Blockchain Lingo for Newbies

2FA

Two factor authentication; a security feature used to verify encrypted identity information.

51% Attack

When one entity or person controls more than half of a proof of work network's hashing power.

Accredited Investor

According to the U.S. Securities and Exchange Commission, anyone with an "earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence)". Airdrop

A strategy to facilitate wide distribution and use of project tokens. Early-stage project creators send tokens randomly to wallet addresses on a public blockchain (such as Bitcoin or Ethereum) that meet certain criteria.

Alt-coin

Alternative-coins, which generally refers to those cryptocurrencies other than bitcoin or other than bitcoin and Ether.

AML

Anti-money laundering; a set of laws and regulations to (1) criminalize the laundering of illicit money and (2) require certain financial institutions to adopt enhanced compliance obligations to detect, prevent, and report money laundering or other suspicious activities.

ATH

All Time High.

BIP/EIP

Bitcoin Improvement Proposal, Ethereum Improvement Proposal (proposed changes to protocol by the community).

Bitcoin

The original decentralized cryptocurrency and the blockchain; generally capital "Bitcoin" refers to the blockchain and community and lowercase "bitcoin" refers to the currency.

Blockchain

A distributed, decentralized ledger combined with a consensus validation mechanism that allows for peer to peer transactions without the need for an intermediary; the definition may vary and some use it interchangeably with the term Distributed Ledger Technology ("DLT").

Bot

Automated algorithms that create strategy for those in the crypto market.

CFTC

The U.S. Commodity Futures Trading Commission.

CODE

Centrally Organized Distributed Entity; a legal construct pioneered in Switzerland for structuring companies that will engage in token offerings.

CTF

Counter-terrorist financing; a set of laws and regulations to criminalize providing financial, technological, or material support, or other goods and services, to foreign terrorist organizations and governments supporting terrorism.

Coin Mixing (or Coin Tumbling)

A process used to remain anonymous by randomly sending coins to numerous new addresses; usually this is done through third party services done with the goal of avoiding forensic detection.

Coin

Another term for a blockchain-based token.

CoinList

A platform for token-backed networks to connect with users and accredited investors.

Convertible Virtual Currency

As defined by the IRS, "virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency".

Crowdsale

The process of raising money in a public token sale, often used interchangeably with the terms "ICO," "token sale," or "token offering".

Cryptocurrency

A form of digital currency secured by cryptography rather than a central system administrator; often used interchangeably with the term "token".

DAO Report

An Investigative Report published by the SEC concerning the DAO token and its characterization as a security for the purposes of US securities law.

DAO

Commonly refers to the Decentralized Autonomous Organization, which was hacked and lost $50 million in cryptocurrency and resulted in the Ethereum blockchain hard fork; also may refer generically to decentralized autonomous organizations, which are organizations run digitally through self-executing smart contracts.

DApp

Decentralized application built using smart contracts.

DDoS

Distributed Denial of Service Attack; when a system is flooded with traffic from numerous sources.

Digital Currency

A more broad term used to define currency that is electronic, such as electronic fiat currency, virtual currency, cryptocurrency, etc.

DLT

Distributed Ledger Technology; often used interchangeably with "blockchain".

DOJ

The U.S. Department of Justice, responsible for enforcing criminal violations of U.S. AML, CTF, economic sanctions, anti-bribery, and other international regulation and compliance laws.

EEA

Enterprise Ethereum Alliance: A group of companies interested in exploring the Ethereum platform possibilities for enterprise applications.

ERC20

A standard or common set of rules for Ethereum-based tokens; most ICO tokens are ERC20 compliant.

Ether

The cryptocurrency of the Ethereum blockchain; designated ETH.

Ethereum

An open-consensus blockchain on which the cryptocurrency Ether is used.

Exchange (Cryptocurrency Exchange)

A platform through which users can purchase and sell cryptocurrency in exchange for other cryptocurrency or for fiat currency.

Faucet

Website where you can sign up and get free coins to test the waters with (basically a registration promotion).

FCA

The UK Financial Conduct Authority.

Fiat Currency

Currency (paper or coin such as the US dollar) designated as legal tender that circulates and is customarily used and accepted as a medium of exchange in the country, jurisdiction, or government of issuance.

FinCEN

The U.S. Financial Crimes Enforcement Network; an agency of the US Department of the Treasury charged with enforcing provisions of the so-called Bank Secrecy Act (BSA), the primary US anti-money laundering (AML) statute for U.S. financial institutions.

FINMA

The Swiss Financial Market Supervisory Authority.

Flippening

The future date when Ethereum's market cap will exceed that of Bitcoin.

Fork

When a cryptocurrency's blockchain splits into two distinct branches. Forks happen regularly before the network reaches consensus on which branch to use. However, if the network decides not to reach consensus and continues to use both chains, each chain will have a separate cryptocurrency (e.g., bitcoin and bitcoin cash or Ethereum and Ethereum classic).

Fraudulent Misrepresentation

The use of a false statement, or material omission, in order to get an individual or party to do something, such as sign a contract, that results in a loss.

Hash

An algorithm or function that turns data of any size into a fixed-length; a hash algorithm is used in the Bitcoin blockchain to write new transactions into the blockchain.

HKMA

Hong Kong Monetary Authority.

HODL

Hold OR Hold on for Dear Life when prices are dropping.

Howey Test

A test to determine whether or not certain instruments qualify as a "security" for the purposes of the U.S. Securities Act of 1933.

HyperLedger Project

A project of the Linux Foundation to create an open-source blockchain protocol for enterprise uses; HyperLedger's blockchain does not use cryptocurrencies and therefore cannot be used for an ICO.

ICO

Initial Coin Offering, or the process of raising money from a public token sale; the term was coined based on an Initial Public Offering, or IPO, which may be misleading as it suggests all ICOs are securities; often used interchangeably with terms token sale and crowdsale.

Insider Trading

Buying or selling of a security by someone with knowledge or access of non-public information.

IRS

The U.S. Internal Revenue Service.

JOBS Act

The Jumpstart Our Business Startup Act of 2012; a law intended to ease some of the US security regulations in order to encourage funding of small businesses.

KYC

Know Your Customer; typically shorthand for a set of requirements placed on sellers of tokens to conform with laws and regulations relating to anti-money laundering, sanctions compliance, and counter-terrorism financing efforts.

MAS

Monetary Authority of Singapore.

Mining

One mechanism bringing new coins or tokens into existence; typically associated with POW or POS.

Minting

Another mechanism for bringing new coins or tokens into existing, not involving mining or miners.

Moon

Means the price of a certain coin is expected to go very high in value.

MSB

Money Services Business; a non-bank financial institution that transfers or converts money; as regulated by FinCEN, such activities include acting as dealer in foreign exchange, check casher, issuer or seller of traveler's checks, provider or seller of prepaid access; money transmitter; or the U.S. Postal Service (subject to certain limitations issued by FinCEN.

MT

Money Transmitter; a type of MSB that accepts currency, funds, or other value that substitutes for currency (including convertible virtual currency) and the transmission of currency, funds, or other value that substitutes for currency to another location or person by an means.

OFAC

The Office of Foreign Asset Control; an office of the US Department of the Treasury charged with U.S. economic sanctions compliance enforcement against countries, governments, entities, organizations, and persons, including activities related to global terrorism, weapons of mass destruction proliferation, drug trafficking, etc.

PBOC

People's Bank of China.

Ponzi Scheme

A fraudulent investing operation where investors are promised high returns with low risk where money from new investors generates returns for older investors.

POS

Proof of stake, a mechanism for achieving consensus on a blockchain; several blockchains such as NXT use POS.

POW

Proof of work, a mechanism for achieving consensus on a blockchain; used on the Bitcoin blockchain.

PPM

Private placement memorandum; often provided by a token issuer as part of the package of materials provided to accredited investors as part of a token pre-sale or token sale.

Pump and Dump

A scheme used to manipulate a stock price by touting the company's stock through false or misleading statements; can also refer to when a group of people quickly buys a lot of tokens or shares and urges others to buy tokens before the price drops. This buying frenzy "pumps" the stock or token price up. Then the group will "dump" their shares at this high price for profit, which typically causes the price to drop and investors to lose their money.

SAFT

Simple Agreement for Future Tokens; contractual mechanism used to pre-sell tokens to accredited investors; typically considered a security and sold under an exemption from registration; can also be a SAFTE (Simple Agreement for Future Tokens or Equity).

Satoshi

Anonymous founder of Bitcoin (Satoshi Nakamoto); also, the smallest denomination of bitcoin ("a Satoshi"), representing 0.00000001 .

SEC

The U.S. Securities and Exchange Commission.

Smart Contract

A digital contract that may self-execute or self-enforce.

SRO (Switzerland)

A self-regulatory organization; in Switzerland, SROs are supervised by FINMA and must meet certain criteria such as ensuring their members comply with the Swiss Anti-Money Laundering Act.

TA/FA

Technical analysis of historical value/coin price graphs. Fundamental analysis looks at team and technology behind the coin to try and predict performance

Token

A coin built, or programmed, on a blockchain; tokens can have different uses on and off the platform such as an incentive for miners, a digital representation of an asset, ownership interest, or loan, or a form of currency for the platform; depending on the functionality, the definition can be narrowed by adding a descriptor such as "utility token" or "equity token".

Token sale (token offering)

The process of raising money by selling tokens, often used interchangeably with terms "ICO" and "crowdsale".

Virtual Currency

As defined by FinCEN, "a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency".

VQF SRO

The VQF, or Financial Services Standards Association, is a self-regulatory organization in Zug, Switzerland.

Wallet

A place to store cryptocurrency; can be a software wallet (software coded onto a smartphone or computer) or a hardware wallet (an integrated hardware/software solution for physically storing private encryption keys).

Wei

Smallest denomination of Ethereum, representing 1/1000000000000000000th Ether.

Whale

Large holder of coins, rich powerful traders who can buy/sell coins to move market rapidly.

Whitepaper

An informational document used by people and entities to convey their business plans and ideas; it is often used as a way for investors to understand more detail about the project motivation and technical aspects of the platform, project, or token.