This is a living document which tries to define things which might be new to people, or are misunderstood by people entering the cryptocurrency world. If you would like to see something defined here please let me know in the comments below. Same with anything you see which is not defined correctly, or is defined poorly. This is more geared towards the lay person side and not the technical side of things – no definition of merkle trees, zero knowledge proofs or the byzantine generals problem here (unless you ask for them).
The original cryptocurrency.
Wonderful resources for understanding more about BTC here – lopp.net.
Still trying to understand bitcoin? Don’t worry you’re not alone. Here’s a good way to start – Explain Bitcoin like I’m a five year old here.
Currently the biggest altcoin by market cap (coin market cap). Started by Vitalik Buterin in 2013, launched in 2015. Built around the idea of Smart Contracts and allowing the creation of Decentralized Applications – Dapps. Read the whitepaper here – Ethereum White Paper.
A hard fork of Ethereum which came out of the decision to role back the hacking of the DAO in summer of 2016. Its trading symbol is ETC. Not confusing at all for people when they read lists of trading symbols with this one at the end i.e. btc, eth, bcc, etc.
A hard fork of the original bitcoin blockchain. Forked in August of 2017 at a 1:1 ratio. Highly politicized within the crypto community. There is a lot of FUD (Fear Uncertainty and Doubt) being spread around that Bitcoin Cash is the ‘real’ Bitcoin. Specifically since Roger Ver, one of the primary drivers behind the Bitcoin Cash hard fork owns the bitcoin.com domain and directs people to Bitcoin Cash instead of Bitcoin when he is telling people to “buy bitcoin”. Its trading symbol is BCC or BCH depending on the exchange.
Do you like it ‘hard’ or ‘soft’? Forks are exactly what they sound like – forks in the road for a crypto project by which either a new coin is created at some ratio to the original or the whole project’s ecosystem is updated for the original coin. Some of the most politically charged hard forks are the Ethereum hard fork which produced Ethereum (ETH) and Ethereum Classic (ETC) after the DAO hack in June 2016; and the hard fork which created Bitcoin Cash out of Bitcoin in August of 2017. Soft forks are more like upgrades of existing software systems. This is best demonstrated by the SegWit updates to Bitcoin, Litecoin and others. More about SegWit on Wikipedia here.
Basically any other cryptocurrency than Bitcoin (BTC). Includes Bitcoin Cash, Litecoin, Ripple, Ethereum and many many many others. Here’s a list – coinmarketcap.com
These are locations where you can buy and sell cryptocurrency. Think of the New York Stock Exchange, but multiplied many times over. Here’s a list of exchanges and a rough description of where they fall on the spectrum – Cryptocurrency Exchanges.
Coin Max Supply
Total amount of coins to ever be produced under this fork of the project – e.g. BTC max supply is 21,000,000
The number of coins allocated to the principals, the company, the seed investors, or any persons or entities prior to the release of the coin on the open markets. This means that there are significant holders of these coins who could control the market or dump on you at any time.
Coin Market Cap
Roughly speaking it is the number of coins circulating multiplied by the averaged current price across all reporting exchanges. In crypto this is a little deceiving because you may have many different exchanges posting significant price differences. As I write this, South Korean exchanges are posting a significant premium (22%) to all other exchanges for BTC. Which seems like a great arbitrage opportunity, but usually isn’t because of the difficulty in moving fiat into and out of crypto. You can see the list of each coin ranked by market cap here – coinmarketcap.com.
A method for valuing the network effect of a coin based on its transaction volume similar to the P/E ratio for equities. Specifically the Network Value to Transactions (NVT) ratio measures the dollar value of cryptoasset transaction activity relative to network value. This is a simple way to compare how the market prices one unit of on-chain transactions across different networks. When paired with the market cap of a coin it is a decent way of seeing which coins may be under or overvalued. More here.
Not a car, well, not in this case. Fiat is any government backed currency and the one with which you are probably most familiar using to buy and sell things. This would include the US Dollar (USD), the Euro (EUR), Chinese Yuan Renminbi (CNY), South Korean Won (KRW), Japanese Yen (JPY) and so on.
Composed of two currencies, can be both crypto, or crypto and fiat. The first currency is the one which you hold and which you are using the buy the second. So for instance if you are buying $1,000USD worth of bitcoin, your trading pairs are USD/BTC. If you are trading Bitcoin for Ethereum then your trading pairs are BTC/ETH. In crypto most cryptocurrencies trade against BTC, not fiat. For people who are new to the crypto space and have never traded forex (foreign currencies) this may seem like an insignificant thing to understand. But it is in reality one of the most significant ways to gain an edge in understanding and trading the crypto markets.
Currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). Traders talk about buying altcoins in ‘sats’ or ‘satoshis’ and traders will interchangeably represent them with both the decimal and without it. For instance they might represent the same price for a specific cryptocurrency as ‘0.00022521’ or ’22,521’.
Know Your Customer laws. This is why you have to put a lot of personal information into any exchange you want to use. Depends on the jurisdiction for the geographical location of the exchange or its operations.
Fundamental Analysis (FA)
Abbreviated as FA a lot. Fundamental analysis of a cryptocurrency based on the merits of the project, the background of the people on the team, any extant partnerships or backing which they might have, any underlying infrastructure which they are already leveraging, the quality of the code, the engagement and pace of activity of the community, the list of recent commits on GitHub or another repository, etc.
Technical Analysis (TA)
Abbreviated as TA a lot. Technical Analysis is the analysis of the trading chart of a given coin on a given exchange, or across a multitude of exchanges. Usually centering around resistance and support, volume, patterns, etc. It is based on probabilities and not certainties.
Also known as USDT. This is a cryptocurrency allegedly pegged at a 1:1 ratio with USD. In reality it fluctuates a few cents in either direction on a regular basis based on whether the markets are feeling bullish or bearish. But it is usually within 2-3 cents of $1 parity. This is not the same as USD. It is a cryptocurrency. And there is some doubt about its stability long term. But it is a decent vehicle at the moment for moving converting some coins to dollar-like vehicles while you wait for a move without being roped to the volatility of Bitcoin or another cryptocurrency trading pair. A lot of new people like to do this because it emulates the way in which they think about trading stocks, real estate, gold, or squirrels (just kidding on the squirrels part… I hope).
Stands for Over The Counter trades. These are trades for cryptocurrencies which are performed off of an exchange between individuals or institutions for a specific price. Generally how early trades in new coins are made, or how large amount of fiat money is onboarded or offboarded from the crypto space.
Just a misspelling of HOLD. Meaning ‘hold your coins’ through the rough patches. Or hold the door. Originated from one of the first big crashes in BTC in a post on reddit.
The unrealized value of your cryptocurrency assets on paper in your portfolio. These are different from realized returns which are the actual profits or loss you take when you sell your cryptocurrency assets for fiat, another asset class or another crypto.
Two Factor Authentication. This is a way of using two factors to authenticate a user. Usually done via a username and pwd as well as using SMS, Google Authenticator or a hardware key. In crypto always use 2FA and use something like Google Authenticator instead of SMS as your second form of authentication. These days it is far too easy for hackers to port your phone number and then steal your funds. Turning on 2FA should be one of the first things you do when you set up an account on an exchange.
Coinbase and GDAX
Coinbase is a prominent USA based exchange which allows people to purchase BTC, ETH & LTC with fiat. They have a wholly owned exchange called GDAX where you can actively trade BTC, ETH and LTC. But this is not immediately clear for most new people. GDAX uses your same login credentials from Coinbase, and you can transfer funds directly from Coinbase into GDAX.
Stands for Fear, Uncertainty and Doubt. Oftentimes used when the news cycle is spewing all kinds of weird, and typically bad news.