Crypto Retirees Glossary of Crypto Terms

Use this crypto glossary to learn about the unusual, uncommon and sometimes downright weird terms crypto geeks and enthusiasts love to use.

There are dozens (hundreds?) more terms I didn’t include here, as they’re not relevant to use as a retiree, even if your goal is to keep up with your kids or grandkids.

If you want to full list, do a web search for “crypto glossary.” Then read more than one. They don’t all have the same terms. Or the same definitions!

Click on the # symbol to see all the terms starting with numbers. Or click on a letter to go to all the terms that start with that letter.

Or use Ctrl-f in Windows, or Command-f on a Mac, to find a term on the page.

# | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

#

1099-MISC

A tax form U.S. taxpayers receive from each centralized exchange and rewards platform based in the U.S. It specifies all the trades, swaps, deposits and/or withdrawals on that exchange/platform during the tax year.

2FA

Short for two-factor authentication, it’s a form of security that provides a new 6-digit code every 30 seconds. The code is then entered to complete the login process or an asset-related process on a crypto exchange or rewards platform.

$5 Wrench Attack

The use of physical force to “persuade” a wealthy crypto owner, who usually likes to flaunt his/her new wealth, to hand over all private keys, giving the attackers access to every penny of crypto.

51% Attack 

No one controls a blockchain. However, if anyone can take control of 51% of the computers maintaining the blockchain, that person now runs it.

A

Address

The destination where crypto will be received and stored; each address is unique, and consists of dozens of characters.

Airdrop

To promote a new coin or token, the developers will distribute some free in an airdrop.

Air Gap

The term given to the “space” between the internet and a computer that’s not connected to it. An unconnected computer is said to be “air-gapped.”

Altcoin

Any cryptocurrency coin or token other than Bitcoin

Algorithmic Trading 

An automated trading system (usually a decentralized exchange) where an algorithm places all buy and sell orders.

All-Time High (ATH)

The highest price or highest market capitalization a coin or token has ever reached.

All-Time Low (ATL) 

The lowest price or highest market capitalization a coin or token has ever reached.

Anti-Money Laundering (AML) 

The term for the legal requirements to eliminate as much as possible individuals or criminal organizations laundering money, in this case through cryptocurrency.

APR 

Annual percentage rate.

APY 

Annual percentage yield; this is the percentage you’ll receive after all compounding is taken into account for the year.

ASIC (Application-Specific Integrated Circuit) 

A computer designed for one use. An ASIC for Bitcoin mining can only mine BTC, for example.

Ask Price 

The lowest price at which a seller will trade his asset on a crypto exchange.

Asset-backed Tokens 

Tokens backed by a physical asset. Gold tokens such as PAXG are backed by gold held in storage.

Astroturfing 

Making marketing campaigns, and especially sponsored messaging, appear to be unprompted views of genuine members of the crypto community.

Atomic Swap 

Sending and receiving crypto without the use of an exchange, rewards platform or other intermediary. If I send Bitcoin from my wallet to your wallet, that is an atomic swap.

Automated Market Maker  

A system that uses an algorithm to price crypto assets rather than using the price point where buyers and sellers agree to do a trade. 

B

Bag 

A crypto slang term for a large amount of a coin or token. A bagholder is someone who holds a large amount of a con or token.

Balloon Payment 

A one-time payment made at the end of a crypto loan. See this article for details about loans.

Bear Market 

A 20% or greater price drop of an entire market.

Bid Price 

The highest price at which a buyer will complete a trade for the desired asset.

Bid-Ask Spread 

The difference between the bid price and the ask price. In other words, the difference between the lowest price the seller will accept and the highest price the buyer is willing to pay.

Bitcoin

The original cryptocurrency, which began in January 2009.

Bitcoin Pizza

The first business transaction ever completed using a cryptocurrency. Laszlo Hanyecz spent 10,000 BTC for two pizzas, making them the most expensive pizzas ever, at today’s Bitcoin price.

Bitcoiner

A Bitcoin enthusiast.

BitPay

A payment platform that lets you use crypto to make purchases.

Block

A file that records all the transactions that occur during a period of time, or until the file reaches a certain size.

Blockchain

A series of blocks, each containing digital information about transactions. Each cryptocurrency coin and token runs on its blockchain. Some run on top of the Ethereum blockchain, but are separate from it. See this article for more on blockchains.

Blockchain Explorer

A search engine for a particular coin or token. It lets users browse through records using either public addresses or transaction addresses.

Brave Browser

A web browser that pays users small amounts of crypto for viewing ads and performing some actions. It also blocks most other ads along with tracking.

BTC

The trading code and abbreviation for Bitcoin.

Bug Bounty

A reward that the developers of a crypto project offer to find and report vulnerabilities. The hope is that by offering a large amount of money, they’ll convince someone to report the bug rather than use it to exploit the vulnerability.

Burn/Burned/Burning

The act of permanently removing coins or tokens from circulation. This makes the asset deflationary, since there are fewer of them. It often results in an increase of the price of the asset.

C

Candlestick Chart

A chart that provides four pieces of information for each time period — the opening price at the start of the period, the closing price at the end, the highest price and the lowest price. The name comes from the resemblance to candles.

Capitulation

The selling of crypto assets at a big loss after giving up hope that the coin or token will increase in price.

Central Bank Digital Currency (CBDC)

A digital coin that will be run by a country’s central bank. China already has a digital yuan. The U.S. is looking into creating one.

Centralized Exchange (CEX)

A cryptocurrency trading exchange owned and operated by one business or organization; see also decentralized exchange.

Centralized Finance (CeFi)

The offering of cryptocurrency rewards (interest), loans and other financial instruments through a central business or organization; see also decentralized finance and traditional finance.

Circulating Supply

An informed estimate of the number of coins or tokens that are circulating in the market and in the public’s wallets. This number is always a subset of the total supply.

Client

Software that resides on the user’s computer.

Cloud Mining

The mining of crypto using rented processing power.

Coin

A cryptocurrency that acts like money. Distinguished from tokens, which have narrow use cases, such as utility tokens and governance tokens.

Coinbase

A centralized exchange (CEX) based in the U.S. It’s the largest exchange by trading volume in the U.S.

Cold Storage

Offline storage of crypto, which includes paper wallets and hardware wallets. Air-gapped computers are another form of cold storage.

Cold Wallet

A hardware (physical) wallet where crypto can be stored offline for increased security against hackers.

Collateral

The crypto asset that is put up by the borrower as security to ensure repayment of a loan. In the crypto world, collateral exceeds the loan amount by at least 2X. See this article for more about crypto loans.

Confirmation

The term used for the addition of a new block to the blockchain, with all the nodes on the network confirming that the new block is valid.

Confirmation Time 

The measure of the number of blocks that have been created since a transaction was added to the blockchain.

For example, an exchange may require 3 confirmations to receive Bitcoin and free it up for trading. Since Bitcoin creates a block every 10 minutes, three confirmations will take 30 minutes

Consensus Mechanism

The process used by a blockchain to reach agreement that new transactions added to the chain are valid. Proof of Work, Proof of Stake and Delegated Proof of Stake are three examples.

Counterparty Risk

The risk that one of the parties involved in a transaction will not meet its obligations.

Storing crypto on a centralized exchange or a rewards platform has counterparty risk, as the exchange or platform may go out of business, or simply refuse to give users their crypto.

Decentralized exchanges, which are automated, have the risk of failure.

CPU Mining

The use of the central processing unit of a computer to add transactions to a blockchain.

Cryptocurrency/Crypto

A digital currency without a controlling central authority. It’s secured by cryptographic technology, is transparent, and is unchangeable (immutable).

Cryptocurrency Exchange

Similar to a stock exchange, except only for cryptocurrencies. Centralized exchanges (CEXes) and decentralized exchanges (DEXes) are the two types of cryptocurrency exchange.

Cryptography

The study and practice of securing information so that only the sender and the recipient can read it. It’s used in cryptocurrencies since there is no central control.

Crypto ATM 

A machine that dispenses certain cryptocurrencies instead of money. A Bitcoin ATM is sometimes called a BTM.

Crypto Loan

A loan made in a cryptocurrency, often at a very low interest rate, using crypto as collateral. See this article for more about crypto loans.

Currency

A medium of exchange. The $100 bill is currency in the U.S., as is a quarter. When the U.S. was on the gold standard, a $10 gold coin was currency, as was a silver dollar.

Custodial Wallet

A cryptocurrency wallet maintained on a centralized exchange or rewards platform by the business or organization.

Custody

In the crypto space, the legal and explicit permission to hold a client’s assets, with the expectation that they will be protected from theft and loss.

D

Day Trading

Frequent buying and selling of crypto with the hope of making a profit on intraday price changes.

Debank

The act of removing yourself from the conventional banking/financial system, which is also called unbanking. See this article for more details about unbanking.

Decentralized App (DApp)

An application that runs on a decentralized network of several computers. This avoids a single point of failure.

Decentralized Autonomous Organization (DAO)

An organization created and governed by computer-defined rules and blockchain-based smart contracts.

Decentralized Exchange (DEX)

An exchange that allows peer-to-peer cryptocurrency trading. There’s no intermediary in the trade.

Decentralized Finance (DeFi)

The offering of cryptocurrency rewards (interest), loans and other financial instruments via algorithms and smart contracts.

Deflation

The opposite of inflation. Prices get cheaper month after month, so people stop spending and wait for a cheaper price.

Degen/Degenerate

A person who tends to go after large yields (hundreds to thousands of percentage points) while ignoring the risks. The label is considered a badge of honor in the DeFi space.

Delegated Proof of Stake

A type of Proof of Stake, where those who have staked their assets delegate their voting rights to someone else with voting rights.

Distributed Ledger Technology (DLT)

The broad term that covers blockchain technology. It refers to storing information on a network whose users have no controlling authority.

Dollar Cost Averaging

The practice of making regular purchases of crypto (or stocks/mutual funds). Some buys will be at lower prices, and some will be at higher prices.

Over time, those purchases result in a lower cost per coin/token than if you buy a larger amount occasionally.

Double Spend

In a digital financial system, there’s a risk of spending the same money twice. That problem becomes more acute when there’s no central authority. Bitcoin solved this issue, which made it possible to create cryptocurrencies.

Dumping

If world or financial news looks bad, or a rumor spreads about a particular coin or token, a panic can ensue. A large sell-off causes an immediate price drop, which feeds the panic, causing more sales and the price to drop even more.

Dust

Trading on an exchange usually leaves tiny amount of the crypto behind. It can’t be sent because the transaction fees are higher than the value of the dust. Binance is an exchange that lets users consolidate much of their dust into the BNB token.

DYOR

Do your own research. Or, in other words, perform due diligence before investing in any crypto coin, token or project.

E

ELI5

Explain it like I’m 5 years old. In other words, explain it simply enough that a 5-year-old would understand it.

Epoch

The term used by some Proof-of-Stake tokens for the staking period during which the tokens are locked up and can’t be redeemed. Similar to the term of a certificate of deposit in traditional finance.

ERC-20

The standard for any token that was created to run only on the Ethereum platform.

ERC-721

The standard that allows non-fungible tokens on the Ethereum platform.

Escrow

The holding of financial assets by a third party while the buyer and seller complete the deal. In crypto, this is used by some peer-to-peer buying platforms since the buyer and seller can’t meet in person.

ETH 

The trading ticker and abbreviation for Ether, the cryptocurrency of the Ethereum network.

Ethereum

The second largest crypto by market capitalization, its designed allowed for the creation of smart contracts and decentralized finance.

Ethereum Classic

A version of Ethereum that split off (forked) in 2015, after a hack stole funds from a decentralized autonomous organization. ETC (Classic) continued as the original blockchain, with Ethereum (ETH) becoming the new chain.

Exchange

Where trading of crypto assets occurs; similar to a stock exchange.

Exchange traded fund (ETF)

An investment fund that can be bought and sold on a stock exchange.

Exit scam

A cryptocurrency project abandoned without notice. The developers behind the project take all the invested funds with them.

F

Faucet

A web page that offers a tiny amount of crypto in return for taking an action. See this article for more details.

Fee

Trading fees are paid to an exchange for facilitating a trade.

Transaction fees are paid to an exchange for sending crypto to an external wallet. This fee usually consists of a fee charged by the exchange, and one charged by blockchain network.

Network fees, called gas on some networks, are the fees paid to the miner or validator who confirmed the transaction.

Fee Tiers

The fee structure on a crypto exchange. The percentage charged as a fee usually goes down as the amount of the transaction increases.

Fiat

By decree; from the Latin for let it be done.

Fiat Currency

Denotes dollars, euro, yen, etc. without a hard asset backing them; governments and central banks issue and control fiat currencies.

Fiat Onramp

A method to convert a fiat currency into cryptocurrency.

Fiat Peg

The price at which a crypto coin or token is tied to a government-issued (fiat) currency. Stablecoins are usually pegged to the U.S. dollar, and trade within a narrow range, usually about half of one cent on either side.

First In, First Out (FIFO)

An accounting method used to determine the cost basis of taxable events. See this article for more about crypto tax.

Flippening

The time when Ether’s market cap exceeds Bitcoin’s market cap. It hasn’t happened yet.

FOMO

Fear of missing out.

Fork 

From the term “fork in the road,” it’s when a blockchain splits. One maintains the current path, while the other goes in a different direction. Nodes and miners choose which path to follow.

Examples are ETH and ETC, and BTC with several forks, including BCH (Bitcoin Cash).

Fractionalization

Another term for asset tokenization, the splitting of ownership of a good into small, affordable parts.

FUD

Fear, uncertainty and doubt; it’s used to affect markets by spreading negative, often inaccurate news.

FUDster

Someone who spreads fear, uncertainty and doubt.

Fungible

If a money is fungible, each unit of the same size is exactly the same as any other unit of the same size. All quarters are the same, all dimes are the same, all $100 bills are the same. One can be exchanged for any other of the same size.

G

GameFi

Play-to-earn (P2E) games, which allow players to own their in-game assets and generate income from playing.

Gas

The fee paid to transact on the Ethereum network. It’s paid in ETH, but priced in Gwei, a tiny unit of ETH. Gas prices can skyrocket when demand on the network is high.

There are additional fees to execute smart contracts. 

Gas Limit 

The most a user is willing to pay to have their transaction completed on the Ethereum network.

Gold Standard 

When an economy is on the gold standard, any unit of currency can be exchanged for the equivalent amount of gold.

In the U.S., the gold standard was dropped in 1972. After that point, any unit of currency can only be exchanged for the same amount of currency.

Google Authenticator 

A 2-factor authentication app that resides on a smartphone. It’s used as an added security tool when logging in to crypto exchanges and rewards platforms, and when performing some actions on them.

Governance

Rules that define how the crypto project or organization will run.

Governance Token

A token that gives the holder a voting right on the direction of the cryptocurrency project or organization.

GPU

Graphical processing unit, the card inside a computer that runs all the graphics processing; it’s used for mining crypto due to its power.

GPU Mining

The use of a graphics card to mine or validate cryptocurrency.

Gwei

Equal to .000000001 of 1 ETH. If the price of Ether was $5,000, 1 Gwei would equal 5 ten-thousandths of one cent.

H

Halving

Bitcoin miners receive a number of BTC as a reward for completing the Proof of Work and adding a new block to the blockchain. Every four years, that number is cut in half. The next halving will occur in 2024, reducing the reward to 3.125 BTC.

Hard Wallet or Hardware Wallet 

A physical device that stores cryptocurrency offline, away from the reach of hackers

Hash

A unique identifier given to every transaction on a crypto blockchain.

HNWI

A high net worth individual.

HODL

A crypto slang term that means holding crypto and not selling it during downswings in its price. See this article for more about HODLing crypto.

Hot Wallet

A software wallet where crypto is stored. “Hot” means it’s always connected to the internet. This makes trading more convenient, at the cost of lower security. See this article for more about crypto security.

Hyperinflation

An economy experiencing hyperinflation is seeing prices increase by hundreds of percent per year.

I

Immutable

Data about crypto transactions cannot be changed once it’s entered into a block and added to the blockchain.

Impermanent Loss

A temporary loss of funds due to volatility in a trading pair on a decentralized exchange.

Inflation 

Continually rising prices due to demand being greater than supply, supply chain disruptions, and other issues.

While government money printing contributes to inflation, its result is not increased prices, but a lower value of each unit of currency already in the economy.

Initial Coin Offering (ICO)

A type of crowdfunding for a crypto project. Popular in 2017, ICOs fell out of favor due to the large number of scam projects introduced during that year.

International Money Remittance

Millions of people living abroad remit money to their families back home. Crypto, particularly Bitcoin, has reduced the cost of sending money internationally, which gives the recipients more money to spend.

Internet of Things (IoT) 

The connected network of physical devices that continually report their status via the internet.

Investment Fund

A private fund available only to accredited investors and high net worth individuals (HNWIs).

Invoice

A request for payment on Bitcoin’s Lightning Network.

Issuance

New coins that are issued and distributed according to the rules established when the crypto project was developed.

J

JOMO

The joy of missing out.

K

KYC

Know Your Customer, a requirement of centralized exchanges to collect information that confirms each user’s identity. Decentralized exchanges, which are not based in a particular location, don’t have to abide by KYC regulations.

KYT

Know Your Transaction, a requirement of centralized exchanges to know where the crypto associated with a transaction is coming from (e.g., so they know whether it’s a money-laundering transaction).

L

Layer 1

A base blockchain. Bitcoin and Ethereum are both Layer 1 blockchains.

Layer 2

A blockchain built on top of, and using features of, a Layer 1 blockchain. Layer 2 usually runs faster than the base blockchain on which it’s based.

Ledger

A record of financial transactions.

Ledger

A brand of hardware wallet.

Leverage

The use of borrowed funds to multiply the gain on a trade. This is a high-risk trading approach as the funds invested can be wiped out, leaving the loan to be repaid.

Lightning Network

A Layer 2 Bitcoin application that speeds up payment processing by completing transactions off-chain. See this article for more about blockchains, sidechains and offchains.

Limit Order

Placed on an exchange, this type of order can be completed only when the cryptocurrency reaches the price specified in the order.

Liquid Market

A market is liquid if there are lots of buyers and lots of sellers, which results in faster trades with lower trading fees.

Liquidation

The conversion of all the holdings of a crypto asset to its fiat currency equivalent. This happens with crypto loans if the collateral’s price falls too much.

Liquidity

This is determined by the amount of a crypto that’s available on any exchange for immediate buying and selling.

Liquidity Pool

Assets of both sides of a trading pair held in a decentralized exchange to help provide enough liquidity to make trades between the pair. In exchange, a share of the trading fees goes to each person offering the liquidity.

Liquidity Provider

A user of a decentralized exchange who offers both sides of a trading pair to increase liquidity.

Loan to Value Ratio (LTV)

The ratio of a loan amount to the collateral amount, usually expressed as a ratio.

M

Mainnet

The fully functioning and launched version of the blockchain, where all transactions occur.

Margin Call

The value of the crypto against which funds are borrowed must maintain a minimum level. If the value falls below that level, the borrower must repay the funds or add more crypto as collateral.

Margin Trading

The use of funds borrowed from an exchange to trade a cryptocurrency.

Market Capitalization

The total value of a cryptocurrency’s price. The formula is total supply in existence x current price.

Market Maker

Someone who places an order to buy or sell at a quoted price.

Market Order

A purchase or sale of an amount of crypto on an exchange at the current price.

Market Sentiment

The prevailing attitude toward the crypto market in general, or toward a particular cryptocurrency. This is usually revealed by news, price movement and trading activity.

Market Taker

Someone who accepts a buy or sell order that has been placed at the quoted price.

Maximum Supply

The total amount of a cryptocurrency that can ever exist. Bitcoin can only issue 21 coins, and the last one will be issued in over 115 years.

Medium of Exchange

Something that is widely accepted for the purchase of goods and services at an agreed-upon rate. Bitcoin is a medium of exchange.

Memecoin

Tokens created as a joke, such as Dogecoin and Shiba Inu.

Metamask

A multi-currency crypto wallet that runs in a browser as a Chrome or Firefox extension. It connects to DApps and DeFi platforms with one click.

Metaverse

A completely digital universe with everything that the real world has, including interactions in real-time with people and businesses.

Microtasking

Completing tiny, sometimes repetitive tasks to earn small amounts of crypto.

Mining

The process where transactions are collected into a digital “block” and a mathematical task completed to confirm the validity of all transactions, in exchange for a number of the network’s cryptocurrency.

Mining Pool

A way to participate in a crypto mining operation as a passive investor.

Mining Reward

The financial compensation, paid in crypto, a miner receives for processing transactions and adding them to the newest block on the blockchain.

Mining Rig

The computer hardware used to mine crypto. It’s typically designed for the sole purpose of mining crypto.

Mixer/Mixing Service

A service that makes it difficult to trace crypto transactions.

It does this by combining transactions then splitting them up again with new addresses, splitting large transactions into many small ones, and other methods to break the link between the receiving address and the recipient.

Mobile Wallet 

A crypto wallet that functions on a smartphone. It may be a custodial wallet, or a non-custodial wallet.

Money 

Something that is widely accepted in a country as payment for goods, services and taxes, and as repayment of debts.

Money Supply

The total amount of money in an economy that’s in use by the public and held by them at a particular point in time.

This includes all the currency in circulation plus all the demand deposits (money held in checking accounts and savings accounts) in banks and credit unions.

Moon/Mooning

A slang term for a cryptocurrency reaching new price heights.

Multi-coin Wallet 

A wallet that can store more than one crypto asset. See this article about the Exodus wallet, which can hold dozens of different cryptocurrencies.

Multi-Signature (Multi-Sig)

An extra layer of security that requires more than a wallet’s private key to sign and complete a transaction.

N

Network Effect

The exponential growth in the value of a network as the network grows. As an example, if a network triples in size, the value of the network to each participant in the network grows by a factor of 9 (3²).

Node

One of the computers on a blockchain network. It operates on the same protocol (set of rules) as the others, and provides the same service.

Non-custodial Wallet

A wallet that no one controls, used on a decentralized exchange.

Non-fungible Token (NFT)

A token that’s unique from all others on the network. NFTs allow permanent records of ownership.

O

Offchain

The processing of crypto transactions outside the blockchain network’s mainnet. The goal is to reduce transaction times and reduce network fees.

Oracle

An algorithm that finds and verifies information, then supplies it to smart contracts. When information meets contract criteria, the smart contract automatically executes a certain activity, such as making a payment.

Over the Counter (OTC)

Trading of cryptocurrencies outside of exchanges, typically in large amounts. The advantage is that these large trades usually do not affect the open market price of the crypto being bought and sold.

Overbought

When a cryptocurrency has been purchased too much, such that the rising price is not sustainable. A downward correction in price usually occurs.

Oversold

When a cryptocurrency has been sold too much, such that the dropping price is likely to slow. A price increase usually occurs.

P

P2P (Peer to Peer)

Trading crypto directly between people as opposed to between people and organizations.

Paper Wallet

A cold storage type of wallet, it has both the public and private keys written or typed on it, which puts the crypto at risk if that paper is ever stolen.

Peg 

The price that has been specified for the exchange rate between two assets. Stablecoins are pegged to fiat money. BUSD, GUSD and USDC are all pegged to the USD, so they have little price volatility.

Permissioned

A distributed ledger or a blockchain that requires permission to use.

Permissionless

A distributed ledger or a blockchain that is open to anyone to use. Bitcoin, Ethereum and most other crypto blockchains are permissionless.

Perpetual Contract

A type of futures contract without an expiry date. These are available on some decentralized crypto exchanges.

Price Discovery

The process of buyers and sellers in a market arriving at what they all consider to be a fair price for the exchange of an asset.

Privacy Coin

A type of crypto that values, and was designed for, privacy. Monero, Zcash and Piratecoin are three examples.

Private Address (or Private Key)

An alphanumeric string of 64 characters that controls access to a crypto wallet. Wallets these days use a seed phrase instead of a private address to restore access to a wallet.

Proof of Keys Day

Celebrated on January 3, the day that Bitcoin launched. It’s used to remind crypto investors to maintain control of their private keys.

Proof of Stake (PoS)

A consensus mechanism that requires those wanting to validate blocks stake crypto to the network. See this article on Proof of Stake for more information.

Proof of Work (PoW)

A consensus mechanism that requires those wanting to mine blocks perform some work, which is measured in CPU (central processing unit) power.

Protocol

The set of rules that govern all aspects of a blockchain.

Pseudonymous

Mistaken for anonymous on blockchains. Crypto transactions are not anonymous. A wallet address acts as a pseudonym for the owner of that wallet.

Public Address (or Public Key)

An alphanumeric string of 64 characters that allows anyone with that character string to view (and only view) to view how much crypto is held in that wallet.

Pump and Dump

The coordinated buying of a crypto to raise its price so that the same crypto can then be sold in a coordinated fashion, usually to rake in large amounts of money.

Q

QR code

A code that can be scanned by a phone’s camera, it contains the wallet address to send crypto, which avoids having to copy and paste the address

R

Referral

Someone referred to a rewards program by an existing participant on that platform.

Referral Program

A program that rewards participants for referring others to the platform. In crypto, this is used to bring people into rewards platforms such as Celsius Network.

Rekt

Crypto slang for “wrecked.” It means a big loss in a trade.

Resistance Level

A price point that halts the upward momentum of a cryptocurrency.

Restore

The process of regaining access to a crypto wallet by entering the 12- or 24-word seed phrase.

Reward

Crypto received for performing an action.

Reward

The interest paid on crypto assets.

Rewards Platform

A platform where crypto is stored in return for earning interest on it, similar to receiving interest on savings parked in a bank account.

Ripple

A money-settlement system, international remittance network, and currency exchange that runs in real time. Users pay for transactions using the XRP token.

Rug Pull

The term used for a scam cryptocurrency whose creators collect millions of dollars and then steal the money. It’s short for “having the rug pulled out from under you.”

S

Satoshi (also Sat)

The smallest unit of a Bitcoin, set at .00000001 BTC. If the price of BTC was $50,000, one sat would be worth five one-hundredths of a penny.

Satoshi Nakamoto

The creator of Bitcoin. A pseudonym, no one knows who Satoshi is, although many have speculated about his identity.

Scamcoin

A token created with the purpose of helping the developers get rich quick.

Second Layer

Applications built on top of a blockchain. Also known as Layer 2.

Security Token

A token that represents an asset, such as ownership of a physical object.

Seed Phrase

A 12- or 24-word list that, when entered properly into a software or hardware wallet, allows you to restore access to all the crypto kept in the wallet.

Sharding

The parallel processing of transaction data by breaking it into small chunks, called shards. This type of processing increases the blockchain’s efficiency and reduces transaction times.

Shilling

The promotion of a crypto project or service for a fee.

Shitcoin

An altcoin that is worth nothing; perhaps as many as 50% of the 18,000 coins and tokens on the market are shitcoins.

Sidechain

A secondary blockchain that runs in parallel to the main blockchain and links to it. Lightning Network is a sidechain of Bitcoin. See this article for more on blockchains and sidechains.

Slippage

If there’s not enough liquidity in a market to fulfill orders, or if there’s high price volatility, the expected price of a trade may be less than the executed price.

Smart Contract

A set of code-defined rules that execute when certain criteria are met. Ethereum, Binance Smart Chain and some other blockchains use smart contracts. See this article for more about smart contracts.

Solidity

The programming language used to create smart contracts on the Ethereum network.

Spot Price

The price you can pay to buy a cryptocurrency on an exchange on the spot, aka right now.

Spread

The price difference between the Bid price (the highest price buyers are willing to pay) and the Ask price (the lowest price sellers are willing to accept).

Stablecoin

A cryptocurrency that’s pegged to a fiat currency on a one-to-one basis. BUSD, GUSD and USDC are three stablecoins pegged to the USD. They rarely move above or below half a cent on either side of one dollar. See this article for more about stablecoins.

Staking

The act of depositing an amount of crypto to a Proof of Stake validator in exchange for a percentage of the rewards received by the validator. See this article for more about staking crypto.

Staking Pool

A group of stakers who combine their computing power or their crypto stakes to improve their chances of validating blocks and earning rewards.

Store of Value

Something that will hold its value in the future. Gold is a good store of value. Dollars sitting in a bank account earning 0.1% aren’t, as inflation is currently over 7.5%.

Swap (or Token Swap)

Trading between crypto pairs (e.g., Bitcoin and Ether), usually not on an exchange.

T

Taxable Event

The disposal of crypto from your holdings, each event must be recorded and reported on your tax return.

Technical Analysis (TA)

Using historical price movement and volume data and a range of accepted indicators to determine the future price of crypto (or stocks).

Testnet

The test blockchain, where new features are added and tested before moving them to the mainnet.

Ticker Symbol

The three- or four-letter symbol for a cryptocurrency.

Timestamp

The precise date and time that a block was mined or validated on a blockchain. Each timestamp includes data from the previous block’s timestamp to create a chronological chain of record.

TLDR (or TL;DR)

An abbreviation for “Too long; didn’t read” or “Too lazy; didn’t read.”

Token

A cryptocurrency with a specific use case. Utility tokens and governance tokens are the two main examples.

Token Distribution

How, and how much of, a token is given out to founders, investors, staff, operational needs (e.g., future development), marketing, and the crypto community.

Tokenize

The process that converts ownership of physical assets into a digital value, represented by a token.

Tokenomics

The set of rules governing the issuance and supply of a cryptocurrency.

Total Supply

All the coins or tokens that exist at any moment in time, minus any that have been burned. This number is always a subset of maximum supply. Circulating supply is usually a subset of total supply.

Total Value Locked (TVL)

The amount of a cryptocurrency that’s locked on a staking protocol, or locked in a liquidity pool on a decentralized exchange.

Trading Fee

The fee charged by a centralized exchange or a decentralized exchange for completing a trade. It’s usually a percentage of the value of the trade.

Trading Pairs

Available cryptocurrency pairs to trade between on an exchange. One exchange may allow trading of a pair that another exchange doesn’t allow.

Traditional Finance (TradFi)

The range of conventional financial products (savings accounts, CDs, credit cards and debit cards, loans, mortgages, etc.) offered by banks and credit unions.

Transaction Fee

The fee charged by a crypto network for completing a transaction. These fees are in addition to block rewards (mining rewards) so miners and validators tend to prioritize transactions that have offered a higher fee.

Transparency

All crypto transactions are transparent, in that the sender’s address, the recipient’s address, the amount, and the time of the transaction are all available for viewing by anyone.

Trezor

A hardware device used as a cold wallet to store crypto.

Trustless

Cryptocurrencies, and especially smart contracts, remove the need for trust in or a central authority overseeing the relationship, as algorithms and code carry out all instructions.

Two-factor authentication (2FA)

The use of Google Authenticator (usually) or Authy (less often) on a smartphone to generate a 6-digit code that must be entered during the login process.

Tx

The abbreviation for “transaction.”

U

Unbank

To remove yourself from the banking and financial system, especially when it comes to earning interest and taking out loans. See this article for more about unbanking.

Unbonding

The process of redeeming staked tokens from a Proof of Stake validator so that the staking rewards can be collected.

Unconfirmed

A transaction that may have been added to a blockchain, but hasn’t yet been confirmed as valid by other nodes on the network. Until the transaction is confirmed, the recipient can’t do anything with the crypto.

Unit of Account

A function of money that allows prices, costs and profits to be determined.

Unstoppable Domains

A company that sells “vanity” crypto domain names, allowing people to receive crypto to that name instead of to a wallet address.

Utility Token

A token needed to use the services offered by a blockchain project, for example, storing files on distributed storage devices; portions of those tokens are then paid to those providing the service.

V

Validator

The “miner” in a Proof of Stake consensus blockchain. The validator confirms transactions on a cryptocurrency’s blockchain in return for rewards paid in that crypto.

Vanity Address

Rather than having to remember a few wallet addresses, especially if receiving crypto via atomic swaps, some people use their name or another easy-to-remember term, after connecting it to a wallet.

I have jeffdjohnston.crypto, as an example.

Virtual Private Network (VPN)

An application that provides privacy when using unprotected wifi (e.g., in a coffee shop or an airport waiting area).

It can also hide your true location so that you can do things that might be restricted in your area (such as access a Canadian crypto exchange from outside of Canada, which I do).

Vitalik Buterin

The creator of the Ethereum network.

Volatility

If crypto prices are shooting up and down, the market is said to be volatile. Volatility is a measure of how much prices are changing and how fast.

Volume

The amount of any crypto that’s been traded over a period of time, usually 24 hrs, 7 days, 30 days or one year.

W

Wallet

A storage system (either a software application or a physical device) for keeping crypto; every coin or token is kept in a private wallet or a wallet on an exchange or rewards platform.

Wash Trade

The creation of artificial activity in a market to manipulate it. It’s done by both buying and selling a cryptocurrency to make other investors believe there’s a lot of interest in the project.

Web3/Web3.0

The combination of data-driven internet services, including blockchain, artificial intelligence, virtual reality and augmented reality.

Web3 Wallet

A wallet designed to operate in browsers, on DApps, and on DeFi platforms.

Whale

An investor with a large enough holding of a crypto asset that he or she can affect the price and momentum by selling or buying.

Whitelisting

The act of adding a receiving address to an exchange or rewards platform, usually with a 24-hour waiting period before crypto can be sent. This is a security measure that’s optional on some platforms, mandatory on others.

Whitepaper

A document outlining the purpose of a crypto project, its technical information, along with marketing-related info, all designed to interest potential investor and token buyers.

Winding Down

Unwrapping tokens back to their original token on DeFi exchanges.

Winding Up

Wrapping tokens into a form that can be traded on DeFi exchanges.

Wrapped Bitcoin (wBTC)

A version of Bitcoin that has been surrounded (wrapped) by an ERC-20 token and thus can be traded on decentralized exchanges, or added to a liquidity pool to earn interest. One wBTC equals one conventional, or native, BTC.

Wrapped Ether (wETH)

A version of Ether that has been surrounded (wrapped) by an ERC-20 token and thus can be traded on decentralized exchanges, or added to a liquidity pool to earn interest. One wETH equals one conventional, or native, ETH.

X

Y

Yield Farming

The practice of earning interest (usually at high rates) by place crypto assets in a liquidity pool on a decentralized exchange.

Z