Crypto Glossary

Two-Factor Authentication - a security method requiring two different types of verification to access an account. Essential for protecting cryptocurrency exchange accounts.

Free distribution of cryptocurrency tokens to wallet addresses, usually as a marketing strategy or to reward early users of a protocol.

Any cryptocurrency other than Bitcoin. Short for 'alternative coin', altcoins include Ethereum, Solana, XRP, and thousands of other cryptocurrencies.

Anti-Money Laundering—regulations and procedures that financial institutions, including crypto exchanges, must follow to prevent the use of financial systems for money laundering and terrorist financing.

Automated Market Maker - a decentralized exchange mechanism using mathematical formulas and liquidity pools instead of traditional order books to determine prices and execute trades.

Annual Percentage Yield—the real rate of return on an investment over one year, accounting for compound interest. In crypto, APY commonly describes staking and DeFi earning rates.

All-Time High - the highest price a cryptocurrency has ever reached. Breaking ATH is often considered a bullish signal and attracts media attention.

An extended period of declining prices, typically 20% or more from recent highs. Characterized by pessimism, low trading volume, and capitulation.

The first and largest cryptocurrency by market cap, created in 2009 by the pseudonymous Satoshi Nakamoto as a decentralized peer-to-peer digital currency.

A collection of cryptocurrency transactions bundled together and added to the blockchain. Each block contains transaction data, a timestamp, and a cryptographic link to the previous block.

A decentralized, distributed digital ledger that records transactions across a network of computers. Each block contains transaction data and is cryptographically linked to the previous block.

An extended period of rising prices, characterized by optimism, increased trading volume, and strong investor confidence. The opposite of a bear market.

Centralized Exchange - a cryptocurrency exchange operated by a company that acts as an intermediary between buyers and sellers. Users deposit funds to the exchange, which manages order matching and custody.

The number of cryptocurrency coins or tokens that are currently available and circulating in the public market, excluding locked, reserved, or not-yet-released tokens.

A cryptocurrency wallet that is not connected to the internet, providing maximum security for long-term storage. Also called cold storage or offline wallet.

The process of adhering to laws, regulations, and guidelines governing cryptocurrency operations. Compliant exchanges implement KYC, AML, and other regulatory requirements to operate legally.

In finance, compound refers to earning interest on previously earned interest. In crypto, Compound is also a leading DeFi lending protocol where users can lend and borrow crypto assets.

A system used by blockchain networks to achieve agreement among distributed nodes on the state of the ledger, ensuring all participants have the same version of the truth.

A digital or virtual currency that uses cryptography for security and operates on decentralized networks, typically based on blockchain technology.

Decentralized Autonomous Organization - an organization governed by smart contracts and token holder votes rather than traditional management. Members vote on proposals using governance tokens.

The distribution of power, control, and decision-making away from a central authority to a distributed network of participants.

Decentralized Finance - financial services built on blockchain technology that operate without traditional intermediaries like banks. Includes lending, borrowing, trading, and earning interest.

Decentralized Exchange - a cryptocurrency exchange that operates without a central authority, using smart contracts to facilitate peer-to-peer trading directly from user wallets.

A slang term describing investors who hold onto their cryptocurrency positions through extreme volatility and price drops, refusing to sell regardless of market conditions.

A measure of how hard it is to mine a new block on a Proof-of-Work blockchain. Difficulty adjusts automatically to maintain consistent block times as mining power changes.

An investment strategy that spreads risk across different assets, cryptocurrencies, or asset classes to reduce the impact of any single investment performing poorly.

Do Your Own Research - a common crypto phrase emphasizing the importance of independently researching investments before buying, rather than relying solely on others' opinions.

A technical standard for creating fungible tokens on the Ethereum blockchain, defining rules that all Ethereum tokens must follow.

The second-largest cryptocurrency and a decentralized platform that enables smart contracts and decentralized applications (dApps) to be built and run without downtime or third-party interference.

A platform that allows users to buy, sell, and trade cryptocurrencies. Exchanges can be centralized (CEX) like Binance or decentralized (DEX) like Uniswap.

Government-issued currency not backed by physical commodity. In crypto, fiat refers to traditional currencies like USD, EUR, or GBP used to buy cryptocurrency.

Fear Of Missing Out - the anxiety that others are profiting from an investment opportunity you're not participating in, often leading to impulsive buying decisions.

Fear, Uncertainty, and Doubt - negative information spread to create panic selling or discourage investment. Can be legitimate concerns or deliberate manipulation.

The theoretical market capitalization of a cryptocurrency if all possible tokens were in circulation at the current price. Calculated as: Maximum Supply × Current Price.

A periodic payment exchanged between long and short traders in perpetual futures contracts to keep the contract price aligned with the spot market price.

Contracts to buy or sell cryptocurrency at a predetermined price on a future date. Crypto futures allow leveraged trading without owning the underlying asset.

The transaction fee paid to blockchain validators for processing and confirming transactions. Named for 'fuel' that powers the Ethereum network.

A cryptocurrency token that grants holders voting rights to participate in decisions about a protocol's development, parameters, and treasury management.

A denomination of Ether equal to one billion wei (10^9 wei or 0.000000001 ETH). Gwei is commonly used to express gas prices on the Ethereum network.

A programmed event that cuts the block reward for miners in half. Bitcoin halving occurs every 210,000 blocks (~4 years), reducing new supply and historically preceding price increases.

A physical device that stores cryptocurrency private keys offline, providing the highest level of security by keeping keys isolated from internet-connected devices.

The total computational power being used to mine and secure a proof-of-work blockchain. Measured in hashes per second, higher hash rate means greater security.

A crypto slang term meaning to hold cryptocurrency long-term rather than sell. Originally a typo of 'hold' in a 2013 Bitcoin forum post that became a meme and investment philosophy.

A cryptocurrency wallet connected to the internet, allowing quick access for transactions. More convenient but less secure than cold wallets.

The temporary loss experienced when providing liquidity to an AMM pool compared to simply holding the assets. Caused by price divergence between paired tokens.

In crypto, interest refers to earnings generated by lending or staking your cryptocurrency. Interest rates in DeFi and CeFi platforms are typically expressed as APY or APR.

Know Your Customer - identity verification procedures required by financial regulations. Exchanges collect personal information like ID documents, address, and sometimes selfies to comply with anti-money laundering laws.

A secondary blockchain network built on top of a Layer 1 (like Ethereum) to improve scalability and reduce transaction costs while inheriting the security of the main chain.

Trading with borrowed funds to increase position size beyond your capital. Expressed as a multiplier (2x, 10x, 100x) that amplifies both gains and losses.

A type of order to buy or sell a cryptocurrency at a specific price or better. Buy limit orders execute at the limit price or lower; sell limit orders execute at the limit price or higher.

The forced closure of a leveraged position when losses approach the deposited margin. Occurs to prevent the position from going negative and to protect the exchange.

The ease with which an asset can be bought or sold without significantly affecting its price. High liquidity means large trades with minimal price impact.

A collection of cryptocurrency funds locked in a smart contract that enables decentralized trading, lending, and other DeFi activities by providing liquidity without traditional order books.

The trading fee charged when you add liquidity to an exchange's order book by placing a limit order that doesn't immediately fill.

A fee model where 'makers' (who add liquidity by placing limit orders) pay lower fees than 'takers' (who remove liquidity by placing market orders or filling existing orders).

Trading with borrowed funds to increase position size, allowing traders to control larger positions than their account balance while amplifying both potential gains and losses.

Market Capitalization - the total value of a cryptocurrency, calculated by multiplying the current price by the circulating supply. Used to rank and compare the relative size of cryptocurrencies.

Illegal or unethical practices that artificially affect cryptocurrency prices, including wash trading, spoofing, pump and dump schemes, and coordinated trading.

An order to buy or sell immediately at the best available current price. Guarantees execution but not price, as it fills against existing orders in the order book.

The collective emotions and behaviors of market participants that drive price movements, including fear, greed, FOMO, and panic selling, often creating predictable market cycles.

The process of using computational power to validate transactions and add new blocks to a blockchain. Miners are rewarded with cryptocurrency for their work.

A fee paid to blockchain validators or miners to process and confirm a cryptocurrency transaction. Also called gas fees (Ethereum) or transaction fees, these vary based on network congestion.

Non-Fungible Token - a unique digital asset on a blockchain representing ownership of items like art, music, collectibles, or in-game items. Unlike cryptocurrencies, each NFT is distinct.

A computer that participates in a blockchain network by maintaining a copy of the ledger and validating transactions according to the network's rules.

A service or platform that allows users to convert cryptocurrency back into traditional fiat currency (like USD, EUR), enabling them to withdraw funds to bank accounts or spend via cards.

A service or platform that allows users to convert traditional fiat currency (like USD, EUR) into cryptocurrency, serving as the entry point from traditional finance to crypto.

A real-time list of all open buy (bid) and sell (ask) orders for a trading pair, organized by price. Shows market depth and helps determine fair market price.

The way you fund your cryptocurrency exchange account, including bank transfers, credit/debit cards, PayPal, and peer-to-peer payments. Different methods have varying fees and processing times.

A cryptocurrency derivative product similar to futures but without an expiration date, allowing traders to hold positions indefinitely while paying or receiving funding rates.

A cyber attack where criminals impersonate legitimate websites, exchanges, or individuals to trick users into revealing sensitive information like passwords, private keys, or seed phrases.

A collection of cryptocurrency investments held by an individual or institution. Portfolio management involves selecting, allocating, and monitoring various crypto assets to achieve investment goals.

The process of determining how much capital to allocate to a single trade or investment. Proper position sizing is crucial for risk management and long-term trading success.

In cryptocurrency, privacy refers to the protection of transaction details, wallet balances, and user identities from public visibility on the blockchain.

A secret cryptographic code that proves ownership of cryptocurrency and allows you to authorize transactions. Never share your private key - anyone with it has full access to your funds.

A consensus mechanism where validators are chosen to create new blocks based on the amount of cryptocurrency they 'stake' as collateral, rather than computational power.

A consensus mechanism requiring miners to solve complex mathematical puzzles to validate transactions and create new blocks. Used by Bitcoin and originally by Ethereum.

A cryptographic code that serves as your public address for receiving cryptocurrency. Derived from your private key, it can be safely shared with others to receive funds.

A fraudulent scheme where coordinated groups artificially inflate a cryptocurrency's price through false hype, then sell their holdings at the peak, leaving other investors with losses.

Government rules and laws governing cryptocurrency activities including trading, custody, taxation, and anti-money laundering compliance, varying significantly by jurisdiction.

The process of identifying, analyzing, and mitigating potential losses in trading through strategies like position sizing, stop-losses, and portfolio diversification.

A crypto scam where developers abandon a project and run away with investor funds. Usually involves draining liquidity pools or dumping pre-mined tokens.

The ability of a blockchain network to handle increasing transaction volumes while maintaining speed, low costs, and decentralization.

A fraudulent scheme designed to steal cryptocurrency or money from victims, including phishing attacks, fake exchanges, rug pulls, Ponzi schemes, and social engineering tactics.

The U.S. Securities and Exchange Commission—the federal agency responsible for regulating securities markets, including determining whether cryptocurrencies qualify as securities subject to federal regulation.

In cryptocurrency, security refers to the measures and practices used to protect digital assets, private keys, and personal information from theft, hacking, and unauthorized access.

A series of 12-24 words that can recover a cryptocurrency wallet and all its accounts. Also called recovery phrase, mnemonic phrase, or backup phrase. Never share with anyone.

The practice of personally controlling your cryptocurrency private keys, giving you full ownership and responsibility for your digital assets without relying on third parties.

A penalty mechanism in Proof-of-Stake blockchains where validators lose a portion of their staked tokens for malicious behavior or failing to properly validate transactions.

The difference between expected price and actual execution price of a trade. Occurs in low liquidity markets or during high volatility when prices move between order placement and execution.

Self-executing code stored on a blockchain that automatically enforces agreement terms when conditions are met. The foundation of DeFi, NFTs, and decentralized applications.

The primary programming language for writing smart contracts on Ethereum and other EVM-compatible blockchains. Solidity is statically typed and designed specifically for blockchain development.

Buying and selling cryptocurrency for immediate delivery at current market prices. The most basic form of trading where you own the actual asset after purchase.

The difference between the highest bid (buy) price and lowest ask (sell) price for a trading pair. Tighter spreads indicate better liquidity and lower trading costs.

A cryptocurrency designed to maintain a stable value, usually pegged 1:1 to a fiat currency like the US dollar. Used for trading, payments, and as a safe haven from crypto volatility.

The process of locking up cryptocurrency to support blockchain operations (like validating transactions) in exchange for rewards. Similar to earning interest on deposits.

An order that automatically sells your position when price falls to a specified level, limiting potential losses. Essential risk management tool for traders.

The total number of cryptocurrency tokens or coins that exist or will exist. Supply metrics include circulating supply, total supply, and maximum supply, each affecting price and scarcity.

An order type that automatically closes a trading position when the price reaches a specified profit target, locking in gains without manual intervention.

The number of transactions a blockchain can process per second (TPS). Higher throughput means faster transaction processing and lower fees during high demand.

A digital asset created on an existing blockchain (like Ethereum) rather than its own network. Tokens can represent utilities, governance rights, assets, or other functions.

The economic model and design of a cryptocurrency token, including its supply mechanics, distribution, utility, and incentive structures that determine its value and sustainability.

Charges applied by cryptocurrency exchanges when you buy, sell, or trade digital assets. Trading fees are typically calculated as a percentage of the transaction and vary based on trading volume and maker/taker status.

Two assets that can be traded against each other on an exchange. The first asset (base) is priced in units of the second asset (quote), like BTC/USDT.

A fee paid to process and validate a transaction on a blockchain network, compensating miners or validators for their computational work.

A participant in a Proof of Stake blockchain who locks up cryptocurrency as collateral to validate transactions and create new blocks in exchange for rewards.

The degree and frequency of price fluctuations in a cryptocurrency. High volatility means prices can change dramatically in short periods, creating both profit opportunities and risks.

The total amount of cryptocurrency traded within a specific time period, usually 24 hours. High volume indicates active trading and better liquidity.

Software or hardware that stores private keys needed to access and manage cryptocurrency. Wallets don't actually store crypto - they store the keys to access it on the blockchain.

The vision of a decentralized internet built on blockchain technology, where users own their data and digital assets rather than centralized corporations.

The smallest unit of Ether (ETH), equal to 10^-18 ETH. Named after Wei Dai, a cryptography pioneer, wei is used for precise calculations in Ethereum smart contracts.

An individual or entity holding a large amount of cryptocurrency - enough to potentially influence market prices through their trades. Named for their size compared to smaller 'fish' traders.

The practice of moving cryptocurrency between DeFi protocols to maximize returns through interest, trading fees, and token rewards.