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Crypto Glossary
A | B | C | D | E | F | G | H | I | K | L | M | N | O | P | Q | R | S | T | U | V | W | Y |
A
Address
The public address of your wallet, similar to your credit card number.
Airdrop
A marketing campaign that distributes a coin or token to numerous crypto addresses.
Altcoin
Any coin alternatives to Bitcoin. Some popular examples include ETH and DOT.
ATH
(All-Time High): ATH refers to the highest price a cryptocurrency has ever reached, whether it's currently trading at that price or not.
Arbitrage
Cryptocurrency arbitrage refers to the practice of taking advantage of price differences between different exchanges or markets to make a profit.
B
Backup phrase
The master key to your account. Never enter it on any websites and never share it with anyone! It's just the same as giving someone your debit card number, expiry date, and CVV code. What is the 12-word backup phrase?
Bitcoin (BTC)
The first ever cryptocurrency.
Blockchain
An immutable decentralized ledger somewhat similar to a large database.
Bull/Bullish
Someone who feels bullish about a cryptocurrency or market has a positive outlook and expects prices to rise.
Bear/Bearish
Someone who feels bearish about a cryptocurrency or market has a negative outlook and expects prices to decline.
Byzantine Fault Tolerance (BFT)
A system that enables a distributed network to function even if some of the nodes are not trustworthy.
Burning
The process of permanently removing a certain portion of a cryptocurrency from circulation, usually done to reduce supply and increase value.
Block explorer
A tool that allows users to search and view the data contained within individual blocks on a blockchain.
C
Coin
A digital asset running on its own independent blockchain. Some examples include BTC, ETH, and DOT.
Confirmation
A "confirmed" transaction is a transaction that's been verified by the network and completed, that is, added to the blockchain. Blockchain transactions get confirmed by miners.
Consensus
Agreement among the network of nodes on the state of the blockchain
Consensus mechanism
A kind of policy governing how a particular blockchain operates. The two most common consensus mechanism are Proof-of-Stake and Proof-of-Work.
Cryptocurrency
Digital or virtual currency that uses cryptography for security.
Cold storage
Storing cryptocurrency offline to protect it from potential hacks.
Crypto wallet
Software or hardware device used to store, send, and receive cryptocurrency.
D
DAO
Decentralized Autonomous Organization is a decentralized organization run by code on a blockchain.
Dapp
Decentralized Application is a software application built on a blockchain network.
DEX
Decentralized Exchange is an exchange that operates on a decentralized network.
Double Spending
The act of spending the same cryptocurrency twice, a problem unique to digital currencies.
E
ERC-20
A protocol for tokens based on the Ethereum blockchain, or a token operating under this protocol. Some popular examples include USDT, LINK, and DAI.
Ethereum
One of the most popular decentralized blockchain platforms with smart contract functionality that allows developers to build decentralized apps, or dapps. ETH: Common Questions
ETC
Abbreviation for Ethereum Classic, a hard fork of the original Ethereum blockchain.
F
Fiat currency
Government-backed currency such as USD or EUR.
Fork
A change in the blockchain network that creates two separate versions of the original blockchain.
Fungible
Items that are interchangeable and hold the same value, such as cryptocurrencies.
Fees
The amount of cryptocurrency charged by the network for processing transactions.
G
Gas
On the Ethereum blockchain, gas is the unit measure for network fee size. Basically, it refers to the computational effort required to make the transaction.
Gas limit
The maximum amount of gas a user is willing to pay to make a transaction.
Gwei
Gwei are the smallest units of the ether currency native to the Ethereum blockchain. 1 gwei equals 0.000000001 ETH. Network fees for all transactions made on the Ethereum blokchain are measured in gwei.
Governance
The process of making decisions and implementing changes to a blockchain network, often done through community voting or consensus.
H
Hard Fork
A change in the code of a blockchain that creates two distinct variations.
Hash Rate
The measurement of computer power used to validate transactions and solve complex algorithms in the network.
Halving
A predefined reduction in the block reward given to miners, occurring every 210,000 blocks in Bitcoin.
I
Interoperability
The ability of different blockchain networks to work together seamlessly and efficiently.
Inflation
Refers to the increase in the supply of a cryptocurrency, which can lead to a decrease in its value.
ICO (Initial Coin Offering)
A fundraising method for new cryptocurrency projects, where investors can purchase newly issued coins in exchange for other cryptocurrencies or fiat money.
Invalid block
A block that is rejected by the network because it does not meet the rules and consensus protocols of the blockchain.
K
KYC (Know Your Customer)
Refers to the process of verifying the identity of a customer before they can engage in certain transactions or services within the cryptocurrency industry.
Kava
A blockchain platform that enables users to create and trade various financial products, such as stablecoins and loans.
L
Liquidity
Liquidity accounts for the trading volume of the market. The more liquid the market is for a given cryptocurrency, the easier it is to trade it. Have you ever been surprised at video game merchants always having enough money to buy anything you might offer? The real market is different in this regard — for you to trade your crypto asset, the market must be liquid enough to offer you anything in exchange.
Ledger
A decentralized digital ledger that records all the transactions on a blockchain network.
Layer 2
An optional built-on layer that allows for more efficient and scalable transactions on a blockchain network.
Limit Order
An order to buy or sell a cryptocurrency at a specific price, which is executed only if that price is met.
M
Mainnet
An independent blockchain running its own network, as opposed to a token based on someone else's platform. It isn't rare to see crypto projects starting out as tokens and setting up their own network later on: some popular examples include ZIL and BAND.
Market capitalization
Market capitalization, also known as "market cap," is the total value of the entire supply of a currency or token. To calculate the market cap for a particular asset, multiply its market price by its circulating supply. The higher the cap, the more popular the project is, which likely means it's here to stay.
Mining
The process of processing a transaction and adding it to the blockchain. Depending on which consensus mechanism is used on a particular blockchain, mining requires either significant computing power (in case of the Proof-of-Work consensus) or a large staking deposit (for Proof-of-Stake networks).
Mining pool
A mining pool is a group of miners who combine their computational power to mine cryptocurrencies more efficiently and increase their chances of earning rewards.
N
Network fee
Every time you make a blockchain transaction, someone has to add it to the blockchain. Those who take up this job are called "miners," and they charge network fees for processing transactions. Does Atomic Wallet charge any additional transaction fees?
Node
A computer connected to the blockchain network and tasked with validating transactions.
NFT (Non-Fungible Token)
A unique digital asset that represents ownership of a specific item or artwork on a blockchain.
O
Oracle
A third-party entity that provides information to smart contracts on the blockchain.
P
Private key
The key to your wallet for some particular asset, for example, BTC or ETH. Your 12-word backup phrase is the master private key, which means anyone who knows it will be able to manage your entire account. What are the private and public keys?
Proof-of-Stake (PoS)
A consensus mechanism that grants a person the power to validate transactions and mine blocks based on the amount of coins they hold. It's much less power-consuming than the Proof-of-Work consensus, although also harder to implement. Some popular examples of PoS blockchains include Cardano, Tezos, and Algorand.
Proof-of-Work (PoW)
A consensus mechanism that's based around making complex calculations to validate transactions and mine blocks on the blockchain. Some popular examples of PoW blockchains include Bitcoin, Ethereum, and Monero.
Public key
See Address.
Peer-to-Peer (P2P)
A decentralized system where participants can communicate and transact without the need for intermediaries like banks or governments.
Pump and Dump
A market manipulation strategy where groups with significant holdings in an asset artificially inflate it before selling it off quickly for a profit.
Q
QTUM
A blockchain platform that combines the security of Bitcoin with the smart contract capabilities of Ethereum.
Quick response (QR) code
A two-dimensional barcode that can be scanned by a smartphone or other device to quickly access information, such as a wallet address or transaction details.
R
Reward
The cryptocurrency amount given to miners or validators for successfully adding a new block to the blockchain.
Ripple
A blockchain-based digital payment protocol and cryptocurrency.
S
Satoshi
Satoshis, also known as "sats," are the smallest units of the Bitcoin currency. There are 100 pennies in 1 dollar, and there are 100 million satoshis in one BTC.
Seed phrase
See Backup phrase.
Stablecoin
A coin or token that can be traded to USD at a 1:1 rate. Basically, it's the dollar of the crypto world. Some examples include USDT and USDC.
Smart contract
A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
SegWit
An upgrade to the Bitcoin protocol that separates transaction data from block data, resulting in faster transaction confirmations and lower fees.
Soft fork
A change to a blockchain protocol that is backward-compatible, meaning it does not require all nodes to upgrade their software.
Supply cap
The maximum amount of a particular cryptocurrency that will ever exist.
T
Token
A digital asset that has no independent blockchain of its own.
Transaction fee
See Network fee.
Transaction
The transfer of cryptocurrency from one wallet to another.
Tether
A stablecoin pegged to the US dollar.
Two-Factor Authentication (2FA)
A security measure that requires a user to provide two forms of identification to access an account.
Testnet
A network used for testing new blockchain technology.
U
Unspent transaction output (UTXO)
The amount of cryptocurrency that remains after a transaction is executed. You can think of UTXOs as physical coins, except that UTXOs don’t come in specific denominations like nickels and dimes do. Instead, UTXOs can have any value.
Unconfirmed Transaction
A transaction on the Bitcoin network that has not yet been added to a block in the blockchain.
Utility Token
A type of cryptocurrency that is designed to be used for a specific purpose or function within a particular blockchain network.
V
Validator
In Proof-of-Stake networks, an actor responsible for validating transactions and adding them to the blockchain.
Volatility
The degree of variation in the price of a cryptocurrency. High volatility is often associated with high risk.
Vesting
The process of releasing a certain amount of cryptocurrency to an individual over a set period of time, usually as part of an employee compensation package or after an initial coin offering.
W
Wallet
An app or a device to store your crypto.
Whitepaper
A technical document that provides details about a cryptocurrency project or blockchain platform.
Web3
The third generation of the internet that uses blockchain technology to decentralize platforms and applications.
Y
Yield Farming
The process of lending or providing liquidity to a decentralized finance (DeFi) protocol in exchange for rewards or interest.