ERC-20, mooning, HODL, DEX, ICO, pump and dump These are all words that you probably heard or read in the past when researching crypto. It is easy for seasoned traders to throw these terms around without remembering that they once did not know them. For them, it is like saying their name. For crypto newbies, it can be very confusing. To help you get familiar with the world of crypto, here are the most important terms that you can see every day when it comes to trading with cryptocurrencies.
ICO
An initial coin offering (ICO) is the cryptocurrency industry’s equivalent to an initial public offering (IPO). A company looking to raise money to create a new coin, app, or service launches an ICO as a way to raise funds.
Interested investors can buy into the offering and receive a new cryptocurrency token issued by the company. This token may have some utility in using the product or service the company is offering, or it may just represent a stake in the company or project.
ERC-20
The popular cryptocurrency and blockchain system Ethereum is based on the use of tokens, which can be bought, sold, or traded. One of the most significant Ethereum tokens is known as ERC-20. ERC-20 has emerged as the technical standard; it is used for all smart contracts on the Ethereum blockchain for token implementation and provides a list of rules that all Ethereum-based tokens must follow.
HODL
“Hodl” is meant to encourage people to not impulsively sell when a cryptocurrency drops dramatically or rises to become highly profitable to sell. “HODL” also acts as an acronym for “Hold on for dear life.” You will often see the term in various cryptocurrency forums and social media circles.
DEX
A decentralized exchange (DEX) is a peer-to-peer (P2P) marketplace that connects cryptocurrency buyers and sellers. In contrast to centralized exchanges (Cass), decentralized platforms are non-custodial, meaning a user remains in control of their private keys when transacting on a DEX platform.
Pump and Dump
Pump and dump is a manipulation scheme that individuals or an entity will accumulate the buying of crypto and artificially inflate the price through means of spreading misinformation and once the price is increased (pumping) they will start selling it off (dumping).
Circulating Supply
The term circulating supply refers to the number of cryptocurrency coins or tokens that are publicly available and circulating in the market. It can increase or decrease over time. For example, the circulating supply of Bitcoin will gradually increase until the max supply of 21 million coins is reached.
Total Supply
Total supply refers to the number of coins or tokens that currently exist and are either in circulation or locked somehow. It is the sum of coins that were already mined (or issued) minus the total of coins that were burned or destroyed.
FOMO
Fear of missing out. It could be described as when people feel an urgent need to get in on what everyone else is doing: buying a specific cryptocurrency when they think its price is about to hike.
Liquidity Pool
Liquidity pools are pools of tokens locked in smart contracts that provide liquidity in decentralized exchanges in an attempt to attenuate the problems caused by the illiquidity typical of such systems.
Whales
'Whales' are individuals who hold large amounts of coins of a certain cryptocurrency. This makes them powerful enough to manipulate the said cryptocurrency's valuation, resulting in price volatility.
Mooning
It refers to the price of a certain cryptocurrency rising in price rapidly and sharply. In the usage of cryptocurrency, traders would say that the coin is “Going to the moon!.” It implies that the price is on a rocket ship.
Altcoin
The term 'Altcoin' is a combination of two words: 'alt' and 'coin' where alt means 'alternative' and coin means 'cryptocurrency'. Together they imply a category of cryptocurrency, which is an alternative to the digital Bitcoin currency.
Diamond Hands
Popularized by r/wallstreetbets, diamond hands (or more commonly depicted in emoji form as ) refers to someone who has high-risk tolerance to the stomach through the high volatility of the stock/ asset that they own; they don't cave under pressure.
FUD
Fear, uncertainty, and doubt. The crypto community’s sentiments swing like a yo-yo from time to time, causing prices to rise or drop. FUD in cryptocurrency is a psychological trick used to spread doubt and fear which would cause a certain coin to drop in price.
AMA
AMA is the abbreviation for ‘Ask Me Anything. This refers to a set of questions that can be asked to a person or team. Within the crypto world, this is a commonly used method to answer questions from the community.
DApp
DApp is short for ‘Decentralized application’ that relies partly on blockchain for its functionality. Dapps can be created using common programming languages like Javascript, PHP or C#. At the time of writing, most DApps are using the Ethereum blockchain.
Comments