Crypto Glossary: 100+ Terms Explained
Your complete reference guide to cryptocurrency terminology and concepts.
Welcome to the crypto glossary! This page contains explanations for over 100 key cryptocurrency terms. The glossary will help you better understand crypto news, guides, and discussions. Use the alphabet navigation below to quickly find specific terms, or browse through the entire glossary.
A
Airdrop
Free distribution of cryptocurrency tokens to wallet holders, often used for marketing or rewarding early adopters.
Example: Uniswap airdropped UNI tokens to users who had used the protocol before September 2020.
Altcoin
Any cryptocurrency other than Bitcoin. Short for 'alternative coin'.
Example: Ethereum, Solana, and Cardano are all altcoins.
APY (Annual Percentage Yield)
The annualized return on an investment including compound interest.
Example: A DeFi lending protocol offers 5% APY on stablecoin deposits.
ASIC
Application-Specific Integrated Circuit - specialized hardware designed solely for mining specific cryptocurrencies.
Example: Bitmain's Antminer S21 is an ASIC designed for Bitcoin mining.
B
Bear Market
A prolonged period of declining prices, typically defined as a drop of 20% or more from recent highs.
Example: The crypto bear market of 2022 saw Bitcoin drop from $69,000 to under $16,000.
Block
A group of transactions bundled together and added to the blockchain.
Example: Bitcoin creates a new block approximately every 10 minutes.
Blockchain
A distributed digital ledger that records transactions across many computers in a way that prevents alteration.
Example: Ethereum's blockchain stores smart contract data and transaction history.
Bull Market
A prolonged period of rising prices, characterized by investor optimism.
Example: The 2020-2021 bull market saw many cryptocurrencies reach all-time highs.
C
Cold Wallet
A cryptocurrency wallet that is not connected to the internet, providing maximum security.
Example: Ledger and Trezor are popular cold wallet manufacturers.
Consensus Mechanism
The method by which a blockchain network agrees on the current state of the ledger.
Example: Bitcoin uses Proof of Work, while Ethereum uses Proof of Stake.
Custodial Wallet
A wallet where a third party holds your private keys on your behalf.
Example: Exchange wallets on Coinbase are custodial - Coinbase holds your keys.
D
DAO
Decentralized Autonomous Organization - an organization governed by smart contracts and token holder votes.
Example: MakerDAO governs the DAI stablecoin through token holder voting.
DeFi
Decentralized Finance - financial services built on blockchain without traditional intermediaries.
Example: Aave and Compound are DeFi lending protocols.
DEX
Decentralized Exchange - a cryptocurrency exchange that operates without a central authority.
Example: Uniswap and SushiSwap are popular Ethereum DEXs.
DYOR
Do Your Own Research - a reminder to investigate before investing.
Example: Before buying any token, DYOR to understand its fundamentals and risks.
F
Fiat
Government-issued currency like USD, EUR, or GBP that isn't backed by a physical commodity.
Example: You can buy Bitcoin with fiat currency on most exchanges.
FOMO
Fear Of Missing Out - the anxiety of missing a profitable opportunity.
Example: FOMO often drives investors to buy at market tops.
Fork
A change to a blockchain's protocol. Hard forks create new cryptocurrencies, soft forks are backward-compatible.
Example: Bitcoin Cash was created from a hard fork of Bitcoin in 2017.
FUD
Fear, Uncertainty, and Doubt - negative information spread to influence prices.
Example: Regulatory news often creates FUD in crypto markets.
G
Gas
The fee required to execute transactions on the Ethereum network.
Example: High network activity can cause gas fees to spike significantly.
Genesis Block
The first block in a blockchain, also called Block 0.
Example: Bitcoin's genesis block was mined by Satoshi Nakamoto on January 3, 2009.
H
Halving
An event where the block reward for mining is cut in half, reducing new coin supply.
Example: Bitcoin's halving occurs every 210,000 blocks, roughly every 4 years.
Hash Rate
The computational power being used by a proof-of-work network.
Example: Bitcoin's hash rate measures the network's total mining power in exahashes per second.
HODL
A misspelling of 'hold' that became crypto slang for holding through volatility.
Example: Many Bitcoin investors HODL regardless of short-term price movements.
Hot Wallet
A cryptocurrency wallet connected to the internet, convenient but less secure.
Example: Mobile wallets and exchange accounts are hot wallets.
K
KYC
Know Your Customer - identity verification required by regulated exchanges.
Example: Most major exchanges require KYC documents like passport and proof of address.
L
Layer 1
The base blockchain network (e.g., Bitcoin, Ethereum, Solana).
Example: Ethereum is a Layer 1 blockchain that supports smart contracts.
Layer 2
Scaling solutions built on top of Layer 1 blockchains.
Example: Arbitrum and Optimism are Layer 2 solutions for Ethereum.
Liquidity
The ease with which an asset can be bought or sold without affecting its price.
Example: Bitcoin has high liquidity on major exchanges.
Liquidity Pool
Smart contract holding tokens that facilitate decentralized trading.
Example: Uniswap liquidity pools enable token swaps without order books.
M
Market Cap
Total value of a cryptocurrency, calculated as price Ă— circulating supply.
Example: Bitcoin's market cap exceeded $1 trillion in 2021.
Memecoin
Cryptocurrency created as a joke or based on internet memes.
Example: Dogecoin and Shiba Inu are popular memecoins.
Mining
Using computational power to validate transactions and create new blocks.
Example: Bitcoin mining requires specialized ASIC hardware.
Minting
Creating new tokens, often used in NFT context.
Example: NFT collectors mint new tokens when creating digital art.
N
NFT
Non-Fungible Token - unique digital asset representing ownership of specific items.
Example: CryptoPunks and Bored Ape Yacht Club are famous NFT collections.
Node
A computer running blockchain software that maintains a copy of the ledger.
Example: Running a Bitcoin node helps decentralize the network.
P
Private Key
A secret code that gives access to your cryptocurrency. Never share this.
Example: Your private key is like a password to your crypto - keep it safe and secret.
Proof of Stake (PoS)
Consensus mechanism where validators stake tokens to secure the network.
Example: Ethereum transitioned to Proof of Stake in September 2022.
Proof of Work (PoW)
Consensus mechanism where miners solve puzzles to validate transactions.
Example: Bitcoin uses Proof of Work, which requires significant electricity.
Public Key
Your cryptocurrency address that others can use to send you funds.
Example: Share your public key to receive payments - it's like your account number.
R
Rug Pull
A scam where developers abandon a project and steal investor funds.
Example: Many DeFi rug pulls happen when anonymous teams drain liquidity pools.
S
Seed Phrase
A series of words (usually 12 or 24) used to recover a cryptocurrency wallet.
Example: Write your seed phrase on paper and store it securely - never digitally.
Smart Contract
Self-executing code on a blockchain that automatically enforces agreement terms.
Example: DeFi protocols like Aave use smart contracts to manage lending and borrowing.
Stablecoin
Cryptocurrency designed to maintain a stable value, usually pegged to USD.
Example: USDC and USDT are popular dollar-pegged stablecoins.
Staking
Locking cryptocurrency to support network security and earn rewards.
Example: Ethereum staking requires 32 ETH for solo validators.
T
Token
A cryptocurrency that runs on another blockchain rather than its own.
Example: USDC is an ERC-20 token running on Ethereum.
Tokenomics
The economic design of a cryptocurrency, including supply and distribution.
Example: Bitcoin's tokenomics include a maximum supply of 21 million coins.
TVL
Total Value Locked - the amount of assets deposited in DeFi protocols.
Example: Aave's TVL measures how much crypto is deposited in its lending pools.
W
Wallet
Software or hardware that stores your cryptocurrency private keys.
Example: MetaMask is a popular browser-based Ethereum wallet.
Whale
An individual or entity holding large amounts of cryptocurrency.
Example: Whale movements can significantly impact market prices.
Whitepaper
Technical document explaining a cryptocurrency project's goals and technology.
Example: Bitcoin's whitepaper was published by Satoshi Nakamoto in 2008.
Y
Yield Farming
Moving crypto between DeFi protocols to maximize returns.
Example: Yield farmers might move stablecoins between lending protocols for the best APY.
Jaa opasJaa
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