Terminology

An extensive glossary of cryptocurrency terms for beginners

The cryptocurrency market is at a nascent stage making definition of some keywords somewhat confusing for enthusiasts.

Coin, Token and Initial Coin Offerings

For the past decade, tokens and coins have often been considered as interchangeable although some researchers, businesses, institutions and enthusiasts differentiate coins from tokens based on their functionalities and the utility they provide to their holders.
Although there are no official definition, current consensus differentiates coin and token as below:

  • coin can operate independently, has its own blockchain infrastructure and its value is derived from the blockchain.
  • token is built on top of an existing blockchain and is not involved in the process of securing transactions.

This can get problematic when defining Initial Coin Offerings, as many project are introducing tokens, yet name their fundraising event an “ICO”.

Because, there are no official definitions of initial coin offerings, token generating event and tokensales, tropyc has decided not to differentiate them for now, and to consider them as interchangeable. Therefore:

ICO = TGE = ITO = Token Sale

Basics

  • Altcoin: Alternative currency or any coin or token besides Bitcoin.
  • Fiat: Currencies regulated by a government and considered as a legal tender in a location
  • Blockchain: Decentralised database that can be immutable, transparent and trustless.
  • Block: Time stamped piece of data usually holding the hash of the previous and the current block and transaction information. Multiple blocks form a blockchain.
  • Exchange: Platform that facilitates the exchange of assets. In crypto, not all exchanges have access to fiat banking.
  • Fork: The act of splitting a program into different versions for further development. Forking a cryptocurrency means implementing software changes to the blockchain
  • Hash: encrypted piece of data.
  • Proof-of-Work: Method to validate a block by investing resources to a problem (computing power, time, energy).
  • Proof-of-Stake: Method to valide a block by locking a chunk of digital assets. The larger the amount staked, the larger the authority.
  • Smart contract: Computerised transaction program that can hold, disburse and manage digital assets.
  • Shitcoin: Any altcoin that is of fraudulent nature.
  • Whale: Individual or organisation holding a large amount of cryptocurrency. So large it might affect the liquidity of a market.

Storage

  • Asymmetric cryptography: system that uses two keys, one public that can be shared globally and one private known only to the owner.
  • Encryption: method to lock a data that can only be unlocked with the associated private key.
  • Keystore file: encrypted format of a private key often locked by a password
  • Mnemonic phrase: 12 words or 24 words to access one or multiple private keys, often used by branded wallets.
  • Public key: Used to send funds (to another public key aka address)
  • Private key: Used to send funds from a public address, it proves ownership of a public address and should not be disclosed.
  • Wallet: Software that holds public and private keys and interacts with blockchains
  • Wallet - Online: Private keys are stored remotely on a third party owned device like exchanges. Owners hold an IOU, a promise that funds will be disbursed when request.
  • Wallet - Hot: Wallet with private keys stored and generated on an online environment (mobile, laptop)
  • Wallet - Cold: Wallet with private keys stored and generated on an offline environment (pen drive, laptop)
  • Wallet - Hardware: Branded cold wallets sold by a company and often released with a graphic user interface.

Financials

  • Market capitalisation: Price of one unit * supply (circulating, total or max)
  • Mining rewards: Amount earned by miners to secure a blockchain
  • Supply - circulating: Amount of coins or tokens in market circulation
  • Supply - total: Amount of coins or tokens that currently exist
  • Supply - max: Amount of coins or tokens that can exist
  • Transaction fees: Amount paid by the emitter to clear a transaction on a blockchain.
  • Valuation: Often considered as the circulating or total market capitalisation

Trading

  • Bearish: Downward price trend
  • Bullish: Upward price trend
  • Leverage: By product of margin letting investors to control larger capital
  • Long: Position that will profit if the price goes up
  • Margin: Deposit to keep a position open
  • Margin call: Triggered when an investor's margin is not enough to cope with underlying losses.
  • Short: Position that will profit if the price goes down
  • Position: Amount of assets owned (long), or borrowed and sold (short) by an investor

Acronym

  • dApp: Decentralised Application.
  • HODL: "Hold" referring to an iconic post.
  • FUD: Fear, Uncertainty and Doubt.
  • FOMO: Fear Of Missing Out.
  • ICO or ITO: Initial Coin/Token offering.
  • TGE: Token Generation Event.
  • ATH: All Time High.
  • IOU: I Owe You.
  • ROI: Return on Investment.

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