A

ASIC-Resistant

The property of a cryptocurrency that makes it difficult to mine with ASICs, eliminating the advantage they have over regular GPUs.

Additional info

ASICs, or Application-Specific Integrated Circuits, have been specially designed to make it easier to mine specific cryptocurrencies. However, since ASICs are expensive, this brings about a level of centralization to crypto mining – something that some crypto enthusiasts find to be against the principles of crypto. With this in mind, some blockchains have been designed so that ASIC mining has no particular advantage over mining with regular equipment (GPUs).

Adam And Eve Double Bottom

A strong reversal chart pattern where a sharp bottom is followed by a rounded one, predicting a bullish market. Compare with Adam and Eve double top. See also double bottom.

Additional info

The pattern starts with a steep decline in price, forming the first bottom where the price bounces hard and fast, forming a 'V' shape. This bottom is called Adam. After a price rebound and some upward movement, the price eventually starts declining again, this time at a slower pace. As it nears the levels of the previously formed bottom (Adam), the price is rejected from falling lower. A second, longer-lasting and thus wider bottom is formed as a 'U' shape. This bottom is called Eve. After the second bottom is formed, the price is expected to start rising.

Adam And Eve Double Top

A reversal chart pattern where a narrow top is followed by a broad one, predicting a bearish market. Compare with Adam and Eve double bottom. See also double top.

Additional info

Adam and Eve double top starts with a price surge, forming the first top (Adam), which is narrow and pointed, with a strong price rejection at the peak. It forms the shape of an inverted 'V'. After this first top and the following sell-off, the price picks up and starts forming the second top (Eve). The shape of Eve is rounder and wider than that of Adam. It is common that the price does not reach the same heights as the first top, thus forming a lower high. After Eve is formed, the price is expected to start declining.

Agreement Ledger

A type of ledger dedicated to reaching consensus. This is a state of agreement between multiple parties.

Additional info

Digital distributed ledgers of cryptocurrencies are agreement ledgers, since their purpose is to get consensus from the nodes on the network on a common history of transactions (or interactions.)

Airdrop

The distribution of tokens to the public without charge or demand for commitment. This differs with ICO, where coins or tokens are sold.

Additional info

Airdrops are a method of advertising a product, but can also be used to increase the number of users of a cryptocurrency and diversify them. The distribution is usually limited to the addresses that already hold a certain token or have interacted with the protocol in question at the time of the airdrop.

Algorithm

A set of rules for a computer that makes it provide a response to any input.

Additional info

Algorithms are used in problem-solving operations. They can be written in any language, but they are most simple to write in clear-cut formal languages, such as computer code languages.

All-Or-None Order

A type of a buy or sell order that must be executed in its entirety or wait for an opportunity when it can be filled entirely. Abbreviated as AON.

Additional info

The all-or-none order is very similar to the fill-or-kill order, except that some exchanges allow it to not be executed if it can't be filled entirely right away, but wait for an opportunity when it can be executed in its entirety.

All-Time High

The peak value a currency reached in its life time. Abbreviated as ATH.

Additional info

Bitcoin reached its ATH in November 2021, when a single coin could be traded for as much as 69,000.00 USD.

All-Time Low

The lowest value that a currency ever hit in its lifetime. Abbreviated as ATL.

Additional info

Cryptocurrencies are volatile and very rarely keep a steady price for an extended period of time. The lowest price that a cryptocurrency was ever traded for is called the all time low. The ATL of some of the largest cryptocurrencies was at their inception, while some reached the lowest point later on.

Altcoin

The abbreviation for 'alternative coin', referring to cryptocurrencies other than Bitcoin.

Additional info

There are thousands of altcoins in existence, with a new ones emerging more or less frequently. The biggest altcoins include Ethereum, Ripple, and Litecoin.

Anti-Money Laundering

A set of laws, regulations and policies put in place to prevent illegal earnings to be presented as legally-generated income. Abbreviated as AML.

Additional info

Anti-money laundering rules and regulations have been adopted by most financial institutions, to counter operations aiming to profit from illegal activities on the market and the actions associated with concealing these activities.

Application-Specific Integrated Circuit (ASIC)

A piece of circuitry (computer chip), dedicated to performing one specific task. By creating hardware designed for only one purpose, greater levels of processing efficiency can be reached. Abbreviated as ASIC.

Additional info

ASICs are the technology behind the new generation of cryptocurrency mining devices, which have mostly displaced CPUs, GPUs and FPGAs, by being more powerful and yet more eco-friendly.

Arbitrage

A trading strategy that takes advantage of price differences for the same asset in different trading venues as a result of market inefficiencies.

Additional info

Arbitrage trades aim to make a profit by exploiting price imbalances. Assets that do not have a uniform price across different markets can be sold where price is highest and immediately re-bought where price is lowest.

Arthur Britto

One of the original authors of the Ripple code and the chief strategy officer of the Ripple company. He joined the company together with David Schwartz shortly after its inception.

Ascending Triangle

A bilateral chart pattern resembling the shape of a triangle, where the upper boundary is a horizontal resistance level and the lower boundary is an ascending support trendline. Compare with descending triangle and symmetric triangle.

Additional info

The ascending triangle is formed when consistent higher lows are formed, with a horizontal resistance level above. This is the most bullish among all bilateral chart patterns, as it signals increased buying pressure, and it usually forms in a bull trend. When the ascending triangle is concluded, a bullish price breakout is expected, however in a bearish market this pattern can result in a sell off.

Ask Price

The specified minimum price at which a seller is willing to sell an asset.

Additional info

The ask usually contains the price and the amount that is to be sold at that price. The ask is always higher than the price the buyers are offering, known as the bid. Exchanges list the lowest ask at any given moment as their selling price.

Asymmetric Cryptography

A cryptographic method where unique pairs of keys are used for encrypting and decrypting data – a public and a private key. Also known as 'public-key cryptography'. Compare with symmetric cryptography.

Additional info

Unlike symmetric cryptography, where a universal key is used, in asymmetric cryptography each user gets a unique public key and its corresponding private key. Messages are encrypted using public keys and decrypted using private keys, thus avoiding the risk of exposing the whole system if they leak. Messages are also signed with a private key and verified with a public key – the verification proves that the creator of the signature owns the private key that has been used to create the signature. Asymmetric cryptography is used by blockchains to ensure a safe and transparent transaction environment.

Atomic Swap

The technology that allows one cryptocurrency to be exchanged for another in a secure fashion, automatically, and without an intermediary. Sometimes referred to as 'chain linking'.

Additional info

Atomic swaps use Hash Timelock Contracts to make both parties involved in a trade acknowledge the transaction within a limited time period. If at least one of the parties fails to do so, the transaction is nullified. In other words, the transaction is executed in its entirety, or nothing at all happens.

B

BCH

The ticker symbol for Bitcoin Cash.

BTC

The ticker symbol for Bitcoin.

Additional info

BTC is the most widely used abbreviation for Bitcoin, but it is not the currency's official ticker symbol. The abbreviation BTC isn't compatible with the ISO 4217 standard, which states that the first two letters indicate the country (BT stands for Bhutan). Bitcoin has an alternative, but rarely used, ticker symbol XBT, compatible with said standard.

BTFD

The encouragement used by traders to buy a coin when its price has fallen considerably and is expected to rise again. Stands for 'buy the f***ing dip'.

Additional info

BTFD is a common expression on crypto forums and message boards.

'Terry08: ppl r selling DIPcoin left right and center Sunflovver: time to BTFD!'

BUIDL

A slang expression inspiring people in the crypto community to active participation instead of passively holding their assets. The coinage of the term is inspired by and a response to HODL.

Additional info

Much like HODL is a distortion of 'hold', BUIDL is a distortion of 'build'. However, whole HOLD came to be by chance (mistyping) and then caught on, BUIDL was created intentionally as a response to both the term and the idea of HODL. As opposed to a HODLer, a BUIDLer believes that simply holding crypto assets is not enough to drive the technology forwards and that a greater level of participation in the crypto community (be it by developing, testing or otherwise contributing) is necessary.

Bear Flag

A flag pattern that predicts the continuation of a bear market. Compare with bull flag.

Additional info

The bear flag pattern forms in two stages. First, a sudden decrease in price happens, forming a bearish flagpole. The bigger the price drop, the more bearish the pattern. Second, a flag is formed, representing a slow price correction in an ascending trading channel. At the end of the flag, the price is expected to continue falling.

Bear Investor

An investor who believes that a particular market is going to fall and wishes to make a profit from that. Sometimes just 'bear'.

Additional info

Bears use techniques such as short selling in an attempt to make profit from a market where prices are believed to start falling. They sell assets when prices are high and then wait for an opportunity to make a cheap purchase once they have fallen. Bears usually generate profit by borrowing assets when market prices are about to fall, then selling and re-purchasing when more affordable, before ultimately returning them.

Bear Market

The condition of the market where prices continuously fall due to pessimism among the investors. The opposite of bull market.

Additional info

Investors in a falling market begin to drop out in an attempt to cash in any profits, sending the market into an even steeper drop. Bear investors attempt to predict market falls and profit from them. The name comes from the way a bear attacks its prey by swiping its paws downwards. Traditional bear markets (stocks and real estate) go hand in hand with a slow and sluggish economy, high unemployment rates and unwelcome changes in taxation. However, no confirmed correlation has yet been established between these factors and crypto markets.

Bear Trap

The false indication that the prices in a market are about to plummet, when they are in fact not.

Additional info

An investor expecting prices to fall is tempted to sell their assets to avoid losses. However, in a bear trap, the signals for the drop are false and the prices remain steady or even continue to grow. Whoever keeps their assets at this point will have an opportunity to make a profit.

Bearish

Trading action determined by the belief that prices will fall.

Bearish Engulfing Pattern

A two-candle pattern that appears during an uptrend and signifies a trend reversal from a bull to a bear market. Compare with the bullish engulfing pattern.

Additional info

The bearish engulfing pattern starts with a bullish candlestick (one that closes above its open) and concludes with a bigger bearish candlestick (one that closes below its open), which closes below the initial bullish candlestick.

Bearish Harami

A candlestick pattern which consists of two candlesticks and predicts a trend reversal from bullish to bearish. Compare with bullish harami.

Additional info

The bearish harami pattern starts with a long bullish candle, followed by a small bullish candle or even a doji candle. The pattern indicates that the bullish momentum has weakened, which might lead to a trend reversal.

Bearish Three-Line Strike

A candlestick pattern which contains four consecutive candlesticks and predicts a bearish trend continuation, however it can also be a sign of a potential trend reversal. Compare with bullish three-line strike.

Additional info

A bearish three-line strike starts with three persuasive bearish candles (as with the three black crows pattern), followed by a long bullish candle which closes around the opening price of the first candlestick. This pattern usually signifies a bearish continuation, meaning that after the last candle the bears step in again and continue to push the price lower. In a bull market, this pattern could signal a trend reversal, meaning that there is no continuation of a bearish sell-off after the fourth candle.

Bid Price

The highest price a buyer is willing to pay for a coin at an exchange.

Additional info

Alongside the price, the bid also determines the quantity to be purchased. The final price may end up below the bid, but never above it. Exchanges list the highest bid as the buying price.

Bid-Ask Spread

The difference between the highest amount that a buyer is prepared to pay for an asset and the lowest amount that a seller is prepared to accept.

Additional info

Bid-ask spreads can be thought of as the difference between the lowest ask and the highest bid in the order book of an exchange. They usually occur on traditional markets as a means of monetizing the services of a broker. However, on crypto exchanges, bid-ask spreads occur as a consequence of the trade orders being placed directly in the order book, and the exchange doesn't monetize them (they usually charge transaction fees instead).

Bilateral Chart Pattern

A type of a chart pattern which doesn't point to a specific market direction and is therefore trickier to trade. Compare with continuation chart pattern and bilateral chart pattern.

Additional info

Bilateral chart patterns are considered indecisive, meaning that they do not predict a clear-cut trend continuation or reversal. As such, bilateral patterns do not present an ideal trade entry or exit points and other factors should be taken into consideration when trading these patterns. Common bilateral chart patterns include rectangles, ascending triangles, descending triangles and symmetrical triangles.

Bitcoin (Coin)

A unit of the bitcoin cryptocurrency. Abbreviated as BTC. Not to be confused with Bitcoin (protocol).

Additional info

Bitcoin serves as the coin for exchanging value on the Bitcoin blockchain. It is further divided into subunits: 0.001 BTC is a millibitcoin, and 0.00000001 BTC is a satoshi (named after Satoshi Nakamoto). Bitcoin is usually spelt in lower case when referring to the coin and uppercase when referring to the protocol.

Bitcoin (Protocol)

The first and the largest cryptocurrency based on blockchain technology. Bitcoin is a decentralized software protocol enabling peer-to-peer payments. Not to be confused with bitcoin (coin).

Additional info

Bitcoin is the first decentralized digital currency that successfully utilized blockchain technology. Attempts at creating digital currencies have existed before Bitcoin, but they were centralized and could not efficiently solve the problem of double-spending attacks.

Bitcoin was designed by Satoshi Nakamoto in 2009 and released as open-source software. It has since become the most popular and valuable cryptocurrency protocol.

Bitcoin Cash

A cryptocurrency created with a hard fork of Bitcoin. Its vision for scaling is increasing block size through a series of forks. Abbreviated as BCH.

Additional info

Bitcoin Cash operates with bigger blocks than Bitcoin in order to resolve bottlenecking issues that prevent a smooth flow of transactions. The philosophy behind this cryptocurrency is that scaling can be achieved by periodic increases in block size (which has currently grown to 32 MB). Bigger blocks can fit more transaction data, but make Bitcoin Cash more power-hungry than its older brother. In order to achieve block size increases, Bitcoin Cash keeps undergoing scheduled forks.

In November 2018, Bitcoin Cash has been further divided into Bitcoin Cash ABC, the continuation of Bitcoin Cash, and Bitcoin SV, or Satoshi's Vision.

Bitcoin Dominance

The ratio between the market cap of Bitcoin and the rest of cryptocurrencies on the market together.

Additional info

Bitcoin represents a large portion of the total market cap of all cryptocurrencies. Bitcoin dominance doesn't only communicate the percentage of the market that Bitcoin occupies, it also speaks of the popularity and attention it gathers. You'll be hard-pressed to find anyone who hasn't heard of Bitcoin, while many other cryptocurrencies, the largest altcoins included, enjoy far less public attention.

Bitcoin Pizza Day

The anniversary of the first public purchase with bitcoin on May 22, 2010.

Additional info

In May 2010, Laszlo Hanyecz, a Bitcoin enthusiast, made the first public purchase with bitcoins, paying 10,000 BTC for two pizzas. Back then 10,000 BTC was small change (around 40 USD). BTC has grown astronomically since then, and this purchase has garnered a lot of attention, with celebrations of cryptocurrency and Bitcoin in particular taking place on this day all around the world.

Bitcoin Price Index

An index representing average bitcoin prices across multiple exchanges. Abbreviated as BPI.

Additional info

A Bitcoin Price Index takes the fiat price for one bitcoin from numerous exchanges and averages it to produce a reliable price for a single coin.

Block

The basic container for data on a blockchain. Blocks can store simple transaction data (Bitcoin) or more complex software code (Ethereum).

Additional info

Data stored on a blockchain is fragmented and stored in blocks. Alongside transaction data itself, blocks also contain metadata (usually stored in the block header). Blocks are arranged in a temporal order, from oldest to newest. From blockchain to blockchain they vary in size and the frequency of creation (see block size and block time). Adding a new block means collecting data and sealing it by cryptographic means. Commonly, proof of work is used to ensure the legitimacy of each block, but there are also several alternatives. After a block is added to the blockchain, it is virtually impossible to change.

Block Explorer

A webpage that displays information on the blocks, transactions, address balances etc. of a specific blockchain.

Additional info

Block explorers are an easy way to gather information on a blockchain, allowing anyone to check the blocks, transactions, address balances and other information on the blockchain that is publicly available. Note that some blockchains don't share such data, limiting the usefulness of block explorers for private blockchains.

Block explorers are not distributed or trustless, but controlled by an authority, so there is no guarantee that they show correct information.

Block Gas Limit

The adjustable limit on Ethereum block size that determines the maximum amount of gas that can be used for the transactions in it. Not to be confused with transaction gas limit.

Additional info

Block gas limit determines how much gas can fit into each block. Since not all transactions are the same, plenty of transactions or a few very complex ones can represent the same amount of computational work and, consequently, gas.

This not a hard limit. With each block, the miners can vote to increase or decrease the gas limit by a factor of 1/1024 or approximately 0.0975%.

Block Header

The part of a block that contains metadata, not the transactions.

Additional info

The block header serves as a means to identify and position the block within the blockchain.

In the case of Bitcoin and similar blockchains, the block header contains the version number of the block, its timestamp, the hash of the previous block, the hash of the Merkle Root, the nonce, and the target hash of the block.

Block Height

Block height is a value that refers to the number of blocks preceding the newest block.

Additional info

Block height signifies the length of a blockchain. A new blockchain only has one block, the genesis block, and its block height is zero. The more blocks are added to the chain, the larger its block height gets.

Block Reward

The payment that the miner who successfully calculated the target hash of a block gets for their work.

Additional info

Mining blocks is an essential process for most cryptocurrencies, but since it can take a lot of computing power, miners need an incentive to participate. In order to repay the miners for their work, a certain amount of coins or tokens is offered as the reward to the first person who manages to perform all the calculations required to seal a block.

Block rewards can be rather substantial, making mining a very competitive space. Bitcoin's current reward is 6.25 coins.

Block Size

The limitation imposed by many blockchains to how much data their blocks can contain.

Additional info

Each blockchain's consensus rules determine the maximum size of blocks. This is done to keep a steady production of regular blocks.

Block Time

The average time it takes for miners to seal off a block. It is based on an algorithm which determines mining difficulty based on available hashing power.

Additional info

Block time is set to a specific predetermined value decided by the blockchain's creators. An algorithm adapts the difficulty of mining according to the computing power on the network, so that the actual time it takes to mine a block is roughly equal to the block time. This results in the actual block time being close to, but not precisely at the set value. Therefore, we often speak about 'average block times'.

The block time of Bitcoin is around 10 minutes, Litecoin is 2.5 minutes, and Ethereum sits at approximately 12 seconds.

Blockchain (Database)

A copy of the database of transactions, consisting of blocks of data arranged in a linear fashion (one after another).

Additional info

A blockchain is a temporally ordered set of blocks usually containing transaction data of a cryptocurrency and distributed throughout a network. Each user (or node) holds their own copy of the blockchain, to which new blocks are added when mined and validated by the blockchain network.

Because independent nodes replace centralized servers, blockchains are said to be decentralized.

It is virtually impossible to tamper with the data in a blockchain, since this would require the majority of nodes on the network to be overthrown.

Blockchain (Technology)

The technology enabling the creation of a fully decentralized and distributed database. It is utilized by most cryptocurrencies.

Additional info

Blockchain presents an alternative to storing data at a single service provider (on a server, cloud or in a bank).

It works by creating a network of nodes, where each node gets a copy of the whole database. The nodes validate transactions among themselves, eliminating the need for a trusted third party.

Blockchain has been popularized by Satoshi Nakamoto, who used it as the backbone for his cryptocurrency Bitcoin.

Blockchain Address

A user's address on a blockchain network, used for sending and receiving transactions.

Additional info

If someone wants to transfer cryptocurrency to you, they need to send it to your blockchain address.

All user addresses on a blockchain are visible to everyone but the identities of the people behind the addresses are hidden.

On blockchains such as Bitcoin's, the address is usually represented by 34-character-long string hashed from the public key. It contains letters and numbers, but some characters are limited to prevent ambiguity (upper case 'O' and zero '0', for instance).

Blockchain Client

The end-user software able to generate a blockchain private key and send and receive payments at an address.

Additional info

Blockchain clients are software enabling you to perform blockchain transactions and run a node (full or lightweight, depending on the client).

Many blockchains have several clients. Bitcoin has more than 10, most with a specific function or target audience (for instance: Bitcoin Core is aimed at end-users, while bitcoin is intended for programmers).

Blockchain Consensus Rules

Consensus rules are a specific set of rules that specify many blockchain properties and procedures.

Additional info

Consensus rules determine various parameters (such as that the same coins cannot be spent twice). If a new transaction fails to meet those parameters, the nodes will reject it.

Consensus rules achieve consistency and agreement between nodes. They determine the validity of every block and transaction, and define the basic properties of the blockchain.

The community usually decides upon what the consensus rules are (private blockchains are a different matter).

The rules are enforced by the client and upheld by full nodes. Actors that fail to adhere to the rules are banned from the network.

Blockchain Policy Rules

Policy rules are configuration options that specify the operation of nodes on a blockchain.

Additional info

Each node can use different policy rules and change them freely (unlike blockchain consensus rules).

Nodes can limit their connections with other peers, set the minimum fee rate for transactions they wish to include in the memory pool and propagate across the network, set the memory pool size limit, etc.

Blockchain Scaling

Enabling a blockchain to improve its transaction throughput in light of the ever-increasing number of its users.

Additional info

Blockchains have been experiencing a remarkable growth in the number of their users. The more the users are, the greater the number of transactions. In order for the network to be able to handle the stress, blockchains need to adapt to be able to process these transactions faster and without delay or any issues.

Scaling is generally divided into two categories: first-layer scaling and second-layer scaling.

Bollinger Bands

A type of technical indicator that is primarily used to forecast market volatility, but can also be used to locate support and resistance levels or identify overbought and oversold price territories.

Additional info

Bollinger bands consist of a moving average in the middle and two trading bands on the sides, one running above and one below the moving average. The moving average follows the price movement with some delay, while the trading bands behave a bit differently. When the market is not experiencing much volatility, the trading bands move close to each other. As the channel formed by the trading bands tightens, the chance that a price movement will occur becomes imminent. When the price makes a significant move, the trading bands move in opposite directions, away from the moving average, forming a broad channel. The moving average of the Bollinger Bands represents a support level (when price is above it) or a resistance level (when price is below it). Bollinger bands were developed by John Bollinger in the 1980s.

Bot Trading

Automatic trading using a computer program known as a trading bot.

Additional info

Trading bots are software tools that perform automatic trades on your behalf. They use various algorithms to identify and capitalize on market trends in order to perform profitable trades.

There is a certain amount of risk involved with bot trading, since you forfeit direct control of your assets to a program. A fault in the code or a crash may result in a non-profitable outcome.

Break Even

To reach the point at which total costs and total revenues are equal; to reach the break-even point.

Additional info

To break even means that all the expenses of an investment have been covered, with there being no loss (or profit) at this point if the investment were to be sold.

The point at which one breaks even is known as the break-even point (or BEP). To calculate this point, the break-even multiple is used.

Break-Even Multiple

The number by which the value of an investment needs to be multiplied in order to cover all the investment expenses and start yielding profits. Sometimes spelt 'breakeven multiple'.

Additional info

The break-even multiple is calculated by dividing the buying price by the current market price. A multiple larger than 1 means the value of the investment has to grow in order to reach the BEP (break-even point), a value smaller than 1 means the investment will yield a profit if sold.

If you invested in a coin whose market price was 100 USD, but has since fallen to 50 USD, you would need the price to double (multiple of 2) in order to reach the BEP. If the price grew to 120 USD (multiple of 0.83), you're in the money.

Break-Even Point

The point at which the total costs and total revenues of an investment are equal. Abbreviated as BEP.

Additional info

Reaching the break-even point means covering all the expenses of an investment with no profit or loss if the investment is sold. After this point, any additional growth of the investment's price results in profits.

To calculate the BEP, the break-even multiple is used.

Breakout

In technical analysis, a successful and untemporary movement of the price of an asset above a resistance or below a support level. Compare with fakeout.

Additional info

Breakouts often indicate the start of a fresh trend in the direction of the breakout, presenting a potential trade entry point. Breakouts which happen with significantly increased volume are considered to be strong. Breakouts that happen when the price break a support level are also called 'breakdowns'.

Brute-Force Attack

A type of attack against a cryptographically-secure system that attempts to go through every possible combination to unlock it.

Additional info

While brute-force attacks are guaranteed to find the correct key, they are enormously expensive and time-consuming. With most contemporary protections, brute force attacks would take millions upon millions of years on average to find the right value. The difficulty is further increased by simple protective measures, such as the one preventing you from logging in your email for several minutes if you've input the wrong password a couple of times.

Bubble

An economic cycle where assets experience an unjustified surge in price followed by a global sell-off and the plummeting of price.

Additional info

Economic bubbles are inflated by exuberant market behaviour. Interest in certain assets skyrockets and so does their price. However, the price of the assets is not justified, which triggers an all-round sell-off. The bubble 'bursts' and the prices plummet.

Bull Flag

A flag pattern that predicts the continuation of a bull market. Compare with bear flag.

Additional info

The pattern starts with a strong vertical price surge, forming a what is known as a flagpole. The bigger the price surge, the more bullish the pattern. The pattern is concluded with a flag, which represents a slow and steady price correction after the initial move upward. The flag is mildly tilted downward, forming a tight trading channel. After the flag is completed, the price is expected to continue climbing up.

Bull Investor

An investor who bases their investments on the belief that market prices will rise. 'Bull' for short.

Additional info

Bulls usually invest in a market where prices are falling, but where they expect the trend to reverse. They look for assets where a spike in price will return the investment or alternatively, search for dips in a rising trend.

They must be careful not to fall into a bull trap.

Bull Market

The condition of the market where prices are rising or are expected to rise, accompanied by optimism and confidence from investors. The opposite of bear market.

Additional info

Market trends are subject to numerous variables, which makes them difficult to predict. It's hard to say without speculation whether market prices will rise, bringing about a bull market, or inversely, fall, resulting in a bear market.

An investor who bases their investment on the belief that the prices will rise is known as a bull.

Bull market is named after the manner in which a bull attacks its victim by thrusting its horns upwards.

Bull Pennant

A chart pattern in the form of a triangle that signifies the continuation of a bullish trend. Compare with bear pennant.

Additional info

The bull pennant is similar to a bull flag. The pattern starts with a price upsurge forming a flagpole. The bigger the flagpole, the more bullish the pattern. Price then consolidates in a symmetrical triangle – this is how the pennant is formed. Upon the completion of the pattern, the price is expected to breakout to the upside.

Bull Trap

The over-extension of bull traders, whose interest in a specific asset causes inflation and decreases its value. It ultimately results in loss for the traders.

Additional info

Widespread interest of investors in an asset may cause its price to decrease. In the case of a bull trap, once all purchases have been completed, the decline in demand causes further drops in price.

When the price is declining, the investors are tempted to sell, which may cause an even steeper downward spiral.

Bullish

To be bullish implies the investor's belief that the price of an asset will rise. See also bull investor.

Bullish Engulfing Pattern

A two-candle pattern which signifies a trend reversal from a bear to a bull market. Compare with the bearish engulfing pattern.

Additional info

The bullish engulfing pattern starts with a bearish candlestick (one that closes below its open) and ends with a bigger bullish candlestick (one that closes above its open), which closes above the initial bearish candlestick.

Bullish Harami

A candlestick pattern which consists of two candlesticks and predicts a trend reversal from bearish to bullish. Compare with bearish harami.

Additional info

The bullish harami pattern starts with a long bearish candle, followed by a small bullish candle or even a doji candle. Reduced selling pressure from the bears might lead to a trend reversal.

Bullish Three-Line Strike

A candlestick pattern which contains four candlesticks and usually signifies a bullish trend continuation, although under some market conditions it can result in a trend reversal. Compare with bearish three-line strike.

Additional info

A bullish three-line strike forms with three strong bullish candles (similar to the three white soldiers pattern), followed by a long bearish candle, which closes around the opening price of the first candle in the pattern. In a bull market, this is a continuation pattern, although it might not seem obvious at first glance. The bearish candle at the end of the pattern only signifies profit-taking from the bulls, meaning that the bulls are willing to rebuy after the bearish candle, which results in the continuation of a bull trend. Sometimes in a bear market, or if a bullish market is generally weakening, this pattern can also play out as a reversal pattern, meaning that the fourth – bearish – candle is actually a reversal candle that puts the bullish price uprise to an end.

Burn

To destroy some units of cryptocurrency.

Additional info

Some cryptos have systems put in place that make it possible to destroy coins. This is usually done in a predictable manner. XRP, for instance, demands that a tiny amount of XRP is burned with each transaction in order to avoid network spam.

Buy Order

An order to buy coins for a particular price at an exchange.

Additional info

Buy orders allow you to specify the amount of crypto you want to buy and how much you are willing to pay for it. Depending on the type of buy order, you can also determine further parameters (see market order, limit order and stop order).

Buy Wall

A condition of an asset of the order book when huge buy orders are placed at the same price, which prevents the price from plummeting below. The opposite of sell wall.

Additional info

A buy wall appears when there is considerable interest in a particular asset at a particular price. It is usually put in the order book by a whale. It often happens that a price starts surging before the buy wall is filled, as other traders start buying the asset because of FOMO (fear of missing out). Walls are sometimes put in place to manipulate the price and can vanish without a warning.

Buy walls can be seen as a vertical line in the depth chart.

C

Call Option

An option that gives the holder the right to buy the underlying asset at a pre-determined price and within a specified time-period. Compare with put option.

Additional info

A call option grants you the right to buy a specified amount of the underlying asset at a particular price up in a specific time window.

You might hold an option to buy 10 ETH for 200 USD each for three months until expiry, giving you the right to spend exactly 2,000 USD for the purchase, regardless of price fluctuations. The premium for such an option is usually a percentage of the total option price (for instance, around 10 percent, which is 200 USD in the example above).

Candidate Block

A not-yet-mined block prepared by a miner, which contains unconfirmed transactions that have not yet been validated by full nodes.

Additional info

Miners assemble candidate blocks from unconfirmed transactions stored in the mempool to be added to the blockchain. When a hash of the required difficulty is found, validating nodes inspect its authenticity and, if everything is in order, the block is added to the blockchain and the miner who solved the computational problem is awarded the block reward.

Candlestick

A symbol on price charts denoting price swings in a limited period of time. It is a popular way of representing technical analysis data.

Additional info

Candlesticks provide an illustrative, color-coded representation of falling and rising market trends, taking into account different parameters such as the opening price, closing price, highest price and lowest price within the given time frame (varies from minutes to days).

Candlesticks are composed of three parts: the body, the top wick and the bottom wick. The body of a candlestick represents the opening and closing prices. The top wick of a candlestick represents the highest price. The bottom one represents the lowest price.

In line with market trends, candlesticks can be either bullish or bearish. Typically, bullish candlesticks are green or white, while bearish candlesticks are red or black.

Candlestick Body

The part of a candlestick between the opening and the closing price that usually appears between the wicks.

Additional info

The body of a candlestick is the part between the opening and the closing price. If the open is below the close, the price has been rising during the printing of the candlestick – the body is typically colored green or white. Conversely, if the open is above the close, the price has been falling – the body is red or black.

The body represents the price range within which the majority of trades have been conducted. Those outside of the body occupy the area of the wicks.

Candlestick Pattern

A formation in technical analysis consisting of several candlesticks, utilized by traders to forecast upcoming market trends. Compare with chart patterns.

Additional info

Candlestick patterns can signify either a trend reversal (meaning that the price trend will change direction) or a trend continuation (where the trend goes on). Bullish candlestick patterns predict an uptrend. Some of the most known bullish candlestick patterns are bullish engulfing, three inside up and  morning star. Conversely, bearish candlestick patterns predict a downtrend. Some of the most known bearish candlestick patterns include bearish engulfing, three inside down and evening star.

Capitulation

A period of strong selling activity.

Additional info

During capitulation, investors want to sell their holdings as fast as possible. The increase in supply through the soaring number of sell orders has a detrimental effect on the price of the asset. Capitulation is accompanied by panic and despair and sees investors give up on any gains and even accept losses if unavoidable.

Central Ledger

A single ledger containing the information on transactions, usually kept by a central institution.

Additional info

A central ledger works by multiple people entrusting a third party (like a bank) to keep records of transactions between them.

If Peter owes Linda two coins, the bank has taken note of that in its central ledger, and Peter will be expected to pay out. Even if Peter doesn't want to pay, he's obligated to do so by the bank.

Centralized Currency

A currency under control of a single authority, such as a government or a central bank.

Additional info

When we talk about centralized currencies, we usually refer to fiat currencies such as the United States Dollar or the Euro. However, even digital currencies can be centralized. Before Bitcoin hit the market, every form of digital money in existence was centralized. Blockchain technology allowed the development of decentralized currencies, but blockchains can also be private and thus controlled by a central authority.

Channel

The space between two parallel support and resistance trendlines. As the price moves within the channel it is expected to rebound from these support and resistance levels.

Additional info

There are three different types of channels depending on the price trend. An ascending channel is bordered by ascending support and resistance lines, and predicts the continuation of an uptrend. A descending channel is bordered by descending trendlines and predicts a downtrend. When the price runs flat for a while, it is trapped in a horizontal channel, bordered by horizontal lines. A horizontal channel is also known as a range. If a price breaks below support or above resistance level this is called a breakout.

Chargeback

The reversal of a transaction that is initiated by the bank. It functions as protection for the consumer against dishonest merchants.

Additional info

With traditional refunds, the consumer demands their money back from a business, but when it comes to chargebacks, the consumer asks the bank to forcibly extract their money from the account of the business.

Charlie Lee

The creator of Litecoin. He used to hold the position of Director of Engineering at Coinbase.

Additional info

Lee used to be an employee of Google before moving to Coinbase. He is most famous for creating the cryptocurrency Litecoin. He is also known by his alias 'coblee'.

Chart Pattern

A specific pattern formation on a price chart which is made up of dozens to even hundreds of candlesticks and is used to forecast upcoming market trends. Compare with candlestick patterns.

Additional info

Recognizing and utilizing chart patterns is essential for traders in any market. Specific chart patterns forecast a bullish or bearish market and can signify a trend continuation or a trend reversal. Chart patterns are split into three categories: continuation chart patterns (price trend continues), reversal chart patterns (price trend changes direction) and bilateral chart patterns (price trend can move either way). When trading based on these patterns, volume plays an important role, as a price breakout (either up or down) at the end of a pattern should be accompanied by an increased trading volume for the pattern to be confirmed.

Circulating Supply

A variation of total supply that approximates the actual number of coins or tokens in circulation. See also max supply.

Additional info

Circulating supply attempts to accurately determine how many coins or tokens are in circulation and held by the general public.

It is often used instead of total supply in calculating market capitalization in order to provide more accurate results.

Closing Price

The price at which a candlestick is concluded. Also called 'close price'. Compare with opening price.

Additional info

Bullish candlesticks have their closing price above their opening price, as the price increased during candlestick formation and closed above its opening. Bearish candlesticks have their closing price below their opening price, as the price decreased after its opening and managed to close below the open price.

Coin

A digital unit of currency that acts as a medium for payments. Not to be confused with token.

Additional info

Coins are digital representations of currency units and can transferred around in exchange for products or services. They are based on their own dedicated blockchain.

For example, bitcoins and Litecoins are coins, but Augur (REP) is a token.

Coinbase Transaction

The transaction that gives the miner the mining reward from the pool of unmined coins.

Additional info

Whenever a miner mines a block, the mining reward is not transferred to them automatically. Instead, they have to claim the coins made available by the algorithm and send them to an address under their control. This first transaction of new coins is known as a coinbase transaction.

Cold Storage

A means of storing your cryptocurrency offline. Often considered the safest way of storing crypto assets.

Additional info

Physical separation from the internet forms a layer of protection for the contents of the wallet, as it reduces the risk of hacking and unauthorized access. Cold storage holds the user's private key, not the units of currency itself. Cold storage is achieved through printing (or writing) private keys on paper or with hardware ledgers, which are devices similar to USB flash drives, but for storing cryptocurrency.

Confirmation

The process confirming a transaction by including it in a block and adding further blocks on top of it to satisfy demands for legitimacy and finality. Usually counted in blocks, e.g. 'three confirmations'.

Additional info

A transaction gains its first confirmation when it is written into the newest block of the blockchain. Every block added after that is considered an additional confirmation, showing that the transaction is legitimate. A merchant accepting crypto as payment can set their own threshold for how deep a transaction needs to be in order to be considered final. If a merchant asks for 6 confirmations before accepting a transaction, that means 5 blocks need to be added to the chain after the block with the original transaction. The more confirmations a transaction has, the harder it is to change with a double-spending attack.

Confirmation Time

The times it takes for a crypto transaction to be added to a block.

Additional info

A crypto transaction first needs to be signed and distributed to the network. Then, it is collected by the miners from the mempool (too low an attached fee could leave it stuck there) and added to a valid block. This process can take anything from a couple of seconds to several minutes, depending on the blockchain, current traffic and the fee attached to your transaction. Some merchants and exchanges will only consider a transaction confirmed after it has reached a level of depth in the blockchain that guarantees practical finality. The general consensus is that this takes around 1 hour when it comes to Bitcoin (6 confirmations).

Continuation Chart Pattern

A type of a chart pattern which indicates that a price trend will continue. Compare with reversal chart pattern and bilateral chart pattern.

Additional info

Traders utilize continuation chart patterns to confirm the current market trend and perform trades based on these assumptions. The most widely known continuation chart patterns are flag patterns, cup and handle, falling wedge and rising wedge.

Contract Account

An Ethereum account controlled by a smart contract, with there being no private key. Compare with externally owned account.

Additional info

Contract accounts can hold a balance of ether, ERC-20 tokens, tokens of a different standard or even none at all. Unlike externally owned accounts, contracts accounts represent the address of a smart contract. This means that there is no private key that would allow the owner of the account to spend the coins held at the contract account’s address. Instead, code execution is triggered by transactions or messages (i.e. calls). Whenever executed, a contract account performs various operations of arbitrary complexity. A contract account can manipulate its persistent storage, which means it can have its own permanent state. It is also able to call other contracts.

Crowdfunding

Financing a new project by allowing a large number of people to invest a small amount into it.

Additional info

Crowdfunding works by advertising a project to many investors via dedicated websites or social media. Potential investors each contribute a small amount of funds, but the donations are very numerous. ICO (Initial Coin Offering) can be thought of as a kind of crowdfunding.

Crowdsale

The last funding stage of an ICO, which opens it to the general public. See also: private sale (1st stage) and presale (2nd stage).

Additional info

The crowdsale takes place after the private sale and the presale. During the crowdsale, almost everyone is welcome to invest in the ICO, but the investors may need to be whitelisted and can be required to fill in and submit a KYC form. This is necessary to comply with regulations (such as AML policies and anti-terrorist prevention measures). The crowdsale is sometimes limited to a country, state or another regulatory jurisdiction.

Cryptanalytic Attack

An attack against a system protected by cryptographic means.

Additional info

A cryptanalytic attack attempts to circumvent or break the cryptographic measures put in place to protect a system.

Many types of cryptanalytic attacks exist, the most well-known being the brute-force attack, the dictionary attack and the man-in-the middle attack.

Crypto

Stands for 'cryptocurrency'. See cryptocurrency.

Cryptocurrency

A digital currency secured by means of cryptography. Most, but not all, cryptocurrencies use blockchain as their technological backbone.

Additional info

Unlike traditional centralized currencies, many (but not all) cryptocurrencies are decentralized, meaning that no single individual or institution controls their supply and transfer. The decision making lies solely in the hands of the users. The name comes from their dependence on cryptography to secure the transactions. Cryptocurrency is sometimes spelt in two words (crypto currency).

Cryptocurrency Wallet

A means of storing public and private keys.

Additional info

Cryptocurrency wallets effectively store cryptocurrency. However, to be precise, a cryptocurrency wallet holds no cryptocurrency. Instead, it stores the public and private key of address. Only by inputting the correct combination of a private and a public key can you generate a digital signature required to spend the funds associated with your address. Cryptocurrency wallets can be digital or physical (paper).

Cryptography

The study of techniques used to encode or decode information in such a way that only authorized parties can access it.

Additional info

Cryptography is essential for providing you with security while surfing the net. As such, it is indispensable when it comes to digital transactions. This field of study dates back thousands of years, but lent its name to cryptocurrencies because of the encoding they use to secure transactions. Today, cryptography is nearly synonymous with encryption.

Cryptokitties

A game based on Ethereum, which allows users to collect, breed, and trade digital cats.

Additional info

CryptoKitties is just one of many games based on the Ethereum network, but it is notable as an early use of non-fungible tokens. When the game was launched, its popularity made the Ethereum network hit its transaction throughput limit due to a massive increase in transaction volume associated with the game.

Cup And Handle

A chart pattern in form of the letter U, which predicts the continuation of a bull market, while sometimes also acting as a trend reversal pattern. Compare with inverted cup and handle.

Additional info

The cup and handle pattern consists of a U-shaped cup, followed by a slight price move downward – the handle. As the cup starts forming, the trading volume should decrease as it reaches the bottom of the cup, signifying reduced selling pressure. When the cup starts rounding upwards, the trading volume should increase, which means there is more interest in higher prices. When the cup is fully formed, a slight decline in price happens – the handle. After this correction, the price is usually expected to rebound and continue climbing higher.

D

DAO

A 'decentralized autonomous organization' based on the Ethereum network, which had no typical management structure or board of directors.

Additional info

DAO tokens gave the owners voting rights for the projects that the organization might tackle. DAO infamously fell into disuse and was abandoned after it suffered a major cyber attack. A bug was discovered in its code, which was exploited in a large-scale attack on the DAO, resulting in hackers gaining 50 million USD worth of ETH. A hard fork was implemented on the Ethereum blockchain to reverse the effects of the DAO hack.

DDoS Attack

An attack at an online service that makes it unavailable by overwhelming it with requests. DDoS stands for 'Distributed Denial of Service'.

Additional info

A DDoS attack is sometimes compared to a group of people crowding a shop, thus preventing a legitimate customer from entering and making their purchase. In the digital domain, a DDoS attack works in a similar way. Unlike just a DoS, a Distributed DoS attack comes from multiple sources, which makes it very potent, since it cannot be stopped by simply blocking a single source.

DYOR

A popular expression in the crypto community that urges its members to inform themselves as well as they can before committing to investment. Stands for 'do your own research'.

Additional info

DYOR is a principle that stands against FOMO, or fear of missing out. Unsuspecting investors want to take part in a bull run and make easy money on an opportunity that seems lucrative, only to be disappointed when their investments fall flat. Therefore, sufficient research prior to investment is vital to prevent losses.

Daemon

A background process or service that is not under the direct control of an interactive user. Pronounced both 'dee-mon' and 'day-mon'.

Additional info

Deamons are used widely in computing. When it comes to blockchains, they are essential in downloading the blockchain and running a node.

David Schwartz

The CTO of the Ripple company.

Additional info

Schwartz joined the company together with Arthur Britto shortly after its inception and is recognised as one of the architects and lead developers for the Ripple payment system. [1]He previously held the position of Chief Cryptographer within the Ripple company.

Day Trading

A trading method where traders buy and sell an asset within a day. Traders utilizing the day trading usually execute one to up to a few trades per day. Compare with scalp trading, swing trading, position trading, investing and holding.

Additional info

Cryptocurrency day traders usually try to capture price movements between 5% and 15%. However, a good knowledge of technical analysis is required to be able to consistently profit from day trading in the long run. Day trading often also involves 'trading the news'. For instance, good news, such as a market reaching a new level of regulation or a breakthrough in the development of a blockchain, could vastly increase a coin’s price, while bad news could make the price plummet. Crypto markets are popular among day traders on account of their volatility.

Dead Cat Bounce

A pattern in technical analysis indicating a temporary recovery in a downtrend before the continuation of the downtrend.

Additional info

The dead cat bounce is a continuation pattern because it signals that a falling trend is going to continue despite a small price recovery.

Death Cross

A bearish market signal which appears on the chart when a shorter moving average crosses below a long-term moving average. Compare with golden cross.

Additional info

The most widely respected and traded death cross occurs when a 50-period moving average crosses below the 200-period moving average. It is most commonly observed on a 1-day candlestick timeframe, however it can happen on any timeframe. Before a death cross takes place on a chart, the price has to reach a peak first, followed by downward price movement (trend reversal). As the price fails to pick up and starts increasing again, a death cross appears on the chart, which results in a breakout to the downside, followed by a downtrend continuation.

Decentralized Application

A piece of software with a specific function that is stored on a decentralized blockchain network. Also 'dapp', 'DApp' or 'ĐApp' (Ethereum only) for short.

Additional info

DApps are applications based on blockchain technology. They store data cryptographically and often generate their own tokens. Just like traditional apps, DApps can have numerous uses and functions. They get their name from the way they host and distribute data: rather than at a central server, DApps run on a decentralized blockchain network of nodes. Decentralized applications were first introduced by the Ethereum platform. DApps built on Ethereum are also sometimes called ĐApps (reads 'Eth-apps') to differentiate them from DApps build on other blockchain platforms.

Decentralized Currency

A currency that is not controlled by any central entity or institution. See also cryptocurrency.

Additional info

Decentralized currencies are almost exclusively digital, have no physical form and rely on cryptography. It's very difficult to envisage a decentralized currency that operates with physical bills and coins. At the very least, physical money has to be printed and stored somewhere, which provides a point of centralization.

Decentralized Exchange

An exchange that conducts trades by connecting users directly.

Additional info

A decentralized exchange doesn't require users to deposit any funds. Instead, they can trade with funds in their wallets.

Decryption

In symmetric cryptography, making an encoded message clear by reverse application of the encryption key. The opposite of encryption.

Additional info

Decryption is the reverse process to encryption, where encryption encodes data and decryption decodes it. Both processes ensure that the data travels through digital space in a scrambled, unreadable form, making it secure from people who may want to exploit it. The notion of decryption is different in asymmetric cryptography, as used by cryptocurrencies.

Deflation

An increase in the value of money that comes about due to a shortage of money in circulation or a general increase in economic productivity. The opposite of inflation.

Additional info

During a period of deflation, the value of money grows, meaning that you can purchase more for less money (the opposite is true for inflation). Strictly speaking, deflation only happens when there is a need for money on the market, and should not be confused with price deflation, which still means everything costs less, but this time because there is a decrease in price of products or services.

Delegated Proof Of Stake

A consensus algorithm where voters elect delegates who will validate blocks on voters’ behalf. Not to be confused with proof of stake.

Additional info

In delegated proof of stake, token holders vote to elect delegates who will do the validation on their behalf. If a delegate fails to deliver a block or validates invalid transactions, they are replaced by a newly elected delegate. Validators don't compete for the next block. Instead, they collaborate. Delegated proof of stake is highly energy efficient, but it is centralized to some extent.

Delisting

The removal of currency or another asset from an exchange. The opposite of listing.

Additional info

Delisting an asset signifies the removal of all of its trading pairs, but asset withdrawals usually remain open for a while after delisting, allowing the users to retain their assets.

Depth Chart

A visual representation of the order book on a tradeview, where a green chart on the left represents the asks and a red chart on the right represents the bids.

Additional info

The depth chart can be used to quickly see how many buy or sell orders are placed at a specific price. The steeper the chart around certain prices, the more orders there are concentrated at that price.  The depth chart is also great for spotting buy walls and sell walls.

Derivative

A type of financial security that bases its value on an underlying asset.

Additional info

Derivatives are a family of financial contracts that have their value based on another type of financial product, such as stocks or cryptocurrencies. Derivatives can specify various terms: what, for which price and when something will be bought or sold, and the conditions under which that will happen, to name a few. Common types of derivatives include futures and options.

Descending Triangle

A bilateral chart pattern resembling the shape of a triangle, where the upper boundary is a descending resistance trendline and the lower boundary is a horizontal support level. Compare with ascending triangle and symmetric triangle.

Additional info

The descending triangle is the most bearish of all bilateral chart patterns and it usually forms during a bear trend. It is formed when a price is reaching ever lower highs, with a horizontal support below. The pattern shows increased selling pressure at an ever lower price. It is expected that a bearish sell-off happens at the end of the pattern, however in a bullish market this pattern can result in a bullish breakout.

Design Flaw Attack

An attack exploiting code to procure funds or trick other users to gain an advantage.

Additional info

The DAO hack is an example where a design flaw in a smart contract was exploited and several million USD worth of ETH stolen from it. Whereas this might have been immoral, it was, strictly speaking, not against DAO's principle of computer code being law. Nevertheless, it lead to a hard fork, enabling the investors to recover the stolen funds.

Dictionary Attack

A type of attack against a cryptographically-secure system that attempts to go through every possible combination to unlock it, but does so in an order based on a set of likely combinations.

Additional info

Dictionary attacks are essentially brute-force attacks, with the twist that they go through the possible combinations in a pre-defined order. This order is determined by which inputs are most likely to unlock the system. They verge from common and proper names, birthdays and other dates, to simply words found in a dictionary. As a demonstration, consider that the most common passwords include 'password', '1234' and 'user'. So naturally, starting your attack with inputs such as these makes most sense.

Difficulty

The difficulty of creating a legitimate block on a proof-of-work blockchain.

Additional info

As a way to ensure that the produced blocks are legitimate, proof-of-work blockchains demand that there is a certain difficulty in producing them. The difficulty translates into a substantial resource demand for mining new blocks, meaning that anyone who tackles the mining job will want to uphold the system, as the mining rewards and fees obtained from it represent their direct compensation for the investment (i.e. mining equipment and facilities, as well as electricity consumed in mining). Difficulty adapts based on the hash rate – an increase in hashing power causes an increase in difficulty and vice versa. Specifically, this means a certain portion of the block header hash needs to display a particular value (the first n characters need to be zero), which is achieved by trying out different nonces.

Digital Asset

An item of value held by an individual or a company that exists only in the form of electronic data.

Additional info

Digital assets contain information that is economically valuable to their owner. Images, video, and audio can all be considered digital assets. Coins or tokens of cryptocurrencies are often considered to be digital assets.

Digital Commodity

A product or service that can be transferred electronically.

Additional info

Commodities are goods in commerce that can be interchanged for other commodities of the same type. Digital commodities differ from regular commodities in that they exist electronically. Cryptocurrencies are sometimes classified as digital commodities, but there is a on-going debate on whether they should actually be considered securities.

Digital Signature

The digital seal that uniquely identifies a piece of code, such as a document or another digital asset and represents proof of ownership while ensuring the integrity of the contents. See also transaction signature.

Additional info

Digital signatures are applied to a digital asset by means of cryptography. Once applied, they uniquely identify the asset with the author or the owner. Their primary purpose is to establish a connection between a piece of code and its owner, as well as ensuring that the contents of the code remain unchanged if sealed by a signature. In cryptocurrencies, digital signatures are generated for transactions by using a public and its corresponding private key.

Digital Trust

The trust between users on the blockchain, based on the common history of transactions. It enables nodes to reach consensus on transactions.

Additional info

Cryptocurrencies use specific protocols (see proof of work and proof of stake) to establish consensus among the nodes. This means users who don't necessarily trust each other can still safely carry out transactions. Digital trust replaces a trusted third party when it comes to validating transactions online.

Digital Wallet

A software program that stores users' payment information, making it possible to send and receive coins or tokens of cryptocurrency.

Additional info

A digital wallet represents a blockchain address and contains its public key as well as the corresponding private key. This allows the user to simply send and receive crypto payments without needing to input the keys with every transaction. Wallets can be physically separated from the network by using cold storage containers. Paper wallets are an alternative way of storing public and private keys.

Distributed Ledger

A decentralized record of transactions that is distributed to a number of nodes. Almost always digital.

Additional info

A distributed ledger isn't stored in a single book of records or on a central server. Instead, it is copied and distributed to many independent nodes. Distribution is a basic feature of blockchain-based cryptocurrencies. It is a safety measure that makes it nearly impossible for anyone to tamper with or abuse the information in the ledger without the changes being obvious to everyone.

Do Your Own Research

DYOR

Doji

A candlestick shape where the opening and the closing price are the same, resulting in a very thin candlestick body.

Additional info

A doji candlestick opens and closes at the same price, resulting in a flat body, with wicks extending above and below it. There are four different types of doji candlesticks: doji star, long-legged doji, dragonfly doji and gravestone doji.

Doji Star

A type of a doji candlestick in the shape of a small cross, where the flat body has very small equally-long wicks above and below it.

Additional info

Doji stars signify a market’s indecisiveness, since neither the buyers, nor sellers managed to push the price in a definite direction. However, when a doji star is formed during an uptrend, it forecasts a potential (at least the short-term) trend reversal to a bullish market, and if it’s formed during a downtrend, it predicts a potential trend reversal to a bearish market.

Dollar-Cost Averaging

An investment strategy whereby you allocate a fixed amount of fiat currency to investing purposes over regular intervals. Abbreviated as DCA.

Additional info

Dollar-cost averaging allows the investor to enter a position gradually by purchasing an amount of an asset equal to a fixed amount of fiat currency in continuous time frames. This allows the investor to take advantage of price fluctuations and possibly secure a lower average price.

Double Bottom

A chart pattern where the price bottoms up twice in a row, forecasting a trend reversal from bearish to bullish. Considered one of the strongest reversal chart patterns. Compare with double top.

Additional info

The double bottom pattern’s shape resembles the letter W and is formed when the price rebounds from the same support level twice in a row. When the price fails to break below the same level for the second time, resulting in a high-volume price rebound, this confirms the strength of the support below. In some cases a double bottom can continue into a triple bottom.

Double Top

A chart pattern where the price peaks twice in a row, forecasting a trend reversal from bullish to bearish. Considered one of the strongest reversal chart patterns. Compare with double bottom.

Additional info

The double top pattern is formed when the price fails to break a certain resistance level twice in a row. The shape it paints on a chart looks like a letter M. After the price reaches its two tops, the decline in price should be accompanied by increased selling volume, which implies the strength of resistance above, resulting in a sell off. Sometimes a double top pattern can also turn into a triple top pattern.

Double-Bottom Pattern

A pattern that appears on price charts when the price rebounds from the same level twice in a row.

Additional info

The double bottom is a bullish reversal pattern, since it signifies an end of a downtrend and a start of an uptrend. Also known as the W-pattern because of its similarity to the letter.

Double-Spending

The possibility that a digital currency can be spent twice.

Additional info

Double-spending means using the same money and copying it to make two purchases. It is a shortcoming of digital currencies that electronic cash has always struggled to eliminate. Cryptocurrencies were able to solve this problem using protocols such as proof of work and proof of stake.

Double-Top Pattern

A pattern that appears on price charts where the price peaks at the same level twice in a row.

Additional info

The double top pattern signifies a reversal of a rising market. Once the price falls below the low between the peaks, a bear market is likely to ensue. It is visually similar to the letter M.

Dragonfly Doji

A type of a doji candlestick with a flat body, a long wick below it and a very short (or nonexistent) wick above it. It has the shape of the letter T. Compare with gravestone doji.

Additional info

The dragonfly doji candlestick is a trend reversal candlestick. If it forms on the chart during a downtrend, it signifies that an uptrend might start, while appearing on the chart during an uptrend signifies a potential start of a downtrend.

Drop

The smallest subunit of XRP equal to 0.000001 XRP.

Additional info

A single unit of Ripple's cryptocurrency, XRP, is divisible into one million subunits called drops. A single XRP transaction costs 10 drops.

Dump

A dump refers to when an asset experiences a huge decline in price in a short period of time. Found in the compound pump and dump.

Additional info

Massive, sometimes deliberately coordinated sale of assets that causes a price decline. Can carry a negative connotation.

Dust

A miniscule amount of bitcoin smaller than 0.00000547 BTC, which cannot be sent in a transaction.

Additional info

The smallest amount you can send in a standard Bitcoin transaction is 547 satoshis (0.00000547 BTC). Anything less than that is defined as dust by the network. Dust transactions will be considered invalid and won't get mined.

E

ERC-20

The technical standard allowing the creation of new tokens based on the Ethereum blockchain. Also spelt 'ERC20' or 'ERC 20'.

Additional info

ERC-20 defines a common set of rules for new tokens to follow within the larger Ethereum ecosystem. These rules specify the way in which tokens can be transferred between addresses and how data within each token is accessed. ERC-20 is primarily used for fungible tokens.

ETH

The ticker symbol for ether.

EVM

The abbreviation for Ethereum Virtual Machine.

Eclipse Attack

An attack where the majority of peers on a network are malicious and act against a small number of honest nodes.

Additional info

In an eclipse attack situation, the majority of peers have become corrupt and are trying to prevent a node (or a small number of nodes) from receiving reliable information from other honest nodes, thus effectively achieving an isolating effect.

Economic Recovery Phase

A phase of business prosperity following a recession.

Additional info

During the period of recovery, employment rises and businesses experience a surge in activity. Economic recovery, much like recession, is sometimes difficult to recognise and is identifiable only months after it has already begun.

Electronic Money

A centralized digital currency. Not to be confused with cryptocurrency.

Additional info

The term electronic money usually refers to digital currencies that existed before the popularization of blockchain technology. As such, they were neither decentralized nor distributed.

Elliott Wave Theory

Elliott wave theory is a trading method in technical analysis. It predicts that the price movements in the market happen in waves, which appear as a result of human psychology driving the market.

Additional info

The Elliott wave theory predicts that the market moves in eight distinctive waves. The first five waves are numbered 1, 2, 3, 4, 5, while the last three waves are labeled A, B, C. This is called a 5-3 move, where the number 5 represents the first 5 waves, and the number 3 represents the last 3 waves. Waves number 1, 3 and 5 are aligned with the general direction of the market trend, while waves number 2 and 4 represent a slight pullback from waves 1 and 3. When the peak (or bottom) is reached at wave number 5, the A, B, C waves represent a bigger price correction. Waves A and C represent a price movement in the direction of the price correction, while wave B represents a slight price pullback from wave A. The theory was developed by Ralph Nelson Elliott in the 1930s.

Encryption

In symmetric cryptography, encrypting (scrambling) a message using cryptographic processes so that it cannot be read. The opposite of decryption.

Additional info

Encryption is the process of encoding data allowing it to be safely sent digitally. The reverse process is called decryption. Both processes ensure that the data travels through digital space in a scrambled, unreadable form, making it secure from people who may want to exploit it. The notion of encryption is different in asymmetric cryptography, as used by cryptocurrencies.

Entry Point

The price at which a trader or investor enters a long or short position. Compare with exit point.

Additional info

Traders utilize various technical indicators to find a good entry point and perform a successful trade. It is wise for a trader to determine support or resistance levels and then open a long or short position when the price has reached their predetermined entry point.

Ether

The native cryptocurrency of Ethereum. Abbreviated as ETH.

Additional info

Ether is a major cryptocurrency in its own right, but within the Ethereum ecosystem, one of its primary functions is to compensate for the expenses of mining. Because of this function, ether is often called the fuel of the Ethereum network. Nevertheless, it should not be confused with gas, which is the unit used to calculate these expenses. Ether's popular subunits are Wei, which is 10^-18 ETH, and Gwei, 10^-9 ETH. Both are named after the cryptocurrency pioneer Wei Dai.

Ethereum

A decentralized platform enabling the storage and execution of smart contracts and decentralized applications. It also hosts its own cryptocurrency ether.

Additional info

Ethereum is a blockchain-based decentralized system that can store all sorts of data. Alongside being a ledger for its own cryptocurrency, ether, Ethereum also supports smart contracts and DApps. It is a popular platform for ICOs and has spawned numerous cryptocurrencies. It was launched in 2014 by a team headed by Vitalik Buterin and is currently one of the largest cryptocurrencies by market cap.

Ethereum Account

The most basic means of storing ether on the Ethereum blockchain by using a public and private key pair. See also externally owned account and contract account.

Additional info

If you want to send and receive ETH on the Ethereum blockchain, you need an Ethereum account. This is a combination of a private and a public key that is similar to the concept of addresses on blockchains such as Bitcoin. Transactions on externally owned accounts are not limited to cryptocurrency transfers alone. An account is also capable of triggering contract code, meaning that it can be used to deploy smart contracts or trigger smart contract functionality. Ethereum accounts are separated into externally owned accounts (or EOA) and contract accounts.

Ethereum Account

The most basic means of storing ether on the Ethereum blockchain by using a public and private key pair. See also externally owned account and contract account.

Additional info

If you want to send and receive ETH on the Ethereum blockchain, you need an Ethereum account. This is a combination of a private and a public key that is similar to the concept of addresses on blockchains such as Bitcoin.

Transactions on externally owned accounts are not limited to cryptocurrency transfers alone. An account is also capable of triggering contract code, meaning that it can be used to deploy smart contracts or trigger smart contract functionality. Ethereum accounts are separated into externally owned accounts (or EOA) and contract accounts.

Ethereum Classic

One of the two branches of the Ethereum blockchain that emerged after the infamous DAO attack. See also decentralized autonomous organization.

Additional info

In June 2016, a smart contract known as the DAO (Decentralized Autonomous Organization) suffered a major cyber attack which drained several million USD worth of ETH from it. In order to prevent the attacker from spending the stolen funds, a part of the Ethereum community decided to hard fork the blockchain and refund the people who invested into DAO. However, the whole community wasn't on board and some decided to remain on the original chain, afterwards known as Ethereum Classic.

Ethereum Request For Comments

The protocol for implementing improvements to the Ethereum network. Abbreviated as ERC.

Additional info

ERC are standards created by the Ethereum community developers. They make a document describing methods and rules that would improve the Ethereum ecosystem. If the core developers and the community reach agreement, the proposal becomes a standard. One of the most widespread and well-known standards is the ERC-20.

Ethereum Virtual Machine

The runtime environment of Ethereum that supports the execution of smart contracts and DApps in isolation from the network. Abbreviated as EVM.

Additional info

Ethereum Virtual Machine is a decentralized computing platform that forms the backbone of the Ethereum network. It is a sandbox environment hosted by every node. EVM executes programs (smart contracts, DApps) in isolation, meaning that they can access other addresses and programs, but not the hosting network, the file system or other processes.

Evening Star

A candlestick pattern which consists of three candlesticks and predicts a trend reversal from bullish to bearish. Compare with morning star.

Additional info

The evening star pattern starts with a long bullish candle, followed by a small candle – either bullish, bearish or a doji – and ends with a long bearish candle. As the buying pressure is reduced after the initial bullish candlestick, the the bears step in, which results in a trend reversal.

Exchange

An organised market for trading financial instruments, such as securities, commodities or cryptocurrencies.

Additional info

The basic function of an exchange is to provide a fair and regulated trading environment for individuals, companies and even governments. Exchanges may be set at a physical location or operate as an electronic platform. Sometimes exchanges are known as 'bourses' or 'trading venues'.

Exchange Rate

The rate at which one currency can be exchanged for another.

Additional info

Exchange rates usually refer to the value of national fiat currencies in relation to other fiat currencies. Broadly speaking, exchange rates also encompass the rates at which cryptocurrencies can be traded for other cryptocurrencies or fiat currencies.

Exit Point

The price at which a trader or investor closes their long or short position. Compare with entry point.

Additional info

To find a potential exit point (or several exit points), traders often employ various technical indicators which help them identify support and resistance levels. This way they try to find a prime price level to close their position right before a trend reversal occurs and therefore maximize their profits.

Expiry

The date at which a derivative with a time restraint expires.

Additional info

Expiry determines the precise date when a contract (such as options or futures) terminates. When it comes to futures, expiry determines the date when a contract must be executed. It is also commonly the date on which options are executed (if they are executed).

Externally Owned Account

An account on the Ethereum blockchain accessed by a combination of a public and a private key. Abbreviated as EOA. Compare with contract account.

Additional info

An externally owned account is controlled by a pair of asymmetric keys, namely a public key and a private key. The former is hashed to determine the account address, and the latter is used to generate signatures and authorize outbound transactions.

F

FOMO

The worry that one will miss out on easy profit in a booming market. Stands for 'fear of missing out'.

Additional info

FOMO inspires traders to invest in markets that won't necessarily realize apparent potential. The phrase fear of missing out has wide application outside the crypto world.

FUD

The concern of a trader that their investment will lose value. Stands for 'fear, uncertainty and doubt'.

Additional info

Widespread fear, uncertainty and doubt can indirectly influence the value of a market, since traders no longer feel comfortable holding their assets and may choose to sell them in flocks. However, traders have to be careful to not sell at the bottom of a trend if they succumb to this emotional bias.

Fakeout

In technical analysis, a trader's anticipation of a specific price movement that never materializes or gets rejected thoroughly. Compare with breakout.

Additional info

Traders attempt to predict future price movement and enter into a position accordingly. However, when a fakeout takes place, the movement doesn't develop in the anticipated way and the price moves in the opposite direction. To increase the chances of successfully avoiding fakeouts, traders resort to using a variety of technical indicators and chart patterns simultaneously, chief among them being volume. Price changes accompanied by low trading volume are considered to be weak and often result in a fakeout.

Falling Knife

A situation on the market where the price is declining rapidly. Often in the phrase 'don't catch a falling knife'.

Additional info

The expression 'don't catch a falling knife' is used to warn traders from buying an asset which is experiencing a rapid price decline. Instead, it is wiser to wait for the price trend to bottom before making a purchase.

Falling Wedge

A chart pattern predicting a bullish trend continuation where price action is confined between two descending tightening lines. Compare with rising wedge.

Additional info

In the falling wedge pattern, lower highs and lower lows are formed while the price is slowly and steadily falling, accompanied by declining trading volume. After the wedge is formed, the price should break out higher accompanied by increased volume.

Federal Reserve

The central banking system of the United States of America.

Additional info

The Federal Reserve provides the government of the United States with central control over their monetary system. It was created in early 20th century and has been increasing its roles and influence ever since. Also called the 'Fed'.

Fee (Exchange)

A small percentage of the total value that an exchange may charge for transferring your funds. For the fee charged by miners, see fee (mining).

Additional info

Exchanges can charge fees for deposits, withdrawals or trading of assets. Based on the type of transaction and the policies of each exchange, these fees may either be free, fixed at a certain amount or dependent on the size of the transaction. Each exchange can choose their own fees. Bitstamp has a volume-based fee structure (you can view it here).

Fee (Mining)

The payment that is offered to a miner to add a transaction to a block. For the fee charged by exchanges, see fee (exchange).

Additional info

Transactions of cryptocurrencies have to be packed into blocks by the miners in the network. Since mining requires a great deal of computing power and can be time-consuming, miners need to be incentivized to write your transaction in the newest block. One way their work can be compensated is by offering a small percentage of your transaction to the miner to add it into the block. Another way of incentivizing miners is the block reward.

Fibonacci Retracement

A technical indicator based on the Fibonacci sequence that is used to identify support and resistance levels on a price chart.

Additional info

The Fibonacci retracement indicator is applied on the chart by placing its anchors on two significant price points; a swing high (when the price hits a peak) and a swing low (when the price reaches a bottom). The indicator will then draw horizontal lines between these two price points.

These horizontal lines are based on the Fibonacci ratios and include 23.6%, 38.2%, 61.8% and 78.6%.

While not a Fibonacci ratio, 50% is also used. These levels are referred to as Fibonacci levels, and predict where a potential support or resistance level is located.

Fill-Or-Kill Order

A type of buy or sell order that must be filled immediately and entirely or not be executed at all. Abbreviated as FOK.

Additional info

Fill-or-kill orders require your transaction to be executed exactly at the specified price. The order is most commonly used for large quantities. Sometimes a FOK order will allow as many tokens to be purchased as are available at the specified price, then cancel the rest. The benefits of a fill-or-kill order are no partial delivery of assets and immediate execution. However, if the order book doesn't hold enough units to fill your order, the order will be cancelled.

Finality

The point beyond which the records in a blockchain cannot be altered.

Additional info

Information in a blockchain (namely crypto transactions) cannot be changed once it reaches the state of finality. To be precise, true finality is impossible to achieve. Therefore, finality usually refers to practical finality, a point beyond which it is infeasible (practically impossible) to alter information in a blockchain. Merchants and exchanges alike achieve a degree of protection by requiring a certain level of block confirmations to ensure practical finality and deem a crypto transaction legitimate.

Financial Transaction

A transfer of currency from one person or account to another, usually in exchange for goods or services.

Additional info

Payment for any kind of items or services is considered a transaction. Transactions result in the change of balance for both participants; the seller's balance increases, and the buyer's balance decreases by the same amount.

First-Layer Scaling

A means of scaling a blockchain by making changes in its core code. Sometimes also '1st layer scaling' or 'layer 1 scaling'. Compare with second-layer scaling. See also blockchain scaling.

Additional info

Well-known ways to achieve first layer scaling include increasing block size (as with Bitcoin Cash) or decreasing block time (Litecoin). Bitcoin’s solutions include SegWit, which virtually increases the block size four times, but does not actually make blocks larger. Ethereum intends to tackle the problem of first-layer scaling by gradually replacing proof of work with proof of stake.

Flag Pattern

A type of chart pattern in technical analysis where a pause occurs after a significant upward or downward move and the price is temporarily confined in a small price range between parallel lines. See also bull flag and bear flag.

Additional info

The first component of a flag pattern is a flag pole, which is formed by a significant price upsurge or a price decline. This is followed by a price consolidation, which happens between two narrow parallel trendlines, which are downward sloping if the flagpole is formed with a price increase, or upward sloping if the flagpole is formed with a price decline. Flag patterns got their name because they visually resemble a flying flag.

Flappening

A colloquial term signifying the moment when Litecoin surpassed Bitcoin Cash in market cap. Inspired by flippening.

Additional info

Flappening took place in December 2018, during a period when Bitcoin Cash was undergoing a fork. Flappening was coined by Charlie Lee, who took inspiration from the term flippening.

Flippening

A colloquial term signifying the moment when Ethereum surpasses Bitcoin in market cap. As of 2019, this has not happened yet. See also flappening.

Additional info

Ethereum has long been in the very top of cryptocurrencies by market cap. Its popularity made some believe there exists a possibility it may one day reach the very top of market cap charts, overtaking Bitcoin. Ethereum has not yet come close to achieving this. The term flippening also inspired the term flappening.

Flipping

Owning an asset for a short amount of time with the intention of making a profit with the sale. Not to be confused with flippening.

Additional info

Flipping is a trading practice where the trader purchases an asset and sells it soon after in an attempt to turn a quick profit.

Foreign Exchange Market

Forex

Forex

The market for trading currencies. Stands for 'foreign exchange'. Abbreviated as FX.

Additional info

The forex market enables you to exchange one currency for another, say USD for EUR. Supported currencies are listed as currency pairs, where the base currency is followed by the quote currency (USD/EUR in the previous example). No physical exchange of currencies takes place on the forex market (that would have made it a foreign exchange kiosk). Instead, traders exchange currencies in expectation of trend movements and consequential profits.

Fork

A split in the blockchain. See hard fork or soft fork.

Forwards Contract

A customizable financial contract by which the participants agree to buy or sell an asset at a later date. See also futures contract.

Additional info

Forwards contracts are in many way similar to futures contracts, with they distinctive difference being their large degree of customization. Because of this, forwards have high potential for profit, but are also inducing high risk. Forwards are typically not available to retail investors.

Full Node

A node on a blockchain network that stores the entire blockchain and performs the role of validator. Sometimes referred to as a 'true peer'. Compare with light node.

Additional info

Full nodes store the entire blockchain, from the genesis block to the newest block. As such they are eligible to verify new block according to consensus rules. They also function as a hub through which light nodes can interact with the blockchain network. Storing the entire blockchain of come cryptocurrencies requires a substantial amount of disk space (Bitcoin's blockchain has grown to hundreds of GB). To save space, full nodes can be pruned, or trimmed down.

Fundamental Analysis

A method of assessing the intrinsic value of a potential investment by investigating the underlying factors of the investment. Abbreviated as FA. Compare with technical analysis.

Additional info

Fundamental analysis takes into consideration a variety of factors, from company or project leadership and experience, past performance and reputation, management, industry atmosphere etc. These factors help create a picture that indicates whether the asset in question is worth your money. Put simply, fundamental analysis determines whether the asset is trading above or below its true value; if its overvalued or undervalued.

Fungible

Items or goods that are mutually interchangeable because they are equivalent.

Additional info

Fungibles consist of many identical parts, each of which can easily be replaced with another identical item. Bills of fiat currencies are considered fungibles, since each bill has the exact same value as other bills (a $10 bill is the same as any other $10 bill). The same applies for cryptocurrency coins. However, some blockchains also support non-fungible tokens.

Futures Contract

A contract that forces the buying party to purchase an amount of the underlying asset at a set date, or conversely, forces the selling party to sell an amount of the underlying asset at a set date. Also known as 'future contract'. Compare with options contract.

Additional info

When signing a futures contract, you are bound to buy or sell a specific amount of an underlying asset, usually at a set date in the future. Futures are mainly used by traders who actually want to purchase the underlying asset, instead of just the financial instrument representing it. Compare with options, which give the buyer or seller the right, but not the obligation, to buy or sell the underlying asset.

G

GPU

An electric circuit that manipulates computer graphics and processes images. Stands for 'graphics processing unit'.

Additional info

GPUs are used in graphics cards found in most modern computers. The specifics of GPUs make them better suited for cryptocurrency mining than CPUs, that's why they've been the most popular method for cryptocurrency mining for some time. However, with crypto's rise in popularity, GPUs were replaced by even more efficient devices created for the sole purpose of mining, called ASICs.

Gas

The unit in Ethereum that determines precisely how much computing power is required to make a transaction or execute a smart contract.

Additional info

Gas is a measurement which expresses how much computational work needs to be done for a transaction or a contract to be written into the Ethereum blockchain. It has no inherent market value and is disconnected from ether, the currency of Ethereum. When paying transaction fees, you offer a price for each unit of gas, then pay the total in ETH (usually Wei). Generally, the higher the offer, the sooner a miner will include your transaction in a block.

Gas Limit

Refers to a particular limit imposed through the unit of gas on the Ethereum blockchain. See block gas limit or transaction gas limit.

Genesis Block

The first block in a blockchain.

Additional info

The genesis block is the first block that is created when a new blockchain-based platform comes into existence. The next block attaches to it. The genesis block has a block height of zero. The Bitcoin genesis block spawned 50 BTC which are unspendable.

Going Long

The buying of an asset and holding it with the expectation that it will rise in value. Sometimes also 'buying long'.

Additional info

Going long is the conventional investing practice where one buys an asset and sells it after its price has risen. It is contrasted by short selling.

Golden Cross

A bullish market signal which occurs when a short-term moving average crosses above a long-term moving average. The opposite of death cross.

Additional info

The most classic iteration of the golden cross happens when a 50-period moving average crosses above a 200-period moving average. This occurrence can be observed on any timeframe, however in crypto trading, the 1-day candlestick timeframe is usually the most popular. Before the golden cross actually prints on the chart, the price has to bottom out and a trend reversal has to take place. After some upward price movement, the crossover of moving averages happens, commonly followed by a breakout and upward trend continuation.

Gravestone Doji

A type of a doji candlestick with a flat body, a long wick above it and a very small (or nonexistent) wick below it. It has the shape of an inverted letter T. Compare with dragonfly doji.

Additional info

A gravestone doji candlestick signifies a potential trend reversal. When it appears on the chart after a downtrend, it forecasts the start of a bullish trend, while its formation during an uptrend forecasts a potential start of a downtrend.

Gwei

The subunit of ether equal to 1/1,000,000,000 (one billionth) ETH.

Additional info

Gwei, much like its smaller brother Wei, are named after Wei Dai, a cryptocurrency enthusiast. G in Gwei stands for 'giga', or one billion, since it's a billion times bigger than Wei.

H

HODL

A term in the crypto community that refers to holding a cryptocurrency rather than selling it. Also spelt in lowercase: 'hodl'.

Additional info

The term originates from the Bitcointalk forum, when its author, GameKyuubi, made a spelling error he didn't bother to correct. It quickly caught on in the community and is now a widely accepted term. 'I am hodling my coins for now.' 'HODL your horses!'

Halving

The algorithm by which the block reward of a cryptocurrency halves after a specific number of blocks has been mined.

Additional info

Many cryptocurrencies incentivize mining by offering a block reward. This reward is reduced by a half at regular, pre-defined intervals (every time 210,000 blocks are mined for Bitcoin, different for other cryptocurrencies).

Hammer

A common type of a bullish candlestick distinguished by a thin body on top of a long wick. Compare with inverted hammer.

Additional info

Hammers appear at the bottom of a downtrend and signify the start of a bull trend. Hammer candlesticks have the same trend reversal meaning as an inverted hammer (another bull signal), and the same candlestick shape as a hanging man (a bear signal).

Hanging Man

A type of a bearish candlestick that has a thin body and a long wick below it. Visually similar to a hammer.

Additional info

A hanging man commonly appears at the top of an uptrend and signifies a trend reversal from bullish to bearish. It is very similar to a shooting star as it predicts a bear trend and has the same candlestick shape as the hammer.

Hard Cap

A limit to the amount of coins or tokens to be sold during an ICO.

Additional info

During an ICO, several funding stages take place. The developers of the project may choose to put a hard cap on how many units of the cryptocurrency can be sold in every stage. If the unit allocation during a round is depleted, that round is deemed finished. The developers determine what that limit is in advance. This number is usually revealed in the whitepaper.

Hard Fork

A split in the blockchain that occurs because of a change in its protocol. Two branches of the blockchain emerge from the split: one with the old protocol, and one with the new, changed, protocol. Not to be confused with soft fork.

Additional info

When a hard fork occurs, all nodes have to update to the new protocol if they want to follow the new branch of the blockchain. This branch won't recognise any nodes using the old protocol. However, all the nodes that use the old protocol can still follow the other branch. The two blockchains have identical history up to the fork, but go their separate ways after it. A hard fork results in the creation of a new cryptocurrency, independent from the original. Bitcoin Cash is an example of a hard fork from Bitcoin.

Hash

A unique string of characters of fixed length that is produced from any input being driven through a hash function.

Additional info

The hash is deterministic, meaning that it will always be the same when the same input is used. It is also a one-way function and it cannot be reversed, making it infeasible to extract original data solely from the hash. Hashes can be found throughout blockchain-based cryptocurrencies. They appear in block headers, transaction signatures, public and private keys etc. In some cases, hashes can also be of variable length.

Hash Rate

The rate at which a blockchain network is able to produce a hash with the correct nonce at the required difficulty.

Additional info

Cryptocurrencies have a set target block time and their algorithm adapts so that the actual block time comes as close to it as possible. The hash rate corresponds to the computing power available in the network. In order to keep block times steady, the difficulty needs to increase as the hash rate rises and vice versa.

Hashcash

A proof-of-work system used in the mining algorithm of cryptocurrencies.

Additional info

Hashcash has initially been developed as a tool for limiting email spam and DDoS attacks, but has since found use in blockchain technology.

Hashed Timelock Contract

A type of payment on a blockchain that requires the recipient to acknowledge receiving the payment before a deadline by generating a cryptographic proof of payment or they won't be able to claim the coins. Abbreviated as HTLC. Also 'hash timelock contract' or 'hash time locked contract'.

Additional info

Hashed timelock contracts use hashlocks and timelocks to create the conditions under which a payment can be finalized. Hashlocks require that a certain piece of data is revealed as cryptographic proof and timelocks restrict the spending of the funds before a specific time (usually expressed in block height). If either condition isn't met, the payment can't go through and is returned to the sender. HTLCs are most notably used in atomic swaps and payment channels.

Hashing

A cryptographic method that converts any form of data into a string of characters that is usually of fixed length.

Additional info

Hashing is a process that is relatively easy to perform, but impossible to reverse. The only way to determine the original string is by using brute force, that is, attempting random strings until you find the solution. When hashed, any amount of data will produce a unique string of characters that is usually of fixed length. Some hashing algorithms limit the output of characters that are easily confused for one another (capital 'O' and zero '0', capital 'I' and lower case 'l', for instance). The result of hashing is the hash. Bitcoin uses the SHA-256 hashing algorithm, Ethereum uses Keccak256 and Litecoin uses scrypt, to name some.

Hashlock

A function that prevents payment finalization until a particular piece of data is revealed as cryptographic proof.

Additional info

Hashlocks restrict the spending of funds that have been sent as payment before the recipient presents a particular cryptographic proof. Such proof usually requires the recipient to reveal the pre-image of a hash and thus demonstrate they have completed a task (such as creating a payment to someone else) by which they have been given the pre-image. Hashlocks are used in payment channels and atomic swaps.

Head And Shoulders

A reversal chart pattern consisting of two lower peaks at the sides and a higher peak in the middle. It indicates the end of a bull trend and the start of a bear trend. Compare with inverse head and shoulders.

Additional info

Head and shoulders is a bearish pattern which consists of three peaks. The two lower peaks at the sides are called the shoulders, while the higher middle peak is called the head. The pattern starts with a price surge, forming the first top – the left shoulder. After price correction, the price picks up and rallies above the first shoulder, establishing a higher high and forming the head of the pattern after a price correction. At the end there’s a final price surge, which forms the last peak, also known as the right shoulder.

Hedge

To lower the risk of your investment by opening an offsetting position in a related asset. Also 'to hedge a position'.

Additional info

Hedging a position means investing in a way that ensures you won't be making (too much of) a loss. Hedging positions prevent your investment from plummeting, but also limit its potential for value growth. This is often accomplished with derivatives or (more crudely) with strategic diversification of a portfolio.

Hedge Fund

A private company that specializes in pooling assets and reinvesting them into complex financial instruments.

Additional info

The purpose of hedge funds is to outperform the market and return a profit regardless of the trends. Hedge funds are more loosely regulated that other investment funds and are thus only available to accredited investors.

High-Frequency Trading

A trading method which uses trading bots to conduct many trades in a small amount of time. A trader who engages in high-frequency trading is a high-frequency trader. Abbreviated as HFT (trading or trader).

Additional info

High-frequency trading takes the reins of trade-making out of people’s hands and hands them over to programs known as trading bots. These use advanced algorithms to carefully analyze market trends and are able to conduct a huge number of trades in a matter of seconds. Their speed is what sets them apart from personal trading. Lightning-fast execution can translate to profitable trades.

Higher High

A term in technical analysis which refers to a price point on the chart which exceeds the chart’s previous price high point. Compare with lower high, lower low and higher low.

Additional info

In a bull market, the price is constantly forming higher highs, since the price of an asset is increasing and constantly reaching new highs. Higher highs indicate bullishness and signify a trend continuation. However, when trading higher highs, traders should also utilize other technical indicators to identify if the trend is likely to continue, or a newly formed higher high is actually a point of a trend reversal.

Higher Low

A term in technical analysis which refers to a price low point which is higher than the previous price low point. Compare with lower low, lower high and higher high.

Additional info

Higher lows are commonly formed in a bull market, since the macro trend is going up and therefore all the lows formed on the chart are merely price pullbacks which get 'bought' fast before the price continues to increase. Higher lows are a sign of bullishness.

Holder (Assets)

Someone who keeps (or holds) the assets they have purchased for a long period of time. Not to be confused with holder (options).

Additional info

While some people are actively trading their assets, holders prefer to keep them for extended periods of time. This means that they securely store their purchased assets and are prepared to wait for months or even years before selling it. This kind of strategy drastically decreases stress and time involved in trading. Holder, sometimes spelt 'hodler', is a particularly popular expression in crypto circles.

Holder (Options)

Someone who buys an options contract. Compare with writer. Not to be confused with holder (assets).

Additional info

The holder enters an options contract by paying the premium to the seller (or writer). This gives the holder the right to purchase the underlying asset and obliges the seller to sell it.

Holding

A trading method where a trader buys an asset and keeps it stored without selling it for a very long period of time (several years or even more). Compare with investing.

Additional info

Holding is not an active trading method, as it merely consists of purchasing an asset and then keeping it stored safely. Holders do not sell their holdings in any market conditions, even if their purchased assets have experienced massive gains during a bull market or losses during a bear market. They firmly believe that the price will keep reaching new highs in the long run. Holders rely on fundamental analysis, as this helps them to estimate the asset’s potential value increase in the distant future.

Horizontal Line

A horizontal line on a trading chart commonly drawn to highlight support and resistance levels.

Additional info

To find a price level where a meaningful horizontal line can be drawn, a trader has to spot where on the chart the price has bounced off the same levels multiple times. In other words, they have to figure out which levels represent a significant barrier for the price. When an asset is trading above the drawn line, it acts as a support, and when it is below the line, it acts as a resistance. The space between two horizontal lines is called a range.

Hot Wallet

A software tool for storing cryptocurrency that is connected to the internet. Compare with cold wallet.

Additional info

Hot wallets are the most popular means of storing cryptocurrency, as they allow easy access to your holdings, making cryptocurrency transfers fast and simple. A wallet that is physically divided from the internet is known as a cold wallet.

I

IBO

The acquisition of a controlling interest in a company. Stands for 'Institutional Buyout'.

Additional info

An IBO occurs when an institutional investor (a private firm, a financial institution, a bank etc.) purchases the majority of a company.

ICO

The raising of funds necessary for the development of a new blockchain project by means of offering the newly created coin or token in exchange for other crypto coins or fiat currency. Stands for 'Initial Coin Offering'.

Additional info

ICOs are a form of raising startup capital, where a team presents an idea (through a whitepaper) and advertises it in an attempt to attract investors. ICOs feature both private investment rounds and public sales, where anyone may purchase the newly created cryptocurrency. This funds the project and enables the group to develop the proposed technology. Upon the completion of the project, investors can sell their coins (ideally for a profit) or benefit from whatever uses these coins have (for example voting rights within the system). The term is a crypto spin on IPO (Initial Public Offering).

IOU

A document that acknowledges one party owes a debt to another. Also a mechanism in Ripple that achieves the same effect. Stands for 'I Owe You'.

Additional info

IOUs are traditionally used as a means of establishing that one party owes a debt (of money or other goods) to another party. As such, they are considered informal agreements and are usually followed by a more formal one. Ripple uses IOUs alongside its cryptocurrency XRP to enable frictionless cross-border transactions.

IPO

IPO or 'Initial Public Offering' is the first sale of a company's stock to the public.

Additional info

IPO is a way a private company can attract investors by allowing shares to be purchased and traded on stock exchanges. In the crypto world, ICO, or 'Initial Coin Offering', rose as the equivalent to IPO.

Iceberg Order

A large buy or sell order that has been split into multiple smaller orders so as to conceal the true size of the order.

Additional info

Iceberg orders are used by large institutional investors who wish to buy or sell at a particular price. Burdening the market with too large an order could cause substantial price movement, thus preventing the trader from securing the desired price. Gradual selling and buying can reduce the risk of a sudden price movement.

Ichimoku Cloud

An advanced technical indicator that projects many different trading signals, ranging from determining support and resistance levels, predicting bullish or bearish trend continuations and identifying overbought and oversold levels.

Additional info

Ichimoku cloud is a technical indicator developed by Japanese stock analyst Goichi Hosoda. It is a powerful indicator with many use cases, which include spotting support and resistance zones, predicting uptrends (bullishness) and downtrends (bearishness) and identifying overbought and oversold levels. It is most useful when the market is in a strong trend (either up or down), while it is not as reliable when the market is moving horizontally.

It consists of several elements:

- Tenkan sen (9-period moving average)

- Kijun sen (26-period moving average)

- Senkou span A (the moving average of the Tenkan sen and Kijun sen projected 26 periods in the future)

- Senkou span B (52-period moving average projected 26 periods in the future)

- Kumo cloud (an area formed between Senkou span A and Senkou span B)

- Chikou span (the current closing price projected 26 periods in the past).

Immutability

The property of blockchains that makes information written in them impossible to change. The expression is also used outside blockchain circles.

Additional info

Once something is written in a block on a blockchain, it is (nearly) impossible to change. Blockchain reaches an astounding level of immutability hardly matched by any other system. The fringe cases in which immutability fails are limited to expensive and time-consuming 51% attacks, against which most blockchains are well-protected.

Index

A measurement system of a particular market, which collects prices across different exchanges and produces an average.

Additional info

Indices are popular on stock markets (Dow Jones Industrial Average, NASDAQ Composite etc.) and lately also on crypto markets (Bitcoin Price Index).

Inflation

The rising in the prices for goods and services that causes a currency's purchasing power to decrease.

Additional info

Inflation comes about when there is an abundance of money in circulation, which has an adverse effect on its purchasing power. When a currency's purchasing power falls goods and services become more expensive.

Initial Coin Offering

ICO

Initial Exchange Offering

A fundraising event conducted by an exchange instead of the project team. Abbreviated as IEO. Compare with initial coin offering.

Additional info

A project team can fund their project in several ways. Blockchains have made initial coin offering accessible to nearly anyone, but this also means ICOs were fraught with risk, with developers often failing to reach set goals or keep promises. Initial exchange offering makes investment in a blockchain start-up somewhat less risky, as it is executed and controlled by an exchange.

Instant Order

A type of buy or sell order that allows you to specify how much fiat you want to spend to buy crypto or how much crypto you want to sell.

Additional info

The instant order operates with funds that you have at your exchange account, be if fiat or crypto. It requires you to input how much fiat or crypto you're willing to trade. The trade is executed immediately at the current market price. In case your desired amount exceeds the currently available amount at the market price, your order will get repositioned to the next order book offer until the trade is fully executed. Other common order types include the market order, the limit order and the stop order.

Institutional Investor

Organisations with access to advanced trading options that conduct trades in large quantities on behalf of their members. Compare with retail investor.

Additional info

Institutional investors conduct much larger trades than retail investors, which makes them eligible for preferential treatment and lower commissions at exchanges. They are considered more knowledgeable traders and better able to secure sustainable profits over time.

Institutional Trader/Investor

An institutional investor, or an institutional trader, is a person or organisation which specializes in investing and trading of assets. Compare with retail trader/investor.

Additional info

Institutional investors are professionals who usually utilize investing or trading as a major source of income. They trade in large amounts and can therefore have a major impact on the market’s price. As they generate a lot of trading volume, this usually makes them eligible for preferential treatment and lower commissions at exchanges. They are considered knowledgeable traders and better able to maintain sustainable profits over time.

Interoperability

The property of some blockchains that make them compatible with each other (to a certain extent).

Additional info

Some blockchains are coded in a similar way (some are based on the code of another), have similar features and explore similar use cases. This allows a certain degree of interoperability between them. Bitcoin and Litecoin reach a certain level of interoperability, with some innovations developed for Litecoin later making it to the Bitcoin blockchain (e.g. the Lightning Network).

Inverse Head And Shoulders

A reversal chart pattern consisting of two lows at the sides and a lower low in the middle. It is commonly formed at the bottom of a downtrend, forecasting a fresh start of a bullish trend. Compare with head and shoulders.

Additional info

The inverse head and shoulders pattern consists of three lows: the first one is called the left shoulder, the middle (lowest one) is called the head, and the last one is called the right shoulder. The pattern starts with a price decline, forming the first low (left shoulder). After price correction, a lower low is established (head), followed by a higher low (right shoulder).

Inverted Cup And Handle

A chart pattern in the form of an inverted letter U, which predicts the continuation of a bear market, while sometimes also acting as a trend reversal pattern. Compare with cup and handle.

Additional info

The inverted cup and handle pattern starts with a cup in the shape of an inverted “U”, followed by a slight price move upwards – the handle. As the price climbs, the trading volume falls, which indicates bullish exhaustion. After reaching the peak of the cup, the volume rises again and the selling pressure strengthens, completing the shape of a cup. At the end of the cup, there is an upward movement in price, forming the handle. When the price is rejected at the top of the handle the price should continue falling to confirm it.

Inverted Hammer

A type of a bullish candlestick distinguished by a thin body below a long wick. Compare with hammer.

Additional info

Inverted hammers appear at the bottom of a downtrend and signify the trend reversal. Inverted hammers have the same price prediction as a regular (non-inverted) hammer (another bull signal) and the same candlestick shape as a shooting star (a bear signal).

Investing

The act of putting money into something expecting to make a profit in the future. Compare with trading and holding.

Additional info

The basics of investing are simple: buy an asset, be it shares, real estate or cryptocurrency, wait for the value of the investment to grow and then sell the asset with a profit. However, far more elaborate methods for investing are nowadays employed by retail and institutional investor alike. In theory, investing is a long-term-oriented method and does not involve active trading. Therefore, the number of trades per year, or even several years, is miniscule. The ultimate challenge in investing is to time the purchase perfectly. The prime time to invest is at the start of a bullish market cycle. Investors usually utilize technical analysis to find a suitable trade entry point, while fundamental analysis is used for long-term price evaluation.

Investor

Investor is a financial market participant who utilizes investing as his strategy to profit in the financial markets. Compare with trader. See also investing.

Additional info

Investors are very long-term focused and don't bother with short-term market price fluctuations, as they usually keep their investments in assets for years before selling them at higher prices. Investors are usually separated into institutional and retail investors, depending on whether investing is their profession, or a part-time occupation or hobby.

Issuance

The generation, release or creation of units of cryptocurrency in particular amounts and at set times.

Additional info

Issuance can be done in a variety of ways, depending on the cryptocurrency. Proof of work cryptocurrencies release new coins from a limited pool of unmined coins whenever a new block is mined. With Bitcoin, 6.25 BTC is made available to the fastest miner approximately every 10 minutes (note that the mining reward undergoes halving). Some cryptocurrencies chose a different path. For example, Ripple created 100 billion XRP from the get-go, escrowed 55%, and now makes 1 billion from the escrow available to be put into circulation every month (whatever remains is put back into the escrow).

J

JOMO

The counterpart to FOMO that refers to the happiness of someone who hasn't invested in a fallen market. Stands for 'joy of missing out'.

Additional info

JOMO is the positive sentiment of the traders who have successfully avoided investing in a market that has turned out to be unprofitable. If FOMO inspires traders to invest in markets with booming potential, JOMO advertises caution.

JVM

A virtual machine that enables a computer to run Java-based programs. Stands for 'java virtual machine'.

Additional info

JVM is an emulator of a computer system that provides a runtime environment in which java bytecode can be executed.

Jed Mccaleb

Founder and developer, best known for co-founding Mt. Gox, Ripple, and Stellar.org.

Additional info

McCaleb was briefly the Chief Technical Officer of the Ripple company. McCaleb announced he will be selling all of his XRP (9 billion) in 2014.

K

KYC

The process of a business gathering personal data, which helps them understand their clients. Stands for 'know your customer' or 'know your client'.

Additional info

KYC is a process that companies employ to better understand their customers. It primarily deals with collecting and analyzing basic identity information and creating an expectation of a customer's transactional behaviour. It also serves as a security precaution, as it can be used in weeding out actors with malicious intentions.

Know Your Customer

KYC

L

LTC

The ticker symbol for Litecoin (coin).

Lambo

An expression with various uses in crypto circles that generally refers to positive trading outcomes, market growth and bull runs.

Additional info

The word Lambo is comes from the Italian sports car manufacturer Lamborghini. It has found use in the crypto environment on account of how expensive these cars are (a successful trader might be able to afford a Lambo) and because the symbol of Lamborghini is a charging bull (the word bull and the image it represents are commonly used for rising markets and optimistic traders).

Latency

The time from the creation of a transaction to its first confirmation.

Additional info

Latency refers to the time delay from when a transaction is sent into the network to when it is confirmed by being included in a legitimate block. Latency mainly depends on network traffic and mining fee. High-fee transactions usually take priority, particularly during a period of network congestion.

Ledger

A record of transactions. Can be printed or digital.

Additional info

A ledger contains a collection of financial accounts. It compiles the information on the balance of the accounts and the history of transactions. Ledger can also refer to the distributed ledger employed by cryptocurrencies. Not to be confused by the brand of crypto hardware wallets Ledger (brand).

Ledger (Brand)

A company that produces cryptocurrency-related security hardware.

Additional info

Ledger is best known as a brand of cryptocurrency hardware wallets.

Leverage

An investment strategy based on borrowing money.

Additional info

Leverage means using financial instruments or borrowed capital to increase the potential return of an investment. Borrowed money can help a company improve or expand their production and can yield long-term profits.

Light Node

Blockchain nodes that function as wallets and don't store the entire blockchain. Also referred to as 'lightweight nodes'. Compare with full node.

Additional info

Most people use light nodes when transacting in crypto, since they take up much less disk space than full nodes. In order for them to be able to function, they have to be connected to a full node. Since they don't store the entire blockchain, light nodes can't validate blocks.

Lightning Network

A second layer on top of Bitcoin's blockchain that enables fast and cheap transactions by creating a network micropayment channels. Commonly abbreviated as LN.

Additional info

The Lightning Network is a second-layer scaling solution that proposes to decongest Bitcoin traffic and drastically reduce transaction fees. It utilizes a grid of off-chain payment channels to unburden the blockchain. Payment channels are connected in a network, allowing nodes to transact with ones to which they have no immediate connection. Only the initial and final balances are written into the blockchain.

Limit Order

A type of buy or sell order that allows you to specify the maximum acceptable buying price or the minimum acceptable selling price.

Additional info

Limit orders give you control over how much you want to spend to buy a particular amount of coins or how little you are willing to accept for your coins when selling. When you place a limit order, you need to specify what the maximum or minimum is. The order will not execute if it doesn't find a trader willing to accept your terms. Other common order types include the instant order, the market order and the stop order.

Liquidity

The property of an asset denoting how quickly and easily it can be bought or sold without its price being affected.

Additional info

Market liquidity determines the extent to which a market permits assets to be bought and sold at stable prices. A liquid market will allow assets to be sold without a noticeable reduction in price, while an illiquid market might require severe cuts in price if the asset is to be sold off quickly or at all.

Listing

The offering of a trading pair of two particular assets at an exchange. The opposite of delisting.

Additional info

Listing an asset means creating a trading pair with another cryptocurrency or a fiat currency. Exchanges usually offer assets they deem trustworthy.

Litecoin

A cryptocurrency released in 2011 as an alternative to Bitcoin.

Additional info

While similar to Bitcoin in many regards, Litecoin is based on its own native blockchain and uses a different hashing protocol (Scrypt). Litecoin's blocks can be mined in just 2.5 minutes which reduces the computing power required for mining. Litecoin's native coin carries the same name: see Litecoin (coin).

Litecoin (Coin)

The coin of the cryptocurrency Litecoin. Abbreviated as LTC.

Additional info

A new Litecoin block is mined every 2.5 minutes (four times faster than Bitcoin) and its total coin supply is 84 million (four times as many as Bitcoin). Note that Litecoin is not spelt in lower case (unlike bitcoin or ether).

Litoshi

The smallest subunit of Litecoin, equal to 0.00000001 LTC.

Additional info

It is impossible to divide LTC beyond a Litoshi. The name Litoshi is inspired by Bitcoin's smallest subunit satoshi, which is in turn named after Satoshi Nakamoto, the mysterious author of Bitcoin and blockchain.

Long Position

A trading position whereby you buy an asset and hold it with the expectation that it will rise in price. Compare with short position.

Additional info

Traders enter a long position when they predict a bullish market, as they plan to sell the asset at a higher price in the future. Long positions can also be performed by utilizing futures contracts or options.

Long-Legged Doji

A type of a doji candlestick with a flat body and long wicks above and below it.

Additional info

A long-legged doji usually signifies a market's indecisiveness. However, depending on where in the chart is has formed, it could also have other implications. If it appears during an uptrend, it might signify a potential trend reversal to a bearish trend, while appearing in an downtrend might result in a trend reversal to the bullish side.

Lower High

A term in technical analysis which refers to a price point on the chart which does not exceed the previous high point. Compare with higher high, higher low and lower low.

Additional info

Lower highs are most common in a bear market, since the price is decreasing and constantly forming lower highs in comparison with previous highs. Therefore, lower highs on the chart are a sign of bearishness.

Lower Low

A term in technical analysis which refers to a price point on the chart which falls below the previous price low point. Compare with higher low, higher high and lower high.

Additional info

Lower lows are constantly formed in a bear market, since the price is constantly falling and reaching new low price points. Lower lows indicate bearishness and predict a trend continuation. However, trading lower lows should always be accompanied by signals from other technical indicators to ensure that the downtrend is likely to continue and thus prevent traders from selling right before a trend reversal.

M

MACD

A type of oscillator consisting of two exponential moving averages with different time periods and a histogram. It is used to discover trade entry and exit points and determine trend strength. Stands for 'moving average convergence divergence'.

Additional info

MACD consists of two exponential moving averages with different time periods, namely a 26-period EMA (exponential moving average), 12-period EMA and a histogram. When the faster moving average (the one based on fewer periods) crosses above the slower one (which is based on more periods), it indicates bullishness (a buy signal) and when the faster moving average crosses below the slower one, it indicates bearishness (a sell signal). The histogram is a column chart that prints columns above the zero value when the faster moving average is above the slower one, and below the zero value when the faster moving average is below the slower one. The bigger the space between the moving averages, the bigger the columns of a histogram are. The histogram reflects how strong the current trend is. When it is nearing zero value, it signals that the trend is weakening.

Mainnet

The main network of a blockchain. See also testnet.

Additional info

Mainnet is the fully developed network of a blockchain on which crypto transactions (or other forms of digital data) are broadcast and recorded in blocks.

Maker-Taker Pricing

A pricing system on an exchange which offers lower fees (or none at all) to customers who provide market liquidity (makers) while charging ordinary fees to the customers who take liquidity (takers).

Additional info

Exchanges and trading platforms match and execute buy and sell orders on behalf of their customers and charge fees for doing so. Customers who perform limit orders provide liquidity to the exchange and are called makers, while customers who perform instant or market orders take liquidity from the exchange (as their orders get executed immediately) and are called takers.

Man-In-The-Middle Attack

A type of attack against a cryptographically-secure system by which the attacker infiltrates the communication between two users who believe to be connected directly.

Additional info

Man-in-the-middle refers to the entity in the communication channel between two users. The users, unaware that there is such an entity between them, send information back and forth. The man in the middle is able to intercept this information, read it and possibly alter it without the users noticing anything.

Margin Trading

An investment technique in which the investor can buy a greater amount than they can afford, with the shortfall being filled by a brokerage.

Additional info

Margin trading enables you to buy an asset even if you lack sufficient funds. This is made possible by a brokerage firm who shares the interest in the asset providing funding for the rest. It has the potential to substantially boost gains, but can also result in heavy losses for the trader.

Market Capitalization

A method of measuring the size of a cryptocurrency by multiplying the price for a single coin or token with its circulating supply. Also 'market cap' for short.

Additional info

Market capitalization is used to rank a cryptocurrency relative to others by determining what the value of all of its coins or tokens in circulation is. Bitcoin has long held the first place as the largest cryptocurrency by market cap.

Market Order

A type of buy or sell order that allows you to specify how much crypto you want to buy or sell at the current market price.

Additional info

With market order you specify the amount of coins or tokens you want to buy or sell. The order gets executed immediately at the best available market price, meaning that you buy at the lowest available published asks or sell at the highest available published bids in the order book. Other types of common order types include the instant order, the limit order and the stop order.

Market Trend

The direction of a market's price; predominantly upward or downward.

Additional info

Market trends indicate whether the prices are ascending (a bullish trend) or descending (a bearish trend). It is also possible that the market enters a state where it is going neither up nor down (a sideways trend). Technical analysts attempt to predict market trends using various technical indicators, candlestick patterns and chart patterns.

Max Supply

The total number of coins or tokens that will ever exist in a cryptocurrency. See also total supply and circulating supply.

Additional info

Most cryptocurrencies have a hard limit on how many coins or tokens can ever exist. This feature stops an infinite influx of coins, thus preventing inflation. Bitcoin's limit is at 21 million (over 18 million of which have been mined), while Litecoin's limit is 84 million.

Mempool

The pool of unconfirmed transactions on a blockchain network. Also known as 'memory pool'.

Additional info

For various reasons, but mostly because blockchains tend to impose a block size limit, not all transactions that are propagated across the network can be inserted in the very next block. Until such a time that they are picked up by a miner, the transactions wait in the mempool. Theoretically, a transaction can be stuck in the mempool forever (say, if the attached fee is simply too small to bother the miners), but this is highly unlikely to happen.

Merkle Tree

A system for labelling nodes in cryptography. Also known as a 'hash tree'.

Additional info

Merkle trees allow efficient and secure verification of the contents of large data structures. The 'tree' part of the name comes from the resemblance to tree branching in nature.

Mining

The process of adding new blocks to a blockchain that uses proof of work.

Additional info

Mining means gathering new transactions and sealing them into a block. The block is sealed by means of solving a complex computational puzzle. This provides the block with a hash that satisfies the condition for difficulty. Since finding this hash is a resource-intensive process, the miner is compensated by fees attached to transactions in the block as well as the block reward. Miners compete for this reward, as it represents their primary source of income.

Mining Pool

A mechanism for cryptocurrency miners for sharing their resources to improve the likelihood of solving the computational challenge required for proof of work. Sometimes also called a 'mining farm'.

Additional info

In a mining pool, numerous miners join together by offering the processing power of their devices. Together, they are more likely to present the proof of work than if they were working alone. If successful, they share the mining reward. Mining pools have become a major player in the mining of some cryptocurrencies, which has raised some concerns regarding these cryptos' decentralized status.

Mobile Wallet

A type of cryptocurrency wallet that is hosted on a portable electronic device, such as a smartphone.

Additional info

Mobile wallets are smartphone applications that enable access to private keys on the move. These apps often include practical features, such as QR code scanning and contactless payment options, making them a convenient choice for those who use crypto in everyday life.

Morning Star

A candlestick pattern which consists of three candlesticks and predicts a trend reversal from bearish to bullish. Compare with evening star.

Additional info

The morning star pattern starts with a long bearish candle, followed by a short candle – either bullish, bearish or a doji – and ends with a long bullish candle. It usually forms in a downtrend and it indicates the end of selling pressure and a fresh start of a bullish trend.

Moving Average

A type of technical indicator that helps smooth out the price action by filtering out the 'noise', and is mainly used to identify market trend direction and determine support and resistance levels.

Additional info

Moving averages smooth price action by filtering out random, short-term fluctuations in price, also known as 'noise'. There are two types of moving averages: the simple moving average (SMA) and the exponential moving average (EMA). The difference between them is the sensitivity, as SMA reacts to the price fluctuations much slower than the EMA. The most commonly used moving averages span over 50, 100 or 200 days. Traders usually keep a close watch on 50-day and 200-day moving average to spot the occurrences of the golden cross or the death cross. Moving averages are lagging indicators, because they provide results after a price change had occurred and are thus used to confirm a pattern that is already in progress.

Mt. Gox

A Bitcoin exchange founded by Jed McCaleb. It was the largest Bitcoin exchange in existence for a couple of months in early 2014.

Additional info

Mt. Gox was founded in 2010 by Jed McCaleb and was based in Tokyo, Japan. McCaleb later passed the CEO role to Mark Karpelès. It went on to become one of the biggest Bitcoin exchanges, dealing with as much as 70% of all Bitcoin transactions in early 2014. However, it suffered a major security breach, losing as much as 850,000 BTC, forcing it to promptly close its website and exchange service, and file for bankruptcy.

Multisig Address

A blockchain address that requires the input of more than one private key to generate a transaction signature. Also known as a 'multisignature' or 'multi-signature address'.

Additional info

Some blockchains allow for addresses to be set up so that they require one or more of several private keys to authorize a transaction. Many variations exist: 2-of-2, 2-of-3, 1-of-2 etc., where the first number represents how many keys are required and the second number represents all the keys that can be used.

N

Node

One of the devices on a distributed blockchain network that broadcasts data. Also a common term in computer science not related to blockchain. Can be a full node or a light node.

Additional info

Every participant on the blockchain network is called a node. Strictly speaking, a node is a device that receives inputs and sends outputs to other nodes. In blockchain, nodes are commonly divided into full nodes and light nodes based on how much of the blockchain they store. Every cryptocurrency wallet is technically a node, as it sends data to the network.

Non-Fungible Token

A cryptocurrency token that represents one specific asset and has no equivalent token. Abbreviated as NFT.

Additional info

NFTs are a subclass of cryptocurrency tokens that are used to represent specific assets, either digital or in the real world. If you exchange one bitcoin for another, no change occurred, as the coins are equivalent – they are fungible. Each NFT is unique, so for each NFT, no equivalent token exists. Ethereum supports the creation of NFTs with the ERC721 standard.

Nonce

In proof of work mining, the free variable when creating a new blockchain block that allows the miner to find a hash satisfying the difficulty demand.

Additional info

The nonce is a field into which a value can be inserted by the miner when creating a new block, allowing the block hash to be on the difficulty target. The only way to achieve this is to try different nonce values until a satisfactory hash is produced. The hash is considered satisfactory if a certain number of zeros to appear at the start of the hash. The number of zeroes depends on the difficulty target. Nodes have a different function on some blockchains. On Ethereum, for instance, they are an essential part of validating transactions.

O

OTC

An OTC, or over-the-counter, market is a market where trades are executed directly between two participants without the price being disclosed to the whole market.

Additional info

An OTC market is one of the two basic ways of organising financial markets (the other being an exchange). Trading happens between individual participants without the price at which it was conducted being made aware to others. This makes OTC markets less transparent than exchange markets.

Open-Source

A type of product that is legally permitted to be used, altered and distributed by anyone. Could be design documents, content or software code. Blockchain technology is open-source.

Additional info

An open-source license gives permission to the general public to use the product as they see fit. Not only is making something open-source ideologically motivated, it could also inspire others to make useful contributions to it. Blockchain has been made open-source by Satoshi Nakamoto and has inspired many into collaborative development of its code. Many other crypto projects have followed Nakamoto's idea. In some cases, there may be some restrictions to how an open-source product can be modified.

Opening Price

The price at which a candlestick starts forming. Also called 'open price'. Compare with closing price.

Additional info

Bullish candlesticks have their opening price below their closing price, as the price managed to increase during the candlestick formation and close above its initial opening. Bearish candlesticks have their opening price above their closing price, as the price declined during the candlestick formation and happened to close below the opening price. When it comes to stock trading, the opening price can also refer to a price at which an asset starts to trade when a stock exchange opens in the morning.

Option

A contract that gives you the right to buy or sell a particular asset at a particular price until a certain point in the future. Also known as 'options contract'. Compare with futures.

Additional info

While an options contract grants you the right to buy or sell a particular underlying asset, it does not oblige you to do so. The price at which the underlying asset is bought or sold is known as the strike price. An option that gives you the right to buy stock is called a call option, and an option that gives you the right to sell stock is called a put option. Options require a premium to be paid in order to secure the right to buy or sell. The premium usually revolves around 10 percent of the option's value. If you want to sell an options contract, factors such as asset price, strike price, time value (time remaining until expiry) and volatility play an important role.

Oracle

A third-party data feed for smart contracts.

Additional info

Oracles are responsible for connecting smart contracts to real-world information. They find and verify information from a website, smartphone app or a different database and forward it to a smart contract in the blockchain.

Order Book

A part of a tradeview that lists of all open buy and sell orders for a specific asset at a specific exchange, organized by price. See also depth chart.

Additional info

Buy orders (bids) are shown in green in the orderbook, while sell orders (asks) are shown in red. The 'amount' column in the orderbook shows how much of an asset is included in each order. 'Value' represents the value of each bid or ask. It is calculated by multiplying the bid or ask price with the order amount. The 'sum' column displays the sum of the order amounts sitting in the book down to that point. When a bid and an ask meet at the same price the trade gets matched, executed and removed from the order book.

Orphan Block

A block on a blockchain that is legitimate, but doesn't form the continuation of the blockchain since another legitimate block exposed to less distribution lag has taken its place.

Additional info

In the process of mining, a time lag in the acceptance of a given qualifying block may lead to blocks that are not accepted in the blockchain. If another qualifying block is processed without lag, the first qualifying block is rejected, or orphaned.

Oscillator

A type of technical indicator that moves within a closed value and is used to determine potential trend reversals and to analyze the strength of the market.

Additional info

Oscillators go back and forth (or 'oscillate') within a closed value to identify when the asset is in an overbought or oversold price territory (for instance, between 0 and 100). The most commonly used types of oscillators are Relative Strength Index (RSI), Stochastic RSI and MACD (Moving Average Convergence Divergence).

Overbought

The state of an asset which is believed to be trading above its true value. Compare with oversold.

Additional info

When an asset experiences a significant increase in price without a pullback it often enters an overbought condition, which means that the asset will most probably correct in price soon. Overbought conditions can be identified by various trading indicators, such as the Relative Strength Index.

Oversold

The state of an asset which is believed to be trading below its true value. Compare with overbought.

Additional info

When an asset experiences a severe price decline with no pullback, it can enter the oversold condition. The oversold condition signifies the sellers' exhaustion and thus forecasts a likely price correction. Trading indicators such as the Relative Strength Index can be used to identify these market conditions.

P

Paper Wallet

A rudimentary cryptocurrency wallet that stores public and private keys in physical form. See also cryptocurrency wallet.

Additional info

Storing public and private keys in a paper wallet simply means writing or printing them out. This is usually done on a piece of paper (that's where the name comes from), but more permanent materials and ornate designs are also used. Paper wallets represent a high level of security, but at the cost of usability, since they require retyping the keys for every transaction.

Payment Channel

A channel between two nodes for transferring crypto off the main chain.

Additional info

Transactions on payment channels are faster and incur lower fees compared to the ones on the main chain. Using a payment channel requires you to lock some funds in it to send back and forth for the duration of the channel. Once you've finished transacting, you can close the channel and return the funds to the main chain. The Lightning Network connects multiple payment channels on the Bitcoin blockchain.

Peer

One of the actors on a peer-to-peer network with equal rights to every other device.

Additional info

Peers are both suppliers and consumers of resources at the same time. They store data or perform computations necessary for the network to function, thus eliminating the need for a central server. At the same time, the peers can access the data provided by other peers and benefit from their computing power. Bitcoin is a peer-to-peer payment system. BitTorrent is a peer-to-peer file sharing protocol.

Peer-To-Peer Network

A network of computers that distributes the data and the workload among equal users, or peers. Also known as 'P2P network'.

Additional info

A peer-to-peer network is based on every participant, or peer, providing a portion of their resources (processing power, disk storage etc.) to other peers. With this configuration, there is no need for a central server or administrators. Most blockchains operate on a peer-to-peer basis. Bitcoin is a peer-to-peer payment system. BitTorrent is a peer-to-peer file sharing protocol.

Penny-Spend Attack

A type of an attack against a blockchain that attempts to flood a large number of addresses with tiny amounts of cryptocurrency.

Additional info

In a penny-spend attack, the attacker sends miniscule amounts of cryptocurrencies to plenty of addresses in order to waste the storage resources of nodes. Transaction fees, burn requirements and a dust threshold are all effective ways of dissuading or completely preventing penny-spend attacks.

Phishing

A common type of cyber attack where the attacker poses as a reputable entity in order to deceive the victim and obtain sensitive data on their identity, logins and financial details. Pronounced as 'fishing'.

Additional info

Typically, phishing takes place over emails and instant messaging, where the attacker poses as a legitimate reputable entity, even going as far as to ensure the appearance of their mails or the way they conduct the conversation precisely matches that entity. Thus, they lull the victim in a false sense of security, making them reveal sensitive information and permitting the attacker into their personal accounts. Cryptocurrency users can also fall victim of a phishing attack, so it's always vital that you protect your public and private key combination and never reveal it to anyone who doesn't enjoy your unconditional trust.

Plasma

An Ethereum second-layer scaling solution that uses child chains to unburden the main chain.

Additional info

Plasma is a series of child chains stemming from the root chain, which is the main blockchain. Child chains attach to the main blockchain by means of a smart contract. A child chain can have children of its own. Plasma re-routes some traffic from the main blockchain and thus enables greater transaction throughput and consequently saves time and money on the root chain.

Ponzi Scheme

An investment fraud where new investors pay off older investors through an intermediary. Not to be confused with pyramid scheme.

Additional info

The Ponzi scheme works by the schemer convincing victims into a seemingly worthwhile investment, whereas in reality, their investments are being paid off by new investors attracted by the schemer. The backend can never profit, and as the scheme breaks down, they will end up paying for the others. It can take a while before the scheme comes to an end, since the requirement for new funds doesn't grow exponentially (unlike with the pyramid scheme). Named after Charles Ponzi, a 1920s swindler who run this scheme for over a year, robbing hundreds of victims of their money.

Position Trading

A trading method where the time duration between buying and selling an asset lasts from several weeks up to a year or even more with high expected profit yields (50%+). Compare scalp trading, day trading and swing trading.

Additional info

Position traders tend to be trend followers. This means they believe that when a (bullish or bearish) trend starts, it is likely to continue. Therefore, the perfect entry point is just before the start of a long-term bullish market, or soon after the bullish trend has started. Position traders utilize technical analysis to identify good entry points, while exceptional fundamental analysis could help them evaluate what price an asset will reach in the future.

Presale

The second funding stage of an ICO, where the funding process has been somewhat automated, allowing for a greater number of investors to buy the coin. See also: private sale (1st stage) and crowdsale (last stage).

Additional info

The presale takes place after the private sale, but before the crowdsale. During the presale, the funding process has been somewhat automated and manual work reduced. The ICO is now open to the public, but investing is still not available to everyone. The team makes a selection usually based on KYC filters, or even a random selection of investors, in order to prevent overcrowding. The presale itself can be split into multiple phases. The price of the coins tends to increase with every phase.

Price Consolidation

A term in technical analysis which refers to market’s indecisiveness, as the price usually trades in a tight range or channel for a while.

Additional info

Price consolidation is typical for certain chart patterns, such as the bull pennant, bear pennant and rectangles. Price consolidation also commonly occurs when the price reaches a support or resistance level and remains there, right above the support or just below the resistance. In this case, the strength of the support and resistance is most important – if sufficient, the price will reverse, but if not, a breakout will eventually happen.

Private Blockchain

A blockchain network with a whitelist limited to a number of trusted parties. Another term for 'permissioned blockchain' or 'permissioned ledger'.

Additional info

Private blockchains allow only a select group of known individuals to join their network. In contrast to this, anyone can join a public, or permissionless, blockchain. While public blockchains are distributed and have no central authority, the notion of centralization is much more prominent when it comes to permissioned ledgers.

Private Key

A unique string of characters allowing its owner to access the cryptocurrency at their address. It is known only to the owner of the address. See also: public key.

Additional info

In asymmetric cryptography, the private key is used to decrypt a message. On blockchains it can generate a digital signature with its corresponding public key. Creating a signature is a requirement whenever you want to send someone some crypto from your blockchain address. The private key is sometimes compared to a password: it is known only to the owner of a blockchain address and it enables the owner to operate with the funds at that address. Private keys usually contain at least 256 bits (64 letters and numbers), which makes it practically impossible that any two private keys should be the same.

Private Ledger

A ledger where monetary transactions are visible only to the senders and the recipients, but not anyone else. Compare with public ledger.

Additional info

Most contemporary banks function as private ledgers. Alongside a central authority (the bank), your balance and any transaction from and to your account is known only to you and the involved parties. The authorities controlling private ledgers have to enjoy unconditional trust of their users.

Private Sale

The first funding stage of an ICO, where the project team looks for large investments to be spent on marketing and funding later stages. See also: presale (2nd stage) and crowdsale (last stage).

Additional info

The private sale usually takes place behind closed doors a few months before the ICO is open to the public. During this stage, the team tries to collect money to be spent for marketing and funding the next stages of the ICO. Since the project is not yet on its feet and many things have to be handled manually, they try to avoid a multitude of small investors and usually create an investment threshold (say, 1,000 USD).

Proof Of Authority

A consensus mechanism in which only a select group of nodes is allowed to validate blocks.

Additional info

Proof of authority is a consensus mechanism where the identity of the validator functions as the stake. Individuals who want to earn the right to validate blocks have to disclose their identity, essentially putting themselves and their reputation at stake. This ensures that it is in their best interest to uphold and preserve the network by performing the role of validators faithfully.

Proof Of Stake

A proof mechanism in which the right to validate blocks is given based on how much coins or tokens candidates have and are willing to stake as insurance that a particular block is legitimate.

Additional info

Proof of stake works on the premise that the person who is invested in a network (holds a stake) is incentivized to act in its best interests. The more stake someone has (the more coins or tokens, for instance), the higher their interest in preserving the system. Based on this, an algorithm awards the right to validate blocks to nodes according to how much they are willing to bet on a particular block. As long as the majority bets on the same block, their bets are safe, but if someone bets on an illegitimate block, their stake is lost. Besides simply having a large stake, a mixture of random selection and other factors (depending on the specific project) are used to select block validators. Proof of stake is a faster and cheaper way to obtain complete new blocks than proof of work, since it bypasses the need for the miner to solve a complex mathematical problem and thus saves a lot of time and electricity. Ethereum is a major blockchain with the vision to eventually switch from proof of work to proof of stake.

Proof Of Weight

A consensus mechanism that takes into account a relatively weighted value, e.g. the amount of data stored when creating new blocks.

Additional info

Proof of weight uses a particular relatively weighted value, such as the amount of data you are storing at a given time, to determine the likelihood of discovering a new block (compare this with proof of stake, where this value is your stake in coins). Proof of weight is actually an umbrella term for an entire array of consensus algorithms largely based on the Algorand consensus model. Examples of proof of weight include proof of spacetime and proof of replication

Proof Of Work

A system used by many cryptocurrencies which requires that some work needs to be demonstrated by the miners in order for each of their new blocks to be considered legitimate.

Additional info

Proof of work requires the miners to solve a complex mathematical challenge in order to complete a new block. Since this process is resource-intensive, a block reward is usually offered to the first miner who cracks the puzzle. The primary purpose of proof of work is to ensure that all new blocks are legitimate. It also functions as a layer of defense against several types of attack and prevents spamming new blocks. Proof of work is the first proof mechanism used by any blockchain-based cryptocurrency. Other mechanisms, such as proof of stake and proof of authority have since been proposed and implemented into many new blockchains.

Pruned Node

A node that has been trimmed down to reduce its storage requirements. See also pruning.

Additional info

Blockchains of some cryptocurrencies take up a lot of storage area. Therefore, in some situations, full nodes can be pruned, or reduced in size, in order to save some disk space.

Pruning

The process of reducing the amount of disk space that a blockchain takes up.

Additional info

Pruning reduces the size of a blockchain by discarding information which is not strictly relevant for the performance of the node. This usually means deleting past transaction data from your local blockchain and only keeping a database of all unspent transaction outputs, or the UTXO database. This drastically reduces the size of the blockchain, but still allows the node to reliably perform the role of validator.

Pseudonymity

The state of pseudo-anonymity achieved with a pseudonym.

Additional info

Pseudonymity is the state of privacy achieved by concealing an identity by means of creating a fake name or address. Pseudonymity is not true anonymity, since it may sometimes be possible to infer the true identity of someone behind a pseudonym from their actions. Pseudonymity is used on public blockchains, where a user is represented by their blockchain address.

Public Blockchain

A type of a blockchain which allows anyone to join the network. Compare with private blockchain.

Additional info

Public blockchains have no restrictions on who can join the network. In order to ensure that the participants don't act maliciously, public blockchains employ a number of protective measures. A common solution is to make it prohibitively time- and resource-consuming to act against the network by means of proof of work.

Public Key

A unique string of characters that identifies a blockchain address. It is used to generate transaction signatures and to verify transaction legitimacy. See also: private key.

Additional info

The public key is a publicly accessible key in asymmetric cryptography, which is used for encrypting messages. Each public key has its corresponding private key. Together, they are used to generate transaction signatures on blockchains. Asymmetric cryptography enables blockchain transactions to be checked and verified using the public key. The public key usually has the appearance of a 256 bit string (64 characters). On blockchains the likes of Bitcoin, blockchain addresses are a truncated version of the hash of the public key.

Public Ledger

A ledger of monetary transactions that openly displays transaction history to the public. Sometimes referred to as 'unpremissioned ledger'. Compare with private ledger.

Additional info

Public ledgers are often equated with distributed ledgers, although they can also be centralized. Most blockchains function as public ledgers of monetary transactions.

Pump And Dump

A type of investment fraud where an investor purchases an asset, actively promotes it using false claims, and then sells it once the prices have risen.

Additional info

Pump-and-dump scams involve an investor or a group purchasing an asset with the purpose of artificially inflating its price and then selling. These investors promote the asset heavily, generating as much interest as possible. False claims and overly optimistic predictions are often used at this stage. The simple act of buying a large amount of an asset also helps start an upward trend that other investors jump on. This artificially created interest will make the price grow rapidly, as more investors buy the growing asset. At some point, the pump-and-dump investors sell their assets, making a profit in the process. Everyone who has fallen for the scam is left with virtually nothing, since after the hype dies out, the price plummets. This type of fraud is common with very small stocks or cryptocurrencies with small market caps, as the price of these assets can be manipulated more easily.

Put Option

An option that gives the holder the right to sell the underlying asset. Compare with call option.

Additional info

A put option grants you the right to sell a specified amount of the underlying asset at a particular price up to a certain point in time. You might hold an option to sell 5 BTC for 5,000 USD each for three months until expiry, obliging the buyer to spend 25,000 USD if you decide to sell, regardless of price fluctuations. The premium for such an option is usually around 10 percent, which is 2,500 USD.

Pyramid Scheme

An investment fraud where established investors are paid off by attracting new investors. Not to be confused with Ponzi scheme.

Additional info

The pyramid scheme is based on enrolling ever larger numbers of people, who pay off old investors. The investors themselves have to make sure they attract new blood, since this is the only way they can hope to break even. For the scheme to go on, the number of new investors must increase exponentially, which means the scheme is bound to break down sooner rather than later, and the last wave of investors end up losing money.

Q

QR code

A matrix barcode that can be scanned with a smartphone. It stands for 'Quick Response Code'.

Additional info

The QR code is a type of a barcode that is composed of numerous squares in a unique arrangement (unlike a traditional barcode that is composed of vertical lines). Scanning it with an optical reader (a camera) will reveal information stored in it (usually a link to a website). In the crypto world, QR codes are often used to store wallet addresses. QR codes were initially used by the Japanese automotive industry. They gained global popularity because of their simplicity and impressive storage capacity.

Quantum Computing

Computing using the principles of quantum mechanics.

Additional info

Quantum computing is a new field of research combining computing and quantum physics with the goal of creating an extremely powerful computer. It takes advantage of quantum bits, which can be in a superposition of states. This technology is potentially vastly superior to traditional computing, which uses ordinary bits (binary digits that can only be in one of two states – 0 or 1).

Quarter-To-Date

A measure of a company's activity from the beginning of the current quarter to the present date. Abbreviated as QTD.

Additional info

Companies report their earnings after every three months, or a yearly quarter. Quarter-to-date refers to the activity that happened since the current quarter started and before the beginning of the next quarter.

Query

In computing, a request to retrieve information from a database, such as a blockchain address.

Additional info

When posing a query, you can either choose from a list of given parameters (e.g. a menu), you can input values into a blank record, or employ the use of a query language.

Quote Currency

The second in a currency pair on a forex market. The first is the base currency.

Additional info

Two currencies on a market dedicated to currencies (a forex market) can be valued against each other in what is known as a 'currency pair'. The first currency is the base currency and the second the quote currency.

R

ROI

A measurement of investment efficiency based on the ratio between the net profit and the cost of investment. Stands for 'Return on Investment'.

Additional info

ROI is a simplistic indicator of an investment's profitability. It is measured as a percentage, where a positive number represents a profitable investment and vice versa. It is calculated in the following way: ROI = (Gain of Investment - Cost of Investment) / Cost of Investment

Raiden

An Ethereum second-layer scaling solution that uses state channels to enable off-chain transactions.

Additional info

Raiden uses state channels, i.e. payment channels that enable secure off-chain transactions. These channels are connected to other channels on the Raiden network, creating a web thorough which it is able to transact with channels you don't have an immediate connection with. The transactions are nearly instant with no associated fees. Fees are only paid when communicating the initial and final balances with the blockchain.

Range

The space between two horizontal lines, where the lower horizontal line represents a support level, while the upper horizontal line represents a resistance level. The price is expected to respect these levels and stay within the range.

Additional info

A range defines the difference between the highest and lowest price an asset was traded for in a specific time period. The support and resistance levels (horizontal lines) keep the price trapped within the range. If the price manages to move through support or resistance level, this is called a breakout.

Rectangle

A bilateral chart pattern resembling the shape of a rectangle, which is formed during a temporary price stagnation.

Additional info

A rectangle is formed when the price stagnates for a while in a bullish or bearish market trend. The price consolidation happens between horizontal support and resistance levels, forming a rectangular trading box. At the end of the consolidation phase, after support and resistance levels are tested a few times, the price breaks either upwards or downwards. This makes rectangles indecisive patterns. Note that, in a bull market, rectangles usually have a better chance for a bullish breakout, while in a bear market, their outcome tends to be bearish.

Reference Client

In the blockchain sphere, a client whose code is written exactly according to specifications.

Additional info

The reference client is the standard implementation of a software project. It provides the reference to how things should work in the standard version. Reference clients are run by nodes on open-source, decentralized blockchains. A popular Bitcoin reference client is Bitcoin Core.

Regulated Market

A market controlled and regulated by an individual or a group, such as a government or an industry group.

Additional info

A regulated market forces the participants to adhere to its rules and regulations, which encompasses everything from determining trading conditions, consumer rights and safety standards to limiting the level of control that an individual can have on the market.

Rekt

The situation one finds themselves in when having suffered a significant defeat. A spelling variation of the word 'wrecked'.

Additional info

Rekt has gained its popularity in texting and gaming, but has since also risen in popularity on crypto forums and especially among traders, which use it when they perform a trade resulting in a significant loss.

Relative Strength Index

A type of oscillator that is used to measure the magnitude of price changes to determine whether an asset is overbought or oversold. Abbreviated as RSI. Compare with stochastic RSI.

Additional info

Relative strength index oscillates between 0 and 100. An asset is considered to be overbought when RSI is above 70. This means there was significant upward price movement without correction, which implies that buyers are losing momentum. The asset is considered to be oversold when RSI is below 30. A vast price decline with no correction means that the sellers are getting exhausted. When RSI enters overbought or oversold levels it signifies a potential market reversal and can thus provide a trader with good buy or sell points. It must me noted that, in a strong bull or bear trend, it frequently happens that RSI enters and stays in these extreme levels for quite some time.

Replay Protection

A security measure that prevents transaction replay.

Additional info

When a fork occurs on a blockchain it may sometimes be possible to replay a transaction from one branch to the other without the initiator's intention or consent. Replay protection makes transactions broadcast on one chain invalid on the other by using various methods: blacklisting addresses, changing signature schemes or changing the transaction format entirely.

Resistance Level

A price level above which it is difficult for the price to move due to a high concentration of sell orders. Compare with support level.

Additional info

Resistance levels are price zones with strong selling pressure. Traders often identify the location of resistance levels and place their sell orders there. Resistance levels are most often determined by drawing trendlines and horizontal lines, but other technical indicators and tools can also be used to locate resistance levels. When the price breaks through a resistance level, it usually becomes a support level. This is known as an s/r flip.

Retail Investor

A non-professional trader who trades in small amounts. Also known as 'retail trader'. Compare with institutional investor.

Additional info

Retail investors are non-professional investors who usually trade infrequently and in relatively small amounts. Investing is not their full time occupation or a major source of income. When it comes to cryptocurrencies, they do most of the trading through online exchanges. The trading volume with which retail investors operate is not big enough to have an impact on the price of what they’re trading.

Retail Trader/Investor

A retail investor, or a retail trader, is a person who invests or trades in small amounts and is not a professional in the field. Compare with institutional trader/investor.

Additional info

Retail investors are non-professional investors who mostly trade infrequently and in relatively small amounts. Investing or trading is usually not their full time occupation or a major source of income. The account size with which retail investors operate is not big enough to have a major impact on the price of what they’re trading.

Reversal Chart Pattern

A type of a chart pattern which indicates that a price trend will change direction. Compare with continuation chart pattern and bilateral chart pattern.

Additional info

Traders utilize reversal chart patterns to predict when the market trend is going to reverse. Knowing when a price trend is going to reverse can provide them with potential trade entry or exit points. The best-known reversal chart patterns are the double top, double bottom, head and shoulders and Adam and Eve double bottom.

Ripple

A real-time gross settlement system that connects banks, payment providers, digital asset exchanges and corporates in a single network.

Additional info

Ripple provides an alternative to traditional payment infrastructure. It is built on its own scalable blockchain that incorporates several different networks, allowing for fast and secure transactions on a global scale. Ripple also has its own native cryptocurrency, XRP, a digital asset that can stand for anything transferred over the Ripple network, or RippleNet. Ripple (payment infrastructure) is not to be confused with XRP.

Ripplenet

Ripple's limited network of banks, payment providers and exchanges that enables global transactions.

Additional info

RippleNet is a blockchain based interconnection of networks that supports transactions across the whole world and among different entities. It is composed of a large number of trusted financial institutions selected by the Ripple company.

Rising Wedge

A chart pattern predicting a bearish trend continuation where price action is confined between two ascending tightening lines. Compare with falling wedge.

Additional info

In the rising wedge pattern, the price is slowly and steadily climbing, while forming higher highs and higher lows, with respect to the trend lines above and below. As the trading zone tightens at the end of the wedge, the volume keeps falling, resulting in a sell off at the end of the pattern.

Ryan Fugger

One of the original authors of Ripple.

Additional info

Ryan Fugger is a web developer from Vancouver, British Columbia, who first designed the predecessor to Ripple, RipplePay. He is recognised as the original author of Ripple alongside Arthur Britto and David Schwartz.

S

S/R Flip

An event on a trading chart when a support level becomes a resistance level or vice versa. This often occurs after a breakout.

Additional info

S/R flip is a very common occurrence in technical analysis. When a price breaks out through a support, this area usually becomes a resistance, while price breaking through a resistance turns it into support. For instance, a price moves above the resistance level. After some time the price returns to the same level (previously resistance level) and rebounds there. This means that the resistance level successfully turned into a support level, and therefore a S/R flip is confirmed.

SHA-256

The hashing algorithm of Bitcoin's blockchain.

Additional info

SHA-256 is used by many blockchains, including Bitcoin. It is a member of the SHA-2 family of algorithms, which was developed by the United States National Security Agency, but has since been made public. It produces hashes that are 256 bits long (usually represented by 64 characters). SHA stands for 'Secure Hash Algorithm'.

Satoshi

The smallest subunit of bitcoin, equal to 0.00000001 BTC.

Additional info

Satoshi is named after Satoshi Nakamoto, the mysterious creator of Bitcoin. Bitcoins cannot be divided into smaller units than a satoshi. Another subunit of bitcoin is a millibitcoin, or 0.001 BTC.

Satoshi Nakamoto

The pseudonym of the anonymous person or group behind blockchain technology and Bitcoin.

Additional info

Satoshi Nakamoto is the author of the Bitcoin whitepaper as well as the person responsible for the development of the cryptocurrency and its underlying technology, the blockchain. Several people have claimed to be Satoshi, but none have yet been established as real. Despite rigorous attempts to reveal his identity, Satoshi Nakamoto remains a mystery to this day.

Scalp Trading

A trading method which focuses on profiting from very small price changes (up to 3%). Compare with day trading, swing trading and position trading.

Additional info

The goal of scalping is to make as many small profits as possible, locking in profits early. Scalp traders usually make a number of trades each day, sometimes dozens or even hundreds of them. Scalping is often done when the market is ranging between horizontal support and resistance levels, or right after a big pump or sell off, when the price is very volatile. Scalping is often done by utilizing trading bots.

Scrypt Algorithm

The hashing algorithm of Litecoin's blockchain that allows blocks to be mined relatively fast and with less computing power than in Bitcoin.

Additional info

Scrypt is a mining algorithm designed to make it difficult to perform large scale hardware attacks without an abundance of computing power. Many cryptocurrencies use a simplified version of Scrypt as a means of obtaining proof of work. Scrypt is pronounced as the letter S and the word crypt, much like 'encrypt' is pronounced as the letter N and the word crypt.

Second-Layer Scaling

A means of scaling a blockchain by diverting a portion of its traffic on a secondary chain or network. Compare with: first-layer scaling. See also: blockchain scaling.

Additional info

Second-layer solutions move a part of the burden carried by the main chain off-chain, reducing the amount of data stored directly in the blockchain. This allows for greater capacity per individual blockchain, enabling a greater transaction throughput and a more efficient network. The Lightning Network is a Bitcoin-specific solution made possible by SegWit. Ethereum’s second-layer solutions include Plasma and Raiden.

Security

A tradable financial instrument that represents an ownership position, a creditor relationship or rights to ownership of a particular asset.

Additional info

The precise definition of the term security and what it represents varies by jurisdiction. It is commonly understood as a fungible financial asset representing stocks, bonds or even options.

SegWit

A protocol implemented on the Bitcoin blockchain to fix transaction malleability, and add a promising first-layer scaling solution. Stands for 'Segregated Witness'.

Additional info

The initial purpose of SegWit was to address the ability to change signatures of unconfirmed transactions and, consequently, transaction IDs, a bug commonly referred to as transaction malleability. But SegWit is also prominent when it comes to scaling. It introduces the concept of block weight (which virtually increases the size of blocks by four times), reduces transaction fees by redefining how they are calculated (fee per weight unit). SegWit achieves this by moving witness data outside the base of the block. Thus, it opens the door to many scaling solutions, such as Schnorr signatures and the Lightning Network.

Segregated Witness

SegWit

Sell Wall

The condition in the order book for a particular asset where a large number of sell orders are placed at a specific price, beyond which it is difficult for the price to fall. The opposite of buy wall.

Additional info

A sell wall appears when there is considerable interest in an asset at a particular price. It is often the result of a wealthy investor, or whale, selling a large amount of an asset. Sometimes sell walls are used to manipulate the market, so some traders start selling the asset because of FUD (fear, uncertainty, doubt). Sell walls can be seen as a vertical line in the depth chart.

Sharding

Partitioning large databases into smaller, faster and more easily manageable units, or shards. It is a scaling solution for blockchains such as Ethereum.

Additional info

Sharding breaks huge databases into numerous smaller units that can be spread across multiple hosts. It is both a means for increasing the speed of the data flow as well as a solution for privacy issues of some blockchains. In the blockchain space, sharding is most notably considered as a scaling solution for Ethereum. Instead of each node storing the entirety of the blockchain, they only store a subset of the whole database and verify the transactions internal to that set. Whenever they needs an external piece of information, they consult a node that possesses it.

Shitcoin

A vulgar slang term for a cryptocurrency that the speaker doesn't find valuable or useful.

Additional info

Shitcoin is a often used in crypto chat rooms and on message boards and designates the negative attitude of the speaker towards the crypto they are referring to, most often small market-cap coins.

Shooting Star

A type of a bearish candlestick that has a thin body and a long wick above it. Visually similar to an inverted hammer.

Additional info

A shooting star appears at the top of an uptrend and signifies a trend reversal to a bearish trend. Shooting star has the same price-trend prediction as a hanging man and the same candlestick shape as an inverted hammer.

Short Position

A trading position whereby you sell an asset with the expectation that it will decline in price. See also short selling. Compare with long position.

Additional info

Traders enter a short position in anticipation of a bear market with the plan of purchasing the asset at a lower price in the future. Short positions can also be performed by utilizing futures contracts or options.

Short Selling

The investing practice of selling borrowed assets and re-purchasing them after their price has fallen before returning them. Also 'going short' or 'to short' or 'shorting'.

Additional info

The process of short selling begins with a trader borrowing an asset that is expected to fall in price and immediately selling it. After the price has fallen, the short seller re-purchases the assets at a lower price and returns them to the original owner, making a profit in the meanwhile. Contrast this with going long, a more traditional way of investing by purchasing assets and selling them once the price has risen. Short selling is often conducted by means of financial derivatives such as options or futures.

Sidechain

A blockchain that complements and extends from another blockchain and offers extended functionality compared to the original chain's coin or token, or unburdens the main chain.

Additional info

Sidechains are blockchains that can use their own tokens and protocols independent of the main chain. They are often attached to the main chain with a two-way peg. They are put in place to expand the possibilities beyond those of the original blockchain and have potential in the development of blockchain scaling solutions. Ethereum’s Plasma second-layer solution with 'child chains' is based on sidechains.

Slashing

An Ethereum mechanism that confiscates a stake from a bad actor. Applicable after the implementation of proof of stake.

Additional info

With proof of stake, validators place 'bets' on what they deem legitimate transactions. If they choose bad transactions, the stakes they put on them are taken away. This is known as slashing.

Slippage

The difference between the desired price of an asset and the price at the execution of a trade.

Additional info

When selling a lot of assets at once, the seller may find that the average selling price was lower than desired. This is due to slippage, which comes about because of market volatility and the imbalance of buy and sell orders incurred by the seller's large sell order. In order to prevent slippage, well-off traders sometimes set up a buy wall, which ensures a steady price when selling their holdings.

Smart Contract

Smart contracts are blockchain applications whose functions can be executed only when their requirements are met. Popularized by blockchains such as Ethereum.

Additional info

Smart contracts are a piece of computer code stored in the blockchain that stipulates various conditions and outcomes. If the conditions are met, smart contract can be called upon to perform its intended function. A smart contract requires no trusted third party to verify its legitimacy – the blockchain network it is based on takes care of that itself. Once written into the blockchain, there is no way to change the contract or to forcibly execute it if the conditions haven't been met. Ethereum is a notable example of a blockchain that supports smart contracts.

Society For Worldwide Interbank Financial Telecommunication

A network allowing financial institutions worldwide to securely and reliably obtain information on transactions. Abbreviated as SWIFT.

Additional info

SWIFT is a member-owned global provider of financial messaging services and products. It offers secure and standardized international communication between financial institutions, allowing them to obtain trustworthy data on transactions.

Soft Fork

A split in the blockchain that retains the compatibility between the two branches. Not to be confused with hard fork.

Additional info

In a soft fork, both branches create blocks that are compatible with each other. Nodes don't need to update to the new blockchain in order to continue uninterrupted operation. Nodes that do undergo the change can still seamlessly interact with old nodes. Soft forks cannot change major blockchain properties – these need to be introduced by means of hard forks.

Solidity

A programming language in which smart contracts and DApps can be written.

Additional info

Solidity is one of the programming languages originally developed for Ethereum's blockchain, but has since found its way into other blockchains. Its primary purpose is to add advanced functionality to the blockchain in the form of smart contracts and DApps.

Source Code Fork

A fork of a blockchain's source code that is the basis for a new and independent blockchain. The term is also used outside the blockchain environment. Not to be confused with hard fork and soft fork.

Additional info

Unlike hard forks and soft forks, source-code forks don't actually fork the blockchain itself. Instead, they fork the source code of the blockchain, creating a brand new and separate blockchain that starts from the genesis block up. Litecoin is an example of a source-code fork from the Bitcoin blockchain.

Spinning Top

A candlestick with a very thin (almost flat) body and sizeable, equally-long wicks above and below it. It signifies the market's indecisiveness.

Additional info

Since neither buyers or sellers managed to get the upper hand during the spinning top candlestick formation, trading this candlestick should be handled with care. If a spinning top appears in an uptrend, it might lead to a trend reversal to a downtrend, while an appearance in a downtrend could lead to the start of an uptrend. However, it is always wise to wait for the next candlestick after the spinning top has formed and perform your trade according to it. Spinning top’s market forecast is very similar to the long-legged doji candlestick.

Spread

The difference between two prices or positions.

Additional info

The expression spread is used in many areas of finance. It generally refers to a difference between prices in the ask and the bid, the difference between a short and a long position or the market price and the trigger price in orders on exchanges. In some contexts, the spread signifies the relationship between supply and demand. If investors show a lot of interest, the spread is narrow and vice versa.

Stable Coin

A cryptocurrency pegged to an asset, usually another currency. Also spelt as one word: 'stablecoin'. Sometimes also called a 'pegged currency'.

Additional info

The value of stablecoins is determined by the underlying asset. Whenever the price of the underlying asset changes, so does the price of the stablecoin. Stablecoins are commonly pegged to fiat currencies, other cryptocurrencies or even tradable commodities.

Stochastic RSI

A type of relative strength index that is prone to enter its extreme levels more often than regular RSI. It is mainly used to spot price reversals. RSI stands for 'relative strength index'.

Additional info

Stochastic RSI oscillates between the values 0 and 100. Its overbought levels are above 80, while its oversold levels are below 20. Crossing these levels usually indicates a high possibility of a price correction. However, in a strong bull or bear market trend, stochastic RSI can irrationally surpass these levels and remain above or below them for an extended period of time. The distinctive feature of the stochastic RSI is that it tends to enter overbought and oversold levels more frequently than regular RSI. Stochastic RSI is therefore more suitable for trading when a price is moving sideways or in a horizontal price range, while 'regular' RSI is better for an uptrending or downtrending markets.

Stop Order

A type of buy or sell order which gets triggered when the asset reaches a specific price.

Additional info

The stop order is commonly used to protect from a significant loss or not to miss out on potential profits. For instance, when you purchase an asset, you can put a stop sell order 10% below your buying price. This means that you will sell the asset if its price reaches your stop sell order price, preventing additional losses if the price continues to decline. A stop buy order, on the other hand, can be used to buy an asset if the price rises to a specified level, ensuring you have made an investment before the price rises further up. The trailing stop order is a variation of the stop order that adapts based on changes in the price. Other common order types include the instant order, the market order and the limit order.

Strike Price

The price at which an underlying asset of a derivative (such as options) can be bought or sold.

Additional info

The strike price is one of the major factors that determines the value of a derivative. It is the pre-set price that the parties signing the contract have agreed to. Commonly found in instruments such as options.

Support Level

A price level with a high concentration of buy orders below which the price is not expected to fall easily. Compare with resistance level.

Additional info

Support levels present potential entry points for a trade. Support levels are represented on a trading chart as straight lines, made by connecting multiple price lows, or using a variety of technical indicators and tools such as trendlines and horizontal lines. If a support level is broken, meaning that the price falls below it, it can become a new resistance level. This is known as an s/r flip.

Swing High

An event in technical analysis when the price reaches a peak before it starts declining. Compare with swing low.

Additional info

A swing high is a candlestick which has peaked higher in price than its neighbouring candlesticks on the sides. Therefore we can say that the swing high candlestick has formed a higher high in comparison with the candlesticks on its sides which have formed lower highs. In any given period of time, there is only one swing high; the highest price point. When searching for a swing high for technical analysis purposes – let’s say for applying the Fibonacci retracement tool to the chart – traders should look for a swing high that really stands out on the chart.

Swing Trading

A trading method which tries to capture big price movements (from 15% to 100% and more) in a medium time-frame interval (from a few days to a couple of months). Compare with scalp trading, day trading and position trading.

Additional info

In swing trading, the traders keep their position open a couple of days, weeks and sometimes even a few months. Traders utilizing this method place just a few trades per month. The goal is to buy an asset before it experiences a big price move. Exceptional technical analysis skills are required to perform swing trades successfully. Swing traders often also open a position in anticipation of upcoming news or events related to the asset, which could significantly increase its price in a relatively short period of time. When a swing trade yields profit, the gains are usually reinvested (for instance, from bitcoin to a different cryptocurrency or vice versa), trying to capture another big price movement on an asset the price of which has not yet swung.

Symmetric Cryptography

A means of encrypting data which makes it decryptable with a universal key. Compare with asymmetric cryptography.

Additional info

In symmetric cryptography, data is both encrypted and decrypted using the same, universal key. They key is the link between two (or more) parties privy to a shared secret. However, this system is vulnerable, because the whole process is compromised if the key leaks.

Symmetric Triangle

A bilateral chart pattern resembling the shape of a triangle comprised from a descending upper resistance trendline and an ascending lower support trendline. Compare with ascending triangle and descending triangle.

Additional info

The symmetrical triangle is the most neutral of all bilateral chart patterns and should, therefore, be traded with extra caution. It is characterized by a descending upper trendline and an ascending lower trendline. Forming lower highs and higher lows, the triangle tightens, and this is followed by a breakout to conclude the pattern. In a bullish market there’s more chance of a bullish breakout, while in a bearish market it more often results in a bearish breakout.

T

Tank

Of an asset's price; to fall sharply and rapidly.

Additional info

The expression usually refers to the price of an asset, but it can also be used for an industry, a company or an idea.

Technical Analysis

The study of market trends that attempts to predict future price action based on the past price changes that happened over a specific period of time. Compare with fundamental analysis.

Additional info

Technical analysis is based on the belief that past trading activity is a reliable indicator of future price movements. The primary tools used in technical analysis are various technical indicators, such as volume, moving averages or RSI and a number of candlestick patterns and chart patterns. Technical analyst use a combination of these to forecast where the price is headed to.

Technical Indicator

A tool in technical analysis used to make educated predictions on future price movements based on past trends.

Additional info

Technical indicators mathematically and statistically analyze past market price movements and use this data to predict the future direction of the market. They are applied to price charts and present information in forms of graphs, oscillator graphs, lines etc. Some of the most popular technical indicators are volume, moving averages, RSI, Ichimoku Cloud and Fibonacci retracement among others.

Testnet

A Bitcoin blockchain network separate from the main blockchain that is used for testing. Other blockchains have their own testnets. Also spelled 'TestNet'.

Additional info

Testnet allows developers to make changes to the Bitcoin code and test them in a safe environment. Testnet has its own coins, an easier mining algorithm, and can be reset at will. The coins on Testnet are not interchangeable with bitcoins and have no real value.

Three Black Crows

A candlestick pattern which consists of three consecutive bearish candlesticks with long bodies and almost no wicks, and forecasts a bearish market. Compare with three white soldiers.

Additional info

Three black crows is generally considered a trend continuation pattern, however it often appears right after a trend reversal, indicating that bears have started to overpower the bulls.

Three Inside Down

A bearish candlestick pattern which consists of three candlesticks and signifies a potential trend reversal from bullish to bearish. Compare with three inside up.

Additional info

The three inside down pattern starts with a long bullish candle, followed by two bearish candles, where the last one closes below the initial bullish candle.

Three Inside Up

A bullish candlestick pattern which consists of three candlesticks and signifies a potential trend reversal from bearish to bullish. Compare with three inside down.

Additional info

The three inside up pattern starts with a long bearish candle, followed by two bullish candles, with the second one (the last candlestick in the pattern) typically being bigger. The last candle closes above the initial bearish candle.

Three White Soldiers

A candlestick pattern which consists of three consecutive bullish candlesticks with long bodies and short wicks, and forecasts a bullish market. Compare with three black crows.

Additional info

Three white soldiers is generally considered a trend continuation pattern, however it is especially strong if it appears right after a trend reversal, as it indicates fresh buying pressure.

Ticker Symbol

The standardized from of abbreviation for a variety of financial instruments, such as shares or cryptocurrencies.

Additional info

Ticker symbols are comprised of letters, numbers or both and uniquely identify an asset. Bitcoin's code 'BTC' is often confused for a ticker, whereas in reality, it is not one. Bitcoin's standardized, but rarely used, ticker symbol is 'XBT'. Nevertheless, BTC is by far the more used abbreviation than XBT.

Timelock

A function that prevents payment finalization before a particular time (or block height).

Additional info

Timelocks restrict funds received in a particular payment from being spent before a pre-determined deadline. This deadline is usually expressed in block height, meaning that the funds are locked before a block with desired height has been added to the blockchain.

Timestamp

The creation time of each blockchain block that is contained in its metadata.

Additional info

Timestamps require validation by other nodes, therefore they provide another level of security on the blockchain. They also serve to help variate the hash. Timestamps are not always precise, sometimes going as far as to produce blocks that have timestamps out of order.

Token

Digital units of cryptocurrencies that offer functionality beyond money. They are created on a blockchain by means of smart contracts, and can represent any tradable utility or asset.

Additional info

Unlike coins, tokens don't have their own independent blockchain. Instead, they are created and exist in the context another blockchain. Blockchains that support the creation of smart contracts (such as Ethereum) allow tokens to be situated on them. Tokens are launched through Initial Coin Offering.

Token Sale

ICO

Tokenless Ledger

A distributed ledger that uses no units of currency (coins or tokens).

Additional info

True tokenless ledgers have little to no use as economic tools, as they cannot carry out transactions in the traditional sense. However, 'tokenless' usually refers to a lack of an intrinsic token, whereas a token that represents an asset may still be used, as with Ripple and XRP.

Total Coin Supply

The total amount of coins or tokens of a particular cryptocurrency in existence at a given time.

Additional info

Total supply is calculated by subtracting the number of unmined (or unreleased) coins or tokens from max supply. Additionally, any coins that are locked off the market are subtracted from this number. With most cryptocurrencies, total supply grows steadily, but at a decreasing rate, meaning that fewer and fewer new units are mined as time progresses. In the case of Bitcoin, total coin supply is estimated to match max supply around the year 2140.

Trader

Trader is a financial market participant who utilizes trading as his strategy to profit in the financial markets. Compare with investor. See also trading.

Additional info

Traders are short-to-mid-term focused, as they try to make profits from daily to monthly price fluctuations of assets. Traders are separated into institutional and retail traders, depending on whether they trade professionally or in their spare time.

Tradeview

Bitstamp's analytical trading interface and comprehensive tool for tracking and analyzing the state of the market. It is the shortening of 'TradingView'.

Additional info

Bitstamp's Tradeview displays the price chart, the trades, the depth charts, the order book and active orders. It contains a number of integrated tools, from the most basic to advanced, making it easier for the traders to make predictions and carry out strategies.

Trading

The activity of buying and selling assets frequently by taking advantage of market fluctuations with the intention of making a profit. Compare with investing.

Additional info

Trading is an active participation in the financial markets. It includes frequent buying and selling of assets. Some trading methods, such as scalp trading and day trading are short-term focused, while trading methods such as swing trading and position trading are mid-to-long-term focused. Simply put, trading involves buying at a lower price and selling when the price increases after a relatively short period of time. After a price correction, traders often buy the assets they've sold back at a lower price and sell again after price increase. Some traders also utilize short selling. The goal of trading is to reach better results compared to investing in a given time-frame. To perform trading profitably, exceptional technical analysis skills are required, while fundamental analysis helps traders to predict long-term market forecasts.

Trailing Stop Order

A variation of the stop order that traces the price direction of the asset you're interested in and adjusts your order accordingly.

Additional info

The trailing stop order automatically moves the position you have secured in case of price changes. It is often used to secure profits and prevent excessive losses. If the market is bullish, but you expect the trend to reverse, you can place a trailing stop sell order at a price below the current market price. The difference between your price and the market price is known as the spread. As long as the market remains bullish and the price rises, the trailing stop order will raise your trigger price alongside it at the distance of the spread. Once the market falls, the order will trigger at a higher price than set initially. Let’s say the price for 1 BTC is 10,000 USD and you put your trailing stop order at 9,000 USD. If the price of BTC then rises to 10,500 USD, your trailing stop order will rise to 9,500 USD, maintaining the spread. If the price then falls, your stop sell order will get executed at 9,500 USD instead of originally placed 9,000 USD.

Transaction Gas Limit

The maximum amount of gas you are willing to spend on a transaction for a miner to include it in a block. Only on Ethereum-like blockchains, and not on Bitcoin or similar. Not to be confused with block gas limit.

Additional info

It is difficult to determine precisely how much computational effort and, consequently, gas writing a transaction in the Ethereum blockchain will take. Allocating too small an amount of gas to a transaction will result in it failing, while you will still have to pay for computational expenses. In order to avoid this, you set a gas limit – the maximum amount of gas you're willing to spend. This is usually much more than necessary for the transaction, but whatever isn't spent is returned back to you.

Transaction ID

The unique identifier of a transaction that makes it possible to reference it on the blockchain. Also known as 'transaction hash'. Abbreviated as TXID.

Additional info

On the Bitcoin blockchain, transaction IDs are composed of 64 hexadecimal characters. They can be used to track transactions and locate them in the blockchain.

Transaction Input

On Bitcoin-like blockchains, one or more UTXOs that comprise a transaction. See also transaction output and unspent transaction output (UTXO).

Additional info

Blockchains like the one of Bitcoin don't store actual coins, but the history of transactions. If someone has sent 1 BTC to your address, you don't have 1 coin, but one transaction output showing that you can spend 1 BTC. This output is indivisible. If you then want to send 0.5 BTC to someone else, you need to create a transaction and allocate your whole output to it as that transaction's input. That transaction is configured to generate one output to the target address, an output to the miner for the fee and an output that returns the remaining amount of BTC back to your address. Keep in mind that inputs and outputs refer to transactions and transactions only. There is no such thing as a 'wallet output' or 'address output'.

Transaction Output

On Bitcoin-like blockchains, the clusters of cryptocurrency that are a result of a transaction. See also transaction input and unspent transaction output.

Additional info

The Bitcoin blockchain stores no coins or account balances. Instead it stores the history of transactions, more precisely transaction outputs. These are indivisible 'bills' of bitcoin. Whenever a transaction takes place it creates at least one output. If you send 2 BTC to someone, you first need to collect any unspent transaction outputs (or UTXOs) you own to verify you have 2 BTC to spend. This is the transaction input. Then, the transaction will create one 2 BTC output at the target address, an output that gives the miner their fee and possibly also an output that returns the excess back to your address (if you didn't manage to collect an exact amount from your UTXOs). All legitimate outputs are technically unspent, ergo they are UTXOs. Note that inputs and outputs refer to transactions and transactions only. There is no such thing as a 'wallet output' or 'address output'.

Transaction Replay

The re-broadcasting of a transaction on a different branch of the blockchain after it has undergone a fork.

Additional info

After a fork, a blockchain may enter into a state where a transaction is potentially valid on both branches of the fork. A transaction can be broadcast (or 'played') on one branch and re-broadcast (or 'replayed') on the other branch without the initiator's intention or consent. Replay protection can be employed to protect against the event of transaction replay.

Transaction Signature

A signature generated from transaction data and the and a private key.

Additional info

Every crypto transaction requires a digital signature to prove its legitimacy. This signature is generated by inputting the private key alongside the public key that corresponds to your blockchain address.

Transaction Throughput

The number of transactions that a blockchain network can process in a specified amount of time.

Additional info

Transaction throughput gauges a blockchain's 'speed' by observing how many transactions can be completed in a given time window. It is usually expressed in number of transactions per second (tx/s or TPS). Bitcoin caps at approximately 7 TPS, Ethereum at 20, Litecoin at 56, while Bitcoin Cash could potentially reach three digits. Scaling solutions, such as the Lightning Network, are aimed at increasing transaction throughput.

Transactions Per Second

The unit expressing the amount of transactions that a blockchain can process in a second. Abbreviated as TPS.

Additional info

The amount of transactions per second (or TPS) is a means of putting a figure on a blockchain's transaction throughput. The number can either refer to the maximum number of transactions that a blockchain can process in a second, or, usually, the average number over a longer period.

Trend Continuation

A state of the market where the current market trend continues without a major interruption.

Additional info

Trend continuation indicates that the currently dominant market trend will continue. However, the continuation is not always completely uninterrupted, with temporary pullbacks (either up or down) often emerging and the previous trend resuming afterwards. To determine whether the trend is likely to continue, traders commonly utilize tools of technical analysis such as technical indicators, candlestick patterns and chart patterns.

Trend Reversal

A change in the direction of an asset's price. Compare with trend continuation.

Additional info

Traders aim to perform their trades when a trend reversal takes place in order to improve the chances of profitability. Technical analysis can assist a trader in identifying changes in a trend.

Trendline

A straight line drawn on price charts to indicate future price direction and market trends.

Additional info

Trendlines are most often used to determine support and resistance levels. When a trendline connects multiple lows on a chart, it is a support line, and when a trendline supports multiple highs, it is a resistance line. Support and resistance levels anticipate where the price may rebound in the future, which helps select trade entry and exit points.

Triangle

Refers to a group of chart patterns including the ascending triangle, descending triangle and symmetric triangle.

Trie

An organized data structure in form of trees. It is usually pronounced 'tree', sometimes 'try'.

Additional info

Strings in a trie can be retrieved by following a particular path down the tree. If a trie contains node A, from which grow nodes B and C, such a trie is able to produce strings 'A', 'AB' and 'AC'. Trie comes from the word retrieval, which also determines its pronunciation (although some prefer to pronounce it as 'try' to distinguish it from 'tree').

Trusted Third Party

Refers to the 'middleman' in traditional transactions or negotiations (a bank, notary etc.).

Additional info

If you want to make a secure transaction with a person who you don't trust unconditionally, you need someone to validate it. In other words, you need a trusted third party to supervise the transaction and make sure nothing fishy is going on. Public blockchain-based cryptocurrencies inherently eliminate the need for mutual trust and, by extent, a trusted third party.

Tweezer Bottom

A candlestick pattern which consists of two candlesticks and commonly appears at the bottom of a downtrend. It signifies a potential trend reversal. Compare with tweezer top.

Additional info

The tweezer bottom pattern starts with a long bearish candle, followed by a very small candle, either bullish or bearish, which indicates reduced selling pressure. The pattern usually leads to a trend reversal.

Tweezer Top

A candlestick pattern which consists of two candlesticks and forms at the top of an uptrend. It signifies a potential trend reversal. Compare with tweezer bottom.

Additional info

The tweezer top pattern starts with a long bullish candle, followed by a small candle, either bullish or bearish. Reduced buying pressure after the initial candle might lead to a trend reversal.

Tx

The abbreviation for 'transaction'. Also spelt in uppercase: 'TX'.

U

UTXO

On Bitcoin-like blockchains, outputs from validated transactions, guaranteeing that the coins they represent haven't been spent. Stands for 'unspent transaction output'.

Additional info

When a new block is mined and added to the blockchain, the validators check if it and the transactions within it are compliant with consensus rules. If everything is in order, the blockchain continues uninterrupted, with the transaction outputs within it labelled as unspent. To guarantee the block's legitimacy, it is sometimes required to reach a certain depth in the blockchain. The distinction between transaction outputs and UTXOs is necessary to distinguish verified transactions from the ones that are a result of a double-spending attack.

UTXO Database

The database of all unspent transaction outputs on a particular blockchain. Stands for 'unspent transaction output(s) database'. See also unspent transaction output.

Additional info

Simply put, the UTXO database contains the records of the most recent destination of all transaction outputs that haven't been spent yet. The UTXO database doesn't hold the history of these outputs. Every transaction input has to be checked against this database to verify that it hasn't been spent yet. The UTXO database is essential for the operation of pruned nodes.

Unconfirmed Transaction

A transaction that has not yet been processed by the miners due to reasons such as too small a fee.

Additional info

An unconfirmed transaction is one that has been published, but has not yet been validated by full nodes. The reason is usually that the attached fee is too small an the miners haven't picked it up. Miners can give preference to transactions with higher fees (more money for the miners), while ignoring transactions with small fees. Another possibility is that the network is simply too busy and since block size is not infinite, only a limited amount of transactions can be written in a block.

Underlying Asset

An asset which is represented and which defines the value of a derivative.

Additional info

The underlying asset is the basis for the price of the derivative. Underlying assets can be represented by various financial instruments, from stocks to currencies etc.

Unspent Transaction Output

UTXO

User-Activated Soft Fork

A type of a blockchain fork enforced by full nodes rather than miners. Abbreviated as UASF. Not to be confused with soft fork.

Additional info

When forking, it is usually the miners who decide to adopt a change in the blockchain or not. However, with UASFs, it is full nodes who make the decision to fork. The participants in the fork must constitute an economic majority if the UASF is to succeed.

V

Vanity Address

A custom blockchain address on a blockchain network.

Additional info

A vanity address contains a number of custom characters somewhere in it (usually at the beginning). The longer the string of custom characters, the harder it is to get such an address. Blockchain addresses are generated by hashing, which makes them random, so obtaining vanity addresses is a matter of trial and error.

Velocity Of Money

The rate at which money is spent.

Additional info

Velocity of money is a gauge of how fast money changes hands, but can also be thought of as a measure of inflation rate (the higher the velocity, the higher the inflation). It is calculated by dividing national GDP with the total money supply.

Venture Capital

The money start-up companies gather from investors.

Additional info

Venture capital is the money gathered by a small company or a start-up from larger investors who get to sit on the company's board or even get a share in the company in return. For these investors, venture capital is seen as an investment that will prove lucrative in the long term.

Virgin Bitcoin

The bitcoins awarded to miners for completing a mining job.

Additional info

Whenever a miner on the Bitcoin network mines a new block, they are rewarded with some coins from the pool of unmined coins. The new bitcoins obtained this way are referred to as 'virgin bitcoins'.

Virtual Machine

The emulation of a computer system that replicates the features of the computer's architecture.

Additional info

Virtual machines are designed to operate exactly as the real thing. They offer a sandbox environment in which it is possible to run code in complete isolation from the rest of the system, which is useful for testing purposes. The Ethereum platform uses a virtual machine (called the Ethereum Virtual Machine, or EVM for short) to execute smart contracts.

Vitalik Buterin

The Canadian-Russian programmer, best known for being the founder of Ethereum.

Additional info

Buterin's 2013 whitepaper on Ethereum soon attracted several similarly-minded individuals with whom he went on to create the cryptocurrency in January 2014. He was also the co-founder and lead writer of Bitcoin Magazine. Buterin was born in Russia, but his family moved to Canada in search of better employment opportunities when he was six [1].

Vladimir Club

A term describing the state of a single person who owns 1% of a cryptocurrency. Usually 'joining the Vladimir Club' or 'being a member of the Vladimir Club'.

Additional info

The term Vladimir Club dates back to 2012, when someone called Vladimir claimed to have acquired 1% of Bitcoin on an online forum. Back then, BTC was worth a bit more than 10 USD, meaning their total investment was just over 23,000 USD. Since Bitcoin (and many other cryptocurrencies) are worth substantially more now, becoming a member of the Vladimir Club has become far more difficult.

Volatility

The tendency of an asset to fluctuate in price.

Additional info

Some assets are liable to experience sharp and sudden raises or drops in value. High volatility of an asset usually means that investing in it can be fraught with risk, but also has potential for profit. On account of their fluctuating nature, some cryptocurrencies are considered volatile.

Volume

A technical indicator that measures the amount of an asset that was traded in a specific time period.

Additional info

Trading volume is especially potent when it’s combined with observing price movements of an asset. All the price movements which are accompanied by high volume are deemed to be strong. This way traders can determine the market’s strength, confirm trend continuation, identify potential trend reversals, spot accumulation in the market or confirm various chart patterns and their breakouts.

Volume-Based Pricing

A pricing strategy that predicts discounts for large-volume purchases. Also 'volume pricing'.

Additional info

Volume-based pricing allows bulks of assets to be purchased at a discount price, where the number of units purchased is directly proportional to the discount.

W

Wei

The smallest subunit of ether, equal to 1/1,000,000,000,000,000,000 (one quintillionth) ETH.

Additional info

Wei is named after Wei Dai, a proponent of widespread use of cryptocurrencies and blockchain-based technology. One billion Wei is one Gwei.

Wei Dai

Crypto pioneer, creator of b-money, Bitcoin's predecessor; one of the candidates for the identity of Satoshi Nakamoto.

Additional info

Wei Dai is best known for being the creator of b-money, a form of electronic money that might have inspired the creation of Bitcoin. On account of his connection with Satoshi Nakamoto during the early development of Bitcoin, he is considered as one of the candidates for the mystery man's real identity. The Ethereum community honored Wei Dai by naming the smallest unit of ETH, Wei, after him.

Whale

Someone holding a large amount of an asset such as cryptocurrency.

Additional info

The massive wealth of whales gives them a strong influence over the market. Whales are sometimes early crypto adopters, who bought immense amounts of cryptocurrencies at very low prices and have become rich on crypto gains. It is speculated that a large amount of bitcoins is held by relatively few whales. In December 2017, over 40% of bitcoins was owned by only 1,000 people [1].

Whitepaper

A detailed report and guide on a particular subject that also includes future plans. Sometimes spelt as two words: 'white paper'.

Additional info

Whitepapers are often used in the crypto community to present new ideas and propose solutions. Among many examples of whitepapers in the crypto world are Satoshi Nakamoto's 2009 whitepaper on Bitcoin and blockchain, and Vitalik Buterin's 2013 whitepaper on Ethereum. The term white paper comes from British English and initially referred only to government-issued reports.

Wick

A part of a candlestick that represents the trades conducted at a price above or below that of the majority. Sometimes referred to as 'whiskers'. Compare with body.

Additional info

Each candle has two wicks: the upper and the lower, with each representing the trades conducted above and below the body of the candlestick respectively. The tips of the wicks likewise show where the price was at its highest and lowest during the time frame of the candle. Wicks can be of various lengths. Sometimes one or both wicks are exceptionally long, sometimes very short or even non-existent, alerting the avid TA specialist to upcoming market trends.

Withdrawal

The action of removing funds from an account or an address.

Additional info

You can withdraw money from a bank or an exchange. You can also withdraw cryptocurrency from a wallet or an exchange by transferring it to a different blockchain address.

Writer

Someone who sells and options contract. Also referred to as 'grantor'. Compare with holder.

Additional info

The writer creates an options contract and sells it to a potential buyer (or holder) for the premium. Thus, the writer grants the holder the right to purchase the underlying asset for as long as the contract is active.

X

X.509 Standard

A standardized format for public key certificates in cryptography.

Additional info

X.509 uses an international public key infrastructure to verify the identity of the user. It was proposed by the International Telegraph Union Telecommunication Standardization Sector in order to achieve standardization in many cryptographic processes.

XBT

An alternative three-letter code for bitcoin (as opposed to BTC).

Additional info

XBT has been created as an alternative to BTC in order to be compatible with the ISO 4217 standard, where the first two letters of the code refer to a country (BT is Bhutan). Nevertheless, BTC is by far the more widely used code.

XRP

The native cryptocurrency of Ripple. Sometimes erroneously called 'Ripple'.

Additional info

XRP was created by a company called Ripple Labs and has since gone on to become one of the largest cryptocurrencies. Unlike BTC, new XRP is not created by mining. Rather, Ripple Labs issued the entire XRP supply of 100 billions at the inception of the XRP ledger and placed it into an escrow. Each month the company is set to release 1 billion XRP into circulation, with any unused amount placed in another escrow. XRP protects RippleNet from spam by requiring a small amount of the crypto to be burned with each transaction. Since XRP’s inception in 2012, close to 10 million XRP have already been burned. The owners of Ripple initially allocated 20% of the max supply to themselves.

Y

YOYO

The slang abbreviation that stands for 'you're on your own'.

Yuppie

A fashionably dressed young professional with a well-paid job. Often derogatory.

Additional info

The expression first saw the light of day in the 1980s, as the abbreviation of the phrase 'young urban professional'.

Z

Zero-Confirmation Transaction

A transaction on a blockchain that has been broadcast to the network, but not yet included in a block by miners.

Additional info

When a transaction occurs between two parties, it needs to be added to the blockchain by miners. Once this is done, a transaction is considered to have 1 confirmation. Every block added to the blockchain after the one containing this transaction gives it another confirmation. Many crypto merchants and exchanges require several transaction confirmations.

Zero-Knowledge Proof

A cryptographic method allowing one party to convey that they have a specific set of information to another party without revealing the information itself.

Additional info

Zero-knowledge proofs require that the two parties, the prover and the verifier, interact in order to establish they have common knowledge on a set of information. The verifier has to prove they have the knowledge and the verifier needs to validate that proof. It is sometimes enough to ensure that a number is in a particular range – this is known as a zero-knowledge range proof. In some cases, a zero-knowledge proof can also be non-interactive, meaning that it doesn't require a prover and a verifier. See zK-SNARK.

zK-SNARK

A non-interactive zero-knowledge proof used on some blockchains that eliminates the need for interaction between the prover and the verifier.

Additional info

zK-SNARK can achieve computational zero-knowledge based only on a common reference string, without requiring a prover and a verifier to interact. In other words, both parties are able to verify that they have a specific set of information, without revealing what that information is.

Đ

ĐApp

Short for an Ethereum-based decentralized application. Sometimes also simply 'DApp'.

Additional info

The 'Đ' in ĐApps is a letter from the Old English Latin alphabet and is pronounced 'eth'. Therefore, Ethereum ĐApps are actually 'Eth-apps'. To ease spelling, ĐApps are often referred to simply as DApps (which is technically a cover term for decentralized applications based on all blockchain platforms, not just Ethereum).

Ł

Ł

The symbol for Litecoin. See Litecoin (coin).

Ξ

Ξ

The symbol for ether. See ether.

μ

μBTC

A micro bitcoin, or 0.000001 BTC.

Additional info

μBTC is spelt with the Greek letter mu (μ), but for the sake of simplicity in conversation, it is usually replaced by Latin lowercase u.

The symbol for bitcoin. See bitcoin (coin).

5

51% Attack

An attack against a proof of work blockchain through which the attacker acquires the majority of the mining power and is able to enforce their version of the blockchain. Also known as a 'double-spending attack', 'majority attack' or sometimes 'race attack'.

Additional info

A 51% attack is primarily a threat for blockchains created through the process of mining. In a 51% attack scenario, a person or an organization with the majority of the mining power  reverses completed transactions in order to spend the same coins twice. This is also known as double-spending.

However, the more computing power there is in a blockchain network, the harder it is to acquire a majority. For this reason, major cryptocurrencies are less likely to be the target of a 51% attack than small ones.

A 51% attack can also be performed on some versions of proof-of-stake blockchains, with the attacker having to control the majority of tokens, rather than hashing power, to carry out the attack.