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Crypto glossary: plain-English definitions of 100+ terms

Short, plain-English definitions of the words you'll meet on crypto exchanges and brokers. Pick a letter, or start with the terms below the list that matter most when you first buy.

Updated 23 October 2026By the editorial team

#

  • 2FA
    Two-factor authentication: a login that needs your password plus a second proof, such as a code from an authenticator app or a security key.

A

  • Airdrop
    A free distribution of crypto tokens to wallet addresses, used by projects to reward early users or spread a new token. Fake airdrops are a common scam.
  • Altcoin
    Any cryptocurrency other than Bitcoin. Short for "alternative coin", it covers Ethereum, stablecoins, meme coins and thousands of smaller tokens.
  • AML
    Anti-money laundering: the laws and checks that make crypto exchanges verify customers, monitor transactions and report suspicious activity.
  • AMM
    Automated market maker: a smart contract that lets you swap tokens against a liquidity pool, with prices set by a formula instead of an order book.
  • APY
    Annual percentage yield: the yearly return on staking, lending or savings including compounding. In crypto it is usually variable and paid in the coin.
  • ATH
    All-time high: the highest price a cryptocurrency or other asset has ever traded at. Its opposite is ATL, the all-time low.

B

  • Bear Market
    A sustained period of falling prices, usually a drop of 20% or more from a recent high, with pessimism and low confidence. The opposite of a bull market.
  • Bitcoin
    The first cryptocurrency, launched in 2009: digital money with a fixed supply of 21 million coins, run by a decentralized network instead of a bank.
  • Block
    A batch of verified transactions bundled together and added to a blockchain, linked to the previous block by its cryptographic hash.
  • Blockchain
    A shared, append-only digital ledger kept in sync by many computers, where records are grouped into blocks that are linked so they can't be quietly changed.
  • Bull Market
    A sustained period of rising prices, usually a gain of 20% or more from a recent low, with strong investor confidence. The opposite of a bear market.

C

  • CEX
    Centralized exchange: a crypto exchange run by a company that verifies your identity, holds your funds and matches buy and sell orders on an order book.
  • Circulating Supply
    The number of coins or tokens that are publicly available and trading right now, excluding locked, reserved, unreleased or burned tokens.
  • Cold wallet
    A crypto wallet that keeps your private keys offline, such as a hardware wallet, so online attacks can't reach them. Also called cold storage.
  • Compliance
    Following the laws that govern crypto businesses: licensing, anti money laundering (AML) checks, KYC, sanctions screening and reporting to authorities.
  • Compound
    Compounding means earning interest or returns on your earlier interest, not just on the money you put in. In DeFi, Compound is also a crypto lending protocol.
  • Consensus mechanism
    The set of rules a blockchain uses so that thousands of independent computers agree on one shared record of transactions, without a central authority.
  • Cryptocurrency
    Digital money secured by cryptography and recorded on a blockchain, a public ledger run by a network of computers instead of a bank or government.

D

  • DAO
    Decentralized autonomous organization: a group run by smart contract rules, where members vote on decisions with governance tokens instead of managers.
  • Decentralization
    Spreading control of a network across many independent participants, so no single company, bank or government can change the rules or the records alone.
  • DeFi
    Decentralized finance: trading, lending and borrowing crypto through smart contracts on a blockchain, straight from your own wallet, without a bank or broker.
  • DEX
    Decentralized exchange: a crypto trading platform run by smart contracts, where you swap tokens from your own wallet with no account or company in between.
  • Diamond hands
    Slang for investors who keep holding a stock or crypto through steep price drops and volatility instead of selling. The opposite is paper hands.
  • Difficulty
    A measure of how hard it is to mine a new block on a proof of work blockchain. Bitcoin adjusts it every 2,016 blocks to keep blocks about 10 minutes apart.
  • Diversification
    Spreading your money across different investments, asset classes and regions, so a loss in any single one has a limited effect on your total portfolio.
  • DYOR
    Do your own research: crypto slang reminding you to check a coin, token or platform yourself before investing, instead of trusting hype or tips.

E

  • ERC-20
    The technical standard for fungible tokens on Ethereum: a shared set of functions that lets every wallet and exchange handle all such tokens the same way.
  • Ethereum
    A public blockchain network that runs smart contracts and apps; its native cryptocurrency, ether (ETH), pays the fees for using it.
  • Exchange
    A platform where you buy, sell and trade crypto, either run by a company (centralised) or by smart contracts (decentralised).

F

  • Fiat
    Government-issued money, such as the euro or US dollar, that isn't backed by gold; in crypto, "fiat" means the regular currency you buy crypto with.
  • FOMO
    Fear of missing out: the anxious feeling that others are profiting without you, which pushes investors to buy in a hurry after prices have already risen.
  • FUD
    Fear, uncertainty and doubt: negative news, rumours or claims that make investors nervous and push prices down, whether the claims are true or not.
  • Fully Diluted Valuation
    FDV: what a crypto project would be worth if every token that will ever exist were already in circulation, calculated as current price times maximum supply.
  • Funding Rate
    A periodic payment between long and short traders in perpetual futures that keeps the contract price close to the spot price of the underlying crypto.
  • Futures
    Contracts that let you bet on crypto prices with leverage, without owning the coins; most retail traders lose money with them.

G

  • Gas Fee
    The fee you pay, in the network's native token, to have a transaction processed on Ethereum or a similar blockchain; it rises when the network is busy.
  • Governance Token
    A crypto token that gives its holders voting rights over a protocol or DAO, such as changes to fees, upgrades or how the treasury is spent.
  • Gwei
    A tiny unit of ether: one gwei is one billionth of an ETH (0.000000001 ETH). Ethereum gas prices are quoted in gwei.

H

  • Halving
    The built-in event that cuts Bitcoin's block reward in half every 210,000 blocks, roughly every four years, slowing the creation of new bitcoins.
  • Hardware Wallet
    A small physical device that keeps your crypto private keys offline and signs transactions itself, so the keys never touch an internet-connected computer.
  • Hash Rate
    The total computing power miners use to secure a proof-of-work blockchain such as Bitcoin, measured in hashes (guesses) per second.
  • HODL
    Crypto slang for holding coins for the long term instead of selling, from a 2013 forum typo of "hold" later read as "hold on for dear life".
  • Hot Wallet
    A crypto wallet whose private keys sit on an internet-connected device, like a phone app, browser extension or exchange account: quick to use, easier to attack.

I

  • Impermanent Loss
    The value a liquidity provider misses out on compared with simply holding the same tokens, caused by the prices of the pooled tokens moving apart.
  • Interest
    The return you earn, usually in coins, for lending, staking or supplying crypto, quoted as APR or APY and with no deposit guarantee.

K

  • KYC
    Know your customer: the identity check (ID, selfie, source of funds) that licensed crypto exchanges and brokers must run before you can trade.

L

  • Layer 2
    A network on top of a main blockchain (layer 1) that processes transactions off chain and settles them on the main chain, for lower fees and faster payments.
  • Leverage
    Using borrowed money to control a position bigger than your own deposit, written as a ratio such as 5:1, which magnifies gains and losses alike.
  • Limit Order
    An order to buy or sell only at a price you set or better: you control the price, but the order may never be executed.
  • Liquidation
    The forced closing of a leveraged position by the exchange when losses use up the margin backing it, usually costing most or all of that margin.
  • Liquidity
    How easily an asset can be bought or sold quickly at a price close to its market price, without the trade itself moving that price.
  • Liquidity Pool
    A pot of crypto tokens locked in a smart contract that traders swap against on decentralised exchanges, funded by liquidity providers who earn trading fees.

M

  • Maker Fee
    The trading fee you pay when your order rests in the order book before it fills, adding liquidity. It is usually lower than the taker fee.
  • Maker/Taker
    A fee model where makers, whose orders wait in the order book, pay less than takers, whose orders fill immediately against existing orders.
  • Margin Trading
    Buying or short selling with money borrowed from your broker or exchange, using your own deposit as collateral and paying interest on the loan.
  • Market Cap
    The total market value of a coin or company: its price multiplied by circulating supply for crypto, or by shares outstanding for stocks.
  • Market Manipulation
    Deliberately distorting a crypto-asset's price or volume with fake trades, fake orders or false information, such as pump and dumps and wash trading.
  • Market Order
    An order to buy or sell immediately at the best available price: execution is almost certain, but the exact price is not.
  • Market Psychology
    The collective emotions of investors, such as fear, greed, hope and panic, that push prices above or below what fundamentals alone would justify.
  • Mining
    Using computing power to validate transactions and add new blocks to a proof-of-work blockchain such as Bitcoin, in return for new coins and fees.

N

  • Network Fee
    The fee you pay to a blockchain's miners or validators to process a transaction; it depends on network congestion and transaction size, not on the amount.
  • NFT
    A non-fungible token: a unique token on a blockchain that records who owns a specific digital item, such as an artwork, collectible or ticket.
  • Node
    A computer running a blockchain's software that stores a copy of the ledger, checks transactions against the network's rules and shares them with other nodes.

O

  • Off-Ramp
    A service that converts crypto back into fiat money such as euros and pays it to your bank account or card, usually a licensed crypto exchange.
  • On-Ramp
    A service that lets you buy crypto with fiat money such as euros, by bank transfer, card or another payment method, usually through a licensed exchange.
  • Order Book
    A live list of all open buy orders (bids) and sell orders (asks) for an asset, sorted by price, that an exchange uses to match buyers with sellers.

P

  • Payment Method
    The way you fund a crypto or broker account, such as a SEPA bank transfer, iDEAL, a debit or credit card, Apple Pay or PayPal, each with its own fees and speed.
  • Perpetual Contract
    A crypto derivative, also called perpetual futures or a perp, that tracks a coin's price with leverage and no expiry date, kept in line by funding payments.
  • Phishing
    A scam in which criminals pose as an exchange, wallet or authority to get your logins, codes or seed phrase, or make you sign a malicious transaction.
  • Portfolio
    The full set of investments you hold, such as ETFs, stocks, bonds, cash, gold and crypto, across all your accounts and wallets, managed as one whole.
  • Position sizing
    Deciding how much money to put into one trade, so that hitting your stop-loss costs only a small, planned share of your account.
  • Privacy
    How much of your identity, balances and transaction history stays hidden. Most blockchains are public and only pseudonymous; privacy coins hide more.
  • Private key
    The secret number that proves you own a crypto address and lets you sign transactions. Whoever has it controls the funds, so never share it.
  • Proof of stake
    A consensus mechanism where validators lock up (stake) coins as collateral to confirm blocks, earning rewards for honest work and losing stake for cheating.
  • Proof of work
    The consensus mechanism behind Bitcoin: miners compete to solve a costly computing puzzle, and the winner adds the next block and earns the reward.
  • Public key
    The shareable half of a crypto key pair, calculated from your private key. The network uses it to check your signatures; your wallet address is made from it.
  • Pump and dump
    Market manipulation where a group hypes a coin to push its price up, then sells at the inflated price and leaves late buyers with the losses.

R

  • Regulation
    The laws that decide who may offer crypto services and on what terms. In the EU that mainly means MiCA, plus anti-money laundering and tax reporting rules.
  • Risk management
    Deciding in advance how much you can lose and limiting it, with tools such as position sizing, stop-losses, diversification and avoiding leverage.
  • Rug pull
    A crypto exit scam in which a project's team drains the funds or liquidity, or dumps its tokens, and disappears, leaving buyers with worthless tokens.

S

  • Scalability
    A blockchain's ability to process more transactions as demand grows, without fees soaring or giving up security and decentralisation.
  • Scam
    A fraud designed to trick you into sending crypto or money, or handing over access to your wallet. Crypto payments are final, so losses are rarely recovered.
  • SEC
    The US Securities and Exchange Commission, the federal regulator that enforces securities laws, including on crypto assets that count as securities.
  • Security
    The measures that protect your crypto from theft and loss: secure accounts, private keys kept offline, safe devices and a trustworthy, licensed platform.
  • Seed phrase
    A list of 12 or 24 words that backs up a crypto wallet and can restore every private key in it. Anyone who has the words controls the coins.
  • Self-custody
    Holding the private keys to your crypto yourself, in a wallet only you control, instead of leaving them with an exchange or other custodian.
  • Slashing
    A penalty in proof-of-stake blockchains that destroys part of a validator's staked coins when it signs conflicting messages or breaks other consensus rules.
  • Slippage
    The difference between the price you expect when you place a trade and the price it actually fills at, usually caused by low liquidity or fast-moving markets.
  • Smart contract
    A program stored on a blockchain that runs automatically when set conditions are met. It powers DeFi, decentralized exchanges, stablecoins and NFTs.
  • Solidity
    The main programming language for writing smart contracts on Ethereum and other EVM-compatible blockchains. It is statically typed and contract oriented.
  • Spot trading
    Buying or selling an asset at the current market price for immediate delivery, so you own the actual asset rather than a contract on its price.
  • Spread
    The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). A wider spread means a higher trading cost.
  • Stablecoin
    A crypto token designed to keep a stable value, usually one euro or one US dollar, backed by reserves such as cash and short-term government bonds.
  • Staking
    Locking up crypto to help validate transactions on a proof-of-stake blockchain, in return for rewards paid in the same coin. Rewards vary over time.
  • Stop-loss
    An order that automatically sells (or buys back) a position when the price reaches a level you set, to limit how much you can lose on a trade.
  • Supply
    How many coins of a cryptocurrency exist, counted as circulating, total and max supply. Together they show how scarce a coin is and how much dilution may come.

T

  • Take-profit
    An order that automatically closes a position when the price reaches a profit target you set, so you lock in a gain without watching the market.
  • Throughput
    How many transactions a blockchain can process in a given time, usually in transactions per second (TPS). Low throughput means congestion and higher fees.
  • Token
    A digital asset issued by a smart contract on an existing blockchain such as Ethereum, rather than on its own network. Examples: USDC, LINK or an NFT.
  • Tokenomics
    The economic design of a crypto token: how many tokens exist, who got them, when new ones are created or burned, and what the token is used for.
  • Trading Fees
    What an exchange charges each time you buy, sell or swap crypto: usually a maker or taker percentage of the trade, plus a spread on simple app buys.
  • Trading Pair
    Two assets traded against each other on an exchange, such as BTC/EUR. The price shows how much of the quote asset buys one unit of the base asset.
  • Transaction Fee
    The fee you pay to have a crypto transaction recorded on a blockchain. It goes to the miners or validators who process it and rises when the network is busy.

V

  • Validator
    A participant in a proof of stake blockchain who locks coins as collateral to check transactions and add blocks, earning rewards or losing stake for cheating.
  • Volatility
    How much and how fast an asset's price moves up and down over a period. High volatility means bigger, faster price swings in both directions.
  • Volume
    The total amount of a crypto asset traded over a given period, usually 24 hours. High volume usually means more active trading and better liquidity.

W

  • Wallet
    Software or a device that stores the private keys to your crypto and lets you send, receive and sign transactions. The coins themselves stay on the blockchain.
  • Web3
    An umbrella term for an internet built on blockchains, where users hold their own digital assets and identity in a wallet instead of on a company's servers.
  • Wei
    The smallest unit of ether (ETH): one ether equals 10^18 wei, or a billion billion. Named after cryptographer Wei Dai, it lets Ethereum count in whole numbers.
  • Whale
    A person or organisation holding enough of a cryptocurrency to move its price or sway governance votes with a single trade or decision.

Y

  • Yield Farming
    Putting crypto into DeFi protocols, such as liquidity pools or lending apps, to earn fees and token rewards, often moving between platforms for higher rewards.

This crypto glossary explains more than 100 terms you’ll meet when you buy digital assets through exchanges and brokers, in plain English. Each entry above has a one-line definition; click a term for the full page, with how it works on a real exchange, an example and why it matters to your money.

Crypto has its own language, and some of it hides costs or risks. Knowing what a taker fee, a spread or a liquidation is before you trade digital assets can save you real money.

The crypto terms to learn first

If you’re buying your first crypto, these are the words that matter most, in the order you’ll meet them:

  • Before you buy: cryptocurrency, exchange, fiat currency, regulation, KYC and AML. Under MiCA, the EU’s crypto law, an exchange needs a licence to serve you.
  • When you place an order: market order, limit order, the maker and taker fee, spread and slippage. These decide what you pay on top of the market price.
  • When you store your coins: crypto wallet, hot wallet, cold wallet, keys and seed phrase. Whoever holds the keys controls the coins.
  • When you send crypto: network fee and gas fee. Every transaction on a blockchain network pays one, separate from the exchange’s own fees.
  • When you go further: staking, DeFi, smart contracts, leverage and liquidation. Most retail traders lose money with leverage.
  • Red flags: phishing, rug pulls, pump and dump schemes and other scams.

How a blockchain network works, in glossary terms

Most technical terms in this crypto glossary describe one idea: blockchain technology is a distributed ledger, a shared digital ledger that network participants keep in sync over a peer to peer network, with no trusted third party in charge. Each block records transactions and links to the one before it through a hash function, so anyone can detect tampering with past transactions.

A consensus mechanism, such as proof of work on the Bitcoin blockchain or the proof of stake network behind Ethereum, decides who adds the next block and how nodes go about verifying transactions. Smart contracts on the Ethereum blockchain run decentralized applications, token swaps, non fungible tokens (NFTs) and most of DeFi.

You don’t need to master these to buy crypto on a licensed exchange. They matter when you move your coins to your own wallet or use DeFi, where no company can reverse a mistake.

Four more terms you may meet

These terms aren’t in our glossary yet, so here they are in short:

  • Central bank digital currency (CBDC): a digital form of a country’s fiat currency, issued by its central bank. It isn’t a cryptocurrency, and MiCA doesn’t cover it.
  • Initial coin offering (ICO): a sale of new digital tokens to the public to fund a project. Under MiCA, offering crypto to the public in the EU needs a published white paper.
  • Lightning Network: a layer 2 network on top of the Bitcoin blockchain that makes small Bitcoin transactions faster and cheaper.
  • Exchange traded product (ETP): a security on a stock exchange that tracks an underlying asset such as Bitcoin. You hold the security, not the coin.

From the glossary to the rest of the site

Glossary entries link to the guides where each term matters. To see the terms in action, read crypto exchange fees explained or one of our crypto investing guides. If a term you need is missing, our list grows every month.

Questions people ask

What are the 12 words in crypto?

They are your seed phrase, also called a recovery phrase: usually 12 or 24 words that can restore a self-custody wallet and every key in it. Anyone who has the words controls the crypto, so never type them into a website or share them with support staff.

What is the difference between a private key and a public key?

A public key, and the address made from it, is what you share so people can send you crypto. The private key signs your transactions with a digital signature and proves you own the funds; whoever holds it controls them.

What is the difference between a coin and a token?

A coin, such as Bitcoin or Ether, is native to its own blockchain network and pays its network fees. A token is built on top of an existing blockchain with a smart contract, as ERC-20 tokens are on Ethereum.

What are the main types of crypto under EU rules?

MiCA sorts digital tokens into three groups: e-money tokens, which track one official currency such as the euro; asset-referenced tokens, which track other assets or a basket; and all other crypto, such as Bitcoin. The rules for the first two have applied since 30 June 2024.

What does MiCA stand for?

Markets in Crypto-Assets: Regulation (EU) 2023/1114, the EU law that licenses exchanges and other crypto service providers. It has applied in full since 30 December 2024, and the transitional period for older national registrations ended on 1 July 2026.