Bitcoin, ALT coin, HODL and Whales, FOMO you say, these are all acronyms and terms used when trading crypto, below I will describe some of these commonly used terms. I will go more into technical analysis terms in another post and explain the basics here to Understanding the Crypto Lingo, so you don’t get REKT in the market.
In digital currency, is an address to send or receive coins or token in your digital wallet similar to a bank account but is typically a string of numbers that looks like this – 1BvKRBUFytWmrxTFn6Mu4m4GYg7xJaKRI6
Want to know more about addresses check out my post What is a BTC Address
Altcoin or ALT
An Altcoin is any other coin that is not bitcoin. It simply means an alternative coin to Bitcoin. There are a thousand of ALT coins you can check them all out at CoinMarketCap.
Annual Percentage Yield (APY) This is the interest earned taking into account compounding interest. You can read more at Investopedia on APY
Just means taking advantage of the price difference between two different exchanges. If a coin sells for $10550 on one exchange and $11600 on another, a trader can buy the digital currency on the first exchange and sell it on the second for a profit.
“ATH” is an abbreviation of “All-Time High.” You will hear this term quite a bit in digital currency markets. It simply means the highest point a currency has reached. You might say this year ATH for Bitcoin is $25,000. These areas can often form price resistance on trading charts.
Bear Market or Bearish
The “Bears” believe that an asset or market will decrease in value. Your sentiment might be bearish around a particular coin if you think its price is going to fall. Traders will often sell or short a coin if they have a bearish view. The term Bearish, because a bear will pull down its prey with its claws thus bearish to pull the coin/market down.
Many digital currencies make use of blocks; a Block contains transactions that have been confirmed; these transactions are a then combined to form the Block.
Basically, a Blockchain is a decentralized distributed ledger system which consists of a series of blocks. These blocks contain verified transactions. The blockchain can also not be erased. For a more detailed look at A blockchain click the link to get the Wikipedia description of A blockchain.
Bull or Bullish
When someone believes a coin or markets value will rise, you can say they have a bullish view. A Bull market is moving up. The term comes from a bull because a bull will use its horns to strike in an upwards motion, thus moving up you can say is a bullish move.
When a digital currency reaches consensus, the network agrees that a transaction took place. A consensus is crucial to a distributed ledger systems.
A cryptocurrency is a currency that relies on cryptography. Crypto leverages cryptography to verify transactions.
Cryptography is basically the process of encoding and decoding information so that someone observing that information can not understand what is being sent.
Is simply short for Decentralized Finance. See what Wiki has to say about ===> DeFi
Stands for Decentralized Exchange.
A system of recording information that is spread across or distributed on many devices. The blockchain is a distributed ledger that was created to keep track of all bitcoin transactions.
Fiat currencies are currencies that have value because a central bank mints them. The Aussie Dollar AUD, the USD or US dollar, the EURO and Japanese YEN are all fiat currencies. So basically if it is not a Crypto, it is likely fiat currency. Click this link for the Investopedia definition of What Is Fiat Money?
Fear, Uncertainty and Doubt
Exchanges are just the marketplaces where traders can make digital currency transactions. If you want to make a Crypto transaction, the best way to do this is through an exchange. You can buy, swap, sell and perform other transactions all within an exchange. A couple of reputable exchanges I use are FTX and Binance.
FOMO is the acronym for Fear Of Missing Out. As a trader, you should never chase a trade for FOMO. Getting caught up in FOMO can be dangerous as a trader, crypto can be volatile, and prices can move fast but if the price has moved away from your predetermined entry price you should never try to chase the price for FOMO.
No not something you use to eat with. A fork is a change in the protocol or rules of a digital currency. A developer may update a cryptocurrency’s protocol over time.
A hard fork is when a permanent change to a digital currency’s protocol is made; this change can result in a whole new blockchain that will not accept any blocks mined using the old protocol.
HODL is an acronym for Hold On for Dear Life. Crypto can be a volatile market when a coins price moves fast, and someone might tell you to HODL that coin. The acronym was originally adopted from a misspelling of the word “hold” by a drunken trader. There is a funny story on Investopedia about it if you want to read more about it click this link > HODL Definition
HYIP stands for High-Yield Investment Program (HYIP), and this is what the U.S. Securities and Exchange Commission has to say about High Yield Investment Programs “These are unregistered investments typically run by unlicensed individuals – and they are often frauds.”
Initial Coin Offering is the first time an organization offers digital tokens to the public to raise capital. Companies often do this to finance their projects. You may have heard of an IPO in stock trading an ICO is the crypto equivalent.
KYC stands for “Know Your Customer.” KYC is used to verify the identity of a trader or investor. It is a required regulation requirement that exchanges use to identify you. Typically, you need to send in a few forms of identification to verify who you are so the exchange can get to know you so to speak.
Long, Going Long, Being Long.
Going long or taking a long position, means making a wager that an asset will increase in value, so if you are Long, you believe that the trade will rise in value. If a trader goes long bitcoin, they are making a decision that Bitcoin will appreciate.
Market cap is a term for total market value, short for market capitalization. To determine the Market Cap of a coin, you multiply the total number of that coin in circulation by the digital currency’s price. I use CoinMarketCap for this; they are a great resource for researching coins.
Mining Crypto is a process for creating new units of a digital currency. Mining involves confirming transactions and combining them into blocks. These days that is typically done on a purpose-built “mining computer. ” Bitcoin one of the most commonly mined coin releases new bitcoins every time a block is mined. The miners are rewarded with digital tokens for contributing these needed resources. Mining these days is not as viable as it was when crypto first started and is another whole subject to cover in itself. These days viable mining is usually done in a mining farm. There have been a lot of scams related to mining crypto as well. If you are curious about mining crypto or mining farms, have a look at the video below.
A mining incentive is a reward that miners get for confirming transactions and mining them into blocks.
POW is an acronym for “Proof Of Work,” POW is a method of proving that a digital currency’s transactions have been verified. A miner can do this work and get rewarded for verifying transactions by receiving units of a digital currency.
POS or “proof of stake” is another method of confirming transactions. Staking crypto is another topic that I may cover in the future.
A private key is a string of numbers and letters a form of cryptography that an investor may use to access their digital currency. Its security helps to protect a user from theft and unauthorized access to funds.
A public key is similar to a private key but is given out publicly; this is where a trader can receive digital currencies.
As the private key, this public key is a combination of numbers and letters and cryptography.
Pump and Dump
“Pump and Dump” is a term used when a market participant or several participants work together to inflate the price of a coin so they can sell it when its value is artificially high.
I got REKT on that new coin. I should have stuck to my trading plan. The term “rekt” is crypto trader slang for “wrecked” meaning to have a big loss.
ROI, or “Return On Investment.” A Crypto trader will invest hoping for a good return on their initial investment; however, you may end up with a negative return on your investment, NOT good if it goes wrong.
Satoshi or Satoshi Nakamoto
Satoshi Nakamoto is known for inventing Bitcoin; it is a pseudonym.
Need to know more have a look on Wikipedia here > Satoshi Nakamoto – Wikipedia
Short, Shorting or Short Selling
Going Short, Shorting, or Short Selling means making a wager that an asset will decrease in value, so if you are Short, you have the view that the trade will fall in value. Yes, you can make money when the market is falling. If a trader goes Short bitcoin, for example, they are deciding that Bitcoin will depreciate.
A “whale” is a term used to describe a trader who makes sizable trades. A Whale can manipulate the market—or “make waves in the ocean” by executing substantial transactions.
It is a comprehensive document that developers provide comprehensive information on the digital token in question and its underlying technology.
I am sure more that I have missed, but this is just a few of the more common terms you will hear around this crypto space. I hope this Understanding the Crypto Lingo guide has helped you to understand crypto a little more. If you think I have missed or should add an important term, please let me know in the comments below, thanks for reading.
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