Crypto trading terms: A glossary of crypto and blockchain terminology

Crypto trading terms

Crypto trading terms

The time taken for a new block of transactions to be confirmed and added to the end of a blockchain. The time taken will depend on the Consensus Mechanism employed. A Bitcoin block confirmation takes roughly 10 minutes, while for Ethereum it is around 15 seconds.

This is a type of “cold storage,” where private keys are not exposed to any internet-connected device that could be hacked or attacked. Blockchains are a method of storing data in a decentralized way. The data can be duplicated and distributed across the network of computer systems on that blockchain.

Crypto trading terms

A metric used to measure the share market value of Bitcoin in the overall crypto market. It is expressed as the ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets. They generate a lot of computing power, enabling users to find results to the cryptographic puzzles in proof-of-work cryptocurrencies quicker and more cost-efficiently. This guide provides step-by-step instructions on how to buy Nexus Mutual, lists some exchanges where you can get it and provides daily price data on NXM. This guide provides step-by-step instructions on how to buy Alpha Venture DAO, lists some exchanges where you can get it and provides daily price data on ALPHA.

Genesis Block

Schnorr Signatures were recently added to the Bitcoin Protocol allowing for more secure multi-signature transactions on the Bitcoin blockchain. A real-time money settlement system, currency exchange and remittance network that uses the token XRP as part of its function. The right, but not the obligation, to sell a security or cryptocurrency at a given price within a given time frame.

IPFS uses content addressing to allow data and files to be stored and served by anyone anywhere on the globe. Essentially a censorship resistant system for storing/serving web files. A test that applies to any contract, scheme or transaction to assess if something qualifies as an “investment contract” and is thereby subject to disclosure and registration requirements.

The ABC refers to Adjustable Block Size, given the fork centred around how to handle block size. Method for maintaining parity of a Stablecoin to a fiat equivalent. A type of zero-knowledge proof that doesn’t require a trusted phase. Instead, it uses publicly verifiable proof of randomness, enhancing privacy, scalability, and security.

A mathematical function used in cryptography that creates a unique, fixed-length string to encrypt and secure a certain selection of data. The ability of an asset to be interchangeable with another of its kind. Bitcoin is often referred to as digital gold because it has many of the same characteristics as gold. A method used to confirm the authenticity of electronically transmitted data. The process of retransmitting encrypted messages back to their original format.

Crypto trading terms

A web tool that lets you explore transactions, wallets, and other aspects of Ethereum’s blockchain. It also provides various charts to visualize said data as well as a list for those who want to track specific activity on the network. An event where a blockchain project distributes free tokens or coins to the community. Away From Keyboard; used on social media platforms like Twitter where users share their trading activity but only want to receive messages while they’re logged into their account . AFKs usually trade for more extended periods of time than those who are active on their feeds. Bitstamp, the world’s longest-running cryptocurrency exchange, offers several types of orders, allowing traders to take advantage of the best prices in the order book.

Solving these puzzles may require significant computing power, which in turn may consume substantial amounts of power. High-end graphics cards used in PC gaming have the processing power needed to validate transactions. In traditional finance, an organization such as a bank holds a ledger of all its customers’ transactions. Distributed ledges use nodes, or independent computers, to record, share, synchronize transactions on the electronic ledger. Amid the dynamically changing state of blockchains and distributed ledgers, consensus mechanisms ensure that only the true state of the systems is maintained. Cryptocurrencies are digital assets that are secured by cryptography.

Spot Market

It doesn’t help matters that cryptocurrencies have largely functioned outside most existing financial infrastructure. The legal status of cryptocurrencies has implications for their use in daily transactions and trading. In June 2019, the Financial Action Task Force recommended that wire transfers of cryptocurrencies should be subject to the requirements of its Travel Rule, which requires AML compliance. Experts say that blockchain technology can serve multiple industries, supply chains, and processes such as online voting and crowdfunding. Financial institutions such as JPMorgan Chase & Co. are testing the use of blockchain technology to lower transaction costs by streamlining payment processing.

Typically, founders will detail in their whitepaper how their project’s altcoin is distinct from bitcoin. Named after the founder of crypto, Satoshi Nakamoto, satoshi (or “sats” for short) is the smallest unit of Bitcoin available. And when we say small, we mean miniscule—one Bitcoin is equal to 100 million satoshis! These tiny units, in theory, help facilitate transactions by breaking them up into smaller bits.

A currency is at a high when its value is higher than ever during a particular time period, and at a low when its value is at its lowest during a different period. Highs and lows can represent the value of just one currency, or compare it to the value of other currencies. Daily highs and lows are often displayed on exchanges and crypto ranking sites. When entering the world of crypto investment for the first time, you may find yourself bombarded with terminology that makes little sense to the average person. In order to grow comfortable with this jargon, an introduction to crypto-specific terms can be useful.

Describes someone with a strong resolve to not sell their crypto even in the face of negative sentiment or declining prices, because of a belief in its fundamental value. Depositing a specific amount of cryptocurrency with a provider or protocol under specific conditions and in return for specific rights or rewards. They appear as Spent in the Output and Unspent in the Input. The ratio calculates the average excess return earned in relation to an asset’s price volatility. Blockchain property that enables data to be partitioned into more easily manageable chunks or shards, which can be processed in parallel, thereby greatly increasing the efficiency of the entire blockchain. The name given to a significant volume of Asks at a specific price that creates the impression of a wall on the Depth Chart for a given cryptocurrency.

Bitcoin Pizza

Crypto loans tend to be over-collateralised, meaning the value of the collateral is greater than the loan amount. A secure method for storing cryptocurrency that by default is offline and therefore minimises the threat of hacking. Abbreviation for ‘Buy the fucking dip’ often used by Bitcoin advocates who see a fall in price as temporary, and a good opportunity to increase their exposure with the expectation of longterm appreciation. A hard fork of Bitcoin Cash, created in late 2018 by a team led by Craig Wright, implementing a significantly larger block size .

Some camps also accuse “no-coiners” of actively hoping that the cryptocurrency market will crash, leaving those who own coins with losses. Pips are the units used to measure movement in the price of a cryptocurrency, and refer to a one-digit movement in the price at a specific level. Generally, valuable cryptocurrencies are traded at the ‘dollar´ level, so a move from a price of $190.00 to $191.00, for example, would mean that the cryptocurrency has moved a single pip. However, some lower-value cryptocurrencies are traded at different scales, where a pip can be a cent or even a fraction of a cent. From smart contract and oracle to metaverse and web 3.0, the crypto and blockchain space can be a confusing hodgepodge of unfamiliar and poorly defined terms. The process of buying and selling a coin on the market to raise its price and attract other users, followed by profit-taking.

Cross-chain Contract Calls

Smart contracts self-execute when and if certain predetermined conditions are met. The repo market is where banks, financial institutions and other participants borrow and lend cash for short periods in exchange for high-quality securities. (Repurchase agreements, or repos, are short-term loans which are often made overnight.

This is primarily used in crypto wallets, which generate a seed phrase for their users. These should typically be written down on paper in case of data or software loss. This way, the user can download the same wallet and recover their funds using their seed phrase. Proof of Authority allows speedy transactions via a consensus algorithm on the blockchain. If a blockchain account has “proof of authority,” it means that is has the power to validate transactions on the blockchain network and update it.

A sustained decrease in prices encouraging a negative outlook on the market. While leverage will magnify your profits, it also brings the risk of amplified losses – including losses that can exceed your margin on an individual trade. Leveraged trading therefore makes it extremely important to learn how to manage your risk.

Transaction Fee

In September 2022, SEC Chair Gary Gensler stated he believes cryptocurrencies are securities and has asked SEC staff to begin working with crypto developers to register their crypto. However, he also clarified that he did not speak on behalf of the SEC; he was only speaking for himself. He encouraged those starting in the crypto space to register their crypto in the spirit of getting ahead because “It’s far less costly to do so from the outset.” Cryptocurrencies traded in public markets suffer from price volatility. For example, Bitcoin has experienced rapid surges and crashes in its value, climbing to nearly $65,000 in November 2021 before dropping to just over $20,000 a year and a half later. Cryptocurrency markets have skyrocketed in value over the past decade, at one point reaching almost $2 trillion.

When a blockchain project launches a coin on a decentralised exchange to raise funds from investors. Uncollateralised digital assets designed to stabilise price and balance the circulating supply of an asset through being pegged to a reserve asset to minimise the volatility price swings. Wallets are tools used by crypto holders to control their private keys and provide an interface to make transactions.

Not all e-commerce sites allow purchases using cryptocurrencies. In fact, cryptocurrencies, even popular ones like Bitcoin, are hardly used for retail transactions. However, cryptocurrency values have made them popular as trading and investing instruments. To a limited extent, they are also used for cross-border transfers. A type of cryptocurrency exchange which has no central trading book but instead facilitates access to liquidity via smart contracts. Cryptocurrency wallets that require two or more private keys to sign a transaction before they are successful.