Cryptocurrency has become one of the hottest topics in the financial world. While some people still view it as a mysterious and complicated concept, it is clear that cryptocurrency is here to stay. Understanding the world of cryptocurrency starts with understanding the terminology used in the industry. Before you dive right into the Crypto Universe, it might be a good idea to familiarize yourself with crypto terms & definitions.
The List
Crypto terms can be separated into 2 different categories.
- Common terms — Actual Crypto terms & definitions
- Slang terms — Crypto terms that are community-based
Let’s start with Common Crypto Terms, first.
Common Crypto Terms you need to Know
Here are the common crypto terms every beginner needs to know before entering the crypto space.
Cryptocurrency (Crypto)
A type of digital currency that is built on the blockchain, & can be held in digital wallets, anonymously.
Centralized Finance (Cefi)
Financial platforms & products that are controlled by a central authority, usually a business or government. Funds are usually held in accounts at those businesses & the investors identity is known. This central authority has a lot of control over the funds & how they interact with the investors.
Decentralized Finance (Defi)
Financial platform & products that are controlled by the investors rather than a business or government. Usually, the investors have great influence over the platform, product, or project.
Token
This is very similar to shares in the stock market, except owning tokens doesn’t necessarily mean that you own a certain percentage of the company or project. Owning certain tokens may allow you do to do certain things in the crypto space. For example: Owning a certain amount of BNB token will allow you to pay for the gas fees associated with transactions.
Nonfungible Token (NFT )
This is basically a place marker on the Blockchain, stating ownership of a particular file or attribute. It can not be copied, or divided. It certifies ownership & the ability to do certain things inside ecosystems. Most NFTs are represented by some type of artwork.
Blockchain
A type of digital ledger or record of transactions. Blockchains contain all of the transactions that are associated with it main token. These transactions show all the information associated with that transaction such as: sender, receiver, amount transferred, time/ date transferred, transaction fee associated with this transaction, & how many times this transaction was verified before being approved.
Blockchain explorer
Usually, a website or app is used to display the different transactions, tokens, & contracts on that particular blockchain. Binance blockchain (BNB Chain) can be viewed with bcsscan.com. Ethereum blockchain explorer can be found at Etherscan.io. The bitcoin blockchain can be viewed here.
Exchange
This is a place that can hold tokens, exchange 1 token for another, send & receive tokens, & other things. Some exchanges are centralized such as Coinbase, & Gemini. Some exchanges are decentralized like Pancakeswap.
Fiat money
This usually refers to paper money or national currency from a particular country’s central bank. For example, in the US the Dollar is Fiat money. In the UK, it is the Pound.
Dapp
This is basically a Digital Application on a website that interacts with crypto a specific way.
Slang terms
The investors have also come up with their own lingo associated with Crypto & Defi.
These slang terms are usually shorthand for a longer word or phrase. They may also be purposely misspelled words to emphasize meaning or importance. These are community-based terms & can sometimes be traced back to other similar terms in the tech community.
Whale
An investor that has a lot of funding, usually a lot more than most other investors. Since a whale is large in real life then if an investor has a large value invested then they are called a Whale.
Bag
This usually refers to an investor’s wallet. If they have a lot of tokens in their wallets then it is said that they have large, or big, bags. If they have a small amount then they have small bags.
FUD (Fear, Uncertainty, & Doubt)
This is a term that describes an investor’s attitude toward a project, contract, or token. If they are afraid, or think that it will be a bad investment then they may talk badly about that project or token.
Rekt (pronounced “Wrecked”)
This is when a user gets scammed & loses out on the transaction, or maybe has a large loss of funds in the process.
Rugged (or rug pull)
This comes from the phrase, “pulling the rug out from underneath.” It happens when a project closes down without notice. Usually, the investors lose a lot of their money in the process.
DYOR
This stands for Do Your Own Research. It basically tells the user not to trust what is being said. Instead, they are encouraged to research the project before investing. This is kind of a way for people to tell not to assume the project is legit but to invest at their own risk.
NFA
Not Financial Advice. This basically states that the speaker is not telling the investor what to do & that the investor must make their own choices without holding the speaker responsible.
FOMO
Fear Of Missing Out. This is not really a crypto term but is seen quite often seen in the crypto space. basically, an investor sees another investor being successful & wants the same success for themselves. They then go & do the same thing as the first investor hoping for the same results.
HODL (pronounced Hold)
This is when an investor keeps a lot of tokens in their wallet without moving them. They are “holding” them there.
Gas
This refers to the amount of the transaction fees associated with a transaction.
KYC
Know Your Customer. This is a way of identifying a user, developer, or investor. Usually, this involves some type of government identification such as a driver’s license, military ID, or Social Security card. Sometimes KYC requires a picture of the person involved.
As said before, this is not an exhaustive list of terms.
Summary
As you can see, there are a lot of terms associated with Crypto & Defi!
Hopefully, this list will help you understand cryptocurrency better and some of the lingo associated with Crypto/ Defi projects & their communities.
If there are other terms that need to be included in this list (I’m sure that I missed a few) then please share them in the comments section so that we all can learn together.
