The ABCs of Crypto Terminology
Do you know what all those crypto acronyms stand for? We’re here to help
Why You Need to Know These Crypto Acronyms to Save Your Investment
The world of blockchain is still relatively new. There are a wide variety of words, phrases, and acronyms that may be lost among new investors and collaborators. Just like in any new field, failing to understand the terminology can lead to poor investments and misunderstandings.
In this article, we will go over a laundry list of important terminology so that you can make more informed decisions in the crypto markets.
Starting with the basics of blockchain
‘Cryptocurrency,’ ‘Bitcoin,’ and ‘Ethereum‘ are blockchain terms that you have more than likely heard before. However, if you are looking to get more involved with the blockchain space, it is important to be aware of the acronyms that will help you understand the industry.
Here are some common blockchain terms and their definitions. You’ve most likely heard of these before, so to make things easier, we’ve put them in list format for studying with ease!
Any cryptocurrency other than Bitcoin. Altcoins are often used to refer to all cryptocurrencies other than Bitcoin.
The first and most well-known cryptocurrency. Bitcoin was created in 2009 by an anonymous individual or group of individuals under the name Satoshi Nakamoto.
The ticker symbol for Bitcoin.
Non-fungible token. NFTs are digital assets that are unique and cannot be replaced by another identical asset.
Here are some more advanced terms to remember. Knowing these can really help make you a much more savvy cryptocurrency investor. Some of these terms are also used outside of the blockchain as well!
Application Specific Integrated Circuit. ASICs are specialized chips that are designed for a specific purpose, in this case mining cryptocurrency.
HODL refers to holding onto one’s coins rather than selling them. Unbelievably, the term was popularized by a typo in a Bitcoin forum post in 2013.
Peer-to-peer. P2P refers to the decentralized interactions between two individuals or entities. In crypto, it refers to the exchange of data or value without the need for a third party such as a bank or central authority.
Decentralized autonomous organization. A DAO is a decentralized organization that is run by a set of rules encoded on the blockchain.
Decentralized application. A DAPP is an application that runs on a decentralized network such as a blockchain.
Decentralized finance. DeFi refers to the shift from traditional financial systems to blockchain-based systems.
Decentralized exchange. A DEX is a cryptocurrency exchange that does not rely on a third party such as a central authority.
Ethereum Request for Comment 20. ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain.
Initial coin offering. An ICO is a fundraising event in which a new cryptocurrency project sells its tokens to early investors in exchange for Bitcoin or other cryptocurrencies.
Fear of missing out. FOMO is the feeling of anxiety or missing out on something, such as a new cryptocurrency, that one has not invested in.
Do your own research. DYOR is a piece of advice often given to cryptocurrency investors to encourage them to research a project before investing.
Fear, uncertainty, and doubt. FUD is negativity spread deliberately by an individual or group in order to manipulate the market.
Know your customer. KYC is a process in which businesses verify the identity of their customers. In the cryptocurrency space, exchanges often require new users to go through a KYC process before they are allowed to trade.
Ask me anything. An AMA is an event in which someone answers questions from the community, usually about a specific topic. AMAs are often done in the form of a live Q&A session.
With the rise of cryptocurrencies, DeFi, NFTs, nodes, and all other types of blockchain technology, there has been a corresponding increase in the demand for usability. Understanding these terms can help you make better investments. They can also help prepare you for new developments that will be on the horizon in the coming years, months, or even weeks.