Crypto and Blockchain: The Ultimate A-Z Glossary
Explore the world of Blockchain and Crypto with our A-Z Glossary! Whether you’re a crypto beginner or looking to deepen your understanding, we’ve compiled the essential terms for you.
AFK (Away From Keyboard): Used on platforms like Twitter to indicate users are only available for trading updates while actively logged in.
Airdrop: An event where a blockchain project distributes free tokens or coins to the community.
Air Gapping: Enhancing security by isolating digital information or machinery from unauthorized access.
Altcoin: Any cryptocurrency alternative to Bitcoin.
AML (Anti-Money Laundering): Legal framework worldwide to combat financial crimes like money laundering.
ATH (All-Time High): The highest value an asset has reached in its history.
Bag Holder: A term for investors still holding assets that have significantly decreased in value.
Bearish: Expecting a price decrease; investors recommend selling coins/tokens during a bearish trend.
Bear Market: Market with falling prices and negative sentiment, leading to reduced demand.
Bitcoin: The first decentralized cryptocurrency, released in 2009.
Bitcoin Maximalist: A person who staunchly defends bitcoin against all other crypto assets.
Blockchain: A decentralized public ledger housing transaction records, the foundation for many cryptocurrencies. It employs cryptography to link blocks in a chronological chain, preventing tampering or revisionist history.
Block Height: In blockchain networks like Bitcoin (BTC), it indicates the number of blocks from the genesis block (#0) onwards. This denotes the network’s total length.
Block Reward: A monetary incentive in cryptocurrencies when an individual successfully mines a block. It ensures that coins/tokens are earned through mining, supporting the security of the network.
Block Size Limit: The maximum data a block can include, measured in bytes. Bitcoin’s limit is one megabyte, while Ethereum recently increased to around 12.66MB, with further plans for expansion.
Bollinger Bands: A market volatility indicator with three lines plotted at standard deviation levels above and below a center line.
BTD (Buy The Dip): Purchasing coins/tokens when their price drops, taking advantage of lower costs.
Bullish: Expecting a future price increase, prompting investors to buy coins/tokens with confidence.
Bull Market: A market characterized by rising prices, with investors anticipating improved returns.
Casper: Ethereum’s proof-of-stake protocol upgrade, enhancing scalability and security by reducing the cost for potential attackers.
Centralized: A power system where a central authority controls operations, often associated with a single point of attack.
Coinless Protocol: A decentralized network with incentive mechanisms built into the protocol, aiming for fully autonomous systems without central management.
Chaffing: Sending false signals between nodes on a network, preventing consensus for new data, countering 51% attacks.
Confirmation: The number of processed/validated transactions added to the ledger, requiring cooperation for reversal. Cryptocurrencies typically need at least six confirmations for finalization.
Crowdsale: Selling crypto coins or tokens through crowdfunding before a project’s token launch, allowing investors to participate in early bonuses.
Cryptoart: Products embedding art on the front with private keys to an address holding digital currency or tokens. Considered collectibles with less market value than traditional cryptocurrencies.
Cryptocurrency: A digital asset utilizing cryptography for security, controlling unit creation and transaction verification on a decentralized network.
Crypto Derivatives: Financial instruments deriving value from an underlying asset, often traded contracts based on future prices of items, rates, or indices.
Cryptoeconomics: The integration of cryptography, information theory, computer science, and game theory to create secure economic systems. It incentivizes proof-of-work consensus models through decentralization, immutability, and trustless transactions.
Cryptography: The use of cryptographic protocols or mathematical techniques to encrypt and secure messages sent between parties.
Crypto Kitty: An internet meme from 2017-2018, referring to an online game where players bred cartoon cats with special traits using the Ethereum-based cryptocurrency Ether (ETH).
Crypto–Native Assets: Digital tokens on a blockchain deriving value from decentralized consensus among users, rather than external sources like fiat money or company stock. Examples include Ether, Binance Coin (BNB), and Basic Attention Token (BAT).
Dead Coin: A failed project initially launched for use as digital currency.
Decentralized: Operating independently through peer-to-peer networks and consensus algorithms without central control. Transactions on decentralized blockchains cannot be reversed once confirmed.
Decentralized Applications (DApps): Software programs on blockchain technology, providing peer-to-peer functions without relying on traditional intermediaries.
Decentralized Autonomous Organization (DAO): A company governed by smart contracts and its token-holding community.
Decentralized Exchange (DEX): A system enabling trustless, peer-to-peer cryptocurrency trading without intermediaries.
Decentralized Finance (DeFi): The development of decentralized blockchain-based financial applications facilitating peer-to-peer transactions without third parties. DeFi apps include lending platforms, exchanges, and prediction markets.
Distribution: The selling of coins, often by large holders (whales) to stabilize prices and prevent crashes.
Distributed Ledger: A decentralized database spread across nodes in various locations, transparent to involved parties. Every node holds a complete copy, updated through consensus algorithms.
Double–Spend: Sending a transaction twice before the first is confirmed on-chain, often with malicious intent and risking the loss of funds.
Digital Gold: Some cryptocurrencies, like Bitcoin, are likened to actual gold due to storage and appreciation qualities.
Dumping: Offloading large quantities of coins on exchanges simultaneously, driving down prices due to oversupply.
DYOR (Do Your Own Research): Advises crypto investors to conduct thorough research before investing in a project.
Entry and Exit Points: The points at which an investor decides to buy or sell a particular coin/token.
ERC-20: A technical standard utilized for smart contracts on the Ethereum blockchain, ensuring compliance with specific rules for tokens and transactions, such as decimal point usage.
Ethereum Virtual Machine (EVM): A Turing complete virtual machine managing smart contracts on Ethereum’s blockchain. It tracks their state, allows simultaneous execution across the network through consensus, and calculates gas prices to prevent spamming.
Etherscan: A web tool facilitating exploration of Ethereum’s blockchain transactions, wallets, and other aspects. It offers charts for data visualization and a list for tracking specific network activities.
Exchange: Platforms enabling users to buy, sell, or trade cryptocurrencies for other digital or traditional currencies. Cryptocurrency exchanges play a crucial role in providing user access to crypto funds.
Fear and Greed Index: A technical indicator gauging market sentiment based on the prices of seven different assets.
Fiat Currency: Government-declared legal tender backed by its economy, regulated by institutions like central banks. Examples include the Great British Pound (GBP) and United States Dollar (USD).
Fiat Gateways: Cryptocurrency exchanges allowing users to deposit fiat currencies like the dollar or euro for trading purposes.
Flippening: The moment when a cryptocurrency’s market capitalization surpasses that of another crypto.
FOMO (Fear Of Missing Out): The phenomenon where investors make decisions based on others’ actions, potentially causing them to miss more profitable opportunities.
Fork: A software update not compatible with previous versions of the same cryptocurrency protocol, creating a new branch from block 0.
FUD (Fear, Uncertainty, and Doubt): The acronym used in discussions within the crypto community.
FUDster: A person spreading FUD (fear, uncertainty, and doubt) about a specific coin or blockchain project, often for personal gain.
Futures: A contract to buy or sell an asset at a later date with a pre-agreed price, used by investors as both a risk hedge and profit tool.
Gas: The transaction cost of running a smart contract on platforms like Ethereum, paid in units called Gwei, a billionth of an Ether.
Genesis Block: The initial block in the blockchain, usually hardcoded into the coin’s system, used to bootstrap its network.
Halving: The process reducing Bitcoin mining rewards by 50% every four years to create scarcity and control the total supply.
Hard Fork: A software update not backward compatible with previous versions of the same cryptocurrency protocol, resulting in the creation of a new branch from block 0.
Hardware Wallet: Also known as cold storage, a hardware wallet is essentially a USB stick used for offline transactions and safeguarding private keys. Considered more secure than other wallet forms due to limited access when lost, it comes in types like paper and digital, each with its pros and cons.
Hash Function: A specific algorithm mapping data to a fixed-size output, often used for encryption and security. It’s irreversible, making it nearly impossible to work backward without access to private keys associated with blockchain transactions.
Hedging: Using two different strategies to reduce risk. For instance, taking a long position and shorting simultaneously lowers exposure compared to a single long or short trade on a particular asset.
HODL: Slang derived from the intentional typo of “hold,” indicating holding a cryptocurrency long term despite market volatility.
Hot Wallet: Any internet-connected cryptocurrency wallet at higher risk of hacking. Not recommended for long-term storage, hot wallets are suitable for sending/receiving funds as needed.
ICO (Initial Coin Offering): The first public offering for purchasing tokens or digital assets in a new blockchain project.
IDO (Initial Decentralized Offering): Similar to an ICO, IDO allows users to interact with the project before it goes live.
IEO (Initial Exchange Offering): Selling a coin for the first time through a digital currency exchange.
Inflation: An economic condition where the general level of prices for goods and services rises, reducing the purchasing power of a currency.
KYC (Know Your Customer): The process of obtaining and verifying personal identification information from customers before granting access to services or products.
Lambo: Slang referencing a Lamborghini, often indicating expectations of quick wealth in current market conditions. It’s also used ironically to convey losses during bearish periods.
Lightning Network: A proposed solution to accelerate Bitcoin transactions by moving them off the main chain. It establishes a decentralized system of pre-funded channels for faster settlement times.
Limit Order: An investor’s instruction when placing a buy or sell order, specifying the maximum price they’re willing to pay (for buy orders) or the minimum amount for which they’ll agree to sell (orders).
Market Capitalization: The total value of a cryptocurrency’s circulating supply, calculated by multiplying its current price with its total supply.
Market Order: A type of limit order placed without specifying the execution price.
Memecoin: A digital currency lacking inherent value, used primarily for social media purposes.
Mimblewimble: A proposed Bitcoin protocol upgrade incorporating various changes to enhance privacy and scalability without compromising the latter. A key change is the introduction of Confidential Transactions, allowing the hiding of amounts and other metadata in transactions. Proposed by Tom Elvis Jedusor (Voldemort’s alias from Harry Potter) in 2016.
Miner: An individual or group using computing power to confirm blockchain transactions, earning rewards for the service.
Mining: The process of creating new cryptocurrency units by solving complex mathematical problems, verified and added to the blockchain, with miners receiving rewards in the form of mined coins.
Mining Difficulty: The level indicating how competitive mining is at a given moment, requiring miners to solve cryptographic puzzles before verifying transactions and earning rewards.
Mining Rigs: Dedicated computers designed for cryptocurrency mining, equipped with graphics cards, processors, and cooling systems for solving complex mathematical problems and contributing to public ledgers.
Moon: Slang for a cryptocurrency’s price skyrocketing.
NFT (Non-Fungible Tokens): Digital assets unique and irreplaceable, distinct from generic items like coins or diamonds.
Node: A connected computer within a network, such as the blockchain, capable of broadcasting messages across the entire system.
On-chain Governance: A blockchain system where token holders vote on proposed changes or upgrades without compromising security.
Peer-to-Peer: A system enabling direct financial transactions between two parties without involving a third party, exemplified by the blockchain connecting nodes.
Permissioned Ledger: A distributed ledger with restricted access, typically determined by rules or an access control layer.
Pizza: One of the first Bitcoin transactions in 2010, where Laszlo Hanyecz paid 10,000 Bitcoins (valued at around $40 then) for two pizzas from Papa John’s.
Proof of Authority (PoA): A consensus mechanism requiring validators to demonstrate possession of a specified stake before being allowed into nodes for transaction verification, implemented by networks like POA Networks and Oyster Pearl.
Proof of Burn (PoB): A consensus algorithm where users “burn” or exchange tokens, sending them to an unspendable address to prove their status as real and active network participants.
Proof of Stake (PoS): A validation type requiring members/nodes to prove ownership of a specific cryptocurrency amount, ensuring their voting right for transaction validation.
Proof of Work (PoW): The consensus algorithm validating blockchain transactions, involving users solving complex computational puzzles to add new blocks to the chain.
Public Key: A cryptographic key allowing users to receive cryptocurrency but not send funds, unique and usually consisting of 64 characters for wallet encryption or digital signatures.
Pump and Dump: The process of manipulating a coin’s market by inflating its price to attract users, followed by profit-taking.
Private Key: A cryptographic key enabling users to send cryptocurrency but not receive funds, unique and typically 64 characters for wallet decryption or digital signatures.
Quantum-Proof: A blockchain resistant to attacks from potential quantum computers, which, although not fully functional, are expected in the future, posing a threat to current encryption methods.
Ransomware: Malware infecting computers, encrypting files and demanding payment for access restoration.
Regulation: Government-created rules enforcing compliance with laws and standards for specific businesses or industries.
Rekt: Slang describing a situation where an investor loses all their money due to trading or market factors.
Return on Investment (ROI): The percentage of investment returns over the initial investment, measuring cryptocurrency or trading strategy performance.
Rugpull: A fraudulent cryptocurrency strategy where developers abandon a project, fleeing with investors’ money.
Satoshi Nakamoto: The pseudonym of Bitcoin’s creator, their true identity remaining a mystery.
Scalability: A system’s ability to handle growing work, such as increased transactions on a blockchain network, without compromising safety, integrity, or performance.
Scalping: Buying and selling a coin multiple times within short timeframes on the same day to profit from small price fluctuations.
Segregated Witness (SegWit): A soft fork Bitcoin protocol upgrade increasing network capacity, fixing transaction malleability, and reducing UTXO bloat.
Sell Wall: A large order meant to push down a cryptocurrency’s price by discouraging buyers and preventing sellers from executing unless at a lower price.
Scrypt: An alternative proof-of-work algorithm adopted by many altcoins to prevent large-scale custom hardware attacks, initially designed by Colin Percival.
Sharding: Splitting a blockchain into smaller node groups (shards) to process transactions in parallel, alleviating pressure on components like CPU or GPU.
Shilling: Heavily promoting a cryptocurrency using social media or influence without regard for its quality.
Sidechain: An interoperable blockchain running parallel to the main chain, allowing asset transfer and faster, lower-cost transactions.
Shitcoin: A derogatory term for cryptocurrencies with low value and likely to fail.
Smart Contract: Executable code on the blockchain triggering after meeting specific conditions, enabling decentralized applications without building the blockchain from scratch.
Soft Fork: A blockchain protocol upgrade making previously valid transactions invalid.
SPAC: Special Purpose Acquisition Companies, combining various asset classes for purposes like IPO registration, even before the company is profitable or exists.
Stablecoin: A cryptocurrency crafted to minimize price volatility, typically by anchoring its value or supply to a physical asset like fiat currencies such as the US dollar or commodities like silver and gold.
Staking: Locking coins in a digital wallet to contribute to network maintenance. While staking earns more coins/tokens as a reward, the locked coins cannot be traded during this period.
Stop Order: An investor’s instruction when placing a buy or sell order, automatically closing their position when a specified condition, like reaching a certain market rate, is met.
Tokenless Ledger: Also called a “pure” or “transaction-only” blockchain, it’s a distributed ledger not reliant on native currency to operate.
Tokenomics: The study of how various variables within an economy impact each other and influence decision-making, focusing on how different asset classes with attached monetary values affect economic dynamics.
Tokens: Units of value utilized for diverse purposes within a crypto ecosystem, representing assets ranging from commodities to loyalty points, real estate, or other cryptocurrencies.
Token Sale: The process of selling digital tokens or coins to fundraise for a blockchain project before it goes live and generates revenue.
Total Value Locked (TVL): The overall value of coins locked in masternodes divided by the number of existing masternodes at a given point, offering an estimate for the figure, indicating undervalued or overvalued projects.
Transaction Fee: Money paid to miners for confirming transactions and adding them to the Blockchain network. It’s an additional charge set by users sending tokens via smart contracts.
Transaction Fee Market: The mechanism allowing blockchain users to increase fees voluntarily, incentivizing miners to prioritize their transactions over others, often achieved through a bidding process.
Transaction Malleability: The ability to slightly modify a transaction before propagation across the network, making it easily detectable; addressed by Segwit, where signatures are no longer included with transaction data.
Transaction Pool: The central node component in a blockchain where all pending/unconfirmed transactions are stored until mined into blocks, either one at a time or concurrently.
Trustless: A term used to describe a system not requiring trust in any party, as it relies on encryption and consensus mechanisms for security.
Virtual Automated Market Makers (vAMMs): A variation of programmable smart contracts designed to autonomously establish a market for cryptocurrencies. They achieve this by placing limit orders to buy or sell tokens at specific prices, enhancing liquidity when active buyers/sellers are scarce.
Volatile Market: A market characterized by rapid price fluctuations, making predictions about future developments more challenging.
Wallet: A digital repository for storing crypto funds, housing private and public keys that grant access to cryptocurrency holdings.
Wallet Address: The public key of a cryptocurrency wallet, utilized for receiving funds.
Wallet Seed Phrase: A set of words generating deterministic keys for wallets, akin to a private password or PIN for securing crypto funds. Safeguarding the seed phrase is crucial to prevent unauthorized access.
Wash Trading: The artificial creation of trading activity to simulate legitimate business transactions, often involving fake buying or selling. Exchanges may engage in wash trading, boosting token value artificially, which can mislead investors before the scheme is revealed.
Weak Hands: Slang denoting individuals easily influenced by market fluctuations, prompting them to sell when prices drop, contributing to further devaluation.
Whale: Slang referring to an investor with a substantial capital base, typically engaging in significant investments.
Whale Watching: Analyzing investors’ activity for indications of potential coin pumping or dumping.
Zero-Knowledge Proof: A proof that verifies the truth of a statement without disclosing additional information beyond what is already known, enabling the demonstration of knowledge possession or secret keys while maintaining confidentiality.
Zk-SNARKs: A category of zero-knowledge cryptography facilitating the proof of knowledge without revealing any information beyond the fact that it is true.
51% Attack: A scenario where over half of a blockchain’s computing power is controlled by one entity, enabling them to control transactions.
51% Attack Protection: Implemented by cryptocurrencies to safeguard against attacks by requiring significant hashing power or a consensus threshold before transactions are approved.
