Crypto Glossary

A free distribution of a new cryptocurrency or token to many wallet addresses. Projects often use airdrops to reward early users or raise awareness.

Any cryptocurrency other than Bitcoin. For example, Ethereum, Ripple, or Litecoin are all altcoins – essentially alternative coins to Bitcoin.

A market trend where prices are falling over time. In crypto, a bear market means many investors are pessimistic, and prices are going down.

A package of cryptocurrency transactions recorded on the blockchain. Each block contains a batch of transactions, and blocks are linked together in a chain.

A secure, digital ledger of transactions that is shared across many computers. It’s like a chain of blocks (each block is a record) that everyone can see, making it very hard to tamper with past data.

An individual or company that acts as a middleman between cryptocurrency buyers and sellers. Brokers often provide easier interfaces, set prices, and handle the trade for you, usually charging a fee for the service.

A market trend where prices are rising over time. In crypto, a bull market means investors are optimistic and prices are going up.

A company-run platform where you can buy, sell, or trade cryptocurrencies. Users trust the exchange to hold funds and execute trades (examples include Binance or Coinbase).

A cryptocurrency wallet that is not connected to the internet. By keeping keys offline (often on a USB device or special hardware), a cold wallet is safer from online hacking.

A type of digital or virtual money that uses cryptography (strong codes) to secure transactions. Cryptocurrencies run on decentralized networks (like blockchains) and aren’t controlled by any single government or bank.

Refers to a service (usually an exchange or wallet provider) that holds and manages your private keys on your behalf. A custodial wallet means someone else safeguards your crypto, whereas a non-custodial wallet means you hold your own keys.

An organization run by code and rules on a blockchain, with decisions made by members voting. A DAO has no central boss – rules and financial transactions are transparently handled by smart contracts.

A software application that runs on a blockchain or peer-to-peer network instead of a single computer. For example, a crypto wallet or game built on Ethereum can be a DApp.

A trading platform where people swap cryptocurrencies directly with each other (peer-to-peer) without a middleman. Orders and trades happen on the blockchain, so the exchange itself never holds your funds.

Financial services built on blockchains that operate without traditional banks. Examples include crypto lending platforms, decentralized exchanges, or stablecoin savings accounts – all run by code rather than a single company.

A database of transactions shared across multiple computers (nodes) instead of kept in one place. Blockchain is a type of distributed ledger; every participant has a copy, ensuring transparency and security.

A platform where you can buy, sell, or trade cryptocurrencies. This includes centralized exchanges (run by companies) and decentralized exchanges (peer-to-peer on blockchains).

Government-issued money like the US Dollar, Euro, or Japanese Yen. Fiat money is what most people use daily, and it is “legal tender” backed by governments – as opposed to cryptocurrencies which are digital.

A split in a blockchain’s code that creates two separate versions. A hard fork permanently changes the rules and creates a new blockchain (and usually a new coin), while a soft fork is backward-compatible. Forks can happen for upgrades or disagreements in the community.

A fee paid to run transactions or smart contracts on certain blockchains (notably Ethereum). It’s like paying for gas in a car – you pay a small amount of cryptocurrency (e.g. ETH) to have your transaction processed by the network.

A cryptocurrency that gives holders voting rights in a blockchain project or DAO. By holding governance tokens, you can help decide on upgrades, changes, or funding within that project.

An event (specific to some cryptocurrencies like Bitcoin) where the reward for mining new blocks is cut in half. This happens periodically to control inflation – after a halving, miners earn 50% fewer coins for adding new blocks.

A fixed-size string of characters produced by a hash function. In crypto, every block and transaction is run through a hash to create a unique fingerprint. Hashing helps secure data and link blocks together in a blockchain.

A cryptocurrency wallet connected to the internet, such as a mobile or web wallet. While convenient for quick access, hot wallets are more exposed to online hacks compared to cold wallets.

A fundraising event where a new cryptocurrency project sells its own tokens to early backers. Investors can buy these tokens hoping the project succeeds. It’s similar to an IPO in stocks but usually less regulated.

A process where exchanges or brokers verify a user’s identity (usually by ID documents). KYC helps prevent fraud and money laundering by making sure traders are who they say they are.

How easily an asset (like a crypto coin) can be bought or sold without significantly changing its price. High liquidity means lots of buyers and sellers (tight spreads and big trade volumes); low liquidity means trades can sway the market price more.

The total value of all coins of a cryptocurrency in circulation. You calculate it by multiplying the current price by the total supply. It’s often used to compare the size of different cryptocurrencies.

The process of using computer power to verify transactions and secure a blockchain (especially in Proof-of-Work systems like Bitcoin). Miners bundle transactions into blocks; if they successfully solve a complex puzzle, they add the block to the blockchain and earn a reward (new coins).

A cryptocurrency based on a joke, meme, or online trend (e.g., Dogecoin or Shiba Inu). They often start as jokes but can gain real value if many people buy them. Be cautious – meme coins can be very volatile.

A unique digital asset on a blockchain. Unlike cryptocurrencies (which are fungible and identical), each NFT is one-of-a-kind and can represent digital art, collectibles, game items, or real-world items. NFTs are like digital certificates of authenticity.

A computer connected to a blockchain network that helps verify and broadcast transactions. Nodes store a copy of the blockchain and follow the protocol rules, helping maintain the network’s security and integrity.

Direct trading of cryptocurrency between two parties, outside of public exchanges. OTC trades are often used for very large orders to avoid affecting market prices. They are usually arranged through brokers or desks.

A long string of letters and numbers that serves as your public-facing address for receiving cryptocurrency. It’s paired with a private key: you can share your public key with others to get funds, but your private key (secret code) is needed to spend them.

A secret code known only to you that allows you to access and spend your cryptocurrency. Think of it like a password – anyone with your private key can use your funds, so it must be kept very secure. Losing it means losing access to your crypto.Proof of Stake (PoS)

A consensus method where validators “stake” (lock up) their coins to be chosen to create new blocks. The more coins you stake, the higher your chance to validate the next block and earn rewards. PoS is energy-efficient compared to Proof of Work.

A consensus method where miners use powerful computers to solve complex puzzles, proving they did “work.” The first to solve it adds the next block to the blockchain and earns rewards. PoW is secure but consumes a lot of electricity.

A scam in the crypto world where the creators of a project abandon it suddenly, take the investors’ money, and let the token’s price crash. Always do thorough research before investing to avoid rug pulls.

The smallest unit of Bitcoin, equal to one hundred millionth of a bitcoin (0.00000001 BTC). It’s named after Bitcoin’s pseudonymous creator, Satoshi Nakamoto.

A set of 12 or 24 simple words generated by your crypto wallet. Memorizing or storing this phrase lets you recover your wallet and funds if you lose access. It’s crucial to keep it private and safe.

A self-executing contract on the blockchain. It’s code that automatically runs when certain conditions are met. For example, a smart contract could automatically release payment when a product is delivered, all without middlemen.

A cryptocurrency designed to have a stable value, often by being backed 1:1 with a fiat currency like the US Dollar. Examples include USDT (Tether) or USDC. Stablecoins make it easier to hold crypto value without volatility.

A digital asset created on an existing blockchain (like Ethereum). Tokens can represent many things: another currency, a stake in a project, access rights, or even physical assets. Unlike a coin (with its own blockchain), tokens exist on top of another chain.

An action of sending cryptocurrency from one address to another. Each transaction is recorded on the blockchain, usually including details like amount, sender’s address, recipient’s address, and a timestamp.

How much and how quickly a cryptocurrency’s price moves. High volatility means price swings are large and rapid (which is common in crypto), while low volatility means the price is relatively stable.

A digital tool (software or hardware) that stores your cryptocurrencies’ private and public keys. A wallet lets you check your balance, send and receive coins, and keep your keys safe. Remember, the wallet doesn’t hold coins literally – the keys control access on the blockchain.

A very large crypto holder or trader who owns a significant amount of a cryptocurrency. Whales can sometimes move the market price simply by buying or selling large volumes.

An official document released by a cryptocurrency project that explains its technology, purpose, and roadmap. It’s like a business plan for the project. Reading the whitepaper helps investors understand what they’re getting into.

The vision of a decentralized internet built on blockchain technology. In Web3, users control their own data and identity through crypto wallets, and apps (often DApps) run on peer-to-peer networks instead of centralized servers.

The practice of using (or “locking up”) crypto assets in DeFi platforms to earn rewards or interest. Think of it as deposit-taking in traditional finance, but instead you’re earning more crypto by contributing liquidity to decentralized protocols.

csdcdxfv e