The term cryptocurrency has taken the world by storm. There are plenty of articles, and office watercooler gatherings around the globe are buzzing with crypto-this and crypto-that. It is the “next big thing”. The recent spectacular rise in several currencies’ prices and market caps has drawn significant attention from the public, but it could be difficult to decipher the terminology without context (and with internet forums being centres of discussion, context is often lacking).

The trading desks of London and New York are no strangers to crude language, and the crypto trading realm is no different. There is plenty of vitriol and aggression on forums, especially in bearish times. On the other hand, there are many legitimate tech terms associated with cryptocurrencies and blockchain, as it is an emerging technology with its own set of jargon. Here, we will give a brief overview of the more common, useful tech-related terms, and then we will dive headfirst into the strange and minted-just-for-crypto words that abound.

Tech Terms

These are legitimate technology terms that have uses outside of cryptocurrency. If the cryptocurrency bubble bursts or cryptos simply disappeared, these terms would still be relevant. They also aren’t as apt to change, because they aren’t slang and have valuable meaning to technology (and in turn, to our lives).

Blockchain – a platform based on open, decentralized, and distributed processing and storage. Blocks record history in an immutable fashion, lending to the credibility of the end product. Currently implemented as DApps, smart contracts, and especially cryptocurrencies, but the applications are far-reaching. Can be public or privately operated.

DApp – decentralized application. Built on blockchain tech, these applications are controlled by no single entity or individual (for public blockchains). They are also redundant, as transactions are stored on every active node.

DAO – decentralized autonomous organization – an organizational structure taking full advantage of blockchain decentralization. The organization is dictated by rules written into the code and executed autonomously on the network.

ASIC – application specific integrated circuit – a specialized device designed to optimally run one application or algorithm. Used by miners to achieve hash rates that are orders of magnitude greater than generalized CPUs or GPU. Many coins have emerged that claim ASIC-resistant algorithms to make mining by individuals fair, largely in response to the increasing influence of massive Chinese Bitcoin mining operations

(Public) Address – a string of characters that denotes a virtual address to which one may send coins or tokens. On smart contract platforms, it also points to such smart contract addresses. Somewhat like a global unique identifier.

Keys – private and public. Public key is the public address. Private keys are the cryptographic complement to public keys and they are required to unlock an address or wallet. Private keys are a bit like passwords, but they are often encrypted by a user-friendly password (keys tend to be long). Widely used in tech and especially public-facing communications (i.e., on the Internet). For cryptos, the biggest drawback is that losing a private key implies forever locking the funds into the address with no access.

Proof of Stake / Work / Time – these are “consensus distribution algorithms”. They are basically the protocol that a blockchain follows in order to choose the correct history. Proof of work requires that each node proves it has done work (calculations), proof of stake gives more weight to decisions by nodes with more holdings, and proof of time gives more weight to nodes that have participated longer.

Soft / Hard Fork – a fork itself is when the blockchain splits into two versions. The term fork is used in open development environments when a project splits up, allowing the same foundational work to take different directions. A soft fork occurs when past transactions are invalided, and a hard fork occurs when new rules or implementations split the chain into two competing chains.

Cryptographic Hash Function (Hash) – “one way” function that takes a variable length input and computes a fixed length output. A change of one bit in the input theoretically generates a completely unrelated output, making it infeasible to take outputs and find inputs (hence it only goes one way). Like keys, used in various cryptography, encryption, and security applications across technology.

SHA 256 – Secure Hash Algorithm (256 bit). Popular hash function and implemented by Bitcoin. ASIC-friendly. A hash function that generates a 256-bit hash. SHA 256 ASICs are just what they sound like.

Wallet – convenient and user-friendly software that collects various public addresses connected to different blockchains to track holdings in a single place. Can also be used to monitor smart contracts.

51% Attack – a type of security issue. If someone can control 51% of the hashing power of a blockchain, they could theoretically build their own history of the chain, violating the assumed immutability.

Block – a set of information that contains transactions and other information. The last block’s output plus current transactions are combined with another input in an attempt to find a hash that meets certain requirements. Once the requisite hash is found, the block is added to the chain of past blocks, forming a chain.

Smart Contract – code that resides on a distributed blockchain. It can execute autonomously, opening up huge opportunities for Industry 4.0, and since it is distributed, it should be difficult to stop or renege on encoded agreements.

Multisig – multiple signatures. Indicates more than one verifier must sign off on a transaction before it is validated. Useful for blockchain-connected applications that require real-world verification. Often used by smart contracts.

Scaling Problem – there is a tradeoff between scale and speed in technology. As more people use a platform, it becomes harder to process transactions quickly. This can limit the growth of technology (or really anything) and has led to high transaction costs on some blockchains.

Crypto and Trading Terms

Here we have collected terms and acronyms to help you navigate the language of cryptocurrency trading and the forums associated with it. Slang in the real world changes rapidly, and it is no different in the crypto world. We didn’t include tech terms that are relatively easy to figure out, such as genesis block, difficulty, or consensus. They have specific definitions pertaining to the blockchain, but you can probably figure them out yourself.

Mostly Tech Terms (but pertaining to Cryptos)

Altcoin – a coin that is not Bitcoin and maybe Ethereum (sometimes considered the “other” blockchain due to its impact and size). There are hundreds of altcoins, and some have legitimate purposes and reasons for using blockchain, while others are simply cashing in on the ICO frenzy.

Inflationary / deflationary – from the economics of money supply, these two denote the monetary policy of a blockchain system. Deflationary are ones that lose coins over time (often coins are destroyed as people use the system, putting downward pressure on supply and, in theory, upward pressure on price). Inflationary coins increase the supply, mostly by minting new coins as rewards for solving blocks. Some coins have linear inflation, and others halve. Supposedly the term has been usurped by people who don’t know anything about finance, and sometimes inflationary simply refers to a crypto with a large coin supply and deflationary a small coin supply – regardless of whether it is actually inflationary, deflationary, or constant.

Halving – a mechanism to decelerate inflation as the system ages. Bitcoin made this mechanism popular. As real time progresses, miners receive fewer coins per block mined (exactly half the previous amount, which is why it’s called “halving” in the first place)

ICO – Initial Coin Offering, a play on Initial Public Offering (IPO). This is when a newcomer to the blockchain space offers its coin for cash to fund the investment. It is unregulated fundraising, and it often transcends national boundaries (and thus judicial jurisdictions). The US SEC warns that ICOs are not regulated like traditional IPOs, and buyers should be wary of the team and motives behind the project. The “equity” received are a specified number of coins, which eventually trade for fiat on an exchange or can be used on whatever platform the company is developing

Tokens – similar to coins, except they are not blockchains in their own right. These are built atop other coins (notably Ethereum and Bitcoin), and use the base-coin’s blockchain to process transactions. Some tokens built on Ethereum have billion-dollar market caps just in themselves. They use smart contracts to control who holds what on the blockchain, but they require the underlying blockchain to do anything – thus they are vulnerable to changes in the underlying blockchain, but they do add some security to that platform’s legitimacy: if several useful tokens rely on a specific blockchain tech, that tech is likely to see continued demand

Whitepaper – from the tech and dev world, this is an explanation of a technology. For legitimate coins, a whitepaper is usually a detailed technical explanation of their technology, competitive advantages, and compelling future plans. For illegitimate coins, the whitepaper is usually a couple pages of self-promotion and fluff. Succinctness does not imply poor technology, though, as the original Bitcoin paper was only a few pages.

Node – can be full or partial. Stores at least part of the entire blockchain (i.e., the history of the platform), and usually performs calculations to add more blocks to the chain. If the node solves a block, it is often rewarded with tokens or coins on the network.

On-chain/off-chain – these terms refer to where transactions occur. To combat the scaling problem, some approaches perform considerable calculations or transfers outside the blockchain, only recording the essentials of results or portions of results on the blockchain for posterity.

Some Slang Terms, Good and Bad

Whale – from finance and casino terminology, this is a large or influential player. If a whale dumps his/her stake into the market, it would cause significant waves. Whales are often the people who got in early and could buy large stakes for cheap.

Hodl – corruption (or typo, if you will) of hold. As in, buy and hold. It is used most often in bear markets, when prices are crashing and the unseasoned crypto traders panic. Hodling is just like a buy-and-hold strategy for other asset classes. Many times the bear market will only last a few hours, but posters will be proudly displaying their resolve as they “HODL!”

AFI – all fucking in, just like in gambling, when someone decides they will put all their money into the proverbial one basket. Can mean rocketing portfolio value, but most often results in tears.

__x my portfolio – when traders (or maybe people suffering FOMO) make massive and clearly unsustainable gains on their portfolios, in the range of __fold: “I 5x’ed my portfolio last week! I’m riding the cryptocurrency wave!” means “I multiplied my portfolio’s value fivefold last week, and I’m reaping the benefits of this bull market”

Riding the crypto wave – the concept that people can catch daily double-digit gains (and sometimes triple digit). Mutually exclusive with “hodl”, since people only “ride the wave” when it goes up. Then they panic and sell when it crashes, netting them losses on their portfolios. If you rode the wave, you should sell high, and if you don’t, you should hodl for that sweet, sweet runup again.

Bearwhale – a portmanteau of one with bearish sentiments and major influence. It is a whale with a bearish sentiment. They can be quite dangerous, because they may sell off large quantities at high points, depressing the price. A bearwhale sounds like a menacing threat, and it certainly is.

Buy Wall – one or more very large green candlesticks. The price may meander along at 500 for three days, but then it jumps to 800 in an hour, then to 1200 the next. This is a buywall, and it is a bit like the sideways momentum ran into a wall. Of course, a crash generally occurs afterwards, because who could resist selling at a 140% gain over two hours? Then you “buy the dip” with the proceeds, of course.

Bagholder – this is one who has hodled too long. From the English phrase “left holding the bag”: the person is stuck with a shitcoin and didn’t exit at the top of the buywall. If you hodl too long, especially if you’re AFI on a shitcoin, you will be a bagholder.

Shitcoin – it’s probably clear what this is, but it is one of the more offensive terms, and it’s thrown around quite liberally. If someone doesn’t like your coin, even if it has a decent technological and business foundation, it’s a shitcoin. But to be fair, a lot of coins are shitcoins (or maybe shittokens – that’s our contribution to the colorful crypto lexicon).

FUD – Fear, Uncertainty, and Doubt. Three concepts anathema to growth. Usually used in “spreading FUD” to refer to news articles or negative posts against one’s favorite coin. Legitimate concerns and criticisms are also FUD for the hodlers of a shitcoin and especially the shills. Admittedly, criticism does spread fear, uncertainty, and doubt. So while FUD is terrible for some hodlers, it protects a lot of long-term and risk-averse investors. Note it has negative connotations, so even if it has positive consequences, one should not employ “FUD” in a positive way.

Rekt – street slang to mean destroyed. Derived from wrecked, which sounds the same in American English. As in, your portfolio is wrecked, or this coin’s management and dev team are a train wreck. Used as a past participle, but we suppose it could be as a nominalized past participle, too: “the Rekt have lost all hope because BTC fell 50% over an hour and stayed there for more than half a day”

Shill – relatively common in English, this is a person who promotes a product. The implication is that the shill is paid to promote an illegitimate or scam product. These are useful for pump-and-dumpers, since they might get people excited to invest in a scam. Of course, if people recognizing the shilling for what it is, the reaction is swift and merciless (i.e., people yell at them in ALL CAPS on forums and the shill makes a new account). Used as both a noun and verb.

BTFD – buy the f***king dip.

FOMO – Fear of Missing Out. We recently published an article on this, and it is exactly what it sounds like: people fear missing out on the crypto wave, so they jump in with little understanding. Often affects unseasoned traders, especially when there’s a buywall or price runup. Can also apply to long-term investors who don’t understand the technology or don’t have time to read whitepapers and verify the project team.

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