No, not where you live! This is a sequence of alphanumeric characters denoting a blockchain-specific address, such as an exchange or wallet. The unique addresses indicate the location on the blockchain network of both the receiver and sender. While addresses can be publicly viewed on a blockchain explorer, they are generally an anonymous alias as they are rarely connected to the user’s true identity.
Isn’t this just a freebie giveaway? Well, kind of. It’s a way for tokens to be distributed directly to users’ wallets, for free; the person receiving the airdrop doesn’t pay for the tokens they get. You’ll usually come across this when a project is trying to raise awareness, but a fundraising process, token upgrade and chain fork can all lead to airdrops.
If you’re old enough, you’re thinking about the theme song to the Bond movie Octopussy right now. Actually, it’s simple. All-time high (ATH) is just the highest price an asset has ever recorded on a market or exchange. As you’d expect, ATH is the converse of all-time low (ATL), which is the lowest price an asset has ever traded at (well, yeah…). Most of the ATH records were set during bull markets when cryptocurrency assets experienced extreme value growth during the upward market trend. Can you guess when the ATL records were set? If not, read on…
Hey, no shame – we’ve all been there. An all-time low (ATL) is the lowest-recorded price of an asset on a market or exchange. This isn’t going to shock you, but ATL is the reverse of all-time high (ATH) – the highest price an asset has been traded for. While bull markets tend to set the ATH, the ATL generally comes during a bear market, when downturns in the cryptocurrency market see values drop.
If it ain’t Bitcoin; it’s an altcoin! An alternative coin, or altcoin, is any cryptocurrency which came after BTC. So, basically all of them. Even the most established are altcoin, including ETH, XRP and LTC.
You know this one; it’s the figure you forget about when you stick that new LV jacket on your credit card. Annual percentage rate (APR) is the interest a borrower must pay each year. Technically speaking, the APR is expressed as an annual percentage of the outstanding loan balance, representing the annual cost of the borrowing.
If dollar makes you happy, then keep an eye on your APY! Sorry, that’s awful, but there’s a serious point here. Annual percentage yield (APY) is the rate of return over a year on your deposit, so put some money away and this is what you could earn. The APY is calculated periodically and added to the balance, so you can benefit from compound interest over time.
This is one to pay attention to, because it is about protecting you and the financial processes you use. Anti-Money Laundering (AML) is a wide-ranging set of processes, rules and regulations aimed at combatting money laundering, which is tied up with funding terrorism, the illegal drugs and arms trades, and financial crimes including cyber theft and fraud. Under AML procedures, financial firms are required to scrutinize transactions to ensure funds being processed are not connected to criminal activities, attempting to dodge tax liabilities, or seeking to break any other regulation.
Yep, it’s about to get technical in here. An ABI, or application binary interface, is a standardized way of engaging with smart contracts in a blockchain ecosystem. Simple, huh? ABIs mean a smart contract can engage with external data in addition to other contracts inside the blockchain platform. Does that help? No? Then how about this – an ABI is sort of like an API (application programming interface) as they let separate software systems communicate and interact.
We love security, and this is all about staying secure and compliant. An approved address is one that, for a wallet, exchange or other blockchain-based financial services platform, has permission to carry out transactions on an account. If it isn’t an approved address, it is prohibited from certain transactions.
Easier to explain than to pronounce! Arbitrage is when the price difference of an asset on two markets is exploited to make a profit. Think of it like this, if a coin is selling for £20 on one exchange and £25 on another, an arbitrageur can make profit by buying from the cheaper exchange and selling on it on the other. The right computer systems and software allow arbitraging to be automated, monitoring prices and conducting high-volume trades to advantage of the slightest price differences. Some say that arbitrage plays an important role by helping to keep prices consistent between different exchanges.
We all know AI right? It’s the thing that will one day replace humanity (probably). In a trading environment, artificial intelligence (AI) is setting trading strategies and executing deals using computer software, machine learning and algorithms. AI allows vast amounts of data to be analyzed, calculated and processed quickly to create optimal investment strategies and trading orders.
Has it got a value? Can it be owned, bought, or sold? It’s an asset then. In trading, the term asset is used to cover a range of physical and financial instruments, from gold and Sterling to property and stocks. Bitcoin (BTC), all the altcoins, and NFTs, are crypto and digital assets.
You gotta love a good audit. Well, maybe not, but you have to appreciate how important it is. Audit is the process of thoroughly analyzing a blockchain's codebase, or specific smart contracts, to identify code errors, security issues, incorrect design or other problems. For all blockchain protocols and applications, it is vital to audit the entire codebase to ensure the blockchain, its interrelated applications and its smart contracts, are not vulnerable to attack or challenge. Most audits are conducted to agreed audit specifications, which might involve executing tests, running symbolic execution tools, extensive code analysis, and production of a results report.
You know when you’re trying to log in and have to remember your password, scan your finger, request a code by phone? Yeah. That. Authentication is basically the procedure to verify a user’s identity before access is granted to an account, platform or private space. The login credentials required vary from platform to platform, and two-step authentication (2-step authentication) is becoming the minimal norm. Generally, authentication is followed by authorization, which is when the user’s level of access is verified.
Are you getting into the VIP lounge or hanging in the lobby with the norms? Authorization is all about verifying the user’s level of access. The authorization procedure determines a user’s permission and access to content or resources. It generally comes after the authentication process, which verifies the user’s identity.
No, not the one for groceries or the one for the gym. Here, bag is a slang term referring to a particular crypto asset holding, especially a higher-than-average amount of the asset. It is generally used to distinguish the different types of tokens or coins present in an investor’s portfolio, and there’s no agreed level of how many tokens or coins constitutes a bag. A relatively large holding of a cryptocurrency may be referred to as a “heavy bag”.
We are hating the baiting. To exploit victims with false promises of big profits, malicious tools, like bots and dishonest online ads, ‘bait’ people with offers of financial riches and quick returns. Those who fall for the baiting will often be required to hand over personal info or download software, which is usually infected with malware. Don’t fall for the bait - #DYOR.
The stuff your computer never seems to have enough of. In trading, bandwidth is the available data capacity on a network, normally measured in megabytes or gigabytes per second, for transactional throughput. Once the bandwidth limit is reached, data flow becomes unable to handle the volume of transaction and connections slow.
Hey, this is an easy one! The base currency is the one that comes first in a currency pair. So, for example, in an ETH/USD currency pairing (referencing the price of Ethereum in terms of US dollars, the base currency is ETH. USD is the quoted currency. The quick version is that a base currency is the currency an exchange rate is quoted against.
When they are fierce, unpredictable wild animals, why do so many movies, TV shows and books make bears cuddly, likeable heroes? Winnie the Pooh, Paddington, Fozzie Bear, Ted. No, wait, scratch that last one. I said cuddly and likeable, not foul-mouthed and dangerous. What makes it even more confusing is that in cryptocurrency trading, bear means neither a fierce wild animal nor a friendly screen star. In fact, bear is the term used to describe someone who is pessimistic about cryptocurrency market prices and expects them to go down. Their attitude, about declining markets and falling crypto prices, is known as ‘bearish’. And yes, a bear market is to do with this, not to do with selling bears!
Is this the good one or the bad one? Bear market sounds bad, right? Like, who wants to tackle a bear? A bear market is when the market sees declines, generally when prices fall by 20% or more from the most recent highs. This is the opposite of a bull market.
Not, we’re not going hunting. Well, maybe hunting profit (and risk) if you’re prepared to do this. A bear trap is a market manipulation, often conducted by wealthy investors working together to influence an asset price. They arrange to sell loads of an asset, such as a cryptocurrency, at around the same time so the price drops significantly. The aim of this element of the bear trap is to spook other traders into selling the declining asset, so the price drops even further. Then the original investors buy back in at the new, low price, which they helped create, which sees the asset value begin to recover. As it recovers, more people buy in, boosting the price further. And then guess what…the original group sell up at the new high, pocket the profit and watch the price drop again, ready to repeat the process all over again.
How do we measure success? One way is to benchmark, to see how far we’ve come. A benchmark index is the use of a leading index security to measure - or benchmark - against so you can track wider market performance. Nasdaq Composite, Russell 3000, and the S&P 500 are commonly used benchmark indexes.
No, not a delicious topping for your breakfast toast. Bid-ask spread is actually the difference between an asset’s bid (buy) price and ask (sell) price on an exchange. In simple economics terms, the buy price is demand and the sell price is supply. A sizable bid-ask spread may be a sign of a market’s poor liquidity.
This one is easy as 01000001, 01000010, 01000011 (A, B, C to the uninitiated…). Binary code is the representation of any data, including text and computer processor instructions, in a two-symbol system which generally uses the binary number system’s 0 and 1. Typically, binary codes are used to encode data from one format to another, such as bit strings to character strings. It is principally used to designate a pattern of binary digits (bits) to each character or instructional format, for example as a binary string of eight ‘bits’ denoting any of 256 possible values to represent a variety of diverse items.
Okay, this really does make sense. Bitcoin is different to bitcoin (BTC)… Bitcoin is a blockchain network with its own native cryptocurrency, which we all know as bitcoin. So, Bitcoin the network, bitcoin the coin. They were the first blockchain and cryptocurrency, which probably explains why it dominates the crypto ecosystem. The Bitcoin network, created in 2009, was at the forefront of Proof of Work, a technology for reaching consensus on a decentralised network.
You want to spend it, right? This hard fork on the Bitcoin network created Bitcoin Cash, an electronic cash payment system. Its cryptocurrency, BCH, was conceived to be a more practical cryptocurrency than BTC for everyday transactions. And the fact Bitcoin Cash has increased block size encourages its use as a payment system rather being a store of value.
It’s time to get hardcore… The legend tells us that Bitcoin Core was created by Satoshi Nakamoto, and it is the main implementation of the software allowing users to interact with the Bitcoin blockchain network. By running the Bitcoin Core code, a user acts as a node on the network which independently verifies the validity of block creation on the network and of the transactions sent by the network’s users. Although not owned by a single entity, it is maintained and reviewed by a worldwide community of computer scientists and software engineers.
It’s the biggest name in the cryptosphere, but just how dominant is bitcoin (BTC)? Measuring the market cap of the world’s largest cryptocurrency against the total market cap of all other cryptocurrencies combined is a metric called Bitcoin Dominance (BTCD). There is a perceived correlation between BTCD and the performance of altcoins (alternative cryptocurrencies), like Ethereum (ETH). When BTCD goes down it is usually the case that the value of other cryptocurrencies goes up – referred to as an "alt season" by some. When BTCD goes up, BTC normally outpaces other cryptocurrencies.
In the beginning… This one references the first book of the Bible rather than the legendary prog rock band, but only takes us back to 2009 (January 3 for the detail driven). The Bitcoin genesis block was the first block mined on the Bitcoin blockchain way back when.
How can we send stuff to each other without anyone else getting involved? Well, how about Bitcoin network? This is a decentralised, peer-to-peer network which means users can send units to each other without an intermediary, like a bank. We know; this is basically the whole crypto gig and we’ve just mentioned Bitcoin because, well, er… While we’re on the subject, don’t forget that Bitcoin with a capital B means the network and bitcoin with a lowercase b is the network's native cryptocurrency.
We know it gets used as an insult today, but we don’t like name calling so we’ll just remind you that a Bitcoiner is someone who is a holder of bitcoin (BTC) and advocate for the Bitcoin network. Don’t expect a Bitcoiner to hold back when it comes to saying which is the most significant digital asset available. Yeah, you like bitcoin. We get it.
At last, some classical ballet! Wait, what? Really? Okay, so a black swan event is how we refer to a massive international event that couldn’t be predicted, happens suddenly and has a dramatic negative impact on the world economy. When a black swan event happens and markets are affected, it can take a long time for them to recover. And you thought it was just a Natalie Portman movie!
J-Lo may be the same old Jenny from the Block, but it ain’t this block. So, we know what a blockchain is, and what is it made up of? Blocks, of course. A chain of them. So, each block is the record of all transaction data from a specific timeframe on the network. On Bitcoin, for example, the data will include date, time and number of transactions, as well as signature information on the origin and destination of the transactions. Blocks are added sequentially to the network’s chain, creating the public ledger we know as blockchain. Each block must, through a process of consensus, be confirmed by the network before the chain can continue transactions and build new blocks.
A block explorer is a software interface that enables users to access real-time blockchain information like transactions, blocks, addresses, nodes, and balances on a particular network. Operating as web browsers for blockchains, the many free-to-use and open-source block explorers are essential in providing for global transparency and democratised access to blockchain networks.
This is pretty much getting to the heart of crypto…blockchain. This public record of transactions is maintained and validated by a peer-to-peer network of computers which is, crucially, decentralised, but uses the same agreed method to confirm data. The beauty of blockchain is that each computer in the network retains a separate copy of the records shared by the network, which makes it almost impossible for a single user to change previous transactions and minimises the risk of the network being overwhelmed by malicious acts. We don’t need to tell you guys, but the thing about decentralised blockchains is they make cryptocurrency possible. That’s because they don’t rely on centralised authorities or others to conduct global, verified, fast and secure transactions.
Champagne music? No, this has nothing to do with bubbles and beats. Bollinger Bands are actually something trader John Bollinger created in 1983. They are a technical analysis device that is now one of the most popular tools traders use. Using moving averages and standard deviation, Bollinger Bands create a range of price movements and can help to indicate if prices have moved beyond the historical deviation range. They allow you to identify market trends and scenarios in real time. Look at a trading chart using Bollinger Bands and they will appear as a centreline based on a moving average with bands below and above the centre based on those standard deviations.
If you are in the USA you might need this one explaining. Most people in the UK, and parts of Europe, will already be familiar. Bounty is a hugely divisive candy bar; it’s compacted coconut which is somehow simultaneously moist and dry, wrapped in chocolate. It’s good chocolate too, I just can’t stand what you find inside. As you can tell, this guy ain’t a fan. But there are plenty who are. They think a Bounty is a treat. Okay, I’ve just been told to stop using the Moni Talks Wiki as a personal stage to rant about bad candy and get on with talking cryptocurrency. Well, just like some people see a Bounty bar as a treat, members of a blockchain project see a digital bounty as a treat. In this context, a bounty is a reward offered by blockchain projects to get the community involved in promoting it. A pretty familiar marketing strategy, the community is offered a bounty, usually some crypto tokens, for carrying out specific tasks, like talking about the project on a social platform. They are also offered for content creation, testing and bug auditing, translation campaigns, and so on. You’re most likely to see a bounty being offered during an Initial Coin Offering (ICO), although they can happen at any time. So, you might like this kind of bounty.
You’d think, wouldn’t you, that this is some kind of slang for your skull. You know, like a safe place to keep your brain? Actually, no. This is what you call it when people take their crypto security really seriously and forget about simple things, like forgetfulness. And death. So, a brain wallet is another name for when you memorise a crypto private key or seed phrase to access your online accounts. There’s no question it is a high security measure; without reading your mind no one is going to hack you online or steal your crypto because that key does not exist anywhere outside your brain. The problem is, that key doesn’t exist anywhere outside of your brain. What if you forget? What happens to your cryptocurrency when you die? While we all encourage securing your online accounts, a brain wallet might be a step too far as a secure crypto wallet option.
I don’t know about you, but I find it kinda weird that people travel to the Spanish city of Pamplona and dress up funny just for the chance to be gored or trampled by a bull. I mean, I get it’s a tradition and it’s not my place to knock someone else’s culture, but surely there are better think to do in Spain. Like seeing the Gaudi-design cathedral in Barcelona. Or sampling the local cuisine. Or just lying on a beach. There’s no need to have 1,000lbs of prime beef running you down. Although I guess it’s probably exciting, just like a bull run in the cryptocurrency world (see what I did there!?!). So, in crypto trading, a bull run is a specific period of time during a financial market cycle when prices go up, significantly. It is a way of referring to the trend that marks a market out as a bull market. The flipside to a bull market is the bear market, where prices fall, a lot.
What does someone always shout as you head out to the store to pick up potato chips? Well, this isn’t guacamole or salsa, but could be just as tasty. In cryptocurrency, the phrase Buy the Dip, or Buying the Dip, is often used as a price dip happens, or just before. It’s times like these that create a buying opportunity, hence ‘buy the dip’. It’s like someone seeing a flash sale or price discount in a store or online and letting others know there could be bargains out there. In crypto trading, many regard buying the dip as a strong investment strategy if you HODL, especially if you want to reduce average entry price. Oh, and yeah, if you are heading to the store Moni Talks could go for some ranch dip.
Fancy some pizza? It’s the oldest and the best known; bitcoin, or BTC, is a cryptocurrency which can be directly transmitted between users on the Bitcoin network. The network and the coin have the same name so, to identify them, the cryptocurrency starts with a lowercase b and the network starts with a capital B.
If you were hoping for something to set a romantic mood or help in a power cut, you’re out of luck. Candlesticks are employed by cryptocurrency investors as a method of charting historical and real-time prices of assets. They will display open, high, low and closing (OHLC) prices for specific periods, usually by the minute, hour, day, week and month. Green candlesticks normally indicate a "bullish" price increase while red candlesticks represent a "bearish" price decrease. Candlesticks are the best-known technical indicator traders use.
We want to keep it cheerful, so I probably won’t mention this is how butchers, and pathologists, refer to where they keep their, er, work. No, not going to do that so, instead, straight to the cryptocurrency definition. Cold storage is how we refer to an offline crypto wallet. By offline, what we mean is that it is not connected to the internet. That makes hacking it very tough, which is why cold storage is widely considered to be the most secure way of storing your cryptocurrency. Normally cold storage encompasses hardware wallets, paper wallets and USB drive.
You know, there was this one time I was visiting family in Canada, in winter, and they made me put on boots, a big coat and a stupid-looking hat to go walking. It was freezing. Along the way, my wallet fell out of the oversized jacket and rested in the snow for a while. Luckily, I found it. But when I did, man, it was a cold wallet. I mean icy cold. I’ve not idea how that’s going to help you in cryptocurrency buying and selling. Unless, you mean the other cold wallet? The storage device for crypto rather than a chilly leather pouch for your cash and cards? In that case, we can help. In cryptocurrency, a cold wallet a place to store your crypto which is not connected to the internet. Usually they take the form of a hardware wallet, which is a device isolated from any network where private keys are stored. Many people consider them more secure than hot wallets, which are is crypto storage in a place that is connected to the internet.
It’s okay not to know, seriously. We all want a piece of crypto, and we all have to start somewhere. So, we’ll keep it simple. Cryptocurrency is a digital asset on the internet that is used as a medium of exchange. It uses blockchain technology (a publicly available distributed ledger of transactions) and is secured by advanced cryptography. The secret of the success of this ground-breaking asset architecture is that it gives you certainty that cryptocurrency coins and tokens cannot be double-spent, even without a centralised intermediary. Bitcoin (BTC) was the first major cryptocurrency success story, leading to a huge growth in the range and availability of other cryptocurrencies.
We’d like to say this is a couple brought together through a mutual love of crypto and, in a sense, it is. A trading pair, or cryptocurrency pair, refers to when a buy order and a sell order are matched. In the crypto world this specifically means viewing the value of one cryptocurrency asset compared with another. The most commonly used is, of course, bitcoin (BTC), so you can see how much another cryptocurrency is worth in BTC rather than, for example, a fiat currency. This means you don’t have to refer back to fiat currency to see the relative values of cryptocurrencies when compared against each other.
It sounds like this is something you, as a trader, do, but it isn’t. In fact, Customer Due Diligence (CDD) is how a potential customer’s identity is verified, so an organisation, like a cryptocurrency exchange, knows who you are. Ordinarily, this involves gathering information about the potential customer, such as name, residential address, date of birth, photo ID and perhaps official government documents, like passports. This data allows the organisation to assess a range of risks some potential customers could pose to the organisation and its users, including but not limited to terrorist funding and money laundering.
Man, I love this 1965 track by The Beatles. Such a great tune. Not sure why it features in this guide to crypto terms from Moni Talks though. What’s that? Oh yeah, you’re right, the Fab Four song was Day Tripper. So, what’s a Day Trader? In cryptocurrency markets, just like traditional markets, a day trader is someone whose trading strategy is focused on getting in and out on the same day – no overnight holding of positions. The aim of the day trader is to take advantage of short-term value shifts between highly liquid assets. As an investment strategy, it is considered to be risky by many. Certainly, day trading is perceived as higher risk than long-term strategies. However, day traders say the potential rewards can also be higher.
The bosses at Trade Moni, the cryptocurrency exchange of Moni Talks, have told me not to joke around with this one. It’s too important. So, lets keep it clear and simple. A decentralised exchange, also known as a DEX, allows users to buy and sell digital assets like cryptocurrency with a central authority. Essentially, the users trade directly on a DEX, peer-to-peer on the blockchain, without an intermediary. As we have come to expect in the crypto world, being decentralised means this type of exchange is not a custodian of your funds and is likely to managed democratically, with decentralised governance. Yes, no central authority charging you fees means DEXs can be cheaper than ‘centralised’ exchanges, but there are other issues to consider, including risk.
Well, this is the big one. The phrase the underpins the whole crypto show. The ‘daddy’ if you like. Maybe the ‘DeFi daddy’? So yeah, decentralised finance – or DeFi as the ‘in’ crowd call it – is the sector within blockchain technology that allows financial services and technologies to be offered. Decentralised governance of a financial product – one that is democratised with no single person or organization charge – is seen as the antidote to traditional financial systems, which are ordinarily ‘centralised’. That means control rests in the hands of individuals or small elite groups, like major corporations, central banks and governments. This is more about equitable stakeholder ownership of the services and systems. Among the blockchain-based DeFi financial products you might find are DeFi exchanges (of course), investments, loans and, at the heart, cryptocurrency coins and tokens. Being decentralised makes them, so the cheerleaders say, more transparent, trustless, permissions and interoperable than old school finance.
This is exactly what you are doing right now, and something we want to encourage! When we, or anyone in the blockchain investing community, says Do Your Own Research (DYOR) what we mean is that you, as potential investors, study, analyse, and perform thorough due diligence on anything you are considering investing in. Investment opportunities can involve risk, which is what makes DYOR so important. If you fail to fully research or understand where you are putting your investment, you are at risk of losing your capital and landing with a negative investment result. We’ll keep saying it #DYOR
In the UK, there is a union specially for actors. It is called Equity and all that most people know about it is that it won’t allow two actors to join who have the same name (if you don’t believe me, read about how Doctor Who actor David Tennant got his stage name from a pop music magazine…). So, I guess an Equity token is something the acting union gives you to celebrate years of membership (or maybe sobriety?). Nah, that’s not true. I was just acting like I didn’t know what equity tokens are! Equity tokens are used to demonstrate you have an ownership interest in a business in the crypto world. It’s kind of like how you might have traditional stocks, sometimes with voting rights, in a company. The purpose is to improve transparency, so ownership is known, and bolster liquidity – the founders buy and sell equity, and therefore equity tokens, when needed.
You may be new to cryptocurrency and digital assets, but you don’t need me to explain this one. Ether was an anaesthetic widely used in the Victorian era. Okay, you got me. It was, but that’s not what we’re talking about here. In the blockchain world, ether, or ETH, is the Ethereum blockchain’s native cryptocurrency. It is integral to the Ethereum ecosystem and, as I write, the second most popular crypto coin out there (after BTC). A transaction on the Ethereum blockchain is paid in ‘gas’, a micropayment of ETH. Ether is also used to facilitate smart contract interactions across the Ethereum platform.
Arguably the ‘other’ powerhouse of crypto right now. Launched in 2015, Ethereum is a global decentralised, blockchain-based supercomputer providing the foundation for an ecosystem of interoperable, decentralised applications (dApps) powered by token economies and automated smart contracts. When assets and applications are designed on Ethereum, they are built with self-executing smart contracts removing the need for a central authority or intermediary. Fuelling the network is Ethereum’s native cryptocurrency ether (ETH), used to pay transaction fees on the network. Fans love the open-source, programmable, private, and censorship-resistant nature of Ethereum, making it, for many, the backbone of the decentralised internet. Among the innovations it has led to are Initial Coin Offerings (ICOs), stablecoins and decentralised finance (DeFi) applications.
There’s literally no way of making this funny, and I’m pretty good at that. To be honest with you, this may be one of the things we don’t want to joke about. Many see the exchange-traded fund (ETF) model as a way of enabling more people, and traditional financial institutions, to get involved in the world of cryptocurrency. As a financial product, an ETF is linked to the price of another financial instrument. It allows the investor to, without owning assets directly, to gain exposure to a specific asset (or a grouping of assets). Commodities, stocks, bonds and other assets have traditionally comprised ETFs. In cryptocurrency, an ETF is used to allow you to invest in a digital asset, such as bitcoin (BTC), without managing the digital asset or even interacting with a crypto exchange. Bitcoin ETFs have been sanctioned by several financial institutions in different jurisdictions and welcomed in many quarters.
Considered a medicine in the 1800s, today ether (ETH) refers to the native cryptocurrency of Ethereum, the decentralised, blockchain-based global network which has advanced blockchain and cryptocurrency technology. On the Ethereum network, ether is the transactional token that facilitates operations.
Here’s some FUD for thought…how do you communicate fearful, uncertain or doubtful market sentiment? Easy; Fear Uncertainty and Doubt (FUD). We generally see FUD increase among market members when there is large drop in the value of a number of assets, or an entire stock market. Specifically in blockchain, FUD is high when bitcoin (BTC) tanks, dropping a lot in a short time. Inevitably, this usually brings down prices across the cryptocurrency market. FUD is sometimes also used as shorthand to tag investment opportunity promotions where people believe traders should exercise caution.
We all get it, and in the fast-paced, ever-changing world of cryptocurrency trading, Fear of Missing Out (FOMO) is a very real thing. We’ve all had that feeling dread, deep in our stomachs, that’s something’s happening in the market right now and we’re not part of the action. In blockchain, as in general finance, Fear of Missing Out, and its more commonly used acronym FOMO, is the name we give that feeling of regret or apprehension. It normally comes when we miss an investment opportunity in stock, cryptocurrency or another other asset which subsequently rises substantially in price in a short time. FOMO was originally coined as a phrase to describe a person’s belief that they may miss out on an activity they really wanted to participate in while their friends or loved ones are enjoying themselves. We feel that.
Sounds like a fancy pasta, and just as tasty. Also known as the golden ration, the Fibonacci ratio, or Fibonacci sequence, describes balancing patterns found throughout nature and earns its name from 13th century mathematician Leonardo Fibonacci who is credited with its discovery. At its most basic, the Fibonacci sequence is when each number is the sum of the two preceding numbers, so 1, 2, 3, 5, 8 and so on. In finance, four main techniques are used to apply the Fibonacci sequence. They are: retracements, arcs, fans and time zones.
It’s time to get fundamental on your analysis! Fundamental analysis (FA) is Valuation 101 – a commonly used method of investment analysis traders and investors use to evaluate an asset’s intrinsic value, and then work out if it is being over or undervalued. As part of your FA, you might look at microeconomic factors like the current economic conditions, industry comparisons and market trends, alongside analysing the team behind the asset. In addition to fundamental analysis, another major market analysis method is technical analysis (TA), which primarily looks at volume, price and more technical indicators.
Can you smell something? Seriously though, gas is how fees associated with transacting and executing smart contracts on the Ethereum blockchain are referred to. Transaction come at a cost to the network, which are calculated on the computational power required and how long each action takes. The gas costs are represented in gwei, a denomination of ether (ETH). Gas also combats spam – charging for each transaction deters people from attempting to disrupt the system by trying to carry a large number of small transactions.
The morning after you went to the bar and then enjoyed a chilli taco with refried beans before bed, it seems like there is no gas limit. Like there’s unlimited supply of the stuff. My, how you pray for a gas limit on that day. Well, guess what? In crypto, that’s in no way what we mean by a gas limit. Here, it is the term given to the maximum fee a user can be charged by the Ethereum network. As you know, Ethereum charges a fee, know as gas, to cover the computation effort needed to complete a transaction on the blockchain. A gas limit sets out how high that fee can go. Generally, the limit depends on how complex the transaction is, how fast you want it doing, and how congested the network is when you make the request. What some users experience is that, due to many transactions ending up in queues as they await confirmation, the network miners who do the work will prioritise users who pay more.
Not only something you might find at the end of a drive, but also a device to connect Internet of Things (IoT) technology to a blockchain network. The idea of a gateway is to combat the inefficiencies found in many IoT network devices, such as limited computing power, restricted bandwidth and poor battery life.
You want influence? You got it. A governance token gives holders some influence over a platform's protocol, products and future functionality. They are usually issued to encourage community-led growth and those with governance tokens may be able to propose changes and vote on those changes.
On the Ethereum blockchain the native cryptocurrency is ether (ETH), and the smallest unit of ETH is gwei. A single gwei is equivalent to 0.000000001 ETH, and gwei is the denomination gas fees are represented in.
Funny how a simple spelling mistake online can take on a life of its own. HODL entered common use after a poster on a popular site misspelled ‘hold’ and a meme was born. Now, HODL is an often-used slang expression which simply refers to holding cryptocurrency assets, rather than cashing them in.
There’s no way you are getting onto a building site without one of these. Usually bright yellow and always uncomfortable and ill-fitting, they are a health and safety must. Well, they would be if we were actually talking about dressing up like a construction worker. In blockchain, hard cap actually has two definitions. So that’s not confusing then. One explanation is that a hard cap signifies the maximum supply of a cryptocurrency. We know, for example, that bitcoin supply is limited to 21 million BTC – that is its hard cap. Definition number two is slightly different. This time it indicates the limit on the amount of cryptocurrency investors will be offered in a funding round or initial coin offering (ICO). This use of hard cap does not tell you how many coins or tokens will be issued in total, just the limit on how many will be sold at this point, during an ICO or funding round.
Aren’t all forks hard? I mean, well, apart from those flimsy ones you sometimes get with store-bought salads. Actually, they may be sporks. It doesn’t matter…what we’re talking about here is an important blockchain software update. This isn’t about shovelling food into your face, it’s about decisions that can shape networks. A hard fork is a software update that is not backwards compatible. What that means in blockchain technology is a point when new rules are introduced into the network’s blockchain code which are not compatible with previous code. So that’s a hard fork, and it can spell trouble or opportunity. If any nodes on the network do not update their software, they become unable to communicate with the nodes that are updated, and this can sometimes result in the blockchain splitting into two networks. So, a hard fork is like a fork in a road. This happened on Bitcoin when a hard fork saw some nodes operating under old rules and others under updated rules, and Bitcoin Cash emerged.
Nope, not going there. I know, it’s an easy and obvious joke, but I’m not touching it. I was going to do one about a potato-based breakfast dish, but with everyone shouting about the elephant in the room, I’m not even sharing that. Instead, I’m going to stay serious. Super serious. In blockchain and cryptocurrency, the hash rate relates to the Proof of Work (PoW) consensus mechanism and is the unit of measurement for the computer power needed. Getting even more serious, terahashes per second, known as TH/s, are what the hash rate is valued in and, as you’d expect, the hash rate goes up and down depending on how many miners are working on a network. Yeah, that was properly serious. My brow got pretty high right then. Now I’m out of this joint.
I bet there’s a load of you thinking ‘yeah, I don’t need that one explaining’. But this isn’t about the buzz you got from that funny smelling cigarette. It’s actually exactly as simple as it sounds. The high is the highest price, and one of four chief data points mainly used by day traders on the markets. The high is the term we give to the highest price reached during the previous 24-hour trading period. Obviously, with old-fashioned stock markets this refers to when they were open. With cryptocurrency, the markets are open 24/7/365, so the high refers to the actual last 24 hours, including weekends and holidays. Oh, and because I can see you need to know, the other four are: opening price, low, and close. Together the four are referred to as OHLC.
I’m pretty sure this is what Captain Edward Smith issued in the early hours of April 15th, 1912. Jeez, learn some history guy. The Titanic. The big ship that sank when it hit an iceberg on the way to New York. There was major movie about it, with Leo DiCaprio and Kate Winslet. Well, that joke sank without trace…(too soon for sinking puns?). Okay, so an iceberg order has nothing to do with the Titanic, other than both involve an iceberg. In this case, the term is derived from the famous phrase ‘just the tip of the iceberg’. The reason for that is that, under an iceberg order, a large purchase of a single asset is divided up into smaller acquisitions, so the transactions you actually see are, well, just the tip of the iceberg. An iceberg order is, typically, an automated strategy for purchasing and often used by larger investment firms. The aim of using software to divide up your purchase into smaller limit orders is to get hold of the asset without impact the price – one large-ass order could have that affect.
Change is good, they say, but not everything can be changed. Take, for example, the story of data which, after a transaction execution, becomes irreversibly codified in the shared data ledger of a blockchain network. This is immutability. Most computer networks not based on blockchain are mutable, meaning data inside can be updated, changed, censored and controlled by one party. It is immutability which means a blockchain network can ensure the overall trust and integrity of data for a dApp, platform, or cryptocurrency.
This is one way to get things rolling, raising the funds needed to move something forward. An initial coin offering (ICO), or token sale, made possible by blockchain and Ethereum, could be launched to fundraise for a new blockchain platform, decentralised application (dApp) or digital asset. Instead of the traditional issuing of equity or shares, an ICO sells tokens that, normally, offer future utility in the products they are sold to fund. However, ICO tokens may still be considered securities, making them subject to jurisdictional regulation.
Mention insurance and you think car, house, health and life. But when you are a trader, you need to think about your assets. Insurance will, generally, compensate you for a loss in exchange for a payment, or premium. Trade Moni, the exchange of Moni Talks, insures your crypto assets, in storage and transit, as standard.
Yeah, you’re right…it does sound like a new instalment of the Matrix movie series. In fact, this could be even cooler. Isolated margin is a type of margin trading that allows you, as a trader, to limit losses to a margin you set. That means you can limit the margin allocated to each position. In volatile markets, highly leveraged positions are more likely to be liquidated, and with isolated margin you can limit your risk for individual positions. To try and keep this simple, think of it like this; if you are liquidating your position using the isolated margin model, only the isolated margin balance is liquidated rather than the entire balance of your account. Cross margin trading is the opposite of isolated margin trading.
There is nothing like a good cup of Java and, to be honest, this is nothing like that. At all. Java, for these purposes is a programming language. The Java computing platform is a collection of programs that help programmers develop and run Java programming applications efficiently. Java is considered fast, secure, and reliable, which is why it is so popular for developing apps.
Who likes missing out on stuff? That kind of depends what that stuff is. You’ve heard of fear of missing out (FOMO)? Well, the opposite is joy of missing out (JOMO). You’ll often hear this from no-coiners when prices fall or a scam is reported, expressing their delight that they aren’t involved in cryptocurrencies. But that’s just sour grapes. JOMO is also used within the crypto industry, especially by traders who are relieved they avoid a particular cryptocurrency trend – like when bitcoin (BTC) value declined steeply during 2018. Back then anyone not holding BTC is like to have experience JOMO.
If you don’t know what this is, how do you get into your home? Seriously, your house, your car, your bike lock, that ‘secret’ drawer you don’t want anyone to look in; you have to know what a key is. Of course you do, and in the cryptocurrency world a digital key isn’t all that different, because they help unlock stuff. Think if a cryptographic key as a string of bits which an encryption algorithm used to convert encrypted text into plain text (or the other way around) in a paired key access mechanism. It's like the cipher that lets the algorithm unlocked the code. Usually, keys are generated randomly rather than you setting them as you would a password, so you, as the user, are not intended to memorise them.
Sounds like good public service advice for any business, but it is actually about protection. A regulator-instituted compliance process, Know Your Customer (KYC) is the way businesses verify the identity and level of risk of their potential customers. KYC often involves requiring customers to provide official ID, such as a drivers licence or passport, to verify identification. Collection of personal data and steps to ensure the potential customer is legitimate is a requirement of most KYC regulation within financial firms, and is to protect both the organisation and other users from being exposed to risk.
This sounds so much like the name of a mid-1990s, all-girl, chart-friendly hip-hop group that I can also imagine the tunes. There’d be loads of stuff about waterfalls, being positive, and kicking that man to the kerb. No? Go look up TLC and come back to me. Back? Good. So, we’re talking LTC here, not TLC. LTC is Litecoin’s short ticker symbol. That’s the shortened version of a cryptocurrency name used on the latest price ticker you’ll find on most cryptocurrency exchanges and trading platforms. Litecoin is a Bitcoin offshoot focused on cheaper transactions.
Isn’t latency the rubber-like material some, er, specialist clothing is made from? No, that’s latex; so this must be a love of latex? Hold on, we’re going down the wrong road here. Let’s just start over. Latency, in trading, actually refers to the time between placing and order and when that order is executed. It is undesirable to have high latency while low latency, with minimal lag and often completed within milliseconds, is optimal. Your trading strategy can be compromised by high latency, especially when you trade on dynamic markets like cryptocurrencies. With prices changing so much and so quickly in crypto, a long delay between you placing an order and it being executed – or high latency – means the price could change. Not ideal.
Most of us met him in 10 Things I Hate About You and were spellbound by him in Brokeback Mountain. Yes, Heath Ledger; a star taken too soon. Of course, Heath has nothing to do with the ledger we’re talking about here – I’m just not going to miss the opportunity to talk about him. I mean, did you see The Dark Knight?!? Anyway, staying on topic, what do we mean by ledger in blockchain and crypto? Well, a ledger is well known in financial systems as a record-keeping system which keeps track of transactions. As blockchains can do exactly that, they are often referred to as distributed ledgers.
How many mornings have we woken up wishing the bar had issued a limit order last night? Actually, in crypto trading, a limit order could also be useful to avoid a headache. A common feature on trading exchanges, this function lets you buy or sell an asset at a determined price. When you, as the trader, set a buy limit order, you will usually set the purchase price of your chosen asset below current market value. As least, you do if you anticipate an impending downward move in the price. When you set a sell limit order, you’d normally put it higher than the current market value of the asset, in hope of the asset you own increasing in value. Your buy or sell order could remain unfulfilled if the limit you set isn’t reached, meaning you can avoid the headache of buying higher or selling lower than you wanted. A market order, on the other hand, is always filled, at the current trading price of the chosen asset, as no threshold has been set.
Liquidation sounds like a polite euphemism used in Bond movies when the bad guy needs to be killed. Don’t worry, if someone says liquidation it doesn’t mean 007 is on his way with the Walther PPK. It can, however, be just as fatal. In our cryptocurrency trading context, the term liquidation is when a trader has an open leveraged position that goes against their goal and results in the loss of the entire initial position. Imagine a trader buys US$1,000-worth of a coin with a current value of US$2,000 per coin with a leverage of 10X. They are betting the price will go up, but then the market takes a turn and the value falls, dropping well below the US$1,500 liquidation point. That liquidation means they’ve lost their initial investment.
A hot new club? Designer water? The latest Radiohead album? No, and this really matters. When you are talking about markets, liquidity is the amount of trading activity in a market - the higher the trading volume, the more liquid the market is. When it comes to assets, liquidity is the ability to exchange an asset without substantially shifting its price, as well as the ease of converting an asset to cash. The easier it is to convert, the more liquid the asset.
Try not to think about that leaning tower in Pisa, Italy, or a sinking ship. No, don’t. They are really, really bad images, and, in the crypto world, listing isn’t a negative thing! Here, listing is when a cryptocurrency exchange decides to offer trading pairs for an asset. When an asset is listed, especially on a larger exchange, and given significant trading pairs like bitcoin (BTC) or Ether (ETH), it suggests there is trust in the project. A listing, again especially on a larger exchange, also suggests a belief the new asset has sufficient liquidity. A crypto listing is pretty similar to the old-fashioned way company shares would be listed for trading on a stock exchange for the first time. Just like in crypto, that listing suggests confidence in the company by the exchange.
All the tangy tase of Bitcoin, but with none of the sugar. Mmmm, delicious Litecoin…just like the real thing - and zero calories! Okay, it isn’t really a diet drink, despite the name, but actually the truth isn’t that far away. Litecoin is an offshoot from Bitcoin and has similar features, so it is sort of like the original. What makes Litecoin different as a cryptocurrency is that it is designed for fast, cheap transactions. Some see Litecoin as a likely candidate to become the de facto ‘digital money’ because it is cheap, fast and easy to use, just like cash (so they say…). So, just like in the beverage industry, Litecoin is trying to be like an existing product, only different.
Big phrase for pretty basic mathematics – take the value of a coin or token and multiply it by the number in circulation. That’s about it. In blockchain, market capitalisation (or market cap for the busy people) is the value of an entire supply of a cryptocurrency or token. So, get the market price, get the number in circulation, and do the sum.
Let’s keep this one simple, because you certainly don’t need to be deep to understand it. Market depth refers to how well a market can absorb large orders without the underlying asset’s price changing. To assess market depth, you look at the number and breadth of orders, bids and offers for the asset. If an asset’s market depth is, well, deep (with a large amount of liquidity), it means an order would have to be very large to significantly change the price. Some people refer to liquidity depth instead of market depth.
When you see it written down, you’d be forgiven for thinking it reads as ‘me-me-coin’, rather than meme rhyming with scheme. Knowing what memecoin actually means, me-me-coin might be more appropriate, given the levels of self-obsessions and private in-jokes often involved. So, a memecoin is a cryptocurrency which comes about because of a viral joke or a reference to a cultural phenomenon. While the projects behind them may be sound, with good cryptoeconomics and genuine use cases, success usually depends on hype. Marketing of the projects relies heavily on social media engagement, playing on the ‘joke’ behind the memecoin, to gain investors and users. Sometimes it doesn’t matter of the crypto project is any good or not; a memecoin can live and die by its viral presence – think Dogecoin and Elon Musk. However, sometimes the projects do live up to the hype and a memecoin can outgrow its jokey conception.
“There’s gold in them thar hills”, as a 19th century goldrush stereotype might yell. Yep, mining is about digging through the dirt looking for the good stuff, whether that’s diamonds or iron ore. The word mining has been adopted by the blockchain and cryptocurrency industries, but, of course, you don’t need a pickaxe. Or to actually get up from your chair to be honest, so no heading west in a horse-drawn, covered wagon. In blockchain, mining is the name of when we use computing power to verify and record transactions. In some cases, the miners are paid for their work, which can result in new coins being created. You’ll see mining in proof-of-work (PoW) blockchains.
Predicting trends is never easy, but there are methods to help, like moving average (MA). For our purposes, an MA is a stock indicator, usually used for technical analysis (TA), to predict trends and the likely direction, up or down, of markets, asset prices, returns and more. It measures different data points by producing averages of specified data. There are many variations of moving average, including Cumulative Moving Average (CMA), Simple Moving Average (SMA) and Weighted Moving Average (WMA), all used to measure different types of data in a predetermined format.
Funny story. This guy heard I wrote ‘stuff on the internet’ and started asking me about nodes. Where could he find a really hot node, where does he find the best nodes, that kind of thing. So, keen to encourage the interest in my world, I explained a bit about blockchain tech and computer networks while this guy’s smile fades. Turns out he wasn’t saying nodes, but something that sounds similar but is WAY different. For those of you here to hear about a node, instead of the other thing, let me help. In blockchain, a node is the name given to a computer which is connected to a blockchain network. It can serve multiple purpose, including several which are vital to maintain the distributed system. Within the network, a node can be used to validate a transaction or observe blockchain activity. When it comes to keeping a blockchain network secure, nodal network structure is a key element.
Nothing to do with mushrooms or any other fungus – actually, looking at some current NFT art that might not be entirely true. Non-fungibility describes when a specific asset is distinguishable or unique from another similar asset. A non-fungible token (NFT) is a cryptographic token that operates within a blockchain platform and is not interchangeable with any related asset. Typically, NFTs cannot be divided or altered in any way.
A huge and growing industry within blockchain that we should all be learning about. A non-fungible token, commonly known as an NFT, is a specialised type of cryptographic token representing a unique digital asset that cannot be exchanged for another type of digital asset. This makes an NFT unlike a cryptocurrency or blockchain utility token (such as BTC and ETH), which are fungible. NFTs are created through smart contract technology and classified in the ERC-721 token standard.
Totally got this one. I’m all over it. So, the beginning of a river is the source and if it isn’t underground, then it is in the open air. That’s an open source! Well, it might be. I flunked geography, so who knows. What I can tell you is that in the digital world, open source is the name given to software development projects which are collaborative, and ‘open’. Open source is an approach encouraging sharing and experimentation, where code is openly shared with others to modify.
Nope, not an instruction to your favourite online bookstore. An order book is an electronic buy and sell order list for a specific asset - in the blockchain world, a specific cryptocurrency – which is organised by price. Sometimes accessed through an exchange’s online platform, order books provide critical trading and investment data to assist traders to improve market transparency. The order book will typically feature a range of assets being bought and sold at specific prices in a sequential order. As you might expect, often the buy list is shown in green and the sell list in red.
This sounds a bit like one of those charity challenges, where you get people to sponsor you to walk or run between two landmarks. It would have to be a coastal challenge and maybe for an educational charity, because that ain’t how you spell Pier to Pier. Actually, the community element of a charity challenge isn’t a bad starting point for describing what Peer to Peer, or P2P, means in the blockchain and cryptocurrency worlds. It refers to the structure of a network which is decentralised and intended to work in the best interests of everyone who is involved, instead of one centralized body. So, a peer-to-peer blockchain network, or P2P blockchain network, operates by linking different computers (called nodes) so they can work together. By having multiple independent participants, the network becomes open, censorship-resistant and public, with important data, such as crypto trades, able to shared.
We all want one and to avoid the other. Profit and Loss (P&L) is a macro-level measurement of the capital gained or lost through trading for an individual or institution – important data for an institutional investment firm. When we talk about unrealised P&L, that means the amount of profit or loss a trader has taken since opening a particular position. It’s a useful metric for trading derivatives.
What proof do you need? You go to the restaurant, check the menu and if it says steak, they probably have steak. No more proof needed. Unless you mean stake, like proof of stake, in which case we have to talk. In the world of blockchain technology and cryptocurrency, proof of stake, or PoS, is one of the most widely used consensus mechanisms. A PoS network will incentivise users to stake native coins in a network of validator nodes. When a transaction block closes, validator nodes are randomly chosen to validate the block, which generates subsequent blocks and earns a reward in native coins. Proof of stake is seen as a robust nodal network model, which can increase network resiliency, security and computational power. Systems based on PoS tend to also allow validator nodes to contribute in a democratic way to the governance of decentralised platforms, by enabling voting on specific decisions and updates. A more recent innovation the Proof of Work (PoW), proof of stake networks are widely seen as being more scalable, and faster, as well as more efficient in energy use terms.
This is what I get asked for. Every. Single. Week. “No, I don’t just watch movies and eat Oreos, I’m working”. “Prove it”. “Er…”. What I need is some kind of recognised consensus mechanism for recording proof of my work. And just like that, we arrive at the true definition! Proof of Work, or PoW, became popular on the Bitcoin blockchain network and remains a prominent consensus mechanism. The way PoW works is that miners on a network provide the computers, or nodes, to complete the complex puzzles that allow transactions on the network to be confirmed. Ordinarily, Proof of Work is rewarded with payment in the network’s own token. This type of working is decentralised and widely recognised as offering greater security than many other consensus methods. However, there are issues with PoW. One is that networks operating on this model sometimes struggle to scale up to the level needed for widespread adoption. Another is the high energy use associated with Proof of Work. Those concerned by such issues are looking more towards the Proof of Stake (PoS) consensus mechanism.
We’ve all seen it and nodded sagely as social media feeds get heated over Pump and Dump (P&D). But do we all really understand what it is? It’s bad. Really bad. In a pump and dump scheme, a trader or investment firm buys a huge amount of an assets (and yeah, sometimes illegally) then puts out misleading information about the asset or underlying company to promote, or ‘pump’ its prospects. This is intended to, and often does, attract unsuspecting investors who help push the value up. The P&D scheme then moves to phase two, where the original investor sells, or ‘dumps’ the asset for much more than they bought in. This means anyone drawn in by the pump is set to lose out. In cryptocurrency trading this is often seen when a whale buys up large amounts of a coin or token, watches the value increase off the back of their purchase, then sells for a big profit.
You’ve reached the green, the hole is right there, and you turn to your caddie and ask for the putt option. Any golfing amateur will tell you it’s usually a choice between blade, peripheral-weighted and mallet putters, but making the shot is still down to your skill. And that’s where we’d finish this explanation, except I’ve just noticed it’s put option, not putt option, and we actually aren’t defining sporting jargon. This is about cryptocurrency trading! So, a put option is a specialised type of contract used in derivatives trading, and the opposite of a call option. A put option contract means the investor has the right, but no obligation, to sell an asset, including crypto, at a set time within a limited time. When the put option contract period expires, the investor can sell or just let the value fall to zero. Some traders create unique strategies by combing put options and call options as they invest.
When numbers simply won’t do the job, we turn to qualitative analysis. While quantitative analysis focuses mainly on data reporting and balance sheets, qualitative analysis uses more subjective information to look at the value or potential growth of an enterprise. Typically, this will consist of non-quantifiable information like management expertise, research and development, industry cycles and other complex data. However, both qualitative and quantitative analysis are important to consider to give you a better perspective on a potential investment opportunity.
There are days when we all feel REKT, and not just because markets are down! This is a slang term referring to a person who is ‘wrecked’ – you know, ruined and destroyed. In cryptocurrency and blockchain, it typically refers to a trader who loses a lot of capital in a short time.
You make a joke out of this then. I dare you. In fact, I double dare you. This just isn’t funny. Not only because, well, it’s not funny, but also because it is pretty serious, especially in the world of cryptocurrency. All over the world, governments and organisations are looking to implement, or already have, regulatory compliance for cryptocurrencies, exchanges, blockchain projects, NFTs, and other digital assets. They see it as necessary to protect users. Those in favour agree, and add it is only with better regulation that the use and value if crypto will continue to grow. Critics say it is just a way for ‘the man’ to control a mechanism specifically designed to be decentralised and away from the interference of central banks, big finance and governments. It’ll come as no surprise that regulatory compliance is a way of ensuring specific guidelines set by government bodies are met. They talk about protection, confidence, transparency and fairness for investors, consumers and markets. They speak of the need to reduce risk and combat financial crime. In the end, cryptocurrency is going to have to accept regulatory compliance if it is to flourish. And those regulations could, like they have for other financial services, extend to customer service, conflicts of interest, marketing and much more.
Sounds like a poster on your gym wall and, to be honest, some of the language sounds more fitness than finance – oscillate, condition, impact anyone? In technical analysis (TA), relative strength index (RSI) is a momentum indicator which measures the impact of recent price changes to calculate overbought or oversold conditions of an asset. It is displayed as an oscillator (a line graph that moves up and down) and measured between zero and 100. Generally, an RSI rating over 70 is overbought or overvalued, while under 30 is oversold or undervalued. Like all technical indicators, the RSI investment metric should be just one data point you use to better analyse market conditions.
It’s an old banking term that we continue to use, and it’s pretty simple. A remittance is just a payment from one place to another. In the crypto world a remittance is typically made via an online service provider, cryptocurrency wallet, or other fintech option. Often, it is quicker and more cost-effective to conduct a cross-border money transfer using blockchain-based mechanisms than it is sending a remittance through the traditional banking system. Thanks to the arrival of blockchain technology and mobile cryptocurrency wallets, we can now transfer substantial amounts of capital essentially anywhere in the world within seconds and with minimal fees.
This is the one we’re all chasing; making money on our trades. Return on investment (ROI) is how we measure the performance of our investments by comparing the current value to what we paid. The ROI is usually shown as a percentage and calculation is pretty straightforward – the formula is ROI=(current value – cost of purchase) / cost of purchase. So, if you invested $1,000 and it increased in value to $1,400, the ROI would be the net profit ($1,400 - $1,000 = $400) divided by how much you invested ($1,000) to give you an ROI of 40%.
Generally, this doesn’t need an explanation as the definition is in the word – it’s a map of roads. It’s also the word governments tend to use now when they are outlining how they will get out of a tricky situation, rather than the more explicable ‘plan’ or ‘strategy’. Maybe they think it sounds more proactive, who knows? When we are talking about blockchain, a roadmap is, as you’d expect, a plan to achieve a series of goals to deliver a project on a flexible timeline. If you are asked to prepare one, remember to include the overall goal and long-term vision for the project as well as the milestones towards those ends and the estimated timeline for progress. Would-be investors may use the roadmap as part of their evaluation of your project.
The old-school jokes sort of write themselves here, but we’re not going to engage in making fun of the follicly-challenged (see season 7, episode 20 of The Office if that’s what you’re looking for!). In finance, a rug pull is a scam where a blockchain project is apparently launched, only for the founders to disappear with the investors' funds. Rug pulls can be seen in decentralised finance (DeFi) ecosystems often via a decentralised exchange (DEX) which allows for the creation of a cryptocurrency, for it to be listed and to be paired with a digital asset like bitcoin (BTC). After people invest, the founders remove the investments.
The name satoshis, or sats, was given to the smallest divisible unit of bitcoin cryptocurrency in recognition of the pseudonymous individual or group that created Bitcoin. There are 100 million satoshis in one bitcoin (BTC), which, like all cryptocurrencies, is fully divisible. In a rejection of the traditional financial system, or perhaps healthy scepticism, many crypto enthusiasts track price fluctuations of cryptocurrencies in terms of sats rather than fiat currencies.
They travelled across inhospitable terrain, braving terrible weather, for months on end. When they found the right land, a fertile plain near a river, they rested for good. This would be their settlement. Sounds like something from an old Western movie, but the reality in cryptocurrency terms is very different. In crypto, settlement is when a transaction is confirmed – or settled – by everyone involved. A transaction remains pending, and therefore unresolved, until the exchange is confirmed as completed via settlement. How fast this happens can have significant financial consequences for traders. The longer it takes for settlement to be confirmed, the more it can cost in both money and time terms. Delayed settlements can build up in a marketplace, slowing down the entire process of doing business. If settlement can be reached quickly, it speeds up operations, saving time and money and removing uncertainty.
I’m going to ignore those of you with a scatological sense of humour who misread sharding and are giggling right now. I’m also going to forgive anyone who thinks Sharding is visiting, or maybe climbing up, the iconic building in central London. Instead, I’ll just tell you that in blockchain, sharding is the scaling solution used to improve the speed of high-volume transaction. In this instance, each node – the name given to each computer which makes up the blockchain network – holds only a partial copy of the chain, instead of the full copy.
When you agree to buy one of those weird little cars Swatch and Mercedes brought out in the 1990s, that’s a Smart Contract. Another type of smart contract, and, let’s be honest, the one we care about, is a computer program within a blockchain protocol that executes automatically in line with pre-set conditions. So, you set predefined terms and the execution is carried out automatically. And it is irreversible, completely trackable and not reliant on a third party.
These are great, because you can put them in the pocket of your jeans and they are totally flexible. Yep, soft wallets are the best. Hold on…oh right, software wallets, not soft wallets. Yeah, that's completely different. A software wallet secures a user’s digital assets by storing your public and/or private keys. Basically, software wallets are computer programs normally stored locally, for example on a desktop, and connect to via the internet. While they offer greater convenience than hardware wallets, the connectivity means they can be more vulnerable to attack. Excellent security and regular software updates are important to reduce the risk of a hack or cybersecurity breach.
So, you’re looking to buy acne and don’t know where to start? Try the spot market. I agree, that’s probably the worst yet, but hey, I’m trying!!! In fact, a spot market is a public financial market where the trade of commodities or financial instruments are immediately settled and delivered. Spot market purchases are settled at the price agreed at the point of purchase rather than what the price is at the time of distribution. By contrast, the futures markets is when a delivery is due at a later date and prices may fluctuate after the exchange.
It’s kind of sad, especially if you love the Twilight books and movies, but this is why there are no vampires anymore. Wooden stakes right through their hearts. Okay, that’s not true (well, not totally at least). Staking is actually the way a blockchain network user locks – or ‘stakes’ - their cryptocurrency assets on the network, ensuring the security and functionality of the chain. When an asset is staked, it usually means it is held in a crypto wallet or validator node. Networks seek to encourage staking by rewarding holders, or hodlers, with regular financial returns. Staking is at the heart (yeah, we saw it) of Proof-of-Stake (PoS) blockchain protocols, and each blockchain project which incorporates a staking feature has its own policies for staking requirements and withdrawal restrictions.
Do you sell music inspired by 1930s jazz with its own distinct dance style and almost 100 years later just refuses to go away? Then you are a swing trader, trading in swing. King of Swing Benny Goodman would be proud. Except you don’t do you. Who would, especially when there are digital assets to buy and sell? In cryptocurrency markets, swing trading is a strategy about making short and medium-term profits by playing on the price fluctuations seen over just days or weeks. You have to study the markets, actively monitoring positions, reading the data and timing your trades perfectly. There are rewards and there are risks, putting swing traders somewhere between day traders and trend traders. While technical analysis in crypto is still regarded as something of a dark art, swing traders tend to rely on the charts and technical indicators to identify the assets to target and time their trades to make the most of short and medium-term value shifts.
It’s not easy, but the name technical analysis (TA) probably makes it sound more complicated than it is to explain. TA is a method used by traders and investors where they analyse patterns on charts, such as price and trading volume, in an attempt to predict future prices based on past data. There are literally hundreds of indicators that can be used in technical analysis, and the most popular ones include moving average convergence divergence (MACD), relative strength index (RSI) and Bollinger Bands.
This is totally one of those evil corporations you get in classic movies like Robocop and Superman, with unnecessarily elaborate plans to take over the world. And the boss is definitely played by an English guy. Or, you know, not at all. In blockchain technology, a testnet is actually pretty serious stuff. It is a testing environment, or sandbox, for a blockchain network which is used during the development phase, before the mainnet launch. A testnet is used to make sure the blockchain network is secure and working as intended. On the testnet, the system is tested and any flaws or weaknesses exposed in a test, rather than live, environment. This allows developers to fix any bugs, or add any new features needed, and complete the audit, before the project is launched.
Do you know South Park? It may be a dated reference, but South Park was the controversial adult cartoon from Trey Parker and Matt Stone which ridiculed stereotypes and prejudice by being really, really, offensive. I mean, like, REALLY offensive. There was one character who was kind of the first non-white kid in the school, and he was called Token Black. It’s right on the nose isn’t it – Token. Although, it turned out later his name was actually Tolkien Black, as an homage to the Lord of the Rings author. Whatever, is that what we mean here? No, of course not! This is the very bedrock of cryptocurrency, in a way. A token, in its most basic form, is a blockchain network’s unit of value. They are used on the network to run the blockchain, including to vote, get access, make payments for work and so on. Tokens are the main way of storing and transferring value on a blockchain, notably Ethereum. Generally they are managed by smart contract and the underlying distributed ledger. As we probably all know now, tokens can also be fungible or non-fungible. The majority of tokens are needed for fairly straightforward tasks, like simple transaction, but more and more use cases are emerging in the designs coming out of blockchain projects. Often these revolve around the governance of the network, and its maintenance, but tokens, especially non-fungible tokens (NFTs) are going so much further now.
Just how much noise can you make when you invest? Well, that’s not this. In capital markets, trading volume (volume) is the amount of a security traded over a set time. It is usually the number of shares traded during a session, or other period. The trading volume constantly changes, and the size and direction of the changes can be important variables to factor into your investment analysis.
We have to throw in a simple one every now and again, and this is it. Or, at least, it might be. If you know. Okay, maybe you don’t, so just to be sure…transaction (TX) in our sector basically refers to the sending and receiving of data between users on a blockchain network. The one most people are interested in is the exchange of network-specific tokens.
At Moni Talks there’s a lot of stuff the team get geeky over, but TPS (transaction per second) is right up there. We all care about numbers, and this is a number we REALLY care about. Transaction per second (TPS) is the number of transaction a network can send in a second. When it comes to a blockchain network, this number is seen as a measure of the network speed and scalability, and how quickly a specific platform can send data like cryptocurrency transactions and the execution of smart contract functions.
Can you see into the future? It would be a great gift to have when you’re trading. Trend analysis is basically an attempt to do that, predict future price movements by looking at overall trend data. Trend analysis is a widely used technical analysis (TA) method which helps investors make decision informed by overall market sentiment and underlying data indications. The conditions of a bear market, when prices fall, and a bull market, when prices rise, are typically considered in trend analysis. While it can be used to examine short, intermediate and long-term periods, trend analysis really must be used alongside several other data sets to be most effective.
I’ve known some people who are exactly this – trustless. They don’t trust you and you can’t trust them with your stuff. I’d say that’s a bad thing, but in blockchain and cryptocurrency, it’s actually kind of cool. We call blockchains trustless because no one who is involved needs to trust anyone else who is involved for transactions to be completed. There’s no need for trust between the individuals, because that trust comes from the impartial system itself. And that’s why trustless is a good thing.
While 2FA sounds like the latest Fast and Furious franchise instalment, the full name - two-factor authentication – kind of explains itself. 2FA gives users additional security, usually requiring a second identity verification after entering a password – hence two-factor authentication. Most often this is achieved with a randomised code you are sent and have to input. This can help reduce vulnerability to device hacks and human error.
This one doesn’t take a lot of explaining. Unbanked simple means someone who can’t access traditional banking or modern financial services. This is most common in developing nations and places with unstable internet connections, or which are under-served by the financial community. It means there are huge numbers of people essentially excluded from the global economy. Achieving equitable financial inclusion around the world, notably for the unbanked, is a stated aim of many involved in blockchain, DeFi and fintech.
So, I fell behind on my gas and power bills. Well, pretty much all my utilities. I went to the utility companies and tried to settle the debts with a special homemade coin I had created, my own utility token. Naturally, they weren’t interested. They might have been if I’d had a real utility token, like you find in blockchain technology. In this world, a utility token gives its owner access to the networks services and products for specific projects. They are not meant to represent investments or equity ownership, just to give the owner access, although sometimes investors will speculate. You may also hear of utility tokens being referred to as utility coins, user tokens, or app coins.
Say what! Cardi B and Megan Thee Stallion have updated the absolute tune? Oh, that’s not what VWAP means. Sad. In fact, volume weighted average price (VWAP) is a benchmark used in technical analysis to calculate, based on volume and price, the average price an asset has been traded at during the day. VWAP can be a guide to identifying support and resistance levels by automatically averaging the closing prices of an asset over time. For traders who rely on technical indicators to more effectively time when to enter and exit their positions, VWAP is a useful intra-day indicator.
This isn’t what they call it when you pull on a vest, although that makes a sort of sense. Vesting, in the blockchain world, is when tokens reserved for a specified time are released. They are tokens normally set aside for those involved in developing and growing a project, representing funds held for a certain period by smart contracts. This seals off access until predetermined conditions are met, and when that happens the process is called vesting.
You either love it or you hate it, and that depends on your taste for risk. Volatility, in trading, means the variation in an asset’s price, relative to the mean, over a given period. Frequent and numerous prices changes indicate a volatile asset. A lot of traders will track volatility to try to spot trading opportunities to capitalise on. That said, investors with a lower tolerance for risk are often put off by unpredictable price volatility.
A wallet is where you keep your money. Simple. And that’s sort of the same in crypto. A cryptocurrency wallet stores your public and private keys, which allows you to interact with various blockchains, as well as sending and receiving crypto assets. Wallets can be physical (hardware) or digital (software), hot (connected to the internet) or cold (disconnected from the internet), custodial (a trusted third party has control of your private keys) or non-custodial (only you control your private keys).
Call me Ishmael. Some years ago - never mind how long precisely - having little or no money in my purse, and nothing particular to interest me on shore, I thought I would sail about a little and see the watery part of the world. Thank you Mr Melville, but a whale in crypto is investor who owns so much of a cryptocurrency coin or token that they can influence the price.
Once upon a time there was a princess called Snow White who was banished to the forest, where she met seven miners (no, not crypto miners!). To remember who was who, she created a record of them and named it after herself. And that’s where whitelist comes from. Nah, it’s not really from a fairy tale. Actually, when it comes to blockchain, whitelist can have several meanings. It could be a list created by a crypto start-up to look into how legitimate would-be investors are. It could also be when a crypto exchange or wallet to verify a withdrawal address by ‘whitelisting’ it.
You got this. It’s usually A4 and you stick it in the printer. That’s right, right? Well, no, of course not. Actually, a whitepaper is a document explaining a complex issue facing a sector and how it could be resolved or improved on. A whitepaper often introduces you to a business model and plan for business development. When it comes to blockchain and crypto, a whitepaper will normally be produced as soon as a business has a working product and funding in place. It’s a great way to pitch to new investors as well as explain a vision to potential users. If you’re in a crypto business and are looking to produce a whitepaper, make sure you include elements like architecture, token economics and team constitution.
This type of music isn’t to everyone’s taste, but its modern incarnation has been bringing the voice of the street to the world since the 1970s and frequently challenging authority and our preconceptions. Oh wait, no, I didn’t see that W at the start. Wrapping, of course, is what we do right before Christmas. We put in hours getting our gift parcels to look perfect, often losing patience with our loved ones and the whole gift-giving tradition, only to see that lovingly wrapped paper ripped off and discarded in seconds. It just makes you hate the holidays doesn’t it? Or it would, if that was what we were talking about. And, of course, we aren’t, because this is about cryptocurrencies. Wrapping in this world is when the value of a coin or token is pegged to another cryptocurrency. The asset is referred to as a wrapped token because it is placed in a ‘wrapped’ digital vault that allows it to be created and then used on another blockchain protocol. Why would you do that? Well, often because it gives access to different functionality. Different blockchains have different functionalities, so it makes sense that an asset from one network which can access another network will have greater functionality. So yeah, that’s wrapping.
This should definitely be a new radio station – non-stop classic rock probably – or the latest incarnation of the Dodge Viper, but it’s not. XRM is actually the ticker symbol used for cryptocurrency Monero. If you use a cryptocurrency exchange, like Trade Moni, and watch the ticker for the latest values, you’ll see short form names used, like BTC for Bitcoin. Well this is XRM for Monero.
You’ve seen this ticker, but it’s okay if you’re not sure what it is. XRP is the native coin of the Ripple ledger network. Designed to be medium for exchange and value transfer, XRP is a low-cost bridge between fiat currencies for a range of international transaction. That is its stated use.
How has the market been behaving this year so far? This is how you know. Year to date (YTD) covers from the first day of the calendar or fiscal year up to today, and that data can be critical to analysing trends and comparing investment performances. YTD is widely used within the traditional investment industry, but you’ll also see it being referenced in blockchain and crypto investing to keep track of asset performance.
While it sounds like the title of an old action movie starring Schwarzenegger or Stallone, Zero Confirmation Transaction is something else entirely. Think of it like this. In order to be acknowledged on a network as valid, every transaction must be included in a block. When transactions are made at the same time, they are collected in blocks, which form a blockchain. Once a transaction is sent, it becomes either unconfirmed pending confirmation, confirmed or rejected. A delayed confirmation may be down to transaction fee or a high volume of transactions queuing. Zero confirmation transactions are also known as unconfirmed transactions.
I so, so wish this was the name of the baddies in my favourite children’s book. Actually, and a bit disappointingly if we’re really honest, Zk-SNARKs stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. They are used to help establish trust on a blockchain and to speed up transaction verification, while keeping some details hidden. The zero knowledge part of Zk-SNARKs refers to someone who wants to prove a statement is true, without saying why it is true. So, on a blockchain, you may have to prove certain conditions are met before a transaction is completed, like demonstrating you have enough in your wallet, but want to do that without giving away too much – like exactly how much you have in your wallet. Zk-SNARKs records only the proof of the transaction on the blockchain node, safeguarding the identity of the sender, receiver and other details associated with the transaction.