"Web3: Key Terms to Know"
Altcoin is a term used to describe any cryptocurrency that is not Bitcoin. The term "altcoin" is short for "alternative coin,"
"The free distribution of cryptocurrency tokens to promote the adoption of a new project or build a community around it."
Bitcoin is a first cryptocurrency by market capitalization and is not controlled by any government or financial institution. It was created in 2009 by an unknown individual or group of individuals under the pseudonym Satoshi Nakamoto.
A blockchain is a decentralized, distributed ledger that is used to record transactions across a network of computers. It consists of a series of blocks that contain information about transactions, and each block is connected to the previous block in the chain, creating a chronological record of all the transactions that have taken place.
A sustained period of declining prices.
A prolonged period of rising prices.
Central Bank Digital Currency (CBDC)
A digital form of a government-issued fiat currency that is controlled by a central bank.
Short for “decentralized applications.” Autonomous apps that operate on distributed networks smart contracts, programs that automatically execute (say, a transaction) when specific conditions are met.
Short for “decentralized finance,” a collective term for all finance-based dapps created on public blockchains.
Fiat money is a type of currency that is issued and backed by a government of a country.
Short for “fear of missing out.” A popular acronym used to describe anxiety over missing out on a potential opportunity.
Short for “fear, uncertainty, doubt.” Commonly used in the crypto space as a label for spreading negative news or information.
Gas is the term used to describe the unit of measurement for the amount of processing required to execute a transaction or smart contract on the blockchain. Every action on a network, such as executing a contract or sending a transaction, requires a certain amount of gas to be consumed.
Halving, also known as halving event or halving day, refers to a predetermined event in the Bitcoin network where the block reward for mining new blocks is reduced by 50%. This occurs approximately every four years, or after every 210,000 blocks are mined, and serves as a mechanism to control the rate at which new Bitcoins are introduced into the network.
A term that originated in the Bitcoin community and has since become a meme in the broader cryptocurrency space. It is often used to refer to the strategy of holding onto one's cryptocurrency assets for a long period of time, rather than selling them.
Refers to the ease with which an asset can be bought or sold on a market without affecting the price of the asset. An asset is considered to have high liquidity when it can be bought or sold quickly and in large quantities without significantly affecting the price. An asset is considered to have low liquidity when it is difficult to buy or sell without affecting the price.
A measure of the value of a cryptocurrency. It is calculated by multiplying the total supply of coins by the current market price of a single unit of the coin. For example, if there are 10,000 units of a particular cryptocurrency in circulation, and the current market price of each unit is $100, the market cap of that cryptocurrency would be $1 million.
Short for “non-fungible tokens.” NFTs are digital tokens used to prove ownership of unique tangible and intangible items.
A code that proves a person’s ownership of a crypto wallet and allows the person to access the funds inside.
A transparent, distributed digital record of transactions that can be downloaded by anyone around the world.
A special type of computer program that automatically executes a transaction whenever a predetermined input is received.
A subset of cryptocurrencies. Tokens are units of value issued by platforms built on top of existing blockchains.
A word used to describe how much the price of a crypto token deviates from the average over a given period.
Hardware or software that stores a user’s private and public key pair and interfaces with a blockchain network.
A term used to describe investors who hold large amounts of specific cryptocurrencies.