Cryptocurrency Trader’s Dictionary for Beginners
Terms and definitions in Blockchain and Bitcoin for those looking to start trading cryptocurrency
Aside from being the single greatest producer of flash-pan geniuses, it is a cryptocurrency that acts a lot like an annoying grandparent. It is slow and hard to move but if you sit with it for a while it will most likely give you some money.
A blockchain is like the make-up of a person. It is a type of distributed ledger that records unchangeable data in an interconnected chain of blocks. To change the blockchain would be akin to watching your hand suddenly turn into a chicken wing. It doesn’t work because your whole body knows that your hand isn’t meant to be a chicken wing.
A thing like money. Money is a thing we all decided has value and we give it to our nieces and nephews on Christmas because who knows what kids are into these days. — oh yeah, Altcoins. That is what kids are into these days.
Hodl is when you hold a currency for the long haul. It is as if you decide to get married and your loved one falls into a coma. You have a choice: Go out and find someone else to bone. Or wait until they wake up and have your dedication rewarded with a stronger and healthier relationship that will last forever.
Fear of missing out: it’s like when your ex-girlfriend and you break up and you spend months fretting over the fact that she was such a great girl and you hear that she met someone and is getting married and you only finally grow enough balls to try to win her back on her wedding day because she was a great girl and you didn’t hodl on to her.
Fear uncertainty and doubt — Like when your over religious grandmother is the first one to teach you about masturbation and blindness.
Peer to peer is like if we are standing in a room and you ask me for a dollar. Then, I give you a dollar. This is important in cryptocurrency because the financial system as it stands is like if we are standing in a room and you ask me for a dollar. Then, I hand $1.05 to a man standing beside me. He pockets the nickel and walks outside for a cigarette. You call him and tell him you want my dollar. He scratches his ass for a bit with the extra nickel I just gave him then comes back inside and hands you my dollar with a sour look on his face.
The way certain coins are created by using computing hardware to solve problems and verify transactions. The metaphor is in the name.
Coins that do not need to be mined but are created all at once. Like giving birth, but a bit more organized.
Cryptocurrency is like money. It is on the internet and you can trade it for other cryptocurrencies which are also like money. Some of these currencies you can spend within the ecosystem of a project developed by the cryptocurrencies founders or you can take the cryp — mom? Mom, come back! This is important!
PUMP AND DUMP:
Pretty much how it sounds. I guess it is like getting hooked by someone who at first seems completely normal, lovely even. You go on a date with them and they are radiant, funny, charming, responsible. They have a job, good relationship with their parents. You get so excited you start picturing your life with them. The Lamborghini you’ll own together, trips to the moon. So, you ask them to come home with you. They do. You wake up the next day, organs missing in a tub of ice. You drag yourself from the tub, weeping. Only as you are crawling, bleeding your way to the telephone do you stop and realize. The mother-fucker took your TV too — okay that one went a little far. A pump and dump is when people hype a certain coin to get you to invest and then they all bail and the coin crashes before you can react. So — yeah, same same.
The blockchain is like the lyrics to a song. In an ideal world, everyone knows all of the lyrics and can sing pretty well. If that were the case, everyone would be a node, everyone would have a copy of the song in their heads and so if one person starts singing Alanis Morisett’s ‘Isn’t It Iconic’, everyone else in the car can turn and tell them to shut the fuck up. That is what nodes are. They are computers in a network that all have a copy of the blockchain and are supporting it by validating transactions.
Distributed Ledger vs. Centralized Ledger:
A central ledger is like when you ask your parents ‘But why??’ and they say, ‘because I said so.’ A distributed ledger is like when you ask your parents ‘But why??’ and they say, ‘because we agreed as a family.’ Essentially a ledger is information. Distributed is when many people agree that information is correct and centralized is when you just kind of trust the guy holding the pencil.
The first block in a blockchain — I think we all know the metaphor is here.
A Whitepaper is like a cryptocurrency’s resume. Not reading a whitepaper before investing in cryptocurrency is like asking every good-looking person on Tinder to marry you. Sure, it is tempting, it happens, but so do house fires.
When a blockchain transaction has been verified. A confirmed transaction, cannot be reversed or double spent. It is like when you learn a magic trick and you go to your friends and try to show them, when you finally pull it off and say, “did you see?” they say, “yes, we all saw” and you say, “do you want to see it again.” and they say, “no, no you never need to show us that ever again.”
A Satoshi is a grain of sand on the beach that is Bitcoin. A Satoshi is a way of measuring bitcoin and is valued at approximated to 0.00000001 Bitcoin.
Address or Public Key
An alphanumeric code used to store, send or receive any cryptocurrency. Like your address. If someone wants to send you mail, you give them your address. If someone wants to send you cryptocurrency, you give them your address.
An exchange is a place where you can go to buy and trade cryptocurrencies just as a back alley is a place where you might go to buy and exchange — uh, cooking supplies.
A wallet is like a bank account without a bank. It is where you can send, receive or store cryptocurrency. It is identified by your public key and accessed using your private key. But, there are different types of wallets:
A hardware wallet is, well, hardware that can store cryptocurrency. It is offline and secure so it is a lot like if your actual wallet and your toaster had a baby.
A paper wallet is like if you wrote the balance of your bank account on a piece of paper and that piece of paper suddenly took on the value of your bank account. It is the safest way for everyone except pyromaniacs to keep their altcoins safe and off-line.
A string of words that, when read aloud, sound like you’re about to set loose the Manchurian candidate. You can use these words to retrieve your private key and access your wallet.
Initial Coin Offering (ICO):
An ICO is a new way for a start-up to raise money for their project by offering shares of their company in the form of tokens. I can’t think of a comparison to make…surely there must be something that existed prior to ICOs that you could compare them to…
These are like contracts, but all grown up and taking care of themselves. They are contracts that execute themselves on the blockchain which prevents the need for third-party intervention.
A fork is something boring people eat pizza with. It is also when you change a cryptocurrency’s software, creating two separate blockchains with different protocols.
A Bear Market:
When cryptocurrencies start to lose value which causes panic, leading to an extended slump. This is sort of like the time leading up to a bear hibernating. All of the currencies are like the grass and dirt that the bear consumes and slowly digests until it goes down, down, down to land somewhere in the bear’s butt. That is where your cryptocurrency stays for a while. In a bear’s butt.
A Bull Market:
The opposite of a bear market. In a bull market, everything is going up, everyone is excited, everyone is buying. Some people wet themselves. It happens. No judgment.
When you Show your bum to unsuspecting passerbys.