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The world of cryptocurrency and crypto trading has its own vocabulary. Whether you are just starting out or already have some experience, the glossary below offers a clear explanation of the most used terms. The concepts are arranged alphabetically.

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A

A security tool that makes it impossible for hackers to hack your account by cracking your password alone. A 2FA can consist of sending a confirmation email to your email address or requesting a sent SMS code.
An interface between two binary program modules. Often one program is from the database and the other is used by the user.
All virtual coins that now exist alongside Bitcoin.
Part of remotely controllable software that requests information on demand, sends it and responds to it.
Hardware processors that can only perform one task, but can do it much faster than the normal CPUs you also find in your computer.
The highest price a coin has reached so far.

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B

Means that a transaction has been verified by the network and can (almost) no longer be undone. Transactions receive a confirmation when they are included in a block and for each subsequent block. One confirmation is fairly safe for everyday transactions with low amounts. For higher amounts (e.g. € 1,000 and above) you can wait for 6 or more confirmations. With each confirmation the risk of reversal decreases exponentially.
A general unit used to denote a subunit of a Bitcoin. 1,000,000 bits equals 1 Bitcoin (BTC or ₿). This unit is usually easier for determining the price of tips, goods and services. Colloquially this is also called Satoshi.
The first and most popular cryptocurrency, based on decentralized ledger storage in the blockchain.
A Bitcoin address is comparable to a home or email address. It is the only thing you need to give others to enable them to send you payments via Bitcoin. An important difference, however, is that each address should be used only once for one transaction.
A block is a collection of transactions that need to be confirmed and a link in the block chain. On average, every 10 minutes a block is added to the block chain, and thereby a batch of transactions is confirmed, through mining.
The number of coins you receive if your computer or miner can decipher the next block.
The maximum number of transactions that can be stored in one block. The larger the block size, the more difficult it is to decipher a block and the more computing power is needed for it.
A public archive of all Bitcoin transactions, in chronological order. The block chain is shared by all Bitcoin users. It is used to verify the durability of Bitcoin transactions and to prevent double spending.
The time needed to decipher a new block. This time is kept constant by the Difficulty Adjustment Algorithm (DAA). For Bitcoin the blocktime is currently 10 minutes. This means that every ten minutes a fixed number of Bitcoins are created.
When the price suddenly breaks through above the trend line, the expected price range predicted by the various indicators.
BTC is a general unit used to denote one Bitcoin (₿).
Coin burning is the process by which coins are permanently taken out of circulation, thereby reducing the total supply. This is usually done to positively influence the price through lower supply.

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C

A network that centrally registers, confirms and processes the authentication of a transaction on the blockchain. Often by a group, government or company.
The public description of the program that exactly reveals the systematics of the digital ledger through the applications linked to it. It is the digital ledger factory that equals smart contracts.
Representation of a digital asset recorded and built up in the blockchain.
When a majority of the participants in a specific currency reach agreement on the course to follow with regard to the validation of transactions.
A virtual coin or token.
The branch of mathematics that provides mathematically proven security. Shops and banks use cryptography to secure their transactions over the internet. In the case of Bitcoin, cryptography is used to ensure that no one can spend money from someone else’s wallet and to prevent anyone from affecting the integrity of the block chain.

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D

The more miners start mining a particular virtual coin, the greater the total computing power and the faster blocks are deciphered in principle. To balance this, an algorithm is programmed into a virtual coin that automatically increases the difficulty of the encryption to be solved when more computing power is applied to it. This balance is important to keep the blocktime constant.
A decentralized self-governing body that operates fully autonomously and can provide itself with funds for maintaining the network. An example of this is the virtual coin DASH.
The concept of a shared network of separate computers or supercomputers (nodes) that can and may process a transaction in the blockchain. Not centralized in one place. In addition, computers in the chain can drop out without this affecting the ledger of the chain.
A cryptographic signature is a mathematical mechanism that lets someone prove they are the owner. In the case of Bitcoin, a Bitcoin wallet and the associated secret key(s) are linked to each other with mathematical tricks. As soon as the Bitcoin software signs a transaction with the appropriate secret key, the entire network can see that the signature matches the spent Bitcoins.
Double spending is a form of fraud in which someone tries to spend their Bitcoins in two or more places at the same time, before the system notices that the Bitcoin has already been spent. The way Bitcoin mining and the block chain work ensures that only one of the two transactions can go through.

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F

Fiduciary money. Money that derives its value not from the material it is made of but from the trust that goods and services can be bought with it. In the context of virtual coins, the term FIAT is used to denote coins such as the Dollar, Yen and Euro.
Many people buy a coin when they see that the price is rising quickly. They don’t want to stay on the sidelines while the price keeps rising.
An upgrade of the algorithm of a virtual coin causes a fork. There are two possibilities: a soft fork is simply an update of the software of the nodes for which no new blockchain has to be created; a hard fork is a split of a virtual coin into an old and a new blockchain, whereby both blockchains continue to exist.
Term used to describe news reports about a virtual coin that are considered unfounded panic-mongering, intended to manipulate the price.
A financial contract between two parties who commit to trade a certain quantity of a product or financial instrument at a certain time at a predetermined price. So they agree on a transaction in the future.

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G

A secret key (Private Key) is a secret piece of data that lets you prove that the Bitcoins associated with a certain Bitcoin address are yours, via a cryptographic signature. Secret keys should never be revealed, because they let you spend Bitcoins from the wallets linked to the keys.
The place on the internet where the open-source code of a cryptocurrency is placed and where developers can flag errors and adjust the code.
The most used application for a 2FA security with which you can link an account to a device such as your iPad or smartphone.

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H

When the code of a coin is adjusted, it can sometimes happen that the new code is not compatible with the current wallets and a new wallet is needed. This creates a new blockchain alongside the old one. In a hard fork the coin is split into two new blockchains. The main computers / nodes must give permission for this and often need an update.
The hashrate is the measure of the total computing power of the Bitcoin network. If the network reaches a hashrate of 10 TH/s, that means it can perform 10 trillion calculations per second.
Misspelling of HOLD: hold on to your coins and don’t sell them, even if the market turns against you.

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I

Before a virtual coin is available on the market, an ICO can be launched in which you as an investor get the chance to buy the coin before it comes onto the free market, often at a more favorable rate. Note: there are many scams around ICOs.

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K

A legislative procedure for the prevention of money laundering, among other things. Exchanges must be able to demonstrate who the customers are for whom they execute orders. Through a verification process you are asked to provide personal details, such as a copy of your passport or a recent photo. Depending on the website, verification takes between 15 minutes and a few months.

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M

The total number of coins in circulation × the value of the coin in FIAT (for example US dollar or Euro).
A predetermined number of coins you keep in your wallet to earn a profit distribution. Only a number of cryptocurrencies have a masternode system, including DASH and VIVO.
Bitcoin mining is having mathematical calculations performed by a computer to have the Bitcoin network confirm transactions and safeguard security. As a reward for the work done, Bitcoin miners receive the commission included in some transactions plus newly mined Bitcoins.
The difficulty for deciphering a block in the blockchain. The higher this number, the longer it takes to find a new block (the blocktime).
A group of miners who work together on deciphering the encryption of the next block. As soon as the pool has found a block, everyone in the group gets a percentage of the total block reward.
Term used to indicate that a coin is rising extremely fast. Virtual coins can rise to such high price levels that people speak of “mooning”.

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N

A node on the network of a virtual coin in the form of a hardware computer that is connected to the internet and on which appropriate software runs that is compatible with the algorithm of that virtual coin.

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O

The code of a cryptocurrency is always on the internet and can be read and adjusted by anyone.

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P

When the price of a small virtual coin starts to rise sharply quickly and shortly afterwards falls very quickly. Usually a result of price manipulation by whales or pump-and-dump groups.
A peer-to-peer network is a system in which individual systems communicate directly with each other, rather than through a central server. In the case of Bitcoin there is no bank or other third party needed.
A paper document on which the private key is written that gives you access to a Bitcoin or altcoin address.
A Bitcoin wallet is the equivalent of a physical wallet on the Bitcoin network. This wallet consists of your secret keys with which you can spend the Bitcoins assigned to your wallet in the block chain.
The unique code that gives you access to a Bitcoin or altcoin address and lets you execute transactions on it. If you lose the private key, you no longer have access to that address in any way and the coins are considered lost.
You receive extra coins by collecting and holding coins in your wallet.
An algorithm that secures the cryptocurrency blockchain with computing power and awards a reward to the miner who deciphers a new block.
When the price of a virtual coin rises sharply after a period of consolidation.

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R

After a virtual coin has been split by a hard fork, it is in principle possible to copy a transaction on one blockchain and also execute it on the other blockchain. A replay protection code ensures that transactions on the first blockchain are no longer valid on the other blockchain.
A plan or strategy to achieve certain goals.

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S

The smallest unit of a Bitcoin: 1 one hundred millionth of a bitcoin (0.00000001 BTC). The term was dedicated to the anonymous developer of Bitcoin, Satoshi Nakamoto.
The name for an online transfer with the payment application of your bank.
A protocol in which vital information from each transaction in the blockchain is stored in parallel instead of in the blockchain itself. In this way the size of the blockchain file becomes smaller.
A program that can be added to some virtual coins. The code decides whether conditions have been met to send the transaction to the destination or to refund it to the executor. Because this program is also stored in the blockchain, the code is immutable.
An upgrade of the algorithm of a virtual coin that is backwards compatible. As a result, the nodes only need to update the software to be compatible with the new code.
By keeping your coins in your wallet, you are rewarded with extra coins. Only a number of coins have Proof of Stake. These rewards are paid out to ensure that less trading takes place.

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T

The virtual coin of the company Tether that is backed by the US dollar. Every tether is always 1-to-1 linked to the dollar, by using a 100% physical cash reserve in cash dollar. This way the price of 1 tether remains constantly equal to 1 US Dollar. Most exchanges use a cash reserve in tether instead of real dollar.
A digital representation of a certain value.

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V

The degree of movement of the price of a virtual coin.
The number of trading actions per minute, hour or day of a cryptocurrency pair. The larger the volume, the greater the interest in trading this coin.

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W

A publicly visible address on the blockchain that you have access to with a unique private key.
Someone who owns so many coins of a coin that he or she can influence the price.
A document that describes how a technology solves a specific problem. White papers are used to provide the investor with objective, relevant information that can be used to make a decision.