For a new person entering the crypto market, it will probably be quite confusing with terms like HODL, ICO, IDO, Hot Wallet, Cold Wallet, liquidity, farming, Bull team, Bear team, Airdrop, FUD, Shill, FOMO… And Twendee will explain the basic glossaries in Blockchain and Crypto for you.
What is Blockchain?
Before explain basic glossaries in Blockchain and Crypto, we want you deeply understand the definition of them.
In a few words, a blockchain is a digital ever-growing list of data records. Such a list is comprised of many blocks of data, which are organized in chronological order and are linked and secured by cryptographic proofs.
The first prototype of a blockchain is dated back to the early 1990s when computer scientist Stuart Haber and physicist W. Scott Stornetta applied cryptographic techniques in a chain of blocks as a way to secure digital documents from data tampering. The work of Haber and Stornetta certainly inspired the work of Dave Bayer, Hal Finney, and many other computer scientists and cryptography enthusiasts – which eventually lead to the creation of Bitcoin, as the first decentralized electronic cash system (or simply the first cryptocurrency). The Bitcoin whitepaper was published in 2008 under the pseudonym Satoshi Nakamoto.
Although the blockchain technology is older than Bitcoin, it is a core underlying component of most cryptocurrency networks, acting as a decentralized, distributed and public digital ledger that is responsible for keeping a permanent record (chain of blocks) of all previously confirmed transactions.
Blockchain transactions occur within a peer-to-peer network of globally distributed computers (nodes). Each node maintains a copy of the blockchain and contributes to the functioning and security of the network. This is what makes Bitcoin a decentralized digital currency that is borderless, censorship-resistant, and that does not require third-party intermediation.
As a distributed ledger technology (DLT) the blockchain is intentionally designed to be highly resistant to modification and frauds (such as double-spending). This is true because the Bitcoin blockchain, as a database of records, cannot be altered, nor can it be tampered without an impractical amount of electricity and computational power – which means the network can enforce the concept of “original” digital documents, making each Bitcoin a very unique and un-copyable form of digital currency.
The so-called Proof of Work consensus algorithm is what made it possible for Bitcoin to be built as a Byzantine fault tolerance (BFT) system, meaning that its blockchain is able to operate continuously as a distributed network, even if some of the participants (nodes) present dishonest behavior or inefficient functionality. The Proof of Work consensus algorithm is an essential element of the Bitcoin mining process.
The technology of blockchain may also be adapted and implemented in other activities, such as healthcare, insurance, supply chain, IOT, and so on. Although it was designed to operate as a distributed ledger (on decentralized systems), it may also be deployed on centralized systems as a way to assure data integrity or to reduce operational costs.
The definition of Crypto
Crypto, also known as “Cryptocurrency”, is a digital payment system that does not rely on banks for transaction verification. It’s a peer-to-peer payment system that allows anyone, anywhere to send and receive money. Cryptocurrency payments exist solely as digital entries to an online database describing specific transactions, rather than as physical money carried around and exchanged in the real world. Transactions involving cryptocurrency funds are recorded in a public ledger. Digital wallets are where cryptocurrency is kept.
The term “cryptocurrency” refers to the use of encryption to verify transactions. This means that advanced coding is required in order to store and transmit cryptocurrency data between wallets and to public ledgers. Encryption’s goal is to provide security and safety.
Bitcoin was the first cryptocurrency, and it is still the most well-known today. Much of the interest in cryptocurrencies is speculative, with speculators occasionally driving prices skyward.
Basic Glossaries in Blockchain and Crypto
There are more eighty glossaries you need to learn when “entering” Blockchain & Crypto market.
Blockchain is a distributed ledger that records all transactions and smart contracts for a cryptocurrency platform or platform.This book is shared among network participants. This shows that in the entire system there is not a single location, a document can serve as a unique authority, because copies of the same ledger version are located in the same location. many places.
A block of data in the Blockchain that contains transactions and is bound to other Blocks. You can think of Blocks as a railroad car that is connected to other railway cars by a chain. All Blocks form a complete Blockchain.
Block height is the number of individual blocks in a blockchain. The first block is called Height 0. It is also known as Genesis Block.
The original Block to generate the next Block in the Blockchain. This is a special block chain that has spiritual significance for every cryptocurrency. Cryptocurrencies deposited in the genesis block will never be withdrawable.
Ledger in Accounting. In the field of cryptocurrency, every transaction of cryptocurrency is stored in a database like a ledger of accountants.
Distributed Ledger. Only a certain amount of data is held by various parties to ensure accuracy. Blockchain technology is a technology for creating distributed ledgers, but distributed ledgers are not necessarily created by Blockchain.
Most blockchains, including Bitcoin, allow anyone to participate in the market. This carries certain risks. Blockchain will likely be more vulnerable to a 51% attack. Permissioned ledger means those who are verified to be able to participate in the blockchain system.
DApp stands for “decentralized app” . Unlike a regular application (which uses centralized servers to run the application’s code), a DApp runs on a decentralized peer-to-peer network. A well-known example is CryptoKitties , a cat-raising game. The famous exchange EtherDelta is also a form of DApp.
DApps also need a front-end to work. This requirement helps distinguish them from smart contracts, which run only on the back-end.
Fork is a technical word often used by Bitcoin developers in particular or in programming in general, but specifically in open source projects.It is simply taking the source code of a previous piece of software and then modifying it to create a different function.For example, when you update an application on a smartphone, you already have a Fork from the old version, the concept of “Fork” in Bitcoin is similar.
A blockchain fork can arise for many reasons. It could be due to security requirements, maybe a part of the community wants to take the project in a different direction, or perhaps there are some new governance rules added to the blockchain’s code. A hardfork (a software update that is required and will conflict with an older version) will make previously invalid blocks and transactions valid, while a SoftFork (software update does not) conflict with an older version, which is optional and allows the network to add new features while processing) will invalidate previously valid blocks.
Hard Fork and Soft Fork
Hard Fork is a large Fork that makes the old blockchain incompatible with the new blockchain, forcing the Blockchain to be split in half if not agreed by all users causing it to create a new cryptocurrency. . Bitcoin Cash, Ethereum Classic are hard forks from Bitcoin and Ethereum in this fashion.
Soft Fork is compatible with old blockchains, so it will not split into new cryptocurrencies.
Just halving the number of coins issued in the new block . Bitcoin Halving every 4 years, this is a major event of the crypto industry.
Bitcoin’s code states that only 21 million coins can exist. To manage the flow of coins, the reward for miners for mining a valid block will be adjusted at certain times. The first batch took place at the end of 2012, the first 210,000 blocks would give a reward of 50 coins, but by the 210,001th block the reward had been reduced to 25 coins per block. The second wave took place in mid-2016 at block number 420,001, and the reward was reduced to 12.5 coins. And this will repeat until 2140, when all 21 million Bitcoins are mined.
If the number of coins is generated too fast and there is not a limit to the maximum number of Bitcoins created. The price of Bitcoin will be inflated and will have a very low value when there are too many Bitcoins circulating in the market.
A string of characters that looks random because it’s been mixed by an algorithm that encrypts the original data so that no one can know that data without a private key. This is the security basis of every cryptocurrency.
Hash power of a cryptocurrency mining system . This is a very important metric because it is directly proportional to the number of coins you can mine.
A transaction will receive a confirmation when it is successfully hashed (hash, a hash function is a mathematical function that maps data of any length to data of fixed length) successfully and added to the blockchain. . Normally in the cryptocurrency world, every a certain period of time, the miner will confirm the transactions in a block. The more confirmations a transaction has, the more secure it is. For Bitcoin, most companies will require about 6 confirmations before processing a transaction.
Lightning Network is a Bitcoin scaling solution that makes the Bitcoin network more flexible and improves transaction speed and transaction costs . Using smart contract functionality, the Lightning Network allows payments to be executed instantly. It even allows cross-payments within the blockchain, as long as both use the same cryptographic hash function. Compared to the Bitcoin system, the Lightning Network is still in its infancy.
A network node is a piece of software running on one computer that joins a network with other computers running the same software on a peer-to-peer network. On a peer-to-peer network, each node (node) is considered a peer. It is responsible for verifying transactions and keeping the distributed ledger up to date.
Means private key or secret key . If you want to deposit or withdraw money, you need to use your private key. Anyone who knows this key can access your wallet, so you need to be careful. If you lose your private key, you will lose access to your wallet forever.
Public key is the key used to encrypt information . If you want to receive cryptocurrency, or from an exchange with others, you need to provide them with your public key (also known as a public address). Key sharing does not introduce security risks.
A Satoshi – named after Bitcoin founder Satoshi Nakamoto – is the smallest unit of Bitcoin that can be recorded on the blockchain . It is worth 0.00000001 BTC.
Smart Contracts . This is a new concept of embedding executable code like software programs, it is embedded in transactions so that depending on the situation that transaction can execute under different conditions. In addition to digital currencies, some blockchains also support smart contracts. The most prominent smart contract network is Ethereum.
Smart contracts allow non-monetary assets to be exchanged instantly on the blockchain without the need for an intermediary. Assets can include membership records, insurance, or even real estate.
Since blockchain is a decentralized distributed technology, if a group of people control more than 51% of the coin’s mining power, they can gain the right to change the Blockchain in their favor to steal a large amount of coins. electronic . 51% attacks often occur in coins that use Proof of Work (POW) consensus.
An attack by sending large amounts of meaningless or malicious data to cripple an exchange system for the purpose of sabotaging or stealing cryptocurrency.
Specialized machines used to mine certain coins and have no other effect . Because it is a specialized machine, it often has extremely high profit performance; but they are also quickly eliminated by more advanced generation ASIC machines.
Proof of Work – A proof-of-work consensus algorithm , where miners have to prove they have decoded the algorithm in order to receive rewards.
Proof of Stake – A proof-of-stake consensus algorithm , where coin stakingers must lock a certain amount of coins and provide the infrastructure to validate transactions in order to receive rewards. There are also many other consensus algorithms, but less popular.
Introductory text of a cryptocurrency ; provides project details as well as technical information of that cryptocurrency. It is not necessary that this document be called a White Paper, this is a way of calling it initiated by Satoshi Nakamoto.
Mining , is the process by which miners (miners) use supercomputers (miners) to mine cryptocurrencies.
The current supply in the market , the coin index of a cryptocurrency currently in the market.
The maximum number of coins that can be reached for a cryptocurrency (like Bitcoin is 21 million)
Total amount of coins that were created , including whether it was in circulation or not minus the number of coins burned.
Just locking an amount of cryptocurrency in the chain to ensure the operation of the Blockchain, verify the transaction, and the staking will receive the cryptocurrency reward, this is the way of mining cryptocurrency using POS.
Simply put, Staking is like you depositing money in a bank and receiving interest on a daily, monthly, or yearly basis.
Indicates that a certain amount of coin or token is removed from the supply permanently to reduce inflation, ensuring value for cryptocurrency holders.
This is also a new term commonly used in recent times. Since each cryptocurrency ecosystem has so many participants, it is difficult for consensus “shareholders” to choose certain directions for the community. Governance is a way of allowing the community to make joint decisions without creating conflict . This also means to govern, or to rule. In the ecosystem, cryptocurrencies are programmed with Governance feature to help holders based on that exercise their voting rights.
A cryptocurrency system requires not only a governance system, but also a decentralized governance system (Decentralized Governance), that is, it is not necessary to trust a person or an organization that the community can trust. Council can make decisions by voting. Encryption technology allows the community to vote and control that voting so that it is fair and transparent.
is the name of a unit of measurement for energy used in Ethereum (or other blockchain platforms) . Gas measures how much “action” an action or set of actions takes: for example, to do an action A it will take 30 gas, or to make action B simpler just need 15 gas. When making certain transactions, investors are also affected by Gas fees.
Inflation . Inflation increases when the quantity of money supplied is greater than the quantity of goods in the market, making the prices of goods more expensive. Inflation is the opposite of Deflation.
Is deflation – the opposite of what inflation means. Deflation means that when the quantity of money supply is less than the circulating demand of that currency causes its price to rise.
Do your own research: do your own research.
Open source . Open source is often talked about in the software industry where programmers make their software source code publicly available for anyone to see and use.
An open source management tool, helping to ensure transparency and open source software for the blockchain sector . This is a software source code management and sharing tool that can be used for free, so it is used by many blockchain application programmers because of its transparency, publicity and interoperability. Its very high pellets.
Decentralized Autonomous Organization: decentralized autonomous organization . It is built on the rules of coding programs, is operated automatically, and completely eliminates central management agencies with a decentralized control system.
Cryptocurrency (or Cryptocurrency, Digital Currency) . A decentralized digital currency that can be used for goods, services and asset transfers. Cryptocurrencies operate independently and do not rely on any third-party management. The first cryptocurrency that appeared in the world was Bitcoin. Bitcoin was released in January 2009.
In Vietnam, many newspapers use the word “virtual money”, this word is not quite right.
Money , is an asset with no intrinsic value (real value), issued by government regulation, commonly circulated widely and used as an equivalent to exchange for goods within micro-national and international (e.g. USD, EUR, VND, …)
An exchange that focuses on factors participating in the Crypto market such as buyers, sellers, traded products (crypto currencies) or other intermediaries to take place exchange activities. There are two types of exchanges, centralized exchanges (CEX – Centralized EXchanges) and decentralized exchanges (DEX – Decentralized EXchanges).
Only buying and selling activities between participants in the cryptocurrency market in particular, in the financial sector in general.
Transaction fee , applied at certain exchanges. This fee is determined by each exchange itself.
Hot wallet is a term that refers to cryptocurrency storage connected to the Internet. Coins held in a cryptocurrency exchange would fall into this category. The security and safety of hot wallets depends on the habits of users and third parties. Therefore, to avoid security risks, you should not keep large amounts of coins in hot wallets.
Cryptocurrency users usually keep a small amount in hot wallets for exchange shopping and the rest in cold wallets.
Cold wallet only wallets that are absolutely secure, disconnect the private storage network so that no one can hack it.
Cold wallets usually come in three main forms: a printed QR code that you can store somewhere safe, a USB drive, or a dedicated hardware wallet.
Automated Market Maker (AMM)
A system that provides liquidity to exchanges that is done automatically by liquidity providers through a decentralized exchange.
Each cryptocurrency that you want to receive must have a public address so that others can transfer money to you. The address in electronic money can be understood as a bank account number.
Decentralized Finance , only financial activities such as lending, raising capital, investing using smart contracts running on Blockchain Platforms such as Ethereum, EOS, DOT, NEO…
A system that automatically rewards users with coins for performing certain tasks . Usually a way of distributing coins as new projects are made.
is an acronym for Initial Coin Offering – initial sale of cryptocurrencies.
ICO is a form of calling for investment capital quite popular in Crypto money projects. When a company or team issues their own cryptocurrency, they usually create a certain number of Tokens and sell these tokens to investors in various Crowdsale. They are like the crypto version of an IPO (Initial Public Offering).
IEO: Initial Exchange Offering
Similar to ICO but it is linked with exchanges to ensure the success of the project because it is certain that the project is listed their cryptocurrency on the exchange. IEOs greatly affect the reputation of exchanges, so they are often carefully screened, but not all IEO projects are successful and profitable.
STO: Security Token Offering
This is a form of fundraising that is authorized by the financial institutions or the government where the project is created . This is considered the most secure form of fundraising.
IDO: Initial DEX Offering
A form of fundraising and listing of cryptocurrencies in decentralized exchanges , currently IDO is the trend of fundraising this year due to its convenience.
INO: Initial NFT Offering
Similar, but instead of selling tokens, the project’s NFTs will be sold.
KYC: Know your customer
This is the process of verifying customer information to avoid money laundering by criminals . Usually KYC requires a citizen ID card or other cards with personal information, bank statements, facial recognition… KYC has a risk of losing personal data, you should KYC only for exchanges reliable translator.
Often called “ candles ” in Vietnamese, it provides information on the price of a cryptocurrency over a specified period of time.
Total market value of a coin . This value is calculated as the most recent matching price multiplied by the total number of coins circulating in the market for a given coin. This value may fluctuate depending on the needs of the market between buyers and sellers from time to time. This is important information for coin ratings.
The total trading volume of an asset over a given period of time (hours, days, months, etc.), including both buy and sell volumes, is important in reflecting the strength of the asset. that type of property.
BTC Dominance (DOM, BTC.D) , roughly translated: dominance . This is a familiar and extremely important term in the field of cryptocurrencies. BTC Dominance can roughly be understood as a Bitcoin dominance rate, or it is the percentage of capitalization that Bitcoin accounts for over the total capitalization of the entire Cryptocurrency market.
Only investors with extremely large capital ; usually from a few tens of millions to a few hundred million dollars have the ability to manipulate the market.
Bull Market and Bear Market
The market is in an uptrend and conversely in a downtrend . It is very easy for investors to make profits in a bull market (Bull Market), whereas it is very easy to lose in a bear market (Bear Market). Words like Bull, Bear, Bearish, Bullrish also have similar meanings.
This is a way of naming market trends after the attacks of the animals. Bull (the bull) usually attacks (butts) upwards and Bear (the bear) usually attacks (scratches) downwards. Thus, when the market is trending up, we call it a bull/bullish market and call it a bear/bearish market in the opposite case.
Pump & Dump
Indicates market effects on prices . Pump is to push the price up, also known as “pump price”. Dump is to push the price down, usually sell off assets to withdraw money.
All-time-high (ATH) and All-time-low (ATL)
The highest and lowest prices in the history of a coin . This has historical significance as it shows where the coin is relative to its highs and lows.
Mooning, or To the Moon
Means the price will go up very high . In 2017, it seems that overnight the value of cryptocurrencies has skyrocketed. The market capitalization of the entire industry has grown from $15 billion in January to $600 billion in December. Ripple is the coin with the most impressive growth. Its price increased by 28.963% in 12 months. The phenomenon is called mooning.
Short for “Alternative coin”, alternative cryptocurrency . Means all non-Bitcoin cryptocurrencies (even tokens still count as altcoins).
For example, ETH, ADA, BNB, SOL, AXS… are all Altcoins.
A coin that is pegged to a certain fixed asset to stabilize the cryptocurrency market, backed by the assets it “anchored” such as gold, fiat money or other cryptocurrencies. Some popular stablecoins today are Tether (USDT), USD Coin (USDC), Dai (DAI), VND Coin (VNDC).
Is a cryptocurrency that is issued on a pre-existing platform , used as a currency. Unlike the concept of “coin” which refers to an individual asset class that operates individually and has its own storage wallet, tokens can be considered as operating fuel for a network (gas) or as a unit of exchange in applications ( CMT), stored on the coin’s wallet and regulated on transaction fees based on the native platform.
Abbreviation for the phrase “ H old O n For D ear Life ”.
Hodl is a term used in cryptocurrencies to refer to when a person holds a certain coin without selling it, no matter how the price drops . The term originated when a post by a member with the nickname Game Kyuubi on bitcointalk, with the title: “I AM HODLING”, was posted on December 18, 2013.
Hold and HODL
These are two terms that mean the same thing; it’s just holding a coin for the long term regardless of market volatility.
ROI: Return on investment
The ratio of profit to the initial sale price of that cryptocurrency . Although ROI has a broader meaning, in the field of crypto that is what it means.
Sell a cryptocurrency , you will make a profit when that coin drops in price.
Buy a cryptocurrency , you will make a profit when that coin increases in price.
A campaign to distribute cryptocurrency to a group of people when they meet certain conditions . A lot of projects have released a large amount of valuable cryptocurrency through the Airdrop.
A campaign to sell a certain coin/token before it goes on the floor.
To be able to participate in PreSale, IDO …, investors must do a few tasks, or draw lucky draw to enter the Whitelist. Anyone in the whitelist will be entitled to participate in PreSale and IDO bets.
FOMO: fear of missing out
The unfortunate feeling when something skyrockets without your presence.
FUD: Fear – Uncertainty – Doubt
An acronym for Fear – Uncertainty – Doubt. These are forms of psychological uncertainty when users make decisions to invest, buy, sell, or trade on cryptocurrency exchanges. FUDer means person with those characteristics. In order not to be considered a FUDer, investors should take the time to thoroughly research and make a solid and rational investment decision.
Shill in English means “stork” . And it is often used with a negative rather than positive connotation. To be honest, the essence of Shill coin is advertising that is sometimes excessively creating expectations for others
JOMO – joy of missing out
Contrary to the popular Fomo feeling, Jomo is the feeling of joy because of being abandoned : the feeling of joy when you do not participate in the pumping phase when the price drops suddenly.
Means exaggeration or exaggeration . In the field of digital currency trading, an unusually inflated currency is called a hype.
The ability of a market to buy or sell an asset combined with a relatively stable and consistent price level between transactions is called liquidity.
Changpeng Zhao – CEO of Binance
Full Portfolio will be “investment portfolio” – Portfolio. If someone asks you “What is your portfolio?” then it means they are asking what coins/tokens you are investing in.
Oracle in the field of Blockchain is understood as a data feed, allowing third-party services to provide Smart Contracts with information outside the real world into the blockchain world.
Example: If two parties are betting on a basketball game through a smart contract on the blockchain, the third party Oracle will allow the smart contract to know the outcome of the match by publishing the relevant data to the blockchain. blockchain. This process is often automated by software. A bot can scan NBA.com for game scores and automatically publish them to the blockchain. But whether it’s a person or software, it exists outside of the blockchain.
Scams in the field of crypto.
The last basic glossaries in blockchain and Crypto is SAFU. This phrase stands forFunds are Safe, which means your capital is safe.