Crypto Terminology
CRYPTO GLOSSARY
A
Accumulation
The process of building a position in an asset through gradual purchases, often before an expected increase in price.
Airdrop
A free distribution of tokens from a project to users – often as part of a marketing campaign or to reward loyal participants.
Air gapping
A security method based on physical isolation – for example, storing a wallet offline with no internet connection.
All Time High (ATH)
The highest price a crypto-asset has ever reached in its history.
Altcoin
Any crypto-asset other than Bitcoin – for example Ethereum, Solana, Litecoin and others.
AML (Anti-Money Laundering)
Legislative and regulatory measures designed to prevent money laundering.
Arbitration
Profiting from price differences between different exchanges – buying at a lower price on one exchange and selling at a higher price on another.
CRYPTO GLOSSARY
B
Bag holder
An investor who continues to hold an asset even after its price has fallen significantly.
Bear Market
A period in which prices decline for an extended time and market sentiment is negative.
Bear Trap
A bear trap occurs when the price temporarily falls, leading traders to expect further declines, before rising sharply.
Bearish
An expectation that prices will fall. The opposite of bullish.
Bid / Ask
Bid – the price at which a buyer is willing to buy.
Ask – the price at which a seller is willing to sell.
Bitcoin
The first crypto-asset, created in 2009 by Satoshi Nakamoto. It is often referred to as “digital gold”.
Bitcoin maximalist
A person who believes that only Bitcoin has value and that all other crypto-assets are unnecessary.
Block
A group of confirmed transactions recorded on a blockchain. Each new block is linked to the previous one.
Blockchain
A decentralised ledger of blocks that records transactions in a secure and transparent way.
Block reward
The reward miners receive for successfully adding a new block.
Block height
The number of blocks in a blockchain, starting from the first one (the genesis block).
Block size limit
The maximum amount of data that can be contained in a single block.
Bollinger bands
A technical indicator of volatility. It is used to identify potential entry and exit points in the market.
Bull Market
A market in which prices rise consistently, usually accompanied by strong demand and optimism.
Bull Trap
A bull trap occurs when the price temporarily rises and then falls sharply.
Bullish
An expectation that the price of an asset will increase.
CRYPTO GLOSSARY
C
Centralised
A system in which control is concentrated in a single institution – the opposite of decentralisation in crypto.
Consensus
Agreement among network participants that a particular transaction is valid.
Consolidation
A period in which the price moves sideways without a clear trend.
Correction
A short-term decline in price following a strong upward move. It is considered a normal part of the market cycle.
Cryptoart
Digital art that often exists as an NFT and can be traded.
Cryptocurrency
Crypto-asset, which uses cryptography for security and is usually decentralised.
Cryptoeconomics
The combination of economics and cryptography – a foundation of blockchain technology design.
Cryptography
The encoding of information for security purposes – a core technology behind crypto-assets.
CRYPTO GLOSSARY
D
Daily trading
Trading in which positions are opened and closed within the same day.
DAO (Decentralised Autonomous Organisation)
A decentralised organisation governed by code and community voting through tokens.
DApps (Decentralised Applications)
Applications that run on a blockchain without centralised control.
DCA (Dollar-Cost Averaging)
A strategy in which a fixed amount is invested at regular intervals regardless of price, with the aim of averaging the entry price.
Decentralised
A system without a central authority – control is distributed among participants.
Decentralised exchange (DEX)
An exchange that enables direct trading between users without an intermediary.
Decentralised finance (DeFi)
Financial services built on blockchain that operate without intermediaries such as banks. They enable lending, trading, saving and other activities through smart contracts and decentralised applications (DApps).
Derivatives
Financial instruments whose value is based on the movement of another asset, such as Bitcoin.
Distributed ledger
A distributed ledger stored across multiple devices, providing transparency and decentralisation.
Double-spend
An attempt to use the same crypto-asset twice – blockchain networks prevent this through verification.
Dumping
A large-scale sale of an asset that usually leads to a decline in its price.
DYOR (Do Your Own Research)
Advice to investors to conduct their own research before committing funds.
CRYPTO GLOSSARY
E
Entry / Exit points
The points at which a trader decides to enter or exit a position.
ERC-20
A standard for creating tokens on Ethereum that ensures compatibility between different smart contracts.
Ethereum Virtual Machine (EVM)
Technology that executes smart contracts on Ethereum and ensures their compatibility and security.
Etherscan
A website for tracking Ethereum transactions, wallets, smart contracts and other network data.
Exchange
An online platform that enables the buying, selling and exchange of crypto-assets – for example Binance, Coinbase and Altcoins.bg.
ETF (Exchange-Traded Fund)
An ETF (Exchange-Traded Fund) is an investment fund that trades on an exchange like an ordinary share. It can combine different assets – such as shares, bonds or even crypto-assets – into a diversified portfolio. When you buy a BTC ETF, you do not own Bitcoin directly; instead, you invest in a security designed to track the movement of Bitcoin’s price.
CRYPTO GLOSSARY
F
Fear and Greed Index
An indicator that reflects market sentiment – fear (low interest) or greed (high interest).
Fiat currency
A traditional currency issued by a government – for example the Bulgarian lev, US dollar or euro.
Fiat gateway
A service that enables users to buy and sell crypto-assets using fiat currencies.
Flippening
A hypothetical point at which an altcoin surpasses Bitcoin by market capitalisation.
FOMO
Fear Of Missing Out – anxiety about missing an opportunity. It can lead to rushed investment decisions.
Fork
A split in a blockchain that occurs when the protocol rules are changed.
FUD
Fear, Uncertainty and Doubt – the spreading of fear and uncertainty among investors.
FUDster
A person who deliberately spreads FUD in an attempt to influence the market.
Futures
Contracts to buy or sell an asset in the future at an agreed price – used for hedging or speculation.
CRYPTO GLOSSARY
G
Gas
A fee paid to perform transactions or execute smart contracts on networks such as Ethereum.
Genesis block
The first block in a blockchain network. It is hard-coded into the protocol and serves as the starting point of the blockchain.
CRYPTO GLOSSARY
H
Halving
A process in which the reward for mining new blocks is reduced by half. It occurs periodically on the Bitcoin network and is designed to limit new supply.
Hard fork
A blockchain split that creates a new, independent chain that is incompatible with the previous one. Example: Bitcoin and Bitcoin Cash.
Hardware wallet
A physical device designed to store the private keys used to access crypto-assets offline for greater security.
Hash function
A cryptographic algorithm that transforms input data into a unique fixed-length output (a hash). It is used to protect data on a blockchain.
Hedging
A strategy for reducing risk by taking opposing positions in the market.
HODL
A slang term for “hold”, originating from a misspelling of the word. It refers to a strategy of holding an asset despite volatility.
Hot wallet
A wallet connected to the internet – convenient for fast transactions, but exposed to additional online security risks.
HTF (High Time Frame)
A chart using a longer time period – for example daily, weekly or monthly.
CRYPTO GLOSSARY
I
ICO (Initial Coin Offering)
A fundraising method in which a project offers new tokens to the public before they are listed on an exchange.
IDO (Initial DEX Offering)
Similar to an ICO, but the tokens are offered through a decentralised exchange (DEX).
IEO (Initial Exchange Offering)
A token offering organised and conducted through a centralised exchange.
Inflation
A general increase in prices accompanied by a decrease in the purchasing power of a currency.
CRYPTO GLOSSARY
K
KYC (Know Your Customer)
A customer identification process required by regulation. It is mandatory for most exchanges.
CRYPTO GLOSSARY
L
Lambo
A humorous term used to express expectations of large profits – “When will I buy a Lambo?”
Leverage
The use of borrowed funds to open a larger position than your available capital would otherwise allow. It increases both potential gains and risk.
LFT (Low Time Frame)
Charts using short time periods – for example 1 to 15 minutes.
Limit order
An order in which you set a specific price at which you want to buy or sell. It is executed only if the market reaches that price.
Liquidity
A measure of how easily an asset can be bought or sold without significantly affecting its price.
Liquidation
The forced closing of a position when your funds are insufficient to maintain the trade – often associated with the use of leverage.
Long
A position based on the expectation that the price will rise. You buy with the intention of selling at a higher price.
CRYPTO GLOSSARY
M
Margin
The amount of capital you need to provide in order to open a leveraged position.
Market capitalization
The market value of a crypto-asset – calculated by multiplying the number of assets in circulation by the current price.
Memecoin
A crypto-asset created as a joke or internet meme – for example Dogecoin or Shiba Inu.
Mining
The process of creating new crypto-assets by solving complex mathematical problems. Miners validate transactions and receive rewards.
Mining difficulty
A measure of how difficult it is to mine a new block on the network. It adjusts automatically according to the network’s computing power.
Mining rig
A specialised computer system designed for mining crypto-assets.
Mooning
A strong increase in the price of an asset – often associated with the phrase “To the moon!”
CRYPTO GLOSSARY
N
NFT (Non-Fungible Token)
A unique token that cannot be replaced on a one-to-one basis by another identical token. It is commonly used for digital assets such as art, music and collectibles.
Node
A computer participating in a blockchain network that stores a copy of the blockchain and helps validate transactions.
CRYPTO GLOSSARY
O
OHLC
Short for Open, High, Low, Close – the opening, highest, lowest and closing price for a given period.
Open interest
The number of active contracts, such as futures, that have not yet been closed or settled.
CRYPTO GLOSSARY
P
Peer to peer
Trading directly between users without a central intermediary.
Permissioned ledger
A distributed ledger that can be accessed only by authorised participants.
POW (Proof of Work)
A mechanism for validating transactions by solving computational problems – used by Bitcoin.
POS (Proof of Stake)
A validation method in which participants stake their tokens to gain the right to validate blocks.
Private key
A secret key that gives you control over your funds. It must never be shared.
Public key
A public address at which you can receive crypto-assets. It can be shared.
Pump and dump
A form of market manipulation in which the price of an asset is artificially inflated before holdings are sold near the peak, often causing the price to collapse.
CRYPTO GLOSSARY
Q
Quantum-proof
A characteristic of blockchain technology or cryptography designed to remain resistant to future attacks from quantum computers – machines that could potentially break some cryptographic methods used today.
CRYPTO GLOSSARY
R
Rally
A rapid and significant increase in the price of an asset over a short period.
Ransomware
Malicious software that locks your computer or files and demands a ransom, often in crypto-assets.
Rekt
Slang for a trader who has lost a large amount of money or has been liquidated. It comes from “wrecked”.
Resistance
A price level at which selling pressure is expected, making it difficult for the price to move higher.
Return on Investment (ROI)
Return on Investment. A measure of how much you have gained relative to the amount invested.
ROE (Return on Equity)
Return on Equity – a measure of how efficiently your own capital is being used.
Rugpull
A fraudulent scheme in which developers abandon a project after taking investors’ funds.
CRYPTO GLOSSARY
S
Satoshi Nakamoto
The pseudonym of Bitcoin’s unknown creator. Their identity remains unknown to this day.
Scalability
The ability of a blockchain to process a large number of transactions without significantly compromising speed or security.
Scalping
A trading strategy in which a trader enters and exits the market within minutes, aiming to profit from small price movements.
Sell
The process of selling a crypto-asset.
Shilling
Excessive promotion of a token or project, often with questionable motives.
Short
A trading position based on the expectation that the price will fall. Profit is generated if the price declines.
Smart contract
A program that executes automatically when predefined conditions are met, without the need for an intermediary.
SPAC (Special Purpose Acquisition Company)
A company created for the purpose of acquiring another company. It can be used as a route for companies to become publicly listed.
Spot
Spot trading is the direct exchange of assets at the current market price. In this type of trading, crypto-assets are exchanged directly for one another without using fiat currency, and ownership is transferred once the transaction is completed.
Spread
The difference between the best buying price (bid) and the best selling price (ask).
Stablecoin
Crypto-assetwith a stable value – usually pegged to the US dollar or another asset, with the aim of reducing price volatility.
Staking
The process of locking tokens to help support a network and potentially receive rewards in return.
Stop loss
An automatic order designed to limit losses by triggering when the market moves against your position.
Support
A price level at which buyers are expected to enter the market and potentially stop a decline.
Swing trading
Trading in which positions are held for several days to several weeks.
CRYPTO GLOSSARY
T
TA (Technical Analysis)
The study of charts and market data in an attempt to identify potential future price movements.
TF (Time Frame)
The period of time represented by one candle on a chart – for example 1h, 4h or 1d.
Token
A digital unit of value. It may represent an asset, participation right, access to a service or other function.
Tokenomics
A combination of “token” and “economics” – the study of how the economic model of a token works.
Total Value Locked (TVL)
The total value of crypto-assets locked in a protocol – an important metric in DeFi.
Trading volume (Volume)
The amount of a crypto-asset traded over a given period. An indicator of market activity.
Transaction fee
A fee paid to execute a transaction on a blockchain.
Trustless
A system in which participants do not need to trust one another because security is provided by the protocol and cryptography.
Two-factor authentication (2FA)
An additional layer of login security that requires not only a password but also a second verification method, such as an SMS code or authentication app.
CRYPTO GLOSSARY
V
vAMM (Virtual Automated Market Maker)
A smart contract that automatically creates a market for trading and provides liquidity without relying on a traditional order book.
Volatility
A measure of how quickly and sharply the price of an asset changes. High volatility means larger price movements and higher risk.
CRYPTO GLOSSARY
W
Wallet
A digital wallet used to manage access to crypto-assets. Different types include online, hardware and mobile wallets.
Wallet address
A public address used to receive crypto-assets.
Wallet seed phrase
A list of words, usually 12 or 24, that can be used to recover a wallet. Store it securely.
Wash trading
A form of market manipulation in which the same person buys and sells to themselves to create artificial trading activity.
Weak hands
Investors who sell at the first sign of a downward move, often driven by fear.
Whale
A large investor who holds significant amounts of crypto-assets and may be able to influence the market.
Whale watching
Monitoring the activity of “whales” in an attempt to identify potentially significant market movements.
Whitepaper
A document describing a crypto project, including its technology, goals, tokenomics and other details. It is advisable to read it before making an investment decision.
CRYPTO GLOSSARY
Z
Zero-knowledge proof
A technology that allows someone to prove that a statement is true without revealing the underlying information.
Zk-SNARKs
A specific type of zero-knowledge proof used to provide privacy on blockchain networks – for example in projects such as Zcash.
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