The Words of Crypto

A

Address A crypto address is a string of characters that identifies a destination on a blockchain where funds can be sent and received. Airdrop An airdrop is a distribution of free tokens to many wallet addresses, often to reward or attract users of a project. All-Time High (ATH) An all-time high (ATH) is the highest price an asset has ever reached. All-Time Low (ATL) An all-time low (ATL) is the lowest price an asset has ever reached. Altcoin An altcoin is any cryptocurrency other than Bitcoin. Annual Percentage Yield (APY) Annual percentage yield (APY) is the yearly return on an asset including the effect of compounding. ASIC An ASIC is specialised hardware built to perform one task — such as mining a specific cryptocurrency — as efficiently as possible.

B

Bear Market A bear market is a prolonged period of falling prices and negative sentiment across a market. Bitcoin Bitcoin is the first and largest cryptocurrency, a decentralized digital money secured by a proof-of-work blockchain. Bitcoin Dominance Bitcoin dominance is the share of the total crypto market capitalization held by Bitcoin. Block A block is a batch of transactions bundled together and added to a blockchain as a single, linked record. Block Reward A block reward is the new cryptocurrency paid to whoever adds a valid block to a blockchain. Blockchain A blockchain is a shared, append-only digital ledger that records transactions across a distributed network of computers. Bull Market A bull market is a prolonged period of rising prices and optimistic sentiment across a market.

C

Circulating Supply Circulating supply is the number of coins or tokens of a cryptocurrency that are publicly available and trading in the market. Cold Wallet A cold wallet stores crypto private keys completely offline to keep them safe from online attacks. Consensus Mechanism A consensus mechanism is the method a blockchain uses for its distributed participants to agree on the valid state of the ledger. Cryptocurrency A cryptocurrency is a digital asset that uses cryptography and a blockchain to record ownership and transfer value without a central authority.

D

DAO A DAO is an organization governed by its members through rules encoded in smart contracts rather than by central management. DApp A DApp is a decentralized application that runs on a blockchain through smart contracts rather than on a single company's servers. Decentralization Decentralization is the distribution of control over a network across many participants rather than a single authority. DeFi Decentralized Finance (DeFi) refers to financial services built on blockchains and operated by smart contracts rather than traditional institutions. DEX A DEX, or decentralized exchange, lets users trade cryptocurrencies directly through smart contracts without a central intermediary. Distributed Ledger A distributed ledger is a database shared and synchronized across many independent participants rather than held by one central party.

E

ERC-20 ERC-20 is the technical standard most fungible tokens on Ethereum follow, so wallets and apps can support them uniformly. Ethereum Ethereum is a leading smart-contract platform that lets developers build decentralized applications on its blockchain. Exchange A crypto exchange is a marketplace where users buy, sell and trade cryptocurrencies.

F

Fear and Greed Index The Crypto Fear and Greed Index is a sentiment gauge that scores the market's mood from extreme fear to extreme greed. FOMO FOMO — fear of missing out — is the anxiety that drives investors to buy quickly so they don't miss a rising… Fork A fork is a change to a blockchain's rules or history that splits its path, sometimes creating a new separate network.

G

Gas Fee A gas fee is the payment required to perform a transaction or run a smart contract on a blockchain. Genesis Block The genesis block is the very first block of a blockchain, the foundation on which every later block is built. Gwei Gwei is a small denomination of Ethereum's ether, commonly used to price gas fees.

H

Halving A halving is a scheduled event that cuts the block reward of a cryptocurrency in half, slowing the rate of new supply. Hash A hash is a fixed-length fingerprint produced from any input by a one-way cryptographic function. HODL HODL is crypto slang for holding an asset for the long term instead of selling during volatility. Hot Wallet A hot wallet is a crypto wallet connected to the internet, convenient for spending but more exposed to attack.

I

Immutable Immutable means that once data is recorded on a blockchain it cannot practically be changed or deleted. Initial Coin Offering (ICO) An initial coin offering (ICO) is a fundraising method in which a project sells a new token to early backers.

K

KYC KYC (Know Your Customer) is the identity-verification process regulated crypto services use to confirm who their users are.

L

Layer 2 A Layer 2 is a network built on top of a base blockchain that increases speed and lowers fees while inheriting the… Ledger In crypto, a ledger is the record of all transactions and balances that a blockchain network maintains. Liquidity Liquidity is how easily an asset can be bought or sold without significantly affecting its price.

M

Mainnet A mainnet is the live, production blockchain where real transactions with real value take place. Market Capitalization Market capitalization is the total value of a cryptocurrency, calculated by multiplying its current price by its circulating supply. Maximum Supply Maximum supply is the largest number of coins or tokens of a cryptocurrency that will ever exist. Mempool The mempool is the waiting area where valid transactions sit after being broadcast but before they are included in a block. Mining Mining is the process of using computational work to validate transactions and add new blocks to a proof-of-work blockchain.

N

NFT An NFT is a unique blockchain token that represents ownership of a specific digital or physical item. Node A node is a computer that participates in a blockchain network by storing and relaying its data and verifying transactions. Nonce A nonce is a number used once in a cryptographic operation — in mining, the value miners change to search for a…

O

Oracle An oracle is a service that feeds real-world data to a blockchain so smart contracts can act on information from outside the… Order Book An order book is a real-time list of buy and sell orders for an asset, organised by price.

P

Peer-to-Peer (P2P) Peer-to-peer (P2P) describes a network in which participants interact and transact directly with one another, without a central intermediary. Private Key A private key is a secret number that lets the holder access and spend the cryptocurrency associated with a wallet address. Proof of Stake Proof of Stake is a consensus mechanism in which validators are chosen to create blocks based on the amount of cryptocurrency they… Proof of Work Proof of Work is a consensus mechanism in which miners compete to solve computational puzzles to validate transactions and add new blocks. Public Key A public key is a cryptographic value derived from a private key that is used to receive funds and verify signatures.

R

Return on Investment (ROI) Return on investment (ROI) measures the gain or loss on an investment relative to its cost. Rug Pull A rug pull is a scam in which a project's creators abandon it and run off with investors' funds.

S

Satoshi A satoshi is the smallest unit of bitcoin, equal to one hundred-millionth of a single bitcoin. Seed Phrase A seed phrase is a list of words that acts as a master backup for a crypto wallet and all of its… Slippage Slippage is the difference between a trade's expected price and the price at which it actually executes. Smart Contract A smart contract is a program stored on a blockchain that runs automatically when predefined conditions are met, without an intermediary. Stablecoin A stablecoin is a cryptocurrency designed to hold a steady value, usually by pegging to a fiat currency such as the US… Staking Staking is locking up cryptocurrency to help secure a proof-of-stake network in exchange for rewards.

T

Testnet A testnet is a separate blockchain used to test software safely, where coins have no real value. Token A token is a digital asset created and managed by a smart contract on an existing blockchain. Token Burn A token burn permanently removes a quantity of tokens from circulation by sending them to an unspendable address. Tokenomics Tokenomics is the study of the supply, distribution and incentives that drive the economics of a cryptocurrency. Total Value Locked (TVL) Total value locked (TVL) is the total value of assets deposited in a DeFi protocol or across DeFi as a whole. Trading Volume Trading volume is the total amount of an asset traded over a given period, a key gauge of activity and liquidity.

U

Utility Token A utility token is a token that grants access to a product or service within a particular crypto network or platform.

V

Validator A validator is a participant in a proof-of-stake network that verifies transactions and proposes new blocks. Volatility Volatility measures how much and how quickly the price of an asset moves over a given period.

W

Wallet A crypto wallet is a tool that stores the private keys used to access and manage cryptocurrency on a blockchain. Web3 Web3 is a vision of the internet built on blockchains, where users own their data and assets rather than relying on centralized… Whale A whale is an individual or entity that holds a very large amount of a cryptocurrency, enough to influence its market.

Y

Yield Farming Yield farming is the practice of moving crypto assets between DeFi protocols to earn the highest possible returns.

Z

Zero-Knowledge Proof A zero-knowledge proof lets one party prove a statement is true without revealing any of the underlying information.