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 singular authority.

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.

D

Dead Cat Bounce

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

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”.

Double-spending

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

E

ETF

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

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.

FUD

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

Futures

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

G

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.

H

Hardware Wallet

A device that can safely store cryptocurrency.

Hot Wallet

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

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

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.

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.

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.

Mooning

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

O

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).

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.

ROI

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

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

Sig/Signature

An encrypted authentication key.

Software Wallet

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

Spread

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

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.

Support

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

T

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.

Trading Fee

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

Trading Volume

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

V

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.

Withdrawal Fee

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