Glossary
Last reviewed November 1, 2026
The words that come up in every crypto conversation, each explained in two or three sentences.
A
- Address
- A public identifier you can send crypto to. Comparable to an account number.
- Airdrop
- A free distribution of tokens to certain addresses, often to reward early users. Fake airdrops are a common scam.
- Altcoin
- Any cryptocurrency other than Bitcoin. See altcoins.
- ASIC
- A chip built for a single job, such as bitcoin mining.
B
- Bear market
- A long stretch of falling prices. The opposite is a bull market.
- Bridge
- A service that moves value between two blockchains. Bridges have suffered some of the largest hacks.
C
- Cold wallet
- A wallet whose keys are kept offline, such as a hardware wallet.
- Cost basis
- What you paid for an asset, used to work out a taxable gain.
D
- DAO
- A decentralised autonomous organisation, with rules in smart contracts and token-based voting.
- DCA
- Dollar-cost averaging: buying a fixed amount on a schedule, whatever the price.
- DeFi
- Decentralised finance. See DeFi.
- DEX
- A decentralised exchange, used directly from your own wallet.
E
- ETF
- An exchange-traded fund. A spot bitcoin ETF holds bitcoin; you hold fund shares.
G
- Gas
- The computing cost of an action on Ethereum, paid in gwei.
- Gwei
- A billionth of an ether, the unit for Ethereum fees.
H
- Halving
- The halving of bitcoin's block reward, roughly every four years.
- Hash
- A fixed-length digital fingerprint that changes completely if the input changes at all.
- Hot wallet
- A wallet whose keys sit on an internet-connected device.
I
- Impermanent loss
- The shortfall a liquidity provider suffers versus simply holding, when prices in the pool diverge.
K
- KYC
- Know your customer: the identity checks regulated platforms run before opening an account.
L
- Layer 2
- A network built on top of a blockchain that batches transactions to cut costs.
- Liquidation
- The forced sale of collateral when a loan or leveraged position is no longer covered.
M
- Market cap
- Price multiplied by circulating supply.
- MiCA
- The EU regulation on markets in crypto-assets. See regulation.
- Mining
- Producing new blocks under proof of work, rewarded with new coins and fees.
N
- NFT
- A non-fungible token that records ownership of a unique digital item.
O
- Oracle
- A service that brings outside data, such as prices, onto a blockchain.
P
- Private key
- The secret key that controls a balance. Whoever has it controls the coins.
- Proof of stake
- A consensus method where validators lock up coins as collateral.
- Proof of work
- A consensus method where miners spend computing power to create blocks.
R
- Rug pull
- A scam where a project's creators vanish with investors' money.
S
- Satoshi
- The smallest unit of bitcoin: 0.00000001 BTC.
- Seed phrase
- 12 or 24 words that restore every key in a wallet. Never share it.
- Slippage
- The gap between the expected price of a swap and the price you actually get.
- Smart contract
- A program on a blockchain that runs automatically under fixed rules.
- Stablecoin
- A token designed to hold a steady value, usually one US dollar. See stablecoins.
- Staking
- Locking coins to help secure a proof-of-stake network in return for rewards.
T
- Token
- A crypto asset created on an existing blockchain by a smart contract.
- Travel rule
- The requirement for crypto firms to pass on sender and recipient details with transfers.
V
- Validator
- A participant that proposes and checks blocks on a proof-of-stake network.
W
- Wallet
- Software or a device that manages private keys. See wallets.