When it comes to learning any new financial market, one of the endeavors a newcomer must embark upon is learning the native language of that market. The crypto space is no exception to this rule. It brings a complex vernacular that is far from intuitive and is literally cryptic at times.
The origin of the language of crypto lies at the intersection of cypherpunks and cryptographers, mixed with hedge funds, Wall Street icons, retail meme stock traders, and degenerate gamblers. The language of crypto acts as a rite of passage. It proves one has done their research and can play the game. As the space has developed, so too have the slang, jargon and euphemisms. “Lettuce hands” is an insult, “apeing” is a viable strategy and “HFSP” is the ultimate snarky response. To an outsider, these terms are non-intuitive and sound outright ridiculous.
The language however isn’t just comedic. It also serves an integral role in describing a new frontier of finance ready to displace the old way of doing things. There is comfort in our language, though. It’s our tool to make sense of the innovation around us, while also shielding us from the hostility that our community has faced for more than 10 years. Below is an alphabetical guide to some of the most important and confusing terms and phrases you need to know today. Read the list over until you commit it to memory.
Welcome to the language of crypto
51% Attack – When more than half of the computational power on a blockchain is controlled by 1 entity. Bad actors then interrupt the following blocks, essentially stealing from others.
Airdrop – A free token distribution to designated wallet addresses. They typically act as a marketing campaign.
Apeing – Diving headfirst into a new coin, NFT, or trading position. It is extreme, and usually entails going big or going home.
Bag Holders – Slang for anyone who holds a large crypto position through the market cycles and refuses to let go.
BTFD – A strong recommendation to buy when prices are dropping, which stands for “Buy The F******* Dip.”
Bull and Bear – The symbols of positive and negative sentiment. Bulls are a sign of price strength, and bears are a sign of price weakness.
CEX – A type of cryptocurrency exchange that is run by a centralized entity. Stands for “Centralized Exchange.”
CBDC – Digital currency issued by a central bank, a new form of bank money. Stands for “Central Bank Digital Currency.”
DApps – A specific type of blockchain application that runs on a decentralized network. Stands for “Decentralized Application.”
DeFi – A new spin on finance, a movement embodying the ideals of cryptocurrency, stands for “Decentralized Finance.”
DEX – The opposite of a CEX, this type of cryptocurrency exchange is operated in a decentralized manner. Stands for “Decentralized Exchange.
Diamond Hands – Ability to withstand the bumps and bruises of the crypto price action, refusing to sell when others are fearful (opposite of weak hands). Willing to hold forever.
ERC-20 – A designated label for tokens designed on the Ethereum platform.
EIP – An improvement to the Ethereum protocol, will continue to arrive leading up to the implementation of Ethereum 2.0. Stands for “Ethereum Improvement Proposal.”
FUD – Negative news that is usually unfounded and designed to affect your emotions or beliefs. Stands for “Fear Uncertainty and Doubt.”
FIAT – A synonym for cash, it refers to legal tender issued by a centralized government. It is considered dirty in the crypto community.
Flippening – Refers to the possibility of Ethereum’s total market cap overtaking Bitcoin’s. One of the most highly anticipated and debated future events in all of crypto.
Gas – An Ethereum term, describing the fee developers, traders, and investors pay to operate in the Ethereum network. It is the fuel of the network.
Hard Fork – A split in the blockchain that renders all previously invalid transactions valid, and vice-versa.
HFSP – A snarky response designed to remind someone their investment strategy (or lack thereof) sucks. Stands for “Have Fun Staying Poor.”
HODL – A highly convicted investment strategy that holds on to their coins for a long-time ignoring volatility and bad news. Stands for “Hold On For Dear Life” now, although that was not the original meaning.
ICO – A popular 2017 term that describes the crowdfunding of an early-stage crypto project. Stands for “Initial Coin Offering.”
Layer 2 – A proposed scaling solution designed to alleviate the data stored on blockchains.
Lettuce Hands – The inability to hold onto your crypto position through volatility or bad news. Your hands are as strong as lettuce.
Lightning Network – A layer 2 built on top of Bitcoin, providing lightning-fast transactional speed.
Mnemonic Phrase – A randomly generated list of words that allow you to recover your crypto. Don’t lose these.
Mt. Gox – Refers to the first major exchange hack back in 2014, resulting in hundreds of millions in lost Bitcoins.
NGMI – simply stated, “not going to make it,” synonymous with HFSP.
Node – A single communication point in a blockchain network that stores, verifies, and distributes data.
OTC – A transaction made outside the bounds of an exchange, stands for “Over The Counter.”
Peg – A set denomination between the exchange of two goods. It typically describes the backing of a stable coin.
Proof-Of-XYZ – Any type of blockchain consensus mechanism that secures the network.
REKT – When the worst-case scenario happens, the term is shorthand for the word “wrecked.”
Rug Pull – A type of crypto scam where the developers abandon the project and take all the money with it.
SATS – The smallest unit of account in a Bitcoin. One Bitcoin is comprised of 100 million of these.
Shadowy super coder – A confused boomer term from Senator Warren. Used to describe the innovators of our space disrupting the modern-day financial system.
Shit Coin – An altcoin you want to stay far away from, the fundamentals and technicals smell really bad.
Weak Hands – A desire to sell a position at the first sign of bad news or negative price action. They are frowned upon in the crypto community (opposite of diamond hands).
Whale – A person with a lot of Bitcoin, typically anyone with 100 or more Bitcoin in their possession.