Cryptocurrency Glossary - Common Terms & Acronyms
The following is a Glossary of Crypto Terms & Acronyms associated with popular cryptocurrencies. Mastery of these terms will allow you to more efficiently learn more about cryptocurrency concepts and principles, and will help you to become a crypto cognoscenti. In order to nominate a term or acronym for inclusion in the Glossary, please contact us.
Glossary of Crypto Terms & Acronyms
| TERM | DESCRIPTION |
|---|---|
| 21 million | The maximum amount of Bitcoins that can be in circulation; after this number is reached (which will occur around 2140 at the current rate at which Bitcoin is mined), no new Bitcoins will be created |
| AML | "Anti Money Laundering" - A set of regulations and laws intended to prevent the illegal movement of money, such as through money laundering. In the context of cryptocurrency, this usually involves the monitoring of individuals who buy or sell cryptocurrency to ensure they don't launder money from cryptocurrency into a fiat currency |
| ATH | "All Time High" - Refers to the highest price ever reached by a particular cryptocurrency |
| ATL | "All Time Low" - Refers to the lowest price ever reached by a particular cryptocurrency |
| BUIDL | Mispelling of "Build"; a crypto investment that involves "building" and otherwise contributing to the blockchain instead of holding (a.k.a. HODLing). Can also involve simply using the cryptocurrency for its intended purposes or any other use of it that could help expand or evolve the blockchain |
| CeFi | "Centralized Finance" - A financial system that is build around a central institution, in which money is managed by said central institution and outside of users' control |
| Cryptocurrency "mining" | A process of creating new cryptocurrency coins or tokens utilizing a PoW (Proof-of-Work) consensus algorithm. |
| Cryptocurrency "minting" | A process of creating new cryptocurrency coins or tokens utilizing a PoS (Proof-of-Stake) consensus algorithm. |
| DAO | "Decentralized Autonomous Organizations" - A company that is governed by algorithms or blockchain-based smart contracts and is therefore decentralized, allowing large groups of people to be able to participate in governing the company. Just as cryptocurrency blockchains need a certain percentage of particpants to be in concensus for transactions to be accepted, a certain percentage of participants in a DAO needs to be in concensus for decisions to be accepted |
| DeFi | "Decentralized Finance" - A financial system that is not built around a centralized institution (such as the Federal Reserve), meaning that transactions can be done without the involvement of any intermediaries or third parties. Generally, DeFi is done through blockchain-based smart contracts |
| DEX | "Decentralized Exchange" - A type of cryptocurrency exchange system that is peer-to-peer, meaning that crypto trades are done directly between two parties and no third party is involved |
| FOMO | "Fear Of Missing Out" - In the context of cryptocurrency, it refers to a psychological state in which one feels pressured to buy into an already-high-priced market because many others have benefitted and they believe prices will continue to increase. Also commonly used outside of the context of cryptocurrency |
| Forex | (a.k.a. FX) "Foreign exchange" - A portmanteau of "foreign currency" and "exchange"; a process that converts one currency into another |
| FUD | "Fear, Uncertainty, and Doubt" - In the context of cryptocurrency, refers to a psychological method of manipulating others into buying less of or even selling a particular cryptocurrency through inspiring a negative sentiment (i.e. fear, uncertainty, and doubt) about that cryptocurrency |
| DYOR | "Do Your Own Research" - An aspect of cryptocurrency investment popularized due to the amount of scamcoins and pump-and-dump schemes (among other scams) in the cryptocurrency market. It is often used as a disclaimer or advice to buyers of cryptocurrency to properly investigate any potential investment before buying into it |
| HODL | Mispelling of "Hold", retrofitted to stand for "Hold On for Dear Life" ; A crypto investment strategy that involves passively holding onto cryptocurrency instead of trading it |
| KYC | "Know Your Customer" - A form of identity verification requiring that background checks are run on buyers of cryptocurrency and a record of each account is kept in an effort to prevent illicit activity; a form of Anti Money Laundering (AML) |
| Minnow | (a.k.a "Crypto Minnow" / "Crypto Fish" / "Fish") A cryptocurrency holder who has a small, relatively insignificant amount of a particular cryptocurrency |
| PoW | "Proof-of-Work" - A consensus algorithm in which transactions are validated and new blocks are created in a blockchain through the solving of computationally-intensive mathematical problems (also known as crypto mining). Generally more secure than PoS, but also considerably more energy-intensive and costly |
| PoS | "Proof-of-Stake" - A consensus algorithm in which instead of mining, participants in a blockchain are simply required to own and "stake" tokens as collateral to validate blocks in a chain. Block validation is much less energy-intensive than PoW block mining and is generally less expensive and more scalable, but can be less secure as control over the blockchain can be bought (as long as a participant has 51%+ stake of that cryptocurrency, which is unlikely to occur) |
| Pump and Dump | A cryptocurrency scam in which investors hype up and/or inflate the price of a cryptocurrency and then sell their share of it once others buy into it (i.e. they "pump" large amounts of money into a cryptocurrency and then "dump" all of their coins before the prices drop) |
| Tokenization | A process that splits the ownership of an asset into pieces, or tokens. This is similar to Non-Fungible Tokens (NFTs), with the ownership of an asset being represented by a virtual token, but with tokenization (and not with NFTs), these pieces are still fungible |
| Tokenomics | A portmanteau of "token" and "economics"'; essentially studies the economics (e.g. supply and demand characteristics) of a particular cryptocurrency |
| Whale | (a.k.a. "Crypto Whale") A cryptocurrency holder who has an abnormally large amount of a particular cryptocurrency. Because of this, whales can potentially significantly influence the price of that cryptocurrency if they move around large amounts at one time |
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