Bitcoin and Cryptocurrency Vocab Cheat-Sheet for Beginners

For those who watched Blues Clues, here's your Handy-Dandy Notebook! (Cheat sheet)

Getting into the world of Bitcoin cryptocurrency ("crypto" for short) can be very confusing, especially considering many of the terms are crosses between technology, cryptography, stocks, and finances. Here's an easy cheat-sheet that will be updated over time that you can always reference back to until you can use the terms in everyday sentences!

General:

  • Cryptocurrency: The Magical Internet Money as a whole! Cryptographically structured with blockchain technology.
  • Cryptography: The art of encryption.
  • Blockchain: The technology of a digital ledger that records transactions. It is transparent and unchangeable.
  • Decentralized: The idea that instead of having a central bank or system that one group controls, computers all around the world build and confirm a public blockchain.
  • Altcoin: (Currently) Any cryptocurrency that is not Bitcoin.
  • Wallet: Like a physical wallet, this is the place where your cryptocurrency is stored! Note: Unlike physical wallets, crypto wallets can only hold the currency they are designed for. If you send coins the wallet can not take, they are gone forever. Here is my blog post on all the types of wallets you can use.
  • Public Key / Wallet Address: This is a string of numbers and letters (case sensitive!) that is used to send coins to that wallet. For example, some of my public keys are listed below so readers like yourself can send tips.
  • Private Key: This is the secret key that is used to access and send your funds. Do not give this to anybody! Anyone who has this key can take all your crypto in a flash. Furthermore, private keys can not be recovered. If you lose your private key, you lose all access to the coins in that wallet.
  • Hot Storage: Any storage/wallet that connected to the internet. Like a checking account, they are fast and convenient but also most vulnerable to attacks.
  • Cold Storage: The type of storage/wallet that is not connected to the internet. A little more complicated, but if done correctly then the risks are minimized.
  • 2FA or Two-Factor Authentication: A highly-recommended security feature that has you confirm from another device that it's you trying to sign in! The confirmation numbers change over time to stop anyone that's not holding your device from signing in. I'm writing a post on good security habits to make that I will link when done.
  • Exchange: Where crypto is traded, always traded against some other currency like Dollars, Euro, Bitcoin, etc.
  • Coin: Often interchanged with tokens, the technical definition is a cryptocurrency that stands on its own block chain.
  • Token: Contrary to coins, these are built on another block chain platform like Ethereum, Bitshares, or Waves.

Tip: Always double- or triple-check the addresses you are sending to and from! Once crypto is sent, it can not be retrieved unless the wallet owner sends it to you in a brand new transaction.

Trading:

  • Market Order: Buying or selling an amount of your crypto at the current market price.
  • Limit Buy/Sell: Setting a price threshold for a specified amount of crypto. Remember this can be compared to fiat or compared to another coin. Think of it as "when the price gets down to 0.015, buy 20 coins" or "when the price goes up to .022, sell 2 coins".
  • Correction: A change in the market opposite of a big change. Most corrections we're seeing are a sudden sell-off and price drop after the coin goes up very quickly.
  • Bull, Bullish: The expectation that value of something will go up, like a bull's horns when attacking.
  • Bear, Bearish: The expectation that value of something will go down, like a bear's paws when attacking.

One thing about trading that can be confusing to many is using cryptocurrency as a currency (I wish someone explained it to me like that). For example, in a BTC/USD market, you're buying or selling Bitcoin with USD as the currency. Since USD and EUR have different values, when you compare in a BTC/EUR market, you will see different prices.
Many markets use Bitcoin as a currency. So ETH/BTC, Ethereum to Bitcoin, might have prices like ".05123", which is how many Bitcoins you need to buy one Ethereum. So sometimes you may see a xxx/BTC market having a "-2%" change over the last 24 hours even though both are going up! This is because it's going up 2% less than Bitcoin.

Mining:

  • Mining: Confirming transactions on the blockchain and solving encryptions for new blocks.
  • Hashes: A unit of measure for how many cycles of encryption a computer is doing per second. Note: hashrates for different languages (called protocols) can not be compared. Example: one machine may get 30 Mega-hashes (Mh/s) on ethash and 730 hases/s on Cryptonight.
  • Use whattomine.com to get some info on hash rates for different GPUs.
  • GPU: Graphics Processing Unit, or a computer's video card. These mine crypto faster than CPUs.
  • ASIC: Application-Specific Integrated Circuit... or a machine built specifically to mine crypto.
  • Cryptonight, SHA-256, Ethash: These are some of the protocols ("languages" from above) that different currencies are written in.

Thanks for reading! I hope this helps you get some groundwork on this new field. If this has saved you some time or confusion or just made you laugh and you're inclined to donate, the addresses are below!

Doge: DUHhAWxpzFQj9mT5TtEETUivQ7Cf5PQpci

BTC: 16BQtRdNp4fsFViHVQdjHpaBzcgPHpA4xw

ETH: 0xFF3CDF7B7c1dBBE238161Def57AaCD72B1000BB3

LTC: LbtAtRFagVZe2A4ynBpKiTEL4wAToMD9eY

Coinbase referral link: Get $10 in free Bitcoin when you use this link!


This is not financial advice- All information provided is for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. All information is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. All information is general in nature and is not specific to you the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this website without undertaking independent due diligence and consultation with a professional financial advisor. You understand that you are using any and all information available on or through this website at your own risk. Furthermore, the trading of Bitcoin and alternative cryptocurrencies have potential risks involved. Trading may not be suitable for all people. Anyone wishing to invest should seek his or her own independent financial or professional advice.

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