40 + Basic Crypto Terms for Beginners

Basic Crypto Terms for Beginners

Cryptocurrency has become more and more popular as time goes on, but there is still quite a bit of confusion surrounding it. The structure and nature of blockchain and the cryptic slang that pops up almost every day make for a complex concept.

While this might seem daunting to catch up with at first, learning the basic terms in cryptocurrency is simple and can be very rewarding in the long run.

In this article, we go over some of the most widely used Crypto terms for beginners and pros alike. Once you understand the basics, you’ll be able to join the conversation with others in the Crypto community.

Crypto terms for beginners

Crypto terms for beginners

Cryptocurrency, blockchain technology, and Bitcoin are all terms that are often thrown around in the same sentence when discussing crypto. However, these are not the only words associated with cryptocurrency, below is a list of the most widely used crypto terminologies.

1) . Cryptocurrency

Cryptocurrency is a digital or virtual currency that uses cryptography to secure its transactions and control the creation of new units. Read more about the basics of cryptocurrency. 

2). Bitcoin

Bitcoin is a digital currency that sprang into existence in 2009, the year after the global financial crisis. It wasn’t the first attempt at digital money — similar ideas date back years — but it was the first to gain a level of momentum and support that gave it real viability.

Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.

3). Altcoin

 A generic term for any cryptocurrency that isn’t Bitcoin. The word “Altcoin” means “alternative coin besides bitcoin.”

4). ATH

 An acronym meaning “all-time high,” referring to the highest price a cryptocurrency has ever achieved since its launch.

5). Memes

Meme is originally an English word; it was first recorded in 1756, and it is a shortened form of the French word mème, which is a derivative of the Latin word memor, meaning “to remember”. It was first used to describe a unit of cultural information that is transmitted from one mind to another.

However, with the launch of cryptocurrencies like Dogecoin and Shiba Inu, the word meme was gradually introduced into the crypto space- which basically means image, video, or text that is used to spread crypto-related ideas or humor.

6). Crypto coins

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units.

In a general sense, the term crypto coin can be used to describe both coins and tokens, while in a specific term, crypto coins are the cryptocurrencies that exist on their own blockchain while token refers to cryptocurrencies that are built on a third-party blockchain.

For example, Shiba Inu, Safemoon, and the likes are tokens, while Bitcoin, Ethereum, Solana, and the likes are coins.

7). Airdrop

A marketing strategy that involves sending free tokens or coins to wallet addresses in order to promote awareness of that particular cryptocurrency.

8). Blockchain

BLOCKCHAIN TECH

Blockchain is a digital ledger of all cryptocurrency transactions in a cryptocurrency network. It is essentially a database that is maintained by a network of computers rather than a single entity.

9). Whitepaper

Whitepaper is one of the most important pieces of content in the cryptocurrency world. They are documents that provide a high-level overview of a project, its goals, and the technology behind it.

It is often used to attract investors and partners to a project. They can also be used to educate potential users about a cryptocurrency or blockchain-based project.

10). Block

In the context of cryptocurrency, a block is a record of new transactions. And when a block is filled up with transactions, it is verified by miners and then added to the blockchain.

11). Binance

Binance is a global cryptocurrency exchange that provides a platform for traders to buy and sell digital assets. Read our Binance review here

This exchange was launched in 2017; and it remains one of the world’s largest cryptocurrency exchanges by daily trading volume, with a host of a vast selection of digital assets ranging from cryptocurrencies to NFT Gift cards.

If you were looking for a crypto exchange to start your trading career, Binance is a good one, they have got lots of material to help your trading journey, sign up for a Binance trading account here.

Read Also!
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12). Coinbase

Coinbase is one of the most popular cryptocurrency exchanges in operation. It allows users to buy, sell, and store a variety of cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. Coinbase also offers a wallet service for storing cryptocurrencies.

13). Cold Wallet/Cold Storage

A cold wallet is a cryptocurrency storage device that is not connected to the internet. Cold wallets are often seen as more secure than hot wallets, as they are less likely to be hacked.

14). Hot wallet

A hot wallet is a type of cryptocurrency storage that is connected to the internet and can be accessed and used with greater ease.

15). Decentralization

Decentralization is a process of distributing power and responsibilities away from a central authority. In the cryptocurrency world, it is often used to describe the distribution of power away from governments and banks, and into the hands of the people.

Decentralization is one of the key features that make cryptocurrencies so revolutionary. By removing the need for a central authority, cryptocurrencies can be used to transfer money and power directly to the people who need it; this method allows for a more democratic and fair financial system.

16). Decentralized Finance (Defi)

Decentralized finance, or Defi for short, is a term for financial applications that run on a blockchain. Defi encompasses a wide range of activities, from peer-to-peer lending and margin trading to decentralized exchanges and stable coins.

The defining feature of Defi applications is that they are trustless. This means that users do not need to trust a third party to hold their funds or execute transactions. Most Defi applications are built on top of Ethereum, which allows for the use of smart contracts.

17). Decentralized Applications (DApps)

Decentralized applications (DApps) are a new type of application that runs on a P2P network of computers instead of a single server. This makes them more secure and less prone to censorship than traditional applications.

DApps are built on top of blockchain technology, which is a distributed database that allows for secure, transparent, and tamper-proof transactions. This makes DApps ideal for applications that require trust and transparency, such as voting or financial transactions.

Decentralized applications (DApps) are different from traditional applications in a few key ways:

  1. Dapps are decentralized, meaning that there is no central authority controlling them.
  2. Dapps are transparent, meaning that all actions taken by users are publicly viewable on the blockchain.
  3. Dapps are secure, meaning that user data is stored on the blockchain and cannot be tampered with.
  4. Dapps are autonomous, meaning that they can function without any third-party involvement.

18). Ethereum

Ethereum coin

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference.

19). Exchange

An exchange is a marketplace for buying and selling cryptocurrencies. Some exchanges allow you to trade traditional currencies as well (like USD). There are many different types of Bitcoin exchanges, each serving a slightly different purpose. Some focus on simple trading, others offer advanced features like margin trading.

Some exchanges are better for trading; others have superior technology in terms of their user experience (think web design and usability). The best cryptocurrency exchange for one person might not necessarily be the right choice for someone else, so it’s important to do your research to find the platform that best meets your needs.

The most popular exchanges include Binance, Coinbase Pro (formerly known as GDAX), Bitfinex, Kraken, Gemini, and Bitstamp.

20). Whale

Whale is a term used in reference to someone who has a large amount of cryptocurrency and can influence the direction of the market.

21). Bag holder

Bag holder: a bag holder is someone who owns a large number of a particular cryptocurrency, especially when the price of that cryptocurrency has dropped significantly.

22). When Lambo?

When Lambo has often been used in jokes about people who are considered wealthy or have expensive lifestyles. The term “Lambo” is short for Lamborghini, a luxurious sports car that is known for its high price tag.

Similarly, when use in a cryptic community, it’s basically referring to when the underlying crypto will boom so that investors can go home with plenty of monies.

23). Fork

Fork: A fork is a type of split that occurs when a cryptocurrency undergoes a change in its underlying code. This can result in two different versions of the currency, both with their own unique set of rules.

24). Hard Fork

A hard fork is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa). This requires all nodes or users to upgrade to the latest version of the protocol software.

There are two types of hard forks: ones that are backward-compatible and those that are not. Forks that are not backward-compatible are also called “contentious” hard forks.

A contentious hard fork occurs when two or more factions that support different versions of the protocol cannot agree on a single version. As a result, they split the blockchain and create two separate cryptocurrencies; this was the case of the Ethereum and Ethereum classic.

25). Gas fee

A gas fee is the amount of cryptocurrency that is paid to the miner as a reward for verifying and processing a transaction. The gas fee is determined by the amount of computational power that is required to verify and process the transaction.

26). Front run

Front running is a form of market manipulation where a trader buys or sells a security, commodity, or currency with the intent of driving the price up or down. The trader then executes their original plan, but at a more advantageous price.

27). Genesis Block

A genesis block is the first block in a blockchain. It is the block that starts the chain. Genesis blocks usually contain a message from the creator of the cryptocurrency or a reference to the first block in another blockchain.

28). HODL

The word “HODL” is a misspelling of “hold” that was popularized in a 2013 post on the Bitcoin Talk forum. The author intended it as a typo, but the typo caught on and became the accepted spelling.

The meaning of “HODL” is “to hold” or “to keep”. In the context of Bitcoin and other cryptocurrencies, it means to hold onto your coins even when the market is crashing so that you can sell them later at a higher price.

29). Halving

Halving is the process of reducing the number of new coins created by miners per block. In Bitcoin, this event happens every 210,000 blocks and it’s what makes bitcoin deflationary.

30). Hash

Hash is a mathematical function that converts data into an alphanumeric string, used to verify transactions on the bitcoin network.

31). Hash rate

Hashrate is the speed at which a computer can complete hash functions, usually measured in hashes per second.

31). Transaction id or hash id

A transaction ID (also known as a hash ID) is a unique identifier used to track a cryptocurrency transaction. Every time a new block is mined, a new transaction ID is created. This ID can be used to follow the flow of that coin from one address to another.

32). Initial Coin Offering (ICO)

An Initial Coin Offering (ICO) is a way for startups to raise money by issuing their own cryptocurrency. Investors buy into the new cryptocurrency in the hopes that it will become valuable in the future.

33). Market Capitalization

In the cryptocurrency space, market capitalization is used to measure the size of a digital currency’s market. It is calculated by multiplying the number of digital coins in circulation by the current price of one coin.

34). Mining

Mining is a crypto term that means verifying and recording transactions on the blockchain in exchange for cryptocurrency rewards. Read our guide to crypto ming.

35). Node

A node is a computer that is connected to a blockchain network and participates in the validation and verification of transactions. In order to be a part of the network and have the opportunity to validate transactions, a node must download the entire blockchain. Nodes are important because they are responsible for maintaining the integrity of the blockchain.

36). Peer-to-peer

Peer-to-peer (P2P) is a decentralized system or network where all nodes are equal; transactions are verified and validated by nodes in the network, without reliance on a central authority.

37). Non-fungible Tokens (NFTs)

Non-fungible Tokens (NFTs)

Non-fungible tokens (NFTs) are a new kind of cryptographic asset that is unique and cannot be divided into identical units. They are often used to represent digital collectibles, such as game items, art, and other digital assets, or real-world assets, such as houses, cars, or land.

The first NFTs were created on the Ethereum blockchain in late 2017 when the ERC-721 token standard was proposed. This standard allows for the creation of tokens that are not identical and can be owned and traded by individuals.

38). Public Key and Private Key

Public Key and Private Key are two cryptographic keys that are used in tandem to create a digital signature.

A public key is shared with the world [coin receiving address], while a private key is kept secret [seed phrase or passphrase]

39). Satoshi Nakamoto

Satoshi Nakamoto is the name used by the unknown person or people who designed bitcoin and created its original reference implementation and subsequently released the first bitcoin software that launched the network and opened it to miners in 2009.

40). Smart Contract

A smart contract is a self-executing contract with the terms of the agreement between buyer and seller directly written into the code. This code is stored on a blockchain and will automatically be executed when the pre-determined conditions are met.

Smart contracts help to remove the need for third-party intermediaries, such as escrow agents and can streamline the entire process of conducting business.

41). Stablecoin or Digital Fiat

A stablecoin is a cryptocurrency that is pegged to another asset, such as the US dollar. This means that its value remains stable, as it is always worth 1:1 with the asset it is pegged to.

There are a few reasons why businesses might want to use stablecoins. Firstly, it gives them a way to protect themselves against price volatility in the cryptocurrency market.

Secondly, it allows them to conduct transactions in a more stable environment. And finally, it can be used to store value in a digital form.

42). Bitcoin wallet

A bitcoin wallet is a digital wallet that stores the user’s bitcoin balance. These wallets are created by either installing a bitcoin client or by downloading a bitcoin wallet app. There are many different types of wallets, but the most popular type is the software wallet.

Bottom line

Blockchain, cryptocurrency, and smart contract – these are words and phrases often used in the world of blockchain development. They’re complex terms that aren’t always easily understood, especially if you’re new to this technological wave.

As with any type of investment, the more knowledge a person has about the industry they’re putting their money into, the better decisions they’ll make in regards to how they use their funds. The same goes for cryptocurrencies.

If you want to be involved in successful crypto projects and make investments for the future, it’s important that you understand what each of these common words means. —  Also read our crypto 101 for dummies.

As always, if you have any questions or some crypto terms we omitted, kindly leave a comment below! We will be more than happy to respond.

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