To all but the uninitiated in crypto, terms such as ‘blockchain’ and ’Bitcoin’ will certainly be very familiar to the average crypto trader, or even someone with a casual interest. But being an industry that doesn’t rest for one minute, there are a multitude of buzzwords in crypto which have sprang up that may be not so familiar. Here are the top 10 cryptocurrency abbreviations and keywords you must know.
This is actually quite a well-known crypto buzzword, but to those who are new to the game, it means holding onto your cryptocurrency instead of selling it. It originates from the early days of crypto in 2013, when an apparently intoxicated individual posted on a Bitcoin dedicated forum “I AM HODLING” (yes, it is a spelling mistake!) This drunken mishap has since gone down in crypto folklore, with the term HODL becoming an backronym (hold on for dear life), being particularly used in times of market volatility to refer to individuals who are keeping hold of their cryptocurrency, when others around them are not doing the same.
FOMO (and FUD)
These words are acronyms, and are often used in wider society too. Meaning ‘Fear of Missing Out’, FOMO is used in crypto terms to describe the fear that traders may feel in that they are missing out on the handsome gains that fellow traders may be enjoying. This can be amplified in the world of crypto due to the sometimes highly documented wild price swings that can occur.This is where it relates to FUD, meaning fear, uncertainty and doubt. The wild price swings of crypto, as has been seen recently, may cause FOMO and FUD in some. Cause of actions resulting from FOMO and FUD may include buying a new coin, or not hodling and doing the opposite. It should be noted, however, that often these fears are irrational, and may spring from unsubstantiated rumours on social media, for example.
As the name might suggest, this buzzword means someone who is 100% dedicated to the Bitcoin cause, and is not interested in any other cryptocurrency. A Bitcoin maximalist sees the future of crypto as being solely Bitcoin, and discredits any altcoin from being anything of significant attention or being a part of this future. While not many will argue that Bitcoin is the king of cryptocurrencies and certainly has the best chance of realizing mainstream adoption, if it is the one that crosses the line, or if others join it or not, remains to be seen.
Some of the more observant among you may realize that this is the first name of the assumed pseudonym Satoshi Nakamoto, the supposed creator of Bitcoin and author of the Bitcoin white paper. But as a word by itself, it means the tiniest amount of Bitcoin that you can possess. This by itself is a mind bogglingly small amount – 0.00000001 BTC. Although it might seem so minute that it is meaningless, the Satoshi unit does have uses. Satoshis are used as the denomination on the Bitcoin blockchain before converted to display. Also, they can be used when referring to small amounts of Bitcoin (but not 0.00000001 BTC small!) For example, you may want to send to 0.0001 BTC to a friend. Instead of saying 0.0001 BTC, you could also say 10,000 Satoshis – or Sats.
Decentralized Finance (DeFi) takes the decentralized concept of blockchain and applies it to the world of finance. Build... (and Dapp)
These are relatively new additions to the crypto dictionary. DeFi is short for decentralized finance, and Dapp is short for decentralized applications. DeFi aims to enable deeper integration between blockchains and financial services. Bitcoin was invented with the intention of taking away the middleman – i.e. the bank – from digital financial transactions. But with DeFi, it is now possible for other services that banks offer, such as insurance, loans, or savings accounts to be made available without the middleman through the usage of blockchains with smart contracts, such as Ethereum. Although still in its early days, it’s a fast-developing movement, with more and more Dapps springing up, and DeFi solutions including yield farming to help you get a piece of this . Finance is by no means the limits of Dapps though, with them having a wide range of functions, spanning from social media, to technology, to the arts, and many more.
To the surprise of absolutely no-one, this term in relation to crypto has nothing to do with the commonly used piece of cutlery. Forking occurs when there is a need to make a change to a cryptocurrency’s blockchain. This could be necessary for a number of reasons, and there are soft forks and hard forks. The key difference is that a soft fork can be seen as a ‘software upgrade’, with the new consensus rules backwards compatible to the rules on the previous version of the blockchain.
A hard fork, on the other hand, sees permanent divisions made to the blockchain, and completely new consensus rules which makes rules on previous versions of the blockchain invalid. Soft forks are often used as a way for developers to make changes without causing significant disruptions, (as only 51% of nodes and users on the blockchain need to upgrade). Hard forks are used when the changes may be more substantial (as all nodes and users on the blockchain need to upgrade), such as the split between Bitcoin and Bitcoin Cash, which saw Bitcoin Cash separate from the main Bitcoin blockchain in August 2017 and become its own cryptocurrency.
First used by gamers, it is a slang of ‘wrecked’ and has now been adopted by crypto traders. This buzzword describes a financial loss of severe proportions, the result of bad judgement or unfortunate moves in the market. A trader could say their position is ‘rekt’ if for example they are holding a long position and the market price crashes. The same could be said for a coin, or indeed the market itself.
Last but not least, is perhaps the most important buzzword of them all: DYOR, meaning do your own research! Ultimately only you can decide what cryptocurrencies to invest in, when to go long or short, or whether to leverage your position. Any seasoned trader will tell you, despite how difficult it may be, that FOMO is not a healthy mindset to adopt, and that it is best practice to stick to what the trading analysis and charts are telling you, instead of what some random guy on Twitter might be saying. You could get REKT if you don’t!