A

Address

A unique string of characters identifying a wallet or contract on a blockchain. You can share it freely to receive funds — it's public, like an account number.

Airdrop

Free distribution of tokens to wallets, usually to reward early users or build awareness. Unsolicited airdrops are often scam bait — interacting with them can trigger malicious signatures.

Altcoin

Any cryptocurrency other than Bitcoin. The term covers everything from Ethereum to obscure microcaps.

AMM (Automated Market Maker)

A smart contract that lets you trade against a pool of tokens instead of another person. Uniswap popularised the model; prices are set by the pool's ratio of assets.

Approval / Allowance

Permission you grant a smart contract to spend a certain amount of your tokens. Unlimited or forgotten approvals are a major attack surface — review them regularly.

APY / APR

Annual Percentage Yield / Rate — how much a position earns or costs per year. 'APY' compounds; 'APR' doesn't. In crypto marketing, big APY numbers usually mean big risk.

B

Bear Market

A prolonged period of falling prices and pessimism. Bear markets historically built the strongest foundations and the best entry points — and tested every weak project.

Bitcoin (BTC)

The first cryptocurrency, launched in 2009 by the pseudonymous Satoshi Nakamoto. A decentralised, capped-supply digital money — the anchor asset of the entire industry.

Block

A batch of transactions added to a blockchain, linked to the previous block. Bitcoin targets a block roughly every 10 minutes; Ethereum every 12 seconds.

Block Explorer

A website that lets you inspect a blockchain: transactions, addresses, contracts and blocks. Etherscan (Ethereum) and Mempool.space (Bitcoin) are famous examples. Verification begins here.

Blockchain

A public, append-only ledger maintained by a decentralised network. Once data is confirmed, altering it requires infeasible computing power. It's the shared database behind all cryptocurrencies.

Bridge

Software that moves assets between blockchains. Bridges are the most-exploited category in crypto — treat them as high-risk infrastructure.

Bull Market

A prolonged period of rising prices and euphoria. Historically where most retail money enters — and where most scams flourish.

C

CEX (Centralised Exchange)

A company-run exchange (Coinbase, Binance, Kraken) that holds customer funds and matches orders. Convenient and liquid — but custodial: 'not your keys, not your coins' applies.

Cold Wallet / Cold Storage

A wallet whose keys never touch an internet-connected device — typically a hardware wallet. The standard for long-term holdings.

Consensus

The mechanism by which a blockchain's nodes agree on the valid state. Bitcoin uses proof-of-work; Ethereum uses proof-of-stake.

Custodial / Non-custodial

Who holds the private keys? Custodial = a company holds them (exchanges). Non-custodial = you hold them (self-custody wallets). This single distinction defines your risk profile.

D

dApp (Decentralised Application)

An application whose backend logic runs on smart contracts instead of company servers. DeFi protocols, games and marketplaces are dapps.

DeFi (Decentralised Finance)

Financial services — trading, lending, staking — built on smart contracts without intermediaries. Permissionless and transparent, with smart-contract risk replacing counterparty risk.

DEX (Decentralised Exchange)

A non-custodial exchange where you trade from your own wallet via smart contracts (Uniswap, Jupiter, dYdX). No signup, no custody — but mistakes are irreversible.

DYOR (Do Your Own Research)

The industry's most important acronym. Check on-chain data, audits, teams and tokenomics yourself — never trade off someone else's 'signal'.

E

Ethereum (ETH)

The second-largest blockchain, launched 2015, which introduced programmable smart contracts. Home to most of DeFi, NFTs and Layer 2 scaling.

F

Fiat

Government-issued money: USD, EUR, NZD and the rest. The 'off-ramp' side of crypto's on/off-ramp metaphor.

FOMO (Fear Of Missing Out)

The emotion that drives chasing pumps and aping into mints. The single most reliable way to lose money in crypto.

Fork

A blockchain splitting into two — either a software upgrade (soft/hard fork) or a community split creating a new chain (like Bitcoin Cash from Bitcoin).

G

Gas / Gas Fees

The fee paid to process a transaction on a blockchain, priced in the native token (gwei on Ethereum). Fees rise with network congestion; Layer 2s exist largely to make gas cheap.

Gwei

The unit used to price Ethereum gas — one billionth of an ETH. '30 gwei' is a typical transaction price in quiet times.

H

Halving

Bitcoin's programmed event, roughly every four years, that cuts the block reward miners receive in half. It enforces Bitcoin's 21-million supply cap.

Hardware Wallet

A dedicated offline device (Ledger, Trezor, BitBox02) that stores private keys and signs transactions without exposing them to your computer. The gold standard for self-custody.

Hash

The fixed-length fingerprint of any data, produced by a cryptographic function. Blockchains chain blocks by their hashes — altering one changes every hash after it.

Hot Wallet

A wallet whose keys live on an internet-connected device (browser extension, mobile app). Convenient for everyday use; strictly for amounts you can afford to risk.

I

Impermanent Loss

The shortfall a liquidity provider experiences versus simply holding, when pooled asset prices diverge. It's 'impermanent' only if prices return — if you withdraw while diverged, the loss is real.

K

KYC (Know Your Customer)

Identity verification required by regulated exchanges — ID, address, sometimes source-of-funds. Centralised finance has KYC; DeFi generally doesn't.

L

Layer 1 / Layer 2

Layer 1s are base blockchains (Bitcoin, Ethereum, Solana). Layer 2s are scaling networks built on top (Arbitrum, Base, Optimism) that inherit security while making transactions cheap and fast.

Liquidity

How easily an asset can be traded without moving its price. Deep liquidity means tight spreads and reliable fills; thin liquidity means slippage and manipulation.

Liquidity Pool

A smart contract holding paired assets that traders swap against. Depositors earn fees but face impermanent loss when prices diverge.

M

Market Cap

Price × circulating supply — the standard way to size an asset. A big market cap means scale, not safety.

Mempool

The waiting room of unconfirmed transactions. Watch it on Mempool.space to understand fee dynamics and confirmation times.

Mining

Proof-of-work's competition to find the next block, securing the network with real-world energy (Bitcoin). 'Miners' get block rewards and fees.

Mnemonic / Seed Phrase

The 12–24 word human-readable backup of a wallet's private keys. Whoever has the words controls the funds. Write it on paper or steel, never store it digitally, never share it — with anyone, ever.

Multisig (Multi-signature)

A wallet requiring multiple keys to sign transactions (e.g. 2-of-3). A compromised single key can't move funds — the standard for large holdings and organisations (Safe is the leading implementation).

N

NFT (Non-Fungible Token)

A unique, non-interchangeable token representing ownership of a specific item — art, collectibles, domains, memberships. Most of the 2021 NFT market proved worthless; the technology persists.

Node

A computer running blockchain software that verifies and relays transactions. Running your own node (or using a wallet that talks to one) is the maximal-privacy option.

Nonce

A transaction counter per address that prevents replay. In practical terms: a number you rarely see but that keeps the ledger unambiguous.

O

On-chain / Off-chain

On-chain: recorded on the blockchain itself, permanent and verifiable. Off-chain: happening outside it (exchange order books, company databases). 'Check it on-chain' is the research reflex.

Oracle

A service that feeds real-world data (prices) into smart contracts. Manipulated oracles have enabled some of DeFi's biggest exploits — an invisible but critical dependency.

P

P2P (Peer-to-Peer)

Direct exchange between individuals without an intermediary — Bisq is the canonical crypto P2P exchange, using escrow instead of custody.

Private Key

The secret number that controls a wallet. The seed phrase derives all private keys. Possession of the private key is ownership of the funds — this is why 'your keys, your coins' is literal.

Proof of Reserves (PoR)

A cryptographic demonstration that an exchange actually holds the assets it claims. Verifiable PoR reports are the modern standard — exchanges without them are asking for blind trust.

Proof of Stake (PoS)

Consensus where validators lock ('stake') tokens to secure the network and earn rewards, rather than burning energy (Ethereum since 2022).

Proof of Work (PoW)

Consensus where miners expend real computational work to secure the network (Bitcoin). Expensive to attack, energy-intensive by design.

Public Key

Derived from the private key; used to generate your address. Sharing it is safe — it's the half that can only receive.

R

Rug Pull

A project whose creators abruptly drain its liquidity or vanish with investor funds. Check liquidity locks, team identities and audits before touching new projects.

S

Satoshi (sat)

The smallest unit of Bitcoin — one hundred-millionth of a BTC. 'Stacking sats' is the community's term for accumulating.

Slippage

The difference between the price you expect and the price you get, caused by moving the market or thin liquidity. Set slippage tolerances carefully — but beware fake tokens when it's set too high.

Smart Contract

Program code that runs on a blockchain and executes automatically when conditions are met. The foundation of DeFi — and the attack surface of DeFi.

Stablecoin

A token designed to hold a steady value, usually pegged to a dollar (USDC, USDT) or algorithmically stabilised. Centralised stablecoins depend on reserves; check who issues and audits them.

Staking

Locking tokens to secure a proof-of-stake network in exchange for rewards. Solo staking (32 ETH), pooled staking (Rocket Pool) and liquid staking (Lido's stETH) are the main flavours.

T

TVL (Total Value Locked)

The total value of assets deposited in a protocol or chain — the standard size metric of DeFi. DeFiLlama is the authoritative tracker.

V

Validator

A proof-of-stake node operator who proposes and attests to blocks, earning rewards and risking slashing (penalties) for misbehaviour.

Volatility

How much an asset's price moves. Crypto is among the most volatile asset classes — position sizes should assume a 50% drawdown is always possible.

W

Wallet

Software or hardware that manages the keys controlling your assets. Wallets don't hold coins — they hold the keys that do.

Web3

The umbrella term for the decentralised internet built on blockchains: tokenised apps, identity, payments and ownership.

Whitelist

Two meanings: (1) a pre-approved list for a mint/presale; (2) a security feature where an exchange only allows withdrawals to pre-approved addresses. The second one is the one you should enable.

Whitepaper

A project's founding document describing its design and economics. Read it before investing — then verify the project actually built what the paper promised.

Y

Yield Farming

Strategically moving funds between DeFi protocols to chase the highest yields. Rewards come from emissions and fees — and the highest yields carry the highest risk of collapse.