In the blockchain industry, the use of acronyms is very common. It is so common that newbies can easily get lost in discussions. That’s why we’ve put together the most popular crypto acronyms that you need to know. Cutting across technical terms, to financial and technological acronyms, get ready to knock the socks off your dinner party guests.
A proper understanding of these acronyms will help anyone new adapt well into the crypto industry. Proper understanding could make all the difference between a successful and an unsuccessful venture into the emerging ecosystem of cryptocurrencies. Here we go:
Proof of Work is the process behind the mining and maintenance of cryptocurrency networks. It requires a miner to solve a mathematical problem in order to confirm a transaction on the network, and rewards the fastest miner in the relevant cryptocurrency. It generally requires a lot of computing power, and as the network grows the problems get more challenging and the rewards become less.
Proof of Stake uses validators instead of miners for verifying transactions on the networks they maintain. Instead of miners competing to solve an equation, algorithms chose the verifier based on their stake (amount of crypto they hold). Instead of rewards, the user receives transaction fees.
This acronym stands for Transaction Identification. It is a unique number that is used to identify a Bitcoin transaction on the network. It usually appears as a long series of alpha-numeric characters and can be used to find the transaction that it represents on the network.
Fear Uncertainty and Doubt is an expression that is popularly used by traders. FUD can be used as a tool by larger altcoins to cast shadows on the smaller ones, and has been known to affect market activity. Always DYOR in order to avoid FUD.
Among the crypto acronyms that you need to know is HODL. It originated from a typo in a forum sometime in 2013 and has since become a prominent word among cryptocurrency users. It is slang for the original word HOLD. Traders and investors in crypto use it to describe holding onto digital assets.
Delegated Proof of Stake is another kind of protocol that verifies transactions, and also acts as a form of digital democracy. Considered to be the least centralized of all the protocols, DPoS gives every network user holding the relevant crypto a vote. Delegates are selected and voted in by the community, and are responsible for validating transactions, and, like PoS, are rewarded in transaction fees.
Initial Coin Offering (ICO) is a non-regulated system that startups and companies use to raise money for their projects. It is similar to the IPO exercise in mainstream stock markets, only that ICOs offer platform tokens to the investors rather than equity. ICOs are a form of crowdfunding for the crypto community.
Security Token Offering (STO) is the love child of an ICO and IPO. The difference between STOs and ICOs are the characteristics of the tokens, and that STOs comply with security regulators and are asset-backed. The token issued is considered to be an investment product backed by a real-world assets (a company or product).
Decentralized Applications (DApps) are open-source applications leveraged off blockchain technology and run on peer-to-peer networks. This category of software was made really popular by Ethereum, which by design is a platform for the development of dApps. There are so many dApps in the blockchain industry today, with their particular tokens based on the parent blockchain on which they are built (i.e. a lot of cryptocurrencies listed on Coinmarketcap are actually ERC20 tokens, built on the Ethereum blockchain).
This is the short form for Segregated Witness. It is the name given to a soft fork that was implemented on the Bitcoin protocol to solve congestion issues responsible for delayed transactions. This update changed how data is stored on the network, separating data from the transaction itself.
Fear Of Missing Out is a common acronym among traders and investors. It is used when traders anticipate a price movement in a certain direction that could make them profit. In order not to miss out on the opportunity, many of them jump into the market without doing their research. This scenario is very common in a fast moving market like the Bitcoin market.
This is used to refer to the decentralized transaction method known as Peer-to-Peer. This is the fundamental nature of blockchain technology that lets users interact and transact without needing any intermediary.
Do Your Own Research is a common acronym in the crypto industry. It comes as a gentle reminder for individuals not to believe everything they hear or see, and rather to do their own investigating.
This acronym means Ethereum Request for Comments. It is the preceding acronym for all Ethereum based token standards, of which the most popular is the ERC20.
The crypto space can feel intimidating at times, but recent innovations like tap are doing everything possible to make it easier for newbies to find their way around the industry.
For instance, rather than going through multiple exchanges and engaging with strange terminologies, the tap platform provides an app and a prepaid crypto MastercardⓇ.
With these access points, you can access and transact in the crypto ecosystem from one base, while still engaging in various exchanges trading various cryptocurrencies. Now that you have the basic knowledge of crypto acronyms that you need to know, it is time to explore.
It's only a few taps away.