Crypto Glossary

A | B | C | D | E | F | G | L | M | N | P | S | T | U | V | W

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.

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.

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 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.

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.

Ether (ETH)

The native cryptocurrency of the Ethereum blockchain. ETH: Common Questions

F

Fiat currency

Government-backed currency such as USD or EUR.

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.

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.

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).

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.

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.

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.

T

Token

A digital asset that has no independent blockchain of its own.

Transaction fee

See Network fee.

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.  

V

Validator

In Proof-of-Stake networks, an actor responsible for validating transactions and adding them to the blockchain.

W

Wallet

An app or a device to store your crypto.


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