Digital Asset Glossary 2.0
E
Ether:
The world's most actively traded cryptocurrency and the token associated with Ethereum.
Ethereum:
A developer-run blockchain technology co-founded by Vitalik Buterin. Ethereum aims to make blockchains more usable and revolutionary than simply serving as a database for transactions. Its technology can hold assets, enable programmers to code functions for buying and selling into smart contracts, and is typically the building block for most DApps for finance. Ethereum is a layer one protocol and is the most successful of all layer ones. Many Ethereum investors anticipate it flipping Bitcoin in terms of its market cap value. The gas fees on Ethereum can be expensive, but they are innovating to reduce this.
F
Fiat Currency:
A traditional currency back and regulated by a central bank, such as the US dollar, euro, British pounds (sterling) and Yen. Fiat currencies are enforced by international governments replacing the gold standard in 1971 at the Bretton Woods II agreement. They are known as legal tender. Individual citizens never know how much fiat currency will be produced by governments year on year; therefore, it is difficult to know how much they will depreciate with inflation.
Flippening:
A term used for the moment when Ether overtakes Bitcoin as the largest and most valuable crypto.
Fork:
A fork is when two incompatible versions of the blockchain emerge, based on different principles and with different user bases. The division occurs due to disagreements amongst developers regarding how the blockchain should be run, thus creating a fork in the network. Concerns over outdated and insecure software, a reversal in the transaction log after a hack, or the need to return investor funds are some reasons for a fork.
FTX:
A fast-growing Hong Kong-based cryptocurrency exchange was founded in 2019 by former trader Sam Bankman-fried. A unicorn business due to its billion-dollar evaluation. FTX sponsors stadiums, sports teams and the 2021 halftime Superbowl show. The company has big plans for the future.
FUD:
Fear, uncertainty and doubt. A label used for negative information about cryptocurrencies. FUD is often used concerning invalid or misleading information and criticisms of cryptocurrencies by the mainstream media.
G
Gas fees
Gas fees are the fees users pay to compensate for the amount of computing energy needed to verify a transaction on the Ethereum network. Prices rise and fall depending on demand. Many users choose to use different chains because fees are lower compared to Ethereum. However, Ethereum is the largest Altcoin and has the most DApps.
Gemini
Gemini is a centralised crypto exchange for buyers and sellers of cryptocurrencies established in 2014 by the Winklevoss twins. Customers can set up automated regular buy orders known as DCA. It is centralised because it adheres to KYC (know your customer) procedures.
Greyscale Investment Trust
A fund that operates the world's most popular Bitcoin ETF (exchange-traded fund). Greyscale is predicted to be granted the first spot based ETF in the USA by the SEC.
I
ICO
Like an IPO, an ICO is a vehicle for fundraising, but this is as far as the similarities go. Investors receive some of the new currency, which they can sell for profit when the project launches. As with all digital asset investments, there is no consumer protection; therefore, doing your research and only investing in things you believe is critical.
H
HODL:
The battle cry of the long-term cryptocurrency holder. Initially a misspelling of 'hold' found on a cryptocurrency forum in 2013 and sometimes thought to be an acronym for "holding on for dear life", the frantic tone associated with its use has struck a chord with the broader crypto community. Hodling is not simply about owning crypto assets regardless of how low they fall. Hodl represents the insatiable hope of a return to profitability. It is a mantra against the crypto-sceptic. If you HODL be sure to DYOR.
Hot Wallet:
An online digital wallet is used to store crypto assets. Being online enables users to trade more quickly; however, online makes it more susceptible to being hacked. Therefore, some people prefer to keep their assets in a cold wallet.
L
Laser eyes
A social media meme in which users change or edit their profile pictures to make their eyes look like they emit red laser beams. It signifies a fan of digital assets, with the light-emitting powers variously interpreted to mean a user has remarkable powers of sight and an iron will to make Bitcoin an instrument of economic empowerment. The meme is used to gain acceptance into the Bitcoin community but can also be unhelpful in aiding new users in the crypto space. It can often be interpreted as hostile.
Layer 2
A secondary network or technology is run by a third party and built on top of an existing blockchain to improve efficiency. For example, some blockchains like Bitcoin and Ethereum cannot handle vast amounts of trades at high speed, affecting the users of some DApps. A layer 2 network can t§ake the bulk of transactions processing legwork so that the original blockchain can scale. An excellent example of this is the lightning network on Bitcoin.
Liquidity pool
A centralised feature of decentralised trading. Customers do not trade on an order book but against other participants in the pool who have filled up the pool with funds that sit on smart contracts.