Glossary
Terms you meet in the news and in our articles. Term links in articles lead here.
- Address
- A string, usually derived from a public key, to which cryptocurrency can be sent. It is safe to share an address with others. Read more: Crypto Wallets: Hot and Cold
- Airdrop
- A free distribution of tokens to users, for example as a reward for using a protocol. Scammers often disguise malicious links as airdrops. Read more: How to Spot a Crypto Scam
- Altcoin
- Any cryptocurrency other than bitcoin. Read more: Bitcoin Dominance Explained
- Automated market maker (AMM)
- A decentralized exchange mechanism where prices are set by a formula based on the ratio of tokens in a liquidity pool rather than by matching buy and sell orders. Read more: Exchanges: CEX vs DEX
- Bitcoin (BTC)
- The first decentralized cryptocurrency, launched in 2009. Its total supply is capped at 21 million coins. Read more: What Is Bitcoin
- Block
- A batch of confirmed transactions added to a blockchain. On the Bitcoin network a new block is produced roughly every 10 minutes on average. Read more: Blockchain
- Blockchain
- A distributed ledger in which records are grouped into blocks that are cryptographically linked to one another. Data already recorded is practically impossible to change without the network's consensus. Read more: Blockchain
- BTC dominance
- Bitcoin's share of the total market capitalization of the crypto market, expressed as a percentage. Read more: Bitcoin Dominance Explained
- CBDC
- A digital form of a national currency issued by a central bank. Unlike cryptocurrencies, it is centralized and controlled by the state.
- Centralized exchange (CEX)
- A crypto exchange run by a company that holds users' funds and matches orders in its own internal order book. Read more: Exchanges: CEX vs DEX
- Cold wallet
- A wallet whose keys are kept offline, for example on a hardware device or paper. This reduces the risk of remote hacking. Read more: Crypto Wallets: Hot and Cold
- CPI (Consumer Price Index)
- A measure of price changes for a basket of goods and services and the main gauge of inflation. US CPI data is released monthly.
- Cross-chain bridge
- A protocol for moving assets between different blockchains. Bridges have repeatedly been targets of major hacks. Read more: Layer 2 Solutions
- DAO
- A decentralized autonomous organization: a community that governs a project through token-holder votes, with decisions executed by smart contracts. Read more: What Is DeFi
- Decentralized exchange (DEX)
- An exchange that runs on smart contracts, letting users trade directly from their own wallets without handing funds to an intermediary. Read more: Exchanges: CEX vs DEX
- DeFi (decentralized finance)
- Financial services such as trading, lending and deposits that run on smart contracts without banks or other intermediaries. Read more: What Is DeFi
- ERC-20
- The standard for fungible tokens on Ethereum. It defines a common set of functions so wallets and exchanges can handle any such token the same way. Read more: Ethereum and Smart Contracts
- ETF (exchange-traded fund)
- A fund whose shares trade on a stock exchange and track the price of an asset or index. Read more: Bitcoin ETFs Explained
- Ethereum (ETH)
- A blockchain platform for smart contracts and decentralized applications, whose native coin is ETH (ether). Since 2022 the network has run on Proof of Stake. Read more: Ethereum and Smart Contracts
- Expiry
- The date and time when a dated contract, such as a futures or options contract, settles and ceases to exist. Read more: Open Interest Explained
- Fear and Greed Index
- A crypto market sentiment gauge on a scale from 0 (extreme fear) to 100 (extreme greed), calculated from several market data points. Read more: The Crypto Fear and Greed Index
- FOMC
- The US Federal Reserve committee that sets the benchmark interest rate. Its meetings often coincide with higher market volatility.
- Fork
- A change to a blockchain's protocol rules. A hard fork is incompatible with the old rules and can split the network in two, while a soft fork stays backward-compatible. Read more: Blockchain
- Funding rate
- A periodic payment between long and short holders of perpetual futures. When it is positive, longs pay shorts; when negative, shorts pay longs. Read more: Funding Rates and Perpetual Futures
- Futures
- A contract to buy or sell an asset at a pre-agreed price at a future date. It lets traders bet on price changes without owning the asset. Read more: Funding Rates and Perpetual Futures
- Gas
- A unit measuring computational work on Ethereum and similar networks. The transaction fee equals the gas used multiplied by the gas price. Read more: Gas and Transaction Fees
- Gwei
- A fraction of ether commonly used to quote gas prices: 1 gwei = 10⁻⁹ ETH. Read more: Gas and Transaction Fees
- Halving
- A scheduled cut in half of the block reward paid to Bitcoin miners. It happens every 210,000 blocks, roughly every four years. Read more: What Is the Bitcoin Halving
- Hardware wallet
- A dedicated physical device that stores private keys and signs transactions internally, without exposing the keys to a computer or phone. Read more: Crypto Wallets: Hot and Cold
- Hash
- The output of a hash function: a fixed-length string uniquely derived from the input data. Even the slightest change to the input produces a completely different hash. Read more: Blockchain
- Hash rate
- The total computing power miners devote to finding blocks. The higher the hash rate, the more expensive it is to attack the network. Read more: Mining and Proof of Stake
- Hot wallet
- A wallet whose keys are kept on an internet-connected device, such as an app, a browser extension or an exchange. Convenient for frequent use but more exposed to attacks. Read more: Crypto Wallets: Hot and Cold
- KYC (Know Your Customer)
- The process of verifying a user's identity with documents. It is typically required by regulated centralized exchanges. Read more: Exchanges: CEX vs DEX
- Layer 2 (L2)
- A network or protocol built on top of a main blockchain that processes transactions separately and relies on the main chain for security. The goal is faster and cheaper transactions. Read more: Layer 2 Solutions
- Lending protocol
- A DeFi service where some users deposit assets to earn interest and others borrow them against collateral, usually worth more than the loan. Read more: What Is DeFi
- Leverage
- Opening a position larger than your own collateral using borrowed funds. Leverage magnifies both gains and losses and brings the liquidation price closer. Read more: Liquidations: How and Why Positions Get Closed
- Liquidation
- The forced closing of a leveraged position by an exchange or protocol when the collateral is no longer enough to cover losses. Read more: Liquidations: How and Why Positions Get Closed
- Liquidity pool
- A set of tokens locked in a smart contract that traders swap against on a DEX. Liquidity providers receive a share of the trading fees. Read more: Exchanges: CEX vs DEX
- Long position
- A position that gains when the asset's price rises and loses when it falls. Read more: Liquidations: How and Why Positions Get Closed
- Margin
- The collateral a trader posts to open and maintain a leveraged position. If the margin becomes insufficient, the position may be liquidated. Read more: Liquidations: How and Why Positions Get Closed
- Market capitalization
- A coin's current price multiplied by the number of coins in circulation. Read more: Bitcoin Dominance Explained
- Mempool
- The queue of transactions that have been broadcast but not yet included in a block. When the mempool is congested, fees tend to rise. Read more: Gas and Transaction Fees
- Mining
- The process of producing new blocks on Proof of Work networks: miners spend computing power and are rewarded with newly issued coins and transaction fees. Read more: Mining and Proof of Stake
- NFT (non-fungible token)
- A unique token on a blockchain that records ownership of a specific digital item, such as an image or an in-game asset. Read more: What Is an NFT
- Node
- A computer that keeps a copy of the blockchain, verifies transactions and blocks, and relays them to other participants in the network. Read more: Blockchain
- Open interest
- The total amount of derivative contracts, such as futures or options, on an asset that are open and not yet closed. Read more: Open Interest Explained
- Options
- A contract giving the right, but not the obligation, to buy (call) or sell (put) an asset at a set price by a certain date. Read more: Open Interest Explained
- Oracle
- A service that brings external data, such as asset prices, onto a blockchain so smart contracts can use it. Read more: What Is DeFi
- Order book
- A list of current buy and sell orders for an asset with their prices and sizes. A trade occurs when opposing orders match on price. Read more: Exchanges: CEX vs DEX
- Perpetual futures
- A futures contract with no expiry date. Its price is kept close to the spot price through periodic funding payments between buyers and sellers. Read more: Funding Rates and Perpetual Futures
- Phishing
- A scam that tricks victims into revealing a seed phrase or password, or signing a harmful transaction, using fake websites, emails and messages. Read more: How to Spot a Crypto Scam
- Private key
- A secret number used to sign transactions that gives full control over the funds at an address. Whoever knows the private key controls the coins. Read more: Crypto Wallets: Hot and Cold
- Proof of Stake (PoS)
- A consensus mechanism in which blocks are produced by validators who lock up coins as collateral. Part of that stake can be slashed for breaking the rules. Read more: Mining and Proof of Stake
- Proof of Work (PoW)
- A consensus mechanism in which the right to add a block goes to the participant who first solves a computational puzzle. Used by Bitcoin. Read more: Mining and Proof of Stake
- Public key
- A key mathematically derived from the private key that the network uses to verify signatures. The private key cannot be recovered from it. Read more: Crypto Wallets: Hot and Cold
- Pump and dump
- A manipulation scheme in which organizers artificially inflate an asset's price and then sell to buyers drawn in by the hype. Read more: How to Spot a Crypto Scam
- Rollup
- A type of layer 2 that bundles many transactions and posts their summarized data to the main chain. The main varieties are optimistic rollups and zk-rollups. Read more: Layer 2 Solutions
- Rug pull
- A scam in which a project's creators suddenly withdraw the liquidity or investors' funds and disappear. Read more: How to Spot a Crypto Scam
- Satoshi
- The smallest unit of bitcoin: 1 BTC = 100,000,000 satoshis. Named after Satoshi Nakamoto, the creator of Bitcoin. Read more: What Is Bitcoin
- Seed phrase
- A list of 12 or 24 words (BIP-39 standard) from which all of a wallet's keys can be restored. Anyone who knows the seed phrase has full access to the funds. Read more: Seed Phrase and How to Keep It Safe
- Short position
- A position that gains when the asset's price falls and loses when it rises. Read more: Liquidations: How and Why Positions Get Closed
- Smart contract
- A program deployed on a blockchain that executes automatically according to predefined rules. Bugs in its code can lead to loss of funds. Read more: Ethereum and Smart Contracts
- Spot ETF
- An ETF that holds the underlying asset itself, such as bitcoin, rather than futures on it. Spot bitcoin ETFs began trading in the US in January 2024. Read more: Bitcoin ETFs Explained
- Stablecoin
- A token whose price is pegged to an external asset, most often the US dollar. The peg is maintained by reserves or algorithms and is not absolutely guaranteed. Read more: Stablecoins
- Staking
- Locking up coins to take part in securing a Proof of Stake network, either directly or through a service. Rewards are not guaranteed and funds may be inaccessible for a period of time. Read more: Mining and Proof of Stake
- Token
- A digital asset issued on top of an existing blockchain via a smart contract, as opposed to the network's native coin. Read more: Ethereum and Smart Contracts
- Token approval
- Permission a user grants a smart contract to spend certain tokens from their wallet. Unlimited approvals to malicious contracts are a common cause of theft. Read more: How to Spot a Crypto Scam
- Token unlock
- The moment when previously locked tokens held by a project's team, investors or treasury become transferable under a vesting schedule.
- Transaction
- A transfer of funds or a smart-contract call signed with the sender's private key. It is considered confirmed once it is included in a block. Read more: Blockchain
- TVL (total value locked)
- The total value of assets deposited in a protocol's or network's smart contracts. Used as a rough measure of DeFi activity. Read more: What Is DeFi
- Validator
- A participant in a Proof of Stake network who has posted a stake of coins, proposes and attests to blocks, and earns rewards for doing so. Read more: Mining and Proof of Stake
- Volatility
- How much an asset's price fluctuates over a period of time. High volatility means sharp price moves in both directions.
- Wallet
- Software or a device that stores keys and lets you send and receive cryptocurrency. The coins themselves are recorded on the blockchain, not inside the wallet. Read more: Crypto Wallets: Hot and Cold
- Whale
- A market participant holding so much cryptocurrency that their trades can noticeably move the price.
- Yield farming
- Depositing tokens into DeFi protocols to earn rewards in fees or protocol tokens. It carries smart-contract and price risks. Read more: What Is DeFi