Ethereum Glossary

cryptocurrency glossary

Algorithmic Trading

The leveraged assets are not owned by the firm or individual borrowing it. Indices are hypothetical portfolios that track a sector of the traditional cryptocurrency glossary stock market. While tradable with derivative products or index mutual funds, indices are not assets that one can actually own.

  • Since most individual miners don’t have the computing power or the hardware to dedicate one or more machines strictly to mining, they’ll join with other miners to distribute the processing burden.
  • When more than one miner is involved in the processing of data blocks, this is called a mining pool.
  • There’s really no one owner of Bitcoin, and no corporate board making the decisions; all of its investors have a vested interest and a share in it.
  • Once the mining is completed and verified, the pool’s members divide the coin and transaction fee rewards evenly.
  • As such, when we use the term “issuer,” we mean the investors in a type of cryptocurrency; we use it conceptually and not literally.
  • There’s no central bank, no government deciding when new cryptocurrency comes into being; it’s “minted” when investors mine the data blocks.

Bitcoin (btc)

Spot price is the last traded price for an asset for immediate purchase or delivery. This is opposed to asset prices on futures or other financial product derivatives. Spot long is the purchasing asset on the open market, synonymous with ownership of an asset. A speculator is a type of trader that seeks to make money off of movements in price only and does not take into account company growth over the long term. A sell cryptocurrency glossary wall is an order block composed of a large enough amount of limit order asks such that price is unable to continue appreciating. A safe haven asset is an asset that is uncorrelated or negatively correlated to the markets, such that purchase of the asset will protect you from a market downturn by virtue of its non/negative correlation. The predetermined price the put option buyer can sell at is called the strike price.

cryptocurrency glossary

It is often used as a term to identify an area of the market where all potential sellers have sold. This is the definition of a market bottom, cryptocurrency glossary as once all sellers have sold there is nothing left but buyers. Traders and Investors can only identify capitulation after it has occured.

Higher transaction fees can be set to incentivize miners to prioritize including a specific transaction in a block. The concept of translating business strategies, goods, or services into discrete, tradeable units that are recorded on a blockchain or other system. A cryptocurrency that is used in conjunction with aDAppto perform actions is an example of a utility token. A cryptocurrency that has a use case beyond simply transferring value between actors.

Bollinger Bands® were developed and copyrighted by famous technical trader John Bollinger. A blue sky breakout refers to the new high price territory that an asset trades up into as it clears at least three months of prior price highs.

Momentum trading is a technique in which traders buy and sell according to the strength of recent price trends. Price momentum is similar to momentum in physics, where mass multiplied by velocity determines the likelihood that an object will continue on its path.

Unspent Transaction Output (utxo)

The win/loss ratio is the ratio of the total number of winning trades to the total number of losing trades. It does not take into account how much was won or lost, but simply if they were winners or losers. The win/loss ratio is used mostly by day traders to assess their daily wins and losses from trading. It is used with the win-rate, that is, the number of trades won out of total trades, to determine the probability of a trader’s success. A win/loss ratio above 1.0 or a win-rate above 50% is usually favorable. The win/loss ratio is also used by systems traders developing a new strategy to determine whether or not that system will be profitable over a long period of time. This is accomplished through rigorous backtesting of a given system.

A blow-off top is a chart pattern showing a steep and rapid increase in price and trading volume followed by a similarly steep and rapid drop in price. A bid is an offer made by an investor, trader, or dealer in an effort to buy a security, commodity, or currency. It is also the price at which Market Sell orders will be filled. A bear trap fools a bearish investor expecting to profit from the dropping prices of a given asset. A bear trap is a false impression that the prices are dropping causing a bearish investor to try to take advantage of that. The price then reverses, going back up, usually resulting in an unprofitable trade.

Candlesticks or Candles are defined as a representation on a chart used to show changes in price over time. A traditional candle provides 4 points of information, the opening price, the closing price, the high, and the low. Other forms of candlesticks are Heiken Ashi and Renko which use different variables to determine the candle. A buy wall is an order block composed of a large enough amount of limit order bids such that price is unable to continue depreciating. Bull market is a prolonged upward trend of a traded asset class. A breakout is the movement of the price of an asset through an identified level of support or resistance.

cryptocurrency glossary

Mobile Wallet

A swap is a type of derivative contract in which one party exchanges the values or cash flows of one asset for another. Swaps tend to be customized contracts that are traded between institutions, with individuals rarely if ever owning or participating in swaps. Support is an area cryptocurrency glossary of the market that price has difficulty falling below. Areas of price that have acted as support, once broken, can act as resistance in the future. A trading strategy is the method of buying and selling in markets that is based on predefined rules used to make trading decisions.

Prepare for the transformational impact of blockchain, from fully traceable supply chains to immutable identity management, with our portfolio of fully connected, smart blockchain solutions. Ethereum’s virtual machine implements a version of WASM that provides additional cryptocurrency glossary functionality for blockchains, known as eWASM. Multipleactors may share a multisignature wallet, but they may not all have to participate in each transaction. Transaction pools may vary from node to node based on which transactions they have been made aware of.

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A „bear market“ is a prolonged downward trend of a traded asset class. The ask or asking price is the price at which an asset is offered by the seller. An accredited investor is an individual or business entity with special status under financial regulatory laws. The cryptocurrency glossary definition of an accredited investor, and the consequences of being classified as such, vary between countries. Sometimes this class of investor is called a Sophisticated Investor. Discover new horizons only reachable through the intersection of blockchain and AI.

A federal government body in the United States of America that is responsible for the oversight and regulation of investments. The nature of some cryptocurrencies designates them as a security under current laws, and they must be registered with the SEC to be legally used in the United States. A cryptographic hashing function designed by the United States National Security Agency.