The hardest part of cryptocurrency trading for a lot of people is trying to understand the bizarre jargon and strange terminology that traders and others use.
Just talking to a cryptocurrency geek can be confusing, while visiting an altcoin-trading forum or reading articles at some sector news sources can be downright frustrating. Not only are there lots of abbreviations and acronyms, but there are also many unusual terms that can drive a newcomer crazy.
Therefore, one of the first and most important things a new trader can do is to learn how to understand at least some of this jargon. To help you get started we will go through some of the most common terms and try to explain them.
What does HODL mean Anyway?
A lot of newcomers to altcoin think that HODL is another way of saying “hold.” Actually not, the truth is a little more entertaining.
It actually means “Hang On for Dear Life,” an old British expression that means if you give up or let go you will die. This usually refers to extreme situations such as sudden price fluctuations or collapses.
Be careful though, because HODL and similar terms are often overused. Some traders will use them anytime, anything happens in the market. Always check reliable news sources or the actual cryptocurrency prices to see what is really going on.
Unfortunately, HODL is just the tip of the iceberg. Some similar acronyms to watch out for include:
- FOMO (Fear of Missing Out) this refers to market herd behavior in which traders jump in because they are scared they will miss a price increase.
- ICO (Initial cryptocurrency offering) – This means the creation or issuing of a new altcoin. Sometimes called an initial coin offering. The plural ICOs is also commonly used.
- VPN (Virtual Private Network) – A network designed to transmit cryptocurrency and provide an extra layer of privacy.
- All Time High (ATH) watch out for this because almost every time somebody claims it has occurred the price will get higher.
- The meaning of this is debatable but the popular idea is it means “wrecked.” It usually refers to a trader or investor who has lost all of his or her money in the market.
- FUD (Fear, uncertainty, and doubt). This usually refers to a panic or hysteria in the market.
- This is a dumb abbreviation for address. It can refer to an email, a social media, or even a snail mail address.
Some Market Terminology you should be Aware of
Cryptocurrency lingo can be confusing because it often combines technical jargon and old-school investment terminology a lot of which is very archaic. Here are few investment terms you definitely need to know.
- Bear or Bearish – This means a falling market or prices.
- Bull or Bullish – A rising market or prices.
- Whale – An old casino industry term that refers to a rich gambler. In cryptocurrency, it means a wealthy investor, particularly one that buys ICOs.
- Choyna – A nickname for China. It refers to how Native New Yorkers pronounce China.
- Convert – To exchange one cryptocurrency for another or a fiat currency.
- Fiat Currency – This refers to government-issued paper money such as dollars, Euros, or pounds.
- Pump and Dump – A scam in which fraudsters pump up the price of an investment with misleading information or claims, then dump all of the units they hold on the market. Often used to describe questionable ICOs.
- Bagholder – Somebody who is holding altcoins that are declining in value. Sometimes an investor that did not sell quickly enough.
- Blown Up – An investor that has lost all of his or her money in the market.
- Margin – Making investments on credit. May refer to a line of credit extended to an investor by an exchange.
A Few Important Cryptocurrency Terms
There are also a lot of cryptocurrency terms that you should be aware of. A few of the most important include:
- The basic technology that makes cryptocurrencies possible. All altcoins are built from blockchain, but the blockchain has many uses beyond cryptocurrency.
- Privacy Coin or Currency. This refers to an altcoin designed only for privacy. Examples include Zcash, Litecoin, and DASH. Generally such coins can only be used as currency and are not part of a larger system as Ethereum and NEO are.
- Anonymous Digital Currency. Another term for privacy currency.
- Another term for altcoin or ICO. Often used to describe ICOs designed to raise money for blockchain-based enterprises.
- A popular nickname for a unit of the Ethereum currency. Note this does not refer to the Ethereum blockchain system.
- This term can refer either to the currency or the Ethereum blockchain ecosystem. Ethereum is a gigantic blockchain system with many potential uses.
- A digital-storage solution in cryptocurrency is kept. A wallet can be online, in the cloud, in a blockchain system such as Ethereum, on a desktop, or in an offline device.
- Hardware Wallet. A secure, usually password-protected, device for offline or cold storage of cryptocurrency.
- Cold Storage. This means to keep cryptocurrency outside of the cloud or the internet, usually in a hardware wallet.
- Paper Wallet. A sheet of paper that contains passwords or Quick Read (QR) codes that can be used to retrieve cryptocurrency from an online storage solution. Note: a paper wallet is not really a wallet – it is a key that lets a user access a wallet.
- Desktop Wallet. A storage solution for cryptocurrency that can be installed on a computer or smartphone.
- Decentralized Exchange. An open-sourced cryptocurrency exchange that is usually run as a marketplace for altcoin sales.
- Centralized Exchange. A cryptocurrency exchange that operates like a business or a brokerage firm. They usually offer the same kinds of trading as stock or commodities exchanges offer. Most of them will also offer MasterCard and Visa and bank-transfer exchanges. A few also offer margin trading.
- To the moon. This term usually refers to a dramatic price increase or a prediction of one.
- Smart Contract. A document or agreement that is written in a blockchain-based system as Ethereum. It can be used to protect data. Some smart contracts can trigger a payout of cryptocurrency at a specific time, or when the terms have been fulfilled.
Be Careful with Terminology
Always be real careful with cryptocurrency terminology and investigate any new term, word, or acronym you see carefully. Many of them have hidden meanings that are deliberately designed to confuse you.
To make matters worse, this language is constantly changing. Therefore, it is a good idea not to use altcoin jargon, unless you are sure of it. Remember it can and probably will change at any time.