Common Cryptocurrency Words - 2022

In a way, crypto in itself is a new language, new concept, a new way of money.

When communicating with others already in the crypto space, it is very easy to feel alienated when they start blurting out words like DeFi, CeFi, NFT's and even WAGMI!  

In this post, i'll try to decrypt (no pun intended😄) a bunch of the most popular terms and make your crypto journey a little less mystifying. There are a lot of terms, and you may not get them all on the first go, so be sure to bookmark this post and refer to it when required. I will keep it updated with all the new words being churned out of the crypto social system each day. It must be said that nothing in this post should be taken as financial or investment advice. Here's my A-Z:

Airdrop: Occurs when a project gives out free tokens or coins to holders of their coin/members of their community.

Alt-coin: Any coin or token that is alterantive to Bitcoin. This includes Ethereum, the second most popular cryptocurrency.

ATH: All-Time-High. The highest value that a coin or token reaches in all of it's history.

Bearish: A trend in the price of a coin or token that is downwards i.e. more sells than buys. Price drops. A bear market is then when the majority of the cryptocurrencies in the market are in a general price decline trend.

Blockchain: A decentralised public ledger. A sequence of blocks that hold transactional information that is stored in a public database.

Bullish: Opposite of Bearish. An upwards trend in the price of a cryptocurrency. Price rises.  A Bull market is characterised by a general increase in coin value across the board.

CeFi: Centralised Finance. This term refers to all finalcial services and products related to crypto but run through a central organisation. Examples include: Binance, Coinbase and Kucoin.

Cold Wallet: A piece of hardware similar to a USB drive that allows for storage of your cryptocurrency portfolio completely offline, keeping them safe and protected from hacking and theft.

Cryptocurrency: A digital currency built upon the concept of cryptography and blockchain.

DAO: Decentralised Autonomous Organisation. An organisation created by developers that automates decisions in a decentralised manner. Holders of the token are given voting rights on the future ventures of the DAO.

DApp: Decentralised Application. An application that is built upon a blockchain platform such as Ethereum or Avalanche. They are decentralised and thus allows users to carry out actions without intermediaries.

DCA: This is the practice of consistently investing a fixed dollar amount into an asset at a fixed time period (weekly, monthly, yearly), regardless of price at the time. It works on the premise of having more time and exposure to the market rather than trying to time the market. It reduces the stress of investing and the risk of sitting on the side-lines waiting for the "right time" to employ capital.

Decentralised: Lacking of central control. The information is not stored in one location but rather among many nodes which all have their individual copy of the information. This removes the risk of manipulation and human error.

DeFi: Decentralised Finance. A collective term for all the financial services and products offered in crypto but is built on a blockchain enabled platform. No central authorities to control access to anything.

DEx: Decentralised Exchange. A peer to peer exchange where all users can trade their cryptocurrencies without the need of an intermediary.

DYOR: Do Your Own Research. A slang term used on the internet advising an investor to carry out their own due diligence into a project as opposed to blindly following.

ERC-20: A digital token standard used on all tokens on the Ethereum network to ensure complaince with certain rules.

Fiat: Legal tender of a country or region regualted by its central bank. Examples include the United States Dollar (USD), Great British Pound (GBP) & Euro (EUR).

FOMO: Fear of Missing Out. Describes the act of investors following the actions of others in an attempt to not miss out on a great money making opputunity. Often joining the bandwagon too late resulting in loss of some/most of their funds invested.

Fork: An update to a cryptocurrency that deviates from the initial currency, creating a completely new chain.

FUD: Fear, Uncertainty & Doubt. Fear caused in the market due to bad news spreading.

Futures: Similar to Options and CFD stock trading but with crypto currencies. A contract to buy or sell an asset at a later date for an agreed upon price.

Gas: Ethereum transaction fee. Made up of units called Gwei which are equal to a billionth of an Ether token. Other projects also use the same term.

HODL: Hold On for Dear Life. A deliberate mispelling of the world hold. The action of holding a coin or token for the long term regardless of the volatility of the market.

ICO: Initial Coin Offering. The very first instance a coin or token is offered to the public for purchase by  project developers.

IDO: Initial Discord/Decentralised Offering. Similar to an ICO but offered to the members of a community via a Discord group chat.

Ledger: A record of transactions that cannot be changed, only appended with new transactions.

Market Cap: Market Capitalisation. The total circulating supply of a cryptocurrency. Market Cap = Current Coin Price x Total Coin Supply.

Memecoin: A crypto coin originated from an internet meme or a humorous characteristic. No inherent value, price fluctuations based on hype and speculation.

Metamask: An online digital wallet that allows users to deposit, transfer and receive cryptocurrencies aswell as utilise DEx's.

Mining: The process of creating new cryptocurrency tokens by solving complex mathematical problems that can be verified and then added to the blockchain. Miners receive a reward for work done, usually in the native coin.

Moon: A slang term relating to the price of a cryptocurrency rising significantly/exponentially.

NFA: No Financial Advice. A term used by an individual when speculating on a cryptocurrency as they are not registered legal counsel, thus exempting them from blame if their advice turns out bad.

NFT: Non Fungible Token. Digital assets that are not interchangeable with other items. Unique.

Node: A computer connected to a blockchain network. All nodes are equal and store their own copy of the blockchain.

Peer to Peer: A system where two individuals can complete financial transactions without the need for an intermediary like a bank.

Pump & Dump: The process of buying a cryptocurrency, attracting others to FOMO in, greatly raising the price (pumping up the price) and then selling it for a profit (dumping the coin).

Recovery Seed Phrase: A random string of words that can be used to recover an account if the user forgets their password.

Rekt: Slang term refering to loss of all of an investors funds from their trading acitivities.

ROI: Return on Investment. The percentage of return (profit or loss) from an investors initial investment.

Rug Pull: A fraudulent cryptocurrency project that builds up hype causing investors to buy into the project, depositing funds. The developers then remove all the liquidity from the coin and flee with all investors' funds.

Satoshi Nakamoto: The name given to the unknown creator of the Bitcoin cryptocurrency.

Shilling: The act of social media influencers using their platform in order to direct the attention of their followers to a certain coin.

Smart Contract: A string of code on a blockchain that can only be executed once it's stipulations have been met. The basis of a lot of created DApps.

Stablecoin: A cryptocurrency created with limited price fluctuations with it's value usually pegged to a physical asset such as fiat currency. Examples include Tether (USDT), Terra USD (UST), Magic Internet Money (MIM).

Staking: The locking away of a cryptocurrency and not selling with the intentions of maintaining a project's coin price or providing liquidity for the project. Stakers are usualy provided with rewards for keeping their coins locked up. Some blockchains allow the stakers to serve as validators, validating transactions and keeping the blockchain secure. Rewards are also distrubuted for this.

TA: Technical Analysis. An analytical method of forecasting the movement in price of a cryptocurrency based off past market data and current price action.

TVL: Total Value Locked. Represents the total number of assets that are currently being staked in a specified project.

Vitalik Buterin: One of the well known creators of the Ethereum cryptocurrency.

WAGMI: We All Gonna Make It. A slang term intended to create a feel-good buzz amongst individuals of the cryptoverse.

Web3.0: Describing the decentralised web as being the third version of the internet. Improving on Web 2.0 which was the dynamic, social stage of the internet and Web 1.0 being the presentation of static web pages.

Whale: Slang term refering to an individual with a large sum of capital that can cause large fluctuations in a tokens price by buying or selling that token.

White Paper: A document released by the developers of a project that describes the technology and purpose of the project in detail.

Now You're Caught Up