Cryptocurrency is confusing at the best of times. Knowing these terms will help. SOPA Images/Getty Bitcoin, ether and dogecoin have become household words, and financial institutions around the world are increasingly embracing cryptocurrencies like them. Against all odds, blockchain technology has gone mainstream. Despite the prominence of cryptocurrencies — and their cousin, the nonfungible token, or NFT — few understand the technology that underpins these coins.
Blockchain technology is still arcane, truly understood mostly by talented engineers — many of whom were early adopters of cryptocurrencies like bitcoin and ether. Part of the reason why cryptocurrencies, blockchains and NFTs are so difficult to understand is the wide range of esoteric terms used by the communities that trade in them.
Below is an alphabetical glossary of blockchain terms you might find useful. This isn’t an investment guide, nor is it an exhaustive list of terms and phrases. It does, however, cover the basics that will be helpful for beginners. airdrop
An airdrop is when a company drops cryptocurrency or an NFT directly into your wallet. Instead of an initial public offering, blockchain services will launch a token and airdrop people who have used that service in the past . This can be done for several reasons: It can be pure marketing, as airdrops raise awareness of a token that people can then invest in, or it can be to provide governance tokens for a DAO .
A recent example: The Ethereum Name Service allows users to change their wallet number to a wallet name (like CNET.eth). In December, it launched its own ENS token , airdropping an amount to everyone who had used the service. The more people had used Ethereum Name Service, the more tokens they were airdropped — in some cases worth tens of thousands of dollars. aping
To “ape” into something is to recklessly invest in the hopes of short-term profit. Everyone knows scams abound, and careful investors do research to vet a cryptocurrency or NFT project to ensure it’s safe. To “ape” into a project is to see its value rising and to throw money into it hoping for the best. altcoin
Any cryptocurrency that’s not bitcoin or ether . Many are also known as shitcoins. bag
Your bags are investments you hold over a long period of time, often ones that have performed poorly. “Hopefully the bullrun pumps my bags.” Binance
The world’s biggest cryptocurrency exchange, where people buy and trade cryptocurrencies. It’s under investigation by the US Department of Justice and the IRS for tax evasion and money laundering. blockchain
A blockchain is a distributed database. In simpler terms, it’s a decentralized ledger that records information in digital blocks. Once a block is mined and added to the chain, it can’t be altered, thus blockchains offer public records of unchangeable data.
There are many different blockchains which feature varying degrees of decentralization, efficiency and security. Many have their own cryptocurrency — for instance, ether is a cryptocurrency built on the ethereum blockchain. bitcoin
Bitcoin is the first cryptocurrency , built on the bitcoin blockchain. It was created in 2009 by a person or group of people under the pseudonym of Satoshi Nakamoto . Only 21 million can ever be minted, around 18.9 million of which are already in circulation . Bored Ape Yacht Club
The biggest NFT collection, with a floor price of $390,000 at the time of writing. It launched in April 2021 and has since become a brand that’s transcended the NFT community , with owners including Jimmy Fallon and Eminem. burning
Cryptocurrencies are “burned” by being sent to a wallet that can only receive them and not send them. Burn mechanics are often utilized to cause a deflationary impact: the fewer tokens in circulation, the more scarce the ones investors hold become. buy the dip
This refers to buying more of an asset after its price as fallen. For instance, a bitcoin holder might “buy the dip” if the price falls by $10,000. candlesticks
Cryptocurrency graphs that chart price movement feature green and red bars — green for price going up, red for price going down — which are sometimes referred to as “candlesticks.” Green and red candlesticks. Dextools cold wallet
A cryptocurrency wallet not connected to the internet. These are safer and less prone to scams . cross-chain
The ability to send data, tokens or assets from one blockchain to another. This is different from multichain services, which are built to work on multiple blockchains. cryptography
A form of information encryption, where […]
source From Dogecoin to DeFi: A Blockchain Glossary for Beginners
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