๐ Cryptocurrency Glossary – Essential Terms You Need to Know
Cryptocurrency is a fast-evolving field full of unique terminology. Whether you're a beginner or an experienced user, this glossary will help you understand the key terms used in the world of crypto, blockchain, and Web3.
๐น General Cryptocurrency Terms
- Cryptocurrency – A digital or virtual currency secured by cryptography, often decentralized.
- Blockchain – A distributed digital ledger that records transactions across multiple computers.
- Decentralization – The distribution of authority away from a central point or institution.
- Token – A digital asset that represents ownership or utility on a blockchain.
- Altcoin – Any cryptocurrency that is not Bitcoin.
- Stablecoin – A cryptocurrency pegged to a stable asset, like the US dollar.
- Fiat – Traditional government-issued currency like USD, EUR, or AZN.
- Public Key – A cryptographic code used to receive funds.
- Private Key – A secret code that allows you to access and manage your crypto.
- Wallet – A software or hardware tool that stores your private/public keys and manages your crypto.
- Cold Wallet – A wallet not connected to the internet; more secure.
- Hot Wallet – A wallet connected to the internet; more convenient but less secure.
- Seed Phrase – A series of words used to recover your crypto wallet.
- Gas Fee – A transaction fee paid to miners or validators for processing transactions.
- Hash – A cryptographic function that turns input data into a fixed-length output.
- Consensus – A method for blockchain participants to agree on the state of the network.
- Node – A participant in the blockchain network that maintains a copy of the ledger.
- Fork – A split in a blockchain network, creating a new chain.
- Hard Fork – A major, incompatible change in the protocol.
- Soft Fork – A backward-compatible protocol update.
- Mining – The process of validating transactions and creating new blocks (usually PoW).
- Staking – Locking up crypto to support network security and earn rewards.
- Validator – A node that verifies and confirms transactions on a blockchain.
- Smart Contract – A self-executing contract with terms directly written into code.
- dApp – Decentralized application that runs on a blockchain network.
- DAO – Decentralized Autonomous Organization, governed by rules encoded as smart contracts.
๐ Trading & Market Terms
- Exchange – A platform to buy, sell, or trade crypto assets.
- Centralized Exchange (CEX) – A crypto exchange managed by a centralized company.
- Decentralized Exchange (DEX) – A peer-to-peer platform for crypto trading without intermediaries.
- Market Cap – The total value of a cryptocurrency (price × circulating supply).
- Volume – The amount of crypto traded in a given period.
- Liquidity – How easily an asset can be bought/sold without affecting its price.
- Slippage – The difference between expected and actual trade price.
- Spread – The difference between the buy and sell price of an asset.
- Order Book – A list of buy and sell orders on an exchange.
- Limit Order – An order to buy/sell at a specific price.
- Market Order – An order to buy/sell immediately at the best available price.
- Stop-Loss – A trade order that automatically sells at a specified price to limit losses.
- Take Profit – A trade order that automatically sells when a target price is reached.
- Long – Betting that an asset’s price will rise.
- Short – Betting that an asset’s price will fall.
- Leverage – Using borrowed funds to amplify trading gains or losses.
- Margin Trading – Trading using borrowed money from a broker or platform.
- Pump and Dump – Coordinated price inflation followed by mass sell-off.
- HODL – A slang term for holding onto crypto rather than selling.
- FOMO – “Fear Of Missing Out,” causing impulsive buying.
- FUD – “Fear, Uncertainty, Doubt,” often spread to cause panic selling.
- Whale – Someone who holds a large amount of cryptocurrency.
- Bagholder – A person holding a crypto asset after it has fallen significantly in value.
- ATH (All-Time High) – The highest price ever reached by an asset.
- ATL (All-Time Low) – The lowest price ever reached by an asset.
๐ธ DeFi (Decentralized Finance) Terms
- DeFi – Financial services built on blockchain that don't rely on banks.
- AMM (Automated Market Maker) – A protocol for trading crypto using liquidity pools instead of order books.
- Liquidity Pool – A pool of crypto assets used to facilitate decentralized trading.
- Yield Farming – Earning rewards by providing liquidity or staking in DeFi protocols.
- Impermanent Loss – A potential loss from providing liquidity when token prices diverge.
- Flash Loan – An uncollateralized loan that must be repaid within one transaction.
- TVL (Total Value Locked) – The total amount of crypto assets locked in DeFi platforms.
- Lending Protocol – A DeFi platform that allows users to borrow/lend crypto assets.
- Governance Token – A token that gives holders the right to vote on protocol decisions.
๐จ NFT & Web3 Terms
- NFT (Non-Fungible Token) – A unique digital asset stored on a blockchain.
- Minting – The process of creating a new NFT.
- Metadata – Data describing the content of an NFT (name, image, properties).
- Floor Price – The lowest price at which an NFT in a collection is listed.
- Royalties – Ongoing payments to original creators from NFT resales.
- Marketplace – A platform for buying/selling NFTs.
- Web3 – The next generation of the internet, based on decentralization and blockchain.
- Metaverse – A shared virtual space where users interact with digital assets and environments.
- Play-to-Earn – Games that allow users to earn crypto or NFTs through gameplay.
๐ก️ Security & Risk Terms
- Rug Pull – A scam where developers abandon a project and steal investor funds.
- Phishing – Fraudulent attempts to obtain sensitive information.
- Dusting Attack – A method of tracking wallets by sending small amounts of crypto.
- Sybil Attack – A type of attack where the network is flooded with fake identities.
- 51% Attack – An attack where a group controls over half the network’s computing power.
- Exploit – Taking advantage of bugs or vulnerabilities in code.
- Multisig – Multi-signature wallets requiring approval from multiple parties.
- KYC (Know Your Customer) – Verification process requiring users to submit identification.
- AML (Anti-Money Laundering) – Regulations to prevent illegal financial activities.
- Front-Running – Executing a trade based on knowledge of a pending transaction.
- MEV (Maximal Extractable Value) – Profits miners/validators can earn through transaction ordering.