A - Z of blockchain

This article seeks to provide crypto enthusiasts with a glossary of crypto terminology they might need to familiarise themselves with within the blockchain ecosystem. I have seen these terms used frequently in the ecosystem and understanding what they mean will help smoothen your transition into the crypto world.

A

• Airdrop: This is a way of publicising and promoting cryptocurrencies by sending free tokens to traders and influencers.

• All-Time High & Low: This is the highest and lowest point that a cryptocurrency has been in its history; in price and market capitalisation.

• Altcoin: This means coins alternative to Bitcoin.

• AMA (Ask Me Anything): This means a session where an individual entertains questions from the public.

B

• Bearish: This is when investors believe that there will be a fall in the price of a coin or when the market has a downward trend.

• Bullish: This is when investors believe that there will be a rise in the price of a coin or when the market has an upward trend.

C

• Circulating Supply: This means the approximate value of coins that are in circulation(supply) and available for public transactions.

• Cold Storage: This means storing your cryptocurrency offline, and it is arguably a much safer way because physical access is required.

D

• Decentralised Autonomous Organisation (DAOs): This means a decentralised open-source system that has no centralised overview.

• Decentralised Finance (Defi): This refers to the growing movement that supports the removal of middlemen or any form of a central governing body and building decentralised applications and solutions in finance. The most prominent example is the stablecoins that mirror physical currency in value.

• Degen: This means when a trader trades without due diligence and research. This is a very risky way to invest in cryptocurrency.

• Dollar-Cost Averaging: This is an investment strategy that helps to minimize the risk that might be attached to crypto trading. With this technique, investors are advised to invest disposable income steadily over a certain period of tie. An example will be a new crypto trader buying a dollar worth of Bitcoin daily.

• Do Your Research (DYOR): This is originally a non-crypto term but it is, however, being used in the crypto ecosystem to warn all investors to do adequate research before trading any coin.

E

• Ethereum Name Service (ENS): This refers to the service that allows people to obtain domain names instead of the usually complicated sequence of numbers and letters. They can use these domain names to send and receive cryptocurrency. ENS usually ends in .eth like the .com we are familiar with now.

F

• Fear of Missing Out (FOMO): This is the dread that traders experience when there is a bullish movement in the market and they do not want to miss out on it. This fear can lead to traders committing errors as they abandon logic and

  buy overpriced coins, which will lead to a loss.

G

• Gas Fees: This refers to the price that is necessary for executing a contract or completing a transfer on the Ethereum blockchain. There is no standard price for gas fees because the price is determined by the supply of computational power.

H

• Hold On for Dear Life (HODL): This term refers to when traders buy a cryptocurrency and hold on to the coin, refusing to sell. Traders often use this method when there is a bearish movement in the market.

I

• Initial Coin Offering: This is when a new cryptocurrency is sold in a bid to raise money. It is a form of crowdfunding and can also be used for publicity for a new coin. It is the crypto form of an Initial Public Offering(IPO).

K

• Know Your Customer (KYC): This is a standard financial procedure where financial institutions verify the information given to them by their clients. It is often part of an institution anti-money laundering mandate.

L

• Ledger: This is the unchangeable record of transactions on a particular blockchain. New records can be added but you cannot delete any record, this is all for easy tracking.

• Liquidity: This term refers to the ease that a coin can be bought or sold without having any sudden large impact on the market price. Liquid markets are markets that have constant supply and demand for their assets.

M

• Market Capitalisation: This refers to the total value of coins that have been mined but it does not reflect the amount of money in the market. To calculate the market cap of any coin, you have to multiply the circulating supply by the current market price. Market Cap = Current Price x Circulating Supply

• Mining: This is the process of verifying and adding a transaction to the blockchain. This is very essential work as it is responsible for the integrity of the blockchain and is also responsible for introducing new coins.

• Moon (to the Moon): This is the crypto slang for when a coin’s value is increasing.

N

• Non-Fungible Token (NFT): NFTs are digital tokens that can be used to indicate ownership of one-of-a-kind goods. NFTs are unique tokens that live on the blockchain. They can be represented by anything such as pictures, literature, songs. They are different from fungible tokens on the blockchain like cryptocurrencies such as Bitcoin and Dogecoin, which can be traded for other cryptocurrencies.

P

• Pump and Dump: This refers to when traders conspire to manipulate the price of a coin by raising it and then selling it for profit.

R

• REKT( pronounced as Wrecked): This is crypto slang for severe financial losses as a result of crypto trading. This is when a trader loses a lot of money because of some bad trades.

• Rug Pull: This is when there is a sudden abandonment of a project by developers and they run away with investors’ funds.

S

• Shitcoin: These are typically bad investments. This refers to a coin with no value or potential use.

• Smart Contracts: These are self-executing contracts on the blockchain that perform an action when a predetermined condition is met, they were first introduced by Ethereum. Transactions are permanent, public, and easily detectable thanks to smart contracts.

T

• Token: Tokens represent a right to ownership on the blockchain, and they can be used for currency, trading and investing. Token holders, like other securities holders, can use their tokens to make purchases or sell them for profit. Tokens can also have some special utilities that will allow the holder to participate in a community and enjoy the perks of that community.

W

• Wallet: A digital wallet that allows holders to access all their cryptocurrency. They can also send and receive funds with their wallets, they operate similarly to the bank account numbers that we are used to now. It can also be used to generate brand new blockchain addresses.

• Whale: A whale is someone who has a lot of cryptocurrency and can easily sway a market. The vast amount of crypto a whale has, allows the whale to influence the market at any time.

• Whitelist: This is a list that is predominantly used in the NFT space, to signify selected individuals that have access to mint NFTs before the general public can mint. They are usually an exclusive list that a lot of people hustle to get on.

• Whitepaper: A whitepaper is an explanatory document that contains a breakdown of all the features of a cryptocurrency, product, NFT, solution or service.