Complete Crypto Glossary Of Crypto Terms To Know | SOMA.finance
A comprehensive list of all the terms you need to get started with both DeFi and TradFi.
Active Management: An investing strategy used by fund managers that has the goal of outperforming index funds and benchmarks.
Address: A string of text that uniquely identifies the location of a specific wallet on a blockchain.
Airdrop: The issuance of a digital asset to the public, usually with some qualifying reason such as being active on a blockchain network or holding another specific asset.
Algorithm: A process or sequence of rules used in problem-solving operations
All or None Order (AON): An order with a stipulation that it must be filled in its entirety or not at all. Designed to prevent the partial filling of orders.
All-Time High (ATH): The highest price a cryptocurrency has achieved against a quote currency, such as the US Dollar or BTC.
Allocation: A portion of tokens or equity that gets distributed to a certain party or entity for various reasons including purchase, earned equity or partnership arrangement.
Alpha: The first version of a primitive, piece of software or product.
Altcoin: A term used to describe all cryptocurrencies and tokens that are not Bitcoin.
Anti-Money Laundering (AML): A legal and regulatory framework designed to prevent the flow of funds that are obtained from illicit activities.
Application Programming Interface (API): A software intermediary that allows two applications to talk to each other and execute a set of functions and procedures programmatically.
Application-Specific Integrated Circuit: An integrated circuit designed specifically to maximize its performance for a particular application, rather than for general-purpose use.
Arbitrage: The buying and selling of the same asset across different markets in order to take advantage of a difference in price.
ASIC-resistant: A cryptocurrency protocol whose mining algorithm is configured in a manner that makes it impossible or brings no benefit to use ASIC machines to mine as compared to traditional GPU mining.
Ask Price: The lowest price the seller of an asset is willing to accept on their sell order.
Asynchronous: Events or operations within an electronic system that do not happen at the same time or speed, and can operate independently of the main program flow.
Atomic Swap: Smart contract technology that allows for the exchange of one crypto asset for another without the need for a centralized intermediary.
Attack Surface: Areas in a software system where attackers can attempt to enter or extract data from the system.
Auction: A live event where an asset or service is sold through a bidding process.
Bags: The portfolio of crypto assets that an investor is holding.
Bear Market: Periods of time where a market is displaying a negative trend.
Benchmark: Something that serves as a measurement standard by which the performance of other assets can be gauged.
Beta (Coefficient): A tool used to measure the volatility of an asset in comparison to the volatility of a specific portfolio or market index.
Beta (Release): An early version of a program that allows users to test out the software to find any bugs and provide feedback.
Bid Price: The value a buyer offers to pay for a specific asset in a financial market.
Bid-Ask Spread: The difference in price between the lowest asking price and highest bid price on the order book for an asset
Bitcoin: The largest cryptocurrency in the market by total capitalization. Created by the pseudonymous developer(s) Satoshi Nakamoto, Bitcoin was the first cryptocurrency.
Bitcoin Core: The most popular software used to connect to the Bitcoin network and run a node.
Bitcoin Dominance: The ratio of the market capitalization of Bitcoin against the market capitalization of the entire cryptocurrency market.
Black Swan Event: An unexpected occurrence that deviates from the expected and has wide-ranging consequences.
Block: A computer file that stores transaction data and can be connected in a linear fashion to form a blockchain.
Block Explorer: An online webpage that allows users to explore various data points such as blocks or transactions on a specific blockchain network.
Block header: The section in a block that contains its metadata and a summary of the block’s transactions.
Block Height: The number of blocks in a chain between the most recent block and the first block, which is also known as the genesis block
Block Reward: The number of coins released to miners following each successfully mined and validated block.
Blockchain: A decentralized digital ledger that chronologically records transaction information about a cryptocurrency.
Bollinger Bands: A technical analysis indicator consisting of two sidelong bands and a simple moving average that measures market volatility.
Bounty: A reward offered by a group or individual to incentivize a certain outcome, such as the completion of some work or the referral of new users.
Break-Even Point (BEP): The point where the revenue of an operation matches the cost to run the operation.
Breakout: When the price of an asset experiences a significant move away from a support or resistance area.
Bull Market: Periods of time where a market is displaying a positive trend.
Buy Wall: A large amount of demand at a specific price point in the order book for a particular market.
Candlestick: A type of price chart used in technical analysis that displays the open, close, high, and low prices within a certain period.
Capitulation: A period of time where investors rapidly sell their holdings as they rush in an attempt to preserve wealth.
Censorship-resistance: The property of blockchain networks that prevents an entity from altering its transaction history.
Central Bank: A financial institution that manages the currency and monetary policy of a state or formal monetary union and oversees the commercial banking system.
Central Processing Unit (CPU): The hardware component of a computer that is responsible for interpreting the instructions of computer programs and executing operations.
Centralized: When planning and decision-making are controlled by a single authority or managed in one place.
CeFi (Centralized Finance): The concept of having a centralized authority manage the funds in an ecosystem.
Cipher: A method for the encryption and decryption of data.
Circulating Supply: The best approximation of the number of coins or tokens for a cryptocurrency project that are circulating in the market.
Cloud: A shared pool of resources that are made available to multiple users through the internet.
Coin: A cryptocurrency that is independent of any other platform and is used as an exchange of value.
Collateral: Property that is pledged by a borrower against the value of a loan to guarantee that the borrower will complete repayment.
Commodity Futures Trading Commission (CFTC): The U.S. agency responsible for the regulation of derivatives markets including options, swaps and futures contracts.
Confirmation Time: The time it takes for a transaction submitted to the network to be recorded and confirmed into a block.
Confluence: The combination of multiple investment methods, technical indicators or trading signals to form a more reliable strategy.
Consumer Price Index (CPI): A measure used to track the average change in prices over time as a way to determine inflation.
Credentials: A users personal information, such as a username, password and email address.
Cryptocurrency: An encrypted data string that denotes a unit of currency used as a medium of exchange in a peer-to-peer (P2P) economic system.
Cryptography: The science of using mathematical theories and computation in order to encrypt and decrypt information.
Custody: Can refer to an entity holding assets on behalf of a client or to the ownership of one’s funds or assets.
Dead Cat Bounce: A period of time where the price of a declining asset briefly recovers only to be followed by a continuation of the downtrend.
Decentralized Application (dApp): Applications that run on decentralized, P2P networks such as Ethereum that have no controlling entity.
Decentralized Autonomous Cooperative (DAC): An organization that is controlled by shareholders rather than a central authority.
Decentralized Autonomous Organization (DAO): An entity with no centralized leadership where decisions are made from the bottom up by the community that is organized around a set of rules that are enforced on a blockchain.
Decentralized Exchange (DEX): A dApp that functions as an exchange where users are not required to deposit funds to start trading, and instead allows them to trade directly from their own wallets.
Decentralized Finance (DeFi): An ecosystem that is comprised of decentralized financial applications that operate on blockchain networks.
Decryption: The act of reverting an encryption process so that unreadable data can be converted into a human-readable form.
Delisting: The removal of an asset from an exchange
Difficulty: In mining, difficulty is used as a measure of the complexity required to mine a block.
Difficulty Bomb: Part of the process in the migration of Ethereum from proof of work to proof of stake, where the difficulty will begin to increase exponentially and make it unprofitable to continue mining.
Divergence: When the market price of an asset is heading in the opposite direction of a technical indicator such as the RSI, Volume or MACD.
Diversification: Allocating funds across a variety of types of assets and jurisdictions as a way to reduce overall risk.
Do Your Own Research (DYOR): Good advice for any crypto investor. Don’t just blindly follow what others say about a coin or token.
Dollar-Cost Averaging (DCA): A method of investing where fixed dollar amounts are regularly invested over time, regardless of the price of the asset.
Double Spending: An instance where a certain amount of coins are spent more than once.
Efficient Market Hypothesis (EMH): An economic theory that states an asset price trades at a fair price that is based on all available information in the market.
Encryption: The conversion of data or information into a secure code for the purpose of preventing unauthorized access.
ERC-20: A technical standard for the Ethereum network that is used to issue and implement tokens on the blockchain.
ERC-721: A non-fungible token standard on the Ethereum network.
Exchange: A marketplace where users can buy and sell cryptocurrencies or other assets.
Fakeout: An instance where a trader opens a position on an asset that is starting to move, only to have it quickly reverse course or stay flat.
Falling Knife: The action of purchasing an asset when its price is rapidly declining due to an expectation that its price will bounce.
Fear of missing out (FOMO): The feelings of fear and anxiety that a person gets when they think they might be missing out on a potentially profitable opportunity.
Fear, Uncertainty and Doubt (FUD): A marketing or propaganda tactic used to instill fear and insecurity in a group of customers, traders or investors.
Fiat: A government issued currency that declared to be legal tender but not backed by any physical commodity.
Fill or Kill Order (FOK): A buy or sell order that has a stipulation that it must be executed in full immediately or else it will be cancelled.
Finality: The guarantee that a completed cryptocurrency transaction is unable to be altered, reversed or canceled.
First-Mover Advantage (FMA): An entity’s ability to be better off than its competitors as a result of being the first to bring a service or product into a new market or industry.
Fiscal Policy: The set of rules that describe how authorities adjust the tax rates of a country, which dictates how public funds are collected and used.
Flippening: The word used to describe the the event where the market capitalization of Ethereum (ETH) surpasses the market capitalization of Bitcoin (BTC).
Forced Liquidation: The forcible closure of a traders leveraged position as a result of not fulfilling the necessary margin requirements.
Forex (FX): The Foreign Exchange Market, which is a global market for the trading of fiat currencies.
Formal Verification: The application of mathematically rigorous proofs in order to ensure certain properties of cryptographic algorithms and blockchain mechanisms
Full Node: A computer that stores and implements a complete copy of the rules for a blockchain network and participates in the transaction validation process that adds new blocks to a blockchain.
Fundamental Analysis (FA): Using an assets underlying characteristics and traits as a way to evaluate its intrinsic value.
Fungibility: The ability of a good or asset to be interchanged with other individual goods or assets of the same type
Futures Contract: The standardized version of a legal agreement to buy or sell a particular asset at a predetermined price at a specified time in the future.
Gas: The fee or pricing mechanism used to determine the cost of smart contract operations and transaction on the Ethereum network.
Gas Limit: The maximum amount of gas a cryptocurrency user is willing to pay as a fee to transact or execute a smart contract function.
General Public License: A license that allows a user to copy and modify a piece of software as long as any works created are distributed under the same license.
Genesis Block: The first block recorded on a blockchain network.
GitHub: A provider of internet hosting for software development where teams can share, collaborate and save their open source code or proprietary code.
Golden Cross: A bullish chart formation where a shorter-term moving average crosses above a longer-term moving average.
Gwei: A small denomination of the currency Ether that is used to measure gas prices and is equivalent to 0.000000001 ETH.
Hacker: An individual with advanced understanding of computer systems that users that knowledge to gain unauthorized access to data.
Halving: The process a blockchain network goes when its block reward decreases to one-half of its previous value.
Hard Cap: The maximum amount of funds a project intends to raise during a fundraising event.
Hash: The output that is produced by a has function after a piece of data is mapped.
Hash Rate: A measure of how many calculations a computer or piece of mining hardware can calculate per second.
Hashed TimeLock Contract (HTLC): A special feature that is used to create smart contacts that are capable of modifying payment channels.
High-Frequency Trading (HFT): A version of algorithmic trading where a large number of orders are executed in fractions of a second.
HODL: A mistyping of the word ‘Hold’ that has become a popular acronym among crypto holders that stands for “Hold on for Dear Life” and refers to the concept of not selling a token no matter what happens to its price.
Honeypot: A mechanism used by computer security experts to detect or counteract unauthorized access to a system.
Iceberg Order: A conditional order to buy or sell a large total amount of an asset in smaller quantities for the purpose of concealing the total order quantity
Immutability: The state of not changing or the inability to be changed.
Index: A financial instrument that is used to track the price of an asset or basket of assets.
Initial Coin Offering (ICO): A fundraising model where a newly launching project makes its tokens available to investors.
Initial Exchange Offering (IEO): A fundraising model where a newly launching project uses a trusted intermediary such as an exchange to make its token available to investors.
Initial Public Offering (IPO): A fundraising model where a private company begins offering its shares to the public for the first time.
Integrated Circuit (IC): A small chip that holds a set of electronic circuits composed of transistors, resistors and capacitors.
Interoperability: The ability for separate blockchain networks to be compatible with each other.
InterPlanetary File System (IPFS): An open-source project designed to create protocol for distributed content storage and access.
Isolated Margin: The margin balance that is allocated to a position.
Issuance: The generation and distribution of a new cryptocurrency.
Know Your Customer (KYC): A standard practice in the financial services industry which allows companies to identify their customers in accordance with KYC/AML laws.
Latency: The time that elapses between when a transaction is submitted to a network and the first confirmation of acceptance by the network.
Law of Demand: The willingness of consumers to buy a certain good or service for a particular price.
Layer 2: A secondary framework or protocol that is built on top of a blockchain network for the purpose of providing increased scalability.
Ledger: A physical book, digital computer file or collection of accounts where transactions are recorded.
Library: A collection of stable resources such as executable files, documentation, message templates, and written code.
Lightning Network: A layer 2 scaling solution designed for Bitcoin that enables increased transaction speeds among participating nodes.
Linux: Popular open source operating system that is used in a wide range of devices around the world.
Liquidity: The ease with which an asset, or security, can be converted into cash without affecting its market price.
Listing: The addition of an asset to an exchange.
Mainnet: An independent blockchain protocol which is fully developed and running its own network where transactions are being broadcasted, verified and recorded.
Mainnet Swap: When a coin migrates from being hosted on a third party protocol to a native on-chain token on its own mainnet.
Maker: The position a trader is in when they place an order that does not fill immediately.
Malware: A software program or code that is created to infiltrate a computer system or network to cause damage.
Margin Trading: The action of trading using borrowed funds.
Market Capitalization: The total trading value of a coin which is determined by the multiplying the supply of the coin and its current price.
Market Momentum: The ability of a market to maintain a continuous increase or decrease in price within a particular timeframe.
Market Order: When a trader picks the best available bid or ask for a cryptocurrency and takes the price and quantity available on the order book.
Masternode: Full nodes on a network that verify new blocks of transactions and perform some roles in the governance of the blockchain.
Maximum Supply: The maximum number of tokens or coins that will ever be created for a given cryptocurrency.
Mempool: The mechanism a node uses to keep track of unconfirmed transaction that the node has seen but have not yet been added to a block.
Merged Mining: The act of mining two or more cryptocurrencies at the same time without sacrificing overall mining performance.
Merkle Tree: A data structure that is used to organize large amounts of data to make it more starighforwad and easy to process.
Metadata: Data that includes information about other data.
Mining: The process of verifying transactions on a blockchain network and adding them as entries into the blockchain ledger.
Mining Farm: The collection of a large array of miners taht are devoted to mining cryptocurrencies.
Monetary Policy: A policy created by an authority to control the money supply and interest rates of a country.
Moon: Popular expression in cryptocurrency lingo used to describe when an asset is experiencing a strong upward market trend.
Multisignature: A cryptocurrency wallet which requires another party to authorize a transaction before it is broadcasted to the network.
Node: A participant on a blockchain network that communicates with other participants on the network to ensure the security and integrity of the system.
Non-fungible Token (NFT): A type of cryptocurrency asset that represents a unique digital or real-world asset and is not interchangeable with any other asset.
Nonce: A random or semi-random number that is generated for verification purposes to prevent replaying past transactions.
Off-chain: Transactions that take place off of a blockchain network and may later be reported or batched together before being submitted to the main chain.
Offshore account: An account that is registered in a jurisdiction that is not the account holders country of citizenship.
One Cancels the Other Order (OCO): A pair of orders that are created concurrently, but will only allow for one of them to be executed.
Open-Source Software: Software that is released under a license that allows anyone the right to use, update and distribute it freely.
Oracle: A data source supplied by a third party that is used to determine the outcome for smart contracts.
Order Book: The list of open buy and sell orders for a specific asset on a marketplace or exchange.
Orphan Block: A block formed in older versions of Bitcoin Core when ancestry data wasn’t required and whose parent block is unknown.
Paper Wallet: A method of safe guarding a private key where it is physically printed on a piece of paper along with its corresponding cryptocurrency address.
Passive Management: An investment strategy that tracks economic indexes instead of relying on active market exposure.
Peer-to-Peer (P2P): The practice of two or more computers connecting to share a workload and resources without needing to rely on a centralized server.
Pegged Currency: A currency whose price is designed to track a specific asset, such as the USD.
Phishing: A malicious attack in which a bad actor attempts to obtain the log-in credentials of a user in order to gain unauthorized access into a system or account.
Ponzi Scheme: A scam in which the funds from new investors are used to pay the returns promised to older investors.
Price Action: The price movement of a financial asset over time, typically plotted on a chart.
Prisoner's Dilemma: A standard game theory that shows why two individuals might not cooperate, even if it may appear to be in their best interest to do so.
Private Key: A string of numbers and letters that allow a user to sign and send transactions.
Private Sale: An early stage investment round for strategic and accredited investors with a large amount of investible funds.
Progressive Web application (PWA): An application created with modern web technologies that follows basic web standards.
Proof of Attendance Protocol (POAP): A protocol that generates digital collectibles and badges as a way to prove attendance at an event.
Proof of Stake (PoS): A consensus mechanism where block validators are required to stake tokens in order to participate in the validation process and earn rewards.
Pseudorandom: A number or data set that is produced by a mathematical procedure and satisfies one or more statistical tests for randomness.
Quantum Computing: A form of computing that operates using particles that function in superposition. These particles operate as qubits instead of bits, meaning that they can take the value of 1, 0 or both simultaneously.
Race attack: When two transactions are created using the same funds at the same time with the goal of conducting a double-spend event.
Ransomware: A type of malware that allows an attacker to take over a computer and threaten to destroy or reveal files unless a ransom is paid.
Rekt: A slang term in crypto describing when someone has their position liquidated or when a system suffers from a catastrophic failure.
Relative Strength Index (RSI): A technical indicator used to measure market momentum and identify overbought or oversold conditions.
Resistance: A Technical Analysis (TA) term used to describe when a price that is increasing runs into sell pressure.
Return on Investment (ROI): The ratio between net profit and net costs, which is used as a measure to assess the efficiency of an investment.
Roadmap: A business planning technique that estimates and lays out short and long term goals on a flexible timeline.
Routing Attack: An attack that occurs at the Internet Service Provider level and is designed to affect uptime or participation in a web-enabled system.
Rug pull: When the development team for a project suddenly abandons it and sells or removes all liquidity for the projects token.
Satoshi: The smallest unit of a Bitcoin equal to one-hundred-millionth of a Bitcoin or 0.00000001 BTC.
Satoshi Nakamoto: The pseudonym of the creator(s) of the Bitcoin protocol and whitepaper.
Securities and Exchange Commission (SEC): The U.S. governmental agency that is responsible for regulating securities markets.
Security Audit: An analysis that is conducted to evaluate how secure a system, smart contract or blockchain is against attacks or technical failure.
Seed Phrase: A collection of words that can be used to access a cryptocurrency wallet and its private key.
Segregated Witness (SegWit): A process that allowed more transactions to fit within one block by separating transaction signatures from bitcoin transactions.
Selfish Mining: When a miner withholds and releases blocks in a strategic manner in order to gain a competitive advantage over the network.
Sell Wall: A large number or amount of sell orders at a specific price level on the order book for an asset.
Sentiment: The prevailing attitude of a community towards a specific cryptocurrency or financial market.
Sharpe Ratio: A ratio used by investors and economists to assess the potential return on investment of an asset.
Smart Contract: An automated contract written in computer code that are designed to trigger a certain action when a set of predetermined conditions are met.
Snapshot: The ability to record the state of a blockchain ledger at a specific point in time.
Source Code: Computer code that is responsible for defining how a piece of software will function based on a list of instructions and statements.
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Stablecoin: A type of cryptocurrency that is designed to maintain a stable value.
Staking Pool: A pool where token holders can combine their holdings in order to increase their collective staking power in order to increase their chance of successfully validating a new block.
State Channel: A two-way communication channel between two users or nodes on a network, or between a user and a service.
Store of Value: A commodity, asset or currency that can be acquired now and exchanged at a future date without experiencing a depreciation in its value.
Supercomputer: A computer or virtual machine that operates at the highest level possible with the currently available computing power.
Supply Chain: The network and activities required by an organization to deliver goods or services to the consumer.
Support: A Technical Analysis (TA) term used to describe when a price that is decreasing hits a level that triggers some buying pressure.
Taker: Someone who fills an order that is currently open on the order book for an asset.
Tank: A slang term used to describe when the price of a financial asset has a strong negative performance.
Ticker: The trading ‘symbol’ or shortened name for a financial asset.
Token: A digital unit issued on a blockchain that can hold value or be redeemed for an asset.
Token Lockup: The time span in which a set of tokens or coins are not allowed to be traded or transferred. Also known as a vesting period.
Token Sale: The issuance of tokens in exchange for another cryptocurrency.
Total Supply: The number of coins or tokens that currently exist in circulation or some form of lockup.
Transaction ID (TXID): A unique string of characters that defines a specific transaction that takes place on a blockchain network.
Transactions Per Second (TPS): The number of transactions a blockchain network is capable of processing in one second.
Trustless: A system where no single entity has control or authority of the system and where consensus is achieved between participants who do not have to trust each other.
Turing Complete: A machine that can solve any computational problem, no matter the complexity, given enough time, memory and the proper instructions.
Unit of Account: One of the primary properties of money that allows for measurement and the comparison of value between different things.
Unspent Transaction Output (UTXO): An output created during a transaction that must be referenced in a future transaction in order to spend funds.
User Interface (UI): The interface where human to computer interaction and communication with a device occurs.
Verification Code: A code that is sent to a second device as a way to ensure the identity of someone logging into an account. Used in Two-Factor Authentication.
Virtual Machine: A computer resource or system that uses software instead of a physical computer to run programs and deploy applications.
Volatility: How rapidly and with what magnitude the price of an asset changes.
Volume: A measure of how many individual units of a given financial asset have traded during a given period of time.
Wallet: Software or hardware that is used to send and receive cryptocurrencies.
Weak Hands: Slang term referring to traders or investors who lack the confidence or ability to hold onto an asset or follow their trading plan.
Web 1.0: The first iteration of the web where data was primarily read-only pages connected with hyperlinks.
Wei: The smallest possible denomination of Ether (ETH), the currency used on the Ethereum network. Equivalent to one quintillionth of an ether.
Whale: An individual or organization that holds a large enough amount of a specific cryptocurrency that it allows them to have an impact on the market.
Whiskers: The lines extending from the colored bar in a candlestick chart that indicate the full low-high range of a trading pair within a certain time frame.
Whitelist: A list of people, computer programs or cryptocurrency addresses considered to be acceptable or trustworthy.
Wick: A line found on a candle in a candlestick chart that is used to indicate where the price of an asset has fluctuated in relation to its opening and closing prices.
Wrapped Ether (WETH): An ERC-20 token that represents Ether at a 1:1 ratio, mainly used for trading purposes on decentralized platforms.
Zero-Knowledge Proofs: A type of proof that verifies a transaction is valid without revealing any information about the transaction, adding a level of privacy while maintaining legitimacy.
Zk-Snarks: One approach to zero knowledge proofs. Stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”
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