Crypto Glossary
Plain-English definitions of the cryptocurrency, blockchain and trading terms you will meet as you learn.
A
ASIC (Application-Specific Integrated Circuit)
An ASIC , or application-specific integrated circuit, is a chip built to perform one task extremely well.
ASIC Resistance
ASIC resistance describes mining algorithms designed to resist ASIC dominance. The aim is to make sure specialized mining chips gain little advantage…
Abnormal Return
An abnormal return describes exceptionally high gains compared with what an investment would normally be expected to earn.
Address
A crypto address is an alphanumeric string that identifies where cryptocurrencies are sent and received on a blockchain.
Airdrop
An airdrop is a token distribution campaign aimed at a specific audience, in which a project sends tokens, usually free of charge, to eligible wallets.
Airnode
Airnode is an oracle node that provides data flow in the API3 protocol. It is open-source software that lets the owner of a web API run its own oracle…
Algorithmic Stablecoin
An algorithmic stablecoin is a stable cryptocurrency whose supply is regulated by algorithms rather than fully backed by reserves of cash or other…
Alpha
Alpha is a measure of an investment’s performance relative to a benchmark. It shows how much better or worse an investment did than its reference point…
Altcoin
Altcoin , short for “alternative coin”, is the name for all cryptocurrencies other than Bitcoin.
Anarcho-Capitalism
Anarcho-capitalism is a political philosophy embraced by parts of the crypto community. Closely associated with the economist Murray Rothbard, it argues…
Atomic Swap
An atomic swap is a peer-to-peer token exchange without intermediaries, often between two different blockchains.
Authority Masternode (VeChain)
An authority masternode is the networked server running the VeChainThor full node program that is approved to produce and validate blocks on the…
B
Bagholder
A bagholder is an investor holding onto losing tokens, usually after their price has fallen sharply.
Beacon Chain
The Beacon Chain is the coordination chain of Ethereum 2.0, the name once used for Ethereum’s move to proof of stake.
Bear Market
A bear market is a prolonged market downtrend in which prices fall broadly for months and pessimism dominates.
BitLicense
A BitLicense is a business license issued by the New York State Department of Financial Services (NYDFS) that allows a company to conduct virtual…
Bitcoin ATM (BTM)
A Bitcoin ATM (BTM) is a kiosk, similar to a cash machine, that allows the user to buy Bitcoin with cash or a card and, on two-way machines, to sell…
Bitcoin Domination (BTCD)
Bitcoin Domination, more often called Bitcoin dominance (BTCD), is the ratio that shows how much of the total cryptocurrency market value belongs to…
Bitcoiner
A Bitcoiner is someone who believes in Bitcoin and expects its price to rise over the long term.
Block Duration
Block duration, often called block time, refers to the time required to generate new blocks in a blockchain-based system.
Block Explorer
A block explorer is an application, usually a website, that allows the user to view the details of a particular block on the blockchain, as well as the…
Block Header
A block header is the compact summary at the top of every block, and hashing it produces the block's unique identifier.
Block Manufacturer
A block manufacturer, more commonly called a block producer (BP), is a person or group whose hardware is selected to validate transactions and create the…
Block Size
Block size refers to the total amount of data that can be inserted into a single block in the chain, and usually means the maximum that a blockchain's…
Blockchain
A blockchain is a type of distributed ledger technology: a shared record of transactions that many computers, called nodes, keep in sync.
Blockchain Tribalism
Blockchain tribalism is when members of a blockchain or cryptocurrency community become ideologically committed to one particular blockchain or…
Bonding Curve
A bonding curve is a mathematical curve that describes the relationship between the price and the supply of an asset, usually a token.
Bull Market
A bull market is a prolonged market uptrend in which prices rise broadly for months and optimism grows.
Burning
Burning is the destruction of tokens to reduce supply. Tokens are either sent to a burn address that no one can spend from or removed by a smart contract…
Byzantine Fault Tolerance (BFT)
Byzantine Fault Tolerance (BFT) is the property that allows a distributed computer system to reach consensus on its own, without a central coordinator…
C
CPU Miner
A CPU miner creates or mines cryptocurrency with a computer's central processing unit (CPU), the general-purpose processor found in every PC and server.
CeDeFi
CeDeFi is a hybrid of centralized and decentralized finance. It combines features of centralized finance, such as company-run platforms, customer…
Cloud Mining
Cloud mining is cryptocurrency mining done with computing power rented through companies. Instead of buying, powering and cooling your own machines, you…
Cold Storage
Cold storage is the offline storage of cryptocurrency using tools such as non-custodial hardware wallets, USB drives, offline computers or paper wallets.
Cold Wallet
A cold wallet is offline cryptocurrency storage: the private keys that control your coins are kept on a device or medium that is not connected to the…
Composable DeFi
Composable DeFi refers to interoperability between different DeFi protocols: because their smart contracts are public and follow shared token standards…
Composable Token
A composable token is an NFT that can own other tokens. In the model defined by the ERC-998 standard, a proposed extension of ERC-721, an NFT gains the…
Consensus
Consensus is the agreement among network participants about which transactions are valid and in what order they are added to the blockchain.
Core Wallet
A core wallet is a crypto wallet that can contain all of the blockchain's data, not just a part of it.
Cryptojacking
Cryptojacking is using a computer to mine cryptocurrency without the user's consent. The attacker collects the mining rewards, while the victim pays for…
Custodian
A custodian is responsible for the safe custody of assets that belong to an organization or to individuals.
Cypherpunk
The cypherpunk movement promotes the use of cryptography and other privacy-oriented technologies as a way to achieve social and political progress.
D
DAO (Decentralized Autonomous Organization)
A DAO, or decentralized autonomous organization, is a community-governed organization without centralized control.
DEX (Decentralized Exchange)
A DEX, or decentralized exchange, is an exchange without intermediaries: users trade crypto assets directly from their own wallets through smart…
DYOR (Do Your Own Research)
DYOR, short for do your own research, is a common warning to conduct individual research before acting on any claim about a coin, token or project…
Daedalus Wallet
Daedalus Wallet is a multi-platform, open-source, hierarchical deterministic (HD) wallet that can generate a practically unlimited number of keys from a…
Darknode
A darknode is one of the computers in the decentralized network that runs RenVM, the system built by the Ren project to move assets between blockchains.
DeFi (Decentralized Finance)
DeFi, short for decentralized finance, is the ecosystem of decentralized financial applications built on public blockchains.
DeFi Aggregator
A DeFi aggregator lists transactions and offers from various DeFi platforms in one spot. Instead of visiting many decentralized exchanges or lending…
Decentralized Exchange (DEX)
A decentralized exchange (DEX) is a peer-to-peer platform that lets users buy and sell cryptocurrencies without the need for an intermediary.
Digital Money
Digital money refers to assets of value that exist only in digital form, unlike traditional physical coins and banknotes.
Distributed Ledger System
A distributed ledger system is a ledger whose data is stored on a network of decentralized nodes rather than in one central database.
Distributed Ledger Technology (DLT)
Distributed ledger technology (DLT) is a way of keeping a ledger that is accessed by multiple participants and stored in multiple locations at once.
E
E-Signature
An electronic signature , or e-signature, is any electronic stamp, such as a sign, sound, or symbol, that replaces a physical signature in the official…
ERC-1155
ERC-1155 is a digital token standard on Ethereum, first proposed by developers at Enjin, that lets a single smart contract manage many kinds of tokens at…
ERC-20
ERC-20 is the Ethereum token standard for fungible assets, meaning tokens where every unit is identical and interchangeable, in the same way that one…
ERC-223
ERC-223 is an Ethereum token standard, backed by smart contracts, that was proposed to let users transfer tokens securely to wallets and other addresses.
ERC-721
ERC-721 is the Ethereum token standard for NFTs, or non-fungible tokens. Every token created under it has its own unique ID, so no two tokens are…
ERC-777
ERC-777 is a tradable token standard derived from ERC-20. It adds new features while staying backwards compatible, so wallets and apps built for ERC-20…
ERC-827
ERC-827 is a proposed Ethereum token standard developed to go beyond the limits of ERC-20, especially in asset transfers and approval (confirmation)…
ERC-884
ERC-884 is a proposed Ethereum standard that allows stock issued by Delaware corporations to be converted into tradable tokens compatible with ERC-20.
ERC-948
ERC-948 is a proposed Ethereum token protocol designed for subscription service businesses. It aims to help a business connect with its customers through…
EVM (Ethereum Virtual Machine)
The EVM, or Ethereum Virtual Machine, is the computational engine of Ethereum: the environment in which smart contracts run.
Edge Node
In computer science, an edge node is a computer that acts as a gateway for the end user to establish connections with other nodes.
Effective Share Proof
Effective Share Proof , more commonly called Effective Proof-of-Stake (EPoS), is a version of the Proof of Stake consensus mechanism used by the Harmony…
Electrum Wallet
Electrum Wallet is a Bitcoin wallet with a simple interface that can run on Windows, macOS, and Linux.
Enterprise Ethereum Alliance (EEA)
The Enterprise Ethereum Alliance (EEA) is a group of organizations and companies working together to move the Ethereum network forward, with a focus on…
Epoch
In machine learning, an epoch is one complete run of the training data set through the algorithm, from start to finish.
Equity (Equity Capital)
Equity capital , or simply equity, corresponds to the funds that could be returned to a company's shareholders if all of the company's assets were…
Erasure Coding
Erasure coding is the storage of data in multiple locations by segmenting it, expanding it, and encoding it with redundant information.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) is the "Turing complete" virtual machine that provides the working environment for each smart contract on Ethereum.
F
FOMO (Fear of Missing Out)
FOMO, short for fear of missing out, describes investor psychology based on the fear of missing opportunities: the urge to buy an asset quickly because…
FUD (Fear, Uncertainty, Doubt)
FUD, short for fear, uncertainty and doubt, means spreading fear and misinformation about a coin, a project or the market as a whole, often to push…
Fakeout
A fakeout is a sudden and temporary price movement that tricks traders into thinking a new trend is emerging in the market, when in fact it is not.
Fiat
Fiat is traditional government-issued currency, such as the US dollar, the euro or the Turkish lira.
Fiat On-Ramp
A fiat on-ramp is a method of buying cryptocurrency with fiat, meaning traditional government-issued money such as US dollars, euros or Turkish lira.
Flash Loan Attack
A flash loan attack occurs when malicious actors exploit smart contracts with the help of a flash loan: a loan that is borrowed and repaid within a…
Fork
A fork is a blockchain split into two versions. It happens when part of the network starts following different rules, or a different chain of blocks…
Fraud Proof
A fraud proof is a technical method used in an Optimistic Rollup (OR) that works together with a bond to keep a decentralized system honest.
Front Running
Front running is when someone who has information about a future transaction adds their own transaction to the queue ahead of it, aiming to profit from…
Full Node
A full node is a computer running blockchain software that downloads the entire blockchain history and checks every block and transaction against the…
Fully Homomorphic Encryption
Fully homomorphic encryption (FHE) is a type of encryption scheme that allows arbitrary computation on encrypted data.
Fungible
Fungible describes the ability to exchange any unit of a cryptocurrency or token for another identical unit of the same cryptocurrency or token.
G
GameFi
GameFi , a blend of "game" and "finance", refers to blockchain games in which in-game activity is tied to tokens and digital assets.
Gas
Gas is the transaction fee on the Ethereum network. Strictly speaking, gas measures how much computing work a transaction needs, and the fee you pay is…
Gas Limit
On the Ethereum platform, the gas limit is the maximum amount of gas a user is willing to spend to perform a transaction.
Genesis Block
The genesis block is the first block of a blockchain network, also known as block 0. It is the only block that does not refer back to an earlier one, and…
Gold-Backed Crypto
Gold-backed crypto refers to tokens backed by physical gold. Each token represents ownership of, or a claim on, a fixed amount of gold, such as one troy…
H
HODL
HODL describes a long-term holding strategy: buying a cryptocurrency and keeping it through price swings instead of trading in and out.
Hal Finney
Hal Finney was an American cryptographer and programmer who, along with Satoshi Nakamoto, pioneered the development of Bitcoin.
Halving
A halving is the event where Bitcoin rewards are cut in half: the number of new bitcoins a miner receives for adding a block drops by 50 percent.
Hard Fork
A hard fork is an irreversible blockchain upgrade that changes the protocol rules in a way older software does not accept.
Hash
A hash is the fixed-length output generated by a hash function, an algorithm used to secure and verify data.
Hot Storage
Hot storage is the online storage of the secret (private) keys that control cryptocurrency, so funds can be accessed and moved quickly.
Hot Wallet
A hot wallet is an online cryptocurrency wallet: its private keys are kept on a device or server that is connected to the internet.
Howey Test
The Howey Test is a legal test used in the United States to determine whether an asset or a deal counts as a security, specifically an investment…
I
ICO (Initial Coin Offering)
An ICO, or initial coin offering, is a first-time token sale in which a new crypto project sells its tokens to the public, usually in exchange for…
IDO (Initial DEX Offering)
An IDO (Initial DEX Offering) is a token sale held through a decentralized exchange, usually via a launchpad built around one.
Immutable (Immutability)
Immutability is the property of data that cannot change over time. On a blockchain, it means that once a transaction is recorded and confirmed, it cannot…
Initial Coin Offering (ICO)
An Initial Coin Offering (ICO) is a crowdfunding sale, or crowdsale, in which an early-stage company raises capital by selling newly created…
Initial Dex Offering (IDO)
An Initial DEX Offering (IDO) is a way to launch a new token by selling it through a decentralized exchange (DEX).
K
KYC (Know Your Customer)
KYC (Know Your Customer) is the procedure a financial service uses to verify a client’s identity.
L
Layer 0
Layer 0 is the network structure that runs underneath a blockchain system. It includes elements such as the protocol, connectivity, hardware and miners…
Layer 1
Layer 1 is the base protocol layer of a blockchain: the main network that processes transactions and records them on its own ledger, using its own…
Layer 2
Layer 2 refers to scaling solutions built on top of a Layer 1 blockchain. They process transactions away from the main chain and then settle the results…
Liquid Staking
Liquid staking allows users to stake their tokens and still use them in the DeFi ecosystem. When you stake through a liquid staking protocol, you receive…
Liquidation / Liquidation
Liquidation means converting an asset or a cryptocurrency into fiat money or its equivalent. For example, selling coins for dollars or euros, or for a…
Liquidation Wave
A liquidation wave happens when liquidation transactions pile up one after another and cause sudden, sharp price changes.
Liquidity
Liquidity is the ease of converting an asset into cash, or into another asset, quickly and without noticeably moving its price.
M
Mainnet
Mainnet is the primary blockchain network of a project: the live network where transactions are real, coins have real value, and confirmed records are…
Market Cap (Market Capitalization)
Market capitalization, or market cap, is the total value of a cryptocurrency’s circulating supply at its current price.
Memecoin
Memecoins are cryptocurrencies created as a joke or inspired by an internet meme, often promoted with claims that they offer their holders huge profits.
Merkle Tree
A Merkle tree is a data structure used in computer science and cryptography to verify the integrity of stored or transmitted data.
Metaverse
The metaverse is a digital universe that brings real-world elements, such as real-time interaction and economic structures, into shared virtual spaces.
Miner
A miner is a person, or a company, that mines to contribute to a blockchain network. Miners run specialized computers that bundle transactions into…
Miner Extractable Value (MEV)
Miner Extractable Value (MEV), also known as Maximal or Max Extractable Value, is a measure of the profit a block producer can make by deciding which…
Mining
Mining is the process of validating transactions and creating new blocks on a proof-of-work blockchain such as Bitcoin.
N
NFT (Non-Fungible Token)
An NFT (non-fungible token) is a unique digital asset recorded on a blockchain. Unlike coins, where every unit is interchangeable with any other, each…
O
Oracle
An oracle is a third-party data provider for blockchains. It brings information from outside the chain, such as asset prices, exchange rates, or sports…
P
Permissionless
Permissionless describes a system, most often a blockchain network, where no authority sets the rules for who can use it or how they can use it.
PoS (Proof of Stake)
Proof of Stake (PoS) is a consensus mechanism based on staking. Participants lock up the network’s coins as collateral for the right to validate…
PoW (Proof of Work)
Proof of Work (PoW) is a consensus mechanism based on computational effort. Miners compete to find a value that makes a block’s hash fall below a…
Private Key
A private key is a secret key granting access to funds on a blockchain. It is a very large number, usually shown as a long string of letters and digits…
Private Key / Secret Key
A private key, also called a secret key, is a secret piece of data generated by asymmetric (public-key) cryptography and paired with a public key.
Proof of Spacetime
Proof of Spacetime (PoSt) is a way for a network participant to prove that they have dedicated a certain amount of storage space to the network over a…
Pseudonymous
Being pseudonymous means using a pseudonym, a consistent made-up name, instead of your real identity.
Public Address
A public address is an identifier derived from a wallet's public key, usually by hashing the key and encoding the result as a string of letters and…
R
Rug Pull
A rug pull is the fraudulent abandonment of a crypto project by its developers, who disappear after attracting buyers’ money and usually take the funds…
S
Satoshi Nakamoto
Satoshi Nakamoto is the name used by the person or group that developed Bitcoin. It is a pseudonym, and the real identity behind it has never been…
Seed Phrase
A seed phrase is the recovery phrase for a crypto wallet: a list of ordinary words, most often 12 or 24, that encodes the master secret from which the…
Smart Contract
Smart contracts are protocols, written as computer programs, that execute automatically on the blockchain when predefined conditions are met.
Spot
Spot refers to a contract or transaction that buys or sells cryptocurrency at the current market price, with payment and delivery happening in real time.
Stablecoin
A stablecoin is a cryptocurrency pegged to a stable asset, most often a national currency such as the US dollar, so that one token aims to stay worth one…
Staking
Staking means locking tokens to support a blockchain’s network operations, mainly validating transactions on a proof-of-stake network, and earning…
T
T-Address (Zcash)
A T-Address, or transparent address, is one of the two main address types in Zcash, a privacy-focused cryptocurrency.
Testnet
A testnet is an alternative blockchain network that developers use for testing. It closely mirrors the main network, but its coins have no real value.
Token Issuance
Token issuance is the process of creating new tokens and adding them to the total token supply of a cryptocurrency.
Token Locking
Token locking, also called a token lock-up, is a period of time during which certain cryptocurrencies cannot be traded or transferred.
Token Sale
A token sale is the opening of a new cryptocurrency for sale to a limited group of investors before it officially launches.
Tokenomics
Tokenomics, a blend of “token” and “economics”, is the economic model of a token. It covers how many tokens exist, how they are created and distributed…
Total Locked Assets (TVL)
Total locked assets (TVL, short for total value locked) is the sum of the assets staked or deposited within a protocol, usually expressed in US dollars.
U
Unpermissioned Ledger
An unpermissioned ledger is an open ledger that is not controlled by any single person and is accessible to everyone: anyone can read it, submit…
Utility Token
Utility tokens are tokens designed specifically for carrying out transactions and actions within a particular network or application.
V
Validator
A validator is a node responsible for validating transactions and adding new blocks to a blockchain, most often on a proof-of-stake network.
W
Wallet
A wallet is digital storage for cryptocurrencies: an app, browser extension, device or account that keeps the private keys controlling your coins and…
Wash Trade
A wash trade is a form of market manipulation in which a trader, or several traders acting together, both sell and buy the same cryptocurrency, creating…
Web3
Web3 is the vision of a decentralized internet, where users hold their own data, digital assets and online identity through blockchains instead of…
Y
Yield Farming
Yield farming means earning rewards by providing liquidity to DeFi protocols, for example by depositing tokens into a lending market or into a liquidity…
Z
Zero-Knowledge Proof
A zero-knowledge proof (ZKP) is a cryptographic method of proving that a statement is true without revealing the underlying data behind it.