LEXICON
Crypto Terms Explained
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Welcome to our comprehensive crypto lexicon, a go-to resource for understanding the complex world of cryptocurrencies and blockchain technology. Whether you're new to the space or a seasoned crypto enthusiast, this lexicon is designed to demystify the jargon and terminology commonly used in the industry.
A
Airdrop - The distribution of free tokens to holders of a particular cryptocurrency, often used as a marketing strategy.
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Altcoin - Any cryptocurrency other than Bitcoin. Altcoins can have various features and use cases, different from Bitcoin. Examples include Ethereum, Litecoin, and Ripple.
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Arbitrage - Buying a cryptocurrency at a lower price on one platform and selling it at a higher price on another platform to make a profit from the price difference. It involves taking advantage of price variations between different exchanges.
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ATH (All-Time High) - The highest price that a cryptocurrency has ever reached in its trading history.
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ATL (All-Time-Low) - The lowest price that a cryptocurrency has ever reached in its trading history.
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Audit - Refers to a thorough examination and evaluation of a blockchain project's code, security practices, and overall reliability conducted by independent experts. It helps to ensure transparency, security, and trustworthiness within the crypto ecosystem.
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B
Bagholder - An investor who is left holding onto a losing position in a cryptocurrency, often purchased at a high price and now facing significant losses.
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Bear Market - A prolonged period in which prices in a financial market are falling, typically resulting in pessimism among investors.
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Bitcoin - The first and most well-known cryptocurrency, created by an unknown person or group of people using the pseudonym Satoshi Nakamoto in 2009.
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Blockchain - A technology designed for secure and decentralized storage and transmission of information. It operates as a transparent and unchangeable ledger, allowing all network participants to easily verify recorded transactions.
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Bull Market - A market trend characterized by rising prices and investor optimism.
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C
CEX (Crypto Exchange) - Platforms where users can buy, sell, and trade cryptocurrencies.
Cold Storage - A method of storing private keys offline, keeping it safe from hacking or unauthorized access. Cold storage methods include hardware wallets, paper wallets, and offline computers.
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Cold Wallet - A crypto wallet that is not connected to the internet, providing enhanced security for storing private keys offline.
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​Consensus - Method by which participants in a blockchain network agree on the validity of transactions.
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D
DAO (Decentralized Autonomous Organization) - Type of organization that operates through rules encoded as computer programs on a blockchain. DAOs are managed by their members, who vote on proposals using tokens or coins, enabling decentralized governance and decision-making.
DApp (Decentralized Application) - An application that runs on a decentralized network of computers rather than a single server.
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DeFi (Decentralized Finance) - Refers to financial services built on blockchain technology that do not rely on traditional intermediaries such as banks.
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DEX (Decentralized Exchange) - Crypto exchange platform that operates without a central authority or intermediary. DEX allows users to trade cryptocurrencies directly with one another in a peer-to-peer manner.
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Dumping - Selling a large amount of a cryptocurrency in a short period, causing the price to drop significantly.
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DYOR (Do Your Own Research) - It is an important reminder for individuals to conduct thorough research and due diligence before making any investment decisions in cryptocurrencies. This includes understanding the project, team, technology, and potential risks associated with a particular cryptocurrency before investing.​
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E
ERC-20 - A technical standard used for smart contracts on the Ethereum blockchain for implementing tokens.
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Ethereum - A decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps).
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​Exchange - A platform that allows users to buy, sell, or trade cryptocurrencies.
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F
FA (Fundamental Analysis) - The study of external factors such as technology, team, partnerships, and market demand to evaluate the intrinsic value of a cryptocurrency.
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Fiat - Government-issued currency that is not backed by a physical commodity, such as the US dollar or Euro.
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FOMO (Fear of Missing Out) - The feeling of anxiety or regret that arises from the fear of missing out on a potentially profitable opportunity in the cryptocurrency market.
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Fork - A split or divergence in the blockchain, resulting in two separate chains with a shared history. It can be a soft fork (backwards-compatible) or a hard fork (not backwards-compatible).
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FUD (Fear, Uncertainty, Doubt) - A strategy to influence perception by spreading negative, misleading, or false information.
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Full Node - A computer that fully enforces all the rules of a cryptocurrency network.
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G
Gas - A unit of measurement for the computational work required to execute operations or transactions on the Ethereum network.
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Gas Fee - The costs users pay to have their transactions processed on a blockchain network. It's like a fee for using the network, and it can vary based on network activity.​
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Genesis Block - The first block in a blockchain, used as the foundation for the entire blockchain.
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Gwei - A denomination of the cryptocurrency Ether on the Ethereum network, equal to 0.000001 Ether.
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H
Halving - An event that occurs in some cryptocurrencies, such as Bitcoin, where the reward given to miners for verifying transactions is cut in half, reducing the rate at which new coins are created.
Hard Fork - A permanent divergence in the blockchain, typically due to a change in the network's protocol that is not compatible with previous versions.​
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Hash Rate - The measure of computing power in a cryptocurrency network. It determines how quickly miners can solve complex mathematical problems to validate transactions.
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HODL - A term in the cryptocurrency community that originated from a misspelling of "hold." It refers to holding onto cryptocurrency assets despite market volatility rather than selling.
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Hot Wallet - Refers to a crypto wallet that is connected to the internet, allowing for easier access and transactions. These types of wallets are more susceptible to hacking compared to cold wallets, which are offline.
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I
ICO (Initial Coin Offering) - A fundraising method in which new projects sell their underlying crypto tokens in exchange for funding.
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Immutable - In the context of blockchain, it refers to the characteristic of data that cannot be changed or altered once it has been recorded on the blockchain.
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Institutional Investor - A large organization, such as a bank, hedge fund, or pension fund, that invests in cryptocurrencies on behalf of its clients.
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Interoperability - The ability of different blockchains and cryptocurrency networks to communicate, share data, and transact with each other seamlessly.
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J
Jump - A sudden significant increase or decrease in the price of a cryptocurrency.
K
Key Pair - A key pair consists of a public key and a private key that are used for encryption and decryption of data in cryptos.
KYC (Know Your Customer) - The process of verifying customer identities to comply with crypto regulations.
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L
Ledger - A record-keeping system that tracks all transactions in a crypto network. It can be either a public ledger (open to everyone) or a private ledger (accessible to a specific group). (This is also a well-known brand for hardware wallets designed to securely store cryptocurrencies.)
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Limit order - An order to buy or sell a cryptocurrency at a specific price or better.
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Liquidity - Refers to how easily you can buy or sell a cryptocurrency without causing a big change in its price. More liquidity means smoother trading.
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Long position - A bet that a cryptocurrency's price will rise.
Limit order - An order to buy or sell a cryptocurrency at a specific price or better.
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M
Market Cap (Market Capitalization) - The total value of a cryptocurrency, calculated by multiplying its current price by the total number of coins or tokens in circulation.
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Mining - The process of validating transactions and adding them to a blockchain. Miners receive rewards in the form of new cryptocurrency coins.
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Mooning - Slang used to describe a cryptocurrency's price rapidly increasing in value.
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Multi-Sig (Multi-Signature) - A security feature that requires multiple private keys to authorize a transaction in a crypto wallet. It is often used for added security and control over funds.
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N
Nakamoto consensus - The consensus mechanism used in Bitcoin, named after its anonymous creator, Satoshi Nakamoto.
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Network - The interconnected system of computers that support a cryptocurrency.
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NFT (Non-Fungible Token) - A unique digital asset stored on the blockchain that represents ownership of a specific item, such as art, collectibles, or music.
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Node - A computer connected to the network that helps validate transactions and maintain the blockchain's integrity by storing a copy of the ledger.
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Nonce - A number used once in the process of mining to create a valid block and secure the network.
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O
On-chain - Refers to activities or operations that are directly recorded on the blockchain, such as transactions, smart contracts, and other interactions within the network.
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Open-source - Software code that is publicly available for anyone to view, modify, and distribute. This transparency fosters collaboration, innovation, and trust within the crypto community.
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Oracles - Third-party services that provide external data to smart contracts on the blockchain.
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Order book - A list of buy and sell orders for a particular cryptocurrency.
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OTC (Over-the-Counter) - Refers to traders who buy and sell directly with each other, outside traditional exchanges.
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P
Peer-to-Peer (P2P) - A decentralized communication model that allows individuals to interact directly with each other without the need for a central authority or intermediary.
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PoS (Proof of Stake) - A consensus mechanism where validators are chosen to create and validate new blocks based on the number of coins they hold and are willing to “stake” as collateral.
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PoW (Proof of Work) - A consensus mechanism used in blockchain networks to validate and secure transactions by requiring participants to solve complex mathematical puzzles.
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Public Key/Private Key - A pair of cryptographic keys used to encrypt and decrypt data in cryptocurrency transactions. The public key is like an address where others can send cryptocurrencies, and the private key is used to access and control your funds.
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Pump and Dump - A scheme where the price of a cryptocurrency is artificially inflated (pumped) by misinformation or hype, only to be sold off (dumped) for profit, leaving other investors with losses.
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Q
QR Code (Quick Response Code) - Used to store addresses or information for easy scanning in crypto transactions.
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Quantum Resistance - Security measures in cryptocurrencies to protect against quantum computing attacks.
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R
Rekt - Slang term used in crypto to describe a situation where a trader or investor suffers significant losses in the market.
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Reward - Refers to the digital coins or tokens earned by users for participating in activities that help maintain the network's security and functionality, such as mining or staking.
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Rig - A computer system specially designed for cryptocurrency mining, typically equipped with multiple GPUs or ASIC miners.
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RSI (Relative Strength Index) - A technical indicator used to analyze price movements in trading.
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S
Satoshi - The smallest unit of Bitcoin, named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto.
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Seed Phrase - Set of words used to back up and recover a crypto wallet. It's essential for securing and accessing funds in case of loss or device failure.
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Slippage - Refers to the difference between the expected price of a trade and the price it is actually executed at. It often occurs in volatile markets and can lead to trades being filled at less favorable prices than intended.
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Smart Contract - Self-executing contracts with predefined conditions written in code, automatically executing when certain conditions are met on the blockchain.
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Soft Fork - A temporary divergence in the blockchain where new blocks are still recognized by nodes that have not upgraded to the new protocol.
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Stablecoin - A type of cryptocurrency designed to have a stable value by pegging it to a reserve asset, such as the US dollar or gold.
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Staking - The process of actively participating in transaction validation on a proof-of-stake blockchain in exchange for rewards.
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T
TA (Technical Analysis) - The practice of analyzing historical price movements and market data to predict future price trends and make informed trading decisions.
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Token - A unit of value issued by a project using blockchain technology. Tokens can represent various things like assets, utility, or access rights within a specific ecosystem.
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Tokenomics - The study of the token economics within a cryptocurrency project, including the token's distribution, supply, demand, and utility.
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Trading Volume - The total amount of a cryptocurrency that has been traded within a specific time period, often used as an indicator of market liquidity and activity.
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Two-Factor Authentication (2FA) - An extra layer of security that requires not only a password and username but also something that only the user has access to, typically a piece of information only the user knows or has, like a code from a smartphone app.
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U
Unicorn - Refers to a startup company valued at over $1 billion.
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Utility Token - A type of cryptocurrency that is designed to be used as a digital asset for specific functions or services within a blockchain ecosystem.
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V
Validator - A participant in a blockchain network who is responsible for verifying and validating transactions, typically in proof-of-stake consensus mechanisms.
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​Vanity Address - A customized cryptocurrency address that includes a specific set of characters or words chosen by the user, typically for aesthetic or branding purposes.
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Volatility - The degree of variation of a trading price series over time, often used to describe the fluctuations in the price of cryptocurrencies.
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VPN (Virtual Private Network) - A service that allows users to securely connect to the internet and protect their online activities, commonly used by crypto enthusiasts for added security and privacy.
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W
Wallet - A digital or physical device used to store crypto private keys and public addresses, allowing users to send, receive, and manage their digital assets.
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Whale - A term used to describe individuals or entities that hold large amounts of cryptocurrency, capable of influencing market prices with their trades.
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Whitepaper - Document that describes the technical details, objective and vision of a blockchain project or cryptocurrency.
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X
XRP - The native digital asset that powers the XRP Ledger, a blockchain technology used for fast and low-cost cross-border payments. It is commonly associated with Ripple.
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Y
Yield Farming - A practice in decentralized finance (DeFi) where users can earn rewards by staking or lending their cryptocurrency assets in various platforms or protocols. Users can earn additional tokens or rewards for providing liquidity to these platforms.
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Z
Zero Knowledge Proof - A cryptographic protocols that allow one party (the prover) to prove to another party (the verifier) that a statement is true without revealing any information beyond the validity of the statement itself. This technology has applications in enhancing privacy and security in various blockchain and cryptocurrency systems.
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As you navigate through our crypto lexicon, we hope you've gained valuable insights into the intricate language of cryptocurrencies. The ever-evolving nature of this industry means that staying informed and continuously learning is key. Remember to check back regularly for updates and new additions to our lexicon.