Glossary of Terms for the Crypto Casino Players
Bitcoin (BTC)
Bitcoin is the original and most valuable cryptocurrency. Established in 2009, it functions on a decentralized network, meaning no central bank or authority controls it. Bitcoin’s value fluctuates significantly, making it a high-risk, high-reward investment.
Altcoin
Any cryptocurrency other than Bitcoin. There are thousands of altcoins, each with its unique features and purposes. Famous examples include Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
Blockchain
It’s the underlying technology that powers Bitcoin and most other cryptocurrencies. Picture a public ledger where each transaction is registered chronologically and securely in tamper-proof blocks. This ensures transparency and trust within the cryptocurrency network.
Address
Like a bank account number, your cryptocurrency address is a unique string of characters used to send and receive crypto. It’s crucial to keep your address safe and never share your private key associated with it.
Wallet
A wallet is a digital application or hardware device where you store your cryptocurrency holdings. There are various wallet types, each with its security features and functionalities. Choose a reputable wallet based on your needs and risk tolerance.
Fiat
Fiat currencies are traditional government-issued currencies such as US Dollars (USD), Euros (EUR), or Japanese Yen (JPY). Cryptocurrencies aim to offer an alternative to fiat currencies by providing decentralized and potentially faster transactions.
Mining
It is the process of approving and adding new transactions to the blockchain. Miners rely on powerful computers to solve complex mathematical problems, and thriving miners are rewarded with the latest cryptocurrency. Mining helps secure the blockchain network and distribute new coins.
Block
A unit of data on the blockchain that contains information about a group of cryptocurrency transactions: blocks are linked together chronologically, creating a tamper-proof record of all activity on the network.
Satoshi (sat)
It’s the smallest unit of Bitcoin, similar to cents for USD. There are 100 million satoshis (sats) in one Bitcoin. This allows for more precise transactions when dealing with smaller amounts of Bitcoin.
Public Key
Part of a cryptographic key pair used to receive cryptocurrency. Think of it like your public mailbox address – anyone can send cryptocurrency to this address. It’s safe to share your public key.
Private Key
It’s the confidential part of a cryptographic key pair, similar to the key that unlocks your mailbox. You need your private key to spend the cryptocurrency stored at your address. Keep your private key safe and never share it with anyone!
Seed Phrase
It’s a string of random words to recover your cryptocurrency wallet if you lose your device or forget your password. Remember your seed phrase securely and treat it like the master key to your crypto holdings.
Decentralization
A core principle of cryptocurrencies. It means there’s no central authority controlling transactions or the overall network. Decentralization aims to provide greater security, transparency, and resistance to censorship.
HODL
It’s a meme that originated in a 2013 Bitcoin forum post that misspelled “hold.” It has become a popular term in crypto culture, signifying a long-term investment strategy of holding onto your cryptocurrency despite market fluctuations.
FOMO (Fear Of Missing Out)
FOMO is a psychological phenomenon that can lead investors to make impulsive decisions due to the fear of missing out on potential gains. In the context of crypto, FOMO can cause people to buy cryptocurrencies at inflated prices without proper research.
ICO (Initial Coin Offering)
ICOs are fundraising methods in which a new cryptocurrency project deals digital tokens to investors in exchange for funding. They can be a way for innovative projects to raise capital, but be cautious of potential scams.
ICO Scam
Unfortunately, some ICOs are fraudulent schemes designed to steal investor funds. Ensure you research thoroughly before investing in any ICO project and look for a legitimate team, clear project goals, and a well-defined roadmap.
Stablecoin
It’s a cryptocurrency designed to hold a stable value relative to a fiat currency or another asset. This is achieved through various mechanisms, such as pegging the stablecoin’s value to a basket of currencies or through algorithmic adjustments.
DApps (Decentralized Applications)
DApps are applications built on top of a blockchain platform. They aim to offer functionalities similar to traditional applications but in a decentralized manner, potentially providing greater security and transparency.
Smart Contracts
Self-executing digital contracts stored on the blockchain. Smart contracts automatically execute predefined terms when specific conditions are met, removing the need for intermediaries and potentially reducing transaction costs.
Gas Fees
Gas fees are transaction fees paid to miners or validators on a blockchain network. They compensate for the computing power required to verify and process transactions. Gas fees can change depending on network congestion and the complexity of the transaction.
Bull Run
It’s a period of sustained price increases in the cryptocurrency market. Bull runs are characterized by investor optimism and buying pressure, increasing cryptocurrency prices. However, bull runs can be followed by periods of correction.
Bear Market
It’s a period of sustained price decreases in the cryptocurrency market. Bear markets are characterized by investor pessimism and selling pressure, leading to declining cryptocurrency prices. While bear markets can be discouraging, they can also be opportunities to accumulate crypto at lower prices.
ATH (All-Time High)
It is the highest price a crypto coin has ever reached. Tracking a cryptocurrency’s ATH can help understand its overall price trajectory and potential for future growth.
ATL (All-Time Low)
It’s the lowest price a cryptocurrency has ever reached in its history. While not necessarily indicative of future performance, knowing a cryptocurrency’s ATL can help assess the potential risk and reward involved in investing.
KYC (Know Your Customer)
These are regulations implemented by crypto exchanges and other financial institutions requiring users to verify their identity. KYC helps prevent money laundering and other financial crimes. The KYC procedure typically involves submitting government-issued identification documents.
AML (Anti-Money Laundering)
It’s a set of statutes designed to prevent criminals from disguising the source of illegally obtained funds. Crypto exchanges and other financial institutions must implement AML procedures to comply with regulations.
Fork
It’s a blockchain split into two chains, creating a new cryptocurrency. Forks can occur due to disagreements among developers or changes to the underlying blockchain protocol. The resulting new blockchain may have features or functionalities different from those of the original chain.
Hash Rate
It’s the combined computing power securing a blockchain network. Miners contend to solve complex mathematical problems, and the hash rate represents the total processing power dedicated to this task. A higher hash rate generally indicates a more secure blockchain network.
DeFi (Decentralized Finance)
DeFi is a financial ecosystem built on blockchain technology. It delivers various financial services without traditional intermediaries like banks. DeFi applications can include lending, borrowing, trading, and asset management, all conducted peer-to-peer on a blockchain network.