Address

The address identifies a specific account on the cryptocurrency network and allows the receipt of cryptocurrencies. Example of an address within the Bitcoin network: 1K31KZXjcochXpRhjH9g5MxFFTHPi2zEXb

Airdrop

A method of distributing a new cryptocurrency by donating coins to users (according to a predetermined key).

Altcoin

All cryptocurrencies that are not Bitcoin are collectively referred to as altcoins. The word altcoin comes from a combination of the words alternative and coin.

AML

Anti-money laundering. AML collectively refers to a set of laws and regulations designed to combat the laundering of funds derived from criminal activity (so-called money laundering), but also to combat the financing of terrorism. In the world of cryptocurrencies, centralised exchanges typically require KYC-AML procedures where they identify the customer and then actively prevent money laundering.

Application tokens

Also called utility tokens. These tokens have a specific use that allows access to different functions of the crypto project or to special products and services.

ATH

All-Time High. The highest price up to the date. For instance, Bitcoin achieved its ATH in November 2021 when its price climbed up to $68 000.

Barter

A type of trade in which goods are exchanged for goods. This type of trade was used even before the invention of money, when people exchanged different goods with each other.

Bear Market

A bear market is a label for a trend of long-term declining prices in a particular market. Example: The cryptocurrencies found themselves in the bear market in 2018 and 2019.

Binance

The largest cryptocurrency exchange originating in China. Binance was founded in 2017 and in its short existence has become the most popular cryptocurrency exchange in the world.

Bitcoin

The world's first cryptocurrency, created by Satoshi Nakamoto. Bitcoin is the designation of individual coins as well as the entire network. It was created as an independent financial system to transfer value. It has no central authority, is open to all, is global in nature, and no one in the network has the right to censor transactions.

Blockchain

The technology that underpins Bitcoin and most other cryptocurrencies. It involves writing individual transactions to blocks of data. The blocks are created by miners and then linked together using cryptographic rules. It is essentially an open ledger that the entire network agrees on and cannot be manipulated backwards.

Block

The data structure within the blockchain in which transactions are stored.

Bull Market

A bull market is a label for a trend of long-term rising prices in a particular market. Example: 2017 was a bull market for cryptocurrencies.

Centralisation

A trait of a system with a hierarchical structure controlled by a central authority. National fiat currencies are typically governed in such a way as they are regulated by central banks.

Cold wallet

A cryptocurrency wallet that is disconnected from the internet and therefore not at risk of hacking or attack in the digital space. These are usually hardware wallets.

DDoS

Typ útoku na internetovú stránku a službu, ktorého hlavným cieľom je znefunkčniť alebo znemožniť prístup ostatným používateľom. Najčastejšie sa uskutočňuje prostredníctvom odosielania obrovského množstva požiadaviek na server, ktoré spôsobia jeho preťaženie.

Deflation

Deflation is the opposite of inflation. In this situation, the price level of goods and services falls and the purchasing power of money increases. Price deflation is often a sign of a healthy economy, but it also has its risks.

Decentralisation

A type of system that is independent of a central authority, and is managed by a network of peer nodes. Bitcoin is a decentralized cryptocurrency because there is no central authority deciding what happens within the network.

Decentralised applications

Applications based on decentralized technology that minimize the necessity of trusting a central authority. They typically use smart contract technology. The most popular platform for decentralized applications is Ethereum.

Decentralised Autonomous Organisation (DAO)

An organization built using smart contracts that together create an autonomous system. The coin owners of a given DAO decide the direction of the organisation's development.

Double-spend attack

A double coin spending attack, i.e. when an attacker spends the same coin in two different transactions.

ERC-20

A standardized format for creating tokens on the Ethereum network. Most of the tokens on the ETH network use the ERC-20 standard.

Ethereum

Ethereum is the second largest cryptocurrency by market capitalization. The main feature of the network is the possibility of creating complex smart contracts and decentralized applications.

Exit scam

A fraudulent method of obtaining funds from investors, for example through an initial coin offering (ICO), in which the authors of a certain cryptocurrency simply disappeared along with the funds obtained without leaving any information to investors.

Faucet

Aplikácia alebo webová stránka, ktorá distribuuje malé množstvá kryptomien ako odmenu za splnenie jednoduchých úloh – napríklad za opísanie captcha kódu. Prvý bitcoinový faucet vytvorený v roku 2010 rozdával používateľom až 5 bitcoinov denne

Fiat

Fiat money is the traditional coins and paper money that we encounter practically everywhere. This money is often referred to as money with internal circulation or money without intrinsic value. A typical example is the euro or the dollar. 

Finalizing the transaction

The period of a blockchain transaction when that transaction is considered irreversible. On the Bitcoin network, transactions are considered finalized after about 60 minutes. There are other types of blockchains, such as Tendermint, where the finalization of a transaction is almost instantaneous.

Flippening

Change in the top spot among cryptocurrencies by market capitalization. In other words, also dethroning Bitcoin as the dominant cryptocurrency. The closest to flippening was Ethereum in 2017, when BTC's capitalization accounted for 38% of the cryptocurrency market and Ethereum was at 31%.

FOMO

Fear Of Missing Out - The fear that an investor will miss out on profits by investing late in an asset. When prices rise massively, retail investors are usually quick to buy because they are afraid of "missing the train".

Fork

It can mean two things: 1. Splitting the network into two separate networks. 2. Changing the rules (protocol) in the given network.

Genesis block

The first block within a particular blockchain, from which all other blocks subsequently derive.

Halving

Within Bitcoin, miners are rewarded with a fixed amount per block mined. This reward halves every 210,000 blocks (approximately 4 years) and this is called halving.

Hashing

Hashing is the conversion of an input string of arbitrary length into an output of a fixed length. Cryptographic hashing functions are at the heart of how cryptocurrencies work, allowing blockchains to maintain data integrity and security.

Hashrate

The amount of computing power that ensures network security in Proof-of-Work algorithms. The higher the hashrate of a given network, the harder it is to conduct an extreme attack on it.

Hardware wallet

This is a specialised version of cryptocurrency wallets where private keys are stored securely on a physical device that is separate from the internet, so there is no risk of hacker attacks. The most well-known hardware wallets are Ledger and Trezor.

Hard Fork

Implementation of new rules within the protocol that are not compatible with the previous version, i.e. if some nodes in the network do not implement the changes, the network is split into two, creating a new cryptocurrency. A classic example is the fork of Bitcoin Cash or Ethereum Classic.

HODL

It means to hold, that is, to hold cryptocurrency. It originated as a corruption of the English word hold. Hodl in the cryptocurrency space means that investors hold their cryptocurrencies for the long term in anticipation of future profits and do not sell even during extreme price drops.

Hot wallet

A type of cryptocurrency wallet that is constantly connected to the Internet. Hot wallets are used to send and receive cryptocurrencies instantly, but are considered inherently less secure than cold wallets.

ICO

Initial Coin Offering is an initial coin offering (similar to an initial share offering). When a new cryptocurrency is created, its creators distribute coins at a fixed price, usually funding its development at the same time. An investor buys a cryptocurrency in an ICO, expecting it to increase in price when it hits the various exchanges. The space of initial coin offerings is known to have a high concentration of fraud.

IEO

Initial Exchange Offering is the initial offering of coins through cryptocurrency exchanges. It is a modified version of an ICO. Some of the most prominent platforms for IEOs include the exchanges Binance, Huobi and Okex.

Inflation

A phenomenon that causes the price level to rise and the purchasing power of money to decrease over time. It is manifested mainly by the growth of prices of products and services that are part of the consumer price index (CPI). This index includes, for example, food, energy, housing, construction materials and transport.

Interoperability

In the cryptocurrency space, interoperability refers to the ability to communicate between networks. Pioneers in interoperability are e.g. Cosmos, ICON or also Chainlink.

Capitalization

The capitalization of an individual cryptocurrency expresses the total dollar value of all coins or tokens in circulation. It is calculated as the product of the amount of coins in circulation and the current price of the coin. The total market capitalization is the sum of the capitalizations of all individual cryptocurrencies available on the market.

Consensus algorithm

A mechanism through which agreement is reached on the common state of data in peer-to-peer distributed networks.

Cryptoassets

A more comprehensive term used to summarize all virtual assets. It is true that all cryptocurrencies are cryptoassets, but not all cryptoassets are cryptocurrency. Cryptocurrency is just one category of cryptoassets.

Cryptocurrency

Digital currency secured by cryptography against counterfeiting and double-spend attacks. It is a type of currency that is not based on the authority of nation states and that is based on the principle of decentralisation.

KYC

Know Your Customer - This is a standard in the investment environment where exchanges or brokers are forced to know their customers. The main reason was investor protection, now it is a regulatory framework to combat "money laundering" and terrorist financing.

Lightning Network

The most well-known solution for speeding up transactions on the BTC network. This is the so-called second layer above Bitcoin, where BTC can be sent for a low fee.

Liquidity

Liquidity is a property of a particular asset. A liquid asset is one that can be easily converted into cash. Bitcoin is a highly liquid cryptocurrency. Works of art or real estate are not very liquid.

Mainnet

A live (or even production) version of the blockchain network. Blockchain, like other software, usually originates as so-called testnets, where no real value is transferred, only tested to see if the network concept works. After the testing comes the Mainnet, where the network is already in live operation.

MiCA

Proposal for a regulation on cryptoasset markets by the European Commission. The aim is to support the digitalization of the financial market and harmonize the regulation of cryptoassets within the European Union.

Miner

Human, or a node in the network that participates in the Proof-of-Work cryptocurrency mining process. Mining is the process that ensures the processing of transactions and the creation of new blocks, for example in the Bitcoin network.

Node

Node is the basic unit of a blockchain network. It is usually a computer or server that ensures the operation of a given network. A blockchain network consists of thousands of individual nodes that operate on common rules. Node versus miner.

Oracle

A specialized unit that ensures the flow of data from one system to another. A classic representative of decentralized oracles in the cryptocurrency space is the Chainlink project or Band protocol.

Paper wallet

This is one of the options for securing private keys offline. The user prints his private key and public address on paper.

Peer-to-peer

A type of computer network in which entities in the network are equal and communicate with each other without a server. An opposite example is a client-server network where there is a superior computer called a server.

Plasma Network

Similar to the Lightning Network, the Plasma Network focuses on higher speed and quantity of transactions. Plasma Network is a specific speed boosting solution for Ethereum.

Payment cryptocurrencies

A type of cryptocurrency whose main goal is to establish itself as an alternative payment system. The main function of payment cryptocurrencies is the transfer and preservation of value over time.

Private key

Privátny kľúč je identifikátor konkrétneho účtu. Ide o tajný kľúč, ktorý môže poznať iba majiteľ. Pomocou privátneho kľúča môže podpísať transakciu a sieť ho tak následne identifikuje ako vlastníka konkrétnych mincí. Privátny kľúč musí zostať vždy utajený. Príklad privátneho kľúča pri Bitcoine: E9873D79C6D87DC0FB6A5778633389F44532 13303DA61F20BD67FC233AA33262

Proof of Stake

It is a blockchain network security mechanism that is not based on electricity consumption. The weight of influence within the network is directly proportional to the amount of coins, not the amount of computing power, as is the case with Proof-of-Work in Bitcoin.

Proof of Work

A method of securing a blockchain network through energy-intensive computation.

Pump and Dump

A type of fraudulent scheme in which a group of investors buys a certain asset at a low price and then massively promotes it in order to attract new investors under the FOMO effect. After the price rises, the group sells the asset at a huge profit, which causes the asset's price to drop, often to its initial values.

Satoshi

Bitcoin is divisible to eight decimal places. The smallest Bitcoin unit, 0.00000001 BTC, bears the name Satoshi. It was named after the founder of BTC named Satoshi Nakamoto.

Satoshi Nakamoto

Anonymous Bitcoin author whose identity is unknown. It is not yet known whether this is a single person or a group of people.

Smart contract

A smart contract is a computer program existing on a particular blockchain.

Software wallet

A software wallet is a type of wallet that does not rely on any specialized hardware (such as a safe or Ledger) and works on a regular computer or mobile phone.

Soft Fork

Implementation of new rules and a change to the protocol that is compatible with the previous version of the protocol. Thus, if some nodes in the network do not implement the changes, the network is not split in two. It is like an upgrade.

Stable Coin

Stable coins are cryptocurrencies that are pegged to the value of a physical asset. Most often they are pegged to the euro or the dollar. There are also stablecoins that are for example pegged to gold (e.g. PAX Gold).

Token

There are two key concepts in the cryptocurrency space. Coins and tokens. A coin refers to the native unit of the network. For Bitcoin, it is BTC (Bitcoin). On the Ethereum network, the coin is Ether. Some blockchains, such as Ethereum, allow for the creation of other "cryptocurrencies", more specifically tokens, within their network.

TPS

TPS (Transactions per second) is a basic indicator for measuring the speed of a particular blockchain network. Bitcoin handles 7 transactions per second (7 TPS). Ethereum handles approximately 20 transactions per second.

Transaction

In the context of blockchain technology, a transaction is considered to be any data entry, e.g. about the transfer of cryptocurrency or other funds (money), which is adequately signed and verified by validators in the network according to cryptographic rules. The transaction is then communicated across the network and indelibly written into the blockchain.

Validator

A node in a blockchain network that processes and verifies transactions.

Public key

A public key is a cryptographically generated code that is derived from a private key. Using the public key, other network participants can verify that a given transaction is signed with the correct private key.

Volatility

Fluctuations in the price level of an asset. Bitcoin is extremely volatile because its price exhibits extreme fluctuations. The dollar, on the other hand, is low volatile because its value is highly stable.

Web 3.0

Web 3.0 is a loose term for technologies whose implementation is bringing a new era to the Internet environment. These technologies include blockchain.

White Paper

Designation for a type of document that describes in detail the characteristics of a certain product, project or technology. In the world of cryptocurrencies, a white paper is used to introduce a new project, as well as to describe its technological or monetary features in detail.