Cryptocurrency FAQ: Bitcoin and Blockchain’s Frequently Asked Questions

What is a Cryptocurrency?
A cryptocurrency is a cryptographically-secured form of money. Cryptography, or complicated math puzzles, are used to make transactions more secure. Today, many cryptocurrencies use blockchain technology.

What is Cryptography?
Cryptography is a type of secure communication tool that emerged during World War II. People have been speaking in code for centuries, but cryptography took code to the next level. In the digital age, cryptography has been enhanced even further. Today, cryptography is its own entire field of research, combining elements of computer science and mathematical theory.

How Many Cryptocurrencies Are There?
Some people dispute the fact that certain digital tokens are cryptocurrencies. They’ll claim XRP is not a true cryptocurrency, for example, because it’s not run in a decentralized environment. As of June 2019, there are approximately 2,200 legitimate cryptocurrencies on the market.

Why Use Cryptocurrency?
Many early cryptocurrency supporters were fueled by libertarian ideals or the cypherpunk movement (including Satoshi): they wanted to create a currency outside of the boundaries of national governments. They envisioned a future where people could transact money freely without relying on intermediaries like banks.

What is Bitcoin?
Bitcoin was the world’s first blockchain-based cryptocurrency. The first bitcoin block was mined on January 3, 2009. Bitcoin was created by Satoshi Nakamoto. Over the years, bitcoin has remained the world’s largest cryptocurrency by market cap by far, accounting for over 50% of the total market cap of the entire crypto space.

Who is Satoshi Nakamoto?
That’s a good question. The bitcoin whitepaper was published more than 10 years ago. However, we still have no idea who Satoshi Nakamoto is or was. Dozens of different names have been suggested. To date, however, nobody has been able to provide concrete proof of being Satoshi Nakamoto.

How Does Bitcoin Work?
For users, bitcoin works like any mobile app: you can send or receive payments, complete transactions, or buy stuff from merchants. Behind the scenes, bitcoin transactions are processed by a decentralized network of nodes (i.e. computers) distributed around the world. These computers solve complicated math problems while competing for block rewards. Every 10 minutes, a new block of transactions is confirmed, and that block is added to the bitcoin blockchain.

Who Controls the Bitcoin Network?
No single entity controls bitcoin – just like nobody controls the technology behind email. Bitcoin is controlled by the entire bitcoin network, with each node getting one vote. Developers can propose changes to the bitcoin protocol, but no single developer has master control to implement changes. Furthermore, if developers implement a change that miners do not like, then miners can choose to use a different version of the software. Bitcoin only works with a consensus among a majority of users, so the ‘majority’ is in control of the bitcoin network.

Does Satoshi Control Bitcoin?
Satoshi has no more control over bitcoin than any other single developer. Satoshi has not contributed publicly to bitcoin’s development since 2011. Satoshi’s biggest source of control, however, comes from the fact that he owns 1 million BTC. If Satoshi’s 1 million bitcoin stash ever moves, then it could crash markets and cause turmoil within the community.

Will Bitcoin Exist in 50 or 100 Years?
Bitcoin is designed to last forever – or at least as long as we have internet and electricity. The last bitcoin is scheduled to be mined in the year 2140. Due to the block reward halving mechanism, where block rewards get cut in half roughly every four years, the ‘inflation’ or ‘emission’ rate of bitcoin will continue to shrink. Today, we have already mined over 80% of all bitcoins that will ever be created.

How Many Bitcoins Are There?
There can never be more than 21 million bitcoins. As of June 2019, bitcoin has a circulating supply of around 17.75 million BTC, indicating that about 80% of the total supply of bitcoin has already been mined.

What Will Be the Price of Bitcoin in One Year? 5 Years? 100 Years?
If you know the answer to that question, then you could be a very rich person. During the early days of bitcoin, nobody thought bitcoin would one day be worth $20,000. 50 years from now, when bitcoin is worth $1 million, we could be telling our grandkids, “Back in my day, we used to be able to buy one bitcoin for only $8,000.” Or, we could be destitute on the streets in 10 years saying, “I can’t believe I invested my life savings in bitcoin the month before it dropped to $0”. Who knows?

How Do QR Codes Work? Why Do We Use QR Codes in Bitcoin?
QR codes are just an easy way to display information digitally. In the bitcoin world, QR codes are often used to represent a wallet address. A merchant might display a QR code, for example, to accept payments for a t-shirt. You open your bitcoin wallet app, scan the QR code, then approve the transaction to send bitcoin.

Is Bitcoin Expensive? How Do Bitcoin Fees Work?
You will not pay a fee when receiving bitcoin. However, there will be a fee when sending bitcoin. Fees are unrelated to the amount being transferred: it’s possible to send $100 million of BTC while paying the same transaction fee as sending $10 of BTC. You can choose your fee from your bitcoin wallet: a lower fee might mean your transaction gets processed more slowly, while a higher fee incentivizes miners to process your transaction more quickly. As congestion on the network rises, so too will fees. Generally, however, bitcoin fees are very competitive compared to traditional payment solutions.

Is Bitcoin Anonymous?
An average person on the street might think bitcoin is anonymous. However, this is misleading. Bitcoin is pseudonymous: your bitcoin wallet isn’t tied to your personal identity, but someone can check your bitcoin wallet to view your balance, transactions, and other information. There are ways around this – say, by using HD wallets to hide your full balance, or by using tumblers to obfuscate the source of your crypto. However, if you’re looking for a truly anonymous cryptocurrency, then bitcoin is not your best option.

What is Bitcoin ‘Mining’? What Are Bitcoin ‘Miners’?
The community has adopted the term ‘mining’ to refer to the creation of new bitcoins. Someone is said to be ‘mining’ bitcoins if their computer is running bitcoin’s client software; their computer is working as a node on the bitcoin network, and that node can earn a block reward by mining a block. When a computer is mining, the computer is trying millions of different combinations of letters and numbers each second in an attempt to guess the right one.

Can I Make Money with Bitcoin Mining in 2019?
You can make money with bitcoin mining in 2019. However, don’t expect to run bitcoin mining software on an ordinary computer or laptop. Those days are long gone. To profitably mine bitcoin today, you’ll need to buy an ASIC – a specialized computer dedicated specifically to bitcoin mining. You’ll also need access to cheap electricity – say, between 4 and 6 cents per kilowatt hour. Today, the people making money mining bitcoin tend to be the ones who run large-scale mining operations and have thousands of machines.

Why Do Bitcoins Have Value? Is It True Bitcoins Are Backed by ‘Nothing’?

A layperson might tell you that you’re foolish to invest in bitcoin because “it isn’t backed by anything”. By this logic, the US Dollar isn’t backed by anything because you can’t exchange it directly for gold anymore. The value of bitcoin comes from its technology, its usability, the apps and software that allow you to access bitcoin, and its acceptance worldwide. All of these characteristics affect the demand of bitcoin. As demand increases, and supply remains relatively stable, prices will inevitably increase.

Is Bitcoin a Ponzi Scheme? Is Bitcoin an Elaborate Scam?
A Ponzi scheme is a fraudulent investment scam where someone convinces you to invest money by promising you high returns. The fraudster continues to accept deposits, promising everyone enormous returns. The fraudster never actually invests the money in a legitimate enterprise; instead, the returns of older investors are paid by the deposits of newer investors until the scheme inevitably collapses. Based on this definition, bitcoin is not a Ponzi scheme. There’s no central authority benefiting from the rise of bitcoin’s price. Someone who holds bitcoin has no incentive to recruit others to buy bitcoin (aside from the fact that greater demand leads to higher prices).

Doesn’t Bitcoin’s Volatility Make it a Bad Currency?
Bitcoin’s volatility can certainly be seen as a problem for its mass adoption. Why would a merchant accept 1 BTC for a $5,000 product today when the merchant doesn’t know if the 1 BTC will be worth $10,000 or $1,000 within a year? Of course, supporters will say that with greater adoption comes greater stability. They’ll also say that bitcoin’s value is always stable relative to bitcoin: 1 BTC will always equal 1 BTC.

Can’t Someone Just Buy All Bitcoin in Circulation?
Wouldn’t someone be able to crash the bitcoin network by buying all bitcoins currently in circulation? It’s certainly possible for some multi-billionaire to theoretically buy all bitcoins that are currently available for sale on exchange marketplaces. However, these bitcoins only represent a fraction of the total number of bitcoins in circulation. Plus, new bitcoins will continue to be issued for decades. For these reasons, even the most determined and wealthy buyer would not be able to buy all bitcoin in circulation.

Why is Centralization a Bad Thing? Why Do We Need Decentralization?
Decentralization is a key tenet of cryptocurrency. But why is it so important for cryptocurrencies to be decentralized? Why is centralization a bad thing? The idea is that anything centralized can be arbitrarily regulated, censored, devalued, or otherwise controlled by the centralized entity in charge. Centralization, by definition, means someone has more control.

Should I Invest in Crypto?
We’re not in the business of giving out investment advice. However, we recommend talking to a qualified investment advisor to help you answer that question. As with any investment, it’s important for you to do your own research.

Is Bitcoin Legal?
Countries and regulators have debated the legality of bitcoin since launch. Generally, bitcoin is legal in most of the world. Today, it’s typically treated like a piece of property as opposed to a security, a stock, or any other type of financial asset. The SEC has indicated that they do not believe bitcoin is a security because it’s not connected to any specific for-profit corporation, nor was there an initial coin offering (ICO) during which bitcoins were sold. ETH, XRP, and other major cryptocurrencies, however, could be declared securities at some point in the future, creating legal headaches. For now, however, bitcoin is totally legal in most of the world.

How Do Taxes Work with Bitcoin?
Countries are struggling to determine the legality of bitcoin. They’re also struggling to determine how to tax bitcoin. Today, most jurisdictions treat bitcoin like property instead of currency. That means you need to pay capital gains tax on any profits you have made by buying low and selling high. It also means you have to report each time you have bought and sold crypto. Crypto taxes can get messy for those buying and selling a lot of crypto. Crypto tax software or crypto accountants may be able to help.

How Do I Store Bitcoin?
One of the coolest parts about bitcoin is that you can store it in a number of different ways. Some people use software on their phone, tablet, or computer called a wallet. This wallet stores your private keys, allowing you to access your crypto at any time. Other people use a paper wallet, where their seed phrase (a series of 12 or 24 words) has been written onto a physical piece of paper. Some people use a ‘brain wallet’, simply memorizing their 12 or 24 word seed phrase in their heads.

How Do I Buy Bitcoin?
There are more places to buy bitcoin than ever before. Investing apps like Robinhood let you buy bitcoin directly from the same platform where you buy stocks and other financial assets. Alternatively, you can buy bitcoin from a bitcoin exchange, a bitcoin ATM, another individual willing to sell bitcoin P2P, websites like LocalBitcoins, and more.

Is Bitcoin Safe?
Bitcoin isn’t inherently dangerous. It’s safe to use. If you start moving around large sums of money and don’t know what you’re doing, however, then it’s certainly possible to make an expensive mistake and lose access to your bitcoin. If you mistakenly send $1 million of BTC to a BCH wallet address, for example, then you could be in trouble.

What Hardware Wallet Should I Use?
We are not officially sponsored by any crypto hardware wallet provider, so we’re free to recommend any one we like. The two most popular (and longest running) crypto hardware wallets are Trezor and the Ledger Nano S. In recent years, however, these two wallet makers have seen competition from BitBox, Coldcard, and KeepKey.

What’s the Difference Between Bitcoin and Bitcoin Cash?
Bitcoin (BTC) and Bitcoin Cash (BCH) have a shared history: they both come from the same original bitcoin blockchain. On August 1, 2017, Bitcoin Cash supporters executed a hard fork, splitting away from the main BTC blockchain, thereby creating BTC and BCH. Today, BTC remains the dominant version of bitcoin, and it’s what most people are talking about when they say ‘bitcoin’. Bitcoin Cash, however, remains very relevant and actively developed. Bitcoin Cash focuses on fast, cash-like transactions facilitated by better on-chain scaling, while BTC focuses on being a slower store of value instead of a daily medium of exchange.

What Are AML, CTF, and KYC?
When signing up for a new crypto exchange account, you may encounter terms like Anti Money Laundering (AML), Counter Terrorist Financing (CTF), and Know Your Customer (KYC). These are various procedures that financial institutions have agreed to implement. Banks have a legal obligation to ‘know their customers’ and ensure customers aren’t using the bank for money laundering or other illegal activities, for example. To meet KYC and AML requirements, a crypto exchange might ask you to upload a photo of your government-issued ID or even a selfie of yourself holding that ID.

What is Ethereum?
Released in 2015, Ethereum is an open source, blockchain-based distributed computing platform. Some describe Ethereum and its Ethereum Virtual Machine (EVM) as like a global supercomputer. Today, ETH is the world’s second or third largest cryptocurrency by market cap (XRP has jumped into the second space periodically over the last few years). Ethereum remains one of the biggest and most heavily-developed open source projects in the crypto space.

How Long Do Crypto Transactions Take? Is Crypto Fast?
Crypto payment speeds vary widely based on the network. Blocks of transactions are confirmed on bitcoin every 10 minutes, for example. On other networks, payments are processed in fractions of a second, delivering speeds similar to Visa or MasterCard. Generally, a bitcoin payment requires at least 3 confirmations to be processed, with each confirmation taking anywhere from a few seconds to 90 minutes (although 10 minutes is the average). Overall, bitcoin is one of the slowest (but most secure) crypto networks in the world.

What Are Proof of Work and Proof of Stake?
Proof of Work (PoW) and Proof of Stake (PoS) are consensus mechanisms: they’re systems that allow a group of individuals to come to a consensus or reach an agreement about something. With bitcoin, consensus is achieved by forcing miners to show ‘proof’ that they did the ‘work’. In this case, the ‘work’ is the hash, and other nodes on the network can instantly verify that your hash is correct. Proof of stake works in a different way, with nodes achieving consensus by ‘staking’ coins on the network, or locking coins in their wallet.

Has Bitcoin Been Hacked?
Security flaws have been found and fixed in bitcoin over the years. To date, all of these flaws have been found before any major damage can be done. As more bitcoin issues are discovered and fixed, the network becomes increasingly secure. Of course, bitcoins have been stolen from exchanges that have been hacked, or through security flaws on other platforms. However, none of these thefts have occurred due to native security problems within bitcoin. You don’t blame the US Dollar system if robbers steal $1 million from a bank.

Will Quantum Computing Kill Crypto?
Quantum computing is a futuristic concept that could become a reality. Quantum computing would make today’s supercomputers look like cheap calculators. They would blow the processing power of today’s systems out of the water. Any system relying on cryptography is, generally speaking, vulnerable to quantum computing. If a quantum computer is invented, then it would threaten bitcoin, traditional banking systems, national security, and all sorts of other systems that rely on encryption and cryptography. Some cryptocurrencies are designed to be quantum-resistant, which means they would be less susceptible to a quantum computer’s power if and when it gets developed.

Address: An address is your ‘location’ on a blockchain. It’s the place where your cryptocurrency can be sent to or from. With most blockchains, your address is a string of numbers and letters. You can share your address publicly by sharing this string of numbers and letters. Or, you can share your address via a QR code. If someone knows your address, they can (typically) view the funds sent and received at that address, although they have no other access to the address or your funds whatsoever.

Airdrop: A growing number of crypto startups have begun distributing tokens via an airdrop. Instead of selling tokens via an ICO for cash, startups will distribute tokens for free via an airdrop. Commonly, startups will take a ‘snapshot’ of the Ethereum or bitcoin blockchain on a certain date, then ‘airdrop’ tokens to all addresses on that blockchain. Any address with a balance of more than 0.1 ETH at the time of the snapshot may receive tokens via an airdrop, for example. For some companies, an airdrop is a legal play designed to avoid the implications of a token sale, which can often resemble a security sale. For other companies, an airdrop is simply a way to distribute tokens to members of the community.

Algorithm: An algorithm is a set of rules that a computer program must follow when solving a problem. Google uses an algorithm to process search queries, for example. In the blockchain and crypto world, an algorithm can be used to secure a blockchain or control distribution of tokens, among many other purposes.

All Time High (ATH): The all time high is a particular coin’s highest price of all-time. Bitcoin reached its all time high (ATH) of $19,700 in December 2017, for example. Bitcoin has never reached a higher price.

All Time Low (ATL): The all time low is the lowest price of a particular coin in history. It’s the lowest that a coin has ever been sold for. For bitcoin, it’s tough to calculate the all time low (because bitcoin used to be available for free or for pennies). However, the all time lows for other currencies is easier to calculate – say, if the coin was sold via an ICO.

Altcoin: Bitcoin was the world’s first true blockchain-based cryptocurrency. Any cryptocurrency that has come after bitcoin is called an alternative coin – or altcoin.

Alpha: The first version of a platform, software, or blockchain created by a development team. An alpha may be released prior to a beta or testnet.

Air Gapped: A device that is entirely offline, meaning that there’s a literal ‘gap of air’ between the device and an internet connection. Typically, an air gapped device has never once been connected to an unsecured network (like the internet) and never will be. Data transfers – like crypto deposits – are done using hardware wallets and similar devices.

Anarcho-Capitalism: Do you believed decentralized institutions can run society better than today’s current centralized institutions? If so, then you may be an anarcho-capitalist. Anarcho-capitalist is a political philosophy that believes in removing centralized power structures in favor of decentralized power structures. The political philosophy is heavily concerned with private property, privacy, free markets, and self-ownership, many of which are principles that are also familiar to the crypto and blockchain world.

Anti Money Laundering (AML): Financial institutions need to abide by Anti Money Laundering (AML) regulations according to international agreements. AML is a set of international laws designed to prevent criminal organizations from laundering money through cryptocurrency exchanges into real world cash. In practice, AML regulations are the reason why you need to verify your identity with most crypto exchanges. They go hand-in-hand with Counter Terrorism Financing (CTF) and Know Your Customer (KYC) verification.

API: An API is an Application Programming Interface (API). It’s a set of routines, protocols, and tools that allow third party software programs to interact with a given application. An exchange might release an API that allows traders to interact with the exchange via third party software, for example. The API will specify how the software components interact, including what data to use and which actions should be taken. Thanks to an API, developers don’t have to individually create their own programs to interact with a particular program or platform.

Arbitrage: Arbitrage is a fancy word for saying ‘buy low, sell high’. In the crypto world, arbitrage involves taking advantage of high prices on one exchange and low prices on another. You might buy bitcoin for a cheap price from a South African bitcoin exchange, for example, only to sell at a higher price on a Venezuelan bitcoin exchange. You can make money by taking advantage of the price difference, especially if you’re buying or selling a high volume of crypto.

Ashdraked: This term was more popular in the early days of bitcoin. ‘Ashdraked’ refers to a situation where you lose all your money – specifically, where you lose all your money shorting bitcoin. The term comes from a Romanian trader who continued shorting BTC during the early days of the coin as it went from $300 to $500, continuously doubting the power of bitcoin. Today, getting ‘ashdraked’ means you lost a lot of money shorting a token.

ASIC: ASIC stands for Application Specific Integrated Circuit. In the early days of bitcoin, users had to use ordinary graphics cards (GPUs) to mine crypto. Today, most mining is done using ASICs, which are high-powered processing units designed specifically to mine crypto – and do nothing else. There are ASICs for bitcoin mining and Ethereum mining, for example, that allow you to mine with 100x more efficiency than the best GPU on the market.

Astroturfing: A marketing campaign where a sponsor is masked or hidden, making it seem like a marketing message came from a community and is strongly supported by that community, when it reality the whole campaign is sponsored by a third party. The third party has ‘astroturfed’ their way into a community.

Atomic Swap: An atomic swap is a crypto exchange where an individual is directly exchanging one crypto for another on a different blockchain without using an intermediary like an exchange. Unavailable during the early days of blockchain technology, atomic swaps now allow users to easily trade between altcoins at will.

Attestation Ledger: An account book designed to provide evidence of individual transactions. An attestation ledger is typically used to prove or ‘attest’ that a particular financial transaction took place, or to prove authenticity of transactions or productions.

Bag: A bag is a significant amount of cryptocurrency that has less value than when you bought it. Let’s say you bought a cryptocurrency called ABC when it was $10 apiece. Now, it’s $1 apiece and you still hold 300 ABC tokens. In this case, you may be a ‘bagholder’. Typically, ‘bag’ refers to a crypto that is not expected to return to its all time high anytime soon.

Bagholder: A bagholder is a person holding a ‘bag’. You might be holding a large quantity of a particular crypto that is no longer worth anything near the price at which you bought it.

Bear: A crypto bear is similar to a bear in any market. A bear believes the market is going to continue to decline. You are ‘bearish’ about bitcoin if you believe bitcoin will sink from $5,000 to $3,500 in the near future, for example.

Bear Trap: Some groups of traders will use a technique called a bear trap to manipulate the price of cryptocurrency. The bear trap involves selling a large amount of cryptocurrency at a specific time, fooling the market into thinking the ‘bear market’ has begun, causing prices to depreciate even further as traders dump their assets. Then, the traders who initially launched the bear trap ‘release the trap’, buying back into the crypto at lower prices. The price rebounds, allowing the ‘bear trappers’ to make a profit.

Bitcoin ATM: A bitcoin automated teller machine (ATM) allows you to trade bitcoin in person. Some bitcoin ATMs are one-way ATMs: you can deposit cash and receive bitcoin. Other bitcoin ATMs are two way machines: you can deposit or withdraw bitcoin in exchange for cash. Originally, bitcoin ATMs were a novelty. Today, they can be found in cities all over the world.

Bitcoin Improvement Proposal: Bitcoin is developed by a decentralized team. This team agrees or disagrees on certain bitcoin improvement proposals (BIPs). These BIPs are discussed, given numbers (like BIP 139), then added to the bitcoin protocol if accepted. A specific proposal may be submitted by an author. The BIP author is responsible for gathering feedback and consensus for a suggested improvement within the community.

BitLicense: The State of New York was one of the first jurisdictions in the United States to pass comprehensive legislation for crypto exchanges and other crypto companies. Today, New York requires many of these companies to obtain a BitLicense to legally operate in the state. The BitLicense application process is operated by the New York State Department of Financial Services (NYSDFS).

Bits: A ‘bit’ is a sub-unit of a single bitcoin. There are 1 million (1,000,000) bits in one bitcoin.

Block: Blockchains are made up of a ‘chain of blocks’. Each ‘block’ on that chain is a group of transactions. A single BTC block, for example, is made up of around 1,000 different transactions.

Blockchain: A blockchain is a distributed ledger spread across a network of nodes. The ledger provides a unified copy of all transactions, with all changes shared across the network of nodes based on a pre-agreed-upon set of rules.

Block Explorer: As blockchains like bitcoin were growing, people realized we needed an easy way to examine these blockchains. Block explorers are online tools that display all transactions and blocks on a particular blockchain. You can use a bitcoin block explorer to check all transactions in bitcoin history – from January 2009 all the way to the present day. There are block explorers for most major cryptocurrency blockchains, making it easy to verify any information.

Block Height: The block ‘height’ is the total number of blocks in a blockchain before that point. A block that was just processed on the bitcoin blockchain might have a block height of 931124, for example, indicating that there were 931,124 blocks before that block was added to the bitcoin blockchain.

Bollinger Band: In the mid 1980s, a trader named John Bollinger created a formulaic method known as the Bollinger Band method. Today, Bollinger Bands are a type of statistical chart characterizing the price and volatility of a financial instrument or commodity over time. In crypto, the Bollinger Band is plotted two standard deviations away from the simple moving average (or exponential moving average in some cases).

Bots: Bots, or robots, are automatic trading software programs that execute trade orders quickly based on a pre-set algorithm or series of rules. You can find crypto trading robots online that promise to give you 5% ROI for month, for example.

Broker: A third party – like an exchange – acting as a middleman between you and an investment market. An exchange can serve as a broker, for example.

Brute Force Attack: A brute force attack, or BFA, involves using automated software to repeatedly try a different combination in order to guess a password. If you know the password is a number between 1 and 1 million, for example, then you might write a computer software program that guesses every number from 1 to 1,000,000 to ‘brute force’ your way into a system.

Bubble: A bubble is a market condition where market participants have driven the price of an asset up beyond its reasonable value. When bitcoin surged to $19,700, for example, you could argue that bitcoin was in a bubble. There have been countless bubbles in traditional markets as well, including the Dot Com Bubble of the 1990s.

Bug Bounty: Bug bounty programs reward ethical hackers in exchange for finding bugs. A developer might set aside $1 million for bug bounties, for example, because they want to encourage ethical hackers to disclose exploits to the team instead of exploiting them for their own personal gain. Ethical hackers are rewarded for identifying potential security breaches in a crypto startup’s code or in a blockchain’s code.

Bull: A bull believes the market will continue going up. The bull is optimistic that market conditions will rise in the near future. You might be ‘bullish’ about the price of bitcoin if you believe that the price will rise from $5,000 to $8,000 by the end of the year, for example.

Bull Trap: -Similar to a bear trap, a bull trap tricks people into thinking a cryptocurrency’s bull run is underway. A trader or group of traders will buy a crypto en masse, causing the price to rise substantially, tricking the marketing into thinking a bull run is underway. As prices rise, the traders who initially ‘set the bull trap’ sell their assets for profit.

Buy the Dip: Buying the dip (BTD), also known as ‘Buying the f***ing dip’ (BTFD), is an expression you’ll hear from supporters of a particular cryptocurrency as the price drops. When the price of BTC plummets 20% in 24 hours, for example, you might see repeated calls to ‘buy the dip’ and take advantage of a ‘20% off sale’ on bitcoin.

Buy Wall: A buy wall refers to a large trade order that is set to execute when the price of a cryptoasset reaches a certain level. Somebody may have setup a buy wall to buy 1,000 BTC when the price drops below $3,000 USD, for example. In this case, the price of BTC may be expected to rebound when the price hits that buy wall, thus preventing the cryptocurrency from falling below that buy wall.

Burned: A token may be said to be ‘burned’ when it’s no longer spendable or has been made permanently unusable.

Byzantine Generals Problem: The Byzantine Generals Problem refers to a crucial problem with consensus algorithms. It’s hard to get multiple groups who don’t one another to agree on a specific truth. The problem refers to an historical issue where a group of Byzantine generals were besieging a city. No single general had a big enough army to completely capture the city on his own. The generals needed to coordinate their attack to overwhelm the city en masse. However, the generals’ camps had been infiltrated by spies, and no general could trust the message sent by another general. The generals needed to discover a way to come to consensus without trusting one another. In the crypto world, bitcoin creator Satoshi Nakamoto was famously able to solve the Byzantine generals problem and create a decentralized consensus solution between trustless parties.

Byzantine Fault Tolerance: Fault-tolerant distributed computing systems have a property called Byzantine Fault Tolerance (BFT). They reach consensus through a mechanism where, even if multiple components fail within that mechanism or multiple parties cannot be trusted, consensus can still be reached. The algorithm can ‘tolerate’ a ‘fault’ within the algorithm to solve the Byzantine generals problem, so it’s Byzantine Fault Tolerant.

Candlesticks: Crypto charts (and general mainstream financial charts) can be displayed using candlesticks. A candlestick is a graphing technique that shows price changes over time. Each candle provides four points of information, including the opening price, closing price, high price, and low price. These points are all displayed on a ‘candlestick’, or a single bar graph.

Cash: Cash is a physical form of a currency, like banknotes or coins.

Centralized: An organization structure is said to be ‘centralized’ when a small number of people are in control of an entire network.

Central Ledger: A central ledger is maintained by a centralized agency (like a bank), giving users a centralized directory of all financial transactions. While bitcoin is a decentralized ledger, most traditional financial ledgers are centralized ledgers.

Central Processing Unit (CPU): A central processing unit, or CPU, is the ‘brains’ of a computer, coordinating different components to organize processing power. CPU clock speed can be measured in gigahertz or GHz.

Change: When you give a cashier $20 to pay for a $15 bill, you get change. Just like an ordinary transaction, bitcoin transactions can have change. Bitcoin transactions are made up of inputs and outputs that interact with one another in a system called Unspent Transaction Output. When you send bitcoin, you can only send bitcoin as a whole output, and the remaining bitcoin are sent back as change.

Chargeback: Let’s say you buy something with your Visa credit card and then later ask for a refund. The retailer refuses to honor your refund so you talk to Visa. Visa – or any credit card processing company – processes the refund request and issues a chargeback. A chargeback reverses a fraudulent or disputed transaction, canceling the transaction so it never took place.

Chain Split: A chain split is another name for a fork. A chain split occurs when a blockchain splits into two components – say, if one part of the community disagrees about certain proposed rule changes.

Cipher: A cipher is the name for an algorithm that encrypts and decrypts information. It’s the ‘secret password’ to solving encryption.

Circulating Supply: How many coins of a particular cryptocurrency are currently being circulated? The circulating supply of a cryptocurrency is the approximate (or exact) number of coins currently circulating in the market in the hands of the general public. If a company sells 200 million ABC tokens during an ICO, for example, and distributes 150 million coins to users and 50 million to the founding team, then the coin has a total circulating supply of 200 million ABC tokens.

Client: A ‘client’ is a fancy name for a software program that can access and process blockchain transactions on a local computer. You might download a bitcoin client, for example, to function as a wallet and hold your crypto funds.

Close: What was the last price of an asset before markets close? This is the ‘closing price’ of an asset. In crypto markets, the markets never close anywhere, so there isn’t a ‘close’ as in traditional markets.

Cloud Mining: Mining involves using processing power to solve complicated math problems. With cloud mining, this processing power is organized via the cloud, with different users contributing processing power across the cloud. Instead of having a centralized mining operation, for example, a company might have a decentralized cloud mining operation.

Coin: A coin is another name for a cryptocurrency. Some people call bitcoin a ‘coin’, for example.

Coinbase: Coinbase can refer to two things. There’s a San Francisco-based crypto exchange giant called Coinbase. In original bitcoin terminology, however, the Coinbase refers to the transaction included in a block by requirement. The output of the Coinbase directs the network where to send the mining reward. With bitcoin, the Coinbase has a 100 byte size input, and messages can be attached or used as an extra nonce.

Cold Storage: When coins are held offline in a server, computer, or set of servers, they’re said to be held in cold storage. Ideally, most exchanges store users’ funds in cold storage, which means they’re offline and separated from internet-based hackers. Users can also hold their funds in cold storage – say, by keeping their cryptos on an offline wallet like Trezor or the Ledger Nano.

Confirmations: Bitcoin transactions require a certain number of confirmations before they’re official. A bitcoin transaction is added to the blockchain after one confirmation. Each additional block referencing that transaction is another confirmation. Some transactions – like withdrawing money from the exchange – require 3 to 6 confirmations. Other bitcoin transactions can be confirmed after 1 to 2 confirmations.

Consensus: ‘Consensus’ is an agreement between multiple individuals or groups. In the blockchain world, participants on a blockchain come to consensus using consensus mechanisms like proof of work (PoW) or proof of stake (PoS). Using these mechanisms, nodes reach ‘consensus’ on the order of blocks in the blockchain and various rules.

Consortium Blockchain: Not all blockchains are public and transparent like the bitcoin blockchain. Some blockchains are consortium blockchains, which are privately-owned and operated blockchains where a consortium – like a corporation and its subsidiaries or a group of companies – share information in a blockchain without disclosing the information to the public.

Correction: In crypto markets, a ‘correction’ refers to a sharp reversal of ongoing trends. Bitcoin might ‘correct’ down to the $5,000 range after surging to $6,000 in a 24 hour period.

Co-Signer: Some wallets require multiple signatures (they’re multi-sig wallets). These wallets are controlled not by one person, but by two or more co-signers.

Cryptocurrency: Cryptocurrency is a digital medium of exchange that uses strong cryptography to facilitate secure financial transactions, control the creation of additional units, and verify transactions. Modern cryptocurrencies are typically based on a blockchain.

Cryptography: A field of study involving techniques for secure communications in the presence of third parties. It comes from the Greek words for ‘hidden, secret’ and ‘to write’. In the blockchain world, cryptography secures blockchains and cryptocurrencies using advanced encryption techniques.

Cryptographic Hash Function: Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 algorithm is one example of a cryptographic hash function. This algorithm outputs a cryptographic hash used in future blockchain transactions.

Cryptojacking: Using another party’s computer to mine cryptocurrency without their consent. You might install software on your computer that looks innocent, but actually mines cryptocurrencies secretly in the background.

CryptoTwitter: A term to collectively refer to the social media accounts of those involved in the crypto space. Many of the crypto industry’s most prominent names are active on Twitter, giving rise to the name CryptoTwitter.

CTF (Counter Terrorist Financing): CTF is a regulatory requirement for many financial institutions, including crypto exchanges. CTF is typically paired with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.

Custodial: Custodial refers to owning or storing your keys. If you have a ‘custodial’ setup, it means your keys are being held by a service provider while the service provider gives you a login account. Today, top exchanges provide custodial crypto services to major investment institutions, allowing institutions to participate in crypto markets without actually handling their own crypto.

Cypherpunk: Popular in the 1980s and 1990s, the cypherpunk movement involved advocating for the mass adoption and use of strong cryptographic solutions and privacy-boosting technologies to facilitate social and political progress. Bitcoin creator Satoshi Nakamoto is arguably the most famous cypherpunk activist in history. Other prominent members of the crypto community and the early days of bitcoin were also involved with cypherpunk.

Dark Web: The dark web is a part of the internet that exists on darknets, preventing it from being indexed on search engines. The term ‘dark web’ or ‘darknet’ is often associated with drug marketplaces and other illicit websites. However, university database and online corporate databases can also be part of the dark web: they’re available on the internet, but not indexed by search engines and not accessible to everyone.

Date of Launch: The date on which an ICO is expected to begin.

Dead Cat Bounce: A sudden rebound after a large price drop. If the price of bitcoin suddenly falls $1,000 and then rebounds with a $200 gain shortly thereafter, the community may call it a ‘dead cat bounce’. The idea is that even a dead cat will bounce if it hits the ground hard enough, regardless of whether there’s any ‘life’ in the project or merit to the idea.

Decentralized: A distributed group of individuals, corporations, or actors working together for a common purpose. A team may be decentralized around the world, for example. There are no centralized authorities with more power, and all nodes on the decentralized network are working for a common goal.

Decentralized Applications (dApps): A type of application running on a decentralized network to avoid a single point of failure. Ethereum, one of the world’s largest blockchain projects, is home to more dApps than any other platform. A game like CryptoKitties is a dApp because it’s an app running on a decentralized platform.

Decentralized Autonomous Organizations (DAOs): Decentralized autonomous organizations are organizations run through a pre-set group of rules encoded in smart contracts. Instead of relying on a centralized governance structure – like a traditional corporation or organization – a DAO runs with a decentralized community. Often, democratic decision-making systems are in place, allowing the community to change rules or make major decisions if there’s majority support. See also: The DAO.

Decentralized Autonomous Initial Coin Offerings (DAICOs): Initially promised by Ethereum co-creator Vitalik Buterin, a DAICO is a method that allows for projects to be funded by a decentralized community. The community contributes funds to the project, but those funds can be returned if certain pre-set conditions are not met.

Decentralized Exchange (DEX): A peer-to-peer exchange where users can trade cryptocurrencies without the need for a centralized power – like a traditional centralized exchange. With a decentralized exchange, you never have to deposit funds into an exchange. Instead, you often swap coins directly with the other user, with the trade occurring instantly to prevent either user from losing funds.

Decryption: The process of ‘solving’ encryption; when you decrypt something, you’re transforming unreadable, encrypted data into readable, decrypted data.

Deflation: Reduction of the general level of prices in an economy. If the price of goods, services, groceries, gas, and commodities drops, then a country may be going through a period of deflation. Most modern countries experience gradual inflation over time. Deflation can also refer to the deflationary monetary policy of bitcoin, where there’s a fixed supply of bitcoins (21 million). This is different from the US Dollar and other fiat currencies, where the U.S. Department of the Treasury prints approximately $560 million worth of USD notes every day.

Delegated Proof of Stake (dPOS): A consensus mechanism where a community votes to give certain ‘delegates’ more authority over a decentralized network. Instead of having all members of the community participate in proof of stake consensus, a dPOS consensus mechanism delegates certain participants to govern the consensus process. The main benefit is to increase efficiency while still achieving consensus across a distributed community in a democratic and fair way.

Depth Chart: A graph plotting the requests to buy (bids) and the requests to sell (asks) on a chart, making it easy to get at-a-glance information about a particular crypto market. The bid and ask orders converge at a point where the market is most likely to accept a transaction (where the lowest sell price meets the highest ask price).

Derivative: A tradeable asset or trading product based off of an underlying asset, index, or interest rate. In December 2017, we saw the first launch of regulated bitcoin derivatives with the launch of bitcoin futures.

Derivatives Market: A public market where traders can buy and sell derivatives, futures contracts, options, and other forms of cryptocurrency assets.

Deterministic Wallet: A type of wallet that derives keys from a starting point called a asset. As long as you have this seed, you will be able to backup and restore any wallet.

Difficulty: In the crypto world, difficulty refers to how much processing power is required to discover a new block. In bitcoin and other crypto blockchains, the difficulty is raised or lowered periodically based on the amount of hashpower deployed by the network of miners. The difficulty of the bitcoin network typically increases every two weeks, which means it is becoming more and more difficult to mine a single bitcoin block.

Digital Asset or Digital Commodity: Not all digital tokens or blockchain-based tokens are cryptocurrencies. Some tokens fall into their own unique categories. That’s why some people refer to certain blockchain-based tokens as digital assets or digital commodities. They could be digital versions of a tangible asset – like a token representing a real ounce of gold. Or, they could be digital versions of an intangible asset – like XRP on the XRP blockchain.

Digital Currency: A broad term encompassing a wide range of tokens and online currencies, including cryptocurrencies, digital money, electronic currencies, and more. Generally, digital currency refers to a type of currency only available in digital form, allowing for instantaneous transactions and borderless transfer of ownership.

Digital Identity: Digital representations and storage of personal information, including the name, address, Social Security Number, and more, on the blockchain. Your digital identity can be decentralized and used for identity verification. It may be stored on a blockchain, for example, and accessed every time you want to login to a service. Some say digital, blockchain-based identities are the future of authentication.

Digital Signature: Digital signatures are digital codes generated by key encryption. This digital code is attached to an electronically-transmitted document to verify its contents and the sender’s identity. A sender can use a digital signature to verify ownership of a wallet or digital asset.

Directed Acyclic Graph (DAG): A structure built out in one single direction and in such a way that it never repeats. The structure consists of many vertices and edges, with each edge directed from one vertex to another, which means there’s no way to start at any vertex and follow a consistently-directed sequence of edges that eventually loops back to the vertex again. Some see directed acyclic graphs as like a more advanced version of blockchain – or at least an alternative blockchain-like organizational structure.

Distributed Consensus: When consensus is distributed across a network, enabling the network to operate in a decentralized way without direction or control by a centralized authority. The agreement (consensus) is split (distributed) among a network of participants before a decision is reached.

Distributed Denial of Service Attacks (DDoS): DDoS attacks involve using a large amount of processing power (typically, a large network of computers) to flood a server (like a website’s server) with information, disrupting the services of a host by overloading the system with requests. This takes down the website. DDoS attacks are as old as the internet, but they have become increasingly important online as.

Distributed Ledger: A ledger is an organized collection of data – like a spreadsheet containing a list of transactions. A distributed ledger is a copy of that ledger spread across a series of nodes in a network. Think of a shared Excel spreadsheet split between 1,000 different computers, with all changes shared across all computers and spreadsheets simultaneously. In the crypto world, a blockchain is a type of distributed ledger. Some people also use the term distributed ledger technologies (DLTs) to refer to blockchains, directed acyclic graphs, and other DLTs.

Distributed Network: A type of network where processing power and data are spread over nodes without a centralized data center or authority. There’s no centralized individual or company in charge of the network, and no single person has control over the network.

Dolphin: When someone owns a huge amount of crypto, they’re called a ‘whale’. If you own a modest amount of crypto, then you might be called a dolphin. Some people also use the term fish or minnow to refer to smaller crypto holders.

Dominance: A measure of how much influence bitcoin has over the general crypto market, typically measured as a percentage. If the total market cap of all cryptocurrencies (including bitcoin) combined is $300 billion, and bitcoin accounts for $150 billion of that market cap, then the BTC dominance rate is at 50%.

Double Spending: One of the major innovations with blockchain-based currencies over other electronic currencies is that blockchain prevents double spending issues. It doesn’t allow you to send the same coin in two different transactions simultaneously. However, if malicious actors take control of the network, or if an exploit is discovered, it’s possible to illegitimately spend money more than once.

Dump: Selling off all your coins.

Dumping: The market may be ‘dumping’ when many users are selling off their coins, creating downward price pressure.

Dust Transactions: Tiny transactions designed to maliciously flood a network and overwhelm it. Typically, the people creating dust transactions are looking to disrupt the network.

DYOR: Do Your Own Research. You might see a post on Reddit advising you to “Do Your Own Research” instead of relying solely on the opinions of users online.

ELI5: Explain it Like I’m 5. A request for someone to explain something in a way that a 5-year old can understand.

Enterprise Ethereum Alliance (EEA): A group of Ethereum startups, developers, corporations, and independent users working together to expand the business (i.e. enterprise) uses for Ethereum.

Emission: The rate at which a blockchain releases (emits) new coins. Bitcoin’s emission rate is 12.5 BTC every block, every 10 minutes, for example. You may see emission referred to as emission curve, emission rate, and emission schedule.

ERC-20: A token standard created for Ethereum, involving the use of smart contracts to control digital token rules – like the emission rate and total number of tokens. Today, there are hundreds of major tokens built on the Ethereum blockchain using the ERC-20 token standard.

ERC-721: Another token standard for Ethereum. ERC-721 tokens are non-fungible Ethereum tokens introduced in a proposal from 2017. Similar to the ERC-20 token standard, ERC-721 allows smart contracts to control rules for tradeable tokens on the Ethereum blockchain.

Escrow: Escrow is a contractual agreement where a neutral third party acts as a middleman between two parties. The third party holds funds ‘in escrow’ while a transaction takes place. Once the third party has verified that each party has sent the promised amount, the funds in escrow are released to either party, completing the transaction. Some blockchain-based smart contracts operate as escrow services automatically.

Ether: Ether, or ETH, is a digital token used on Ethereum. ETH was designed to incentivize machines on the network to execute requested operations. Today, it continues to be one of the top 2 or 3 largest cryptocurrencies by market cap.

Ethereum Improvement Proposal (EIP): Ethereum Improvement Proposals (EIPs) are like Bitcoin Improvement Proposals (BIPs). They’re suggested changes for the Ethereum network. Token standards like ERC-721 were introduced through an EIP, for example, as were most other changes to the Ethereum over time.

Ethereum Virtual Machine (EVM): A Turing-complete virtual machine that allows users to execute code exactly as intended. It allows you to run programs and execute code on the blockchain. Every smart contract on the Ethereum network uses the EVM as its runtime environment, and all Ethereum nodes run on the EVM to maintain consensus across the distributed network.

Exchange: A place where you can buy or sell a digital asset. Sometimes called digital currency exchanges or crypto exchanges.

Exchange Traded Fund (ETF): A security that tracks a basket of assets like stocks, bonds, or indices. In the crypto world, there’s been an ongoing debate over whether or not we’ll ever see a crypto ETF introduced in traditional financial markets. However, several ETF-like investment products already exist in the crypto world. Some believe the SEC will approve the first bitcoin ETF in the near future.

Faucet: A crypto distribution system that gives you free coins in exchange for visiting a website or downloading an app. In the early days of bitcoin, users setup bitcoin faucets to give away bitcoin to users for free. It was one way to get bitcoin in the hands of as many users as possible. Today, faucets are less common, but may still be used when launching altcoins.

Fiat: Meaning ‘by decree’ in Latin, fiat refers to traditional currencies that are backed by a central government. Money like the USD has value ‘by decree’ of the U.S. government. Each USD isn’t connected to a specific amount of gold. Instead, we trust it has value because we trust the U.S. government. Fiat currency can take the form of physical cash. Or, it can be represented electronically – like with bank credit.

Fiat-Pegged Cryptocurrency: Some cryptocurrencies peg themselves to the value of a specific fiat currency. This gives the crypto stable value while still allowing users to enjoy the benefits of blockchain-based tokens. Also known as stablecoins or pegged cryptocurrencies, a fiat-pegged cryptocurrency maintains its value by holding a reserve of fiat funds.

Fibonacci Retracements: A technical analysis (TA) measurement where markets move substantially in one direction, then pull back to specific levels before continuing a trend. These retracement levels correspond with ratios derived from Fibonacci numbers, including 23.6%, 38.2%, 50%, 61.8%, and 100%.

Fish: A small holder in the crypto world. A fish, also known as a minnow, is smaller than a dolphin or a whale. Fish are subject to the moves of dolphins and whales and have no control over the market.

Flippening: Refers to a situation where one cryptocurrency becomes more valuable than another cryptocurrency. Traditionally, the flippening refers to a theoretical point when ETH overtakes BTC in value. We’ve also seen the flippening refer to the potential flip in value between BTC and BCH.

Flipping: Just like in the real world of investing, flipping refers to buying an investment low and selling it high. You might flip a house, for example, buying a fixer-upper for a low price, renovating the home over the course of a year, and then selling it. In the crypto world, you can ‘flip’ a token by buying it low during an ICO and then flipping it for a higher price after the ICO.

FOMO: Fear Of Missing Out. Crypto prices might continue rising after a surge due to ‘FOMO’ – users don’t want to miss out on the next big price surge.

Fork (Blockchain): A blockchain fork or chain slip creates an alternative version of a blockchain, leaving two blockchains to run simultaneously. There are hard forks and soft forks. With a hard fork, the new and old blockchains are incompatible with one another. With a soft fork, the new and old blockchains are compatible with one another. Forks led to the creation of ETH and ETC, for example, and to BTC and BCH.

Fork (Software): A software fork, also known as a project fork, occurs when developers take the source code from one project and modify that code to create a new project. Litecoin famously did this with bitcoin, taking bitcoin’s source code and modifying it to create a ‘lighter’ version of bitcoin.

FUD: Fear, Uncertainty, and Doubt. When you see people talking about ‘FUD’ online, it typically means there is negative information about a project or coin circulating online for no good reason. Someone might ‘spread FUD’ about a rival project, for example, in an attempt to influence the perception of other cryptocurrencies.

FUDster: Someone who repeatedly spreads FUD online.

Full Node: Nodes that have downloaded a blockchain’s entire history to observe and enforce the blockchain’s rules.

Fundamental Analysis (FA): An investment research method where you analyze the underlying value of an asset by looking at the technology, team, growth prospects, and other indicators. It’s different from technical analysis (TA). You might see people talk about FA when they’re focusing on ‘value investing’.

Futures: A futures contract is an agreement to buy or sell a certain asset at a pre-specified price. You might buy a futures contract to buy 1 BTC at a price of $5,000 per BTC one year from now, for example, because you believe the price of bitcoin will be significantly higher by that date. Bitcoin futures contracts launched in December 2017.

Gains: Increased value or profit.

Gas: A measure of the computational effort needed to execute code on the Ethereum network. It’s like the ‘fuel’ of Ethereum, and it’s required when executing smart contracts or launching dApps. In Etheruem, gas is denominated in Gwei.

Gas Limit: Refers to the maximum amount of gas the user is willing to spend on a transaction. Ethereum prioritizes transactions based on gas, so users willing to pay more gas for a transaction will have their transactions processed sooner than users with lower gas limits.

Gas Price: Refers to the price you are willing to pay for a transaction. A higher gas price incentivizes miners to prioritize that transaction over others, which means your transaction will be processed sooner than someone with a lower gas price.

Genesis Block: The very first block on a blockchain. Bitcoin’s genesis block was formed on January 3, 2009, for example. Blockchains refer to the genesis block as block 0 or block 1. Unlike every other block in the blockchain, there’s no reference to a previous block.

GitHub: A code repository website dedicated to hosting open source code for all types of software. Today, GitHub is the repository for the code of most major blockchain projects, making it easy to share code among the community.

Gold-Backed Cryptocurrency: Some projects have proposed launching a gold-backed cryptocurrency, allowing users to enjoy the benefits of gold (stable value) combined with the convenience of a digital currency (easy transferability).

Graphical Processing Unit (GPU): Also known as a video card, this is a computer component that processes visual information – like 3D images. Prior to the crypto mining boom, GPUs were mostly used for video games, video processing, and similar tasks. Today, GPU mining has become less common as ASICs have risen in popularity.

Group Mining: Also known as a mining pool, group mining occurs when a collection of miners band together to mine a specific cryptocurrency.

Gwei: Gwei is the denomination used when defining the cost of gas in transactions involving Ether.

Hacking: The process of exploiting a system to illicitly gain access.

Halving: The process of cutting the block reward in two. The bitcoin block reward has ‘halved’ from 50 BTC to 25 BTC to 12.5 BTC over the years, and it will continue halving until the year 2140, at which point the very last bitcoin will e mined.

Hard Cap: The maximum amount than an ICO can raise. An ICO might set a ‘soft cap’ of $10 million, for example, and a hard cap of $20 million. The soft cap is the general target amount an ICO wishes to raise, while the hard cap is the point after which the ICO will stop accepting funds.

Hard Fork: A blockchain hard fork is a major change to the network. With a hard fork, new rule changes will invalidate all previously valid transactions, which means the new (post-fork) version of the blockchain will be incompatible with the new (pre-fork) version. With a hard fork, all miners have to upgrade their software to the new version to continue operating. The split between BTC and BCH was a hard fork, for example.

Hash: A hash is a string of text that represents any form of data. When you ‘hash’ something in cryptography, you’re converting any form of data into a unique string of text. Any piece of data can be hashed, with all data represented as a hash of the same length when using the same hashing algorithm. Data can be recovered from the hash using a cipher.

Hash Function: Any function used to map data of arbitrary size to data of a fixed size.

Hash Power or Hash Rate: Used frequently in mining, hash power or hash rate is a measurement of the amount of computing power output by a miner, a GPU, or an ASIC. Hash power can be measured in kH/s, MH/s, GH/s, TH/s, PH/s, or EH/s. The hash power is just the number of hashes the computer can ‘guess’ each second. A miner with higher hash power has a better chance of winning the block reward than a miner with low hash power.

Hierarchical Deterministic Wallet (HD Wallet): A wallet that uses the Hierarchical Deterministic (HD) protocol to support the generation of crypto wallets from a single master seed. It’s a way to create ‘sub-wallets’ underneath a single wallet. You might receive funds at one sub-wallet, for example, allowing you to conduct transactions without showing someone the entire value of your wallet.

Hidden Cap: Some ICOs have a hidden cap, which means the project is seeking to raise an undisclosed amount of money from investors. A hidden cap encourages investors of all sizes to participate because larger investors are unable to adjust their investment based on the cap. They can’t buy 10 million coins and know that they’re buying 50% of the available supply, for example.

Hodl: A type of investment strategy where you ‘hold’ onto your crypto funds for a long period of time, even through periods of volatility and uncertainty. The term originally came from a typo by a bitcoin forum user. Some have even made hodl a ‘backronym’, stating that HODL refers to ‘Hold On for Dear Life’.

Hosted Wallet: A wallet managed by a third party service.

Hot Storage: Online storage of private keys in an internet-connected wallet. Ideally, you hold a small amount of funds in a hot storage wallet for convenience (like daily trading and spending) while keeping most of your funds in offline (‘cold’) storage.

Howey Test: A test the United States Securities and Exchange Commission (SEC) uses to determine whether or not an asset – like a digital token or cryptocurrency – should be categorized as a security.

Hybrid PoW/PoS: A blockchain that uses a hybrid PoW/PoS consensus mechanism has a combination of proof of stake and proof of work consensus systems in place. These hybrid chains aim to combine the benefits of both consensus mechanisms.

Hyperledger (Hyperledger Foundation): Hyperledger is an organization launched by the Linux Foundation in 2015 to support the development of blockchain-based tools, blockchain-related applications, and open source blockchains. Hyperledger is supported by major industry names like IBM and Intel.

Immutable: Unable to be changed. Entries in a blockchain are said to be ‘immutable’ because once recorded, they cannot be altered.

Inflation: A general increase in prices in the economy, indicating a fall in the purchasing value of money.

Initial Coin Offering (ICO): A unique type of fundraising method where startups raise money from a community of users, selling digital tokens in exchange for USD, BTC, ETH, or another major currency. The first ICO was the Mastercoin ICO in July 2013. Ethereum rose to fame through its ICO in 2014, raising an unprecedented 3,700 BTC in the first 12 hours. In 2016 and 2017, hundreds of ICOs appeared online.

Initial Token Offering (ITO): Similar to an ICO, but involving the sale of ‘tokens’ instead of coins. A token might have a specific role within a digital ecosystem, for example. Instead of being used as a currency, the token can be used to access the network or perform other tasks.

Initial Bounty Offering (IBO): Startups post bounties online to incentivize users to perform various tasks. There are security bounties, for example, where users are rewarded for identifying exploits within a system. There are also marketing bounties, where users receive coins in exchange for tweeting or sharing a project online, or translation bounties. During the IBO, the bounties are made public for the first time.

Instamine: A period of time when a large amount of coins are quickly mined. A startup might ‘instamine’ 50% of its total supply, for example, with the remaining mining rewards distributed over a longer period of time.

Intermediary or Middleman: The person, platform, or service that acts as the ‘third party’ between two parties doing business with one another. An exchange acts as a middleman between a buyer and seller, for example.

JOMO: Joy Of Missing Out. Did you avoid buying a hype-driven cryptocurrency during its surge? Did you avoid investing in an obvious scam or pyramid scheme? Did you enjoy watching a shady token plummet in value after a long bull run? You have experienced JOMO.

Know Your Customer (KYC): Used in modern finance, KYC refers to a financial institution’s obligations to know its clientele. Banks are required to take certain steps to verify that clients aren’t laundering money, for example. A crypto exchange is required to verify your identity to ensure you’re not using the exchange illegally.

Lambo: Short for Lamborghini. Long-term bitcoin hodlers often talk about buying a Lambo when the price skyrockets. It’s a way to talk about getting rich from crypto trading.

Ledger: A record of financial transactions.

Ledger Nano: One of the most popular hardware wallet lineups available today, including the popular Ledger Nano S and Ledger Nano X wallets. Ledger is based in Paris, France.

Leverage: A loan offered by a broker or exchange, allowing a trader to trade more than what he or she currently has. You might use 10x leverage to turn your 1 BTC trade into a 10 BTC trade, for example. Leverage trading comes with significantly higher risk and reward.

Lightning Network: A proposed bitcoin scalability solution where a ‘second layer’ protocol operates over top of the bitcoin network, allowing trades to be conducted away from the blockchain at higher speeds. The Lightning Network continues to expand, although it’s a long way from being a realistic scalability solution for bitcoin. It’s also controversial, with some claiming that the Lightning Network sacrifices a foundational element of bitcoin – the fact that all transactions take place on-chain. The Lightning Network’s development is led by blockchain technology company and leading bitcoin developer Blockstream.

Limit Order / Limit Buy / Limit Sell: Limit orders, including limit buys and limit sells, are trade orders that define a certain limit at which a cryptocurrency will be bought or sold. You might put a limit sell order into an exchange to sell 10 BTC when the price hits $20,000, for example. Limit orders are different from market orders, where you buy or sell crypto at the best available price.

Liquidity: The volume of trading activity within an exchange, indicating how easy it is to make a buy or sell trade without impacting the overall market price. Exchanges with higher trading volume have higher liquidity, which means it’s easier to make a trade at any time.

Litecoin: One of the first major altcoins ever launched, Litecoin was created by former Google employee Charlie Lee and released in October 2011. Litecoin was built to be a faster, more lightweight version of bitcoin, quadrupling the total supply (from 21 million to 84 million) and cutting transaction time by four (from 10 minutes to 2.5 minutes).

Long: A trading position where you buy an asset today with the expectation to sell that asset for higher value in the future. You might be ‘going long’ on bitcoin if you buy it today for $5,000 and plan to hold it for 2 years until the price reaches $10,000.

Mainnet: The technological foundation of a blockchain. The ‘main network’ of a blockchain. A blockchain startup may launch a testnet first, for example, before launching a mainnet as their final product.

Maker: The ‘maker’ is the person who places an order on a market when the order isn’t filled immediately. The order sits on the exchange’s order book until someone else fills or matches it.

Market: A space online or offline where buyers and sellers interact. A crypto market can appear in many forms – like as an offline marketplace or an online exchange.

Market Capitalization / Market Cap / MCAP: The total value of a cryptocurrency on the market, similar to the market cap of a traditional stock or financial asset. It’s the ‘total capitalization’ of a cryptocurrency, calculated by multiplying the total circulating supply of a cryptocurrency by its current price.

Market Order / Market Buy / Market Sell: An order to purchase or sell a digital token at the best available rate. If you simply want to buy a cryptocurrency at the lowest available price or sell at the highest available price right now, then you would make a market order.

Margin Call: When an investor’s account falls below the margin maintenance amount. The broker will then request the trader to deposit more money to meet the required maintenance amount to continue trading.

Margin Trading: A practice where the trader is borrowing funds from an exchange to trade cryptocurrency. The trader’s deposited funds form the collateral for the loan. A risky form of trading that can lead to huge rewards – and huge losses.

Masternodes: Masternodes are nodes on a blockchain network with a higher level of responsibility. A masternode might anonymize and clear transactions, for example, and participate in governance or voting. Some blockchain networks give greater responsibilities to certain nodes, calling them masternodes.

Max Supply: The total number of coins that can ever exist in a particular digital ecosystem. There’s a maximum supply of 21 million bitcoin, for example. Some coins have a pre-defined max supply, while others – like Ethereum – do not.

Merkle Tree: A cryptography and computer science concept also known as a hash tree where every ‘leaf node’ is labeled with the hash of a data block, and every non-leaf node is labeled with the cryotpgraphic hash of the labels of its child nodes. The tree-like structure allows for efficient and secure verification of large data structures. In blockchain, a Merkle Tree ensures data blocks received from peers are undamaged and unaltered. It prevents individuals from sending fake blocks.

MicroBitcoin (uBTC): One millionth of a bitcoin, or 0.000001 BTC.

Microtransaction: A very small transaction. A website may collect a few fractions of a penny from every visitor in the form of an automatic microtransaction, for example.

Mineable: Some cryptocurrencies are mineable, while others are not. If a cryptocurrency is mineable, it means users can ‘mine’ the network (i.e. contribute processing power) in exchange for hashpower rewards. Bitcoin is a mineable cryptocurrency. Other cryptocurrencies are not mineable, but still allow users to earn block rewards through staking (like on Proof of Stake or PoS networks).

Miners: A machine or individual contributing processing power to a blockchain network. A ‘miner’ can refer to the machine doing the mining (like the ASIC rig, GPU, or computer). Or, it can refer to the individual or company operating the equipment.

Mining: The process of adding new blocks to a blockchain and verifying transactions. Miners contribute processing power to the network, and that processing power is used to secure the network with cryptography.

Mining Contract: An agreement between two parties to rent or lease a miner for a specified period of time. Mining contracts are often used in cloud mining, allowing users to rent or invest in mining capacity over the internet.

Mining Pool: A mining pool involves combining the power of multiple miners – often thousands of miners – together, giving the collective group a better chance of earning block rewards than if they were all to mine individually. The block reward is split between the pool. Today, bitcoin’s mining ecosystem is dominated by a handful of large mining pools, including Antpool, BTC.com, BTC.top, Bixin, and BTCC.

Mining Reward: The number of bitcoins a miner receives in exchange for contributing processing power to the network. Bitcoin’s current block reward is 12.5 BTC. A mining reward could be 12.5 BTC if an individual miner gets it. Or, it could be a smaller number if you’re part of a mining pool.

Mining Rig: A computer used for mining – like an ASIC rig or a computer with a high-end GPU. Some mining rigs are dedicated entirely to mining crypto, while others only mine crypto part-time. You might leave your high-end gaming PC to mine crypto overnight, for example.

Minnow: Another term to describe a ‘fish’ in the crypto community. A trader with insignificant crypto holdings, smaller than a dolphin or whale.

Mixing Service: A mixing service, also known as a tumbler or mixer, accepts crypto from multiple parties, then mixes the crypto together before returning the crypto to each respective party. Some people use a mixing service to obfuscate illegally-obtained bitcoin. Others use mixers for general privacy reasons. After running coins through a mixer, it can be very difficult to track the source and destination of certain funds.

Mnemonics: Mnemonics are memory aids that involve using a phrase to help with recall. “Every Good Boy Does Fine” is a mnemonic for learning to read music, for example, because it helps you remember that musical notes go EGBDF.

Mnemonic Phrase: A mnemonic phrase, also known as a mnemonic seed or seed phrase, is a list of words that can restore access to your cryptocurrency assets from anywhere. A 12 or 24 word seed phrase can be memorized or written down in a secure location. Using this phrase, you can retrieve your funds at any time. Most crypto wallets support mnemonic phrases as a standard feature.

Money Transmitter / Money Transfer License: A money transmitter or money transfer service is a type of business category in the United States. These businesses transfer money for individuals, including cryptocurrencies, fiat currencies, or some other type of value. A money transmitter is a subcategory within the larger money service business (MSB) category in the legal code of the United States.

Moon: An optimistic prediction for the ultimate price of a cryptocurrency. Bitcoin’s price might be predicted to ‘moon’ or ‘go to the moon’ when it reaches $1 million, for example.

Moving Average Convergence Divergence (MACD): A technical analysis (TA) calculation showing the relationship between two price moving averages. MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA.

Mt. Gox: Originally known as Magic: The Gathering Online Exchange, Mt. Gox was a cryptocurrency exchange launched in 2011. In the early days of bitcoin, Japan-based Mt. Gox was handling approximately 60% to 80% of all bitcoin trades. In 2014, Mt. Gox suddenly discovered that 850,000 BTC was missing from its cold storage reserves. The exchange quickly shut down, leaving users with limited recourse. The bankruptcy proceedings continue today in courtrooms in Tokyo.

Multi-Signature (Multi-Sig): A wallet that requires multiple signatures before funds can be transferred. Multiple parties can share a wallet, for example, with two or more signatures required before funds can be moved. A ‘signature’, in this case, is a private key.

MyEtherWallet (MEW): MyEtherWallet is a free online tool that will generate an Ethereum software wallet for you, allowing you to store ETH and ERC-20 tokens and interact with the Ethereum ecosystem.

Network: All nodes operating on a blockchain at any time.

Node: A computer or miner that maintains a copy of the blockchain or ledger.

No-coiner: An individual who owns no coins, typically because they believe cryptocurrencies will fail or that all cryptocurrencies will eventually be worth nothing.

Non-Custodial: A type of private key storage where the user maintains control of his or her private keys directly while dealing with a wallet or an exchange. This is different from a custodial exchange, where an exchange holds your private keys on your behalf.

Nonce: An arbitrary number meant to be used only once. The nonce plays a crucial role in bitcoin mining.

Off-Ledger Currency: A currency that is used without having transactions recorded in a ledger or blockchain. The Japanese Yen, US Dollar, and most fiat currencies are off-ledger currencies because funds are spent without any type of ‘master ledger’.

Offline Storage: Also known as cold storage, offline storage is a private key storage system where cryptocurrencies are stored in devices or systems not connected to the internet.

On-Ledger Currency: A currency where transactions are recorded on a ledger or blockchain. Bitcoin and most other cryptocurrencies are on-ledger currencies, for example.

Online Storage: Also known as hot storage, online storage is a private key storage system where cryptocurrencies are stored in devices or systems connected to the internet.

One Cancels The Other Order (OCO): An advanced order type where one order cancels the other. If one order to buy 1 BTC at $6,000 is accepted, for example, then you might cancel another order to buy 1 BTC at $6,500.

Open/Close: The price of an asset at the time markets begin and end the trading day. In traditional financial markets, stock have an opening and closing price based on where they started and ended the day. In the crypto world, there are no official opening or closing times. However, you may still see terms like ‘open/close’ used when reporting on crypto – say, if bitcoin opened a 24 hour period at $6,000 and ended the same period at $6,500.

Open Source: Software released under a license that allows anyone else to study, change, and distribute the software for any purpose. Blockchain and cryptocurrencies are often developed under an open source philosophy, where advancements are shared within the community – say, on code repositories like Github – to push the industry forward as a whole. Open source development exists in contrast to closed source development, where software is developed privately and copyrighted, preventing others from using or accessing it.

Option: A contract that gives a buyer the right to buy or sell an underlying asset or instrument at a specified price on or before a specified date.

Options Market: A marketplace where buyers and sellers can trade options contracts.

Oracles: An algorithm that takes information from the real world to be verified on the blockchain. Oracles are often used in smart contracts to execute certain conditions. A smart contract for a decentralized gambling marketplace, for example, might use an NHL scores oracle to get the score of a game after the game is over. Based on the score reported by the oracle, the smart contract automatically sends payment to the winning bettor.

Orphan: A blockchain block that has become separated from the main blockchain. When two miners on the bitcoin network produce the same block simultaneously, the network will only pick one block to be added to the chain, causing the other block to be ‘orphaned’. An orphan block is also known as a detached block.

Overbought: When too many people buy a particular asset in a certain period of time, it can drive prices unreasonably high, indicating that an asset is overbought.

Oversold: When too many people sell a particular asset in a certain period of time, it can drive prices unreasonably low, indicating than an asset is oversold.

Over The Counter (OTC): Over The Counter trades are transactions made away from an exchange’s main orderbooks. Many major exchanges operate OTC trading desks, allowing institutional traders to move large amounts of cryptocurrency without ‘trading against themselves’ by moving the market. The OTC trading desk matches buyers and sellers away from the main orderbooks. If Goldman Sachs wants to buy $10 billion of BTC, for example, and Starbucks wants to sell $10 billion of BTC, then the two parties can interact with one another through an OTC trading desk without moving the market at all.

Pair: Two cryptocurrencies that can be traded for one another. BTC/BCH is a pair on most exchanges, for example, as is BTC/ETH.

Paper Wallet: A physical document containing your private key or seed phrase. A paper wallet can be a literal piece of paper. Or, it can be something more secure – like a piece of metal on which you’ve engraved your seed phrase.

Peer to Peer (P2P): An exchange between two individuals or parties, typically without the interference of a middleman. BitTorrent is a P2P protocol because it shares data between ‘peers’ in order to spread files online. Bitcoin trades are P2P exchanges because they involve transferring bitcoin directly from one person to another.

Permissioned Ledger: A ledger or blockchain that only certain people can access. A corporation may have a permissioned ledger, for example, to store corporate data or in-house transactions. Only individuals with the right ‘permission’ can access the ledger.

Phishing: A type of scam where the attacker tricks you into divulging personal information – like login details and passwords.

Platform: A general term that can refer to a number of different things, including a ‘blockchain platform’, an ‘exchange platform’, a ‘token platform’, a ‘software platform’, etc.

Ponzi Scheme: Named after infamous 1920s fraudster Charles Ponzi, a Ponzi Scheme is an investment scam that pools investor funds together with the promise of earning high returns. The returns of older investors are paid with the deposits of newer investors. Older investors think they’re making high returns, but the scheme is doomed to collapse. Crypto has given rise to hundreds of new types of Ponzi Schemes.

Portfolio: A collection of assets held by an individual, hedge fund, or institution. Your portfolio might be allocated into 50% bitcoin, 30% ETH, and 20% BCH, for example.

Pre-Mine: When some or all of a coin’s supply is mined before a public launch. A project might pre-mine its entire supply of coins instead of making them available through mining or staking, for example.

Pre-Sale: A sale that takes place before an ICO is made available to the general public.

Private Key: Also known as a secret key, a private key is a piece of code generated in asymmetric key encryption. It’s paired with a public key, allowing you to decrypt information. In the crypto world, your private key ‘unlocks’ access to your crypto funds.

Proof of Authority: A consensus mechanism that allows trustless nodes on a distributed network to reach an agreement. With proof of authority (PoA), the individual’s identity is used as a stake to deliver relatively fast transaction times without the downsides of PoW or PoS networks.

Proof of Born (PoB): A consensus mechanism where participants provide evidence that a coin was made unspendable (burned). This consensus mechanism is designed to transfer the value of one blockchain to another, with miners providing proof of burning to verify a cost was incurred.

Proof of Developer: Proof of Developer is a cryptocurrency developer verification system. Proof of Developer allows an individual to verify that a developer is genuinely working on a project and that another developer’s identity hasn’t been stolen. Today, Proof of Developer verification has been formalized through ProofOfDev.com, which independently verifies developers and awards them a badge.

Proof of Stake (PoS): A consensus mechanism that involves locking (i.e. ‘staking’) coins on a blockchain network to earn mining rewards. Stakers receive rewards based on random selection, with some PoS networks awarding higher odds based on the age of the staked coins. The staked coins contribute to transaction verification on the network in different ways.

Proof of Work: A consensus mechanism where nodes are required to provide evidence that they have contributed processing power to the network. Nodes on bitcoin’s PoW consensus mechanism, for example, provide proof that they found the correct hash, indicating that they ‘did the work’ to find that hash.

Protocol: A general term for the rules of a network or blockchain, including the consensus rules, transaction validation rules, and network participation rules.

Pseudonymous: Writing under a false name online. Satoshi Nakamoto is a pseudonym for the unidentified developer of bitcoin, for example.

Public Address: The cryptographic hash of a public key. You can send your public address to users and request them to send money to it, for example.

Public Blockchain: A blockchain accessible by anyone.

Pump and Dump (P&D or PnD) Scheme: Artificially inflating the price of an asset and then selling the asset at its peak to make a profit. In the crypto community, coordinated pump and dump groups organize via Telegram and other channels, buying a targeted token en masse and flooding social media with hype. The organizers sell the coin at its peak for easy profit, while everyone else loses when prices retreat to normal levels.

QR Code: A machine-readable label where data is encoded into a black and white pattern. In crypto, most wallet software allows you to display your public blockchain address as a QR code, and someone can send you bitcoin just by scanning that QR code with their own wallet app.

Raiden Network: An off-chain scaling solution proposed for Ethereum, similar to the Lightning Network for bitcoin. Raiden would bring off-chain scaling to Ethereum, reducing congestion on the Ethereum network while providing near-instant, low-fee transactions.

Reddit: One of the world’s most heavily-trafficked social media and forum websites. Reddit has become a hub for crypto and bitcoin discussion. Major forums include /r/bitcoin (a pro BTC subreddit), /r/btc (a pro BCH subreddit), /r/cryptocurrency, /r/Ethereum, /r/bitcoinmarkets, and /r/ethtrader.

Replicated Ledger: A copy of a distributed ledger – like a blockchain – distributed to all participants in a cryptocurrency network.

Resistance Level: A price that a digital asset struggles to break through. Bitcoin may struggle to break above $10,000, for example, indicating that there’s a resistance level at $10,000. Once a resistance level is broken, further upward price movement is likely.

Rank: Relative position of a digital asset based on any number of characteristics. You can rank cryptocurrencies by market cap, for example, or by 24 hour trading volume.

Rekt: Internet slang for getting ‘wrecked’ in a trade – say, if you made a significant loss in a trade.

Reverse Indicator: An individual or signal that consistently makes incorrect predictions, encouraging smart traders to ‘trade against it’. If someone frequently posts buy signals on Twitter when you should actually be selling, for example, then you might call that person a reverse indicator, which means you do the opposite of what that person says.

Ring Signature: A cryptographic signature principle where members of a group each have their own keys, and any of those keys can be used as a digital signature. With a ring signature, it should be impossible to determine which of the group members’ keys was used to produce the signature.

ROI: Return on investment, or ROI, is the amount of money you have gained or lost from a particular investment.

Relative Strength Index (RSI): A form of technical analysis (TA) that serves as a momentum oscillator, measuring the speed and change of price movements. Developed by J. Welles Wilder, RSI oscillates between 0 and 100. When an asset is considered overbought, the indicator will be above 70. When it’s oversold, RSI will be below 30. Wilder developed RSI for traditional markets, although it’s frequently used in crypto markets to determine optimal buy and sell times.

Satoshis: A Satoshi, also known as a SAT, is the smallest divisible unit of bitcoin. 1 Satoshi has a value of 0.00000001 BTC, or one hundred millionth of a single bitcoin. The unit is named after bitcoin creator Satoshi Nakamoto.

Satoshi Nakamoto: The unidentified creator of bitcoin. While there are many suspects behind the Satoshi Nakamoto identity, the identity of Satoshi has never been confirmed.

Scam: A ploy where you trick someone for your own personal gain. In crypto, we’ve seen ICO scams, exit scams, Ponzi schemes, and other forms of fraud.

Scrypt: An alternative Proof of Work (PoW) algorithm, unique from the SHA-256 PoW algorithm used with bitcoin. Scrypt was designed to be ASIC-resistant, preventing ASICs from dominating the network. Scrypt mining relies both on CPU power and memory within the miner, reducing the advantage of ASICs.

Second Layer Solutions: A blockchain protocol or system built on top of an existing blockchain. The bitcoin Lightning Network is a second layer solution, for example, because it’s built on top of bitcoin.

Securities and Exchange Commission (SEC): America’s top regulatory authority governing the trading of stocks and other assets. One of the largest and most influential securities regulators in the world today. The SEC is headed by five Commissioners appointed by the President of the United States. One of the Commissioners is chosen as the Chairman. You can view a list of current SEC Commissioners at SEC.gov.

Seed: A starting point when deriving keys for a derministic wallet, typically presented as a series of words, enabling the owner to quickly backup or restore a wallet.

Segregated Witness (SegWit): A bitcoin improvement proposal (BIP) designed to boost security on the bitcoin network by reducing transaction malleability. Under the original bitcoin code, changing the ‘witness’ information (the signatures) on blocks would also change the transaction ID and its subsequent hash. SegWit aimed to fix this issue by ‘segregating’ ‘witness’ signatures and block content. A side effect of SegWit is smaller block sizes and a better ability to support second layer solutions.

Selfish Mining: A malicious bitcoin mining strategy where a miner or mining pool mines a new block but doesn’t broadcast this new block to other miners. If the miner can find a second block faster than other miners in the network, then that miner will have created the longest public chain, thereby invalidating all other blocks discovered in the time it took to execute the attack. Originally proposed in a 2013 paper, selfish mining is a form of collusion to increase mining revenue.

Sell Wall: A large number of orders waiting to be executed. When bitcoin reaches a certain notable price, for example, it often faces a sell wall. There may be thousands of sell orders that will automatically sell bitcoin when it reaches $10,000, making it difficult for bitcoin to rise above $10,000 and ‘break through the sell wall’.

Side Chain: A blockchain ledger that runs parallel to a primary blockchain, with a two-way connection spanning both the primary chain and sidechain. The sidechain can operate independently of the main blockchain while still using the protocols and rules of the main blockchain.

Simplified Payment Verification (SPV): Using bitcoin or another blockchain without running a full network node. Satoshi’s original whitepaper explained that it was possible to verify bitcoin payments without running a full network node.

SHA-256: A cryptographic hash function used in certain PoW consensus mechanisms, including bitcoin’s consensus mechanism. The hash function generates a 256-bit signature for a text. ‘SHA’ stands for Secure Hash Algorithm. SHA-256 is one of the SHA-2 algorithms originally developed by the National Security Agency (NSA).

Sharding: A scaling approach enabling the splitting of blockchain states into partitions that contain states and transaction history, allowing each shard to be processed in parallel. Each node receives a partial copy of the complete blockchain, allowing the network to speed up transaction times significantly.

Shilling: Enthusiastically supporting an ICO, coin, or crypto project online. Can also be used with ‘paid shill’.

Shitcoin: A coin with no perceived value or usage.

Short: A short sale, also known as a short, shorting, or going short, is the sale of an asset that the seller has borrowed, allowing the seller to profit from a subsequent fall in the price of an asset.

Silk Road: One of the largest darknet drug marketplaces in internet history. The market was launched in February 2011 and then shut down by the FBI in October 2013. Bitcoin was the most popular currency used on Silk Road, and Silk Road undoubtedly enhanced the value and popularity of bitcoin during its early days.

Smart Contract: A computer program based on the blockchain designed to execute certain functions when certain conditions are met. Similar to an ordinary contract, a smart contract can codify an agreement between two parties. Ethereum popularized the use of blockchain-based smart contracts.

Soft Cap: The target amount that a crypto startup seeks to raise, typically during an initial coin offering (ICO). Sometimes, a project uses the soft cap as the minimum target amount. In other cases, the minimum funding amount is lower than the soft cap.

Soft Fork: A blockchain soft fork is a protocol upgrade where only previously valid blocks and transactions are made invalid. Old nodes will still recognize the new blocks as valid, which is why a soft fork is backwards-compatible (while a hard fork is not backwards-compatible). When a majority of miners upgrade to enforce new rules, it’s called a miner-activated soft fork (MASF). When full nodes coordinate to enforce new rules without miner support, it’s called a user-activated soft fork (UASF).

Solidity: An object-oriented, high-level programming language for implementing smart contracts. The development of Solidity was closely linked to the development of Ethereum.

Spot: Purchase or sale of an asset – like a cryptocurrency – for instant delivery. Also called a cash trade.

Spot Market: A public market where you can buy and sell assets – like cryptocurrencies – for instant delivery. Spot markets exist in contrast to futures markets, where settlement is due at a later date.

Stable Coin: A digital token, typically based on a blockchain, that aims to be stable relative to the price of other crypto assets. Some stablecoins are pegged to a fiat currency like the US Dollar, while others have unique stabilization mechanisms. The goal is to give crypto traders a hedge, allowing them to diversify their portfolios and avoid volatile crypto prices.

Staking: Locking your tokens into a proof of stake (PoS) system in exchange for a chance of winning rewards.

Stale Block: A block that was successfully minted but was not added to the current longest blockchain. Typically, a stale block emerges because another block at the same type was already added to the longest blockchain.

State Channel: A second layer scaling solution designed to reduce the number of on-chain transactions, increasing transaction speed and scalability. Participants can conduct multiple off-chain transactions, then make a single change to the main blockchain.

Symbol: The unique 2, 3, or 4 symbol ticker code that identifies a particular cryptocurrency, like ETH, BTC, BCH, XRP, etc.

Taint: The amount of crypto in one account that can be traced to another account. You might perform a taint analysis to determine the strength of a connection between two addresses, for example, and spot underlying connections in the crypto world.

Taker: The person who ‘takes’ an order from an exchange’s orderbook. If you place an order and that order is instantly matched with an existing order, then you are the ‘taker’ in the maker/taker equation.

Tangle: An alternative blockchain developed by IOTA. Tangle uses direct acyclic graphs to create a quantum-resistant distributed ledger.

Testnet: A test version of a blockchain released by developers (typically) before a mainnet. Or, an alternative version of a blockchain that allows developers to test various proposals – like the Ropsten testnet for Ethereum or the Rootstock testnet for bitcoin.

Technical Analysis (TA): Technical analysis is a type of financial research that involves analyzing market activity like price and trading volume to make predictions about future price movements.

The DAO: The DAO, or Decentralized Autonomous Organization, was an investor-directed venture capital fund organized on the Ethereum network. After raising millions of dollars in one of the most successful ICOs in history, The DAO was hacked, causing funds to be frozen. The DAO debacle led to the split of ETH and ETC.

This Is Gentlemen: Like ‘hodl’, ‘This Is Gentlemen’ was a typo from someone trying to type out ‘This Is It Gentlemen’. Today, the term is used to point out positive things currently happening.

Trend Analysis: Similar to technical analysis and often used interchangeably, trend analysis involves analyzing price and market trends to predict where an asset is going next.

Think Long Term: A recommendation to focus on long-term value instead of short-term goals.

Ticker: A symbol that identifies a cryptocurrency – like BTC or ETH.

Timelock / Locktime: A transaction rule where the transaction can only be processed at a certain time or block on the blockchain.

Timestamp: An indication of the time at which a certain transaction occurred, including the hour and date of the transaction, typically accurate to fractions of a second.

Token: A general term for a digital asset, typically an asset with some utility in a wider ecosystem.

Token Generation Event: The date and time at which a particular token will be created.

Tokenize: The process of turning a tangible, real-world asset into a digital token. Someone might create a tokenized form of gold, for example, with each blockchain-based token representing one ounce of gold.

Tor: Free software that enables anonymous communication. Required to access certain darknet websites and other sites. Originally known as The Onion Router, Tor relies on a network of relays to conceal the user’s location and other personally identifying data.

Total Supply: The total amount of coins in circulation right now, minus any coins that have already been burned.

Trade Volume: The amount of cryptocurrency that has been bought and sold over the past 24 hours.

TX: A shorthand way to say ‘transaction’.

TX/s: A shorthand way to say ‘transactions per second’. You’ll often see discussions of blockchain speed reference ‘tx/s’ or TPS.

Transaction Fee: The amount you pay to execute a trade. Most exchanges have transaction fees, for example, and most blockchains – including bitcoin – have transaction fees that go towards miners.

Trezor: Along with Ledger, Trezor is one of the best-known hardware wallet makers today. The Trezor wallet lets you store your coins securely offline while still easily accessing them online at any time.

Tumbler: Another name for a mixer or mixing service, where coins from multiple sources are jumbled together then distributed to obfuscate their source and destination.

Turing-Complete: A computer term that tells you whether or not an abstract machine – like a programming language – can be used to emulate a Turing machine. Most modern programming languages are Turing-complete, also known as computationally universal. In crypto, we frequently hear about Ethereum being Turing-complete.

Unconfirmed: When a transaction has not yet been added to the blockchain.

Unpermissioned Ledger: a public blockchain that does not require any special access privileges.

Unpsent Transaction Output: A blockchain transaction output that has not been spent and can be used as an input for new transactions.

UTC Time: Coordinated Universal Time. In a crypto community that’s distributed around the world, UTC is often used for time measurements. UTC has taken over from Greenwich Meridian Time (GMT) in scientific fields. UTC is within about 1 second of meal solar time at 0 degrees longitude.

Validator: A participant who approves or disapproves blocks in a proof of stake (PoS) blockchain in exchange for a chance of receiving rewards.

Vanity Address: A crypto address that, instead of a series of random numbers and letters, uses custom letters and numbers picked by the owner.

Vaporware: A software project that is never actually developed. A crypto ICO might promise to create the fastest blockchain of all time, for example, only to disappear from the internet and have the software labeled as vaporware soon after.

Venture Capital: A type of private equity offered to fund small, early-stage companies (like startups) with high growth potential. Popularized in Silicon Valley, modern venture capital firms have now turned their attention to cryptocurrencies.

Virgin Bitcoin: A bitcoin that has never been spent and has no previous transactions. The only way to get a virgin bitcoin is by mining it directly.

Vitalik Buterin: The co-founder of Ethereum and one of the best-known figures in the crypto space. Born in 1994 in Russia, Buterin was raised in Canada and published Ethereum’s whitepaper in 2013 at the age of 19 after becoming interested in bitcoin.

Volatility: A measurement of the unpredictability and wild price movements of a particular market during a period of time. In traditional financial markets, volatility is measured by systems like VIX. In bitcoin, we have the bitcoin volatility index and other measurement tools.

Volume: The amount of crypto bought and sold during a certain period of time. In the crypto world, we typically track trading volume on a rolling 24 hour basis.

Wallet: A place to store, send, and receive crypto assets. There are multiple types of wallets, including cold wallets, hot wallets, paper wallets, hosted wallets, software wallets, and more.

Wash Trade: A form of market manipulation where investors generate fraudulent trading volume by buying and selling cryptocurrency amongst themselves, repeatedly buying and selling the same coins to make trading volume seem higher than usual. Many exchanges – even the most legitimate exchanges – have admitted to engaging in wash trading.

Watchlist: A list of cryptocurrencies you wish to follow. Most exchanges allow users to create a ‘watchlist’ where you can add specific coins.

Weak Hands: An investor who panics at major price drops, selling coins when they go low instead of riding through market peaks and valleys.

Wei: The smallest fraction of ETH, with each ETH consisting of 1000000000000000000 Wei.

Whale: Some of the largest individuals in the crypto space. Whales hold large amounts of crypto – often enough to move markets with a single trade. Some whales amassed bitcoin fortunes by purchasing bitcoin during the early days. Other whales are financial institutions, exchanges, or well-known billionaires.

Whitelist: A list of expected participants for an upcoming ICO. You might request to be added to the whitelist of an ICO prior to the sale to ensure you can participate.

Whitepaper: A document outlining the plan for a specific crypto project, including the business model (if applicable), technical details, ICO information, and more. The term ‘whitepaper’ was popularized in the 1990s to refer to documents providing a concise description of complex information. The most famous whitepaper in history is the bitcoin whitepaper published by Satoshi Nakamoto in 2008.

XRP: One of the world’s largest digital tokens by market cap, XRP is closely connected to a private company called Ripple. XRP is designed to facilitate high-speed transactions, particularly between financial institutions and banks.

YTD: Year to Date. A measurement of information from the beginning of the calendar year or fiscal year up to the present date.

Zero Confirmation Transaction: Also known as ‘0-conf’, a zero confirmation transaction is a transaction that has not yet received any blockchain-based verification.

Zero Knowledge Proof: A cryptography principle where one party can prove that a transaction or event occurred without revealing private details of that transaction or event to the other party. Entire cryptocurrencies, including Zcash, have been built around zero knowledge proofs using systems like zk-SNARKS. Zero Knowledge Proofs were originally theorized by MIT researchers in the 1980s, but the principle plays a crucial role in cryptography and cryptocurrency to this day.

1hr: References any data collected during the past hour.

24hr: References any data collected during the past 24 hours.

7d: References any data collected during the past 7 days.

51% Attack: A 51% attack is one of the best-known ways to attack a blockchain. A 51% attack occurs when more than half the computer power or mining hash rate on a network is run by a single person or a single group of people. Once a single person or group has control of 51% of the hashpower on a network, that individual or group has full control of the network, controlling which transactions are confirmed, which rules are enforced, and other crucial information. The attackers can double spend tokens, stop or change transactions, and take over mining operations. 51% attacks are virtually impossible against major cryptocurrencies like bitcoin, but they’re certainly possible on smaller crypto blockchains with less hashrate.

30d: References any data collected during the past 30 days.

1y: References any data collected during the past year.