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ALTCoin: The collective term used for other crypto-currencies, such as Litecoin, Dogecoin, Reddcoin
Blockchain: A public ledger of all the bitcoin transactions that have ever been made
Cold wallet: An offline wallet which is not connected to the internet
Faucet: A website that offer free bitcoin for completing a simple task, such as clicking on an advert
Hot wallet: An internet connected wallet
IPO: Initial Public Offering
ICO: Initial Coin Offering
POS: Proof Of Stake
POW: Proof Of Work
Mining: A way of generating new bitcoins
Satoshi: The smallest subdivision of a bitcoin (0.00000001BTC)
Transaction fee: A small fee imposed when making a bitcoin transaction
ICO / ITO: An ‘Initial Coin Offering’ or ‘ICO’ is the cryptocurrency take on an ‘Initial Public Offering’, when a company’s shares are first listed on the stock market. It usually takes place prior to the launch of a coin’s blockchain and involves the public sale of a certain percentage of the coin’s initial supply in order to raise funds for development. An alternative name for this is an ‘Initial Token Offering’ or ‘ITO’.
Market Cap: The market capitalization of an altcoin is the total value of all its coins. It is common practice to use the currently available supply rather than the total supply, and this may exclude unreleased premines. Market cap is therefore calculated by multiplying the price per coin by the number of coins currently released onto the open market.
Premine: When some or all of a coin’s initial supply is generated automatically by the developer at, or prior to, the public launch, rather than being generated over time through a form of mining, this is called a ‘pre-mine’ or ‘premine’. Pre-mines can be used for legitimate purposes: for example to crowdfund development through an ICO, or to put into a fund for the continued development and promotion of a coin. They can also be dumped onto the market, for a quick and easy profit, by a developer who then abandons the coin and disappears in a kind of exit scam.
Insta-mine: Because some altcoin enthusiasts are very wary of coins which have a premine, automatically suspecting a scam, a number of developers have sought to find different ways to gain control of a large percentage of a coin’s supply from the beginning. One way to do this is to have very easy mining for a short period after launch, during which the developers seek to instantly mine a large number of coins for very little cost. The difficulty then increases rapidly after a short period of time. Sometimes this short and highly profitable mining period may take place before a coin has even been announced to the public. This is known as an ‘insta-mine’ or ‘instamine’.
Ninja Launch: A ninja launch is basically a method for conducting an instamine. It involves announcing a coin suddenly with no prior warning, with the mining beginning immediately as the coin is announced. By the time other users have had the chance to set themselves up to start mining, the developer may have already conducted their own instamine. Another ninja launch tactic is to create an announcement with only very basic information, conduct and instamine, then add more information to attract interest only after a significant amount of coins have already been mined.
FUD: The acronym FUD stands for ‘Fear, Uncertainty and Despair’. In cryptocurrency it is generally used to refer to negative talk about a coin which is inaccurate or misleading, often posted in forums and through social media. This kind of FUD may be the result of a genuine fear response among the holders of a coin whose value is crashing, or it may be deliberately spread in order to suppress the price – either by competing coins, speculators looking to pick up a bargain before hyping the coin later, or just by angry trolls with some kind of grudge.
PoD: Some coins have anonymous developers who do not reveal their real identity. There may be good reasons for this, and it may not hinder a coin’s adoption – for example Bitcoin’s creator never revealed his real world identity. But if the developers are anonymous then there is a greater risk that they will disappear, and this can be especially risky if there is a premine that they may be able to dump for an easy profit before they vanish. Several services have emerged which verify the identities of developers in order to prevent this kind of scam, and this is often known as ‘Proof of Developer’ or ‘PoD’.
Emission Schedule: The rate at which new coins are generated and the pattern by which this changes over time. This may also be described as the ’emission curve’.
Ponzi Scheme: An investment scam in which initial investors are paid returns from the capital of subsequent investors, and an ever-increasing supply of new investors is therefore needed for returns to be paid. If there is no reason for people to buy a coin as anything other than an investment, or if its creators never intend to pursue regular users, for example, then it may be described as a ponzi scheme.
Whales: A whale is a large holder, who owns enough coins to move the market by a substantial amount when they buy or sell.
Bagholders: People who are left holding a coin which has depreciated in value by a large amount, and who continue to hold in the (often vain) hope of being able to sell at a profit later on, are often described as ‘bagholders’.
Bots: A casual term used to refer to automated trading software.