Back to posts

crypto

Our A-Z Crypto Glossary

Our glossary of cryptocurrency terms, jargon and slang

Samantha Adams

Wed Oct 12 2022

New to crypto? Accountant with new crypto clients and feel like you need a translator? Our complete A-Z Glossary will have you up to speed with the lingo in no time!

Recap's A-Z of crypto

Aa

Address - a string of letters and numbers where crypto can be sent to and from

Airdrop - a token that is distributed to an audience, often as part of marketing campaign

Algorithm - a process or set of rules followed in performing a calculation or problem solving

Alphanumeric - phrase containing letters and numbers

Altcoin/Altcoin Trader - an alternative coin to Bitcoin/someone trading Bitcoin alternatives

AML - Anti Money Laundering, legal and regulatory procedures to minimise and prevent funds generated by illegal or dubious activity

API - Application Programming Interface, a set of protocols and tools for building software applications, allows softwares to interact, for example Recap fetches data from Coinbase through their API

Apeing - when a trader buys a new token shortly after launch without researching thoroughly

ATH/ATL - stands for all time high/ all time low, the highest/ lowest price point in a crypto’s history


Bb

Bags - portfolio of coins and tokens held by an investor, tends to be used when performing badly so can have a negative tone

Basket - a collection of digital currencies managed as a single asset

Bear - (bearish) someone who believes market prices will decline

Bear Market - when prices fall (after market highs) causing low confidence in investors

Bear Trap - a group of traders manipulate price of an asset

Beta - early version of software (or product feature) allows users to test and feedback to development team

Bitcoin – the first and most famous crypto currency created by Satoshi Nakamoto; a peer-to-peer payment system now used by millions around the world

Bitcoiner - an individual who is bullish on Bitcoin

Bitcoin Pizza - the first known Bitcoin transaction, Laszlo Hanyecz paid 10,000 BTC for two pizzas

Block - a file containing information on transactions during a specific time relating to a cryptocurrency

Blockchain – a digital distributed ledger secured by cryptography; a series of transactions where each block builds on the previous block

Block Explorer - a webpage that allows you to browse information about blocks, transactions, balances, and transaction histories

Block Reward - awarded by the protocol to a miner when they validate a bloc

Bollinger Bands - used to measure market volatility

Bots - automated software, often used by crypto users to automatically carry out trades

Bounty - like the traditional sense; a reward to incentivise certain behaviour for example development work or referrals, often aimed at white hat hackers to identify vulnerabilities

Brave Browser - a private internet browser that’s very popular within the crypto space

Bridges - a blockchain bridge that allows transfer between different chain

Bull Market - market prices rising encouraging investors, also used in the traditional markets

BUIDL - comes from HODL, focus on building the product


C

Candlestick - a graph of price action that displays the open, close, high, and low points, shaped like a candlestick

Capitulation - lots of selling activity in a short duration, investors sell their holdings as quickly as possible

Centralised - planning and decision-making processes are concentrated in a particular point of a process meaning power lies with a chosen few, for example a centralised crypto exchange

Cipher - a method of encrypting and decrypting messages

Circulating Supply - the number of cryptocurrency coins or tokens publicly available and circulating in a given market

Coin cryptocurrency independent of any other platform used as an exchange of value

Collateral - value pledged against a loan to guarantee repayment

CPI - Consumer Price Index, a measure that tracks the effect of inflation over time

CPU - Centralised Processing Unit, a computers control centre, performs calculations, actions and runs programs, can be used to mine crypto

Credentials - personal information, for example username, email address

Cryptocurrency/crypto – an alternative to the existing fiat system; a digital currency used as a medium of exchange in a P2P system where transactions are secured and verified by cryptography

Cryptography - science of encrypting and decrypting information using mathematical theories and computation

Crypto Winter - declining or flat pricing over an extended period that leaves uneasiness and negative feeling across crypto investors

Custody - refers to the holding and ownership of assets, do you have full custody of your assets (for example, in a crypto wallet) or does someone else hold them on your behalf (a centralised exchange)?


Dd

DApp - a decentralised application running on a P2P network of computers as opposed to one central computer

DAC - Decentralised Autonomous Co-operative, an organisation controlled by shareholders/community instead of one authority

DAO - Decentralised Autonomous Organisation, hard-coded rules for collective management of a decentralised organisation

DCA - Dollar Cost Averaging, the process of investing fixed amounts in an asset at regular intervals

Dead Cat Bounce - when an asset with a declining value has a brief recovery but this is followed by continuation in the decline

Decryption - reverting an encryption process converting unreadable data into readable data

DeFi - Decentralised Finance; a P2P ecosystem of decentralised financial applications, DeFi uses processes and technology that remove the need for third party or centralised institutions

Delisting - removing an asset from an exchange by request from the project or decided by the exchange

Derivative - a contract between a buyer and seller to agree the future value of an asset

DEX - Decentralised Exchange; an exchange where users do not need to deposit funds to start trading, they can trade directly from their own wallet

Diamond Hands - holding a volatile asset but not selling regardless

Difficulty - the level of difficulty in mining a block

Difficulty Bomb - the increase in mining difficulty as Ethereum migrates to Proof of Stake

DYOR - Do Your Own Research, valuable advice within crypto meaning investigate yourself before investing rather than following the crowd or marketing hype.


Ee

Encryption - information is converted into unreadable data

Ethereum - ETH, the most popular cryptocurrency after Bitcoin, decentralised open source blockchain that recently migrated from proof of work to proof of stake

Exchanges – a marketplace where you can interact with (buy/sell/trade etc) cryptocurrencies, for example Coinbase and Kraken (centralised) or Uniswap (decentralised)


Ff

Fakeout - a trader enters a position expecting price movement that ultimately doesn’t happen

Falling Knife - purchasing an asset thats price is quickly declining expecting it to later bounce back up

Fiat - currency declared as legal tender by the government, El Salvador is currently the only country in the world where Bitcoin is recognised as legal tender

Finality - the reality that completed cryptocurrency transactions are guaranteed and irreversible

Flappening - described when Litecoin surpassed Bitcoin Cash in terms of market capitalisation

Flippening - will be used to describe the moment when/if Ethereum surpasses Bitcoin

FOK - Fill Or Kill Order, a buy or sell that must be executed immediately to avoid being cancelled

FOMO - Fear Of Missing Out, anxious that you may miss out on a profitable opportunity

Fork – when a blockchain splits into two

FMA - first mover advantage, as it sounds competitive advantage of the first product in an unexplored market

FX - Forex, Foreign Exchange Markets, the global market for trading fiat

FUD - Fear, Uncertainty and Doubt, a marketing strategy that spreads fear to influence investors

Full Node - essential for keeping a blockchain network running; a computer that hosts and implements all of the chain’s underlying rules and fully validates the transactions and blocks

Fungibility - the ability of an asset to be changed with other assets of the same type as their individual units are not indistinguishable from each other

Fungible token - a token that is not unique and therefore can be exchanged for an identical token of the same value

Futures Contract - a contract that legally agrees to buy/sell an asset at an agreed price and date


Gg

Gas - the pricing structure of the Ethereum blockchain which calculates operational costs and transaction fees

Gas Fee - the fee to execute a transaction on the Ethereum blockchain

Gas Limit - the max fee price the user is willing to pay to execute the transaction

Genesis Block - Block 0 or 1 - the first block recorded on the blockchain

Github - a repository where a team can collaborate on their open source code


Hh

Hacker - often comes with negative connotations but can actually apply to any individual with an advanced understanding of computer systems and networks

Halving - for protocols with fixed supply (like Bitcoin) halving is when the block reward drops to one-half of what it was before

Hard Cap - the maximum amount of funds a project intends to raise during their Initial Coin Offering (ICO) or fundraise

Hash - a fixed length of code produced after a piece of data is mapped Hash Rate - measured in hashes per second, the speed at which new hashes are calculated

HFT - High Frequency Trading; a large number of trades executed in fractions of a second

HODL – basically just means hold (it originates from a typo that stuck) it is also used as the acronym “hold on for dear life”

Honeypot - term used by cyber security professionals, basically its a virtual trap


Ii

ICO - Initial Coin Offering, a fundraising method for a new project where they sell new cryptocurrency to early investors, normally at a low price

IEO - Initial Exchange Offering, like an ICO but with a trusted intermediary (exchange) between the project and investor to reduce the risk. Interoperability - blockchains building on each other’s features to be compatible

Immutability - a core feature of crypto; the inability to be changed

Index - used to track the price of an asset

Isolated Margin - margin balance allocated to a position, traders manage risk by restricting the amount allocated


Kk

KYC - Know Your Customer, a well known verification procedure within the finance industry, companies must be able to identify their customers to comply with KYC laws


Ll

Latency - the time difference between submitting a transaction to a network and the network confirming its acceptance

Layer 2 - A secondary protocol built on top of an existing blockchain for scalability

Ledger - a digital record keeping system where cryptocurrency transactions are tracked (or a physical book or computer file for traditional financial transactions)!

Lightning Network - a second layer operating on top of a blockchain for increased transaction speed and volume

Linux - an open-source operating system

Liquidity - the ease of trading an asset without causing significant fluctuations in price

Listing - adding an asset to an exchange by request of the product team or exchange decision

LP - liquidity pool, a crowdsourced pool of tokens locked in a smart contract used to facilitate trades between the assets on a decentralized exchange

LP Tokens - Liquidity Provider tokens are awarded to a user when they supply a pool with funds, when the pool facilitates a trade a fractional fee is also distributed proportionally amongst the LP token holders


Mm

Mainnet Swap - the migration of a coin from a third party platform to native on-chain

Margin Trading - using borrowed funds to trade, high risk and for experienced investors

Market Capitalisation - total trading value of a coin, current price of coin x the supply

Maximum Supply - the maximum number of coins/tokens for a cryptocurrency, for example we know the maximum number of Bitcoins that can be mined is 21 million

Merged Mining - mining two or more cryptocurrencies at the same time without impacting performanc

Metadata - data about other data

Mining - process of verifying transactions on a blockchain, transactions are added to the ledger and miners are rewarded with the native currency

Moon(ing) - when a cryptocurrency is strongly rising in price and at a fast rate, you may hear traders say “to the moon”


Nn

Node - a participant on the blockchain network, ensures the security of the system and validates new blocks

NFT - Non-Fungible Token, a unique digital asset that isn’t interchangeable, often used in gaming and art/collectibles, examples are Axie Infinity, Bored Apes, Crypto Punks


Oo

Off-Chain - transactions that don’t occur on the blockchain network

OSS - Open Source Software, software that is open for anyone to use, update and distribute


Pp

Paper Wallet - a handwritten note or printout containing a crypto address and private keys

P2P - Peer-To-Peer, two or more connected computers sharing resources without a central server

Pegged Currency - aka Stable Coin, a currency that’s price is designed to stay in-line with another asset, for example USDT and the US dollar

Ponzi Scheme - a scam, beware! new investors funds pay the returns of older investors

Private/ Public Keys - a string of numbers that act like a digital signature, used with an algorithm to encrypt and decrypt data, the public key is just that - it can be shared, whereas the private key should remain with the user

PoS - Proof of Stake, a consensus mechanism where randomly selected validators verify transactions and create new blocks, receiving transaction fees as rewards

PoW - Proof of Work, a consensus mechanism where miners work to solve for the hash, a cryptographic number, to verify transactions and create new blocks, receiving block rewards


Rr

REKT – just as it sounds, this individual lost… a lot

Rug pull - a new project is suddenly abandoned by its development team, a scam - the project is normally massively over marketed to generate lots of interest and investors lose funds


Ss

Satoshi - sats are the smallest unit of a bitcoin - 0.00000001 BTC

Satoshi Nakamoto - the anonymous creator(s) of Bitcoin and the Bitcoin whitepaper

Seed Phrase - collection of random words used to access your wallet, we also use this secure approach for the Recap app, you’ll be given a seed phrase when signing up, we refer to this as our recovery phrase and you’ll be asked for it when signing in from different devices to show that it is you

Stablecoin - a cryptocurrency designed to maintain stable value

Staking Pool - a pool where a group of stakeholders stake their assets to increase their chance of validating a new block and earning rewards


Tt

Ticker - the symbol for a cryptoasset e.g. BTC and ETH

Tokens - digital units issued on a blockchain

TXID - Transaction ID, a unique string of characters that represents a transaction on the blockchain

Trustless - consensus is agreed between multiple participants, no individual entity has full authority


Vv

Volatility - rapid fluctuations in the price of an asset


Ww

Wallets - where crypto can be stored, there are hot (soft) and cold (hard) wallets, hot wallets are online storage for crypto whereas cold wallets are more secure hardware devicces that are offline

Weak Hands - investors who don’t always stick to their plan to hold assets as they lack confidence

Wen Lambo – when are you going to be rich enough to buy a Lamborghini?

Whale - an individual holding large amounts of crypto, they can make an impact on the market

Whiskers - lines representing the low-high range of a trading pair on a candlestick chart

Whitelist - trusted individuals, addresses or computer programs

Wick - line on a candlestick chart that represents the fluctuating price of an asset in regards to its open/close price


Zz

Zero-Knowledge Proofs - a way of verifying a transaction without compromising privacy

Ready to go to the moon?

Don't forget about Recap when you're ready to calculate your crypto taxes!