Blockchain & Crypto Glossary

AddressA public identifier (like an account number) derived from a public key, used to receive crypto.

AirdropFree distribution of tokens to wallets, often to reward early users or market a project.

AltcoinAny cryptocurrency other than Bitcoin.

AMMAutomated Market Maker — a DEX model where prices are set by a formula over liquidity pools (Uniswap, Curve).

APYAnnual Percentage Yield — return per year including compounding.

ASICSpecialised mining hardware built for one hashing algorithm.

Bear marketA prolonged period of falling prices and pessimism.

BitcoinThe first cryptocurrency (2009); a Proof-of-Work blockchain with a 21M supply cap.

BlockA batch of transactions added to the chain, linked to the previous block by its hash.

Block explorerA website for reading blockchain data (Etherscan, Mempool.space, Solscan).

BlockchainA distributed ledger of blocks linked by cryptographic hashes and maintained by consensus.

BridgeA protocol that moves assets between blockchains; a frequent hack target.

Bull marketA prolonged period of rising prices and optimism.

BurnPermanently removing tokens from circulation by sending them to an unspendable address.

CEXCentralised exchange — a company that custodies your coins and matches trades (Coinbase, Binance).

Cold walletA wallet whose keys never touch an internet-connected device (hardware wallet, paper).

ConsensusThe mechanism by which nodes agree on the ledger's state (Proof of Work, Proof of Stake).

Cost basisWhat you paid for an asset, used to calculate taxable gains.

CustodialA service that holds your keys on your behalf (exchanges). Opposite: self-custody.

DAODecentralised Autonomous Organisation — a group governed by token votes and smart contracts.

DAppDecentralised application — software whose backend runs on smart contracts.

DCADollar-cost averaging — buying a fixed amount at regular intervals.

DeFiDecentralised finance — lending, trading and other financial services run by smart contracts.

DEXDecentralised exchange — trading directly from your wallet via smart contracts (Uniswap, Jupiter).

DifficultyHow hard it is to mine a block; adjusts to keep block times stable.

ERC-20The Ethereum standard for fungible tokens.

ERC-721The Ethereum standard for NFTs.

ETFExchange-traded fund — a stock-market product that holds an asset (spot BTC/ETH ETFs).

EthereumA smart-contract blockchain (2015); the largest DeFi and NFT ecosystem.

EVMEthereum Virtual Machine — the runtime for smart contracts, also used by many other chains.

FiatGovernment-issued currency (USD, EUR, INR).

FinalityThe point after which a transaction cannot be reversed.

FOMOFear of missing out — emotional buying during rallies.

ForkA change to protocol rules; a hard fork can split a chain (Bitcoin/Bitcoin Cash).

GasThe fee paid to execute transactions or contracts on Ethereum-style chains.

GweiOne billionth of an ETH; the unit gas prices are quoted in.

HalvingThe scheduled 50% cut to Bitcoin's block reward every ~210,000 blocks (~4 years).

HashA fixed-length fingerprint of data; tiny input changes produce completely different hashes.

Hash rateTotal computing power securing a Proof-of-Work network.

HODLSlang for holding long term regardless of volatility.

Hot walletA wallet on an internet-connected device (browser extension, mobile app).

Impermanent lossThe shortfall a liquidity provider suffers versus simply holding when prices diverge.

KYCKnow Your Customer — identity verification required by regulated exchanges.

Layer 1A base blockchain that settles its own transactions (Bitcoin, Ethereum, Solana).

Layer 2A network that processes transactions off-chain and posts proofs/data to a Layer 1 (Arbitrum, Base).

Liquid stakingStaking via a protocol that issues a tradable receipt token (stETH).

LiquidationForced sale of collateral when a loan's health factor falls below the threshold.

LiquidityHow easily an asset can be traded without moving the price.

Liquidity poolTokens locked in a smart contract to enable trading on an AMM.

MainnetThe live production network, as opposed to a testnet.

Market capPrice multiplied by circulating supply.

MempoolThe waiting room of unconfirmed transactions.

MiningAdding blocks to a Proof-of-Work chain by solving a hash puzzle for a reward.

MultisigA wallet requiring multiple signatures to spend (e.g., 2 of 3 keys).

NFTNon-fungible token — a unique token representing ownership of a specific item.

NodeA computer running blockchain software that validates and relays transactions.

NonceA number used once; in mining, the value changed to search for a valid hash.

OracleA service that feeds off-chain data (prices) to smart contracts (Chainlink).

PerpetualsDerivatives contracts with no expiry, used for leveraged trading.

PhishingTricking a user into revealing keys or signing malicious transactions via fake sites or messages.

Private keyThe secret number that signs transactions; whoever holds it controls the funds.

Proof of ReservesAn audit showing an exchange holds the assets it owes customers.

Proof of StakeConsensus where validators lock coins as collateral; misbehaviour is penalised (slashing).

Proof of WorkConsensus where miners expend energy to add blocks; attacking costs more than it pays.

Public keyDerived from the private key; used to generate addresses and verify signatures.

RollupA Layer-2 that bundles many transactions and posts compressed data or proofs to Layer 1.

Rug pullA scam where developers abandon a project after taking investor funds.

SatoshiThe smallest unit of Bitcoin (0.00000001 BTC); also Bitcoin's pseudonymous creator.

Seed phrase12–24 words that regenerate all keys in a wallet; the ultimate backup and the ultimate risk.

SequencerThe entity that orders transactions on a rollup; usually centralised today.

ShardingSplitting a blockchain's data or execution into parallel pieces to scale.

SlashingDestroying part of a validator's stake as a penalty for misbehaviour.

SlippageThe difference between expected and executed trade price.

Smart contractCode deployed on a blockchain that executes automatically when called.

SolanaA high-throughput Proof-of-Stake blockchain known for low fees and consumer apps.

StablecoinA token pegged to a fiat currency (USDC, USDT, DAI/USDS).

StakingLocking coins to help secure a Proof-of-Stake network in exchange for rewards.

TestnetA sandbox network with valueless coins for development.

TokenA digital asset issued on a blockchain, distinct from the chain's native coin.

TokenomicsA token's supply, issuance, distribution and utility design.

TPSTransactions per second — a throughput measure.

TVLTotal value locked — assets deposited in a DeFi protocol.

Two-factor authentication (2FA)A second login factor; use an authenticator app or hardware key, not SMS.

ValidatorA Proof-of-Stake participant that proposes and attests to blocks.

WalletSoftware or hardware that manages keys and signs transactions.

Web3The umbrella term for blockchain-based, user-owned internet applications.

WhaleAn entity holding enough of an asset to move its price.

WhitepaperA document describing a project's design and purpose; Bitcoin's is nine pages.

Yield farmingMoving capital between DeFi protocols to maximise rewards.

ZK proofZero-knowledge proof — cryptographic proof that a statement is true without revealing the data; powers ZK rollups.