Credit and thanks to Nick Black!
Market cap: The total value of all the coins of a particular crypto. Calculated by multiplying the current price per coin by the total number of coins in circulation. Typically used to rank cryptos, such as on the website CoinMarketCap.com. As of this writing, the total market cap for the entire crypto space is $1,958,973,106,141.
Maximalist: A person who believes in the primacy of one cryptocurrency over all others. Most frequently applied to adamant Bitcoin advocates: “He’s such a Bitcoin maximalist.”
MetaMask: A browser-based crypto wallet that is installed as an extension. Allows you to send Ethereum to individuals and businesses, store Ethereum and ERC-20 tokens, and store non-fungible tokens (NFTs) and collectibles.
Metaverse: A virtual world where people gather to live, work, and shop. First coined in the 1992 science fiction novel Snow Crash by author Neal Stephenson, the metaverse has gone from a means of “escaping” the real world to a lucrative market that Goldman Sachs and Morgan Stanley are projecting could reach $8 trillion over the next two decades. By using special hardware and software – such as a smartphone or a dedicated headset like the Oculus – users can have an immersive experience where it actually feels like you’re inside the virtual environment. Corporations are already staking their claim in the metaverse.
Microcurrencies: Microcurrencies refer to a new class of “penny cryptos.” These coins sell for pennies on the dollar but have racked up some of the biggest gains we’ve seen anywhere, even crushing gains made by Bitcoin by 75X, 211X, even 5,567X more in the same time frame.
Mining: The process of using hash rate power to solve a math problem, then verifying the most current transactions and adding a block of data to that cryptocurrency’s blockchain. Mining is used in cryptocurrencies that employ proof of work, such as Bitcoin. The miner that solves the block receives a mining reward of a set amount of the cryptocurrency being mined. Mining success depends on having hardware with a high combined hash rate.
Monero (XMR): This cryptocurrency was designed with a focus on privacy features. It’s extremely difficult, if not impossible, to trace transactions on the Monero network.
Moon: A way of expressing optimism that a cryptocurrency’s price will skyrocket/is skyrocketing, as in “To the moon!” Another popular variant is “When moon?” (See Lambo.)
Mt. Gox: In Bitcoin’s early days, Tokyo-based Mt. Gox was by far the biggest exchange, handling more than 70% of all trading. The name is actually an acronym for Magic the Gathering Online Exchange, as it had started out as a way to trade the digital playing cards for that well-known game. But the exchange was poorly run and subject to hacks that depleted its reserve of bitcoins. Mt. Gox went dark in February 2014, and days later reported the loss of 850,000 customer bitcoins. About 200,000 bitcoins were later found. But with the case moving slowly through the Japanese legal system, former customers have so far received no compensation.
Multi-sig: Short for multi-signature, it means more than one digital signature is required to authorize a transaction. Adds another layer of crypto security. Also can play a role in smart contracts that involve more than two parties.
Nakamoto, Satoshi: The pseudonym used by the person or group of people who wrote the Bitcoin white paper as well as the original code that runs the Bitcoin network. This person or group remains anonymous, as all attempts to uncover Nakamoto’s identity have failed. Australia native Dr. Craig S. Wright claims to be Nakamoto but so far has been unable to prove it.
Nifty Gateway: An online marketplace for non-fungible tokens (NFTs) where people can buy and sell digital goods such as collectibles, gaming items, and digital art. This is Nick’s favorite platform to use and the one he would recommend to beginners.
No-coiner: A person who owns no cryptocurrency. Term is typically used to describe a cryptocurrency skeptic.
Node: Any computer that connects to the Bitcoin network is a node. A computer that maintains an up-to-date copy of the blockchain and is able to verify all the rules of a cryptocurrency is a full node. To run a full node requires a copy of that cryptocurrency’s network software. Any type node can also serve as a wallet.
Non-custodial: This term refers to the private keys that control who can spend or move crypto in a wallet. Non-custodial means the user has the crypto in a wallet they control directly, as opposed to keeping coins on an exchange.
Non-fungible token (NFT): A unique token on a blockchain that cannot be replicated. NFTs can be used to represent digital art or even real-world assets. The sale of an NFT grants ownership of the asset it represents to the buyer. NFTs can be bought and sold like any other asset.
OpenSea: The current leading NFT marketplace.
Oracle: An oracle is an online trusted source of data used by a smart contract to settle the contract. Some crypto projects, such as Chainlink (LINK), were created to serve as oracles.
Paper hands: The tendency to panic sell your crypto at the slightest sign of trouble. The opposite of diamond hands.
Paper wallet: A piece of paper that contains a private key and a Bitcoin address. Somewhat of a misnomer since a paper “wallet” can’t actually store any cryptocurrency.
Peer-to-peer: The exchange of data – or in this case, cryptocurrency – between parties over a network without the need for a third party like a bank.
Pizza Day: The anniversary of the very first commercial transaction with Bitcoin, May 22, 2010. A programmer named Laszlo Hanyecz bought two pizzas for 10,000 bitcoin.
Pre-mine: When the supply of a cryptocurrency is created in advance of its launch, as opposed to the creation of supply over time by some method such as mining. Frequently used by ICOs.
Private key: A very long password used to unlock your cryptocurrency so you can withdraw it from your wallet to spend, sell, or send to another address. Losing or forgetting your private key means permanently losing access to your crypto. Anyone who gains access to your private key can steal your cryptocurrency. Never, ever, ever share your private key with anyone ever under any circumstances.
Proof of stake: An alternative system for securing a network and maintaining a blockchain. In proof of stake, users put up collateral tokens of a crypto (their “stake”) in return for becoming a “validator” of its blockchain – the same function as miners in a proof-of-work system. For each block, the network chooses a validator at random to record and verify the data. The chosen validator earns fees for performing that task; the larger the stake, the higher the odds of being selected to validate a block. Ethereum has plans to move to a proof-of-stake system.
Proof of work: As computers mine cryptocurrency, they expend computing power (measured by their hash rate) in an effort to be the first to solve a math problem. The winner verifies the next block in the blockchain and receives a reward. The computing power expended is the “proof of work” that tells the network the winning miner has earned that reward.
Protocol layers: Think of these as the roads and highways that connect the entire cryptocurrency space. Cryptos like Polkadot (DOT) and Algorand (ALGO) fall into this category.
Pseudonymous: Most cryptocurrencies, including Bitcoin, are only partly anonymous. Because a cryptocurrency address is simply long string of numbers and letters, it offers some level of privacy. But it is often possible, with some effort, to link those addresses to individuals. Privacy-oriented cryptocurrencies such as Monero have additional code to make it virtually impossible to link addresses to individuals, and are considered truly anonymous.
Public key: The wallet address (the alphanumeric string of letters and numbers) you give to others in order to receive cryptocurrency.
REKT: A phonetic spelling of “wrecked.” This term was borrowed from the online gaming community, where it describes a person who suffered an especially bad beat. In cryptocurrency, it means a severe financial loss: “When Bitcoin crashed in 2018, I got REKT.”
Ripple: A source of constant confusion outside of the crypto community (and sometimes within it). Ripple is the company that created the XRP cryptocurrency in 2012. It incorporates XRP into its business of facilitating payments between financial institutions. But XRP should not be referred to as “Ripple,” which is a common mistake. And XRP advocates will call you out on it.
Rug pull: A scam crypto project that “pulls the rug out” from investors by enticing them to swap a valuable crypto like Ethereum for a new token that promises massive gains. The scammers then drain liquidity for the coin from its trading pools on DeFi exchanges, making it near impossible to sell and leaving victims with worthless tokens. Also known as “getting rugged.”
Satoshi: The smallest unit of Bitcoin. One satoshi is equal to 0.00000001 bitcoins (one hundred-millionth of a bitcoin). Also referred to as “sats” for short. Named in honor of Bitcoin’s creator, Satoshi Nakamoto.
Scamcoin: Cryptocurrencies with no real purpose other than to fool investors, thus enriching the coin’s creators at the expense of the investors. Most often found among ICOs. Sometimes used derisively by crypto enthusiasts for a coin they dislike, regardless of whether it is an actual scam.
Security token: A cryptocurrency backed by an asset such as gold, real estate, or other investable assets such as ETFs. A security token must comply with the Howey test. Allows for a single physical asset to be subdivided digitally among many owners (one gold could be split into 100 security tokens owned by 100 different people). The initial sale of this variant is called an STO (security token offering). Considered a safer, better-regulated alternative to ICOs.
SegWit: A portmanteau of the phrase “segregated witness,” a technology introduced to the Bitcoin protocol in July 2017. By changing how the data is stored, SegWit makes it possible to squeeze more transactions into each Bitcoin block, thus helping to address Bitcoin’s scaling problems. SegWit also fixed an issue called transaction malleability, which opened the door to second-layer technologies such as the Lightning Network.
Sharding: A process of slicing up a large blockchain into smaller pieces to make it easier for the network’s nodes to manage. Instead of each node storing the entire blockchain, it need only process a part of it. Sharding allows less powerful computers to participate in a cryptocurrency network and aids scaling. Sharding is expected to be implemented on the Ethereum network by 2021.
Silk Road: An online market on the dark web (invisible to search engines like Google) that the FBI shut down in 2013. On Silk Road, people could use Bitcoin to buy and sell legal products as well illegal drugs. The association with the illegal activity created a cloud over Bitcoin that lasted for years.
Slippage: On a crypto exchange, a change in the price of a market order between the time it is placed and the time it is executed. The likelihood of slippage increases during times of high market volatility.
Smart contract: A “self-executing” contract that uses cryptocurrency as both the defining and the enforcement mechanism. The contract executes when the software determines that the conditions set forth in the code (and agreed upon by the participants) have been met. Often data from an oracle is used to determine if the contract conditions are met. Once executed, the smart contract is recorded as part of that cryptocurrency’s blockchain database – thus creating a permanent record of the contract.
Stablecoin: A cryptocurrency designed to have constant value relative to some other asset or group of assets. Most stablecoins are pegged to the U.S. dollar, though some are pegged to gold or other commodities. In theory, the administrators of a stablecoin should hold an amount of the pegged asset equal to the value of all the units of that stablecoin. So if there are 10 million units of a stablecoin backed by the U.S. dollar, the administrators should have $10 million in an account to back it.
Staking: Crypto staking involves committing some or all of a particular crypto you hold to help validate transactions on as well as maintain that crypto’s blockchain network. In return, stakers earn rewards at regular intervals. Usually your crypto must be “locked” on the network for as long as you keep it staked.
Token: A digital asset distinct from a cryptocurrency (like Bitcoin), although the terms are often confused. There are three basic types: a utility token, which provides access to a product or service offered by the company that created it; a security token, which represents an asset; and an equity token, which represents ownership in a company (like a share of stock does). Token projects are usually built on top of an existing crypto network such as Ethereum.
Tokenomics: The details of how a specific cryptocurrency works. It includes how the coins are created, the maximum supply, the means of distribution, how many coins are retained by the project’s creators as well as the conditions under which they might be released or sold, and, if applicable, how coins are “burned” (destroyed) as part of supply management.
Total value locked: The aggregate value of all the assets staked in a DeFi platform (usually expressed in U.S. dollars).
Transaction fee: A payment associated with a cryptocurrency transaction. Fees usually go to those who maintain the network (in the case of Bitcoin, miners get the fees). Fees can vary widely depending upon the cryptocurrency, but are usually very small.
Transactions per second (TPS): The number of transactions a cryptocurrency’s underlying network can process in one second. The higher the TPS, the better the network’s ability to handle surges in activity.
Trustless: A quality of most cryptocurrencies in which no party need trust another, a product of having no central authority. With crypto, the network processes a transaction and writes it into the blockchain (the digital ledger) for all other nodes to verify. This eliminates the need for a trusted third party such as a bank to process and verify transactions.
Turing complete: A programmable system capable of solving any computational problem. Some cryptocurrencies, such as Ethereum, are considered Turing complete – programs (known as dApps) can be executed on the network itself.
UniSwap: One of the most popular decentralized crypto exchanges where user can simply “swap” one crypto for another. See decentralized exchange.
Utility token: A type of cryptocurrency token designed to provide access to a particular product or service offered by the company that created it.
UTXO: Unspent transaction output – how a network tracks cryptocurrency ownership. Each time a person receives crypto into their wallet, it creates a new UTXO in that amount. All of the UTXOs in a wallet, and the amounts of crypto they represent, adds up to how much crypto that wallet holds in total.
Validator: On a proof-of-stake network, a participant tasked with verifying transactions on the network. Validators typically must “stake,” or lock, a certain amount of the crypto asset to qualify as a validator. Validators typically earn rewards for performing this role. Validators are the equivalent of miners on a proof-of-work network.
Ver, Roger: One of the earliest investors in Bitcoin, Ver became a tireless evangelist for the cryptocurrency and earned the nickname “Bitcoin Jesus.” Since siding with the faction that advocated for the Bitcoin Cash fork in 2017, Ver has maintained that Bitcoin Cash is the “real Bitcoin” and his influence in the crypto community has waned.
Wallet: A software program or hardware device that receives and stores cryptocurrency. Moving or spending the stored crypto requires the user have their private key. See hot wallet, hardware wallet, paper wallet, cold storage.
Weak hands: Owners of crypto who panic sell on pullbacks.
Whales: People or institutions who hold and trade large amounts of cryptocurrency. It is widely assumed that whales manipulate crypto prices.
White paper: A document prepared by a developer team to describe the purpose, structure, and roadmap of a proposed cryptocurrency. Typically used to entice investors into a new project.
Winklevoss, Tyler & Cameron: Twins who became known for suing Mark Zuckerberg for stealing the idea for Facebook from them while all three attended Harvard University. The “Winklevii” invested part of their $65 million settlement into Bitcoin, and have since founded a crypto-related enterprise, the Gemini Exchange. Their Bitcoin holdings are believed to exceed $1 billion.
Wright, Dr. Craig S.: An Australian-born computer scientist who claims to be Bitcoin’s creator, Satoshi Nakamoto. However, Wright has failed to prove that he has control of any Bitcoin that Nakamoto is known to have mined. Wright remains a controversial figure who also helped drive the creation of the Bitcoin “Satoshi’s Vision” (BSV) hard fork, which he maintains is the “real Bitcoin.”
XRP: See Ripple.
Yield farming: A way to earn more crypto on your existing crypto by lending it to a DeFi operation like Uniswap. In return for supplying liquidity, yield farmers earn fees and usually rewards in the form of crypto tokens. Yield farmers will move their money frequently as they search out the highest returns. Also known as liquidity mining.