Being a beginner in the crypto world, I initially struggled a lot with difficult technical terms like atomic swaps, to the moon, and double-spending. Coming straight to the point, these terms are nothing more than phrases, used to communicate more effectively among seasoned crypto investors.
Not only these but there is a plethora of other terms as well that are used to share messages in a few words. While more than 500 million people are investing in crypto as of 2024 (Triple A), many of those people have just learned how to buy Bitcoin. Hence, for people like those, I am writing this article to help them understand basic crypto terms you must become familiar with.
Keep reading.
Atomic Swap
Atomic swap ensures a simple and quick transaction of cryptocurrencies without any central body. On comparing an atomic swap with an exchange, there is no third party included in the earlier one. Both parties transact the currencies safely with the help of smart contracts or multi-signature wallets.
Speaking of its benefits, atomic swap provides privacy, efficiency, and low transaction fees.
Austrian School of Economics
Austrian School of Economics is not a phrase, but the institution holds a notable significance in the industry as it puts emphasis on key factors like decentralization, individual liberty, govt policies, etc. Here’s how its functions are connected to crypto:
Focus on Sound Money: The Austrian economists understand the need for a sound currency and, hence, advocate for limited supply in cryptocurrencies too.
Criticism of Central Banks: The institutions are honestly skeptical about a central body collecting the money, and embrace a more decentralized option that is followed by these cryptocurrencies.
Market Freedom: Those who understand money in Austria have embraced a free market with minimum or no government intervention.
With these top three contributions, the Austrian School of Economics has influenced the sector to a great extent.
Bitcoin Core
As the name suggests, the Bitcoin core lays the foundation of the Bitcoin network that helps to maintain and enforce its rules. The following are its key points worth noticing:
Development and Maintenance: Bitcoin is developed with a team of various contributors and developers who ensure various aspects such as stability, security, etc.
Wallet Integration: Bitcoin core also provides a wallet to store, share, or purchase cryptocurrencies instantly.
Significance of Investors: For investors, it is primary to know how the coin functions and why they are so volatile.
Bubble
Whenever the price of the crypto rises to a skeptical extent from where there is no point to rise but to fall, it is called a bubble. A bubble is a common economic concept that is not exclusive to crypto only but can be applied here as well. The reasons for this situation might be the rising trend, hype, or FOMO in the market.
There are some common signs of the crypto bubble:
Rapid Price Increase: Sudden upward slope of the price curve in the graph.
Speculative Behavior: Whenever there’s a sudden trend in buying or selling of the coin instead of its utility or fundamentals.
Burst Potential: The hype of the whole trend fails all of a sudden when there is even a minor convenience such as fake news or exposure of the currency.
Double spend
There are high chance that the data or record of the cryptocurrency can be duplicated. This phenomenon is called double-spending. Unlike the traditional currency, this issue can arise commonly.
You just have to take care of some factors like Blockchain security, attack, and prevention.
Flippening
Generally, this phenomenon is considered exclusively to Bitcoins and Ethereum. Since these coins typically dominate the industry with their market capitalization, whenever the ETH surpasses BTC, or vice versa, it is termed as flippening.
This event causes a major trend in the market, since both digital currencies hold significance in the overall scenario.
As you can see in this graph, the prices of BTC and ETH are highly volatile, and at some points in time, they usually surpass each other.
Hyperbitcoinization
As it is pretty clear by the name, the term hyperbitcoinization refers to a hypothetical future possibility when BTC becomes the dominant currency in the world.
Again, there are some factors that influence the way Bitcoin can become the universally accepted cryptocurrency. The following are some of those:
Mass Adoption
Economic Implications
Driving Factors
Investor Impact
Maximalism vs Minimalism
Maximalism and minimalism are two contradicting concepts in which maximalism believes that there must be the supremacy of one cryptocurrency. This currency is typically considered to be the BTC, as many believe that BTC is the only truly decentralized currency.
Whereas, minimalism is more of a liberal type of thought and believes in diversifying the crypto scene with various projects. For instance DeFi, NFTs, or smart contracts.
To the Moon
The term to the moon is simply used in situations when the prices of the crypto are going to skyrocket or are skyrocketing in the near future. This does not mean that the coin is literally going to make it to the moon (unless Elon Musk is by the side).
It actually means that the prices are going to touch really high prices.
End Note
When you start the journey of investing in cryptocurrencies, you will have to face various slang and phrases such as “to the moon” or “flippening”. Each of them has a different meaning that conveys messages or phenomena in short. Hence, I shared some of those commonly used terminologies that I encountered, and you must also know.
If you find this article helpful, consider sharing it with your fellow investor friends as well.
