Crypto Glossary of Terms and Acronyms

Have you recently joined the crypto community? Are you puzzled by various phrases and words used by its members? Do you need a dictionary to precisely understand the meaning of crypto terms and acronyms?

We will explain some of them that are frequently used in the blockchain ecosystem. For those who are finding answers to how to trade crypto for beginners, this list may come in handy.

Anti-Money Laundering (AML)

A set of procedures aimed at preventing the inflow of funds generated from illegal activities into crypto exchanges. As dirty money must stay away from the crypto world, all reputable cryptocurrency exchanges have AML procedures implemented thoroughly.

Arbitrage

Trading crypto assets on different exchanges, using the fact the same asset has a different price on different exchanges. The arbitrage usually requires a bit of expertise and certain trading tools, but it is a fine way to make a profit.

Asset

A common word for all tradable crypto coins, tokens, NFTs, and every other digital object that is blockchain-based and can be traded on an exchange.

Ask Price

The lowest price a seller of a crypto asset is willing to accept from a buyer.

Bid Price

The price of a crypto asset a buyer is offering to the sellers.

Burning

Taking a certain amount of tokens out of circulation. This move should cause an increase in the value of the existing tokens kept in circulation.

Candlestick

A visual representation of the price of an asset. A candlestick contains the information on the open, close, high, and low points of the price within a period.

CEX

Digital marketplaces used for trading cryptocurrencies. A centralized exchange (CEX) is run by a company (Binance, for example)  that facilitates financial transactions between its users.

Collateral

Any valuable that serves as a guarantee the loan will be paid in full. In crypto trading, collaterals are usually given as BTC or ETH. Upon the full repayment of a loan, collateral is returned by the lender to the borrower.

Crypto Winter

A long period of steadily declining or stagnant prices of crypto assets. Crypto Winters may occur during any time of year, even during the winter.

Dump (“Pump-and-Dump”)

A type of fraud. Pump-and-dump in crypto is a type of fraudulent scheme that misleads investors into purchasing an artificially inflated asset hyped (“pumped”, shilled) by paying celebrities and social influencers. Once the desired price is achieved, fraudsters sell their holdings in seconds (“dumping”), leaving the gullible investors to hang out dry.

Halving

An event where Bitcoin mining rewards are cut in half. The expected consequent increase in BTC price should offset the fact miners will receive fewer bitcoin for their costs. Happens every 4 years.

Hard Cap

The upper limit on the number of tokens that can be sold during an ICO. If the hard cap is reached during an ICO fundraising campaign, the tokens are considered sold out and the project owners no longer accept further investments.

Liquidity Pools

What are liquidity pools? They consist of all crypto assets locked in a smart contract, providing liquidity to a decentralized exchange. Illiquid exchange is a dead exchange and having robust, healthy liquidity pools is essential to their existence and operation.

Listing

Placing a crypto asset on an exchange. Once listed, a crypto coin or token can be bought and sold in the open market. Listing is an important event for every asset as it displays its perceived value through the price movement after the moment of being listed.

Mainnet

The end product of a blockchain project. As a blockchain protocol, a mainnet is used for broadcasting, verification, and recording transactions.

Memecoin

A cryptocurrency originated from an internet meme. Some countries have forbidden them as they “lack clear objective or substance”. The most famous one is Dogecoin (DOGE), favored by Elon Musk.

Moon

A desired sky-high valuation of BTC or any other crypto coin. “When moon?” is a question asked by impatient traders who cannot wait anymore for the crypto asset price to rise substantially.

Non-Fungible Token (NFT)

A tokenized version of a digital or real-world asset. They are proofs of authenticity and ownership over a digital asset within a blockchain network. Most often, an NFT is a unique piece of digital art stored on a blockchain.

Order Book

A list of the currently open buy and sell orders for an asset, organized by price. The order book is used by the so-called matching engine - the system that matches buy orders with sell orders, for the sake of the execution of trades.

P2P (Peer-to-Peer)

What is P2P in crypto? In the widest sense, it is a distributed networking architecture that divides tasks or workloads across a multitude of computer systems, each of which acting as an individual peer. P2P networks are used to share any kind of digital data, including cryptocurrencies. Every such peer is referred to as a node.

Phishing

A cyber attack technique. Based on social engineering, a phishing attack abuses basic human emotions (trust, greed, naivety), posing as a credible authority, with the goal of deceiving people in order to obtain their sensitive information.

Ponzi Scheme

A type of financial fraud. The investors who have entered the Ponzi “pyramid” are settled only with funds collected from new investors. The scheme is viable until the inflow of new investors dries out. In order to attract numerous new investors, the organizers promise high returns with little or no risk. The biggest crypto Ponzi scheme so far is known as the Onecoin case.

Staking

A method of earning a passive crypto income. Staking is how many cryptocurrencies verify their transactions. Those who are willing to commit their crypto asset in order to support a specific blockchain network and confirm its transactions perform staking. Staking is available with all cryptocurrencies that use the proof-of-stake (POS) model to process transactions. POS is a more energy-efficient alternative to the original proof-of-work (POW) model, used by the Bitcoin blockchain network.

Of course, the list of crypto phrases is not even nearly exhausted by this mini-glossary.

Author

Svyatoslav Pinchuk

Man who simply bought some BTC for domestic needs in 2014 and then forgot about it till 2017. The dude who got Etherium in 2017 by misclick and sold it in 2018 “just to try”. After loosing a Florida house in XEM in 2018, Sviatoslav finally decided to trade reasonably and now he is one of the most analytical and data-driven trader in Crypto Industry.

Has Bachelor Degree of Chinese Interpreter and deep practical experience in competitive niches SEO. Head of SEO at https://tradecrypto.com/author/esferus/