish refers to a market sentiment in which the market participants are negative and pessimistic about an asset. If someone is bearish, it means they expect an asset or asset class to decline in price. People being "bearish" are also called "Bears".
BTFD
BTFD stands for "Buy The F****** Dip" and is being used to expresss to buy an asset after it has substantially dropped in price. Its also often used in uptrending markets and means that when price retraces in an uptrend, you should go long.
Bull Market
When prices of assets in a market are increasing for a prolonged time, we are talking about a bull market. As a result, investor's confidence is high and the market turns optimistic.
Bullish
Bullish refers to a market sentiment in which the market participants are positive and optimistic about an asset. If someone is bullish, it means they expect an asset or asset class to rise in price. People being "bullish" are also called "Bulls".
Capitulation
Capitulation is the process of selling assets or cryptocurrencies at a significant loss because you have lost hope or belief that it will ever increase in price.
CEX
A Centralized Exchange (CEX) is type of cryptocurrency exchange that is operated by a company that owns it in a centralized manner. Binance or Coinbase is a centralized exchange, for example. You often have to go through a verification process to be able to trade on their platform.
Cold Wallet
A Cold Wallet refers to a cryptocurrency wallet, which has a high security-standard because it is not connected to the internet. Also called a "hardware wallet" and "offline wallet," the cold wallet stores the user's address and private key in an offline environment such as a USB stick or on paper. The opposite is a hot wallet, which is stored online.
Consensus
When a transaction is made on a blockchain, all node validators on the network verify that it is valid on the blockchain, and if so, they have a consensus. Blockchain networks rely on consensus algorithms to reach agreement among various distributed nodes. A consensus mechanism such as proof of work (PoW) or proof of stake (PoS) secures the network and prevents unauthorized users from validating bad transactions. The mechanism also enables agreement on the network even when no single node is in charge.
dApps
Decentralized Applications (dApps) are digital applications or programs which exist and run on a blockchain. These Apps are often built on the Ethereum Blockchain and have different purposes including gaming, finance, socialmedia and more. Because dApps are decentralized, they are free from the control and interference of a single authority.
DCA
Dollar Cost Averaging (DCA) is an automated investment strategy which can be set up to accumulate an asset in a periodic way. If you buy Bitcoin every week at the same time, its called Dollar Cost Averaging into Bitcoin for example. A major advantage for the investor using DCA is not having to actively manage the investment and determine when the best time to buy is, but rather automate it so the buys happen regularly at the same time and averages your buy-in price.
Dead Cat Bounce
A Dead Cat Bounce refers to the temporary recovery and uptick in prices after an asset has sold-off and decreased in price substantially.
Decentralization
In Crypto, Decentralization refers to the transfer of control and decision-making from a centralized entity (individual, organization, or government) to a distributed network. Decentralization is the process of moving power away from a centralized authority to the decentralized blockchain and its users.
DeFi
DeFi stands for "Decentralized Finance" and is a movement against the traditional, centralized forms of financial services and banks.
DEX
A Decentralized Exchange (DEX) is a peer-to-peer exchange allowing users to trade cryptocurrency without the need for an intermediary. Buy/Sell crypto straight from your own wallet, without the need of going through a identification process or signing up on a centralized exchange.
Diamond Hands
Diamond Hands is a slang term for an investor who refrains from selling an investment despite downturns or losses.
Dump
A Dump refers to a large fall in a crypto asset's price within a short amount of time. When markets are dumping, it means they are crashing in price.
DYOR
Acronym for "Do Your Own Research", meaning you should research and look into a project yourself before investing in it.
Escrow
Escrow refers to a neutral third party holding assets or funds before they are transferred from one party in a transaction to another. The third party holds the funds until both buyer and seller have fulfilled their contractual requirements.
Fiat
"Fiat" money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. Most modern paper currencies are fiat currencies, including the U.S. dollar, the euro, and other major global currencies.
Flash Crash
A flash crash is a market condition where an asset/cryptocurrency's price falls very rapidly and steep within a very short amount of time. These crashes often happen due to panic or leverage getting wiped out in the market.
FOMO
Fear Of Missing Out (FOMO) is a term often used in marketing, if there is a product selling out and you fear of not being able to catch it. FOMO also explains the feeling when you see a huge green percentage growth on a cryptocurrency chart and you don’t own that coin, so you FOMO-buy into the coin, potentially at an elevated price.
Fork
Blockchain Forks are essentially a split in the blockchain network. A hard fork refers to a radical change to the protocol of a blockchain network that effectively results in two chains, one that follows the previous protocol and one that follows the new version.
FUD
An acronym that stands for "Fear, Uncertainty and Doubt". It is a strategy to influence perception of certain cryptocurrencies or the cryptocurrency market in general by spreading negative, misleading or false information.
Gas Fee
A gas fee is something all users must pay in order to perform any function on the Ethereum blockchain such as sending a transaction or performing a coin swap. Gas is the term for the amount of ETH – the native cryptocurrency of Ethereum – required by the network for a user to interact with the network. These fees are used to compensate Ethereum validators for the work they do to secure the network and validate transactions.
Halving
A feature written into Bitcoin's code in which after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. Halving is an event in which the total rewards per confirmed block halves. The halving can have an impact on Bitcoin's price.
HODL
Stands for "Hold On for Dear Life" though the term originated from a user typo on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.
Hot Wallet
A Hot Wallet refers to a cryptocurrency wallet, which is accessible online and always connected to the internet. The wallet allows you to send/receive tokens and do other things on the blockchain. If you store your coins on a crypto exchange, its also considered a hot wallet because its accessible online. The opposite is a cold wallet, which is stored offline.
ICO
An Initial Coin Offering (ICO) is a type of crowdfunding/crowdsale using cryptocurrencies as a means of raising capital to fund early-stage companies / crypto startups.
KYC
Know Your Customer (KYC) refers to the process of identifying who you are. Centralized Exchanges and Banks are obligated to complete these KYC checks to verify the identity of the customers using their platform. Often you have to submit your passport, address, a picture of yourself and more.
Liquidation
Liquidation refers to the activity of selling off crypto assets for cash to mitigate losses in the event of a market crash. In the crypto world, the term is often used to describe the forced closing of a traders position due to the partial or total loss of his trade due to leverage.
Liquidity Mining
Liquidity Mining is the practice of lending cryptocurrencies to a decentralized exchange in return for incentives. Participants contribute their coins to liquidity pools for a certain exchange in return for fees and rewards depending on the quantity of crypto they contributed to the pool.
Long
A situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. Going "Long" is basically a bet that the price of an asset goes up.
Moon
Moon refers to the extreme bullish movement of a coin. If a particular cryptocurrency has doubled in price within one day for example, people often say like "Bitcoin is mooning!" or "Ethereum is going to the moon!"
NFT
Non-Fungible Tokens, often referred to as NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content or a real world asset. An NFT can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical.
Private Key
A Private Key is a secure cryptographic-code which gives you the ability to prove ownership of your crypto wallet and spend the funds associated with your public address. It can be seen like a password, which you need in order to "login" to your crypto wallet and access your funds. Important: Never share your private key with anyone.
Proof of Stake
Proof of Stake (POS) is a consensus mechanism used to verify new transactions on a blockchain. With this system, owners of the cryptocurrency can stake their coins, which gives them the right to check new blocks of transactions and add them to the blockchain. By doing so, these validators/stakers receive crypto rewards for their contribution. Ethereum is running under the POS consensus mechanism.
Proof of Work
Proof of Work (POW) is a form of adding new blocks of transactions to a cryptocurrencys blockchain. The work, in this case, is generating a hash (a long string of characters) that matches the target hash for the current block. The crypto miner who does this wins the right to add that block to the blockchain and receives rewards. Bitcoin is running under the POW consensus mechanism.
Public Key
A Public Key allows people to send cryptocurrencies to your wallet. Its a cryptographic code thats paired to a private key. While anyone can send transactions to the public key, you need the private key to "unlock" them and prove that you are the owner of that public key to be able to access the wallet containing the tokens. The public key that can receive transactions is usually an address, which is simply a shortened form of your public key.
Pump
A Pump refers to a large spike in a crypto asset's price within a short amount of time. The unusual large price spike is often followed by a huge crash, resulting in a Pump and Dump.
Real Yield
Real Yield is classified as yield derived from the generation of actual revenue, as opposed to revenue derived from token emissions. It is like a dividend in crypto and often paid in stablecoins or mature coins like Bitcoin or Ethereum.
Rekt
Rekt is a misspelling of "wrecked" and refers to someone that has lost their money in the markets. Often, it was due to excessive risk taken by buying worthless coins or trading with leverage.
Shill
The act of unsolicited endorsing of the coin in public / on social media. Traders who bought a coin have an interest in shilling the coin, in hopes of igniting the public’s interest in that particular coin. Paid "shills" are people that are getting paid for speaking positive about a particular crypto project / coin.
Shitcoins
A shitcoin is a cryptocurrency with no obvious potential value or usage and its price often falls the most in a downturn of the markets.
Short
A trading technique in which a trader borrows an asset in order to sell it, with the expectation that the price will continue to decline. Going "Short" is basically a bet that the price of an asset will go down.
Smart Contract
Smart Contracts are self-executing "programs" stored on the blockchain, which are automatically executed when predetermined conditions are met and can act like a regular contract. Smart contracts work by following simple "if/when,then" statements that are written into code on a blockchain and are therefore immutable and autonomous. All kinds of dApp functions such as staking, swapping and more are written in Smart Contracts. Anyone can write Smart Contracts and deploy it to a blockchain network.
Stablecoin
A Stablecoin is a type of cryptocurrency living on the blockchain whose value is pegged to an external, generally stable, asset class such as a fiat currency. For example, there is a "USD"-coin which is a 1:1 clone of an actual US Dollar, that can be redeemed for real Fiat US Dollars in the real world. Stablecoins enable you to store your value in less-volatile cryptocurrencies than bitcoin or others. It is often being used to temporarily cash-out and secure your buying power.
Staking
Staking refers to the participation in a Proof of Stake (PoS) system, where you lock your tokens up to serve as a validator to the blockchain and receive rewards.
Technical Analysis
Technical Analysis (TA) is an evaluation method involving statistical analysis of market activity, such as price and volume. Charts and other tools are used to identify patterns to underpin and drive investment decisions. Tradingview is a well-known platform where traders can create charts and use all kinds of TA-Indicators to do Technical Analysis.
Weak Hands
Weak Hands refer to investors that do not have enough conviction or patience to hold a cryptocurrency. If you cannot be patient and immediately sell at loss when the market is down, you are being called a "Weak Hand".
Web3
Web 3.0 (Web3) is the third generation of the evolution of web technologies. Web3 builds on concepts such as decentralization, blockchain technologies, and token-based economics. It is the idea of a new kind of internet service that is built using decentralized blockchains.
Whale
A huge market participant who has a substantial amount of capital and is considered rich. Whales are said to have the ability to be market movers for small altcoins too due to their huge capital.
Yield Farming
Yield farming is a process in Decentralized Finance, which involves lending or staking cryptocurrency in exchange for interest and other rewards. Yield Farmers often use complicated strategies, to maximize their returns and switch from one protocol to another to get the highest yield.