If you’re a beginner in the cryptocurrency craze, you’ve probably come across a few terms that you didn’t understand. That’s only natural, as the cryptocurrency world is fairly complicated, and it can take time to understand it. However, that’s no reason to stand back and not learn about it. (If only because it’s the future, and you don’t want to end up missing out on life-changing opportunities.) In this guide, we’ll take a look at some of the most popular terms and acronyms in the world of cryptocurrency.
There’s a lot of new terminology to learn when you’re ready to start trading cryptocurrencies. Crypto traders use many terms that might not be familiar to you, such as HODL, FUD, and shilling. (Okay, shilling isn’t actually a crypto term, but it’s actually a word we’ve heard a lot more these days.) The best way to learn about these terms is to read the definitions and then look them up on Investopedia, which has a glossary of crypto terms .
If you’re new to the world of crypto-currencies, you’re going to need some basic knowledge of the most common popular terms and slang. This list should help you get started. Ripple (XRP) Named after the ripple effect, Ripple is considered a cross-border payments system, as it is built around the idea of a universal exchange. This means that it can be used to swap any currency for any currency, no matter where it’s from. Bitcoin The first decentralised digital currency, Bitcoin is the most popular cryptocurrency. Ether Ether is a token and cryptocurrency that is used to pay for the Ethereum network. Altcoin AnotherCryptocurrencies are an exciting new technology that has had a powerful impact on the financial sector in its short existence. Bitcoin, the first crypto currency, was introduced in 2009. Like any new technology, cryptocurrencies have introduced a lot of new terminology and expressions with subtle or clever meanings that may be unfamiliar to the average person. For those who are new to cryptocurrencies, learning these subtle phrases and acronyms can help you buy in and ride the FUD wave. (At the end of this article you will know what that means). Related to : Taxation and crypto-currencies handbook Photo credit: DepositPhotos.com.
1. Satoshi, aka Sats
The Satoshi, commonly abbreviated as Satoshi, is the smallest unit of Bitcoin, the leading crypto currency. Named after the alleged creator of Bitcoin, a developer named Satoshi Nakamoto (who may in fact be the pseudonym of a group of people), one Satoshi is equal to 100 millionths of a Bitcoin. Since bitcoin is easily divisible and fractional amounts are traded constantly, the ability to designate arbitrary fractions of bitcoin is very important. This is especially important because the price of bitcoin has skyrocketed over the past decade, making it much more expensive for new investors to buy an entire bitcoin. A similar popular term, satoshi stacking, refers to an investment strategy in which an investor accumulates satoshi, fractions of bitcoin, to increase a bitcoin position. Photo credit: whyframestudio / iStock.
2. Altcoin, also known as Alt
Altcoin is a different cryptocurrency than bitcoin. Since bitcoin was the first cryptocurrency, conceived in 2008 and launched in 2009, many consider it a cryptocurrency in its own right. A few years later, other altcoins appeared as offshoots of bitcoin, with different applications and capabilities. Although thousands of altcoins have been created, some have failed or become inactive. Many of the most popular altcoins, such as Ethereum, Litecoin, and XRP, promise higher transaction speeds, lower transaction fees, or some form of stacking for passive income in the native crypto-token. Some of the most popular altcoins can even be purchased through a traditional investment account. Photo credit: Jirapong Manustrong / iStock.
3. Fear, uncertainty and doubt, also known as FUD
FUD, as it is commonly known in cryptocurrency circles, is a psychological method of creating negative sentiment toward a particular asset to discourage further purchases, or even cause a sale or short sale. The goal is to suppress the price of the asset so that a FUDer can accumulate money at a lower price or inflict financial pain on others who own the token for a potentially competing crypto project. There are many ways to sow fear, uncertainty and doubt, including proclaiming weak fundamentals, questionable project management, stagnant or declining price movements, unclear roadmaps, lack of adoption, low network utilization and the inability to trade in some countries. Photo credit: DepositPhotos.com.
4. Fear of missing an event, aka FOMO
FOMO occurs in all areas of life. In this context, it is the usual psychological state of an investor who feels a combination of panic and envy for not actively participating in a strong market movement that benefits others. For cryptocurrencies, this usually refers to a case where there is a strong bullish breakout and concerned investors are debating whether or not to buy in an already rising market in hopes of following the rest of the movement. FOMO can apply to any financial market, but it is often heard in the crypto-currency markets, which are usually made up of small, amateur investors trying to navigate extremely volatile price movements while trying to build a well-rounded crypto-currency portfolio. Photo credit: D-No/istockphoto.
5. Hold on for dear life, aka HODL
HODL is a popular cryptographic meme and a misspelling of the word hold (which some people have subsequently misinterpreted as hold for your life). The term came up on a bitcoin forum during the market turmoil in late 2013, when an unbalanced investor said that investors were not suited to trade the ups and downs, but were simply buying and holding their personal portfolios. Since then, HODL has exploded in popularity and is widely advertised during price increases, with investors instructing other investors on the necessity of HODL during periods of sharp price fluctuations. Photo credit: DepositPhotos.com.
6. Know your customer, also known as KYC
Know Your Customer, known as KYC for short, is a form of identity verification that many cryptocurrency exchanges have required since its introduction by regulators in 2017. Securities and Exchange Commission (SEC) Rule 17a-3(17) requires broker-dealers (exchanges) to make a good faith effort to obtain personal information and maintain records for each customer account. KYC ensures that clients are relatively fit for their transactions or investments, that clients are who they say they are, and that clients’ transaction histories are recorded for tax purposes. KYC is commonly referred to with the hyphen KYC-AML (Anti-Money Laundering), as the two policies closely complement each other. KYC is a standard that has long existed in the traditional financial world, but has met with some disapproval in cryptocurrencies. Some bitcoin maximalists and cryptocurrency enthusiasts strongly oppose KYC, believing it to be contrary to the decentralized philosophy of cryptocurrencies. Here are some other rules and regulations for crypto currency that you should be aware of. Photo credit: SKapl / iStock.
7. Buy Dip aka BTD/BTFD
Buy the dip or BTD is a commonly used term in the financial markets and means taking a long position during an expected short-term decline in the price of an asset. It is mostly used in bull markets to support bullish sentiment and rising prices, but it is also used in bear markets in crypto-currencies to buy at a good historical value for a longer term investment horizon. BTFD, short for Buy the [Expletive] Dip, is the exuberant BTD exclamation often used during manic bull rallies. Photo credit: rockdrigo68 / iStock.
8. Decentralised financial management as FISCON
DeFi, short for decentralized finance, is a general term for a form of finance that relies on a peer-to-peer blockchain network with the support of smart contracts, rather than relying on a central financial intermediary such as banks or brokerage firms. DeFi builds on the core philosophy of bitcoin and cryptocurrencies: enabling people to trade directly with others, anywhere, anytime, outside of corporate and government control. However, DeFi wants to go a step further by converting legacy financial products such as loans, insurance, installment payments, etc. into modern iterations of DeFi. Most DeFi applications are based on Ethereum, the main underlying protocol. Photo credit: rclassenlayouts / iStock.
Rekt – an intentional misspelling of the word wrecked – is a slang term used in cryptocurrency to describe an investor’s portfolio or investments that have suffered a loss. This is being used on social media to warn against liquidating over-leveraged positions, resulting in huge financial losses. Photo credit: Pictures of the promise.
10. Pumps and drains
Pump and dump is an investment construct and a form of securities fraud in which an unscrupulous player buys a large position in an inferior asset, falsely induces other investors to buy that asset, causing the price to rise significantly, and sells the entire position at an artificially inflated price. This form of manipulation occurs in many financial markets, but is common in the cryptocurrency markets due to less oversight and the large number of private amateur investors. Pumping and dumping can be disguised as trade groups and insider chat sessions, where the leader recommends the new feature to the group’s followers in the short term and encourages them to buy it and promote it themselves on forums and social media. Photo credit: DepositPhotos.com.
Shilling is the use of propaganda, a false or exaggerated narrative, to promote a service or investment, especially of poor quality, in exchange for a financial incentive. The term shilling has a negative connotation and is often used in the pump and dump sector, but can also be used in other contexts. For example, an influencer may be paid to promote a cryptocurrency or service, a developer of a cryptocurrency project may promote his project to help it attract users and succeed, or an occasional investor may promote an underperforming cryptocurrency in his portfolio to sell it at a higher price and make a profit. Photo credit: mrtom-uk/istockphoto.
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Cryptocurrencies are a new area for many investors, but they are rapidly changing the way people think about money and monetary transactions. Cryptocurrencies bear some resemblance to traditional finance, in that they are both a network in their own right and considered by some to be a store of value. As these overlaps provide opportunities for technical integration and widespread adoption, a new wave of specific terminology has emerged. Before investing in this dynamic new asset class, it’s a good idea to become familiar with these cryptocurrency-specific terms and phrases. Read more: This article was originally published on SoFi.com and syndicated by MediaFeed.org. Crypto: Bitcoin and other cryptocurrencies are not backed or guaranteed by any government, are unstable, and are high risk. Consumer protection and securities laws do not regulate cryptocurrencies to the same extent as traditional brokerage and investment products. Research and knowledge is a must before getting started with any crypto currency. U.S. regulators, including FINRA, the SEC, and the CFPB, have issued public guidance on digital asset risk. Purchases in cryptocurrencies cannot be made with funds from financial products, including student loans, personal loans, mortgage refinances, savings, retirement funds or traditional investments. External pages: Information and analyses provided through hyperlinks to third party websites cannot be guaranteed by SoFi, although we assume they are accurate. References are provided for information purposes only and should not be construed as an endorsement. Mention of third party trademarks None of the brands or products mentioned are associated with, endorsed by or sponsored by SoFi. Third-party trademarks mentioned herein are the property of their respective owners. SoFi Invest The information provided does not constitute investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, objectives and risk profile. SoFi cannot guarantee future financial performance. Advisory services provided by SoFi Wealth, LLC. SoFi Securities, LLC, member of FINRA / SIPC . SoFi Invest refers to three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms and conditions applicable to one or more of the platforms listed below. 1) Automated Investing – The Automated Investing platform is owned by SoFi Wealth LLC, an SEC-registered investment adviser (Sofi Wealth). Brokerage services are provided by SoFi Wealth LLC through SoFi Securities LLC, an affiliated broker-dealer registered with the SEC and a member of FINRA/SIPC, (Sofi Securities). 2) Active Investing – The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities is provided by APEX Clearing Corporation. 3) The cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered money services company. For more information about the SoFi Invest platforms described above, including the state license of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither SoFi Wealth’s investment adviser representatives nor SoFi Securities’ registered representatives receive compensation for the sale of products or services sold through a SoFi Invest platform. Loan product information contained herein shall not be construed as an offer or prequalification for any loan product offered by SoFi Lending Corp and/or its affiliates. Photo credit: jpgfactory/istockphoto. AlertMeThis text is sensitive. Click edit and regenerate for new copy.. Read more about keywords for cryptocurrency and let us know what you think.
Frequently Asked Questions
What does FUD mean in Crypto?
FUD stands for “Fear, Uncertainty, and Doubt” and it’s a term that has been used in technology for decades, but it recently found its way into the cryptocurrency world as a way to describe the bad actors in the space who spread false information to cause panic. For example, when Bitconnect was shut down by the SEC, many of the company’s followers claimed that the move was due to FUD, since it was a centralized company. It’s also worth noting that FUD, which is usually used as an adjective, can be used as a verb as well. For example, “Don’t FUD me!” can be said in response to bad news, or as a way to say you won’t FUD: In the cryptocurrency world, FUD stands for fear, uncertainty and doubt. It is typically used to describe negative sentiments and emotions about cryptocurrency, and it’s usually used to describe concerns people have about the market as a whole. This term is closely tied to the cryptocurrency community, but it also has ties to other areas of the internet, including the business world. For example, some critics of Microsoft might call their concerns about the company FUD.
What are the top 10 Altcoins?
For those who are new to the world of cryptocurrency, altcoins can be a bit of an enigma. To make matters worse, there are over 1,000 alternative coins (aka altcoins) out there. So how do you cut through the noise of all these altcoins and find the most promising ones? This is a question we’ll try to answer in this article. We also put together a list of the top 10 altcoins that you may want to consider. (Note: All price change data is from CoinMarketCap at the time of the writing and is accurate as of August 1, 2018.) There are hundreds of cryptocurrencies on the market and each one tends to serve a specific niche. (Bitcoin is the most popular cryptocurrency, but it is not the only option.) For example, Monero is a popular alternative cryptocurrency that is often used by people who wish to remain anonymous. The popularity of alternative cryptocurrencies has increased significantly over the past few years. Some estimate that these digital currencies are now worth more than $300 billion.
What is FUD and fomo?
The crypto community is a giant tangle of buzzwords, and newbies often have no idea what everyone’s talking about. Whether you’re new to crypto or just need to brush up on some basic terms, here are some you should know: FUD (Fear, Uncertainty, and Doubt): This term is used to describe the spread of derogatory or negative information about a crypto project, usually by someone who holds a competing token, or by someone who is trying to manipulate the price of a token. This is a very common tactic used in the crypto markets, and it’s not always clear who is behind it. Fomo: This stands for ‘fear of missing out’ and it refers to the phenomenon of people buying a FUD and fomo are two of the most popular terms in crypto-speak, and they’re both rooted in fear, uncertainty, and doubt. FUD is an acronym for “Fear, Uncertainty, and Doubt” (or sometimes just “Fear” on its own) and refers to spreading negativity. The goal is usually to negatively impact the market price of a cryptocurrency. This can be done by spreading incorrect or misleading information about a project, such that investors become fearful and sell, or just by making predictions that don’t come true. FUD is often discussed in the context of red or bear markets.
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