Glossary

Enrich your dictionary with important cryptocurrency terms.


1 SATOSHI (0.00000001 BTC)

It is named the bitcoin cent - it has 8 decimal places and 1 BTC = 100,000,000 satoshi (named after Bitcoin's founder, Satoshi Nakamoto).


ALL TIME HIGH / ATH

This represents the highest value that the cryptocurrency has ever reached. An example is Bitcoin, which was valued at USD 19,500 on December 17, 2017, the highest value since its inception. Today, its ATH is USD 64,600.


ALTCOIN

It is named the bitcoin cent - it has 8 decimal places and 1 BTC = 100,000,000 satoshi (named after Bitcoin's founder, Satoshi Nakamoto).


BEARISH

A bear market is a pessimistic mood, which expects the price of cryptocurrency or the whole market to fall. During a bear market, cryptocurrency values decrease, e.g. in 2014 - 2015, the price of Bitcoin decreased for almost two years. The model for this trend is a bear, characterized by a bowed head and claws symbolizing the fall in prices.


BITCOIN

The first and most famous cryptocurrency. Created in 2009 by Satoshi Nakamoto, whose identity is still unknown. It could be the pseudonym for a person or group. Bitcoin is considered digital gold and a store of value.


BITCOIN CASH (BCH)

The term Bitcoin CASH defines a cryptocurrency other than Bitcoin. The Bitcoin currency was separated by forks on 1 August 2017, i.e. one database of transactions was divided into two branches. The history of transactions has been retained. So if Bitcoin was credited to our address on the original network, we had the same number of BCHs at the same address on the network.


BLOCK (BLOK)

Is a data package with stored transactions. Data is stored in the block, and is permanently defined in the blockchain. A block saved this way cannot be edited in the future.


BLOCK EXPLORER

An online tool in which we can search for transactions. By entering the transaction ID, it can be checked what has been moved from one address to another within a given transaction.


BLOCK REWARD

A reward for people extracting cryptocurrency in an effort to complete a block.


BLOCKCHAIN

A decentralized database in which all transactions of a given cryptocurrency are stored. The term decentralized means that the database is not located in any central location. So theoretically, a copy of the entire database can be stored for all users of a given cryptocurrency. Users have information about each movement, and each transaction stored with them.


BTC

This is an abbreviation for the cryptocurrency Bitcoin. On some exchanges, the cryptocurrency may be traded under another abbreviation. For example, the KRAKEN.COM exchange uses the designation XBT. The number of Bitcoins is limited - only 21 million can be extracted. The last Bitcoin is to be mined in 2140.


BULLISH

A bull market is an optimistic mood that expects a given cryptocurrency, or the entire cryptocurrency market, to go up in price, given the value of the US dollar. The model for this trend is a bull, whose horns symbolize a graph of rising prices.


COINMARKETCAP

The most popular website that collates information from the world of cryptocurrencies. Millions visit this domain every morning to find out how their cryptocurrencies have gained in value overnight.


COLD STORAGE

Indicates the storage of cryptocurrencies offline, e.g. to a paper or hardware wallet that is not connected to the Internet.


CORRECTION

An ATH (all time high) is typically followed by a correction, i.e. a fall in price.


CRYPTOCURRENCY

Digital decentralized currency. There are currently over 10,000 cryptocurrencies, and dozens to hundreds of new ones are added every week. For a ranking of the values of most cryptocurrencies, visit: "https://coinmarketcap.com/".


CRYPTOCURRENCY ADDRESS

This is the address of your wallet or stock exchange account to which you can send a cryptocurrency. Different cryptocurrencies usually have different addresses, i.e. you can only send Bitcoins to one address, and LTC to an LTC address.


CRYPTOCURRENCY ATM

A bitcoin ATM is a device in which you can exchange classic money for cryptocurrencies or vice versa. Cryptocurrency ATMs usually have higher fees than stock market fees.


DECENTRALIZATION

The term decentralized means not located in one place. In theory it can be found everywhere, e.g. a decentralized database can be stored for all system users. Decentralized systems are more resistant to attacks because they don't "run" from one place, but on hundreds or thousands of servers. Another advantage of a decentralized service over centralized services is that they cannot be so easily "turned off" by the government.


ERC-20

This is a type of cryptocurrency that was created on the Ethereum platform. Because they are both built on the same platform, adhere to the same standards, and use similar centralized apps, they can be easily interchanged. All ERC-20 tokens can be sent to the same ether wallet. But you need to be careful and send ERC-20 tokens only to your own installed wallet, not to your wallet on the stock exchange. The exchange may not support all cryptocurrencies, in which case you would lose cryptocurrencies irreversibly.


ETHEREUM (ETH)

Ethereum is currently the second most valuable cryptocurrency on the market. It allows you to program smart contracts on its network, something like intelligent agreements that are automatically evaluated and executed. Additional ERC20 tokens can be created on the network. Several cryptocurrencies offer similar functionality, but Ethereum is still the largest.


EXCHANGE / CRYPTO-EXCHANGE

A cryptocurrency exchange is a website or mobile app where individual cryptocurrencies can be exchanged for money or other cryptocurrency. Some exchanges also accept deposits and withdrawals in cash. But most exchanges accept deposits and withdrawals exclusively as cryptocurrencies.


FIAT / FIAT MONEY

The official currency of a country without physical commodity coverage, e.g. gold. Fiat currency is the official currency because the government has legally declared it the official currency. Typical examples of fiat currencies are the US dollar, the euro, the Czech koruna, etc.


FOMO (fear of missing out)

A fear that we're missing something. In the crypto world, it's a feeling when we see a high percentage increase in cryptocurrency, and we're afraid we've missed the boat. Internally, we feel that we need to invest in the cryptocurrency quickly, otherwise we will lose a large potential profit. The opposite of FOMO is JOMO (joy of missing out).


FORK

This is the division of a blockchain into two blockchains, e.g. on August 1, 2017, the Bitcoin blockchain was split and a second blockchain was created – Bitcoin Cash. Transactions before the fork were identical. If you had a certain number of Bitcoins at your address before the fork, then after the fork you had the same number of Bitcoins at the same address in both networks, in the case of the second network it was then not Bitcoin, but rather Bitcoin Cash. Another big fork, Bitcoin Gold, followed in October 2017, and was followed by many more.


FUD (fear, uncerainty, doubt)

Fear, uncertainty and doubt. If you have a cryptocurrency that starts to decline, for example a one day drop of 20%, you start to wonder if buying it was really such a good idea, and if it wouldn't be better to quickly get rid of it - what if it drops even more? You feel very unsure, and wonder if your investment has a future. You begin to have doubts about the cryptocurrency - what if it's a scam and the bubble soon bursts? That's a fact. Fear, uncertainty and doubt - a feeling that forces you to sell cryptocurrency, even at great loss.


HALVING

Reduce of the reward for block extraction for miners of cryptocurrency. In the case of Bitcoin, after the extraction of every 210,000 blocks, the number of Bitcoins that the miners receive as a reward will be reduced.


HARD FORK

A change in blockchain, e.g. new blocks have different parameters than the original blocks (increasing the block from one megabyte to eight megabytes).


HARDWARE WALLET

A way to store Bitcoins and other cryptocurrencies. When working with the wallet, you connect to a computer via USB and disconnect when finished.


HASH

A computer function that encrypts data - resulting in a combination of letters and numbers of a certain length.


HASH RATE

The power of a cryptocurrency extractor as the number of hashes per second.


HODL (hold on for dear life)

The typo from the English word HOLD has become popular - it means long-term holding, i.e. if someone HODLS cryptocurrency, they want to own it in the long run. So they do not plan to trade it in the near future because they believe in long-term growth. In English, the words HOLD/HODL, and HOLDING /HODLING sound very similar, and perhaps that's why this funny typo has become a common concept.


KYC

Abbreviation for the rule based on which the identity of the user is verified on the stock exchange. If you register on any exchange, the exchange will require the verification of personal data, e.g. a photo of your passport, driver's license, or ID card.


LITECOIN (LTC)

This is an old fork from 2011. When Bitcoin is sometimes referred to as digital gold, Litecoin is referred to as digital silver. The maximum number of LTCs is 84 million, which is four-times the maximum number of Bitcoins. LTC transaction fees are much lower than Bitcoin fees. For this reason, many people prefer it to using Bitcoin.


MARKET CAP

The total market value of a given cryptocurrency can be found on the CoinMarketCap website.


MAXIMUM SUPPLY

This is the maximum number of parts of a given cryptocurrency that should exist. The volumes of some cryptocurrencies are in the thousands, others in the millions, and some in the billions. For example, the maximum number of Bitcoins is 21 million, while for XRP it is 100 billion, i.e. 5,000 times more.


METAVERSE

A virtual digital 3D space inhabited by avatars, in which cryptocurrencies, blockchain, NFT, and smart contracts play an important role.


MINING

The process of solving cryptographic calculations in order to extract coins of a given cryptocurrency. If a miner solves the calculation, he/she will receive a reward in the value of a certain number of parts of the cryptocurrency.


MONERO (XMR)

XMR is currently the largest anonymous cryptocurrency. Transactions in the Monero network are designed to be untraceable.


NFT

A non-fungible-token can be any asset, art, or something unique. NFTs are a unique asset in the digital world.


PAPER WALLET

The paper wallet is printed on paper - the address of the wallet is given, also with its QR code. You can send Bitcoins or other cryptocurrencies to this address, depending on the paper wallet. A paper wallet is appropriate if you want to receive payments there. When you want to send money from a paper wallet, from the paper wallet you must import a private key from another wallet to work with it.


PEER TO PEER

A connection between two or more computers that share information, data, or files with each other.


PoS (Proof-of-Stake)

In this case, the cryptocurrency is not mined, but rather those who are already owners and holders of cryptocurrency are valued. In the PoS system, they receive something like a dividend, e.g. NEO and GAS. A client who owns the cryptocurrency NEO receives a small portion of the cryptocurrency GAS every day.


PoW (Proof-of-Work)

Cryptocurrency is mined by miners who receive a reward for their work. Miners solve cryptographic calculations to extract the cryptocurrency. The first to solve the task will receive a number of items of the cryptocurrency as a mining reward. The PoW system uses e.g. the cryptocurrency Bitcoin. Proof-of-Work can be considered more energy intensive than Proof-of-Stake.


PRIVATE KEY

A combination of letters and numbers that allows you to access cryptocurrencies in your wallet. The private key symbolizes the password for internet banking, so it should remain your secret.


RIPPLE (XRP)

A controversial cryptocurrency that is not decentralized. Many people do not even consider this cryptocurrency to be a cryptocurrency. It recorded huge growth in 2017, much larger than BTC itself, and was one of the TOP fastest growing cryptocurrencies in 2017. There are 35 billion coins on the market. But actually there are up to 100 billion - most (up to 62%) owned by a private company that founded the cryptocurrency.


ROADMAP

A graph with significant milestones of the cryptocurrency, together with its future plans, e.g. planned rebranding, a new version of the wallet, or the start of production of own payment cards. It often includes past events. Before investing in a cryptocurrency, it is advisable to familiarize yourself with the detailed information that a ROADMAP provides, and is listed on the official website of each cryptocurrency.


SATOSHI NAKAMOTO

Bitcoin was created in 2009 by a man who used the pseudonym Satoshi Nakamoto. It remains uncertain whether it was really a person or rather a group of people. Bitcoin's smallest unit, the Satoshi, represents one 100-millionth of Bitcoin.


SMART CONTRACT

An automatic contract between two parties who have agreed on a transaction carried out via cryptocurrencies. This will be performed automatically after the fulfillment of a specified condition, or the execution of an event defined in the contract.


SOFTWARE WALLET

Software downloaded from the Internet - e.g. Exodus.


STAKING

Cryptocurrency staking is one of the possibilities for achieving a passive cryptocurrency income. The term originated after a new consensus mechanism called Proof of Stake was established. As a term used nowadays, staking represents any locking of a certain number of tokens or coins. The user gains the right to validate the Proof of Stake consensus transactions or other benefits for them.


TOKEN

A cryptocurrency that is based on another cryptocurrency, such as the ETH, ADA, NEO platforms, etc. There are currently hundreds of such cryptocurrencies that do not have their own blockchain, but function on the blockchain of another cryptocurrency.


TREZOR

Trezor is a popular hardware wallet that is produced in the Czech Republic.


VESTING

Vesting is a gradual release of locked tokens. This procedure is usually associated with a pre-sale phase when investors obtain a certain number of tokens at a discounted price. Release rules vary; the release may be single or phased at specific intervals.


VOLATILITY

This represents the rate of change in the value of a cryptocurrency or stock price. In the cryptocurrency market, volatility is much higher - it is common for a cryptocurrency to increase or decrease by several tens of percent.


WALLET

Each wallet has its own address (like a bank account number) to which you can send the cryptocurrency and save it to your wallet. Having cryptocurrencies stored in your wallet is usually safer than having them stored on the stock exchange.