Learn the most important crypto terms in our exclusive Crypto Glossary
- ATH (All-time high)
- Alternative Coins (Altcoins)
- Bitcoin Maximalist
- Bitcoin to the moon
- Block reward
- CEX – Centralized Crypto Exchange
- Digital Address
- Digital Wallet
- Market Cap
- Mining and Miners
- Proof-of-stake (PoS)
- Proof-of-work (PoW)
- Private Key (Seed)
- Total Market Cap
- Whale (Bitcoin Whale)
- What is ATH (All-Time High)?
The highest price reached by an asset, Bitcoin’s ATH is at $19,800 (as of writing these lines). The ATH was reached on December 26, 2017. The opposite of ATH is ATL, which is an all-time low.
- What are Alternative Coins (Altcoins)?
Aside from the Bitcoin cryptocurrency, there are thousands of other digital cryptocurrencies, which are also based on blockchain technology.
Each coin brings its uniqueness and innovation. The vast majority of the altcoins are not recognized, and they have relatively low daily trading volume and market capitalization. However, there are several examples of alternative coins, like Ethereum and Ripple, with decent liquidity and trading against FIAT pairs. Over the years, of the thousands of altcoins, many bled-out their value and just disappeared.
- Who is a Bitcoin Maximalist?
Such a person believes only and emphatically in Bitcoin. Usually, the maximalist considers the other altcoins as unworthy and unnecessary, or as “shitcoins.”
- What is Bitcoin to the moon?
The term “Bitcoin to the moon” is used by investors hoping for a big increase in their cryptocurrency or other asset's value given that the moon sits high in the sky. This is a play on words of other terms such as “sky-high valuation,” “soaring prices,” and etc.
- What is Block Reward?
The compensation that miners receive for successfully validating new transactions and recording them on the blockchain.
- What is Blockchain?
Blockchain can be described as a huge information file which lists all transactions that were ever made. Blockchain is the heart of the Bitcoin network and serves as a kind of a ledger.
- What is a Centralized Crypto Exchange (CEX)?
A crypto exchange is an online trading platform where cryptocurrencies and FIAT money can be traded. Centralized means that the exchange is operated by a specific entity that maintains full control over it.
Most of the crypto exchanges allow crypto-to-crypto trading only. However, the larger ones also allow crypto-to-FIAT trading. The most popular exchanges are Binance, Coinbase, Kraken, Bitstamp, and BitFinex.
- What is DAO?
A decentralized autonomous organization (DAO) is a developing form of legal structure that has no central governing body and whose members share a common goal to act in the best interest of the entity.
- What are dApps?
Decentralized Applications (dApps) are apps built on a decentralized network that consists of a smart contract backend and a user interface frontend. dApps are for anyone to use and have smart contracts others have written and are also ‘trustless,’ meaning anyone is able to verify their authenticity and functionality.
- What is a DEX?
A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions happen directly between crypto traders
- What is DeFi?
DeFi, or Decentralized Finance, is a new monetary system built on public blockchains without the involvement of a centralized institution
- What is a Digital Address?
A sequence of 27 to 34 letters and numbers. Each address is unique. Here is an example of a digital address: 135sti2R9ZooiGrFFRJxYGeDvF5Uvjj7JK.
Digital addresses are representing cryptocurrencies wallets. In order to send cryptocurrencies or funds, we will need to use the recipient’s digital address.
- What is a Digital Wallet?
A digital wallet is an application installed on a local computer (PC), a mobile app or a remote server, facilitating the storage of digital currencies. Most digital wallets are made to store Bitcoin. A digital wallet uses public addresses as well as private keys to hold one’s funds.
The most secured digital wallets are the cold storage paper wallets or hardware wallets, such as Trezor and Ledger. For more info on digital wallets.
- What is FIAT?
Any currency that is backed by the state or country. Basically, it is all kinds of coins we know and use on a daily basis (USD, Euro, CAD, etc.).
- What is KYC?
KYC stands for “Know Your Customer.”, is a process that users are requested to provide identity information due to regulations. This is including but not limited to a passport scan, proof of address, and online webcam verification.
- What is Market Cap?
Market cap, or capitalization, represents the current price of a single cryptocurrency multiplied by the total number of coins in the market (the circulation supply). Bitcoin is the cryptocurrency with the highest market cap.
- What is Mining? Who are the Miners?
Mining is the process of creating new Bitcoins. Mining is done by ‘miners,’ who are solving complicated equations. The miner that solves the fastest will receive the reward (fee) for the transaction and add it to the block.
On average, every 10 minutes, a new block is added to the gigantic distributed public ledger of already existing transactions, which is the blockchain.
Bitcoin mining could be done using a personal computer (PC) in the early years of the cryptocurrency. These days, the mining efforts are divided between giant companies such as the Chinese-based Bitmain.
Mining is not limited to Bitcoin only, but to PoW (Proof-Of-Work) type of cryptocurrencies.
- What is Proof-of-Stake (PoS)?
This consensus algorithm allows users to decide on who will validate the next block, depending on the number of coins they have. The token holders lock those tokens to secure the network and receive rewards in return.
- What is Proof-of-Work (PoW)?
The original consensus algorithm of the blockchain network. The algorithm is being used to confirm transactions and add new blocks to the chain. Miners compete with each other to receive rewards when confirming transactions.
- What is a Private Key? What is Seed?
Each public or digital address has a unique private key that is required to access the funds. Here is an example for a private key: 6AkL0TJAuKcucHGqWVfUIa4g1haE0ilcm7eWUDo..fd + PpzdCJf1s4WdsK.
A private key is usually represented in a neater way, by a seed phrase. The seed is a combination of 12 or 24 words.
- What is Satoshi?
Satoshi is the cent unit of Bitcoin. One Satoshi is 0.00000001 of a Bitcoin. It’s named after Satoshi Nakamoto, the anonymous creator of Bitcoin.
The reason for 8 decimal spaces is because Satoshi Nakamoto had planned Bitcoin to be used as everyday-currency even when Bitcoin reaches the price of over one million USD.
- What is the Total Market Cap?
Total market cap, or capitalization, is the combined market capitalization of all cryptocurrencies.
- Who is a Bitcoin Whale?
A person or entity that owns such a large amount of Bitcoin that they can single-handedly affect the price of Bitcoin by mass-buying or selling.
- What is Whitepaper?
Whitepaper (or WP) is an authoritative report or guide designed to inform readers about the specifications of a newly created crypto project. It’s equivalent to a business plan in the traditional financial sphere. The WP is written by the project’s team and usually has chapters discussing the problem solved, the token, the team, and the technical aspects of the project.