Whether you’re a novice or a seasoned member of the cryptocurrency world, many terms in the industry might seem like they’re part of a different language if you aren’t familiar with them. To help you better understand the world of cryptocurrency, here are some common crypto-related terms and their definitions. We hope this helps to take away some of the confusion and boost your confidence when you’re learning more about cryptocurrency and transactions!
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An address is a unique set of 26 to 36 alphanumeric characters that serve as a virtual location where cryptocurrency can be sent. The address is either the source or the destination of cryptocurrency payments.
“I would like to send you 1,000 Dogecoin. Can you verify your address?”
Altcoin is any coin other than Bitcoin. The term combines the words “alternate” and “coin” to encompass all types of digital coins outside of the popular cryptocurrency, Bitcoin. Examples of Altcoin include coins such as Ethereum, Binance Coin, and Dogecoin.
“Elon Musk tweeting about Dogecoin made it one of the most popular altcoins on crypto platforms.”
Blockchain is a secure public ledger that lays the foundation for cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin. It is a transparent database that records transactions and places them into blocks that are all chained together. Each block is given an exact timestamp, making it easier to record and track transactions.
“Was the transaction you completed yesterday recorded on the blockchain?”
A bubble is when the public attributes a high value to an asset, such as cryptocurrency, despite the fact that it is believed that the true value of the asset is much lower than what the public has assigned to it.
“The hesitancy that many people have with cryptocurrency is that they believe it is a bubble and that the true value is zero.”
Crypto, or cryptocurrency, is a secured digital currency that exists outside of governments and central authorities. It is secured by cryptography, making it nearly impossible to replicate in the form of counterfeit crypto.
“I started investing in crypto to expand my assets and incorporate digital forms of currency into my investment portfolio.”
The term decentralized refers to a method of operations whereby there is no governing body or intermediary involved in any of the transactions.
“Crypto holders are fans of the decentralized nature of blockchain because it does not involve the government.”
Short for decentralized finance, DeFi is an entity that uses technology to remove intermediaries from financial transactions. This allows for peer-to-peer involvement during transactions.
“The peer-to-peer nature of DeFi appeals to individuals who have little to no interest in the government being involved with their finances.”
Fiat is a currency that is not backed by a commodity such as gold. Central banks have the ability to control the amount of Fiat currency entering the market.
“The U.S. dollar is an example of Fiat currency.”
A fork is when a community makes a change to the blockchain’s basic set of rules. A fork can occur if a software upgrade is needed to address things like security risks or a disagreement in the community about a particular cryptocurrency.
“Ethereum’s recent fork helped to make it more secure and address the transfer fees.”
Gash is the fee associated with performing a transaction. The exact price of gas is determined by the current supply and demand, which is set by miners, or those who find new cryptocurrency, based on the transactional energy required to process and validate transactions.
“A high gas price for Ethereum could mean the demand for Ethereum is high.”
Short for “hold on for dear life,” the term hodl is used to encourage individuals not to sell their crypto impulsively. What started out as a misspelling for “hold” now encourages others to wait things out if there’s a sudden spike or decrease in their cryptocurrency.
“I know there is a dramatic change in your Bitcoin but hodl!”
Mining is the process of verifying various forms of cryptocurrency and adding them to the blockchain digital ledger. Cryptominers solve complicated mathematical problems to open new blocks containing cryptocurrency data.
“Mining for Bitcoin is a tedious but rewarding process.”
Non-fungible tokens, or NFTs, is a digital asset that is stored on a ledger or blockchain. An NFT is one-of-a-kind, meaning NFTs are unique and not interchangeable.
“The use of NFTs is becoming increasingly popular for art and collectibles.”
Satoshi Nakamoto is the creator of Bitcoin. This is a pseudonym as the name of the creator of Bitcoin is intentionally unknown.
“Many people believe that Satoshi Nakamoto is the father of Bitcoin.”
Staking is the validation of transactions on a blockchain. Staking involves setting aside a certain amount of tokens to validate said transactions. Typically, staking will yield an interest rate for your participation in the process.
“If I start staking my Etherum, I can earn a good interest rate.”
Tokens are a form of cryptocurrency that can be used for investment purposes, to store value, or to make purchases. Tokens are also known as crypto tokens, and they are typically used to fund cryptocurrency companies. Investors can purchase tokens from companies they are interested in, which will subsequently help the company raise money.
“I used my Ethereum tokens to expand the Ethereum platform.”
Volatility is a measure of how much the price of an asset has changed over time, which helps assess the overall risk of an investment. Assets can have high volatility values, and when they do, these volatile assets are often considered to be risky investments because of the high chance for loss. Even so, they can also yield high returns.
“It is said that cryptocurrency has high volatility because of the way it increases and decreases at steep rates over time.”
A whale is a person who owns a large amount of cryptocurrency. Whales can also be entities, but either way, a whale will impact the volatility of crypto by either holding or selling a large number of coins at once.
“Bitcoin saw a huge drop in price last night. People are saying it’s because a whale sold a huge amount of currency.”
Crypto made easy
The crypto world encompasses a lot of terms that can make it hard to follow, but honestly, once you get the hang of some of the basics, you will be equipped with enough knowledge to join in on conversations about cryptocurrency and even begin investing in crypto on your own.
When you’re ready to start investing, MoneyLion Crypto can help you with your entrance into the crypto world. Whether you are interested in buying or selling crypto, MoneyLion’s opportunities offer a chance for you to participate in the crypto world with ease. Even seasoned veterans are welcome! Reserve your spot today so that you can be in-the-know when MoneyLion Crypto opens.