Crypto Glossary: Cryptocurrency Terms You Should Know

Crypto is still a new concept, and while winning digital assets is fun, you first have to learn how the industry works. Whether you’re a newcomer to cryptocurrencies or looking for a refresher, understanding key cryptocurrency terms is essential for having a positive crypto journey. 

By familiarizing yourself with crypto terms, you’ll feel more comfortable navigating the world of cryptocurrencies and communicating with others in the field. To help you survive and thrive in this space, here are some of the must-know cryptocurrency terms that will enrich your vocabulary and enhance your comprehension of the subject. 

51% attack

A 51% attack happens when more than half the computing power or mining hash rate is controlled by a single user or a single group of users who are related.

Airdrop

The distribution of cryptocurrency tokens to the wallets of users. Airdrops are usually organized by blockchain-based startups, and they reward users with tokens in exchange for publicity (usually in the form of social media interaction). 

All-Time-High

An all-time-high (ATH) represents the highest price (and market cap) a cryptocurrency has had ever since it was launched on the market.

All-Time-Low

An all-time-low (ATL) is the lowest price (and market cap) a cryptocurrency has ever had.

Allocation

The allocation of a token is the plan a crypto project follows in what concerns sharing its token supply to specific teams, institutions, and other activities (e.g. for trading).

Altcoin

All cryptocurrencies besides Bitcoin, which was the first crypto project launched, are called altcoins.

APR (Annual Percentage Rate)

The annual percentage rate represents the amount of interest a borrower has to pay each year for the assets they borrowed.

APY (Annual Percentage Yield)

The annual percentage yield is the rate an investor can earn over the course of a year on a specific investment.

AML (Anti-Money Laundering)

Anti-money laundering represents a set of laws created to keep institutions and individuals from laundering money through crypto into real-world cash (fiat).

API (Application Programming Interface)

An application programming interface is a set of rules and protocols developed to contribute to building software applications. An API contains information such as how software components should interact, what actions should be taken in each situation, and what data should be used for various actions.

Atomic Swap 

An atomic swap is a smart contract technology that helps a user exchange one cryptocurrency for another, without using an exchange. 

Application-Specific Integrated Circuit (ASIC) 

An ASIC is a hardware created with a specific purpose. In the case of cryptocurrencies, that purpose is mining. 

Bear Market

A bear market happens when prices of assets fall by 20% or more from recent highs. As a result, confidence is low, and the economy becomes pessimistic.

Bitcoin ETF

A Bitcoin ETF (Exchange-Traded Fund) is a type of investment fund that tracks BTC’s price evolution and offers users the opportunity to purchase shares of the fund.

Bitcoin Halving

The Bitcoin halving is the event in which the block reward halves to keep the supply of Bitcoin available for as long as possible. The next Bitcoin halving is set to take place in April 2024.

Block Height 

The block height represents the number of total blocks in a blockchain. 

Block Reward

A block reward consists of coins or tokens awarded to a miner or a group of miners for solving a cryptographic puzzle required to create a new block.

Block Size

The block size represents the amount of data a single block can store.

Block Time

The block time is the approximate time it takes for an entire block to be mined or for a blockchain to produce a new block.

Blockchain

A blockchain network is a distributed ledger system consisting of a series of blocks that store information and are stored consecutively in a public and decentralized database. Blockchain technology stands at the very basis of cryptocurrencies.

Blockchain Explorer

A blockchain explorer is an online platform users can access to browse through blockchain records.

Blockchain Trilemma

The blockchain trilemma is a concept first mentioned by Vitalik Buterin that addresses the three main features a blockchain should have: decentralization, security, and scalability. According to the blockchain trilemma, no network has yet achieved all three at once.

Bollinger Band

Bollinger bands are patterns in the prices of crypto or other assets. Bollinger bands are volatility indicators consisting of a moving average and two standard deviations. This indicator can determine a trend, indicate overbought or oversold levels, and determine the volatility of an asset.

Bull Market

A bull market happens when the prices of assets grow surprisingly, generally at least 20%. These moments increase motivation and lead to more activity in the market.

Buy Wall 

Is a concept that describes the situation when a wealthy trader or group (commonly known as whales) performs a huge buy order or multiple large buy orders at the same price. This action is done in order to control the market and set the buying price of a currency at a desired value. 

Candlesticks

A candlestick is a way to visualize the changes in a specific asset. Each candlestick provides 4 types of information: opening price, closing price, high, and low.

CeDeFi

Centralized decentralized finance (CeDeFi) is a concept that combines centralized financial services with dApps, thus merging accepted regulatory policies with modern financial systems.

CBDC

A CBDC (Central Bank Digital Currency) is a digital currency issued by a central bank. Such types of digital currencies strongly rely on and depend on government regulation or law.

CEX

A centralized exchange (CEX) is an online trading platform that is operated by a central entity that owns it in a centralized manner.

Circulating Supply 

The total number of units (or monetary mass) of a specific cryptocurrency that is publicly available at the moment. 

Cloud Mining

Cloud mining is the process in which the power used to validate transactions is rented from companies that offer it remotely.

Cold Storage

Cold storage implies storing cryptocurrencies offline, on hardware wallets, offline computers, USBs, or paper wallets.

Consensus Mechanism

A consensus mechanism is a program used by a blockchain system to reach an agreement about the distributed ledger’s state.

CPU Miner

A CPU is a central processing unit used in mining activities, where there is a need for extensive processing power to support the network and the mining process.

Cross-Chain

Cross-chain is a technology that focuses on the interconnection between various blockchain networks by sharing information between them.

Crypto Debit Card

A crypto debit card is a debit card that allows users to store crypto on it and complete transactions using those funds. A good example is the Coinbase debit card.

Crypto Loan

A crypto loan is similar to regular loans, only you get crypto when completing the loan.

Crypto Winter

Crypto winter is what investors consider to be a period when crypto is experiencing a bear market. Basically, during a crypto winter, the market deals with falling prices that go way lower than all-time highs.

Cryptocurrency Pairs

Cryptocurrency pairs can be found on crypto trading platforms. Exchanges use crypto pairs to facilitate the trade between specific coins or tokens.

Cryptography 

Cryptography is a base brick in the crypto industry. It is a technology used to secure information, preventing third parties from accessing data they are not allowed or required to see.

DAO

A decentralized autonomous organization (DAO) is an entity that is founded and governed by a set of computer-defined rules and/or smart contracts.

DApps

Decentralized applications (dApps) are applications that are developed and run on a decentralized network.

Day Trading

Day trading is a type of trading that implies buying and selling assets during the same day.

Death Cross

A death cross is a crossover between a negative short-term moving average and a positive long-term one. It can indicate a bearish market trend.

Decryption 

The process of transforming encrypted data back into a readable format. 

Delisting

Delisting is the process of removing an asset from a trading exchange.

DEX

A decentralized exchange (DEX) is a peer-to-peer (P2P) exchange that allows users to trade various cryptocurrencies without the need for a third party.

DeFi

Shortly, DeFi (Decentralized Finance) is a financial system that is not controlled by a single entity. Decentralized finance relies on concepts such as blockchain technology and smart contracts to create a system used across the entire crypto industry and not only.

DLT

DLT is short for distributed ledger technology and is the core idea of all crypto projects. It is a database shared across numerous users (computers) from all over the world.

Double Spending 

The act of spending a coin more than once. This is usually caused by a 51% attack. 

Eclipse Attack 

When the majority of a network’s users are malicious and monopolize the network in order to abuse it for their own benefit. 

ERC

ERC stands for “Ethereum Request for Comment.” You will find multiple standards on the Ethereum network that are called ERC-something. For instance, ERC-721 is the token standard for NFTs (Non-Fungible Tokens).

EVM

The EVM or Ethereum Virtual Machine is a Turing-complete virtual machine that defines, reads, and runs smart contracts and many other Ethereum-related concepts. Every Ethereum node runs on the EVM to maintain consensus across the entire network.

Exponential Moving Average

The exponential moving average or EMA is a trading indicator that can show recent price movements of various assets. EMA is used when performing trading activities and can work best when combined with RSI, for instance.

Falling Knife 

The action of purchasing an asset while its value is declining, with hopes that the price will rise after a while. 

Faucet

A faucet is a crypto reward platform that rewards users for completing specific tasks, such as watching ads, playing short games, or completing CAPTCHAs.

Fiat

Fiat is another way to call the regular currencies we deal with every day. Fiat currencies are backed by a central government and can take the form of physical cash, for instance.

Finality 

The assurance of guarantee that completed (cryptocurrency) transactions cannot be altered, reversed, or canceled. 

Flappening 

The event when Litecoin (LTC) surpassed Bitcoin Cash (BCH) in market cap. 

Flippening 

The event when/if Ethereum (ETH) will surpass Bitcoin (BTC) in market cap.

FOMO

FOMO stands for “Fear of Missing Out.” It is an abstract emotional response users can have when thinking that they might be missing out on something that might improve their lives one way or another. The term is often used in the crypto space to describe the feeling you have when thinking that other investors are making profitable transactions or benefiting from bright opportunities.

Forced Liquidation 

The involuntary sale of assets or securities to create liquidity. It is usually executed by an automated system from a crypto loan platform or trading platform.

GameFi

GameFi is a term describing games that are designed to have well-developed financial systems that rely on blockchain and cryptocurrencies.

Gas Limit 

The maximum amount of gas a user is willing to spend on a particular transaction.

Governance Token

A governance token is a type of crypto asset that offers users the opportunity to vote on decisions within a crypto-related ecosystem.

Gwei

Gwei is the denomination of ETH (Ethereum) used to define the cost of gas for transactions conducted on the Ethereum network.

Halving 

When the block reward of a crypto asset, such as Bitcoin, drops to one-half of what it was before. This is used to create a decaying rate of insurance to arrive at an eventual finite supply of a crypto asset. 

Hard Cap 

The maximum amount of funds a project aims to raise during its funding campaign (ICO/IEO/STO). 

Hard Fork

A hard fork is a significant change to the protocol of a blockchain network that usually leads to the creation of a new blockchain diverging from the original chain. A good example is the Bitcoin hard fork from 2017 when BCH (Bitcoin Cash) was created.

Hashed TimeLock Contract (HTLC) 

Refers to a special feature that is used to create smart contracts that are able to modify payment channels. 

Hash Rate

The hash rate measures the computing power used by a blockchain network to operate.

HODL

HODL stands for “Hold on for Dear Life.” It is an investment strategy that implies holding a cryptocurrency for a long time, not considering potential changes in the price of that digital currency.

Hot Storage

Hot storage is a type of storage that stores private keys online, thus allowing for quick access.

ICO

ICO (Initial Coin Offering) is a type of crowdfunding that aims to raise capital for newly launched crypto projects through the sale of its native cryptocurrency.

IDO

An IDO or initial DEX offering is an alternative to ICOs, where the project completes the crowdfunding through a decentralized exchange.

IEO

An initial exchange offering implies conducting a crowdfunding by listing your token on an exchange.

KYC

KYC or Know Your Customer represents a set of actions that trading platforms or crypto exchanges must complete to verify the identity of their new users.

Leveraged Tokens

Leveraged tokens offer investors and traders a leveraged position in trading, thus their potential earnings and losses being multiplied.

Lightning Network

The lightning network is a protocol especially designed for the Bitcoin network, in order to solve its scalability problem by reducing transaction time.

Liquid Staking

Liquid staking is a type of staking that allows users to stake their tokens while also using them in the DeFi space.

Liquidity

Liquidity shows how easy it is to convert a crypto coin or token into cash and whether this action can be completed without affecting the value of the digital asset.

Mainnet 

The blockchain where the transactions are being made, verified, and recorded. The main network. 

Margin Trading

Margin trading implies that a trader uses borrowed funds to complete their trading activities.

Market Cap

The market cap (or market capitalization) of a cryptocurrency represents the total capitalization of a cryptocurrency’s price.

Market Signal

A market signal can notify market participants when to buy or sell a specific digital asset.

Masternode 

A MasternodeisA PC wallet or crypto coin node that is used as a Proof-of-Service algorithm to protect a real-time copy of the blockchain. 

Max Supply

The max (or maximum) supply is the maximum amount of coins that can exist in the lifetime of the cryptocurrency. Some coins or tokens have a max supply, while others (inflationary) have an unlimited supply.

Memecoin

Memecoins are cryptocurrencies created as or based on a joke or meme. Memecoins usually create quite a buzz when launching.

Merged Mining 

Merged Mining isThe process of allowing two different cryptocurrencies to be mined simultaneously.

Metaverse

A metaverse is a virtual universe where you can find every aspect of the real world, interact with others, and benefit from a blockchain and crypto-backed economy.

Mining Difficulty

The mining difficulty tells how difficult it is to find the right hash for the next block of a specific blockchain network.

Mining Farm 

A Mining Farm isa group of miners housed in a single location dedicated to mining cryptocurrencies. 

Mining Rewards

Mining rewards represent the income crypto miners can get for validating blocks on a specific network.

Minting

Minting is a process that implies generating new coins through a PoS consensus mechanism and adding them to the circulating supply.

Mnemonic Phrase

A mnemonic phrase consists of a list of words used to access or restore crypto assets.

M2E

M2E or Move-to-Earn is a concept used by blockchain-based games to encourage users to perform various physical activities to earn digital assets.

Multisignature 

A technology used by certain wallets that require more than one party to authorize a transaction. 

Node

The node is the most basic unit of blockchain infrastructure used in processing transactions and storing blockchain data.

Non-Custodial

Non-custodial refers to the way wallet keys are stored. In non-custodial projects, private keys are held by users themselves, so they have full control over them.

NFT

An NFT or non-fungible token is a type of digital asset that is unique and cannot be substituted. Its uniqueness, ownership, and various characteristics are all contained in the token’s smart contract.

Off-chain 

A transaction that is recorded and validated off the blockchain. 

Open Source

“Open source” is a term often used to describe code and software that is generated by a developer community and can be used and verified publicly. In blockchain projects, it means that the code of a crypto project is available online so it increases transparency and trust.

Orphan Block 

An orphan or detached block is a valid block that is not part of the main chain. Orphan blocks usually happen when two miners produce a block at similar times. 

Paper Wallet 

A piece of paper that acts as a crypto wallet, holding the public and private keys of a user. 

P2P

P2P stands for peer-to-peer and represents the decentralized interactions from a distributed network without the need for a central server.

Pegged Currency 

Also referred to as a stablecoin, a pegged currency is a currency that has a value fixed to a designated asset. For example, 1 stablecoin = 1 USD.

Phishing Scam

A phishing scam occurs when a scammer pretends to be someone else or a trusted institution to trick users into revealing personal information that can then affect their identity or funds.

P2E

P2E stands for play-to-earn and is a business model used in crypto games to encourage users to play the game in order to win crypto rewards.

Ponzi Scheme

A Ponzi scheme is a fraudulent investment that implies paying purported returns to existing investors from funds brought by new investors.

Presale

A presale event implies the sale of a cryptocurrency to specific investors before it goes public on trading platforms.

Private Key

A private key (or secret key) is a code generated through an asymmetric-key encryption process that can be used to decrypt information hashed with the public key.

Private Sale 

An early investment stage targeted only to strategic partners and investors. 

PoS

PoS stands for proof-of-stake and is a consensus mechanism that allows users to contribute to the decision-making process of a network based on how much of the native cryptocurrency they own. The most popular PoS network is Ethereum.

PoW

PoW or proof-of-work is a consensus mechanism that allows users to contribute to the evolution of the blockchain according to the hashing power they provide to the network. The most popular PoW network is Bitcoin.

Public key

A public key is a series of alphanumeric characters used to encrypt a piece of data.

Pump-and-Dump

A pump-and-dump scheme occurs when the price of a cryptocurrency is artificially inflated with false and misleading messages and suddenly falls, with the developers most often cashing out.

Quantum Computing

Quantum computing is a type of computing that uses subatomic particles (Qubits) to store information.

Race Attack 

The attempt to make two transactions using the same funds at the same time.

Recovery seed

A recovery seed is a security code developed through cryptography that consists of a list of random words, usually between 12 and 14.

Routing Attack 

A malicious attack on ISP (Internet Service Provider) level that affects a user’s activity on the internet. 

RSI

The RSI (Relative Strength Index) is a trading indicator that can be considered a momentum oscillator. The relative strength index measures the speed and change of price movements.

Rug Pull

A rug pull is a type of scam where the team behind the project abandons it, but only after it takes investors’ money.

Satoshis

Satoshis represent the smallest unit of Bitcoin. A Satoshi has 0.00000001 BTC.

SEC

The US Securities and Exchange Commission (SEC) is an independent agency of the US federal government that is responsible for enforcing federal securities laws, setting securities rules, and regulating the securities industry.

Security Token 

Crypto token that usually derives its value from a tradable asset. The security Tokens are subjected to federal securities and regulations. 

Sell Wall 

Is a concept that describes the situation when a wealthy trader or group (commonly known as whales) performs a huge sell order or multiple large sell orders at a specific price. This action is done in order to control the market and prevent sell orders from executing at a higher price than the desired value.

Smart Contract

A smart contract is a computer program that automatically verifies or enforces a contract on a blockchain without the need for a third party.

Soft Cap

The soft cap is the minimum amount of crypto that an ICO (Initial Coin Offering) event plans on raising.

Solidity

Solidity is the programming language used by the Ethereum developers to build smart contracts.

Spot Trading

Spot trading is a trading strategy that implies immediately exchanging a financial instrument at the current price.

Stablecoin

A stablecoin is a cryptocurrency with pretty low volatility that is pegged to a fiat currency. Stablecoins are used to diversify your portfolio or complete more complex transactions that cannot be made directly from one cryptocurrency to another. A good example of a stablecoin is Tether (USDT), which is pegged to the US dollar.

Staking

Staking is a way of validating transactions and receiving rewards on PoS (Proof-of-Stake) networks.

Store of Value 

A commodity, currency, or asset with low volatility that can be traded at a future date without depreciation. 

Sweeping 

The process of transferring money from a paper wallet to a software wallet. 

Swing Trading

Swing trading is a trading technique that implies profiting from short or medium-term price changes in various financial instruments, including cryptocurrency markets.

The Merge

The Merge is an event that took place in 2022, when Ethereum switched from PoW (Proof-of-Work) to PoS (Proof-of-Stake). The Merge aimed to combine the Ethereum mainnet and the Beacon Chain to achieve the transition.

Tokenomics

The tokenomics of a cryptocurrency can tell more about the set of rules that govern its issuance and supply.

Token Lockup 

Setting a time period in which the tokens or coins are not allowed to be sold or transferred in order to prevent a drastic fall of the token price, which happens shortly afterward the crowdsale. 

Token Sale 

A means of fundraising for crypto-currency projects by trading a token for cryptocurrency before it reaches the final stage and goes on the mainnet. 

Total Supply 

The total amount of tokens or coins that are either circulating or being locked. 

TVL

The TVL (or Total Value Locked) is the number of assets that are currently involved in staking activities in a specific protocol.

Trading Volume

The trading volume of a cryptocurrency represents the total number of coins or tokens that have been exchanged between traders of an asset during the trading hours of a specific day.

Transaction ID (TXID) 

Transaction identification code used for determining transactions in the blockchain. It’s also referred as transaction hash.

2FA

Also known as two-factor authentication, 2FA is a method of access that requires two forms of authentication to gain access to your account. You can use it for exchanges or for your cryptocurrency wallet, for instance.

Utility Token 

Digital token issued to fund the development of a cryptocurrency, and that can be later used to purchase a good or service offered by the issuer. 

Validator

A validator is a participant in a PoS network that validates blocks to earn rewards.

Vesting Period

The vesting period implies restricting the sale of a specific token or coin for a set period of time.

Wei

Wei is the smallest fraction of an Ether (ETH). Each ETH token consists of 1,000,000,000,000,000,000 Wei.

Whitepaper

The whitepaper of a crypto project is a document released by the team of developers to offer investors extensive technical information regarding the concept they develop, as well as a roadmap describing how it plans to grow and achieve success in the industry. The whitepaper is extremely important every time you want to research a project and decide whether it is worth it and safe to invest in it.

Yield Farming

Yield farming is a crypto-related practice that implies earning interest by investing your crypto assets in DeFi (Decentralized Finance) markets.

Zero-Knowledge Proof

Zero-knowledge proof implies proving that a piece of information or data is true without having to reveal it.