Glossary

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51% Attack

A 51% attack is a hypothetical scenario in which more than 50% of a blockchain network's nodes fall under the control of a single group. In such a circumstance, the consensus of a network is no longer sufficiently distributed enough to be viable, leaving the blockchain open to manipulation. Attackers with greater than 50% control of a network would be able to stop, reverse, and duplicate new transactions, a catastrophic condition for any blockchain. Notably, a 51% attack becomes more difficult and expensive as a network grows more sizable, distributed, and valuable.

A

Aave

Aave is a decentralized lending and borrowing platform on Ethereum. Aave users can take out loans by providing collateral in the form of crypto assets. Lenders who to Aave receive aTokens in return, which automatically pay interest to the holder with funds earned from platform trading fees. Aave has pioneered the technology of ‘flash loans,’ which allow for the uncollateralized lending of funds, so long as the principal is repaid within the same Ethereum transaction block.

Airdrop

A free of charge crypto distribution method. Usually happens during the beginning of a hard fork attempt to attract more users or retain already existing.

Algorithm

A sequence of well-defined instructions that is used to perform a computation or to solve a problem.

Allocation

The term is often used in the context of creating an investment portfolio: it refers to the percentage of each asset that will be held by an investor.

Altcoin

An altcoin is an «alternative coin, ” or any cryptocurrency launched after Bitcoin. It refers to any cryptocurrency that is not BTC. For example, ETH, XRP, and LTC are all altcoins.

AML

Anti-money-laundering laws, regulations, and procedures that aim to end the unlawful income practices.

Amortizing

Amortizing refers to the spreading of an initial or overhead cost across time or between parties. On the Orchid network, transaction costs are kept low by amortizing the fees across transactions and users. Transaction fees are slowly paid off or broken into increments that are then shared across a large network to reduce individual user costs

API

Application Programming Interface, software that allows two applications to exchange data and interact with each other.

Arbitrage

A method of getting profit by using price differences between various exchanges. For example, if Bitcoin costs $9,000 on one exchange and $9,080 on another one, then the arbitrage profit would be $80 if you buy at the first one and sell at the second.

Ashdraked

Being ‘Ashdraked’ means losing all your money by shorting Bitcoin. It comes from the name of a Romanian investor who insisted on shorting Bitcoin and, as a result, lost all his investments.

ASIC-resistant

A cryptocurrency that cannot be mined by ASIC machines.

Ask Price

A price that the seller is willing to accept for their crypto.

ATH

‘All-time High’. In the context of cryptocurrencies, it marks the maximum price ever reached by the crypto.

Atomic swap

Automatic exchange contracts that provide two parties with a way to trade tokens from two different blockchains.

B

Backdoor

A backdoor refers to any method that can circumnavigate regular authentication and authorization procedures to gain root or high-level access to a system, computer, application, or network. Backdoors are commonly installed through remote file inclusion (RFI), which identifies a weak component in an application or a network. This type of channel allows direct control over an infected device to manipulate data, deploy more malware, or create a zombie network of infected computers for criminal activity.

Backtesting

Backtesting is the simulation of a trading strategy based on historical data.Traders use backtesting to prove that their trading system works based on historical results. In trading and investing, past performance does not guarantee future results, which means a strategy that performs well in backtesting may not perform as well going forward.

Bagholder

A person who either holds a crashing coin or altcoin after it was Pumped and Dumped.

Bandwidth

The maximum amount of data that can be transmitted over an Internet connection in a given period of time.

Bear

A bear is a trader who banks on the market value going down. A bear market is a period during which the price of the asset goes down,

Bear Trap

A situation when the price of the asset goes down, prompting bears to sell their positions, and then starts to rise again, thus ‘trapping’ them.

Bid Price

A price that the buyer is willing to pay for the crypto. Opposite of the ‘Ask Price’

Bid-ask spread

The amount by which the ask price (selling price) differs from the bid price (buying price).

Bitcoin

The biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions.

Bitcoin ATM

ATM that allows people to purchase Bitcoin using a debit or credit card.

Bitcoin Dominance

The ratio between the market share of Bitcoin and that of altcoins.

Block height

A specific location on the blockchain that is measured by the number of confirmed and verified blocks preceding it.

Block reward

The number of coins or tokens you can get if you manage to successfully mine a block of a cryptocurrency.

Blockchain

The technology behind the crypto, it is a public database protected by cryptology, that can only be updated by its owners.

Bollinger Band

Bollinger Band (BBand), is a margin around the price of a certain cryptocurrency, that allows seeing whether it is being overbought or oversold.

Breakout

The price of an asset moving below the support area or above its resistance level.

BTD

‘Buy the dip’ – used as an advice to buy an asset during the price dip.

Bubble

A crypto bubble is a state when crypto’s price remains stable for a long time before its price explodes and goes up. When the ‘burst’ of a bubble happens, its price starts to drop as quickly as it rose.

Bull

Opposite of a bear, a bull is a trader who bets on the market value going up. A bull market is a period of time when the price of an asset goes up.

Bull Trap

Opposite of a Bear Trap, this is a situation when the price of an asset goes up, prompting bulls to buy it, and then starts to fall.

C

Candle/Candlestick Chart

It is one of the most popular price charts that shows the highest crypto price, the lowest one, and the prices at the opening and the closing of the trade during a certain time period.

Central bank

 A national bank that carries out the country’s monetary policy, issues the national fiat currency, and provides banking services to the government and commercial banks.

Centralized

An organization or activity that is controlled and/or managed by a central authority.

Changelly

An instant cryptocurrency exchange that allows users to exchange, buy, sell, and trade cryptocurrency in a fast manner. Users can purchase digital assets with a bank card (Visa, Mastercard), bank transfer, Apple Pay.

Close

The end of a trading session when the financial markets close. It also has another meaning: the closing of a certain deal.

Coin

A cryptocurrency that operates on its own blockchain.

Cold Storage

A way to store your cryptocurrency offline, usually on hardware or paper wallet.

Collateral

An asset (in the field of crypto lending, it is usually another cryptocurrency) that the borrower pledges to the lender as a guarantee that they will repay the loan.

Confirmation time

The time that elapsed between the moment a transaction was submitted to the network and the moment it was recorded into a confirmed block on the blockchain.

CPU

Central processing unit, a piece of hardware that allows a computer to interact with all the applications and programs that have been installed on it.

Crypto exchange

A service that gives customers a platform for trading, exchanging, purchasing, or selling cryptocurrencies.

Cryptojacking

A type of criminal activity that uses a person’s computer to generate cryptocurrency unbeknownst to them.

Custody, custodial exchange

The word “custodial” means that a third party will hold some modicum of control over either your assets or your data. Custodial exchanges are called this way because they hold their users’ private keys.

D

Dead Cat Bounce

A small, brief recovery of a crypto’s price, followed by further decline.

Decentralization

The handover of control from a central authority to several different custodians.

Decentralized application (dApp)

A digital application that runs on a blockchain network and does not rely on a single computer. DApps are free from the control and interference of a central authority.

Decentralized Autonomous Organization (DAO)

A system of rules that define how a decentralized organization should operate and which actions it should take.

Decentralized exchange (DEX)

 A cryptocurrency exchange that enables online direct peer-to-peer transactions.

Deep Web (Darknet)

Web pages that cannot be detected or identified by search engines.

Deposit Fee

A fee that most exchanges take when you deposit fiat currency on the platform. It can be either a fixed fee, or depend on the sum in question.

Depth Chart

A display showing the total number of buy and sell orders. It is usually split in two, allowing to show buy and sell orders at the same time.

Derivatives Market

A market for financial derivatives, like futures and options.

Deterministic Wallet

It is a wallet that needs to be backed up only once. It generates all your keys and addresses and can be recovered from the “seed”.

Difficulty

A measure of how difficult it is to mine a single block on a particular blockchain.

Diversification

An investment strategy that involves allocating one's funds across different types of assets in an effort to minimize risks and maximize profits.

Double-spending

A successful attempt to use the same crypto coins for multiple payments at once.

DYOR (Do your own research)

One of the main rules of crypto investment. It reminds investors not to trust others’ advice and to always carry out their own research before buying or selling any cryptocurrency.

E

Eclipse attack

An eclipse attack aims to obscure the victim’s view of a peer-to-peer network.

Encryption

The process of converting data into code.

ERC-20

One of the most popular Ethereum technical standards. It is used for token implementation and provides a list of rules that tokens must follow.

ERC-721

Another Ethereum technical standard. ERC-721 tokens are classified as NFTs — non-fungible tokens.

ETF

An Exchange-traded Fund, an investment fund that users trade on exchanges and trading platforms.

Ethereum

A decentralized open-source blockchain with smart contracts functionality.

Exchange

A platform that allows you to swap your crypto coins for another crypto or fiat money.

F

Fiat Currency

It is a currency controlled by the government and declared by it to be a legal one, while not being backed by a commodity. Good examples of fiat are USD, EUR, and GBP.

FOMO

Fear of missing out is a feeling of anxiety associated with worrying about missing out on some profit or positive experience.

Forced liquidation

 Liquidation is the process of selling assets for cash. Forced liquidation refers to situations when that happens automatically if certain conditions are met. For example, forced liquidation occurs when a trader is unable to fulfill margin requirements.

FUD

Negativity and panic spread by someone who wants to profit from it (a FUDster).

Fundamental analysis

The process of determining the real value of an asset by using all the publicly available information.

Futures

Futures, or a futures contract, is an agreement to buy or sell an asset on a certain date at a predetermined price.

G

Gas

The fee that has to be paid to successfully execute a transaction or a contract on the Ethereum blockchain.

Genesis block

The first block of a blockchain.

Going Long/Short

Going Long/Short is a margin trade situation that happens when the trader profits from the rising/falling price of the crypto.

Gwei

Gigawei, or gwei for short, is 1,000,000,000 wei. Wei is the smallest unit of Ethereum, and 1 gwei is equal to 0.000000001 ETH.

H

Halving

The event after which the mining reward for a particular cryptocurrency is cut in half. It also reduces the rate at which the cryptocurrency is mined by 50%.

Hardware Wallet

A device that can safely store cryptocurrency.

High-frequency trading

An algorithmic trading strategy that involves executing a large number of orders per second

HODL

A trading strategy that originated as a misspelling of “hold.” It simply means to hold on to your crypto without selling it off.

Hot Wallet

A wallet that can be accessed from the internet. Less secure than their Cold Storage counterparts.

I

Initial Coin Offering (ICO)

A limited period of time during which a predetermined amount of particular crypto is being sold to the public for the first time.

Initial Exchange Offering (IEO)

IEO is an ICO that is handled and directly operated by the cryptocurrency exchange.

Initial Public Offering (IPO)

A public offering wherein shares of a company are sold on the stock exchange for the first time.

Interoperability

The ability of different programs and software to interact with each other and exchange information.

InterPlanetary File System (IPFS)

An ambitious open-source project that aims to build a massive peer-to-peer file system.

Isolated margin

The margin balance allocated to a particular margin position. Isolated margin helps traders to manage risk on positions separately.

J

JOMO

‘Joy of missing out’, a trading concept when traders should sometimes take a time-out to carefully assess the situation, without worry that they will miss a good deal.

K

KYC

‘Know Your Client’. A procedure when a trading platform or exchange would require you to confirm your identity in order for you to use them.

L

Latency

A delay between the input and output. In crypto, it usually refers to the delay in transaction processing by either the network or exchange.

Layer 2

A secondary protocol or framework that was built on top of the existing blockchain. It is usually a third-party integration that aims to speed up transaction processing and solve scalability issues.

Ledger

A record of all the transaction data. Blockchains are ledgers.

Lightning network

A layer-2 payment protocol designed to speed up transactions on blockchain networks like Bitcoin or Litecoin.

Limit Order

An order placed by a trader to make a deal when the crypto’s price reaches a certain threshold.

Liquidity

An ability of crypto to be sold without causing a significant price change, or a value loss.

Listing

The addition of an asset or an asset pair to an exchange.

M

MACD

The Moving Average Convergence/Divergence indicator. This is a technical indicator used in the technical analysis assessment of forecasts and fluctuations in the cryptocurrency market.

Mainnet

An independent blockchain that runs its own network with its own protocol and underlying technology.

Malware

Crypto malware allows criminals to mine cryptocurrency using the victim’s computer or another device.

Margin Call

A situation when one or more securities in the trader’s account have fallen below a certain threshold, prompting the trader to either deposit more money or sell some assets.

Margin Trading

A type of trading, when you add leverage to your trades. It works by borrowing money to increase your buying power.

Market Capitalization

A total value of the cryptocurrency, calculated by multiplying the price of a single coin on the total amount of coins.

Market maker

A trader that provides liquidity to the market by actively placing both bid and ask orders.

Masternode

 Masternodes require initial collateral to operate and play a special role in governing the blockchain.

Memo ID

A unique figure or an additional address used by some cryptocurrencies (e.g., XLM, XRP) to identify the recipient of a transaction.

Merkle tree

Also known as a hash tree, it is a hash-based data structure that can efficiently and securely encode the blockchain data.

Miner

The term “miner” can refer to both the person doing the mining and the device that is used to mine crypto.

Mining

The process of solving complex cryptographic equations to verify transactions and add new blocks to the blockchain.

Mining farm

 A collection of several or multiple mining rigs.

Mooning

In terms of crypto trading, mooning means a rapid rise of a crypto price to record heights.

Multisignature

A way of signing a single document by many people. In crypto, it usually refers to an additional security requirement of multiple keys for the transaction verification.

N

NFT (Non-fungible token)

 A unique non-interchangeable piece of digital content that is stored on a distributed ledger (blockchain).

Node

Nodes communicate with each other to perform various functions, such as validating new blocks and adding them to the blockchain.

Nonce

An abbreviation for the phrase “number only used once.” In crypto, it refers to the number that blockchain miners are looking for and working on.

O

Off-chain

Off-chain transactions transfer value outside of the blockchain.

Open/Close

Opening position means that the trader entered the market and holds a certain amount of crypto. To close the position, a trader should either sell or buy that crypto, depending on whether he chose a close or long one.

OTC

OTC, or ‘Over The Counter’ is trading that happens directly between two parties, with no exchanges or trading platforms involved.

P

Pair

Pair trading is a strategy when a trader opens two opposing positions in related assets, to ensure that they will win no matter what happens on the market.

Paper Wallet

A wallet that is produced by directly printing the keys and addresses on the paper (hence the name).

Proof-of-stake

PoS is a type of consensus algorithm that rewards validators according to the amount of crypto they have staked.

Proof-of-work

PoW is a type of consensus algorithm that rewards validators according to the amount of computational power they have expended.

Public key

A cryptographic key that can be used by anyone to encrypt messages that are intended for a particular recipient. The encrypted message can only be deciphered by the individual that holds the private key.

Pump and Dump

A tactic of inflating the price of altcoin by getting more people interested in it, followed by the crash.

R

Resistance

A certain price limit that the crypto in question will rarely, if ever, exceed.

Roadmap

A plan for future development that is usually presented in a clear and concise form. Roadmaps are often used by companies to inform investors, customers, and users of their plans and goals.

ROI

Return on investment, a percentage that shows the amount of profit made compared to the initial investment.

Routing attack

A network-layer attack that involves the criminal(s) maliciously changing the routing table of the victim’s router.

RSI

Relative Strength Indicator, a way to ascertain whether the crypto is being oversold or overbought, allowing you to find the best entry and exit points.

S

Satoshi

Satoshi is the smallest unit of Bitcoin and is equal to 0.00000001 BTC.

Satoshi Nakamoto

The anonymous creator of Bitcoin.

Securities and Exchange Commission (SEC)

 A federal agency responsible for regulating and maintaining the orderly and fair functioning of the securities markets.

Seed phrase

Seed phrases are collections of words that can be used to access one’s crypto wallet.

Segregated Witness (SegWit)

The process of increasing the block size limit by excluding signature data from transactions’ details.

Sentiment

The sentiment is the overall mood and attitude of traders and investors in regard to a particular asset or the whole market.

Sig/Signature

An encrypted authentication key.

Smart contract

A program stored on a blockchain that runs when some predetermined conditions are met.

Snapshot

A recording of the state of a blockchain at a particular block height.

Software Wallet

Storage for cryptocurrency that works entirely as a program on the trader’s computer.

Source code

Source code is a collection of code written using a human-readable programming language. It is responsible for defining the functionality of any given software.

Spread

A price difference between asking and selling prices of the asset.

Stablecoin

A cryptocurrency that was designed to have a stable price. Stablecoins are usually pegged to another asset, such as a fiat currency (e.g., USD).

Stop Loss Order

It is an order designed to limit possible losses by stopping the trade on reaching a certain level. It could be set on any desired threshold.

Supply chain

 A sequence of processes that are involved in the production and distribution of an asset.

Support

The opposite of Resistance, it is a threshold that crypto’s price doesn’t fall below.

T

Taker

A trader who places an order that gets fulfilled immediately before getting to the order book.

Technical Analysis

A trading strategy that evaluates investments and trading potential of cryptocurrencies based on the statistical data.

Think Long Term

It is common advice for traders, prompting them to invest more in long-term trading, allowing them to get more profit later, instead of some profit now.

Token

A cryptocurrency that does not operate on its own blockchain and stands for an asset or a deed.

Token sale

Also known as an Initial Coin Offering (ICO), a limited period of time during which a predetermined amount of digital assets is sold to the public for the first time.

Trading Fee

A fee that you pay for a transaction on the exchange or a trading platform.

Trading terminal

Software provided by the exchange that allows traders to directly place orders without having to contact a broker or any other intermediary.

Trading Volume

The total number of crypto was traded during a certain period of time.

Transaction ID

A special string of unique characters that represents each transaction that’s been verified and added to the blockchain. It can also be called a transaction hash.

Transactions per second (TPS)

The number of transactions performed per second.

U

User Experience (UX)

The type of design that focuses on the interactions between the user and the product, system, or service.

User Interface (UI)

A space where all human-computer interactions occur.

V

Virtual Machine

A machine that allows the whole network to work as a single supercomputer. The main role of the virtual machine is to ensure a proper environment for smart contracts’ execution.

Volatility

The intensity of the crypto’s price fluctuations, the currency is considered volatile if its price changes significantly on a daily basis.

W

Whale

A person who holds enough cryptocurrency to be able to significantly influence its price dynamics.

Whiskers

Whiskers, or wicks, are vertical lines that run above and below boxes or bars on charts and graphs. They represent the lowest and the highest prices reached for a particular period.

Whitelist

A security feature that enables crypto withdrawals only to the cryptocurrency addresses that have been deemed trustworthy by the user.

Withdrawal Fee

A fee that exchanges or trading platforms receive on the withdrawal of money from the deposit.

Wrapped Bitcoin (WBTC)

An ERC-20 compatible version of Bitcoin. 1 WBTC can be exchanged for 1 BTC and vice versa.

Wrapped Ether (WETH)

An ERC-20 compatible version of Ether. 1 WETH can be exchanged for 1 ETH and vice versa.

Z

Zero-Knowledge proof

A method of validating any given statement without giving away any information about it other than the fact that it’s true.