This is part three of our series on cryptocurrency slang you need to know if you want to understand all the lingo being thrown around in the cryptocurrency space. Have a look at some of these acronyms and terms below!
This is not a misspelling of Dior, but rather an acronym for ‘do your own research’. Although most people are able to Google and read, many just follow the crowd when it comes to making decisions on what to buy and sell. DYOR is a great piece of advice everyone in the cryptocurrency space should always follow to avoid making investment mistakes.
If you are a whale in the cryptocurrency market, it means you are one of the very best investors out there. It also means that you have a fat digital wallet, full of cryptocurrencies that would make any Uncle Scrooge salivate with envy. People look up to you, and your investment decisions can even impact on the market as a whole.
Wall Street traders will be familiar with this term, which is lifted from the stock market exchanges. When you are a bagholder, you hold on to your cryptocurrency tokens for too long before selling. This can sometimes result in the tokens losing most of all of their value, and you will then be left holding an empty bag.
The blockchain is a decentralized system, which means that several computers around the world are maintaining it. When a computer is helping maintain the blockchain by keeping a copy of it, it is called a node.
Sharding refers to splitting up the copy of a blockchain into several ‘shards’. Right now, the nodes described above all hold a complete copy, which means they require a lot of processing power. Sharding will allow smaller CPUs to hold part of the blockchain, which will improve the overall performance.7
A fork is when a blockchain is being split into two or more blockchains. Sometimes new governance rules are assigned to a blockchain, and this is the point at which forks are often created. A fork is also sometimes called a hard fork.
If you have ever wondered what the complex mathematical problems cryptocurrency miners are solving, then you will be pleased to know that the simple term for these are hashes. A hash is when a large amount of variable data is condensed into a finite output. Similar to shortening a URL, to use an analogy.
This is not an acronym for Prisoner of War, but rather Proof of Work. It is a consensus algorithm used by the Ethereum network and ties the ability to mine for new cryptocurrencies to the actual processing power a computer possesses.
Similar to PoW, this acronym does not stand for what you might think (piece of… you get it). PoS stands for Proof of Stake, and is what the future consensus algorithm proposed by Ethereum will be. Rather than spending lots of money on mining for cryptocurrency, Ethereum owners will be able to lock their tokens in for a short period of time. This will allow them to vote on network decisions, and they will be rewarded with new Ethereum tokens for doing so.