Crypto Glossary: 100 Terms Explained

Crypto comes with its own language, and jargon is one of the ways people get misled. Here are 100 terms you’re likely to meet, explained in plain English and sorted alphabetically.

A–C

• 51% attack: when one group controls most of a network’s mining or staking power and can rewrite recent transactions.
• Address: a string of characters that receives crypto, like an account number.
• Airdrop: free tokens sent to wallets, often as promotion. Fake airdrops are a common scam.
• Altcoin: any cryptocurrency other than bitcoin.
• AML: anti-money-laundering rules that regulated platforms must follow.
• APY: annual percentage yield, a yearly return including compounding.
• ATH: all-time high price.
• Audit: a security review of smart-contract code.
• Bear market: a long period of falling prices.
• Bitcoin: the first cryptocurrency, launched in 2009.
• Block: a batch of transactions added to a blockchain.
• Block explorer: a website for looking up transactions and addresses.
• Block reward: new coins paid to whoever adds a block.
• Blockchain: a shared, tamper-resistant record of transactions.
• Bridge: a tool for moving tokens between blockchains, and a frequent hacking target.
• Bull market: a long period of rising prices.
• Burn: permanently removing tokens from circulation.
• CBDC: a central bank digital currency.
• CEX: a centralised exchange run by a company.
• Cold wallet: a wallet that keeps keys offline.
• Confirmation: each block added after your transaction, making it harder to reverse.
• Consensus mechanism: the rules a network uses to agree on its records.
• Custodial: a service that holds your keys for you.

D–H

• DAO: a decentralised autonomous organisation, run by token-holder votes.
• Dapp: a decentralised app built on smart contracts.
• DCA: dollar-cost averaging, buying a fixed amount at regular intervals.
• DeFi: decentralised finance, financial services run by smart contracts.
• DEX: a decentralised exchange.
• Difficulty: how hard it is to mine a new block; adjusts automatically.
• Double spending: spending the same coins twice, which blockchains prevent.
• Dusting attack: tiny amounts sent to wallets to track or trick their owners.
• ERC-20: the standard for interchangeable tokens on Ethereum.
• ETF: an exchange-traded fund; some track crypto prices.
• Ether (ETH): Ethereum’s native currency.
• Exchange: a platform for buying, selling and trading crypto.
• Fiat: government-issued money, such as dollars or pounds.
• FOMO: fear of missing out, a feeling scammers exploit.
• Fork: a change to a blockchain’s rules; a hard fork can split it in two.
• FUD: fear, uncertainty and doubt.
• Gas: the fee to process transactions on Ethereum and similar networks.
• Genesis block: the first block of a blockchain.
• Halving: bitcoin’s scheduled cut in block rewards, about every four years. See the halving explained.
• Hardware wallet: a device that stores private keys offline.
• Hash: a fixed-length digital fingerprint of data.
• Hash rate: the total computing power securing a proof-of-work network.
• Hot wallet: a wallet connected to the internet.

I–M

• ICO: an initial coin offering, selling new tokens to raise money.
• Impermanent loss: the loss liquidity providers can suffer when prices move.
• KYC: “know your customer” identity checks.
• Layer 1: a base blockchain, such as Bitcoin or Ethereum.
• Layer 2: a network built on a layer 1 to make transactions faster and cheaper.
• Lightning Network: a layer 2 for fast, cheap bitcoin payments.
• Liquidation: the automatic sale of collateral when a loan becomes too risky.
• Liquidity: how easily an asset can be traded without moving its price.
• Liquidity pool: tokens locked in a smart contract to enable trading.
• Market cap: price multiplied by circulating supply.
• Memecoin: a token driven by jokes and hype rather than use.
• Mempool: the waiting area for unconfirmed transactions.
• Mining: using computing power to add blocks in proof-of-work networks.
• Mint: to create new tokens or NFTs.
• Multisig: a wallet that needs several keys to approve a transaction.

N–R

• NFT: a non-fungible token, a unique token recording ownership of an item.
• Node: a computer that stores and checks a copy of the blockchain.
• Nonce: a number miners change while searching for a valid block.
• On-ramp and off-ramp: services that convert money to crypto and back.
• Oracle: a service that feeds real-world data, such as prices, to smart contracts.
• Passphrase: an optional extra word that adds protection to a seed phrase.
• Peer-to-peer (P2P): directly between users, without an intermediary.
• Phishing: fake messages or websites designed to steal logins or keys.
• Pig butchering: a long-con friendship or romance scam that ends in fake investments.
• Private key: the secret that controls crypto at an address.
• Proof of reserves: evidence that an exchange holds the assets it owes customers.
• Proof of stake: consensus in which validators lock up tokens as collateral.
• Proof of work: consensus in which miners compete using computing power.
• Public key: derived from the private key and used to create addresses.
• Pump and dump: hyping a token to raise its price, then selling to late buyers.
• Recovery scam: a fake offer to recover lost crypto for a fee.
• Rug pull: when creators take investors’ money and abandon a project. See rug pulls explained.

S–Z

• Satoshi: the smallest unit of bitcoin, one hundred-millionth of a coin.
• Satoshi Nakamoto: the pseudonymous creator of Bitcoin.
• Seed phrase: 12 or 24 words that back up a wallet. See how to store it.
• Self-custody: holding your own private keys.
• Sharding: splitting a blockchain’s data or workload to increase capacity.
• SIM swap: criminals taking over your phone number to intercept security codes.
• Slashing: destroying part of a validator’s stake as a penalty.
• Slippage: the gap between the expected and actual price of a trade.
• Smart contract: a program on a blockchain that runs automatically.
• Spread: the gap between buy and sell prices.
• Stablecoin: a token designed to hold a steady value, usually one dollar.
• Staking: locking tokens to help secure a network. See what is staking?
• Testnet: a practice blockchain with worthless tokens.
• Token: a digital asset created on an existing blockchain.
• Tokenomics: a token’s supply, distribution and incentives.
• Transaction fee: the payment to have a transaction processed.
• Transaction hash (TXID): a unique ID for a transaction.
• Two-factor authentication (2FA): a second login check beyond your password.
• Validator: a participant who stakes tokens to confirm blocks.
• Wallet: software or hardware that manages your keys.
• Whale: someone holding a very large amount of a cryptocurrency.
• White paper: a document describing a project’s design and goals.

Frequently asked questions

Which terms should beginners learn first?

Start with wallet, private key, seed phrase, exchange, blockchain and gas. They cover most of what you need to stay safe.

Why does crypto have so much jargon?

It’s a young, technical field with a strong online culture. Jargon can also make weak projects sound impressive, so ask for plain explanations.