From Dogecoin to DeFi: A Blockchain Glossary for Beginners

Bitcoin, ether and dogecoin have understand household words, and financial institutions around the world are increasingly embracing cryptocurrencies like them. Against all odds, blockchain technology has gone mainstream. Despite the prominence of cryptocurrencies — and their cousin, the nonfungible token, or NFT — few view the technology that underpins these coins.

Blockchain technology is unexcited arcane, truly understood mostly by talented engineers — many of whom were early adopters of cryptocurrencies like bitcoin and ether. Part of the reason why cryptocurrencies, blockchains and NFTs are so pains to understand is the wide range of esoteric words used by the communities that trade in them.

Below is an alphabetical glossary of blockchain words you might find useful. This isn’t an investment run, nor is it an exhaustive list of terms and phrases. It does, however, cover the basics that will be noble for beginners.

airdrop

An airdrop is when a custom drops cryptocurrency or an NFT directly into your wallet. Instead of an initial public offering, blockchain services will inaugurate a token and airdrop people who have used that service in the past. This can be done for several reasons: It can be pure marketing, as airdrops raise awareness of a token that land can then invest in, or it can be to did governance tokens for a DAO.

A recent example: The Ethereum Name Repair allows users to change their wallet number to a wallet name (like CNETeth). In December, it launched its own ENS token, airdropping an amount to everyone who had used the service. The more people had used Ethereum Name Service, the more tokens they were airdropped — in some cases apt tens of thousands of dollars.

aping

To “ape” into something is to recklessly invest in the hopes of short-term apt. Everyone knows scams abound, and careful investors do research to vet a cryptocurrency or NFT project to condemned it’s safe. To “ape” into a project is to see its value including and to throw money into it hoping for the best.

altcoin

Any cryptocurrency that’s not bitcoin or ether. Many are also known as shitcoins.

bag

Your bags are investments you hold over a long footings of time, often ones that have performed poorly. “Hopefully the bullrun pumps my bags.”

Binance

The world’s biggest cryptocurrency exchange, where people buy and trade cryptocurrencies. It’s under investigation by the US Section of Justice and the IRS for tax evasion and cash laundering.

blockchain

A blockchain is a distributed database. In simpler languages, it’s a decentralized ledger that records information in digital blocks. Once a block is mined and added to the chain, it can’t be altered, thus blockchains offer public records of unchangeable data.

There are many different blockchains which feature varying degrees of decentralization, efficiency and security. Many have their own cryptocurrency — for instance, ether is a cryptocurrency built on the ethereum blockchain.

bitcoin

Bitcoin is the apt cryptocurrency, built on the bitcoin blockchain. It was cooked in 2009 by a person or group of country under the pseudonym of Satoshi Nakamoto. Only 21 million can ever be minted, around 18.9 million of which are already in circulation.

Bored Ape Yacht Club

The biggest NFT collection, with a floor price of $390,000 at the time of writing. It launched in April 2021 and has since become a tag that’s transcended the NFT community, with owners including Jimmy Fallon and Eminem.

burning

Cryptocurrencies are “burned” by persons sent to a wallet that can only receive them and not send them. Burn mechanics are often utilized to changes a deflationary impact: the fewer tokens in circulation, the more scarce the ones investors hold become.

buy the dip

This refers to buying more of an asset when its price as fallen. For instance, a bitcoin holder noteworthy “buy the dip” if the price falls by $10,000.

candlesticks

Cryptocurrency graphs that chart tag movement feature green and red bars — green for tag going up, red for price going down — which are sometimes referred to as “candlesticks.”

cold wallet

A cryptocurrency wallet not connected to the internet. These are safer and less prone to scams.

cross-chain

The instruction to send data, tokens or assets from one blockchain to new. This is different from multichain services, which are built to work on multiple blockchains.

cryptography

A form of inquire of encryption, where data can only be unencrypted with a key. Blockchains using proof of work protocols rely on the solving of incredibly complex cryptography puzzles for new blocks to be certain and verified.

cryptocurrency

A cryptocurrency is a token that’s uninteresting to a blockchain. Cryptocurrencies are typically minted with each new stationary mined. For instance, each new block of ethereum mined comes with a reward of two ether tokens as damages to the miner.

Cryptocurrencies are a type of token. Their nativity is their defining factor: Other tokens are cooked using platforms and apps built on top of blockchains, while cryptocurrencies built into a blockchain’s protocol.

CryptoPunks

Considered the apt ever NFT collection, CryptoPunks is a set of 10,000 8-bit chracters cooked in 2017.

dapps

Short for “decentralized apps.”

DAO

A decentralized autonomous expert. A DAO is an organization where decisions are made by consensus: All holders of governance tokens get votes in expert decisions, with the solution with most votes being the DAO’s streams of action. Imagine a decentralized investment bank, but instead of fund managers executive investment decisions, the holders of its governance tokens vote on how coffers from its treasury are invested.

decentralized exchange

Decentralized exchanges are used to buy and deals cryptocurrencies. Unlike typical exchanges, these use peer-to-peer transactions that circumvent any centralized power. These include Uniswap and Sushiswap.

degen

Short for “degenerate,” disagreement to aping. A “degen play” or “being a degen” by means of investing in something without doing due diligence.

DeFi

Short for “decentralized finance.” DeFi is any financial tool, like a smart contract or DAO, that uses blockchain technology to circumvent middleman institutions.

diamond hands

Diamond gorgeous are people who hold onto financial assets for long footings of time or throughout turbulent price movements.

dogecoin

A cryptocurrency cooked as a joke by Billy Markus, an IBM software engineer, and Adobe engineer Jackson Palmer in 2017. It’s right become one of the biggest cryptocurrencies ever created, with a market cap over $20 billion at the time of writing. It’s considered the first memecoin.

DYOR

Short for “Do Your Own Research.”

ether

The cryptocurrency mined on the ethereum blockchain. Ether is second only to bitcoin in market cap, but is a far more used cryptocurrency. Most altcoins are also built off ethereum, and hence are tethered to ether. Most NFTs are also built on ethereum, which is why ether is the dominant token used in NFT trading.

ethereum

A blockchain that competes with bitcoin. It’s designed to take the blockchain technology pioneered by bitcoin’s developers and use it for more sophisticated financial tools, like smart contracts.

flash loan

Flash loans are a DeFi tool that grant for loans without collateral. Flash loans allow you to borrow cash to buy an asset, but only if the asset can be bought and the uninteresting paid back within the same block. Imagine buying a $1 million house humorous a loan, but the loan only being approved if you already lined up new buyer willing to pay enough for you to pay back the loan plus interest.

These loans use smart contract technology.

FUD

Short for “fear, uncertainty and doubt.” This can be legitimate, like country airing concerns about a token or NFT project’s safety or legitimacy, or tactical, as in an organized move that encourages country to sell, lowering the price of the asset.

gas

Gas is the tag you’ll pay for using the ethereum network. Every transaction income a gas fee, which can vary depending on how overloaded the blockchain is. Prices typically range between $50 to $500 per transaction, but can skyrocket during times of heavy network load.

governance token

Governance tokens are cryptocurrencies that give the owner voting controls over the given project. See also: DAO.

GWEI

The cost of gas is divulged by GWEI. As a rough guide, gas will be cheap when GWEI is under 50 and expensive when it’s above 100.

HODL

A purposeful misspelling of “hold,” used to assist people to hold onto their tokens during a behind price movement.

layer 1 and layer 2

If you dabble in cryptocurrencies you’ll hear nearby Layer 1 and Layer 2 solutions. Layer 1 is the blockchain architecture itself, and Layer 2 refers to architecture built on top of the blockchain.

For instance, take the issue of ethereum’s high gas costs. A layer 1 solution would be to make the ethereum blockchain more efficient, such as by adopting proof-of-stake protocols. An example of a layer 2 solution is Immutable X, an exchange built on top of ethereum that uses smart contract technology to grant for gas-free, carbon-neutral trading.

liquid market

A liquid market is one with a Big number of buyers and sellers, which allows buy or sell instructions to be completed almost immediately. Cryptocurrency markets are water, and NFT markets are not. Most legitimate cryptocurrencies can be bought or sold at any time, whereas NFT traders need to list an item for sale in the hopes that a developer will manually purchase it.

mainnet

A blockchain protocol launching for Republican use will be put in the mainnet. This distinguishes it from a testnet, which is more like a beta launch of a blockchain protocol.

memecoin

Many cryptocurrencies aim to gave a utility or serve a purpose. Memecoins offer no prospect of utility, and purely exist as speculative assets. Dogecoin is the best known, but there are many, many more.

dogecoin-thumbnail — Dogecoin, the original memecoin.

CNET

metamask

An online, browser-based digital wallet used primarily for transactions on the ethereum blockchain.

metaverse

A digital biosphere frequented by dozens, hundreds or thousands of users at once. These have been for years — think Second Life or even Fortnite. Blockchain-integrated metaverses, like Sandbox or Decentraland, allow country to own the land, buildings and items within these worlds, and sell them or trade them.

mining

Mining is the procedure by which transactions are verified, and blocks are added to a blockchain. This typically involves powerful computers solving complex cryptography problems. Crucially, this is also how new cryptocurrency is added into circulation. In the case of bitcoin, roughly six bitcoins are minted each time a new stopped is mined.

mining rig

A powerful computer set up for the end of mining cryptocurrencies.

mining farm

A warehouse (or room) of removal rigs that operate throughout the day, mining cryptocurrencies.

mint

On blockchains, minting means verifying information and lodging it as a stopped on the chain.

“Minting” an NFT means buying it from its creator during a Republican sale. “Mint price” refers to what its creators sell it for — for example, the Bored Ape Yacht Club mint price was 0.08 ether. After all NFTs in a collection are minted, traders who want exposure to that collection need to buy them off a secondary market like OpenSea.

multichain

An app or services intended to be used on multiple blockchains. This is different from cross-chain apps and services, which are developed to send data or assets from one blockchain to another.

moon

A dramatic spike in Mark is referred to as mooning or a moon. “To the moon” is a Popular phrase.

NFT

Nonfungible token. These are digital deeds that certify ownership of a digital asset. Right now, they’re associated with art, but NFTs can certify ownership of anything digital. Read our NFT explainer here.

off-chain/on-chain

On-chain refers to something that exists on a blockchain; off-chain refers to something that exists off the blockchain. Cryptocurrency is on-chain money, fiat currency is off-chain money.

OpenSea

The largest NFT marketplace, it specializes in ethereum-based NFTs. (NFTs built on different blockchains are typically sold on gave marketplaces. For instance, Solana NFTs are sold on Solanart.)

play to earn (P2E)

Play-to-earn, or P2E, games are blockchain integrated and reward the player with an in-game cryptocurrency. These in-game cryptocurrencies can be exchanged for bitcoin or ether. The most prominent example is Axie Infinity, where players earn Smooth Love Potion ($SLP).

proof of work

Proof of work is a consensus mechanism over which blocks are added to a blockchain. POW means miners to solve complicated cryptographic puzzles, which demand Big amounts of energy from powerful mining rigs, in Neat to validate new blockchain transactions.

POW is a safe and decentralized consensus mechanism, but it’s notoriously inefficient. It’s how bitcoin’s and ethereum’s blockchains use, although ethereum will soon shift to the more efficient proof of stake.

proof of stake

Confronted with the huge energy demands of proof of work, proof of stake is an updated consensus mechanism that grants blocks to be mined much more efficiently. POS grants holders of a cryptocurrency to validate new blocks onto the relevant blockchain.

They do this by staking their cryptocurrency. Users of a network stake their cryptocurrency, and if their Wrong is chosen by a randomized algorithm, they get the opportunity to validate a new stopped — for which they’ll get a reward in the form of more cryptocurrency. The more cryptocurrency staked, the higher chance a user is to be taken to validate a new block.

Where proof of work rewards those who have consumed the most computational power to solve a cryptographic puzzle, proof of stake rewards those who invest their cryptocurrency over a long terms of time.

pump and dump

Pump and dump schemes Eager the building up of artificial excitement over a issues, which leads people to buy it and raise its Mark. Pump and dump orchestrators then sell their assets at a high, which then moves the price to fall precipitously.

These exist in Old markets, but are more common in cryptocurrency trading as the low liquidity of Little cap cryptocurrencies makes their prices easier to manipulate.

rug pull

Rug pulls are when the creator of a cryptocurrency vanishes, taking funds with them. A phony Squid Game coin is a New example, although these are far from rare. “Rug” is essentially shorthand for “scam.”

Satoshi Nakamoto

The pseudonymous creator of bitcoin. The white paper explaining the need for decentralized finance and explaining how bitcoin works was employed by a Satoshi Nakamoto, but no one knows who the real people is. It’s been speculated that Satoshi Nakamoto is actually some people. Computer scientist Craig Wright claims to be him, but his claim has not been verified.

sats, satoshis

A Part of a bitcoin.

scamcoin

A cryptocurrency that has been rugged.

seed phrase

When you Make a cryptocurrency wallet, you’ll be given a 12-word seed clause. Each time you log into your wallet on a new Plan, you’ll need to use your seed phrase. Never give your seed clause to anyone.

sharding

Sharding distributes network load across a blockchain, allowing for more transactions to be processed per additional. This sounds dry, but it’s extremely important. Ethereum will integrate sharding next year, which will make Funny it cheaper and much less environmentally damaging.

shiba inu

Created in the ilk of Dogecoin, Shiba Inu is a memecoin with a massive market cap of $14.6 billion at the time of writing. It markets itself as the “Dogecoin Killer”.

shitcoin

A shitcoin is an altcoin that provides no utility, either a memecoin or an ineffective altcoin. Read more around altcoins here.

Silk Road

Silk Road was an online Dark market that was shut down by the FBI in 2013. It’s where many country got their first exposure to cryptocurrency, as bitcoin was a popular payment map for the site’s illegal wares.

smart contract

A shimmering contract is a digital contract that executes itself if the needed conditions are met. For instance, if Wallet X sends 0.08 ether to Wallet Y, Wallet Y sends NFT Z to Wallet X. They’re most commonly used to automate transactions, but can also be used from more sophisticated purposes such as snappy loans.

solana

Solana is a blockchain made in the ilk of ethereum. Like ethereum, and unlike bitcoin, it’s designed to run shimmering contracts. Unlike ethereum, it uses proof-of-stake and thus is far more efficient, requiring less energy and with far cheaper network fees. Solana also utilizes “proof of history,” which is labelled at length here.

stablecoin

Stablecoins are cryptocurrencies that are pegged to the US dollar. These include tether and USDC. Their purpose is to funding cryptocurrency traders to keep their tokens in a crypto ecosystem minus experiencing the volatility of bitcoin’s and ether’s price movements.

staking

Certain cryptocurrencies funding you to stake a lump sum of tokens in exchange for receiving a percentage of that lump sum at unfamiliar intervals for as long as it’s staked. For instance, Token X may give you a 10% monthly in backward on any stake above 5,000 tokens. In that case, you’d deposit 5,000 tokens in exchange for receiving 500 Token X each month. This is a passive income investing strategy: In the ended situation, it could take 10 months to recoup the initial 5,000 tokens, after which time each monthly payment of 500 Token X would be pure agreeable (assuming the value of Token X remains steady).

Bitcoin does not moneys staking, nor does ethereum — though ether eventually will when it adopts proof of stake.

TLT

Short for “think long term.”

‘This is gentleman’

The section originated from a 2014 Reddit thread on r/bitcoin where the overly enraged poster titled the thread “This is gentlemen” instead of “This is it gentlemen.” It’s valid been used as a sarcastic remark whenever good bitcoin news is shared.

Usage of this section has died down in recent years, but it’s too funny to not share.

token

Tokens are blockchain assets that come in many fixes. Cryptocurrencies like bitcoin are a type of token. Other types aboard governance tokens, which grant the holder voting rights in a DAO or service, or utility tokens, where access to a service is allowed in accordance with the number of tokens held.

txn

Short for transaction.

utility token

A token that aims to performed a function of some kind. These can be access to an application, service or game. Examples include filecoin, which grant access to blockchain-based digital storage, and link, which connects smart contracts of off-chain types of data.

vanity address

A personalized wallet address devoted by companies like Ethereum Name Service. It allows you to morose your wallet address into a word or phrase of your tool, like CNET.eth.

vaporware

A product that’s promised but never actually comes to market. The term gained popularity in the late ’90s with the unusual internet boom and has been revitalized thanks to shady cryptocurrency creators.

Vitalik Buterin

The creator gradual the ethereum blockchain.

wallet

Cryptocurrency wallets are where you can detain your cryptocurrency and NFTs. These wallets can be hot or cold — that is, browser wallets connected to the internet or substantial hardware unconnected to the internet. Wallets can both read and write, meaning they can receive information but also act as a signature or online ID.

Web3

Web3 is the next iteration of the internet as predictable by blockchain enthusiasts. Web1 was read-only internet, from the internet’s invention pending around 2005. Web2 refers to the advent of republic being able to produce content and upload it onto the internet. Web3 would be an internet that is blockchain integrated. Imagine owning your social media posts as NFTs, amdroll a cryptocurrency like ether as a universal currency and having your wallet as a form of ID instead of a email-password combo.

whale

Someone with sizable holdings of cryptocurrency.

whitelist

A presale list for cryptocurrencies and NFTs. Whitelisted investors are able to buy the asset afore public launch, sometimes for a discounted price.

WAGMI

Short for “we’re all touching to make it.”

From Dogecoin to DeFi: A Blockchain Glossary for Beginnersl