Crypto glossary

Cryptocurrency and blockchain technology have introduced a vast new vocabulary that can be overwhelming for newcomers and even experienced users.

This comprehensive glossary serves as a reference guide to help you navigate the complex world of digital assets, decentralized finance (DeFi), and blockchain technology.

From fundamental concepts like mining and wallets to advanced topics such as yield farming and zero-knowledge proofs, these terms represent the building blocks of the crypto ecosystem.

Whether you’re a trader, developer, or curious observer, understanding these terms is crucial for participating in the rapidly evolving cryptocurrency space.

Address – A unique identifier for receiving cryptocurrency transactions.
Airdrop – Free distribution of cryptocurrency tokens to existing wallet holders, often used for marketing.
Alpha – Early or exclusive information that could provide a trading advantage.
Altcoin – Any cryptocurrency other than Bitcoin.
AMM (Automated Market Maker) – A decentralized exchange protocol that uses algorithms to price assets.
APY (Annual Percentage Yield) – The real rate of return on a cryptocurrency investment, including compound interest.
Arbitrage – Profiting from price differences of the same asset across different markets.
ATH (All-Time High) – The highest price a cryptocurrency has ever reached.
ATL (All-Time Low) – The lowest price a cryptocurrency has ever reached.
Atomic Swap – A peer-to-peer trade of cryptocurrencies between different blockchains.
Bear Market – A period of declining prices in the crypto market.
Bear Trap – A false signal suggesting a bearish trend that traps sellers.
Bitcoin Dominance – Bitcoin’s market cap as a percentage of the total crypto market cap.
Block – A collection of data or transactions recorded on a blockchain.
Block Explorer – A tool for viewing blockchain transactions and data.
Block Height – The number of blocks in the chain between any given block and the first block.
Block Reward – The reward given to a miner for validating a block.
Block Time – The average time taken to create a new block.
Bridge – A protocol that enables the transfer of assets between different blockchain networks.
Bull Market – A period of rising prices in the crypto market.
Bull Trap – A false signal suggesting a bullish trend that traps buyers.
Burning – Permanently removing a cryptocurrency from circulation to reduce supply.
Centralized Exchange (CEX) – A traditional cryptocurrency exchange operated by a company.
Chain Split – When a blockchain divides into two separate chains after a hard fork.
Circulating Supply – The amount of cryptocurrency currently available and in circulation.
Cold Storage – Storing cryptocurrency offline for enhanced security.
Cold Wallet – An offline wallet for storing cryptocurrency.
Collateral – Assets deposited as security for cryptocurrency loans or leverage trading.
Confirmation – The number of blocks added after a transaction block.
Consensus Mechanism – The method by which a blockchain network agrees on the valid state.
Custodial – When a third party holds and manages your cryptocurrency.
dApp (Decentralized Application) – An application running on a blockchain without a central authority.
DAO (Decentralized Autonomous Organization) – A digital organization run by smart contracts and governed by token holders.
DCA (Dollar Cost Averaging) – Investing fixed amounts at regular intervals regardless of price.
Dead Cat Bounce – A temporary recovery in price during a bear market.
DEX (Decentralized Exchange) – A cryptocurrency exchange that operates without a central authority.
DeFi (Decentralized Finance) – Financial services and products built on blockchain technology.
Depth Chart – A visualization of buy and sell orders at different price levels.
Derivative – A financial instrument whose value is based on an underlying cryptocurrency.
Diamond Hands – Slang for holding onto cryptocurrency despite market volatility or losses.
Difficulty – How hard it is to mine a new block, adjusted based on network hash rate.
Double Spending – A potential flaw where digital currency could be spent twice.
Dust – Tiny amounts of cryptocurrency that are smaller than the minimum transaction amount.
Dust Attack – Sending tiny amounts of crypto to wallets to break privacy.
EIP (Ethereum Improvement Proposal) – Formal proposals for improving the Ethereum network.
ERC-20 – The technical standard for fungible tokens on the Ethereum blockchain.
ERC-721 – The technical standard for non-fungible tokens (NFTs) on Ethereum.
Escrow – A third party holding funds until conditions are met.
Fiat – Government-issued currency, such as USD or EUR.
Flippening – The hypothetical moment when another cryptocurrency surpasses Bitcoin’s market cap.
FOMO (Fear Of Missing Out) – Making investment decisions based on anxiety about missing potential gains.
Fork – A split in a blockchain, resulting in two separate chains.
FUD (Fear, Uncertainty, and Doubt) – Negative information spread to influence market sentiment.
Gas – The fee required to conduct a transaction or execute a contract on the Ethereum network.
Gas Limit – Maximum amount of gas you’re willing to spend on a transaction.
Genesis Block – The first block of a blockchain.
Governance Token – A token that gives holders voting rights in a protocol’s decisions.
Gwei – A small denomination of ETH, used to measure gas prices.
Halving – A periodic event where mining rewards are cut in half.
Hard Fork – A radical change to the protocol that makes previously invalid blocks/transactions valid.
Hash – The output of a cryptographic hashing function.
Hash Rate – The speed at which a blockchain network completes calculations, measured in hashes per second.
HODL – A term derived from “hold,” meaning to keep cryptocurrency rather than selling it.
Hot Wallet – An online wallet for storing cryptocurrency.
ICO (Initial Coin Offering) – A fundraising event where new crypto tokens are sold.
Impermanent Loss – The temporary loss of funds provided to a liquidity pool compared to holding.
Index – A measurement of a section of the cryptocurrency market.
Layer 2 – Secondary frameworks or protocols built on top of existing blockchains.
Leverage – Borrowing funds to increase potential returns on investment.
Liquidation – Forced closing of a position when maintenance margin requirements aren’t met.
Liquidity – The ease of converting an asset into cash or another asset without affecting its price.
Liquidity Pool – A collection of funds locked in a smart contract.
Long Position – Buying an asset expecting its value to increase.
Market Cap – The total value of a cryptocurrency’s circulating supply, calculated as price × supply.
Market Maker – An entity that provides liquidity to a market.
Maximum Supply – The maximum amount of coins that will ever exist for a cryptocurrency.
Mempool – The collection of unconfirmed transactions waiting to be validated.
MEV (Miner Extractable Value) – The profit miners can make through reordering transactions.
Mining – The process of validating transactions and adding them to the blockchain.
Mining Pool – A group of miners who combine their computational resources.
Moon – When a cryptocurrency’s price rises significantly.
Multisig – A wallet requiring multiple signatures to authorize transactions.
NFT (Non-Fungible Token) – A unique digital asset representing ownership of a specific item, often art or collectibles.
Node – A computer that supports a blockchain by verifying transactions and maintaining a copy of the ledger.
Nonce – A number used once in cryptocurrency transactions to prevent double-spending.
Oracle – A service that provides external data to a blockchain or smart contract.
Order Book – A list of open buy and sell orders for an asset.
Paper Hands – Slang for selling cryptocurrency at the first sign of a downturn.
Paper Wallet – A physical document containing cryptocurrency keys.
Peer-to-Peer (P2P) – Direct transactions between parties without intermediaries.
Private Key – A secret key used to authorize cryptocurrency transactions.
Proof of Stake (PoS) – A consensus mechanism where validators are chosen based on their holdings.
Proof of Work (PoW) – A consensus mechanism that requires miners to solve complex problems to add a block.
Public Key – An address derived from a private key, used to receive cryptocurrency.
Pump and Dump – Market manipulation where price is artificially inflated then sold off.
ROI (Return on Investment) – The ratio between net profit and investment cost.
Rug Pull – A scam where developers abandon a project and take investors’ funds.
Satoshi – The smallest unit of Bitcoin, equivalent to 0.00000001 BTC.
Scalping – Trading strategy focused on profiting from small price changes.
Seed Phrase – A series of words used to recover cryptocurrency wallets.
Sharding – Splitting a blockchain into smaller pieces to improve scalability.
Short Position – Selling an asset expecting its value to decrease.
Slippage – The difference between expected and actual trade execution prices.
Smart Contract – A self-executing contract with the terms directly written into code.
Soft Fork – A change to the protocol where only previously valid blocks/transactions are made invalid.
Solidity – The primary programming language for Ethereum smart contracts.
Spot Market – Where assets are traded for immediate delivery.
Stablecoin – A cryptocurrency pegged to a stable asset, like USD.
Staking – Locking up cryptocurrency to support network operations and earn rewards.
Stop-Loss – An order to sell an asset when it reaches a specific price.
Testnet – A blockchain used for testing without real monetary value.
Token – A digital asset created on an existing blockchain, often representing assets or utilities.
Token Standards – Technical specifications for creating tokens on a blockchain.
Total Value Locked (TVL) – The total value of cryptocurrency locked in a protocol.
Transaction Fee – The cost to process a blockchain transaction.
Transaction Hash (TXID) – A unique identifier for a blockchain transaction.
Wallet – Software or hardware that stores cryptocurrency private keys.
Whale – An individual or entity holding a large amount of cryptocurrency.
Whitepaper – A document explaining the technology and purpose of a cryptocurrency project.
Yield Farming – Earning rewards by lending or staking cryptocurrency in DeFi platforms.
Zero-Knowledge Proof – A method of proving knowledge without revealing the information itself.