Technology-wise, we live in a fascinating time, yet there is more to come. Digital technology has grown in leaps and bounds. We have seen more change in the last 10 years than in the preceding 20 years. Web 3, as it is being called, comes with its own terms and lingo widely used in circles. If you want to know the meanings of words like blockchain, CEX, Dapps and HODL you’re in the right place.
Airdrop
Where coin/token developers distribute their assets directly to users’ wallets to create awareness and fanfare.
Altcoin
In the early days, this was short for Alternative to Bitcoin, but current usage refers to coins with small market capitalisation.
Ape
Adopted from the slang phrase “to go ape”, meaning to go crazy, Ape is a person who aggressively buys or promotes crypto or NFT but doesn’t display deep knowledge.
ATH- All-Time High
The highest historical price of an asset
ATL- All-Time Low
The lowest historical price of an asset
Bitcoin
The first decentralised digital currency was built on its own blockchain. It was launched in 2009.
Block
a group of transaction data. Every block contains information about the previous block, thus, chaining them together.
Blockchain
a publicly-accessible digital ledger of blocks used to store and transfer information without the need for a central authority. Blockchains are the core technology on which cryptocurrency protocols like Bitcoin and Ethereum are built.
Bridge
A method to connect two or more blockchains and make them compatible. Allowing transfers between blockchains.
Bull market
Adopted from traditional finance, this term refers to a market with sustained price increases.
Burn
Burning in web3 terms is the process of removing a digital asset (crypto or token) from a blockchain. Usually done by moving it to a cold (offline) wallet. Other digital assets, such as NFTs, can be burned via the same process.
CBDC – Central Bank Digital Currency
A digital asset that is sometimes blockchain-based is issued by a central authority such as a Central Bank.
Centralised
Any community structure where control rests with a few or central authorities.
CEX- Centralised Exchange
Any exchange managed by a centralised business or entity such as Coinbase or Kraken.
Coin
A cryptocurrency or digital asset that is built on its own blockchain such as Bitcoin or Ethereum
Cold Wallet
Any offline method of storing digital assets. This may be a flash drive or even a paper printout. Cold because they are not active on the blockchain and are considered the most secure method.
Cryptocurrency
a digital asset on a decentralised blockchain as opposed to centralized banks or governments.
DAO- Decentralized Autonomous Organisation
Any open-source organisation that is run by its user-members.
Dapp- Decentralised Application
An open-source application that is built on a blockchain. Unlike the apps we are used to, which run through a central authority, dApps do not need a central authority.
Decentralised
A system or organisation that operates without the control of a centre of power or authority
DeFi- Decentralised Finance
Decentralised finance is largely peer-to-peer (P2P) finance
DEX- Decentralized Exchange
A blockchain-based peer-to-peer exchange that is run by its users instead of a central authority. Smart contracts are used to govern the exchange.
DYOR- Do Your Own Research
Usually used as a disclaimer and a reminder to research information.
Ethereum
A popular blockchain that allows users to create their own decentralised applications and self-executing smart contracts
Fiat
A traditional currency issued by a central bank or monetary authority that has legal tender status.
FOMO- Fear Of Missing Out
The tendency to do something because it is popular is based on the fear of being left behind.
Fork
A change in the way a blockchain works alters its protocol. A minor change is referred to as a soft fork, while a significant change is referred to as a hard fork.
Gas
Fees that are paid for transacting or executing smart contracts on the Ethereum blockchain.
Hashing
Hashing is the process of converting a long string of characters into a shorter string that is easier to identify. This is how complicated entries are stored and managed on a blockchain.
Hash rate
This is the rate at which hashing is done. So when nodes validate blockchain transactions, they are hashing, and the hash rate is how fast they do it.
HODL
A misspelling of the word hold that was later acronymized as Hold On for Dear Life. Refers to holding an asset for the long term rather than selling it for short-term gain.
ICO-Initial Coin Offering
A crowdfunding approach that sells tokens to the public to raise capital for crypto projects.
Key
Alphanumeric codes either point to a wallet (public key) or allow access to a wallet (private key).
Liquidity
How easily a digital asset can be bought or sold in the market.
Market Cap
Short for market capitalisation is the total value of an asset based on current market prices.
Metaverse
A virtual and augmented reality 3D world that allows people to interact and inhabit through avatars.
Memecoin
A coin that is popular and growing but without fundamental or utility backing.
Mining
The process of verifying transactions and organising them into blocks on a blockchain.
Minting
The process of validating information and adding it to a blockchain.
Moon
When the value of an asset is expected to rise dramatically, it is said to be shooting to the moon.
NFT
A digital certificate of ownership and authenticity of an item that is not interchangeable with another.
Node
Any device connected to a blockchain network.
P2P (Peer to Peer)
Where users connect directly on a network without intermediation.
PoS (Proof of Stake)
A mechanism that requires validators on a blockchain to stake (collateralise) their own currency when verifying transactions on a blockchain.
PoW (Proof of Work)
Validators on a blockchain are required to solve mathematical puzzles to gain the ability to verify transactions.
Pump and Dump
A scheme where the value of a crypto or digital asset is artificially increased and then sold to unwitting buyers at high prices. The asset then declines in price rapidly.
Rug Pull
A scam where creators of a crypto project take funds invested into it, out of the project and run.
Sh*tcoin
A cryptocurrency with little value due to a lack of fundamentals or use case.
Smart Contract
A program that exists on a blockchain that monitors activity and executes a set of instructions automatically when conditions are satisfied.
Stablecoin
A token that pegs its value to another asset such as Bitcoin, Gold or fiat currency like the US dollar.
Token
A digital asset created on an existing blockchain can represent physical assets too.
Wallet
A software application (warm wallet) or hardware device (cold wallet) is used to store private keys that prove ownership of digital assets.
The web3 dictionary will continue with new terms being added or becoming popular. You will notice many terms come from the data or investment world and have been given new meanings or a twist. Are there any other web 3 or crypto-related terms you have come across that you feel should be added to this list?
