Algorithm / algo: Just like in any other discipline, an algorithm is a set of rules to be followed in calculations or problem-solving operations. Specific to cryptocurrencies, there are proof-of-work algorithms, which describe how to transform random numbers into potential solutions used to create transactions. One example of these is scrypt (pronounced s-crypt), which is the proof-of-work algorithm for the coins Litecoin, DogeCoin & FedoraCoin.
Airdrop: A distribution of virtual currency, usually for free, to a large number of wallets. This may be carried out for marketing or publicity reasons.
Altcoin: Any cryptocurrency that is not Bitcoin, such as Ethereum, Litecoin, Verge, Ravencoin, etc. Hundreds of altcoins exist, check out our full list of algorithms and coins for a comprehensive list.
API: Application Programming Interface; a communication convention agreed to be used between two computer programs to exchange information.
ASIC: Application Specific Integrated Circuit; electronics designed and produced to perform a single task. In recent times, such ASICs are being used in, for example, computer networking, to optimize the high-speed transmission of data. Specific to cryptocurrencies, ASICs have been implemented to rapidly perform proof-of-work calculations.
Bitcoin: The original cryptocurrency, and the coin with the highest market share, market capitalisation, and coin price. It is considered the godfather of cryptocurrency, created by the mysterious and elusive Satoshi Nakamoto, and was released in 2009 following the global stock market crash a year earlier. Originally designed as a new digital cash with finite financial model similar to gold, Bitcoin is now seen more as a store-of-value, due to its scaling limitations, coupled with most people choosing to “hodl” (hold) their balances.
Block: As the most granular unit that can be appended to a blockchain, a block contains records of transactions, and references the previous block, while to be referenced itself by the block that will follow.
Blockchain: A generic term for digitised, decentralised public ledger of transactions used, in various forms, for all virtual currencies, and an increasing range of additional applications. Originally developed as the account method for Bitcoin, blockchains use what is known as distributed ledger technology (DLT), which records transactions across many computers, so that the record, or block, cannot be altered retroactively, without the alteration of all subsequent blocks and the consensus of the network.
Bear market: A term given to a period, in which the price of an investment falls over time. The market trend during a bear market will show a 20% drop from the 12 month high for the investment in question. For example, if Bitcoin was trading at £14,000 at its peak within the last year, then a bear market would be from the point at which it dropped to £11,200 and remained below that value over at least a two-month period.
Bubble: A bubble can be described as a situation in which trade in an asset occurs within a price range which far exceeds the asset’s intrinsic value. Due to the difficulty of determining the intrinsic value of of a market from within (i.e., when the market is current), bubbles are often identified following a crash, or “burst” of the bubble, where the price of the asset in question falls dramatically. Bubbles commonly occur in the early stages of technology, as has been seen twice now in Bitcoin since its inception.
Bull market: The opposite of a bear market. The market trend during a bull market will show at least a 20% increase for the investment in question. It is usually preceded and followed by a bear market, in which a dramatic decrease occurs.
Computational resource: A component of finite capacity within a computer, such as its processing, memory, storage or throughput capability. Specific to mining, this might describe the number of hashes or solutions per second, a given computer can complete.
CPU: Central Processing Unit; in a modern computer this is the main resource used to perform computational tasks. This is a type of general-purpose processor, that can be programmed to perform almost any type of computation. This is in contrast to ASICs, which are able to perform only a predefined single task, albeit much more efficiently than a CPU.
Cryptocurrency exchange: A platform that allows buyers and sellers to trade cryptocurrencies, either for other cryptocurrencies or for fiat currencies such as the US dollar.
Cryptosphere: A nickname coined for anything and everything happening within the crypto community, industry and news.
DApp: Decentralised Application; an application, the code for which runs in a distributed manner. Many examples of this exist on the Ethereum platform. One popular example being CryptoKitties, which was a game that was brought to the Ethereum network in 2017.
Decentralised: In the context of cryptocurrencies, decentralised refers to one of the key defining facets of blockchain, being that it is distributed, and therefore not under the singular control of a central, authoritative entity, such as a business or government.
DLT: Distributed Ledger Technology; the definition of a consensus-based, replicated, shared, and synchronised record-set, not bound to a single location, and therefore without a central administration or data storage. Blockchain is a form of DLT.
Ethereum: Ethereum is second to Bitcoin in terms of market capitalisation (at time of writing). Its stated design goal is somewhat different to Bitcoin, in that it positions itself as a decentralised platform on which others can build their DApps, due to Ethereum’s smart contracts feature.
FOMO: Fear Of Missing Out. Remember late 2017 when every man and his dog started buying Bitcoin for the first time, because prices were skyrocketing? Well, this was largely down to FOMO.
FUD: Fear, Uncertainty & Doubt. FUD is not just prevalent in cryptocurrency, as anything new is likely to cause some amount of FUD. There will always be contrasting opinions on everything, so be a receptive human and draw your own conclusions.
GPU: Graphics Processing Unit; commonly known as a graphics card, this computer component’s main application is rendering and drawing graphics in games. Today, the two dominant manufacturers of GPUs are nVidia and AMD, and in their high end product ranges they have cards able to deliver VR and 4K experiences. Specific to cryptocurrencies, early pioneers of mining soon discovered that GPUs also made excellent tools for proof-of-work calculations.
GUI: Graphical User Interface; a software interface that provides intuitive control in a graphical way. For example, the Cudo Miner desktop application allows the user to monitor and control their cryptocurrency mining efforts from a simple-to-use GUI, rather than having to write specific commands into a CLI (Command Line Interface).
Hard fork: A change to the rules that govern the transactional conventions of a cryptocurrency. These are typically implemented such that they take effect concurrently for all users, at a predefined time. After a hard fork, any outdated software following the old rules would be seen as invalid under the new rules, and unable to participate on the blockchain.
Hash rate (hashrate): For proof-of-work algorithms, this is the number of hashing calculations per second, that a given piece of hardware can average. Often this is represented as a summation describing all miners deployed by a user, a pool, or a cryptocurrency network.
Hella: Commonly used in place of “really” or “very” when describing something. This is not just used in the cryptocurrency community of course, but is increasingly common to see across the social media world.
Hodl: Originally a typo of the word ‘hold’ that went viral in the early cryptocurrency community. The infamous typo has now been written into cryptocurrency jargon and refers to when a person holds their cryptocurrency, with the view that it will one day be worth more.
ICO: Initial Coin Offering; a new style of raising capital for a project. Like company shares in traditional fundraising, the company looking to raise funds will create their own token (think of it like a company currency), which will then be issued to their investors based on the proportionate share of investment they made. ICOs carry a high risk with a lot of the projects up for funding only being at the idea stage. With high risk though, comes high reward should the project succeed and with ICOs the company raising money is not reliant on venture capital (VC) investment. This prevents equity being diluted and also gives everyone, not just VC backers, with the chance to invest in a new company.
Mining (Mine, Mines, Mined): The process of taking a cryptocurrency’s pending transactions and placing them into a new block to be appended onto the blockchain. To create a viable block, the miner must find a qualifying hash value by trying random numbers. The miner receives a block reward, according to the rules of the currency, as well as transaction fees offered by those requesting the transactions. The higher a miner’s hashrate, they more likely they are to find a block and reap the rewards.
Mining hardware: Any equipment capable of mining. This includes desktop computers, laptop computers, professional workstations, servers, cloud compute instances, ASIC or FPGA mining appliances, mobile phones, and tablets. In summary, anything that can run mining software.
Mining pool: Because most cryptocurrencies have such a large number of individual miners working to find blocks, the probability of any one miner finding a block is very low. A mining pool allows many miners to share the effort of finding a block. Typically a pool operator will split the reward of a found block according to the proportional contributions of the pool members.
Multi-algo: A feature of mining software, whereby it can support mining coins that use a variety of different proof-of-work algorithms.
Multi-miner: A piece of mining software that supports multiple coins, and generally will select the best coin to mine based on market profitability at a given time.
Network: In the context of cryptocurrency, this refers to a peer-to-peer network that supports the transactional operation of a given cryptocurrency. The network is used to submit transactions to be processed, as well as to broadcast the creation of each new block.
Network botnet: A collection of computers, that has been maliciously taken over to perform distributed actions according to commands, issued by its operator. In recent times, such botnets have been used to send spam email, and perform denial-of-service attacks. In the context of cryptocurrency, such botnets can be used to steal computing power from victims, for mining.
Network fork: An accidental fork, or network fork, happens when two or more miners find a block at nearly the same time. The fork is resolved when subsequent block(s) are added to the blockchain and one of the chains becomes longer than the other(s). The network abandons the blocks that are not in the longest chain (they are called orphaned blocks).
Newb / noob: A new user, often considered a derisive term due to its association with describing someone who has made mistakes or failed to understand concepts, because of their lack of familiarity or knowledge.
Orphaned block: A block, that although valid, failed to become the accepted candidate for the blockchain, due to the timing of its creation relative to the accepted block. Also see “network fork” for details.
Overclock (overclocked, overclocking): The act of setting the frequency of a component, typically a processor or memory clock, to a higher value than intended by the manufacturer. This is usually done to boost performance, though comes at the risk of causing malfunctions, often due to overheating.
Proof of stake: A cryptocurrency paradigm; the first major alternative to the proof-of-work method, whereby rewards are distributed in a partially-randomized manner, preferential to those holding either a larger quantity or more ancient coins.
Proof of work: In the context of cryptocurrencies, proof of work refers to demonstrating an investment of computing power in finding the solution to a cryptographic problem. Typically, this comes in the form of feeding random numbers into a hash function until that function produces a value conforming to a rarely achieved criteria.
Pump and dump: Refers to financial manipulation of a market, whereby a consortium of experienced traders collude to flood that market with new money. In response, other watchers of that market, often amplified by social media buzz, will naively invest, believing they will stand to gain. When the market value peaks, the manipulators proceed to sell off all of their assets, achieving large profits, but ultimately causing an enormous loss of confidence.
Reward: A mechanism used in mining, whereby the miner who successfully finds a block is rewarded in cryptocurrency for their efforts. This is usually also the mechanism by which new currency is created.
Shill: A person who aims to publicly bring credibility and trust, specifically to a given cryptocurrency coin or related service, in this context. They will typically be associated with the thing they are trying to promote, but will aim to hide this fact to give the illusion of legitimacy in their statements.
Shitcoin: Generally forks of existing coins, shitcoins offer little to give them any merit in the cryptocurrency market. While it is not impossible to profit from these coins, many of them fizzle out of popularity quickly, due to a lack of active miners or traders. It is rare to see technological or socio-political innovation in this space.
Smart contracts: Smart contracts are designed to digitally facilitate, verify or enforce the negotiation or performance of a contract. They have the potential to be highly disruptive to ‘middle-men’ industries, where the terms of the contract between supplier and consumer is managed by the software itself rather than a lawyer for example.
Consider the music industry, where the artist (supplier) only receives a small percentage of the album sale through royalties due to middle-men costs (platform, management, advertising & publisher) and often long after listener (consumer) bought or streamed the content. If the musician hosted their music on a platform leveraging the smart contract feature, they would have greater control of their content and finances and reduce their payment time to near zero.
Soft fork: A change to the rules that govern the transactional conventions of a cryptocurrency. In the case of soft forks, these are usually to introduce new, optional features or tweaks and they do not break backward compatibility.
To the moon: A phrase coined by cryptocurrency miners or traders, with two common interpretations. The first expresses the rise in the market value of cryptocurrency as plotted on a graph, one day reaching the height of the moon, on that graph. The other expresses an expectation that someone will make so much money from cryptocurrency, that they will be able to travel to the moon.
User: A person who uses a service.
Valid shares: When mining as part of a pool, each piece of work submitted entitles you to a share, when that pool discovers its next block. A valid share is one that the pool has accepted.
Virtual currency: Any type of unregulated digital money, which is issued and usually controlled by its developers, and used and accepted among the members of its community. Examples of such currencies include Bitcoin and Ethereum.
Wallet: A virtual container for cryptocurrency. When stored on a computer, this is typically encrypted and password protected.
Whale: A person who hold a large amount of wealth. Specific to cryptocurrencies, early miners or deep-pocketed institutional investors who hold a large amount of cryptocurrency and are therefore considered whales.
When Lambo?: A question often asked about a fledgling cryptocurrency, its meaning being to enquire at what point their potential investment could hold enough value to facilitate the purchase of a Lamborghini sports car.
