Crypto Glossary
All the crypto terminology you need to know, explained in plain English.
Cryptocurrency has its own language. Terms like "gas," "HODL," and "rug pull" confuse newcomers. This glossary translates crypto jargon into plain English with practical examples.
Over 100 terms covering blockchain basics, trading concepts, DeFi protocols, NFT terminology, and security practices. Use browser search (Ctrl+F) to find specific terms quickly.
Terms marked ⚠️ involve security risks. Terms marked 🔰 are important for beginners. Jump to alphabetical sections below.
A
Airdrop
Free tokens distributed to wallet addresses, often as a marketing strategy or reward for early users.
Altcoin
Any cryptocurrency other than Bitcoin. Includes Ethereum, Solana, Cardano, and thousands of others.
APY (Annual Percentage Yield) 🔰
The real rate of return on an investment, accounting for compound interest. Higher than APR due to compounding. Example: 10% APY with daily compounding equals about 10.52% actual return.
ATH (All-Time High)
The highest price a cryptocurrency has ever reached. Bitcoin's ATH was $69,000 in November 2021. Often used as reference point.
Atomic Swap
Direct peer-to-peer cryptocurrency exchange between different blockchains without intermediaries or exchanges. Uses smart contracts for trustless trading.
B
Blockchain 🔰
A distributed digital ledger that records transactions across many computers. The foundation of cryptocurrencies. Each "block" contains transaction data linked to previous blocks forming a "chain." Immutable and transparent.
Block Explorer
A website that lets you search and view blockchain transactions, addresses, and blocks. Etherscan for Ethereum, Blockchain.com for Bitcoin. Important for verifying transactions.
Bridge ⚠️
A protocol that allows transferring assets between different blockchain networks. Move ETH from Ethereum to Polygon. Bridges are frequent hack targets - use established ones only.
Bull Market
Period of rising cryptocurrency prices and widespread optimism. Opposite of bear market. Bitcoin's 2020-2021 bull run saw prices increase from $10k to $69k.
Bear Market
Period of falling prices and pessimism. 2022-2023 crypto bear market saw 80% declines from peaks. Tests long-term believers versus short-term speculators.
BTC
Ticker symbol for Bitcoin. The first and most valuable cryptocurrency. Created by Satoshi Nakamoto in 2009. Digital gold and store of value.
C
Cold Wallet 🔰
A cryptocurrency wallet not connected to the internet. Hardware wallets (Ledger, Trezor) and paper wallets are cold storage. Most secure option for long-term holdings.
CEX (Centralized Exchange) 🔰
A traditional crypto exchange like Coinbase or Binance where the company holds your funds. Convenient but requires trusting the exchange. Opposite of DEX.
Consensus Mechanism
Method blockchain networks use to agree on transaction validity. Proof of Work (Bitcoin) and Proof of Stake (Ethereum) are most common. Prevents double-spending and fraud.
Collateral
Assets locked up as security for a loan. In DeFi, deposit $10k ETH to borrow $6k USDC. If ETH price drops too much, collateral gets liquidated.
CoinMarketCap
Popular website tracking cryptocurrency prices, market caps, and trading volumes. Important resource for market data and discovering new projects.
Custody
Who controls the private keys. Self-custody means you control keys. Exchange custody means they control keys. "Not your keys, not your coins."
D
DeFi (Decentralized Finance) 🔰
Financial services built on blockchain without traditional intermediaries like banks. Lend, borrow, trade, and earn yield using smart contracts instead of institutions.
DEX (Decentralized Exchange) 🔰
A crypto exchange that operates without a central authority. Users trade directly from their wallets. Uniswap, SushiSwap, and PancakeSwap are popular DEXes.
DAO (Decentralized Autonomous Organization)
An organization governed by smart contracts and token holders rather than traditional management. Members vote on proposals using governance tokens.
DApp (Decentralized Application)
An application built on blockchain. Backend runs on decentralized network instead of centralized servers. Examples: Uniswap (DeFi), Axie Infinity (gaming).
Diamond Hands 💎
Holding crypto through extreme volatility without selling. Opposite of paper hands. Shows commitment to long-term investment thesis.
Double Spend
Spending the same cryptocurrency twice. Blockchain prevents this through consensus mechanisms. Major security concern networks must solve.
DYOR (Do Your Own Research) 🔰
Common advice in crypto - investigate any project before investing. Don't trust, verify. Check team, code, tokenomics, and community before buying.
E
ERC-20
Ethereum token standard for fungible tokens. Most altcoins on Ethereum follow ERC-20. USDC, LINK, UNI all use this standard.
ERC-721
Ethereum standard for NFTs (non-fungible tokens). Each token is unique. CryptoPunks, Bored Apes, and most NFT collections use ERC-721.
ETH 🔰
Ticker symbol for Ethereum. Second-largest cryptocurrency by market cap. Platform for smart contracts, DeFi, and NFTs. Transitioned to Proof of Stake in 2022.
Exchange
Platform for buying, selling, and trading cryptocurrencies. Centralized (Coinbase, Binance) or decentralized (Uniswap). Gateway between fiat money and crypto.
F
Fiat 🔰
Government-issued currency like USD, EUR, or JPY. Not backed by physical commodity. Crypto's opposite - centralized and inflationary.
Flash Loan
Borrow massive amounts without collateral for single transaction. Must repay within same block. Used for arbitrage and attacks. Advanced DeFi concept.
Floor Price
Lowest price for NFT in a collection. Bored Apes floor at 30 ETH means cheapest available costs 30 ETH. Key metric for NFT value.
FOMO (Fear of Missing Out) 🔰
The anxiety that others are profiting while you're not. Often leads to poor investment decisions. Buy high, sell low due to emotional trading.
Fork
Split in blockchain creating two separate chains. Hard fork (incompatible changes) or soft fork (backward compatible). Bitcoin Cash forked from Bitcoin in 2017.
FUD (Fear, Uncertainty, Doubt)
Spreading negative information to manipulate prices. "China bans Bitcoin" headlines create FUD. Sometimes legitimate concerns, often manipulation.
G
FOMO (Fear of Missing Out)
The anxiety that others are profiting while you're not. Often leads to poor investment decisions.
Gas 🔰
The fee required to execute transactions on blockchain networks like Ethereum. Measured in gwei. Varies based on network congestion. $5-$50 typical, $200+ during peak times.
Gwei
Unit for measuring Ethereum gas fees. 1 gwei = 0.000000001 ETH. Gas prices quoted in gwei - "50 gwei" means each unit of computation costs 50 gwei.
Genesis Block
The first block in a blockchain. Bitcoin's genesis block mined January 3, 2009 by Satoshi Nakamoto. Contains message about bank bailouts.
Governance Token
Token granting voting rights in DAO or protocol decisions. UNI holders vote on Uniswap changes. COMP holders govern Compound. Token weight = voting power.
H
HODL 🔰
Originally a typo for "hold" - now means holding crypto long-term regardless of price volatility. Buy and hold through market cycles. Opposite of trading.
Hot Wallet ⚠️
A wallet connected to the internet. Convenient but less secure than cold storage. MetaMask, mobile wallets, exchange wallets. Fine for small amounts, risky for life savings.
Hash Rate
Computing power used to mine and process transactions. Measured in hashes per second. Higher hash rate = more secure network.
Halving
Event where Bitcoin mining rewards cut in half every 210,000 blocks (~4 years). Reduces inflation. Next halving April 2024. Historically bullish.
I
Impermanent Loss ⚠️
Loss liquidity providers face when token prices change. Providing ETH/USDC liquidity loses money if ETH pumps. Loss becomes permanent when withdrawing. Major DeFi risk.
IPFS (InterPlanetary File System)
Decentralized file storage protocol. NFT metadata often stored on IPFS instead of centralized servers. More permanent than regular hosting.
ICO (Initial Coin Offering)
Cryptocurrency fundraising method popular 2016-2018. Projects sell tokens before launch. Largely replaced by IDOs and IEOs. Many ICOs were scams.
K
KYC (Know Your Customer) 🔰
Identity verification required by centralized exchanges. Upload ID, take selfie, prove address. Prevents money laundering but sacrifices privacy.
Key Pair
Public key (wallet address visible to everyone) and private key (secret code controlling funds). Cryptographic pair for blockchain transactions.
L
Liquidity 🔰
How easily an asset can be bought or sold without affecting its price. High liquidity = stable prices, tight spreads. Low liquidity = price volatility, wide spreads.
Liquidity Pool
Smart contract holding tokens that enable decentralized trading. Provide ETH+USDC to pool, earn fees from trades. Foundation of DEXes like Uniswap.
Liquidation ⚠️
Forced sale of collateral when borrowed position becomes unsafe. Borrowed against ETH, ETH drops 30%, collateral sold to repay loan. Lose everything plus penalty.
Layer 1 (L1)
Base blockchain network. Ethereum, Bitcoin, Solana are L1s. Process transactions natively. Foundation that Layer 2s build upon.
Layer 2 (L2)
Secondary network built on top of L1 for scaling. Arbitrum, Optimism, Polygon. Faster and cheaper than Ethereum mainnet. Inherits L1 security.
M
Market Cap 🔰
Total value of a cryptocurrency: current price multiplied by circulating supply. Bitcoin at $40k with 19M supply = $760B market cap. Measures project size.
Mainnet
The live, production blockchain network. Opposite of testnet. Real money and actual transactions. Going to mainnet means project launches fully.
Mining
Using computing power to validate transactions and create new blocks on Proof of Work chains. Miners compete to solve math problems. Rewards paid in newly minted coins.
Minting
Creating new tokens or NFTs on blockchain. Mint NFT = upload to blockchain and create ownership record. Also refers to minting stablecoins.
Multisig (Multi-Signature) ⚠️
Wallet requiring multiple private keys to authorize transactions. 2-of-3 multisig needs 2 out of 3 keys. Enhanced security for large holdings and DAOs.
MetaMask 🔰
Popular browser extension wallet for Ethereum and EVM chains. Gateway to DeFi and NFTs. Connect to dApps with one click. Most used crypto wallet.
N
NFT (Non-Fungible Token) 🔰
A unique digital asset on a blockchain. Each NFT has distinct identifier. Used for digital art, collectibles, gaming items, memberships. Unlike fungible tokens (BTC, ETH) which are interchangeable.
Node
Computer running blockchain software that stores and validates transactions. Full nodes store entire blockchain history. Light nodes store partial data.
Non-Custodial
You control private keys, not a third party. MetaMask is non-custodial. Exchange wallets are custodial. Non-custodial = true ownership but full responsibility.
O
Oracle
Service providing external data to smart contracts. Chainlink is major oracle. Needed because blockchains can't access off-chain data (prices, weather, etc.).
On-Chain
Data or transactions recorded directly on blockchain. Visible to everyone, permanent, censorship-resistant. Opposite of off-chain.
OpenSea
Largest NFT marketplace. Buy, sell, and create NFTs. Supports Ethereum, Polygon, Solana. User-friendly interface for beginners.
P
Private Key ⚠️ 🔰
A secret code that gives you access to your crypto. Never share it with anyone. Lose it = lose funds forever. Anyone with your private key owns your crypto.
Public Key 🔰
Your wallet address visible to others. Derived from private key. Share publicly to receive funds. Like email address - safe to share, unlike password (private key).
Proof of Work (PoW)
Consensus mechanism using computational power. Bitcoin, Litecoin use PoW. Miners compete to solve puzzles. Energy-intensive but proven secure.
Proof of Stake (PoS)
Consensus mechanism using staked coins. Ethereum, Cardano use PoS. Validators chosen based on stake. More energy-efficient than PoW.
Paper Hands
Selling crypto at first sign of price drop. Opposite of diamond hands. Weak holders who panic sell. Usually regret it later.
Pump and Dump ⚠️
Coordinated scheme to inflate price then sell. Group pumps worthless token, outsiders buy high, group dumps leaving victims with losses. Illegal manipulation.
R
Rug Pull ⚠️ 🔰
A scam where developers abandon a project and run away with investors' funds. Disappear with liquidity overnight. Hundreds happened in 2021-2022. Check liquidity locks before investing.
Rekt
Slang for "wrecked" - lost significant money. "Got rekt trading with 20x use." Common outcome for overused traders and DeFi users.
Rollup
Layer 2 scaling solution bundling transactions off-chain then posting to mainnet. Optimistic rollups and ZK-rollups. Arbitrum and Optimism use rollup tech.
S
Seed Phrase ⚠️ 🔰
A 12-24 word phrase that can recover your entire wallet. Guard it with your life. Anyone with seed phrase controls all funds. Never digital - paper or metal only.
Staking 🔰
Locking up crypto to support network operations in exchange for rewards. Earn 3-15% APY depending on network. Ethereum, Cardano, Polkadot offer staking.
Smart Contract
Self-executing code on blockchain. "If X happens, do Y automatically." Foundation of DeFi, NFTs, DAOs. Ethereum pioneered smart contracts.
Slippage
Difference between expected and actual trade price. High slippage on illiquid pairs. Set slippage tolerance (1-5%) before swapping on DEX.
Stablecoin 🔰
Cryptocurrency pegged to stable asset like USD. USDC, USDT, DAI all target $1. Used as safe haven in crypto and for DeFi transactions.
Satoshi
Smallest unit of Bitcoin (0.00000001 BTC). Named after Bitcoin creator Satoshi Nakamoto. "Stack sats" = accumulate Bitcoin slowly.
Shard/Sharding
Splitting blockchain into smaller pieces (shards) that process transactions in parallel. Scaling solution. Ethereum planning sharding for future.
Shill
Promoting cryptocurrency for personal gain. "Stop shilling your bags." Crypto influencers often shill coins they hold. Be skeptical of recommendations.
T
Token 🔰
Digital asset on blockchain. Can represent currency, utility, governance rights, or ownership. Built on existing chains (unlike coins which have own blockchain).
Tokenomics
Economics of cryptocurrency token. Supply, distribution, emission rate, utility. Good tokenomics = sustainable. Bad tokenomics = eventual worthlessness.
TVL (Total Value Locked)
Amount of crypto deposited in DeFi protocol. Measures protocol size and popularity. Aave has $11B TVL means $11B deposited. Higher TVL generally safer.
Transaction (TX)
Transfer of crypto from one address to another. Recorded on blockchain. Requires gas fee. Identified by transaction hash (TXID).
Testnet
Sandbox blockchain for testing without real money. Developers test features before mainnet. Get free testnet tokens from faucets.
U
Utility Token
Token providing access to service or product. BNB pays Binance fees. LINK pays oracle data. Value comes from actual use, not speculation.
Uniswap
Leading decentralized exchange on Ethereum. Automated market maker model. Swap tokens directly from wallet. Pioneered liquidity pool concept.
V
Validator
Node that validates transactions on Proof of Stake network. Requires staking minimum amount. Ethereum validators need 32 ETH. Earn rewards for honest behavior.
Volatility
Price fluctuation magnitude. Bitcoin drops 20% in day = high volatility. Stablecoins stay at $1 = low volatility. Crypto more volatile than traditional assets.
Vesting
Gradual release of tokens over time. Team tokens vest over 4 years prevents immediate dump. Protects investors from founders cashing out.
W
Whale 🔰
An individual or entity holding large amounts of cryptocurrency, capable of moving markets. Wallet with 10,000+ BTC is whale. Watch whale movements for market signals.
Web3
The vision of a decentralized internet built on blockchain technology. Users own data, no central authorities. Includes DeFi, NFTs, DAOs, decentralized social media.
Wallet 🔰
Software or hardware storing private keys for accessing crypto. Hot wallets (MetaMask) online and convenient. Cold wallets (Ledger) offline and secure.
Whitepaper
Technical document explaining cryptocurrency project. Bitcoin whitepaper by Satoshi laid foundation. Read whitepapers before investing to understand vision and tech.
Wei
Smallest unit of Ethereum (0.000000000000000001 ETH). Named after Wei Dai, cryptography pioneer. Gas calculated in gwei (1 billion wei).
Wrapped Token
Token representing another asset on different blockchain. WBTC is Bitcoin on Ethereum. Wrapped tokens enable cross-chain DeFi. Backed 1:1 by real asset.
Y
Yield Farming
Providing liquidity to DeFi protocols for rewards. Move funds between protocols chasing highest APY. High risk, high reward. Requires active management.
Yield
Returns earned from DeFi activities. Lending earns yield. Staking earns yield. Providing liquidity earns yield. Expressed as APY percentage.
Z
Zero-Knowledge Proof (ZK)
Cryptographic method proving something without revealing underlying data. ZK-rollups scale Ethereum privately. Complex math enabling private blockchain verification.
51% Attack
When entity controls majority of network hash rate and can manipulate transactions. Possible on small networks. Bitcoin too large to attack realistically.
Important Terms by Category
Absolute Beginner Basics
Master these first: Blockchain, Wallet, Public Key, Private Key, Seed Phrase, Hot Wallet, Cold Wallet, Gas, Transaction, Fiat, BTC, ETH, Altcoin, Exchange, Market Cap, HODL, Whale, Stablecoin, NFT, DeFi.
Understanding these 20 terms covers 80% of basic crypto conversations. Everything else builds on this foundation.
Trading & Investing
Bull Market, Bear Market, ATH, FOMO, FUD, Volatility, Liquidity, Slippage, Order Book, Limit Order, Market Order, Candlestick, Support, Resistance, DYOR, Pump and Dump, Shill, Whale, Rekt, Diamond Hands, Paper Hands.
DeFi Importants
DEX, Liquidity Pool, Yield Farming, Impermanent Loss, TVL, APY, Collateral, Liquidation, Smart Contract, Gas, Oracle, Flash Loan, Wrapped Token, Governance Token.
Security Critical
Private Key, Seed Phrase, Hot Wallet, Cold Wallet, Multisig, KYC, Rug Pull, Phishing, 2FA, Custodial vs Non-Custodial, Bridge Security. These terms involve direct security risks.
NFT Terminology
NFT, ERC-721, Minting, Floor Price, Collection, Rarity, Metadata, IPFS, OpenSea, Royalties, Gas War, Reveal, PFP (Profile Picture).
Technical Blockchain
Consensus Mechanism, Proof of Work, Proof of Stake, Hash, Node, Mining, Validator, Block, Genesis Block, Fork, Halving, Sharding, Layer 1, Layer 2, Rollup, Sidechain.
Common Crypto Phrases Decoded
"WAGMI"
We're All Gonna Make It. Optimistic community sentiment. Used during bull markets and by long-term believers.
"To the Moon"
Price will skyrocket. Often accompanied by rocket emojis. Usually said sarcastically after pump-and-dump schemes.
"NGMI"
Not Gonna Make It. Said about people making obvious mistakes. Selling at bottom, aping into scams, ignoring security warnings.
"When Lambo?"
When will token price moon enough to afford Lamborghini? Satirizes get-rich-quick mentality. Usually asked ironically after project fails.
"Ape In"
Buy without research. "I aped into new memecoin." Usually results in losses. Opposite of DYOR.
"GM" / "GN"
Good Morning / Good Night. Crypto Twitter greeting ritual. Showing you're active in community. Reply "GM" to build social connections.
"Few Understand This"
Crypto will change everything but masses don't realize yet. Often said by Bitcoin maximalists. Sometimes genuine insight, sometimes cope.