Web3 Glossary

Web3 Glossary

September 11, 2022

A

  • Airdrop: A distribution of a crypto token to a number of users, often those who have interacted with services associated with the airdrop’s sponsor.
  • Altcoin: The term used for all cryptocurrencies other than Bitcoin.
  • Ape: To invest heavily into a digital asset, often recklessly.
  • AMM: Automated Market Maker; a mechanism that replaces an order book in a DEX.
  • ASIC (Application-Specific Integrated Circuit): A computer specially designed to perform the function of Bitcoin mining, and nothing else.
  • ATH (All-Time High): The highest value ever reached by an asset in its history.

B

  • Bagholder: A crypto investor who continues to hold large amounts of a specific coin, even when it performs poorly.
  • Bearish: The belief that market progress and prices are trending downwards.
  • Bearwhale: An individual who holds a large enough amount of a cryptocurrency to be able to profit from driving the price down.
  • Bitcoin: The first and most well-known of cryptocurrencies running on a blockchain, having begun in 2008.
  • Bitcoin Mining: The process of guessing a random number before all other participants on the Bitcoin blockchain in order to release new Bitcoin into circulation.
  • Block: A group of transactions broadcast to the network and then written to the Bitcoin blockchain.
  • Blockchain: A decentralized ledger of digital asset transactions maintained across a network of computers.
  • BTD (Buy The Dip): The act of purchasing a cryptocurrency when the price has dropped significantly in a short time period.
  • Buidl: Intentional misspelling of “build,” in reference to “HODL”.
  • Bullish: The belief that market progress and prices are trending upwards.

C

  • Centralized: A system or organization that is controlled by a person, group, corporation, or government.
  • CeFi: Centralized Finance; centralized companies that participate in crypto; “crypto banks” (e.g., BlockFi).
  • Cold Storage: The act of keeping one’s Bitcoin private key in a secure, offline environment.
  • Confirmation: The successful inclusion of a Bitcoin transaction within a block on the blockchain.
  • “Crypto”: A term generally used in the community to describe blockchain and blockchain-adjacent technologies and protocols, other than Bitcoin.
  • Cryptocurrency: A digital asset designed to work as a medium of exchange, store of value, unit of account, or, in the case of Bitcoin, all three.
  • CEX: Centralized Exchange; Crypto exchanges that use traditional order book (e.g., Coinbase).
  • Cryptocurrency Mixer: A service that mixes different streams of potentially identifiable cryptocurrency in order to improve anonymity.
  • Cryptocurrency Wallet: A device or program that stores the private and public keys that together grant access to stored cryptocurrencies.

D

  • dApp: A dApp, or decentralized application, is a software application running on top of a quasi-decentralized protocol and commonly incorporates a smart contract.
  • DAO: A DAO, or decentralized autonomous organization, is a blockchain-based community, the purest form of which has no elite class of members.
  • Decentralized: Globally distributed, peer-to-peer, and not reliant on any person, group, corporation, or government.
  • Decentralized in Name Only (DINO): A term that refers to centralized or quasi-centralized blockchains, protocols, and groups that self-identify as “decentralized” without achieving real decentralization.
  • Decentralized Ledger: A system of independent computers that are simultaneously recording data, while also maintaining identical copies of the data.
  • DeFi (Decentralized Finance): Blockchain-based financial services that are often used without the need for an intermediary.
  • Degen: Short for “degenerate.” Colloquial term amongst crypto traders, esp. for industry veterans that make crazy bets.
  • DEX: Decentralized Exchange - crypto exchange that uses an AMM rather than an order book (e.g., Uniswap).
  • Diamond Hands: A term used to describe an investor who has a high tolerance for risk and volatility and refuses to sell their holdings.
  • Double Spend: The act of spending the same token or cryptocurrency in more than one transaction.
  • DYOR (Do Your Own Research): The process of researching one’s investments rather than turning to a third party who supports a particular asset.

E

  • Ethereum: The second-largest cryptocurrency by market cap, Ethereum’s primary focus is on enabling blockchain-based services through the use of smart contracts.

F

  • Fiat: A government-issued currency that is not backed by a physical commodity, but rather by the government that issued it.
  • Flippening: The hypothetical growth of another cryptocurrency to exceed the size, value, and importance of Bitcoin.
  • Fren: Intentional misspelling of “friend;” term of endearment amongst crypto communities.
  • FUD (Fear, Uncertainty, Doubt): Negative, misleading, or false information that influences the perception of specific cryptocurrencies or the market as a whole.
  • Fungible: A quality in which two or more of the same thing, such as Bitcoin, have identical value and are a perfect substitute for one another.

G

  • Gas: Gas is the fee paid to execute transactions on the Ethereum blockchain, and is denominated in gwei, a sub-unit of the Ether cryptocurrency.
  • Genesis Block: A term to describe the very first block mined on the Bitcoin blockchain.
  • gm: “Good morning;” how all web3 communities greet each other (often regardless of the time of day 😂).
  • Gwei: The smallest denomination of Ether; units used to price gas

H

  • Halving: The periodic halving of the issuance rate for Bitcoin or other cryptocurrencies, or the rate at which new crypto is released into circulation through mining.
  • Hard Fork: A radical change to a blockchain’s software protocol that makes previously valid blocks and transactions invalid.
  • Hardware Wallet: A device specially designed to lock away the private key used to access one’s Bitcoin.
  • Hashing: The act of using a computer program to transform information into a string of letters and numbers of a predetermined length.
  • Hash Rate: The unit of measurement for the amount of processing power on the Bitcoin blockchain.
  • HODL: It began as a typo on an old Bitcoin forum where a user misspelled “HOLD;” Often taken to be an acronym for “hold on for dear life.” It is the act of buying crypto with the intent to not sell it for an extended period of time. It can be conjugated as well. For example, "I am hodling" and "Yeah, I hodled."
  • Hot Storage: The act of keeping a private key connected to the internet to increase accessibility.

I

  • ICO: An ICO, or initial coin offering, is a funding method used by crypto-based companies and protocols in which a native token is exchanged for fiat currencies or other digital assets.
  • Inflation: An increase in the supply, or total available amount, of a currency. Inflation directly leads to a decline in the value and purchasing power of the currency.

J

K

  • KYC (Know Your Customer): Requirements imposed by centralized service providers, often at the demand of governments, that collect personal and identifying information from users.

L

  • Layer-2: An application on top of Bitcoin that interacts with the network without downloading and storing the entire blockchain (e.g. Polygon)
  • Lightning Network: A Bitcoin Layer-2 application designed for economical, fast, and private payments.

M

  • Market Capitalization: The size of a cryptocurrency, calculated by multiplying the number of coins in circulation by the current price.
  • Metaverse: A network of 3D virtual worlds focused on social connection, often intersecting with cryptocurrencies and other crypto assets.
  • Mooning: A term used to describe a cryptocurrency that is experiencing a strong upward market trend.

N

  • NFT: Non-fungible token - a cryptographically unique representation of a digital or physical asset on a blockchain.
  • Node: A computer that participates in validating transactions on the global peer-to-peer Bitcoin network.
  • NGMI: “Not gonna make it;” usually in reference to a project or person that makes a dumb move.

O

  • Orphan Block: A block on a blockchain that has been abandoned in favor of a different block and will not be built upon.

P

  • Paper Wallet: A piece of paper on which the private key used to access one’s cryptocurrency is written.
  • Peer-to-Peer (P2P): A connection between two computers or people that allows information, files, goods, etc., to be shared without an intermediary.
  • Permissionless: A quality in which anyone is allowed to join and participate in a blockchain network.
  • PFP: Profile picture; usually one of an NFT.
  • Private Key: A cryptographic key that can be used to decrypt messages or transactions meant for a specific recipient.
  • Proof-of-Work (POW): The algorithm upon which the Bitcoin blockchain operates. Proof-of-work is defined as the conversion of electricity into processing power.
  • Proof-of-Stake (POS): A blockchain algorithm in which a participant’s likelihood of being selected to confirm a block on a blockchain is probabilistically tied to the percentage of the blockchain’s token supply the participant controls.
  • Protocol: An established set of rules dictating how nodes on a blockchain interact with one another and the codebase.
  • Public Key: A cryptographic key that can be used to encrypt messages or transactions meant for a specific recipient.
  • Pump and Dump: A market manipulation in which an entity accumulates a large amount of an asset to inflate the price before dumping it.

Q

  • QR Code: A digital version of a Bitcoin address (i.e., public key) that can be scanned by a QR reader.

R

  • Rekt: “Wrecked;” losing lots of money in crypto.
  • Rug pull: The theft of digital assets entrusted to developers, real or fake, of a crypto-based project, before or soon after the project launches. It is a scam where crypto project takes invested funds and runs.

S

  • Satoshi Nakamoto: The person or people responsible for releasing the Bitcoin whitepaper and original software code.
  • Satoshis (Sats): The smallest on-chain unit of Bitcoin, equal to .00000001 BTC.
  • Seed Phrase: A list of words that, when spelled correctly and entered in the proper order, allow recovery of Bitcoin on its blockchain.
  • Ser: Intentional misspelling of “sir; common in crypto circles
  • SHA-256: A cryptographic hash function used to secure transactions and information on the Bitcoin blockchain.
  • Sharding: The process of breaking up a large quantity of data and distributing it among multiple computers.
  • Shill: The act of promoting a cryptocurrency in order to make money, even and especially when the cryptocurrency’s fundamental value is low.
  • Sidechain: A separate chain built on top of the main blockchain in order to upgrade the technology with additional features.
  • Signature: A mathematical mechanism that allows for the proof of ownership by the individual holding a cryptographic key.
  • Smart Contract: A smart contract is a set of instructions written in code on a blockchain that execute when specified conditions are met.
  • Soft Fork: A change to a blockchain’s software protocol where only previously valid transaction blocks are invalidated.
  • Software Wallet: A computer program designed to secure the private key used to access one’s cryptocurrency.
  • Stablecoin: Any blockchain token that is designed to maintain a price peg with another financial or real-world asset.
  • Staking: Staking occurs on Proof of Stake blockchains and entails locking up one’s holdings of the blockchain’s native cryptocurrency to earn additional units of the cryptocurrency.

T

  • TPS: Transactions per second; used to measure a blockchain’s speed and efficiency.
  • Token: A unit of value on the blockchain that can incorporate a variety of use cases, such as governance or a rewards program.
  • Transaction: A blockchain entry that records the transfer of value or information from one entity to another.
  • Transaction Fee: The cost paid to incentivize processors (e.g., miners, stakers, etc.) to confirm a transaction on the blockchain.
  • Trustless: A quality in which two transacting parties are not required to trust one another in order to conduct a transaction.
  • TVL: Total value locked; the measure of assets locked in a specific DApp’s smart contract

U

  • UTXO (Unspent Transaction Output): The output of a previous Bitcoin transaction that has not yet been spent (i.e., used in a subsequent transaction).
  • Unconfirmed Transaction: A transaction that has not yet been added to a block on the Bitcoin blockchain.

V

W

  • WAGMI: “We’re all gonna make it;” phrase used to signal optimism and camaraderie
  • Weak Hands: A term that describes an investor whose confidence is tested during market downturns to the point of selling their Bitcoin.
  • Web3: An idea for a new version of the internet based on decentralized and pseudo-decentralized blockchain technology.
  • Wen Lambo?: Slang for the type of car that many crypto enthusiasts aspire to buy when their digital assets “moon” — or rise in value substantially.
  • Wen Moon?/To The Moon: A situation where there is a continuous upward movement in the price of a cryptocurrency. Often used in communities to question when a cryptocurrency will experience such a phenomenon, saying “Wen moon?” It is usually combined with “Wen Lambo?” The following emojis are usually used to reference it as well: 🚀🌙
  • Whale: An individual who holds a large enough amount of a certain cryptocurrency to be able to move the market.

X

  • xPub (Extended Public Key): A set of public keys (i.e., addresses) corresponding to one private key or set of related private keys (e.g., multisig wallet).

Y

Z

  • Zero Confirmation Transaction: A transaction that has been broadcasted to the network, but not yet recorded on the Bitcoin blockchain.