CRYPTO DICTIONARY.
📒CRYPTO DICTIONARY
AIRDROP
Airdrop is a free distribution of cryptocurrency.
🔸 Usually, cryptocurrency is handed out for performing certain actions, this can be registration on some website or crypto-exchange, watching certain videos, installing an application on the phone, etc.
🔸As a rule, the reward for the Airdrop is not significant and is not worth the effort spent on getting it, but there are good airdrops - but you need to choose them among all the others.
Altcoin
Altcoin - any cryptocurrency other than Bitcoin is called "Alternative Crypt" for abbreviated altcoin.
🔸It should be borne in mind that most of the Altcoins, in fact, have no value, and do not carry any developments to support their value. Basically, all Altcoins are pure speculative assets and were created with the aim of enriching the project developers themselves.
🔸As a rule, less than 10% of altcoins become more expensive from the original price during the year, the rest become significantly cheaper.
🔸Be careful with long-term investments in obscure cryptocurrencies.
🔹 Do not confuse Altcoins and Stablecoins (cryptocurrencies pegged to the dollar, euro or other national currency)
Altseason
Altseason is a period in the crypto market when most altcoins are growing.
🔸The high season is not an ordinary increase in the price of a few percent, it is a global growth of the entire market, in which alcoins grow several times, sometimes 10 - 20 times.
🔸 The last alt season was in 2018, and now in the current 2021 - we are also witnessing this long-awaited period.
Arbitration
Cryptocurrency arbitrage is one of the ways to trade cryptocurrencies.
There are 2 main types of cryptocurrency arbitrage:
🔸Cross-exchange arbitrage - when a trader buys cryptocurrency on Exchange A, for the subsequent transfer and sale of cryptocurrency on Exchange B, in other words - trading cryptocurrencies between exchanges.
🔸Internal exchange arbitrage is a type of trading in which a trader trades cryptocurrency between different markets (trading pairs). For example, it can be USDT-DOGE and BTC-DOGE markets, or any other markets within the same exchange.
Attack 51
The 51% attack is a manipulation of the cryptocurrency blockchain, which makes it possible to gain control over it.
🔸An attacker or a group of attackers connects mining equipment to the coin network, the amount of which is sufficient to capture more than 50% of the computing power. This allows you to process transactions that are beneficial to the fraudster, for example, spend more funds from the wallet than it has.
Block
Block - a list of transactions in the cryptocurrency network that have been processed and confirmed by miners.
🔸Blocks are created once in a certain period of time, for most cryptocurrencies it is different.
🔸For example, in the bitcoin blockchain, a block is generated every 10 minutes. The block, after formation, is added to the previously found blocks connected in a chain. This is how the blockchain is formed.
Blockchain
Blockchain - in simple words, it is a network in which one or another cryptocurrency operates. Each cryptocurrency has its own "network", if the cryptocurrency is created on the blockchain of another - it is called Token.
🔸The first was the Bitcoin blockchain, which was created on January 3, 2009.
🔸Today, a lot of blockchains have already been created, the fastest growing is BSC.
Bulls
Bulls are traders who expect an asset or the market as a whole to rise. Usually bulls build up their investment portfolio, or sit in long positions in futures.
🔸Bull Market - Growing Market, Time - When Most Cryptocurrencies Grow
Bears are traders who expect the market to fall and fully or partially sold their positions or opened short positions (in futures)
🔸Bear market - a period in trading when most assets fall in value
Bucket
A bucket is an order to buy at a price much lower than the market price.
🔸Bucks are placed by traders in anticipation of a sharp drawdown in the price of cryptocurrency, in the hope of buying at the very bottom.
🔸 Usually, after a sharp drop, a price recovery follows, although it may not be significant.
Volatility
Volatility - the level of fluctuations in the cryptocurrency rate over a certain period of time
🔸Cryptocurrencies with high volatility carry both high risks and the likelihood of high profits for traders.
🔸In principle, cryptocurrency is popular because of its volatility and the ability to make money on it.
Head and shoulders
Head and shoulders - One of the technical analysis techniques used by a large number of traders.
🔸The figure somewhat resembles a person, thanks to the lines of the shoulders, neck and head, in the outlines of which a man is guessed.
DeFi (DeFi)
DEFI - The decentralized finance ecosystem can provide anyone with access to traditional financial services, eliminating the need for intermediaries. Not run by any institutions or their employees - instead, the rules are written in the program code. Once the smart contract is written on the blockchain, DeFi applications can run on their own with little or no human intervention.
🔸Application of DEFI:
Allows you to create "stablecoins", lend money and earn interest on it, take loans, exchange one asset for another, open long or short asset trades and implement advanced automated investment strategies.
⚠️ The disadvantage of DeFi is the vulnerability of smart contracts. If a hacker finds a bug in the open source Dapp and exploits it, millions of dollars could be wasted in an instant.
Pump and Dump
🔸PAMP - a sharp rise in the price of a cryptocurrency, usually accompanied by an increase in trading volumes.
It happens either artificially, in order to raise the price and sell the cryptocurrency as expensive as possible, with its subsequent decrease, or on positive news for a specific cryptocurrency, in which case the price grows due to demand from investors and traders
🔸DAMP - a sharp drop in the cryptocurrency, often after the dump, the price is corrected to the previous levels.
It occurs mainly on bad news for the project (delisting from the exchange, discord among the project developers, SCAM project, or someone from the owners of a large amount of the coin - decided to sell it.
Two-factor authentication
Two-factor authentication is a security measure that, in addition, each time you log into the system (to the exchange or your wallet), it will ask for a password, for example, a code from an SMS or a Google Authenticator application code.
🔹This will make it very difficult for attackers to gain access to your funds or data.
🔸Many exchanges offer to enable this function by default, or you can do it yourself in the profile security settings!
Double spending
Double-spending - repeated (multiple) sale of the same coins, when one seller transfers his balance to two recipients of the transaction and the money is spent twice.
🔸Bitcoin is protected from double-spending attacks by verifying each transaction that is added to the blockchain to ensure that the funds contained in the transaction have not been spent earlier.
🔹In theory, a successful double spend on the BTC network could mean the collapse of the first cryptocurrency and create serious problems for blockchain technology.
Deversification
Diversification - The investor is looking for other directions so that the fall in the rate of cryptocurrencies and possible circumstances do not put him at risk.
🔸 Simply put, the main idea behind diversification and asset allocation comes down to the adage "don't put all your eggs in one basket." Combining asset and asset classes that are independent of each other is an effective way to build a balanced portfolio.
🔸The main hypothesis is that if one asset class moves down, losses can be offset by returns from other asset classes.
🔸 Example of asset allocation:
- 50% - Bitcoin
- 25% - large cap cryptocurrencies (eth, bnb, dot)
- 15% - mid-cap cryptocurrencies (twt, sfp, sol)
- 10% - small cap cryptocurrencies (trx, cake, cro)
Delisting
Listing is adding a cryptocurrency to an exchange. Usually, before listing on a large exchange, for example BINANCE, the price of a cryptocurrency rises, maybe even several times. You can use this and make good money by buying cryptocurrency before listing.
🔸Delisting is the process of removing a cryptocurrency from the exchange, usually when this cryptocurrency drops very much, but then there is a rebound, this can also be used in trading.
Bottom
The bottom is the smallest point where the rate can fall for a short time.
🔸After this small segment, the price will start to rise again. In any case, there is no decline below this point.
Domination
Bitcoin dominance is the share of Bitcoin's capitalization to the total capitalization of all other coins.
🔸 Example: if the capitalization of all cryptocurrencies is 100, and the capitalization of bitcoin is 70, then the dominance of bitcoin = 70%
🔸As a rule, a decrease in domination indicates the beginning of the altseason
Fear and Greed Index
In short, it is a cryptocurrency index that reflects the mood of market participants. There are two main points - "0 and 100", where the value "0" means extreme fear and the value "100" means extreme greed.
Extreme fear can be a sign that investors are too worried. This could be a good opportunity to buy an asset.
Extreme greed signals that an asset is overheated and may indicate an impending correction.
Swing
Swing - fluctuations in the price of a cryptocurrency without an obvious direction of movement up or down, synonymous with flat, but with a large range of price movement.
Long and Short
LONG and SHORT are terms used in the futures market.
🔸LONG - a position is opened if you think that your chosen cryptocurrency will grow, and the higher it grows, the more% of the profit will be.
🔸SHORT - a position is opened if you think that your chosen cryptocurrency will fall, and the lower it falls, the more profit% will be
🔹Long and Short positions can be closed at any time, regardless of where the price went
Liquidation
Liquidation is a word that all traders who use futures are afraid of.
🔸 Liquidation occurs if the loss on the transaction is equal to or greater than your margin, in other words, you cannot provide your position with the money that you have on your balance sheet. In this case, your order is automatically closed at the market price.
🔸When using Isolated Margin, liquidation will occur at PNL -100%.
🔸When using the Cross Margin, PNL can fall even below 100%, everything will depend on what part of the deposit you entered into the deal, in other words PNL can go down as long as your margin allows.
🔸PNL - shows% of your profit or loss on a trade.
Liquidity
Liquidity is the ability to buy and sell assets at a price that remains more or less constant between trades.
🔹A large community of buyers and sellers is important for liquidity.
🔸The result of an illiquid market is price volatility (fluctuations) and an inability to assess the real value of an asset.
Listing
Listing is adding a cryptocurrency to an exchange. Usually, before listing on a large exchange, for example BINANCE, the price of a cryptocurrency rises, maybe even several times. You can use this and make good money by buying cryptocurrency before listing.
You can find out about the listing from the official cryptocurrency channels
Delisting is the process of removing a cryptocurrency from the exchange, usually when the cryptocurrency drops very much, but then there is a rebound, this can also be used in trading.
Mining
Mining (Production) is the process of processing and confirming transactions in the cryptocurrency Blockchain.
🔸For mining, they usually use special mining farms that have a lot of computing power.
🔸At the beginning of Bitcoin's existence, it could be mined on a regular PC, but with the increase in the number of miners, the complexity of mining also grows, so now, the idea of mining on a laptop looks stupid.
Mining pool
Mining pool - Today, a mining pool is a special server that is used to distribute tasks for mining bitcoins or other types of digital coins among the pool members
🔸 Since the difficulty of mining Bitcoin is constantly growing, the chances that you individually actually compute a block are extremely small, although you will spend a lot of money on equipment and electricity.
Therefore, now almost all miners use Pools
Mining farm
A mining farm is a device designed for mining cryptocurrencies
🔸Mining farm can be either individual, it can be used in your house or apartment, or on an industrial scale. Recently, large mining farms have reached the size of a football field and more.
Cloud mining
Cloud mining is a type of mining that does not imply the purchase of equipment. The company buys devices for mining cryptocurrency and rents them out on a remote basis.
🔸The question arises why the company itself does not mine on its equipment, but spends money on advertising, marketing, support and development of infrastructure.
🔸It turns out that the commission of the users of this service should cover the costs of supporting the infrastructure and bring additional. profit for cloud mining owners. What, then, will ordinary users earn?
🔻I haven't used it myself, but I think that the income from cloud mining, if any, is much lower than from ordinary mining.
Masternode
Masternodes are special nodes in the cryptocurrency network that are responsible for its decentralization, high speed of operation, verification and approval of transactions. Also, one of their main functions is to ensure the safety of users. For their work, masternodes receive the currency of the network in which they operate.
🔸In fact, the whole process resembles mining: for adding a new block, the masternode receives a reward, but there are also differences. There is no place for luck here, the nodes that have not received it longer than others receive the payment.
🔸 Servers or computer devices operating in the network with a static IP address act as masternodes. For their functioning, the following conditions are necessary: round-the-clock activity, a running cryptocurrency wallet and full synchronization with the blockchain. Masternode is an alternative to GPU mining.
Maker
Maker is a trader who creates a Limit order to buy or sell a cryptocurrency. That is, when you create an order and wait for the price to reach (go down / go up), you are a Maker.
🔸 By the way, on futures, trading with limit orders is more profitable, since the Maker's commission on the BINANCE exchange is 2 times lower than the Taker, and on the ByBit exchange it is generally negative (they pay you a little extra for filling the order books with your limit orders)
A taker is a trader who makes market deals at the current price.
🔸 Often they say - "Bought / Sold by the glass" - this means that the trader did not create a limit order, but immediately bought at the last price.
Memo
Memo is a prerequisite for the transfer of the crypt to the recipient. This technology is not used by all cryptocurrencies, but in the case of those that do, without fulfilling this condition, the cryptocurrency simply will not reach the addressee (the exception is the case when the exchange itself does not request a memo).
In the case of currencies that do not use it, for example, BTC or ETH, this column simply will not be in the details.
🔸Why do you need a Memo?
On cryptocurrency exchanges, cryptocurrency transactions using Memo must not only go to the wallet, but also identify the recipient. If the house is a stock exchange, then Memo is the apartment number of the recipient of the letter.
🔸How can a Memo look like?
Memo for each cryptocurrency that uses it has its own format. For some currencies, it can be exclusively digital, for others - combine letters and numbers.
Option
option (Option agreement) is a contract that gives the buyer the right to buy or sell Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies in the future at a predetermined price, and obliges the seller to exercise this right.
Oracles
Oracles are third-party services that provide smart contracts with connections to external sources of information, i.e. act as a bridge between blockchains and the outside world.
There are oracles: software, hardware, human oracles, inbound, outbound, consensus.
Where can you use the Oracle?
🔸Inventory inventory - when the quantity of any product decreases, a smart contract can be created to order more products.
🔸Predicting Markets - Provided the correct conditions are met, the payout can be made.
🔸 Supply chain - sensors can be used to inform a smart contract that a product has arrived.
Order (STOP, LIMIT, CCA)
An order is an order to buy or sell cryptocurrency, there are several types of orders: Market, Limit (Buy, Stop, Take, OCO) orders
🔸Market - When you buy at the market price from the order book for sell (usually used when you urgently need to buy)
🔸Limit (buy) - an order that you create in the order book "to buy" - for this order to work, you need to wait until the price or queue reaches your order
🔸Stop - The order by which your deal will be executed, if the price went against you, is used to minimize losses.
🔸Take (limit for sell) - it sets the price at which you want to sell the previously purchased cryptocurrency
🔸ОСО is an order that combines several types of orders described above, instructions for use are below.
Capitalization
Capitalization is the total cost of a cryptocurrency at the current average exchange rate on exchanges.
🔸Capitalization is calculated using the formula: The sum of all available coins * for the price of 1 coin.
Capitalization of TOP cryptocurrencies:
🔸BTC - $ 923,895,703,896
🔸ETH - $ 179,545,098,653
🔸ADA - $ 39,851,532,490
🔸BNB - $ 38,474,817,676
🔸DOT - $ 34,496,864,528
🔸XRP - $ 20,181,907,553
Whale
🐳Kits are big players who own a huge amount of cryptocurrency and can control the market by buying and selling assets.
The "whales" have enough funds to artificially raise the price of a certain stock, coin or token.
🔸Whale Tactics:
The tactics are simple. The "whale" or group of "whales" begins to make large purchases. This leads to a sharp rise in prices and huge "green candles". Sometimes such purchases take several days.
When the price reaches a sufficient height, the whales begin a wavy reset. Waves maximize profits as new investors think the dips are temporary. But in the end, the "whales" completely leave the market.
⚠️But the fact is that about 1000 people own 40% of the BTC market.
⚠️And for small coins, the situation is an order of magnitude worse, usually 90% of coins in 1-2% of whales
Consolidation
Consolidation is the state of the price of a cryptocurrency when, over a certain period of time, it moves up or down without any significant fluctuations.
🔸 Such periods are called consolidation, flat or sideways.
Consolidation means that a certain equilibrium has reigned in the market for a time, caused either by an approximate equality of supply and demand, or simply by the absence of most players in the market.
Pump-Chat
In this article, the author reveals in detail a very popular and, most importantly, relevant topic in trading, like "PUMP-GROUPS" in all their manifestations - both free and paid.
Premining
Pre-mining - cryptocurrency mining by its creators before the official release of the project.
🔸This allows you to create an initial pool of coins that will be used to keep the project running and cover development costs. However, too much initial premining may be a sign of fraud.
🔹He's instamined. The bottom line is that with instamining, the complexity of the calculations for getting coins is quite simple. Therefore, often the creators of new digital coins in this way get tokens for themselves just before the launch of their platform.
Sidechain
SideChain is a type of blockchain that differs from Bitcoin in its capabilities and functions. This mechanism allows you to move Ethereum (or other cryptocurrencies) to another, completely independent blockchain, exchange it there, and then return it back to the main blockchain.
🔸Sidechain is designed to solve the specified problem of the main chain. This creates a simple interaction between different cryptocurrencies. Developers have the option to beta test their coins before releasing them on the main chain.
🔻Disadvantages:
Miners still need to keep the side chains safe. Forming a new side chain is an expensive decision.
Satoshi
Satoshi is a part of Bitcoin (like a dollar cents) - 0.00000001. If there are more than 7 zeros after the decimal point, then this is already Sub-Satoshi (tenths or hundredths of Satoshi)
🔸The name Satoshi comes from - Satoshi Nakamoto - the pseudonym of a person or group of people who developed the Bitcoin cryptocurrency protocol and created the first version of the software in which this protocol was implemented.
Candle
Japanese candlestick - an indicator describing the price movement of a cryptocurrency
🔸Green candle - means that the price of the cryptocurrency has increased over a certain period of time. The lower part of the candlestick shows at what price the asset started trading, and the upper part - at what price it finished trading (exactly for a specific time period of 15m, 1h, 1d, and so on)
🔸Red candle - everything is exactly the opposite as in the case of the Green candle.
Swap (SWAP)
SWAP (Swap) - This is a process during which one cryptocurrency is exchanged for another at a predetermined rate. Unlike selling one coin to buy another, when replacing tokens, the new coin replaces the old one, which means that this operation is mandatory, otherwise the owner will lose money.
🔸Usually, a token swap is carried out when switching from one blockchain (the network in which the token operates) to another, or when modernizing the blockchain.
🔸 Often a Swap is done in order to reduce the number of coins in circulation, usually as a result, the owner loses part of his actual savings, since such a Swap is used in most cases by Scam and semi Scam projects.
Burning
Burning Coins is the process of reducing the number of coins in circulation, reducing the total supply.
🔸Many projects attract attention to themselves, I focus on this process.
🔸 If you look closely, I burn a very small amount of coins (usually 1 time per quarter), on average, 3-4% of the total number of coins issued.
- Thus, this process stretches over decades and does not actually affect the price of the coin, but affects the consciousness of people who cannot count)
- If they burn 3% a year, then the growth against this background can be no more than 3%, and the rest is manipulation and greed by Khomyakov.
Smart contract
A smart contract is a computer algorithm designed to generate, control and provide information about the ownership of something.
🔸 Most often we are talking about the use of blockchain technology. In a narrower sense, a smart contract is a set of functions and data located at a specific address in the blockchain.
🔸 Basically, a smart contract is used to create new tokens on the blockchain of other cryptocurrencies (ETH, TRX, WAVES, BSC)
Nozzle
Snot is a slang expression that means a sharp drop in the price of a cryptocurrency. On the chart, it looks like a big red candle after an extended rise or flat.
Glass of Orders
Depth of orders is a list of all orders to buy and sell cryptocurrency at a predetermined price
🔸Sale glass - it contains orders of those traders who sell their cryptocurrency
🔸Buy glass - it contains orders of traders who want to buy a given cryptocurrency at a certain price.
🔸I remind you that orders are triggered in turn, that is, if there were already 1 BTC cryptocurrencies in front of you for sale at a certain price, then your order will be executed only after Bitcoin is sold out in front of you.
The progress of the queue cannot be seen, but it can be calculated by the trading volume
Stablecoin
Stablecoins are cryptocurrencies, the price of which is pegged to conventional currencies (for example $) or to commodities (gold, oil). As a rule, the rates of such cryptocurrencies are stable and they are considered a safe haven in the crypto market.
List of TOP stablecoins:
🔸Tether (USDT) is the leader among stablecoins in terms of popularity and emission. Capitalization over 24 billion.
🔸USDC Stablecoin is developed by Coinbase and Circle and is considered by many traders to be the most reliable stablecoin. Capitalization 5.5 billion
🔸DAI is a stable decentralized cryptocurrency. Capitalization 1.6 billion
🔸BUSD - stablecoin of the BINANCE exchange, Capitalization - 1.22 billion.
🔸 (TUSD) - appeared in 2018. Many people call it the only adjustable stable. Emission 0.4 billion
🔸PAX - originated in 2018. Capitalization 0.25 billion
Wall
Wall - an order or a group of orders that can significantly affect the price movement. On the other hand, there is the expected level of resistance or support.
🔸There are often false walls on small panels, when orders are placed by a large player in order to mislead traders and buy or throw off an asset!
Staking
Staking is the process of storing cryptocurrency in a wallet that supports the blockchain network.
🔸In simple words, it is holding the cryptocurrency to receive a reward, a kind of crypto deposit.
🔸The concept of staking is closely related to PoS (Proof of Stake)
🔻 The main disadvantage of staking is the fact that if the price of the cryptocurrency that you are stacking drops, you can lose in relation to the initial investment amount (in terms of $)
Scalping
Scalping is a type of trading in which a trader makes a large number of transactions with a small percentage of profit. Typically, with scalping, the% of profit ranges from 0.5% to 2% per trade. On futures, when leveraging is used, the% per trade can be much higher.
Scalping is the most popular trading method among crypto traders, but this method has its drawbacks.
🔸Advantages:
- You can quickly overclock the deposit (if you understand how to scalp)
- You do not need to predict the price of cryptocurrency in the long term, since you are trading in fact, here and now.
🔸Disadvantages:
- You need to be constantly at the monitor and follow the schedule
- For each transaction, the trader pays a commission, and there are many transactions in scalping (therefore, you need to use all types of commission discounts)
Scam
Scam (fraud) is a situation when an investment instrument for some reason has stopped fulfilling its obligations to the investor. In the field of digital currencies, this word is often used when discussing unreliable startups or dubious projects.
🔸Skamer is a person who advertises and promotes such projects
Squeeze
Squeeze - a sharp drop or rise in the price of a cryptocurrency, with a subsequent return to the original.
🔸 Often squeezes are done specifically in order to liquidate short / long positions in futures, usually this is done by unscrupulous exchanges.
🔸Also, a squeeze can be if someone mistakenly or intentionally buys / sells a large amount of cryptocurrency - a market order.
Taker
Maker is a trader who creates a Limit order to buy or sell a cryptocurrency. That is, when you create an order and wait for the price to reach (go down / go up), you are a Maker.
🔸 By the way, on futures, trading with limit orders is more profitable, since the Maker's commission on the BINANCE exchange is 2 times lower than the Taker, and on the ByBit exchange it is generally negative (they pay you a little extra for filling the order books with your limit orders)
A taker is a trader who makes market deals at the current price.
🔸 Often they say - "Bought / Sold by the glass" - this means that the trader did not create a limit order, but immediately bought at the last price.
Candle shadow
The Shadow of the Candle (wick) - denotes the price range in which the cryptocurrency was traded for a certain period of time, but due to circumstances, the price could not gain a foothold at a new level and rolled back, thus forming the Shadow of the Candle
🔸 Shadows are lower and upper, there are many strategies for technical analysis of candles and their shadows, all of which are available on the Internet.
Technical Analysis (TA)
Technical analysis (TA) is the study of the history of prices and trading volumes in order to identify patterns on the basis of which price dynamics are predicted. The basic basis is the analysis of the price chart and the order book of a trading pair!
🔹 In TA, patterns are considered and analyzed - patterns that form on price charts (Head-Shoulders, Pin Bar, Flag, etc.), and levels based on previous highs / lows of prices.
🔸Technical analysis - often criticized as "self-fulfilling prophecy" - predicting events that only happen because a large number of people admit the likelihood of a certain scenario.
🔹But since numerous traders and investors use the same indicators such as support and resistance levels, these patterns become working.
Token
A token is a digital asset - a cryptocurrency made on the blockchain (network) of another, usually a larger cryptocurrency. The token does not have its own Blockchain, and they are completely dependent on the performance of the cryptocurrency on the blockchain of which they are issued.
🔸Basically, tokens are issued on the ETH, TRX, EOS, WAWTS blockchains.
🔸 Unlike cryptocurrencies, which need to be mined (mined), tokens are available immediately after they are created, so they are often used by SCAM.
Tokensale
Tokensale is the initial sale of project tokens issued by a preliminary emission to investors.
🔸New projects so attract funds for further development. For investors, this is an opportunity to buy tokens at a certain rate, which is set by the creators of the project, and after entering the market, sell them at a higher price and make a profit if the project itself is good. Here the course is already regulated depending on the popularity (expectations from the project) and the activities of the team.
🔸In 2021, token sales have become very popular again thanks to the development of the DeFi sector. New mechanisms and formats appeared for them - IDO / IEO, which gave investors a little more guarantees for safe participation in token sales.
🔹In 2017-2018, there was already a hype ICO (token sale format) on the crypto market. But it ended with the fact that very soon most of the projects, after attracting funds from investors, began to disappear along with the money. And thanks to the anonymity of cryptocurrencies, it was almost impossible to catch such scammers and return the funds!
Averaging
Averaging a position is one of the techniques in trading, when when the price of a cryptocurrency falls, you buy it down a ladder.
🔸 Example: I bought a cryptocurrency for $ 100, at a price of $ 10 per coin, but its price dropped to $ 8, in this case, I buy the same coin for $ 8, in the amount of $ 100 - as a result, the average purchase price is 9 $ is averaging. And if the price rises to $ 9.5, I will close the deal at + 5%
🔸When trading futures, averaging should be used with extreme caution.
Shilling
Shilling is the act of enthusiastic promotion of a specific cryptocurrency or ICO project.
🔸 Usually, Schiller actively attracts new investors to put their money into a certain coin. Thus, interest in the crypto asset is heated up, they begin to bring in - pump.
🔹All this lasts a certain time, until the flow of investors weakens. As soon as the new money stops coming in, there are massive sales. At this final stage, many people lose their invested money, since there is always a dump behind the pump on the shilling.
📌Lately, the shilling of cryptocurrencies on Twitter has become popular thanks to the well-known Elon👨🚀 and Doge🐶
Shieldcoin
Shieldcoin (shield) is a small cryptocurrency that has no value, created specifically for manipulation and fraud, with its use.
🔸 Usually, all small cryptocurrencies traded on small exchanges are called shchitkomi.
From myself, I would say - 95% of all cryptocurrencies fall under this definition, since they have no value or benefit. Their price is formed exclusively by the demand from investors and traders.
Farming
Farming - "Profitable farming" is a way to earn cryptocurrency using the one you already have. It is assumed that you lend your funds to other users through special computer programs - smart contracts. For the provision of services, you receive a commission in cryptocurrency.
🔸In September 2020, the BINANCE exchange launched the Binance Launchpad pharming service where you can receive a reward in new tokens for keeping existing ones
Flipping
Flipping (flipping) - the term comes from the English word "flip" and denotes a situation in which in the future another cryptocurrency will take the leading place of Bitcoin. Most often we are talking about Ether.
🔸There is even a special Flippening Watch tool that monitors the percentage of Ether to Bitcoin on a daily basis by market capitalization, number of transactions, volume of trading operations, size of mining rewards, number of nodes in the network and even Google trends.
Flat
Flat (sideways) is a cryptocurrency price movement without significant fluctuations
When trading during a flat, there are both disadvantages and advantages:
🔸Disadvantages
- Difficult to earn a large% of profit as there are no price fluctuations
- Usually, deals are delayed, again due to the fact that the price stands still
🔸Advantages:
- Easier to analyze charts and general cryptocurrency price behavior
- It is convenient to engage in arbitration, both inter-exchange and intra-exchange (between markets)
Fork
Fork "fork" - the use of the code base of one project as a start for another, while the main project can either continue to exist or terminate it.
There are 2 types of forks:
🔸Hard fork - in which the new and old Blockchains can no longer interact with each other.
🔸Soft fork - In this case, there is a connection between projects and they can interact with each other in the future.
The most famous FORKS:
- Bitcoin Cash (BCH) - Bitcoin fork
- Ethereum Classic (ETC) - a fork of Ether
Fomo
FOMO - Missed Benefit Syndrome, fear of missing an interesting event or a good opportunity.
🔸In the case of trading, the thirst for lost profits during the growth of cryptocurrency, when a trader, having earned on a deal for the first time, buys this cryptocurrency again and again, and as a result, with a subsequent fall in price, remains at an exorbitant price for the purchased cryptocurrency and incurs losses instead of profit.
Hype - Aggressive and intrusive advertising of an event or product.
🔸In the case of cryptocurrencies, this is a ubiquitous advertisement of crypto projects and related services. Just what we are seeing now.
Futures
Bitcoin Futures is one of the types of cryptocurrency trading, with the ability to use leverage.
🔸The main difference between futures and regular (spot) trading is the ability to open a SHORT position and make money on the price drop.
🔸Futures trading is a more risky business than regular trading. According to surveys that I conducted on the channel, traders using futures are 40% more likely to trade in the red than traders who do not use futures.
Hype
FOMO - Missed Benefit Syndrome, fear of missing an interesting event or a good opportunity.
🔸In the case of trading, the thirst for lost profits during the growth of a cryptocurrency, when a trader, having earned on a deal for the first time, buys this cryptocurrency again and again, and as a result, with the subsequent price drop, remains at an exorbitant price for the purchased cryptocurrency and incurs losses instead of profit.
Hype - Aggressive and intrusive advertising of an event or product.
🔸In the case of cryptocurrencies, this is a ubiquitous advertisement of crypto projects and related services. Just what we are seeing now.
Halving
Halving is a decrease in the reward for miners for a successfully mined block by 2 times.
🔸 Simply put, now miners, for the same work, will receive half the reward.
🔸 Halving stimulates the growth of the cryptocurrency rate, as new coins are mined in 2 times less.
Hedging
Hedging is the main risk management tool that protects a trader from unforeseen events in the market, for example, from a sharp collapse in rates.
📌In cryptocurrency, this is a set of methods and strategies aimed at compensating for losing positions at the expense of profits on other positions. If you do not use hedging techniques, then at the time of a sharp drop in rates in conditions of market uncertainty, you will be forced to close positions in the negative to reduce your risks.
🔸Basic cryptocurrency hedging strategies:
-Diversification;
-Opening opposite positions;
- Portfolio rebalancing.
🔹 Derivatives can act as instruments:
-Futures,
-Options,
-Margin trading, etc.
Hashret
Hashrate is a unit by which the computing power of equipment for the production of cryptocurrency (mining) is measured.
🔸The maximum hashrate of bitcoin was 166 TH / s, this figure was reached on February 10 of this year.
🔸As you can see from the graph, the bitcoin hash rate has grown by 80% over the past year, and continues to grow, along with the price of BTC.
Hamster
Hamster is a beginner Trader / Investor who, due to his inexperience, is prone to buying on emotions.
🔸 Also called hamsters are those who buy all cryptocurrencies in the hope of a huge% profit after the sale, but as a rule, all their long-term investments lead to losses.
As soon as the market starts to fall, the term will be very ACTUAL🙂
Cold Wallet
A cold wallet is a wallet without internet access. The safest way to store cryptocurrency, which excludes hacking by hackers who do not have physical access to the storage.
🔸 Cold storage of cryptocurrencies is considered the safest. Suitable for long-term investors and large cryptocurrency holders.
🔹 Major exchanges store most of their assets in cold multi-signature wallets. Cold wallets are immune to hacking over the Internet and have a high level of security. They can be destroyed physically or lost, and often cannot be restored. Instant access to cryptoassets from a cold wallet is not possible.
📌 Popular cold wallets - Trezor, Ledger Nano S.
Expiration
Expiration - fulfillment of obligations of counterparties under concluded derivatives contracts.
🔸On the expiration date, the exchange carries out deliveries and settlements for all open positions in the futures and options market, and then the trades are held on the contracts that are next according to the date of execution.
🔹 Closer to the expiration date, market volatility usually increases, since during this period of time trading is influenced by the struggle between buyers and sellers of options and futures. The greater the number of open positions and the amount, the stronger the volatility can be.
ATH
(ATH) All Time High - the historical maximum of the value of the cryptocurrency.
🔸For example, the bitcoin rate set its ATH in February 2021 at $ 58,000
Dapp
DAPP - Decentralized Application decentralized applications and services that are open source, built on the blockchain and work autonomously.
🔸Decentralized applications can be applied in several online industries - from finance to gaming and even online casinos
🔸Decentralized applications can be found on the platforms State of the DApps, Dapp.com, Holdex, DAppRadar, CoinGecko. According to Dapp.com, more than 2,700 decentralized applications have been released as of early July 2019.
Deposit
Deposit - replenishment of the balance of the cryptocurrency wallet.
🔸 When you click the Deposit button, a window opens in front of you in which you can copy the address of the crypto-wallet and, as a rule, select the transfer network
Withdraw (withdrawal) - the process is the reverse of the Deposit.
🔸In order to find out the commission for the withdrawal of cryptocurrency, just click on this button, next to the name of the crypt and in the pop-up window you will see the cost of transferring this cryptocurrency.
ETF
An ETF is an exchange-traded fund, that is, an investment fund that tracks the price of an underlying asset.
🔹 ETFs exist in different industries and for different types of assets. An example is gold ETFs that have been in use for decades and track gold prices.
ETFs are regulated financial products and are not traded on cryptocurrencies, but on traditional exchanges like NASDAQ or NYSE.
🔹Bitcoin ETF will work in a similar way: the ETF price will change depending on the bitcoin price.
Bitcoin ETF allows investors in traditional markets to access Bitcoin in a regulated space.
FUD
FUD - (from the English "Fear, Uncertainty and Doubt", translation "Fear, Uncertainty, Doubt"). This is a deliberately created situation when rumors or unconfirmed news about a specific cryptocurrency affect its rate, which is obviously beneficial only to a narrow segment of the audience.
🔸 Usually FUD is pushed with the aim of pumping some kind of shield or buying a certain coin below the market.
🔷How not to succumb to manipulation?
Read trusted sources you trust and always check the information you receive!
Funding
Funding commission - this type of commission is present on futures, on most exchanges.
🔸The Funding rate can be either positive or negative - it depends on the ratio of Long and Short positions for a particular cryptocurrency
🔻 Negative Funding rate (as you can see in the picture above) - means that there are much more Shorts open than Longs, therefore the commission is deducted from those traders who are in SHORT positions.
🔻 Those who opened LONG positions, on the contrary, are charged a surcharge, in accordance with the% Funding rate.
❗️This is an important indicator, when analyzing the chart and choosing the price to enter a deal, many traders do not interpret it correctly, since each case has its own nuances. (If the majority of traders SHORT, this does not mean that the price will go down, the crowd usually loses, but does not earn)
HOLD
HODL is a typo for "Hold" that quickly became a term.
🔹In 2013, a user with the nickname GameKyuubi, being drunk, created a topic called "I AM HODLING", in which he announced that he was a bad trader and continued to keep bitcoins in his wallet, despite the fact that their rate was falling. The rest of the users were amused by the error in the title, and they quickly picked it up.
🔸 Soon, a decryption for HODL - Hold On for Dear Life was also invented (keep it as if life depends on it).
📌Hodl strategy - in a growing market is one of the most profitable for newbies!
NFT
NTF (non-fungible token) is a non-fungible token, in other words, each token is Unique.
🔸 At its core, an NFT is a digitally represented commodity or asset. Given that this or that product or asset is unique in nature, accordingly, the digital token in the form of which it is presented will also be unique.
🔸Properties of NFT tokens:
- they can be built on the basis of the ERC-721 and ERC-1155 standards;
- each NFT token is unique and contains unique data;
- not only information about the transaction is recorded in the blockchain, but also the subject of the transfer of ownership.
P2P
P2P is a person-to-person exchange of cryptocurrency for ordinary money, in which an exchange or exchanger acts as an intermediary
🔸Today p2p exchange is the most profitable way to withdraw cryptocurrency into fiat (regular) money.
PNL
PNL (ROE%) - Indicator of profit / loss for an open position. This indicator can be either positive - PROFIT, or negative - LOSS
🔸Positive PNL (ROE%) - can increase indefinitely, of course, if the price moves in the direction you chose when opening a deal.
🔸Negative PNL (ROE%):
- When using Isolated Margin, this indicator cannot be less than 100%, in this case your position is liquidated.
- When using cross margin, this indicator can fall below 100%, it all depends on the balance of your futures wallet.
👉Example: With an open short position of $ 100 and a wallet balance of $ 500, if the price moves against you, PNL (ROE%) may drop to -500%, after that the position is liquidated, and your balance will be reset.
TxID
TxID (Hash) is a unique 64-digit indicator that is generated when a transaction is executed.
🔸TxID has any cryptocurrency transaction (transfer), using it you can track from which wallet and to which - the cryptocurrency was transferred, see the amount and time of the transfer.
TVL
What is TVL in the DEFI space?
🔸TVL (Total Value Locked) is the total amount of funds locked in a smart contract that are on the blockchain.
🔸TVL talks about the total value of assets that are used for staking. This is the most important indicator of the success of a particular DeFi project, since almost all of them need high liquidity, and it also reflects the degree of popularity and security of the protocol.
🔸Very often investors pay attention to this parameter. When buying an asset, it is a kind of measure of reliability or invalidity.
ICO
ICO - or Initial Coin Offering - is a way to raise initial capital using cryptocurrency, analogous to an IPO on the stock market.
🔸The project sells its tokens to investors and uses the proceeds for development.
🔸 ICO participants hold the purchased tokens in the hope of future growth in their value.
🔸ICOs were popular in 2017 - 2018, recently 90% of such sales have become unprofitable for investors.