In today's financial field, the cryptocurrency world attracts countless investors with its unique charm and immense influence. This innovative and transformative field not only has advanced blockchain technology as its support but also builds a distinctive cultural system. In this cultural system, 'slang' is one of its prominent features, widely circulating in various communication scenarios. For newcomers to the cryptocurrency world, this slang can be like insurmountable hurdles, making it difficult for them to understand market dynamics and participate in investment activities. Therefore, a deep understanding of this cryptocurrency slang can not only help newcomers quickly integrate into this circle but also allow them to accurately grasp market information and make wiser investment decisions.
1. Unveiling Cryptocurrency Slang
(1) Basics of Cryptocurrencies and Blockchain
Cryptocurrency: A form of currency that exists in digital or virtual form, fundamentally different from the fiat currency issued by governments that we use in daily life. It operates without a central issuing or regulatory authority and relies on decentralized systems. Transactions are protected through complex cryptographic technologies, and all transaction records are stored on a public ledger, securely kept in digital wallets. Its value is determined entirely by market supply and demand, leading to significant price volatility. For example, Bitcoin (BTC), as the pioneer of cryptocurrencies, experiences price fluctuations akin to a roller coaster, sometimes soaring to astonishing heights and sometimes plummeting drastically, causing investors' emotions to swing correspondingly.
Blockchain: A machine of trust and a distributed ledger. It stores data in units called 'blocks,' which are securely linked together by cryptographic hashes, forming an irreversible chain. Once a transaction is recorded in this shared ledger, it cannot be altered or tampered with. It establishes trust without central authority intervention by ensuring that the majority of participants in the network recognize the validity of the transaction through a 'consensus mechanism.' Blockchain can be imagined as a publicly transparent, permanently unalterable 'super ledger,' where each transaction is meticulously recorded, timestamped, and securely 'locked' to the previous transaction, creating an indestructible chain. This feature gives blockchain technology extensive application prospects in various fields such as finance, supply chain management, healthcare, etc.
Mainnet and Testnet: The mainnet is the network where a blockchain project officially operates and processes real transactions, carrying actual digital assets and value interactions, just like a real financial system in the real world. The testnet, on the other hand, is an independent network specifically designed for developing, testing new features, fixing bugs, and simulating real transactions, involving no real assets or fees. The testnet provides developers with a safe 'sandbox environment', allowing them to comprehensively test smart contracts and applications without using real assets, promptly identifying and fixing potential errors or vulnerabilities to ensure stability and security during the mainnet deployment. When investors pay attention to a blockchain project, understanding whether it has launched the mainnet and the operational status and maturity of the testnet is an important basis for assessing the project's reliability and development prospects. Projects that rush to launch the mainnet while skipping sufficient testing often carry higher technical risks and capital security hazards, and investors should treat them cautiously.
(2) Storage and Trading of Digital Assets
Wallet: A cryptocurrency wallet is a digital tool used for storing, sending, and receiving cryptocurrencies, mainly divided into hot wallets and cold wallets. Hot wallets are online wallets connected to the internet that are convenient to use, making them ideal for high-frequency trading and daily small payments. However, due to their online nature, they are also more vulnerable to cyberattacks and have relatively lower security. Cold wallets, on the other hand, are offline storage wallets, typically existing in hardware form, such as USB devices. Because they are not connected to the internet, cold wallets significantly reduce the risk of private key breach and are considered one of the safest methods for storing cryptocurrencies at this stage. However, their offline nature also brings about operational inconveniences and risks of physical loss or damage. Investors need to understand that cryptocurrencies are not actually stored in wallets; wallets merely help manage the 'keys' (private keys), and with the private key, investors can control their assets on the blockchain. When choosing a wallet, investors should weigh their funds, trading frequency, and risk tolerance between hot and cold wallets sensibly. Generally, it is prudent to keep a small amount of funds in a hot wallet for daily trading while storing the majority in a cold wallet for long-term safekeeping. At the same time, it is essential to properly safeguard private keys and mnemonic phrases, as they are the only proof of asset ownership; once lost, assets will be difficult to recover.
Public Key and Private Key: The private key is a complex code composed of numbers and letters, serving as the only proof of ownership of crypto assets, used for authorizing and signing transactions. The importance of the private key is self-evident; once lost or stolen, investors will permanently lose control over all their cryptocurrencies. The public key is a string of numbers generated from the private key, used for encrypting transactions and verifying digital signatures, which can be shared publicly. Others can send cryptocurrencies to the investor's wallet through the public key. The private key can be likened to the only key that opens the digital asset vault and must be kept absolutely confidential; while the public key is like a public email address used for receiving emails (cryptocurrencies). Due to the irreversibility and anonymity of blockchain transactions, once the private key is leaked, assets are nearly impossible to recover. Therefore, investors must take the protection of the private key seriously, adopting strict protective measures such as using hardware wallets, offline backing of mnemonic phrases, and avoiding operations in insecure network environments.
Trading-related terminology
Whales: In the cryptocurrency world, 'whales' usually refer to individuals or groups that manipulate market prices to gain huge profits. Their actions are often deceptive and severely harm the interests of ordinary investors. Whales may spread false information, manipulate trading volumes, and other means to influence cryptocurrency price trends, driving prices in favorable directions for them, and then profiting at the right moment, leaving ordinary investors with losses.
Arbitrage: The act of exploiting price differences of the same cryptocurrency between different exchanges for profit. Due to varying market conditions and user bases between exchanges, the same cryptocurrency may experience short-term inconsistencies in prices across different platforms. Arbitrageurs will buy cryptocurrencies on exchanges where the price is low and quickly transfer them to exchanges where the price is high to profit from the difference. However, with market development and rapid information dissemination, this arbitrage opportunity is becoming increasingly narrow, and arbitrage also needs to consider transaction fees, withdrawal limits, and other cost factors.
Breaking the Issue Price: Refers to the market price of a cryptocurrency falling below its issue price. In some new coin issuance scenarios, the project party usually sets an issue price, and when the market does not highly recognize the coin or is affected by overall market downturns, the coin price may fall below the issue price shortly after listing, which is an unfavorable situation for investors who participated in the issuance.
Leveraged Trading: Investors use a small amount of funds as margin to borrow money from exchanges or other financial institutions for investments multiple times the original amount. Leveraged trading can amplify investment returns but also increases risk. For example, if an investor trades with 10x leverage, when the coin price moves favorably by 10%, the investor's return will be 100% of the principal; however, if the coin price moves unfavorably by 10%, the investor may lose all their principal and could even face margin calls or forced liquidations.
Position, averaging down, increasing position, establishing position, reducing position, light position, heavy position, missing out, hedging
Position: Refers to the initial holdings an investor has in a trade, reflecting the investor's degree of market participation and directional judgment at a certain moment.
Averaging Down: When an investor already holds a certain cryptocurrency, and its price falls, they buy a certain amount of that cryptocurrency again to lower the average cost. The purpose of averaging down is to hope to reduce losses or achieve profits through subsequent price rebounds, but averaging down also carries risks; if the price continues to fall, it may lead to further losses.
Increasing Position: Unlike averaging down, increasing position refers to the act of buying more of a cryptocurrency that an investor already holds and is optimistic about its future development, during a price increase, to increase the number of holdings and hope to gain more profit. Increasing position requires accurate judgment of market trends; otherwise, one may chase in at a price peak and face the risk of price correction.
Establishing Position: Also known as opening a position, refers to investors using account funds to buy a certain amount of cryptocurrency, thereby establishing their investment position. Establishing a position is the first step in investing, and the timing and price selection for establishing a position significantly impact subsequent investment returns.
Reducing Position: When investors believe that the market conditions may decline or that their current holdings carry certain risks, they sell part of their holdings to reduce their risk exposure in the investment portfolio. Reducing position can help investors lock in some profits and avoid excessive losses resulting from market downturns.
Light Position: Refers to a situation where the funds for a certain cryptocurrency in an investor's portfolio account for a smaller proportion of the total funds, usually used to test the market or as a base for long-term investment. Light position operations are relatively stable, pose smaller risks, but also have relatively limited returns.
Heavy Position: In contrast to light positions, heavy positions mean that the funds held in a certain cryptocurrency by an investor account for a large proportion of the total funds. Heavy position operations may yield substantial returns when market conditions are favorable, but they also carry significant risks; if the market trend goes against expectations, it may lead to severe losses.
Missing Out: When the market price rises, investors miss the opportunity to profit for various reasons (such as hesitation, misjudgment, etc.), this situation is referred to as missing out. Missing out can create psychological pressure for investors, especially in a continuously rising market, where investors may regret not entering in time.
Hedging: Refers to investors opening new positions in the opposite direction of their original holdings, also known as locking or hedging. The purpose of hedging is usually to temporarily lock in current profits or losses, avoiding further impact from market fluctuations on the holdings, while also mitigating risks to a certain extent. However, hedging operations are relatively complex and require deep understanding and grasp of the market; otherwise, they may increase transaction costs and management difficulty.
(3) Market Trends and Dynamics
Waterfall: Vividly describes the dramatic decline of coin prices, akin to a waterfall that is rapid and difficult to contain. In the cryptocurrency market, due to its high uncertainty and volatility, various factors (such as major policy adjustments, spread of market panic, exposure of negative project news, etc.) may trigger a waterfall-like drop in coin prices. Once a waterfall market occurs, investors' assets often significantly devalue in a short period, so it is essential to closely monitor market dynamics and take timely risk response measures.
FOMO (Fear of Missing Out): The anxiety of missing out. In the cryptocurrency market, when the price of a certain cryptocurrency continues to rise or a project attracts widespread attention and brings high returns, investors may blindly follow in buying out of fear of missing out on profit opportunities, often lacking adequate evaluation of the project's fundamentals and market risks. FOMO sentiments can be highly contagious in the market, easily triggering irrational booms, and when the market heat subsides, these blindly following investors may face significant losses.
FUD (Fear, Uncertainty, and Doubt): Represents fear, uncertainty, and doubt. In the cryptocurrency world, FUD usually refers to exaggerated negative market information that may be false or maliciously spread, aimed at creating market panic and influencing investors' decisions. Some bad actors may use FUD to suppress coin prices to buy in at low prices or achieve other ulterior motives. Investors need to remain rational, carefully discern market information, and avoid making erroneous investment decisions due to the influence of FUD.
ATH (All Time High): Represents the highest historical price. When the price of a certain cryptocurrency reaches its historical peak, it is said to have set an ATH. ATH is an important reference indicator for investors, reflecting the heights that the cryptocurrency has reached in the market, and can also serve as a basis for evaluating current price levels and market trends. However, it is important to note that past historical highs do not guarantee that future prices will reach or exceed those levels again, as market conditions are complex and variable.
Bull Market, Bear Market, Monkey Market
Bull Market: Refers to a period when market conditions generally rise. In a bull market, the prices of most cryptocurrencies show an upward trend, and investors are generally in a profitable state, with the market filled with optimism. The formation of a bull market is usually related to several factors, such as a favorable macroeconomic environment, policy support, ample market funds, and enhanced investor confidence. In a bull market, investors tend to actively buy and hold cryptocurrencies, hoping to gain more profits.
Bear Market: In contrast to a bull market, a bear market refers to a period when the market trend generally declines. In a bear market, cryptocurrency prices continue to fall, and investors generally face losses, with a pervasive atmosphere of pessimism. The emergence of a bear market may be caused by factors such as macroeconomic recession, tightening policies, market bubble bursts, and major security incidents. In a bear market, investors need to be more cautious, control risks, and avoid blindly bottom-fishing to prevent larger losses.
Monkey Market: Describes a market where prices fluctuate wildly and are difficult to predict. In a monkey market, the forces of bulls and bears are relatively balanced, with no clear upward or downward trends, making it challenging for investors to grasp market rhythm and complicating operations. In such market environments, investors need strong risk tolerance and flexible trading strategies to respond to rapid market changes.
(4) Expansion of Blockchain Technology and Applications
Smart Contract: This is a computer protocol that disseminates, verifies, or executes contracts in an informational manner. Based on blockchain technology, it writes and deploys contract terms in code on the blockchain. Once conditions are met, the contract automatically executes without third-party intervention. The emergence of smart contracts greatly improves transaction efficiency and security, reducing human intervention and disputes in traditional contract execution. For example, in some decentralized finance (DeFi) applications, smart contracts are widely used in lending, trading, insurance, etc., achieving automated financial services.
Public Chain: A blockchain that anyone in the world can read, send transactions, and participate in the consensus process. Public chains have a high degree of decentralization, openness, and transparency, and their operation is not controlled by any single entity or individual. Bitcoin and Ethereum blockchains are typical public chains, providing foundational support for numerous cryptocurrency projects and decentralized applications. On public chains, users can freely create wallets, conduct transactions, develop applications, and all transaction records and data are publicly transparent, allowing anyone to query and verify.
Layer 1 and Layer 2
Layer 1: Generally refers to the underlying infrastructure of a blockchain, including core components such as data layer, network layer, consensus layer, and incentive layer. The performance and characteristics of Layer 1 directly affect the security, scalability, and transaction processing capabilities of the entire blockchain network. For example, Bitcoin and Ethereum's Layer 1 adopt a Proof of Work (PoW) consensus mechanism, which, while performing well in terms of security, also faces issues of slow transaction speed and high energy consumption.
Layer 2: An expansion solution built on top of Layer 1, primarily focusing on the contract layer and application layer of the blockchain. The purpose of Layer 2 is to address the scalability bottleneck issues of Layer 1 by moving some transactions from Layer 1 to Layer 2 for processing through techniques such as sidechains, state channels, and Rollup, thereby improving transaction efficiency and reducing transaction costs. For instance, some Layer 2 solutions of Ethereum, like Optimistic Rollup and zk-Rollup, can significantly enhance the transaction throughput of the Ethereum network while lowering gas fees, providing users with a better experience.
DeFi (Decentralized Finance): A financial ecosystem built on blockchain technology, aiming to realize various functions of traditional finance, such as lending, trading, insurance, and wealth management, through decentralized means. DeFi applications typically run on top of smart contracts, eliminating the need for traditional financial intermediaries, allowing users to engage in financial transactions without trusting third parties. For instance, on a DeFi lending platform, users can directly deposit their cryptocurrencies to lend and earn interest, while users in need of funds can borrow from the platform by collateralizing assets. The emergence of DeFi has brought innovation and transformation to the financial sector, providing users with more convenient, efficient, and low-cost financial services, but it also faces risks such as smart contract security vulnerabilities and regulatory uncertainties.
NFT (Non-Fungible Token): A unique digital asset based on blockchain technology, which differs from fungible tokens (like Bitcoin, Ethereum, etc.) in that each NFT has unique attributes and value, making them non-interchangeable. NFTs can represent various digital assets such as artworks, collectibles, game items, virtual land, etc. For example, a digital artwork can be minted as an NFT, allowing the artist to prove the ownership and uniqueness of their work through blockchain technology, and the purchaser can hold unique ownership of the digital asset. The emergence of NFTs has brought new models and opportunities for the creation, trading, and collection of digital content, promoting the development of digital art, gaming, and virtual worlds.
2. The Rise of Undervalued Altcoins
In the vast landscape of the cryptocurrency world, altcoins, as various tokens outside of Bitcoin, have always occupied an important position. They are like seeds full of potential, taking root in the market soil, some even blooming into brilliant flowers unexpectedly. In recent years, some previously undervalued altcoins have quietly risen, achieving a stunning turnaround from being overlooked to doubling or even multiplying in price.
(1) Signs of Rising
Price Surge: Some undervalued altcoins have experienced astonishing price increases over a short period. For example, [Specific Altcoin Name 1] has seen its price rise from an initial price of [Initial Price 1] to [Current Price 1], with an increase of [X]%. This rapid price increase has attracted a large number of investors' attention and become the focus of the market. Similarly, [Specific Altcoin Name 2] achieved consecutive price doubling over a specific period, significantly increasing its market capitalization and quickly rising in rankings within the cryptocurrency market.
