Glossary of BitCoin and AltCoin Definitions

  • 51% Attack

    Consider this concept as sort of a “hostile takeover” of a cryptocurrency; it's possible in theory, but most industry experts doubt it's very likely. The process of mining blocks of digital currency data often takes considerable computing time and energy. It's conceivable that a miner or mining pool could expend the computing resources necessary to control more than 50% of the total computing power devoted to the currency's network, and once they have majority control, they could “take over” and do some damage. For example, they could reverse current and new transactions, and could keep new data blocks and currency from being created. They would create more of an interruption than anything else, but they would not be able to “steal” currency or hack other investors' accounts.

    Gaining more than 50% of a digital currency network's computing time would take a lot of energy and computers, which in and of itself would be very expensive. Additionally, that percentage would have to be sustained over a decent period of time in order to do any damage. While it's a potential threat—and since it's dramatic, it makes for good media copy—it's unlikely to happen. The work-to-reward wouldn't be worth it.

    Learn more about this topic and others in our mining section.

  • Alternative Currency

    See Cryptocurrency.

  • Application Specific Integrated Circuit (ASIC)

    An Application Specific Integrated Circuit (ASIC) is a computer chip created to perform one specific function, and only that function. Since mining of cryptocurrency data blocks can demand a lot of computer space and time, some miners set aside entire devices—or partition off a section of their computers—to do nothing but mining.

    Learn more about ASIC in our mining section.

  • Ascending Triangle

    See Triangle Pattern.

  • ASIC Mining

    Out-of-the-box computer systems that you buy at electronics stores usually don't include the processing power that's necessary for the cryptocurrency mining process. As a result, many miners purchase separate computing devices set aside solely for mining. As an alternative, they can also get an Application Specific Integrated Circuit (ASIC); this is a specially-designed computer chip created to perform one specific function, and only that function—in this case, mining calculations. ASICs reduce the processing power and energy required for mining, and can help reduce the overall cost of the process in that way. Whether the ASIC—a term that refers to the specialized chip itself—is integrated into an existing computing system, or functions as a stand-alone device, the term “ASIC” is often used generically to refer to the overall system itself, and not just the chip.

    Learn more about crypto mining in our mining section.

  • Asymmetric Key Algorithm

    This is the algorithm used to generate public and private keys, the unique codes that are essential to cryptocurrency transactions. In a symmetric key algorithm, both the sender and receiver have the same key; they can encrypt and exchange information privately, but since both parties have the decoding information, they can't keep information private from one another. With an asymmetric key algorithm, both parties have access to the public key, but only the person with the private key can decode the encryption; this assures that only they can receive the funds.
    Learn more about crypto trading in our comprehensive exchanges section.

  • Bear Trap

    This is a manipulation of a stock or commodity by investors. Traders who “set” the bear trap do so by selling stock until it fools other investors into thinking its upward trend in value has stopped, or is dropping. Those who fall into the bear trap will often sell at that time, fearing a further drop in value. At that point, the investors who set the trap will buy at the low price and will release the trap—which is essentially a false bear market. Once the bear trap is released, the value will even out, or even climb.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Bitcoin

    This was the first type of cryptocurrency introduced to the public. Satoshi Nakamoto published a white paper spelling out its concepts and mathematics in 2008, and it came into being the following year. (Nakamoto was originally considered a pseudonym for the person or persons who created Bitcoin, and up until March 2014, their true identity was unknown. At that time, it was revealed in an expose in Newsweek Magazine that Satoshi Nakamoto was the currency's creator's real name.) As it was the first cryptocurrency—and had no competition for over two years—Bitcoin is easily the most famous, and to date the most popular. Bitcoin uses the SHA-256 mining algorithm, and is mined by the proof-of-work method.

    Learn more about different types of cryptocurrencies in our crypto coins section.

  • Bitcoin Price Index (BPI)

    For the first few years of Bitcoin's existence, it was difficult for investors to firmly establish what their accounts were worth; the comparative value of Bitcoins against other currencies would vary from exchange to exchange—and sometimes vary quite wildly. In September 2013, digital currency news organization CoinBase decided to remedy the situation, and they created the Bitcoin Price Index (BPI). The BPI gathers information from the largest and most influential Bitcoin exchanges in the world, and applies the aggregated statistics to reach a more balanced and realistic picture of the currency's market value. The BPI has a set of criteria—best practices guidelines for the exchange industry, if you will—and exchanges that don't meet or accept these criteria aren't included in the BPI statistics. The strict adherence to these standards—and the accurate information that results—have given the BPI a strong reputation in the cryptocurrency trading industry.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Block

    This is a collection of transaction data, one of the fundamental elements of cryptocurrency. As transactions are made, the pertinent information for each one is collected—and when the gathered data reaches a predetermined size, it's bundled up as a block. As soon as possible after blocks are created, they're processed by investors for transaction verification; this process is known as mining.

  • Block Chain

    Blocks of cryptocurrency transaction data don't stand alone. As they're created and processed, they're interlinked with other blocks into what's known as a block chain. On rare occasion, errors in transaction data are not found immediately, or in the block in which their information is embedded; however, as the processing, or mining, continues, information in the block chain is reviewed repeatedly. Therefore, the further down the chain a transaction is, the more secure and correct its details are.

    Learn more about block chains in our Mining Section.

  • Block Reward

    This is the “payoff” given to a miner who has successfully calculated the hash in a data block during the mining process. Since the verification of this data generates new coins, a portion of those will go to the miner. The block reward can also include a percentage of the transaction fees associated with the processed block. The new coins minted by the mining process, by the way, are called “virgin” coins, since they're brand new and have not yet been used for any transactions.

    Learn more about block chains in our Mining Section.

  • Bot Trading

    The majority of investors in digital currency use manual methods when they want to buy or sell their cryptocurrency of choice. However, there are now programs available for investors that have been created to make the process more precise and automatic. They download these programs, which monitor alternative currency exchanges and markets for them. These “bots” will carry out transactions automatically according to the price criteria the investor has set. There are those who argue bot trading is a little too reactionary, and that sales and purchases will be made on a “knee-jerk” level, rather than waiting for the market to stabilize. On the flip side of that coin, bot trading advocates insist the method will work in their favor, since they can't personally monitor the markets 24/7.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Breakaway Gap

    See Graph Gaps.

  • Bubble

    A bubble occurs when a market is driven upward by investors; this has happened in the dot-com and housing industries in the past decade or so. Factors such as industry popularity, speculation of potential worth, political influence, and many other things can combine to create these spikes in value. If the market is perceived to have “topped out,” or investors believe it will no longer retain its overall worth, the bubble can “burst.” This represents a massive sell-off by investors, which can make market value drop sharply.

    Depending on your perspective, some cryptocurrency markets may or may not have experienced periodic bubbles. The industry's naysayers insist the market is too volatile, and will continue to roller-coaster up and down, with no real stability in sight. Conversely, industry insiders claim these are the growing pains of a new field, and that digital currency fluctuations will smooth out over time.

    Is cryptocurrency considered a bubble? Read more in this article.

  • Bull Trap

    A bull trap is “set” by investors in a stock or commodity who will buy large amounts in order to artificially drive the value upward, or create a false bull market. Traders who are fooled by the bull trap will often buy shares at the inflated price, in the belief that the upward trend will continue and the shares they're buying will rise in value. Unfortunately, those who fell into the bull trap will often be left holding shares for which they paid too much, since once the trap is released, the market evens out, and sometimes even drops.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Buy Order

    A buy order is established when an investor approaches an exchange and wants to purchase cryptocurrency. These can range from very simple orders (“I want to spend x amount of dollars on Bitcoins”) to complex ones that include factors such as time frame in which the order should be filled, range of price, and so forth. Most exchanges allow for these to be entered online, but some investors prefer to go over the details directly with an exchange representative. Buy orders don't necessarily guarantee your purchase; if your price is too low, for example, the offer may expire without being filled unless you make adjustments.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Candlestick Chart

    This is a popular at-a-glance type of chart that is commonly used in stock and commodity exchanges. Some charts use a dot to show where a certain stock or commodity closed on a given day; while this is valuable information, it doesn't show the range of price the commodity experienced during the trading day. With a candlestick chart, a vertical bar is used to show the scope of activity in a trading day; the upper edge of the bar will be the opening price (in a bear market), and the lower edge denotes the closing price (also in a bear market; in a bull market, the two are reversed). Lines extend out of the top and bottom of the bar, showing the highest and lowest trading prices for the commodity for that day (thus forming the “wick” of the candle). Candlestick charts are ideal for showing day-to-day market activity in a concise—but still accurate—way, denoting the full range of activity for that period.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Collective Mining

    The commitment of resources and materials to the process of mining digital currency data blocks often proves to be too expensive for individuals to take part. As a result, many enterprising businesses have worked out a way to make mining more affordable for those miners who would otherwise be left out. These companies invest in the hardware that allows for high-end mining power, and they in turn lease the access to this mining capability to third parties. As an individual miner, this means you can sign a contract that allows you to use a predetermined amount of mining power through cloud computing, without the hassle or expense of buying or maintaining the processing power needed to do so. The block rewards that come with the successful mining of the data block go to the individual miner who purchased the contract from the collective mining company.

  • Confirmation

    When a block of transaction information is successfully processed, or mined, all the transactions within that data block are considered confirmed, or validated. Depending on the type of cryptocurrency, the confirmation time for transactions can vary anywhere from 30 seconds to several minutes; longer validation times—though considered a small inconvenience to those making transactions—are generally considered to be more secure, since a “closer look” is being given to the data as it is mined.

    Since all data blocks are linked together in what is called a data chain, re-confirmation takes place for several blocks after the one containing the original transaction data. For each block that is mined, past the block containing the original data, another level, or generation, of confirmation is considered to have taken place. For example, let's say Transaction X's information is contained within Data Block 1 (we are heavily oversimplifying for this example). When the mining of Data Block 1 is completed, that's one generation of confirmation for Transaction X; after Data Block 2 is mined, Transaction X has two levels of confirmation, and so forth. For most intents and purposes, a transaction is considered “official” after one level of confirmation; however, some exchanges and merchants will wait until several levels of confirmation have taken place before the funds related to the transaction are unfrozen. This practice helps guard against double-spending of digital currency, or using the same currency for more than one transaction.

  • Continuation Graph Pattern

    When you take a look at a market value graph on a digital currency exchange site, you'll be able to see at a glance the upward (“bull” market) and downward (“bear” market) trend lines. However, on occasion you'll see graph patterns that show fluctuations that go against the flow of the current trend, only for the trend to continue in the same direction afterward. This type of graph pattern is known as a "continuation” type; though there may be momentary up-and-down movement in a currency's value, from a macro view the trend hasn't really changed direction. Continuation graph patterns show that investors have tested the current trend and found it to be sound—therefore, it continues.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Cryptocurrency

    Crypto is a word root that comes from the Greek for “hidden” or to hide;” for example, cryptography is the process of coding written messages. Cryptocurrency is a financial tool that takes the form of long blocks of alphanumeric code, and this alternative currency is traded between investors and used as a form of payment for goods and services to merchants who accept it.

    Unlike traditional bill-and-coin currency such as the US dollar, cryptocurrency is not directly tied in to any government, corporation or bank, and is therefore not susceptible to inflation, regulations or charges and fees that affect traditional legal tender. Cryptocurrencies are relatively new; the first to be publicly introduced was Bitcoin in 2009. Cryptocurrency is also known by the terms “digital currency” and “alternative currency.”

    Learn more about different types of cryptocurrencies in our crypto coins section.

  • Cup and Handle Pattern

    This is a pattern that appears on market value graphs when investors want to test the validity of an upward, or “bullish,” trend in a commodity market.

    The upward trend, due to investor buying and selling, will gradually slope downward, then back up again, in a gently-sloping “Letter U” shape. After this “cup” is formed, the market will be tested again briefly, making a quick downward slope that's considerably smaller (and shorter in duration) than the “cup” preceding it; this forms the “handle” to the teacup shape. The cup and handle is considered a “continuation” pattern, in that, once the handle is formed, the upward trend will continue.

    Learn more about other trading graphs, including visual illustrations, in our graphing section.

  • Day Trading

    This is the practice of buying and/or selling a stock or commodity, with the beginning-to-end process of the trade taking place all within the same calendar day. Day traders look for small price shifts minute-to-minute, and do their best to maximize their profits (or at least minimize their losses) by making several transactions a day—but without leaving any business unfinished overnight. Day traders depend on “micro-trends,” which are minuscule shifts in market value, as compared to regular traders, who may observe the trends of a stock or commodity over several days, weeks or months before taking action.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Dead Cat Bounce

    In market trading terms, this somewhat unsavory phrase relates to a momentary recovery in a downward trend for a stock or commodity, such as cryptocurrency. When there's a bear market—that is to say, a market in which a commodity's values are steadily moving downward—there are two types of recovery. The first type is a true recovery, in which the downward slide is reversed over a long period of time, and prices trend upward consistently. The second type is the “dead cat bounce.” The price trend—which has been going downward for a long period of time—shifts upward briefly, usually for no more than a week or two at most. Dead cat bounces can occur in miniature—over the space of a few hours or days—but most analysts consider this version a minor blip in the market as opposed to calling it a “true” dead cat bounce. No matter the bounce's duration, it's a false recovery, and the downward trend in valuation continues afterward. The term comes from an old—and slightly disturbing—saying, “Even a dead cat will bounce if it falls from a great height.”

    Learn more about crypto trading in our comprehensive exchanges section.

  • Decentralized

    This is a term you'll hear often when cryptocurrency is being discussed. In this context, it means the currency isn't issued or controlled by a centralized authority, such as a bank or government. While this means cryptocurrency isn't directly affected by inflation or governmental regulations—which its advocates insist makes for a more level international playing field—it also means its investors carry more responsibility for its well-being. They should be aware of the risks inherent with cryptocurrency, such as value fluctuation and the lack of institutional protections against theft and fraud. There's no FDIC for digital currency—as there is in the centralized US banking system—so once it's stolen, it's gone forever.

    Learn more about decentralized currency in our crypto section.

  • Deflation

    Generally speaking, in the financial sense deflation refers to a decline in prices of consumer goods. On the surface, this may seem like a good thing; after all, you're paying less for your groceries, clothing and so forth. However, a sustained period of deflation can have negative effects on an economic system overall, because it represents reduced spending power in the population at large. Longer periods of deflation can lead to recessionary periods, and—in severe cases—depression. Governments and banks will often take steps to induce temporary inflation, or the rising of prices, to curb the effects of long-term deflation. As history has shown, these actions have had varied degrees of success.

    Deflation can also refer to the falling prices or values of assets, such as homes, cars and investments such as cryptocurrency. Severe asset or equity deflation can result in an “underwater” situation; for example, if you are a homeowner, and the current appraised value of your house is less than what you paid for it, in that specific case you would be considered underwater. The same can happen with a digital currency portfolio; however, most periods of deflation tend to be corrected over time—so knee-jerk reactions such as selling off an investment can, in the long run, prove to be unwise.

  • Demurrage

    This is a charge levied against the accounts of investors who don't use their digital currency for transactions, but just leave it sitting as a long-term investment. Some cryptocurrencies use this as a way to keep their currency in circulation, and to prevent hoarding. After all, it's in the issuer's best interest to keep their currency active; it makes it more stable and supports its value. If you're looking to invest in cryptocurrency—and not necessarily use it for purchases—you'll want to shop around to see which ones carry demurrage fees.

    Learn more about cryptocurrencies in our crypto coins section.

  • Descending Triangle

    See Triangle Pattern.

  • Difficulty

    The term “difficulty” here refers to how easily a data block of transaction information can be mined successfully. Each type of cryptocurrency has algorithms (such as SHA-256 and Scrypt) that determine the mining difficulty for their corresponding coins—and adjust those difficulties as circumstances warrant.

    Setting the difficulty for cryptocurrency mining is a challenge, one that needs to strike a delicate balance. Make the process too easy, and miners will flood the market with too many new coins created by the mining process. Make it too difficult, and miners will lose interest in taking part. The latter has become an issue with more popular digital currencies like Bitcoin; its difficulty has risen to the point that most individual miners can't justify the added cost of specialized mining machinery. Collective mining (where miners can contract mining power from third parties) has eased this somewhat, but many prospective miners are looking for newer and “easier” currencies to mine.

  • Digital Currency

    See Cryptocurrency.

  • Distributed Denial of Service (DDoS)

    To anyone who maintains any kind of online presence, this term represents a potential nightmare. The letters DDoS are almost always followed by the word “attack,” because that's exactly what it is. A DDoS attack begins when the attacker rounds up hundreds, if not thousands, of “zombie” computers; this is achieved by downloading trojans or viruses onto remote computers without the owner knowing. Once the zombie network is in place, the attacker targets one website, email server or network, and directs all the zombie computers to flood the victim with tasks or requests. This coordinated attack can bring a website or network to its knees; DDoS attacks commonly crash servers and make websites temporarily disappear until the attack can be traced and halted. Several cryptocurrency exchanges have been the targets of DDoS attacks, which are often politically or personally motivated.

    Webmasters and server owners can avoid DDoS attacks with powerful security measures such as firewalls, but the main issue remains in the hands of individual computer owners. Since the “zombie” trojans and viruses tend to work invisibly in the background, the members of a zombie computer network never know they're part of it. In order to avoid such an infestation, computer owners should download a current (and easily updated) security program that searches their systems for malware and spyware.

  • Double Bottom Pattern

    A double bottom pattern forms on a market chart when investors buy and sell to test a downward trend in value. Buying and selling will take place, and over time this will form two distinct and almost-equal valleys on the chart's trend line. Once the second valley has formed, an upward trend will develop past the point of the peaks or tops formed during the pattern's formation. Once that happens, the market is likely to be “bullish,” or upward-trending, for a while; thus the double bottom pattern is considered a “reversal” pattern, transitioning from a bear to a bull market.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Double Spending

    Those who turn a critical and skeptical eye on the cryptocurrency industry insist that double spending is the biggest flaw in the concept. Since digital currency is 100% electronic, the argument goes, there's no accounting for one electronic coin being spent more than once. And, indeed, it has been tried many times; a holder of an alternate currency coin will spend it in one place, and will turn around and use its unique code for a transaction somewhere else.

    This cynical argument, however, tends to assume there are no safeguards in place for this kind of fraud—and that couldn't be further from the truth. For all types of cryptocurrency, there is a validation system in place, and it happens as data blocks are mined, or verified. For example, if Coin A is used for Transaction B, all is well and good; when the data block for that transaction is mined, the transaction is confirmed, and that's that. But, let's say our unscrupulous coin holder turns around and tries to use the code for Coin A for Transaction C a little while later. When the data block for Transaction C is mined, a red flag is raised, because the code for Coin A—which has already been electronically “spent”—has been duplicated. As a result, Transaction C will not be confirmed; instead, it will be rejected. So, yes, in theory double spending is an issue with cryptocurrency. But in practice, security measures built into the mining process doesn't allow it to happen.

  • Double Top Pattern

    A double top pattern forms on a market chart when investors buy and sell to test an upward trend in value. Buying and selling will take place, and over time this will form two distinct and almost-equal peaks on the chart's trend line. Once the second peak has formed, an downward trend will develop past the point of the dips or valleys formed during the pattern's formation. Once that happens, the market is likely to be “bearish,” or downward-trending, for a while; thus the double top pattern is considered a “reversal” pattern, transitioning from a bull to a bear market.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Escrow

    This is the act of having a third party store the funds for a transaction in a temporary account until the details of the trade can be acknowledged and approved by the two chief parties involved. Digital currency exchanges often use escrow accounts when large amounts of currency are being traded; this allows the traders to do research not only on each other, but on other factors that may affect the transaction. When the payer and the payee are both satisfied with the transaction details, they notify the escrow holder (in this case, the exchange representative), who releases the funds to the recipient.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Exchange

    An exchange is a service where cryptocurrency investors go to buy and sell their currency of choice. That's the heart of an exchange—a secure third-party location where transactions can take place—but not all exchanges are alike. For example, some sell cryptocurrency directly to investors—and buy from them as well—whereas some simply offer a platform where buyers and sellers can connect. Investors can find market values, exchange rates, and other trading information on exchange web sites, and many exchanges offer wallet services, too. Several exchanges also maintain directories of merchants who accept cryptocurrency as payment.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Exchange Rate

    With traditional currency, this term refers to the comparative worth of one government-issued currency to another. For example, if you're an American looking to make a purchase from a merchant in England, in order to do so you'd want to take a look at the exchange rate between the US dollar and the British pound before making your purchase. This way, you'll know exactly how much you'll be spending in your currency as it applies to the other.

    Since cryptocurrency is international in nature, and has the same worth no matter what country you're in, the term “exchange rate” takes on a different meaning. With digital currency, it can mean one of two things: How the currency compares to a traditional currency such as the US dollar, or how it stacks up against another type of cryptocurrency (such as Bitcoin to Litecoin).

    Learn more about crypto trading in our comprehensive exchanges section.

  • Exhaustion Gap

    See Graph Gaps.

  • F.U.D.

    Fear, Uncertainty and Doubt. This is usually disseminated by people and/or companies to put others at a disadvantage.

  • Falling Wedge

    See Wedge Pattern.

  • Faucet

    If you're a business owner, and you want to generate publicity for your product or service, what's the best way to do that? Well, free stuff, of course! People will line up around the block for a chance to pick up something for nothing. This lesson hasn't been lost on the cryptocurrency industry, and there are many places online where those interested can stop by and request some shiny virtual coins for free. The sites that offer free digital currency are called “faucets.”

    Of course, those running the faucets aren't just doing it out of the kindness of their sainted hearts. The amounts of currency given away on faucet sites are quite small, and they offer just enough of a taste to get potential investors interested in picking up more—and not for free this time around. Faucet owners also tend to offer advertising on their sites as another way to offset the cost of giving away some of their currency for nothing. On occasion, either lack of investor interest or shortage of funding will cause a faucet site to shut down; when that happens—in keeping with the terminology—that faucet is said to have “gone dry.”

  • Fiat Currency

    “Fiat” is the Latin word for “it shall be,” so that translation isn't of much help to us here. In a nutshell, a fiat currency is a financial tool that is not backed up by any physical commodity or goods; essentially, it exists and flourishes simply because the people who use it believe in it. While that might sound like a somewhat shaky proposition, it should be pointed out that the majority of currencies in the world—including cryptocurrencies—are fiat currency systems. They can be used for transactions—and are viable for trade in their own markets—because those who use them—be they governments, banks, or individual investors—have faith in their validity as a financial entity. Should that faith be lost—the Confederate States of America currency, or the “Dixie Dollar,” is a prime example—the currency loses its value. In theory, all fiat currencies have the potential to become worthless—banks can fail, governments can fall—so they rely very heavily on that faith.

    In contrast, a lot of people don't realize the United States dollar wasn't always a fiat currency. All currency issued in the US used to be backed by a proportional amount of silver or gold; if you hear the terms “gold standard” or “silver standard,” that is what they used to mean. However, due to economic factors, by 1973 the US dropped both the gold and silver standards, making the dollar a full fiat currency.

  • Fill or Kill

    This is a simple type of buy order made with a cryptocurrency exchange. The investor dictates how much currency they want, and at what price, and establishes a cutoff date for the order. The exchange will then do their best to fill the order according to those criteria. If the exchange hasn't found an appropriate match for the order by the cutoff date, the order is canceled and left unfilled. In other words, fill this order according to these guidelines and within this time frame. If you can't, kill it.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Flag Pattern

    This pattern forms on market value charts when investors want to test a current trend in a commodity's value. The buying and selling that takes place during this testing period—which generally last one to three weeks—forms fluctuations that can be bracketed by parallel diagonal lines, forming the “flag” shape.

    Flag patterns can occur during both upward-trending (“bear”) and downward-trending (“bull”) markets. Since they don't signify the current trend is going to reverse, the flag pattern is considered one of the “continuation” pattern types. Once the pattern is formed, the trend will continue moving in the direction it had been beforehand.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Fontas

    This isn't so much a “what” as it is a “who.” Fontas is a mysterious investor or group of investors who has been using pump and dump schemes to manipulate the value of various digital currencies. That is to say, he/she/they have been buying large amounts of currency at low prices, then they've used misleading information to get other investors to buy, falsely inflating the currency's price. At that point, Fontas sells a large chunk of their cryptocurrency investment for a sizable profit. Thus far, Fontas' focus has been on Bitcoin, but they are trying to do the same with Litecoin and Namecoin; however, investors are on to the scheme. Needless to say, Fontas is not exactly the most popular investor in the alternative currency industry. However, even savvy investors who weren't taken in by Fontas' scheme have to grudgingly admit its effectiveness.

  • Genesis Block

    See Block Chain.

  • Genesis Block

    In the cryptocurrency mining process, blocks of data are processed and validated one by one, and each of these blocks are linked in chronological order, forming what is called a block chain. But every chain has to start somewhere, and the very first block of data mined in order to launch an alternate currency is known, appropriately enough, as a “Genesis block.” The main way in which a Genesis block differs from all the other blocks on the chain following it is that the Genesis block will have its “previous hash” data set to all zeroes. This indicates that no other data was processed before the block in question; all other blocks will have other numbers in this data field.

    The most famous Genesis block generated was Block 0 of the Bitcoin chain, created by the currency's founder, Satoshi Nakamoto, in January 2009. Genesis blocks are almost always mined by the creator of a given digital currency—and sometimes several other subsequent blocks, as well—to establish the coin before it's released to the general public. In comparison, for cryptocurrency types that have failed and no longer exist, the final block of data mined for such a currency is referred to as the “Omega block.”

  • Graph Gaps

    On occasion, gaps will appear in trend lines on market value graphs. These gaps indicate a visible drop or rise in a commodity's value that hasn't necessarily happened due to trading. These can be the result of closed markets, statistical adjustments by analysts, or by strong news about the commodity. There are three types of gaps:

    1. Breakaway Gap. These appear at the beginning of a strong upward or downward trend, and represent very high-volume trading.

    2. Runaway Gap. These occur during an upward or downward trend, and represent a quick momentary intensification of that trend.

    3. Exhaustion Gap. This occurs toward the end of an upward or downward trend, and tends to indicate a small trend in the opposite direction.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Hash

    This is a random and complex mathematical formula used in the verification of blocks of transaction data in the process known as mining. Once a miner calculates the proper hash in a block, they're rewarded with coins and a percentage of the transaction fees embedded in that block. Achieving the right hash in a given block can take several tries and calculation adjustments—and some blocks, even though properly processed, may not “pay out.” The difficulty of calculating the hash in a block is set fairly high, so the rewards aren't distributed at too fast a rate; after all, mining also helps create new coins, and the mathematics are set so this doesn't happen too quickly—that could destabilize the currency.

    Learn more about Hash in our mining section.

  • Hash Rate

    The hash rate is the speed at which complex mathematical calculations are performed in the mining of cryptocurrency data blocks. What this measurement boils down to is: the higher the hash rate of a mining system, the more data blocks can be successfully mined—which in turn means more block rewards for the miner or miners involved. As some types of digital currency become more popular—and the mining as a result becomes more competitive—the hash rates required for successful mining can increase as a result. Higher hash rates often require specialized computing equipment, and the use of more energy. Also, more complex mining algorithms such as SHA-256 require higher hash rates than simplified systems like Scrypt.

    The following terms are used for mining hash rate measurement:

    KH/s: Kilohashes per second, or one thousand hash computations per second
    MH/s: Megahashes per second, or one million hash computations per second
    GH/s: Gigahashes per second, or one billion hash computations per second
    TH/s: Terrahashes per second, or one trillion hash computations per second
    PH/s: Petahashes per second, or one quadrillion hash computations per second

  • Head and Shoulders Pattern

    The head and shoulders pattern forms on a market value chart when two smaller fluctuations in value bracket a larger one in the middle.

    There are two types of head and shoulders patterns, both of which are illustrated in the image above. One is the traditional head and shoulders, viewed “right side up” if you were looking at the bust of a human being. The fluctuations forming the head and shoulders represent investors buying and selling to test a current trend. The regular head and shoulders pattern represents a reversal from a “bull” (upward-trending) market to a “bearish” (downward-trending) one, whereas the inverted head and shoulders pattern shows the opposite, from bear to bull. Because of these characteristics, the head and shoulders pattern is listed among those of the “reversal” type.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • HELLO

    hI FOR TESTING

  • Hybrid Wallet

    This is a cryptocurrency storage and maintenance system that is a combination of a software wallet (stored on your home computer) and a web wallet (stored on a third-party server). The bulk of your digital currency account information is stored on the wallet host's server—except for one important detail. Your private key (the code that uniquely identifies you) is stored only on your own device. When you make a transaction, your private key is encrypted on the way to the exchange's server, so they never know what your private key is. This is an impressive security feature, but access to your private key also includes a password that—again--only you know. If you lose or forget that password, access to your account could be denied, and you could potentially lose your account balance forever.

    Learn more about cryptocurrency storage in our wallets section.

  • Inflation

    In financial terms, inflation indicates the general trend of rising prices for consumer goods and services. As a result—unless consumers' income matches the rate of inflation—it means consumers have a lower level of purchasing power as prices go up. Banks and governments often do whatever they can to stop long periods of excessive inflation, just as they do the same for its opposite, deflation—or a sustained drop in prices. Though inflation is a natural financial process, most countries try to keep the rate of inflation at a more manageable level of 2-3%; the majority of consumers are able to adapt more readily to these rates.

    Inflation can also apply to assets, such as a home or an investment portfolio. In the spirit of “buy low, sell high,” many savvy investors will wait until a given commodity has shown a long and sustained period of asset inflation before selling (at a substantially higher price than they initially paid), and will often then turn around and buy a commodity that shows indications of an oncoming inflationary trend. Like most commodity trading, this concept applies to cryptocurrency investing.

  • Issuer

    We admit openly that we use this as a term of convenience when we talk about cryptocurrency. With traditional currency, the issuer would be the US Treasury for American bills and coins, for example. Technically, digital currency coins aren't issued, they're created by the mining process. There's no central bank, no government deciding when new cryptocurrency comes into being; it's “minted” when investors mine the data blocks. 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. As such, when we use the term “issuer,” we mean the investors in a type of cryptocurrency; we use it conceptually and not literally.

  • Level Wedge

    See Wedge Pattern.

  • Litecoin

    This type of cryptocurrency was introduced to the public in October of 2011, the first major player to do so since Bitcoin in 2009. Even though about 30 different cryptocurrencies have cropped up since then, Litecoin holds the number two spot behind Bitcoin, and it's gaining ground as Bitcoin prices surge out of the range of some investors' budgets. Litecoin uses the Scrypt mining algorithm, and is mined by the proof-of-work method.

    Learn more about different types of cryptocurrencies in our crypto coins section.

  • Mining

    Cryptocurrency transactions are bundled together in packets of data that are called blocks. The timely processing of these blocks is essential to the health of cryptocurrency, and since there's no one central entity that can carry out all this processing on their own, it's done by the currency's investors. This is called mining, and the miners are offered incentives to take on the task. When a block of data is properly mined, and specific predetermined algorithmic and mathematical criteria (known collectively as “hash”) have been met, the miners collect a reward of coins and a percentage of the transaction fees from the block they've processed. It should be noted mining is more a perk than a requirement; you can invest in cryptocurrency without mining, if you wish.

    Mining serves a dual purpose; not only does it validate transactions, but it results in the generation of new cryptocurrency. For currencies that carry mintage caps, the mining reward of coins will eventually disappear when the cap is met; by that time, it's projected—and hoped—that transaction volume will be high enough to provide adequate incentive for miners to take part in the process for their share of transaction fees alone.

    For a more comprehensive overview of Mining read our article for an in-depth look.

  • Mining Pools

    In many cases, the process of mining can be a resource hog; it can eat up a lot of processing time and space on computers. 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. Once the mining is completed and verified, the pool's members divide the coin and transaction fee rewards evenly.

    Learn more about mining pools in our mining section.

  • Mintage Cap

    As cryptocurrency miners process blocks of transaction data, they generate new coins as a result. Cryptocurrency is a young industry, and its issuers want enough coins to go around to satisfy new investors as they join. These new coins are mathematically designed to be turned out at a stable rate, so the value of the currency will remain relatively stable, too (there will be fluctuations, as in any other commodity market, but not as wild as they would be if the commodity was extremely limited in availability). Over time, however, the mathematics of coin creation are also designed to end, to avoid over-saturation of the market and currency devaluation. In plain English, that means most cryptocurrencies will eventually stop being created when they reach a predetermined amount known as a mintage cap. Once the last coin's created, there won't be any more. In most cases, the cap won't be reached for a number of years—that's by design, so new investors will be allowed to join up for some time to come. The majority of cryptocurrencies have mintage caps set; however, a few—like Peercoin—don't.

    For more information on mintage caps read our digital currency mining article.

  • Mobile Wallet

    See Wallet.

  • Noob Trap

    “Noob” is an abbreviation for the term “new blood,” and is also sometimes expressed as “newb” or “newbie.” It applies to anyone who is a newcomer to a given community—in this case, investing in digital currency. Most alternative currency investors are good folks, and are willing to lend a helping hand and advice to those who are new to the game. However, there are also folks who see noobs as an easy mark, and these unscrupulous investors often use market manipulation methods to take advantage of those who may not yet know any better. Luckily, some judicious studying of these methods can help new investors protect themselves from falling into market manipulation traps. For better understanding of the types of noob traps there are in the digital currency world, see the terms Bear Trap, Bull Trap and Pump and Dump and read our articles for more trading tips.

  • Novacoin

    Though this type of cryptocurrency is not yet near the value or overall investor numbers of the big players in the industry, Novacoin still holds a spot in the top five; not bad, considering it was introduced in February 2013. Novacoin uses the Scrypt mining algorithm, and is mined by the combined proof-of-work and proof-of-stake methods.

  • Offline Storage

    This concept relates to how your cryptocurrency is stored. If your currency is online—on an active drive on a computer that's turned on, or accessible through cloud computing-- that means it's also accessible by other computer users. Sometimes that access takes place without your knowledge. This can lead to hacking and theft, since cryptocurrency—by design—isn't connected directly to any one person. As such, it's important to keep your unique currency information offline as often as possible; it's best to do so unless the currency is directly in use for a transaction. Two of the best ways to keep your investment info offline is to store it on an external drive that can be disconnected from your computer when it's not needed, or to print it out and store it in a paper wallet. If you decide to take advantage of a wallet service from a cryptocurrency exchange, one of the first questions you should ask them should be about offline information storage, since digital currency theft is usually untraceable and irreversible.

    Learn more about cryptocurrency storage in our wallets section.

  • Paper Wallet

    See Wallet.

  • Peer-to-Peer

    Also abbreviated as P2P, this is a concept that's central to cryptocurrency. Transactions are made between individuals (peers), with no interruption or dictation from a centralized authority. On the plus side, all those invested in a type of cryptocurrency have a say in its well-being, without having to answer to a bank or government. On the minus side, this means people of less-than-ideal reputations are able to invest, just like anyone else. Cryptocurrency systems tend to be self-policing, but in the young industry's growing pains there have been conflicts between keeping the riffraff out and keeping the environment as free and accessible as possible.

  • Peercoin

    Alternately known as “PPCoin” or “Peer-to-Peer Coin,” Peercoin is a type of cryptocurrency that was introduced in August 2012 by Sunny King. In a short period of time, it's established itself as one of the most popular cryptocurrencies in the world. Peercoin uses the SHA-256 mining algorithm, and is mined by the combined proof-of-work and proof-of-stake methods.

    Learn more about different types of cryptocurrencies in our crypto coins section.

  • Pennant Pattern

    This pattern forms on market value charts when investors want to test a current trend in a commodity's value. The buying and selling that takes place during this testing period—which generally last one to three weeks—forms fluctuations that can be bracketed by converging diagonal lines, forming a “pennant” shape.

    These pennant patterns can occur during both upward-trending (“bear”) and downward-trending (“bull”) markets. Since they don't signify the current trend is going to reverse, the pennant pattern is considered one of the “continuation” pattern types. Once the pattern is formed, the trend will continue moving in the direction it had been beforehand.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Phone-to-Phone Transfer

    This is a mobile application feature that allows the instantaneous transfer of information from one smartphone to another. If two mobile device users want to exchange data, and both have this feature installed and activated on their phones, they can make the transfer simply by having their devices in close proximity to each other. These are also sometimes called “touch transfers.”

    Many digital currency applications include this as a feature, so currency trades can be made from one mobile wallet to another instantly.

  • Platform Exchange

    This is a digital currency exchange that limits the role they play in transactions made between investors. The majority of exchanges are there to facilitate these transactions, and make them easier to carry out. The exchange will sort through buy and sell orders, and will then match up investors who meet the criteria of the order in question. Their algorithms are designed so the trades being made are both secure and fair to both parties involved. Beyond that, however, the exchange does not play any “middleman” or mediating role. This is in contrast to exchanges that will hold the transaction funds in escrow, or will discuss the details of the trade with both investors before moving forward.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Private Key

    This unique identifier code is issued to investors to be used as a digital signature during transactions. Compared to public keys—which are openly listed in the directories of many cryptocurrency exchanges—private keys are to be just that: closely guarded and not given out. Your private key is what you use when you receive a transfer—from an investor who encrypts it with your public key—to “sign” your approval of the transaction. Private keys should be treated just as you would your credit card or Social Security numbers.

  • Proof-of-Stake Mining

    Rewards for this type of mining are based upon the amount you've already invested in the cryptocurrency in question. The more currency you hold, the higher your potential rewards for mining will be. Proof-of-stake mining, as of yet, is not used as a stand-alone method, but is used by some cryptocurrency issuers in combination with proof-of-work Mining. Peercoin and Novacoin are two major cryptocurrencies that use this combination mining method.

    Learn more about proof-of-stake in our mining section.

  • Proof-of-Work Mining

    The rewards for this type of mining are straightforward: you receive coins and transaction fee rewards in direct correlation to the actual mining work you do. As such, the more mining you do, the more you can make. With some major cryptocurrencies such as Bitcoin and Litecoin, this is the only type of mining option available; however, some use a combination of proof-of-work and proof-of-stake mining.

    Learn more about proof-of-work in our mining section.

  • Public Key

    This is a unique encrypted code issued to an investor. When they want to make a transaction with their cryptocurrency, they give their public key out—many cryptocurrency exchanges have a directory of these for their investors—so the transfer can be made. The public key is a way to positively identify someone making a transaction, even though their actual name or personal information is not embedded in the key itself. Contrast this with a private key—which is not publicly known, and should be closely guarded—which is used to accept and validate a transaction.

  • Pump and Dump

    This is a market strategy that's strongly frowned upon by conscientious investors. An individual or group will invest heavily in a stock or commodity when its price is low, and will then publicize it aggressively, often using misleading or outright false statements. This is the “pump” part of the term, and it's designed to get other investors interested and to drive the price upward. Once that happens, the individual or group will sell off their shares at a higher price; this often results in a profit for them, but it also creates a drop in the commodity's value. This is the “dump” part, and needless to say, does not please the other investors.

    Cryptocurrency markets are just as susceptible to pump and dump strategies as other markets are. To help guard against it, heavy and aggressive over-investment is discouraged, and digital currency investors learn quickly how to sort the truth from false information.

    Learn more about crypto trading in our comprehensive exchanges section.

  • QR Code

    These are a lot like the rectangular bar codes you'll find on just about anything you buy, except QR codes are square in shape and can hold more information than bar codes. Below is an example of a QR code:

    [IMG]
    Scan Me Now!


    Merchants who accept cryptocurrency as payment—as well as other types of currency—will often display QR codes in their stores. All the customer has to do is scan the QR code with their smartphone, and it will direct them to a URL where they can make the purchase right then and there, without the inconvenience of waiting in line at a cash register. Most digital currency mobile apps include QR code-scanning capability.

  • Reversal Graph Pattern

    This is a type of pattern that forms on market value charts you'll see on many digital currency exchange websites. A reversal pattern indicates that a market that has been trending upward (known as a “bull” market) will reverse direction and start moving in a downward direction, or become a “bear” market—or vice versa. When a reversal graph pattern appears, it shows that investors have been testing the current trend, and for one reason or another they don't find it viable or sustainable—thus the market changes direction.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Rising Wedge

    See Wedge Pattern.

  • Rounding Bottom

    Occasionally referred to as a “saucer bottom,” this is a term for a pattern you may see on market value charts on exchange websites. The rounding bottom pattern is considered a “reversal” pattern; that is to say, it represents the transition over time of a downward-trending, or “bear” market, into an upward-moving “bull” market. The gently downward-sloping line on the left of the illustration above tracks the market as it eventually finds its bottom, or lowest market value, then—usually just as gently and slowly—the trend heads upward. This is a very long-term pattern, often taking several months to a couple of years to fully form.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Runaway Gap

    See Graph Gaps.

  • Satoshi

    Currently, this is the smallest possible fraction of cryptocurrency available for transactions. It refers to 0.00000001 Bitcoin, and is named after Satoshi Nakamoto, the enigmatic creator of the first publicly-available digital currency. Nakamoto wrote the white paper in 2008 that evolved into the creation of Bitcoin—and until March 2014, no one had been able to pin down the true identity of the person or persons operating under the pseudonym. An expose in Newsweek Magazine at that time revealed that Satoshi Nakamoto was, indeed, the creator of Bitcoin's real name.

  • Saucer Bottom

    See Rounding Bottom.

  • Scrypt

    Scrypt is a type of mining algorithm, and it's used by major cryptocurrencies such as Litecoin and Novacoin. It has the one major advantage over other algorithms such as SHA-256 in that it's quicker and easier to use. It doesn't use up as much computer processing space or time, so individual miners can more readily process blocks of data with it.

    For more information on mining algorithms visit our mining section.

  • Sell Order

    This takes place when an investor approaches an exchange with the intent to sell some or all of their cryptocurrency investment. Sometimes sell orders are simple and straight to the point (“Just sell what I have at the best price you can find”), or the investor can set criteria that have to be met before the sale can be made. This can include, price, time frame, percentage of holdings being sold, and so forth. Most exchanges have sell order forms that can be filled out, but if investors have specific questions or concerns, they can talk directly to an exchange representative before activating their order.

    Learn more about crypto trading in our comprehensive exchanges section.

  • SHA-256

    This is a mining algorithm protocol used by cryptocurrencies such as Bitcoin and Peercoin. While a popular algorithm, SHA-256 tends to use a lot more computing power and processing time than others, so it can be more difficult for individual miners to use. As a result, the majority of SHA-256 mining is performed by mining pools or individual miners who have separate computers they can devote solely to mining.

    For more information on mining algorithms visit our mining section.

  • Silk Road

    This was the notorious online black marketplace where drug deals and money laundering occurred on a regular basis. Many of the transactions on Silk Road used cryptocurrencies, which gave the entire industry a black eye for a while. After a long FBI investigation, Silk Road's owner was arrested in October of 2013, and the entire operation was shut down.

  • SliceFeeds

    SliceFeeds is Coin Pursuit's free social network that eliminates hassle by concentrating all traders, miners and enthusiasts contacts and cryptocurrency information in one place. Members can Slice conversations, notes, rumors, tips, links and videos to fellow community members to follow. Its network is divided into three easy-to-use sections: the network page shows statistics at a glance; the Slices page displays updates as they happen; and the profile page allows members to customize their own personal network-within-the-network. Members will also be able to monetize their unique contributions to the community; for example, bloggers can offer subscriptions (payable in digital currency, of course) for access to their exclusive content, and merchants will be able to advertise their companies and products through SliceFeeds, as well. To join SliceFeeds you can register here.

  • Slices

    Slices are member-contributed content provided by members on SliceFeeds, a social media network provided by Coin Pursuit. These Slices can consist of conversations, notes, rumors, tips, links and videos for fellow community members to follow, rate and view.

  • Software Wallet

    See Wallet.

  • Stale Block

    When a block of cryptocurrency data has been successfully processed by a miner or mining pool, that block of data is considered stale. Experienced miners know to skip stale blocks, for it would be a waste of their time to try to mine them again.

    For more information on Stale Blocks visit our mining section.

  • Stop-Loss Order

    This is a standing “get me out of here!” sell order that investors in stocks or commodities (such as cryptocurrency) use to, well...stop their losses. Or at least minimize them.

    Investors often establish a stop-loss order the minute they make a purchase. This is a sell order that specifies the price at which the currency should be sold. For example, if you buy shares of something at $100 each, you might decide to issue a stop-loss order at $60. As long as the share price remains above that number, all is well—and nothing will happen unless you contact the exchange personally. However, the second the price hits $60, all or part of your currency (whichever you specify) will be sold at your stop-loss order price. Different exchanges treat this differently; some sell immediately, and some wait to see if it's just a momentary “hiccup” on the market; if the price falls below your stop-loss limit, you'll get the latter amount for your shares.

    Learn more about crypto trading tips in our article library.

  • Symmetrical Triangle

    See Triangle Pattern.

  • Trading Walls

    Generally speaking, the trend line on a chart (such as those offered by digital currency exchanges) will move more or less diagonally as trades are made. However, once in a while there is a buy or sell order that comes in which will make the trend line move directly up and down, creating a vertical line that resembles a wall. These “walls” represent a temporary high demand in interest, either in buying or selling a certain type of digital currency. If a wall is created by a large buy order, it's called a “buy wall,” and if it represents a sizable sell order, it's called a “sell wall.” Generically speaking, these walls are called “trading walls” or “bid walls.” Once the orders have been filled—or are ignored by the market in general—the wall disappears, and the diagonal trend line continues.

    Learn more about crypto trading in our comprehensive exchanges section.

  • Transaction Fee

    Most trades and purchase made with cryptocurrency include a small transaction fee. This fee is fed into the data block that contains the transaction's information, and all or part of the transaction fee will be rewarded to the miner or mining pool that successfully processes that block.

  • Triangle Pattern

    Generally speaking, triangle patterns form on market value charts when investors buy and sell to test a current trend. The highs and lows of these fluctuations can be bracketed by straight lines that define the highs and lows during that testing period; these lines form an open-ended triangular shape.

    There are three types of triangle patterns:

    1. Descending Triangle. This is formed when the lower line of the triangle is a horizontal line, and the upper line tilts downward from left to right. The descending triangle represents a downward-trending, or “bear,” market.

    2. Ascending Triangle. This is the inverse of the descending triangle, with an upward left-to-right tilted line at the bottom, and a horizontal line at the top. Ascending triangle patterns indicate an upcoming “bull,” or upward-trending, market.

    3. Symmetrical Triangle. The symmetrical triangle stands out because both lines forming the triangle are tilted. It's also a more tricky pattern to predict, because it can continue in either an upward (“bullish”) or downward (“bearish”) direction.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Triple Bottom Pattern

    A triple bottom pattern forms on a market chart when investors buy and sell to test a downward trend in value. Buying and selling will take place, and over time this will form three distinct and almost-equal valleys on the chart's trend line. Once the third valley has formed, an upward trend will develop past the point of the peaks or tops formed during the pattern's formation. Once that happens, the market is likely to be “bullish,” or upward-trending, for a while; thus the triple bottom pattern is considered a “reversal” pattern, transitioning from a bear to a bull market.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Triple Top Pattern

    A triple top pattern forms on a market chart when investors buy and sell to test an upward trend in value. Buying and selling will take place, and over time this will form three distinct and almost-equal peaks on the chart's trend line. Once the third peak has formed, an downward trend will develop past the point of the dips or valleys formed during the pattern's formation. Once that happens, the market is likely to be “bearish,” or downward-trending, for a while; thus the triple top pattern is considered a “reversal” pattern, transitioning from a bull to a bear market.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Virgin Coin

    See Block Reward.

  • Wallet

    Just like a bill-and-coin wallet, this is a place to keep your digital currency. There are four types of cryptocurrency wallets:

    1.Software Wallet. These are programs you load onto your desktop or laptop computer.

    2.Mobile Wallet: These come in the form of applications you install on your smartphone or tablet computer. They usually include QR code scanning and phone-to-phone transfers for on-the-go transactions.

    3.Web Wallet: These are usually gotten through exchanges, and stored on third-party servers via cloud computing. They can be accessed by any computing device.

    4.Paper Wallet: Your digital currency can be printed out—usually in the form of QR codes—and these hard-copy cryptocurrency “bills” can be kept in a physical wallet just like traditional money.

    Learn more about cryptocurrency storage options in our wallets section.

  • Web Wallet

    See Wallet.

  • Wedge Pattern

    These are a type of “continuation” pattern you'll see on market value graphs; that means they represent a momentary shift against the current trend, but the trend tends to continue in the direction it was going once the pattern is fully formed. Wedge patterns can be spotted by two diagonal, but non-converging, lines that bracket the up-and-down fluctuations that occur while investors test the current trend. There are three types of wedge patterns:

    1. Rising Wedge. This wedge shape is tilted upward; thus the name. However, a rising wedge occurs during a downward trend, or “bear” market. It's a momentary upward shift, but the bear market continued afterward.

    2. Falling Wedge. The falling wedge is tilted downward. It represents just the opposite of the rising wedge, in that it denotes a brief downward movement during a “bull” market, which continues once the wedge is formed.

    3. Level Wedge. These appear to move in more or less a horizontal direction on a graph. Just like the rising and falling wedges, the level wedge shows a brief respite in a trend, which will continue once the wedge pattern is complete.

    Learn more about other trading graphs including visual illustrations in our graphing section.

  • Zero Confirmation Transaction

    The processing of data for cryptocurrency transactions can take anywhere from half a minute upward to over ten minutes in some cases. Though this is necessary in order to validate transactions—and guards against fraudulent activity such as double spending—the waiting period can be inconvenient for those involved in the transactions. As a result, some exchanges and businesses that deal with digital currency are offering “zero confirmation” transactions, which are almost immediately verified without waiting for the mining process to confirm the data block.

    Double spending—the practice in which a coin holder applies the same currency to two different transactions—is a concern with zero confirmation transactions. Since cryptocurrency is not “attached” to the person spending it in any way, by the time their double spending is discovered through the mining process, they are long gone and untraceable. With the demand for zero confirmation transactions on the upswing, entrepreneurs in the cryptocurrency industry are looking at ways to instantly verify—or deny—transactions without having to wait for mining to take place. In the meantime, many businesses levy fees to offset the financial risk of zero confirmation transactions, and yet others are refusing to accept them until the technology catches up.