• HODL
• Fork
• Halving
• FOMO
• FUD
• ICO
• Bitcoin Dominance
• DAO
• Pump and Dump
• Hot and Cold Wallets

Meaning Hold On for Dear Life, HODL is a really common term used by crypto traders. Commonly used as Buy and HODL, this term implies that traders have purchased cryptocurrency that they plan on keeping for a long period of time. This is a common strategy utilized by many traders who purchased cryptocurrencies for low prices and are now holding onto them with the hopes that their prices will rise significantly in the future, just like Bitcoin did.

If you have interacted with cryptocurrencies and blockchain in the past, even slightly, it is likely that you have heard the term Fork. Something is a Fork of something, this is how people usually use this term, but what does it mean?

Each blockchain has specific rules that it follows. But some people who have sufficient knowledge of the blockchain can offset these rules and make the blockchain behave somewhat differently. When this is done, it does not affect the original network and just creates a new path that can be followed. This new path is what we call a Fork. This term became even more popular just recently, as the Ethereum merge is coming, people started to Fork the Ethereum network in order to keep the PoW protocol.

Another common term that you are destined to hear many times is halving. Halving refers to the automated process of cutting Bitcoin miner rewards in half.

Bitcoin has a fixed max supply of 21 million tokens, and it can never go over this number. So in order to introduce new tokens to the market and still keep the inflation rate low, Bitcoin was coded in a way that every time a new 210,000 block gets added to the blockchain, the amount of rewards Bitcoin miners receive is cut in half. This takes place approximately once every four years, and the next one is expected to happen somewhere in 2024.

FOMO is a common term that is used in many different financial markets. It is a shortening of the phrase “Feat Of Missing Out” and is a term describing a person's state of mind, when they invest in an asset that is growing at a rapid speed, with fear of missing out on this good deal.

This can be considered a negative term as traders usually act on their emotions and might invest in an asset that is being pumped and dumped. A good example of it is the explosion of Dogecoin and Shiba Inu, where a lot of traders invested in a growing token with the fear of missing out, and they were left with significant losses.

"That fear of missing out on things makes you miss out on everything." - Etty Hillesum

Fear, uncertainty, and doubt are what FUD stands for. This is a time when the market is shrouded in a dark cloud with lots of negative news going around. Once it happens, people panic and make harsh negative statements.

This is not a positive term, and can even be abused. When the market goes into an uncertain state, there are always people who try to stir up the situation even more by making different negative statements, that further fuel this bad situation.

Initial Coin Offering, or ICO for short, is a process when new or already existing projects gather necessary funds. This is somewhat similar to the IPO, but instead of shares, here companies are offering their cryptocurrency for a certain price.

Usually, these cryptocurrencies hold some sort of value connected with the company. Be it a utility, voting rights, or even a stake in the company, this is a great way for projects to gather much-needed finances.

Another common term that you will hear quite often, especially nowadays, is Bitcoin Dominance. This is the percentage of Bitcoin's market capitalization compared to the market capitalization of the whole crypto market.

The formula to calculate this number is pretty simple.

Bitcoin Dominance = Bitcoin Market Cap / Whole Crypto Market Cap

This is an important metric as it shows traders how strong of a position Bitcoin currently holds and what the best investment decision at that given moment is.

Decentralized Autonomous Organizations, or DAO for short, are applications that run on different blockchains and use smart contracts to keep everything operational. 

This is probably one of the best developments coming from blockchain technology as it gives control to people, instead of one single entity making decisions about certain projects.

People who use these DAO projects have voting rights on many different aspects of the project. They decide which direction the project should follow, what to add and remove, and many more things.

The cryptocurrency market is known for its volatility, and because of that, there are many instances where traders use Pump and Dump strategies to make profits.

Pump and Dump is the process of artificially inflating the price of a cryptocurrency by advertising it to the public. Here people try to show off the crypto as investment-worthy, and once prices go up, they dump their big holdings, selling them at inflated prices and making good profits.

This is an ill practice that leaves many people, who thought that they were investing in something valuable, counting their losses.

If you are new to the crypto market and heard the terms hot and cold wallets you might have been confused as to what they meant. But don't fear as these two are simple terms, describing crypto wallets.

Hot wallets are crypto wallets that come in the form of software programs. Being connected to the internet, these wallets can fall victim to hackers, but it's relatively hard to hack into them.

Cold wallets, on the other hand, are crypto wallets that come in the form of hardware devices like USB sticks. They are impossible to hack as they are disconnected from the web. It is the highest security you can implement to store your tokens.