For those who are new to the crypto market, you will doubtlessly be overwhelmed by a wide range of specialized terms that are confusing.
For that reason, we have collected a list of significant Cryptocurrency Terms to make it simpler for you to comprehend the phrases as well as explore project information in the crypto world. For your reference, below are some significant and often used terms in the crypto industry.
You might check: Cryptocurrency Terms You Need to Know (Part 1)
You may use the keyboard shortcut Ctrl + F and input keywords to search for a phrase faster and more correctly.
Hackathon – Software Development Contest
Hackathons are competitions for developers, creating potential projects for a certain ecosystem. There will be prizes for the projects, which are judged by the judges.
Some examples of hackathons are: Terra’s DeFi Connected Hackathon, Solana’s Solana Season Hackathon, etc.
Halving is an event that halves the block reward. About every 4 years, Bitcoin goes through this important event, called the Bitcoin Halving.
This is a feature that simulates the gold mining process, increasing the scarcity and difficulty of mining. Not only Bitcoin, Litecoin and some other coins also have such halving events.
Hard Cap is the maximum amount of capital that the project wants to raise through ICO, IEO…
A hard fork is an update of the Blockchain system that will conflict with the old version, which results from a Blockchain system being split into two systems.
A popular hard fork of Bitcoin is Bitcoin Cash, Bitcoin Cash Hard Fork out of Bitcoin to raise the block’s data to 8MB.
Hodl (Hold on to dear life) or Hold coin is a term in the crypto market that refers to holding cryptocurrency. Hold coin is a form of long-term investment, investors buy and store for a long time waiting for price increases. Some common examples of this word: “Hold to die”, “Hodl or discharge”, “Hold to die?”…
Holders are often referred to as Holders. The opposite of Holder is Trader.
HYIP – Super Profitable Investment Program
HYIP stands for ‘High Yield Investment Programs’, i.e. super profitable investment programs, but almost 100% of large profit investment trust projects will be scams.
ICO – Initial Coin Offering
ICO (Initial Coin Offering) means the initial issuance of coins, this is a way of raising capital in the Crypto market.
Similar to IPO (Initial Public Offering) is a form of raising capital of companies through the initial issue of shares.
IDO is an acronym for Initial Decentralized Exchange Offering. This is also a form of fundraising, but the place to raise capital is not a centralized exchange (Centralized Exchange) like Binance, but decentralized platforms like Polkastarter, Poolz, Dao Maker, ..
IEO is an acronym for Initial Exchange Offering, it is like ICO, also a form of fundraising. But IEO is crowdfunding through the offering of tokens on exchanges.
You are probably familiar with Binance Launchpad, the projects listed here are all offered for sale in the form of IEOs, some recent projects such as Injective Protocol (INJ), Sandbox (SAND),…
IFO is an acronym for Initial Farm Offering. Similar to IDO, ICO is also a form of fundraising. But IFO will use LP token (token received when providing liquidity) as ticket to attend IFO.
IPO (Initial Public Offering), literally means “Initial Public Offering”. This term is used to refer to a company that raised funds widely from the public for the first time through the initial issue of shares and listing on the stock exchange.
Impermanent loss (IL)
Impermanent loss is sometimes translated by some as “impermanent loss”, which refers to the decrease in asset value when compared to providing liquidity and buying in the wallet, doing nothing. This term became popular around August 2020, when the Yield Farming movement became hot.
KYC – Identity Verification
KYC (Know your customer) means know your customer, is a regulation that forces companies operating in the Crypto market to know about their customers. This regulation is for governments to combat money laundering and illegal activities in the virtual currency market.
Layer refers to blockchain layers. Layer 1 is blockchain, Layer 2 is the solution to the limitations of Layer 1. Layer 2 currently only appears in Ethereum because of the disadvantages of high transaction fees, easy congestion, non-scalability, etc.
This is also a type of node inside the Blockchain. Leaf node is a node that has no child nodes.
Launchpad is where current projects use to issue tokens and raise IDO capital, including a few names such as Polkastarter, DAO Maker, Solstarter, BSCPad, etc.
Leverage is a leverage, only users borrow money from the exchange to go long/short. This will help players with less capital to make more money if the price moves in a favorable direction (Long, the price goes up, or short, the price goes down), but also makes the player lose money when the price moves in the opposite direction (Long. and the price goes down, or short and the price goes up).
Liquidity is the liquidity on the DEX or CEX exchange. If there is a lot of liquidity, it means that the transaction will not be deviated too much, due to the high market demand.
An example of a highly liquid asset is BTC and ETH, if buying and selling in the amount of about $10,000 will not make the market price change much, but if you use $10,000 to buy newly launched tokens, it will push the price up very high because not everyone sells.
Liquidity Provider – Liquidity Provider
These are the people who provide liquidity for the DEX (Uniswap, Sushiswap, …), in return they will receive a part/full transaction fee, possibly with some other benefits such as project tokens. However, if this is not calculated carefully, it will lead to Impermanent loss.
Long – Leveraged buy
Long is the act of borrowing money from the floor under a certain leverage to buy an asset, then wait for a high price, then sell it and return the capital (with borrowing fee) to the exchange.
Example: Player has $100, using x10 leverage means borrowing $900 floor to generate $1,000 capital. Then when the asset price goes up, close the long order, sell it and return to the floor $900 + fee, the profit and capital will belong to the player. However, if the asset price drops sharply, it will be liquidated and lose $100 of capital. This is a high-risk, high-return trading method.
Mainnet – Official Network
Mainnet is the official network – the official Blockchain version after the developers (developer) tested on the testnet successfully.
When the mainnet is released, it means that the coin has an independent Blockchain network, and has its own wallet platform… However, the mainnet can be changed when new updates from the project team appear.
Margin – Leveraged trading
Margin (or Margin Trading) is a way of trading to borrow assets off the floor to raise capital, after taking profits or being liquidated, the assets will be returned to the floor. Margin includes long/short (buy, sell short).
Mint means mining, creating tokens, can be encountered in projects that require the use of collateral to borrow the desired token (mint).
Money Flow is understood as the cash flow of the market in general. When money flows into an ecosystem, it causes the tokens in the system to increase in price. Can be understood as “water on the boat up”.
Multichain refers to projects that are built to integrate with multiple blockchains, which makes it possible for assets on different blockchains to use the project’s services without switching to a specific blockchain.
Market cap – Market capitalization
Market cap is the capitalization value, calculated by the formula Coin Price x Number of coins in circulation.
These servers perform different functions on the system. In reality, masternodes are Blockchain wallets, running online at a fixed static IP address.
Mining is the activity of mining coins and Miners are the participants in mining.
MMO – Make Money Online
MMO is an abbreviation for “Make Money Online”, also known as making money online. This is a job where you use a computer or phone (mostly computers) with an Internet connection to do jobs with the ultimate purpose of making money.
NFT stands for Non-fungible token, which means that the token is non-fungible. For example, a $5 bill of yours A would be exchangeable for your $5 bill B because of the same value (that’s an example of a replaceable token). But a house of friend A cannot be exchanged for house of friend B because of completely different properties (that is, an example of a non-fungible token).
NFT is often used for art, games are mainly with different formats such as ERC721, ERC1155,…
Non-custodial usually refers to DEXs and wallets that do not store user funds. That is, the producer only has to create the product, the user will keep his property. Unlike DEX, which is CEX, users have to create an account and deposit money on the exchange, which means that the exchange will keep this amount.
Another thing that distinguishes Non-custodial and Custodial is whether the user holds the passphrase, the private key of the wallet or not. If yes, then Non-custodial.
OTC (Over the counter) is a term used to refer to a decentralized market. That is, buying and selling outside of traditional exchanges. The OTC can be an individual broker, or a proxy OTC trading company.
Example: Like Huobi’s C2C platform, Binance OTC… a personal OTC broker that can offer you the service of buying and selling BTC, USDT or securities – directly with VND through Banking.
Oracle is an important piece in DeFi, projects working on Oracle will help other projects in crypto be able to update data in real life. Examples of projects working in this area are Chainlink, Band Protocol, DIA, etc.
It can be imagined that this is an order book, the user wants to buy and sell anything, then create an order, the order will be listed, and wait for other users to buy/sell. An example for an exchange using Order-book is CEX such as Binance, Okex, Huobi, Kucoin, etc.
The node contains the extension nodes (child nodes).
Pump & Dump
Pump and Dump are understood as a form of market manipulation.
Pump: “Make prices”, “pump prices” the market up.
Dump: Lower the market price to a catastrophic level by discharging large quantities of goods on the floor.
Pump & Dump is very popular in markets like stock, forex, Crypto, even gold.
Pump (pump price up) and Dump (push price down) are actually illegal behavior. However, the crypto market does not have enough legal framework, so this situation still happens often.
Commonly found in DEX and Lending projects. Pool refers to a “lake”, where users put assets in and wait for others to buy, sell and borrow according to their needs. In return, the person who puts assets into the pool is called a Liquidity Provider, and receives a transaction fee.
PoA – Proof of Authorization
PoA stands for Proof of Authority. It is a reputation-based consensus algorithm that offers a practical and efficient solution for blockchain networks.
PoB – Proof of Burn
PoB stands for Proof of Burn. This is an alternative consensus algorithm that tries to solve the power consumption problem of POW. Instead of using miners, miners need to burn or destroy tokens, allowing them to write blocks proportional to the burned coins.
PoD – Proof of Developer
PoD stands for Proof of Developer. This is a mechanism developed back in 2014. As a means for crypto projects and ICOs to verify that they are actively managed by the developer(s). PoD in Crypto is often confused with Proof of Delivery in finance.
PoS – Proof of Stake
PoS stands for Proof of Stake, i.e. proof of stake. This is a form of mining based on the number of coins held. Holders of 5% of coins can mine 5% of coins.
PoW – Proof of Work
PoW stands for Proof of Work, i.e. proof of work. This is a form of mining based on the power of the computer. The machine with more powerful capacity will dig more.
Ponzi is a pyramid scheme. Ponzi works by paying high interest to the participants who invest. In fact, taking money from the latter to pay the former. When it is not possible to pay interest to investors, the Ponzi project will scam not for investors to withdraw capital.
Examples of Ponzi projects: Bitconnect, Ifan, Pincoin…
QR Code stands for Quick response code. This is a form of fast response barcode. It has a square shape commonly used to encode web page links.
The highest node in the Blockchain network.
Rekt is a concept to refer to failure or to show someone’s defeat or defeat. In coin trading, people use the word Rekt to refer to a heavy loss, just like the word “tang”.
ROI – Rate of Return
ROI stands for Return On Investment, which is an indicator of the rate of return. Simply put, “profit” – profit (in %) on the total amount invested.
The node connects to the same big node – parent node.
Satoshi Nakamoto is said to have created Bitcoin. Satoshi or sat is also Bitcoin’s smallest currency: 1 BTC = 100,000,000 sat.
Shill – Pump blowing news
The shill is the former currency of Great Britain and Austria. However, in Crypto this term refers to the act of inflating news about the project in order to increase the value of a certain coin.
Smart Contract is a term that describes the ability of a computer system to make terms and enforce agreements on its own using Blockchain technology.
The whole process of Smart Contract is done automatically and without outside intervention.
Soft forks are software changes that are compatible with the old interface. Usually does not require users to upgrade to the latest version for the current interface.
However, upgrading will help your software overcome the limitations of the old version and increase compatibility with new applications.
Stablecoins are coins that are pegged to a fixed asset to stabilize the cryptocurrency market.
Stablecoins must be backed by the assets it “anchored” such as gold (Digix Gold Tokens – DGX), some fiat currency (Tether – USDT), or other cryptocurrencies (MarketDAO – DAI). .
Short – Leveraged Sell
In contrast to Long, Short only acts to borrow assets of the exchange according to a certain leverage and sell immediately, then wait for the price to be low, then buy back and pay the floor (with borrowing fee).
Example: Player has $100, using x10 leverage, means borrowing the floor an amount of assets equivalent to $900, then selling off $1,000. When the asset price falls, close the short order, buy it back and return to the floor the above asset + fee, profit and capital will belong to the player. However, if the asset price rises sharply, it will be liquidated and lose $100 of its capital. This is a high-risk, high-return trading method.
Testnet – Test Network
Testnet is a test network – a version of Blockchain for developers to test new features without affecting the current protocol.
Usually, any coin has its testnet for testing new features.
Traders are traders in general. But sometimes, traders are usually short-term investors, who can buy and sell over a period of a few days, weeks or months, or use margin as a trading tool.
The opposite of Trader is Holder.
TVL – Total value locked
This term appeared when the DeFi trend formed, Total Value Locked (TVL) refers to the total value of assets deposited by users into DeFi projects, which mostly belong to DEX and Lending through providing liquidity. You can check the current TVL at defillama.com or defipulse.com.
TGE stands for Token Generation Event – token release event, that is, when the token is released to the community
This word is often found in the token release schedule section of projects. Vesting is understood as a period of time when the token is paid in installments, the people in this category will receive the token gradually, until the final point is to receive the entire token. Usually applies to tokens held by the team, advisors or investors.
For example: Team Allocation: Cliff 12 months, vesting 12 months, which means that there is no token for the first 12 months for the team, from month 13 to 24 will gradually pay the token.
Token phase is distributed according to the vesting schedule.
For example: linear vesting by month for 12 months ie get 1/12 of total tokens each month
Volatility – Market Volatility
Volatility is the volatility of the market. This is an index that measures the price volatility of a traded financial asset such as stocks, cryptocurrencies, gold, etc.
The higher the volatility index, the more susceptible the asset’s value is to sudden changes (increase/decrease) in a short period of time.
A cold wallet is a wallet that manages an offline secret key that has been completely disconnected from the Internet. Hence no external environment involved and no risk of hacking except for some chance of connecting to the Internet when sending and receiving funds.
Volume – Trading volume
Volume (or trading volume) is a metric that measures the volume of money traded within a certain time frame. Trading volume is calculated as the total amount of coins/tokens bought and sold in a given time period.
Whitelist can be said to be an indispensable term if you invest in an ICO. In a word, Whitelist is a white list. It means that you can participate to buy tokens in the fundraising of that project.
And usually you need to complete KYC to be on this list.
Yield Farming is a small branch in DeFi, a form of brotherhood that makes a profit by borrowing or lending its assets on DeFi protocols.
YTD (Year to date) is an index that refers to a period starting from the first day of the current year or fiscal year to the current date.
So we’ve introduced you to some of the most significant and commonly observed cryptocurrency terms. I hope you found this article to be useful and practical!