Crypto Glossary

401 plain-English definitions of the terms you will meet when buying and holding cryptocurrency. Each entry opens with a one-sentence definition.

ABI (application binary interface): The published description of a contract's functions and their argument types, which lets external software encode a call the contract will understand.
account abstraction: A design that lets a crypto wallet be a programmable smart contract instead of a plain key pair, so it can carry spending limits, recovery rules, and fees paid by someone else.
ACH transfer: A United States bank transfer network that exchanges use for free or low-cost dollar deposits, usually clearing in one to three business days.
address: A unique string of characters that identifies where cryptocurrency can be sent on a blockchain.
address book: A saved list of withdrawal destinations on an exchange account, usually with a delay or an extra confirmation before a new entry can be used.
address poisoning: A scam in which an attacker sends a tiny or zero-value transfer from an address that closely resembles one you use, hoping you will later copy the wrong address out of your transaction history.
air-gapped wallet: A wallet kept on a device that never connects to the internet, signing transactions offline and passing them out by QR code, memory card, or cable.
airdrop: A distribution of free tokens to wallet holders, usually to reward early users or promote a new project.
airdrop farming: Using a protocol deliberately to qualify for a token distribution that has not been announced or specified.
algorithmic stablecoin: A stablecoin that tries to hold its price using supply rules or a paired token rather than holding reserves worth the tokens issued.
all-time high (ATH): The highest price an asset has ever traded at, quoted per exchange and per currency, with the all-time low as its mirror.
altcoin: Any cryptocurrency other than Bitcoin.
AML (anti-money laundering): Laws and procedures requiring financial businesses, including crypto exchanges, to detect and report suspicious transactions.
API key: A credential that lets a program trade or read data on your exchange account without your password.
API key permissions: The specific rights attached to an exchange API key, typically read-only, trading, and withdrawal, each of which can usually be granted separately.
approval revocation: The act of withdrawing a spending permission you previously granted a smart contract, so it can no longer move that token from your wallet.
APY (annual percentage yield): The annualized return on a deposit including compounding.
archive node: A node that keeps every historical state of the chain, not just the current one, so it can answer what a balance or contract variable was at any past block.
asset-referenced token (ART): Under European Union rules, a crypto-asset that stabilizes its value by referencing several currencies, commodities, other crypto-assets, or a basket of them, rather than one official currency.
atomic swap: A direct exchange of coins between two parties on different chains that either completes fully for both or not at all, enforced by cryptography rather than by a custodian.
attestation: A report in which an accounting firm checks a company's own statement about its holdings at a chosen moment, under standards weaker than a full audit.
auto-deleveraging (ADL): A last-resort mechanism in which a derivatives exchange force-closes profitable traders' positions to cover losses it cannot otherwise absorb.
automated market maker (AMM): A smart contract that prices trades from the ratio of assets held in a pool instead of matching buyers and sellers on an order book.
backwardation: A market condition in which futures trade below the spot price, the mirror image of contango.
base fee: The mandatory per-unit gas price an Ethereum block must pay, set by the protocol from how full recent blocks were and destroyed rather than paid to anyone.
basis: The difference between a derivative's price and the spot price of the asset it tracks, usually quoted as a percentage of spot.
basis point (bp): One hundredth of a percentage point, so 50 basis points is 0.50% and 100 basis points is 1%.
beacon chain: Ethereum's consensus layer, which tracks validators, assigns block proposals, and finalizes the chain.
bear market: An extended period of falling prices, informally defined as a decline of 20% or more from recent highs.
bid / ask: The bid is the highest price a buyer is currently willing to pay and the ask is the lowest price a seller will accept.
BIP-39: The Bitcoin Improvement Proposal that defines the 12- or 24-word recovery phrase, drawn from a fixed list of 2,048 words, that most wallets now use.
Bitcoin (BTC): The first and largest cryptocurrency, launched in 2009 as a peer-to-peer digital cash system with a fixed supply of 21 million coins.
Bitcoin halving: The scheduled event, every 210,000 blocks or roughly every four years, that cuts the reward paid to Bitcoin miners in half.
blind signing: Approving a transaction whose contents your wallet cannot decode, so you see raw data rather than what it will do.
blob transaction: An Ethereum transaction type introduced by EIP-4844 that carries a large chunk of data priced in its own fee market and deleted by nodes after a fixed retention window.
block: A batch of transactions recorded together on a blockchain.
block explorer: A website that lets anyone look up transactions, addresses, and blocks on a public blockchain.
block height: The number of blocks between a given block and the genesis block, used as the chain's clock.
block proposer: The single validator selected for a given slot and permitted to publish a block in it.
block reward: The new coins a blockchain pays to whoever adds the next block, plus the transaction fees inside it.
block subsidy: The newly created coins paid to whoever mines a block, separate from the transaction fees also collected in that block.
blockchain: A distributed ledger that records transactions in linked blocks, maintained by a network of computers rather than a central authority.
bonding curve: A formula written into a contract that sets a token's price as a function of how many units exist, so buying mints new supply at a rising price and selling burns supply at a falling one.
bootnode: A well-known, long-running node whose address ships with client software so a new node has somewhere to ask for peers when it first starts.
BRC-20: An experimental token standard that stores balances as JSON text inscribed on individual satoshis, so transfers are interpreted by indexers rather than enforced by Bitcoin.
bridge: A service that moves an asset from one blockchain to another, usually by locking it on the source chain and issuing a wrapped version on the destination.
broker: A platform that lets you buy and sell crypto at a quoted price rather than on an open order book.
bull market: An extended period of rising prices.
burn: The permanent removal of tokens from circulation by sending them to an address no one controls.
buyback and burn: A program in which a project uses revenue to purchase its own token on the open market and permanently destroy the purchased units.
calldata: The read-only input data sent with a transaction, holding the function being called and its arguments.
candlestick: A chart element showing an asset's opening, closing, high, and low price over a fixed period.
canonical bridge: The official bridge for a rollup or sidechain, operated as part of the chain's own protocol, through which assets enter and leave with the chain's own security assumptions.
capital gains: The profit or loss from selling an asset for more or less than you paid, which is what most tax systems charge on a crypto disposal.
CARF: The Crypto-Asset Reporting Framework, an OECD standard under which crypto service providers report user transaction data to their tax authority for exchange with the user's country of residence.
CASP (crypto-asset service provider): The European Union's regulatory category, defined by the Markets in Crypto-Assets Regulation, for firms offering services such as custody, exchange, order execution, or transfer of crypto-assets.
CEX (centralized exchange): An exchange operated by a company that holds customer funds, matches trades, and complies with regulation.
chain analysis: The practice of clustering addresses and tracing flows to attribute on-chain activity to real entities, sold as software to exchanges, banks, and law enforcement.
chain ID: A number that identifies which chain a transaction is valid on, included in the signature so the same signed transaction cannot be replayed elsewhere.
chain reorganization (reorg): An event in which a blockchain discards recently added blocks and replaces them with a longer competing chain, undoing the transactions they held.
chargeback: A card payment reversed by the issuing bank at the cardholder's request, which is why exchanges treat card deposits as high risk.
checkpoint: A block that the network treats as settled, after which reversing it requires more than out-competing later blocks.
child pays for parent (CPFP): A fee trick in which you spend the output of a stuck transaction in a new, high-fee transaction, so a miner must include both to collect the second one's fee.
circuit breaker: A rule that pauses trading automatically when a price moves beyond a set threshold in a set period, to interrupt a disorderly market.
circulating supply: The number of coins or tokens currently issued and freely tradable, excluding amounts that are locked, reserved, or not yet created.
client diversity: The spread of a network's nodes across independently written software implementations, so a bug in one does not stop or split the chain.
clipboard malware: Software on a compromised device that watches for a copied crypto address and silently swaps it for the attacker's before you paste.
coin control: Choosing which specific unspent outputs a transaction spends, instead of letting the wallet pick.
coinbase transaction: The first transaction in every block, created by the miner, which pays the block subsidy plus all fees in that block to an address of the miner's choosing.
CoinJoin: A collaborative Bitcoin transaction in which several people combine inputs and take equal-sized outputs, so no observer can say which output belongs to which participant.
cold storage: Holding the keys to crypto on a device or medium that has never touched an internet-connected machine.
cold storage ratio: The share of customer assets an exchange keeps in offline storage rather than in wallets connected to the internet.
cold wallet: A wallet whose private keys are kept on a device not connected to the internet, such as a hardware wallet.
collateralization ratio: The value of collateral you have posted divided by the value of what you have borrowed, expressed as a percentage.
compute unit: Solana's measure of the work a transaction performs, equivalent in role to gas on Ethereum.
concentrated liquidity: An automated market maker design that lets a liquidity provider commit capital to a chosen price range instead of the entire curve, earning far more fees per dollar while that range holds.
confirmation: A record that a transaction has been included in a block, with each additional block on top counting as another confirmation.
consensus: The mechanism a blockchain uses to agree on which transactions are valid without a central authority.
contango: A market condition in which futures trade above the spot price, usually because holders are willing to pay to hold exposure without owning the asset.
cooling-off period: A window after a security change, such as a new password, a new second factor, or a newly added withdrawal address, during which an exchange blocks withdrawals.
cost basis: The original value of an asset for tax purposes, usually the purchase price plus fees.
cost basis method (FIFO, LIFO, specific identification): The rule deciding which units you are treated as selling when you hold coins bought at different prices.
counterparty risk: The risk that the business holding your money or crypto fails, halts withdrawals, or turns out to be a fraud.
cross margin: A margin mode in which every position in an account draws on one shared pool of collateral.
cross-chain messaging: A protocol that carries instructions, not just tokens, from one blockchain to another, letting a contract on one chain trigger an action on a second.
crypto-backed stablecoin: A stablecoin issued against crypto collateral locked in a contract, always worth more than the debt it supports.
custodial: Describes a wallet or service where a third party controls the private keys on your behalf.
custodian: A regulated business that holds crypto keys for clients, often under a trust charter or an equivalent license.
custody insurance: A policy an exchange or custodian buys to cover theft of the crypto it holds, usually limited to hot-wallet balances and to the custodian's own failures.
DAC8: The European Union directive extending automatic exchange of tax information to crypto-asset transactions, requiring reporting providers to collect user tax residence details and report transactions to tax authorities that then share them across member states.
dApp: An application whose logic runs in smart contracts on a public blockchain rather than on a company's servers, with a website as the front end only.
data availability: The guarantee that the data behind a block has actually been published where anyone can retrieve it, which is what allows independent parties to verify or challenge the chain's state.
DeFi (decentralized finance): Financial services such as lending, borrowing, and trading built on blockchains using smart contracts instead of intermediaries.
delisting: The removal of an asset from an exchange, after which it can no longer be traded there.
delisting notice: The announcement that an exchange will stop supporting an asset, giving a date after which trading stops and a later deadline for withdrawals.
delta-neutral: A position built so that small moves in the underlying asset's price do not change its value, because a long and a short offset each other.
depeg: When an asset designed to track a fixed value, usually a dollar-pegged stablecoin, trades away from that value.
deposit address: The address an exchange issues for you to receive one specific asset on one specific network.
derivatives: Contracts whose value is based on an underlying asset's price rather than on owning the asset itself.
descriptor wallet: A wallet defined by a written formula that states exactly which keys and script types produce its addresses, rather than by an opaque internal key list.
devnet: A development network run by a project for its own testing, usually reset at will and less stable than a public test network.
DEX (decentralized exchange): An exchange that runs as smart contracts on a blockchain, matching trades directly between users' wallets without a company holding funds.
difficulty adjustment: The automatic change to Bitcoin's mining target every 2,016 blocks that keeps new blocks arriving roughly ten minutes apart.
dollar-cost averaging: Buying a fixed amount at regular intervals instead of all at once.
double spend: Spending the same coin twice, the problem a blockchain's consensus mechanism exists to prevent.
dust: An amount of crypto too small to move, because the network fee to send it would exceed its value.
dusting attack: Sending tiny amounts of crypto to many addresses so the sender can watch which of them later combine those amounts and reveal a shared owner.
e-money token (EMT): Under European Union rules, a crypto-asset that maintains a stable value by referencing a single official currency, the category most euro and dollar stablecoins fall into.
EIP (Ethereum Improvement Proposal): The numbered document format used to propose changes to Ethereum, from core protocol upgrades to application standards.
EIP-1559: The 2021 Ethereum change that replaced a blind fee auction with a protocol-set base fee that is burned, plus an optional tip to the proposer.
EIP-712: An Ethereum standard for signing structured data, so a wallet can show a readable list of fields instead of an unintelligible hash.
emission schedule: The published plan for how many new units of a token will be created over time and where they go.
epoch: A fixed block of time or blocks that a proof-of-stake network uses as its accounting unit, at whose boundaries it rotates validator duties, applies rewards, and finalizes earlier blocks.
ERC-1155: An Ethereum token standard that holds many token types in one contract and can transfer several of them in a single call.
ERC-20: The Ethereum standard defining how a fungible token reports balances and moves between addresses, followed by most tokens on Ethereum and on Ethereum-compatible chains.
ERC-4337: The specification that brought smart-contract wallets to Ethereum without changing the protocol, by routing intents called user operations through a shared entry-point contract.
ERC-721: The Ethereum standard for non-fungible tokens, in which every token has its own identifier and is owned individually rather than as a balance.
escrow: An arrangement in which a third party holds funds until both sides of a trade have met their obligations.
ETF (exchange-traded fund): A fund traded on a stock exchange that tracks the price of an asset.
Ethereum (ETH): The second-largest cryptocurrency and the dominant platform for smart contracts, defi, and tokens.
event log: A record a contract writes during execution to announce that something happened, cheaper to store than state and readable by outside software but not by contracts themselves.
EVM (Ethereum Virtual Machine): The execution environment that every Ethereum node runs, defining exactly how contract code changes state so that all nodes reach the same result.
exchange: A platform where cryptocurrencies are bought and sold.
exchange token: A token issued by an exchange that typically discounts trading fees, unlocks higher tiers, or grants access to sales on that platform.
exit queue: The rate-limited line a validator joins when it stops staking, which is why withdrawing staked ETH is not immediate.
FATF: The Financial Action Task Force, an intergovernmental body that sets the global standards countries use to write anti-money-laundering and counter-terrorist-financing law.
faucet: A service that hands out free test tokens so developers can pay fees on a test network.
FDV (fully diluted valuation): An asset's price multiplied by its maximum eventual supply rather than by its circulating supply.
fee switch: A governance-controlled setting that diverts part of a protocol's fee income from liquidity providers or users to the token treasury or to token holders.
fee tier: The schedule setting your trading fees by 30-day volume, and on some venues by how much of the exchange's own token you hold.
fiat: Government-issued currency such as the US dollar, euro, or pound.
fiat gateway: The part of an exchange, or a third-party provider plugged into it, that converts government currency into crypto through cards, bank transfers, and local payment rails.
fiat-backed stablecoin: A token whose issuer holds cash and short-term government debt one-for-one against tokens outstanding, and redeems tokens for currency on demand.
FIFO (first in, first out): A cost basis method that treats the earliest units you acquired as the first ones sold.
fill or kill (FOK): A time-in-force instruction that either executes the entire order immediately or cancels the whole thing.
finality: The point at which a confirmed transaction can no longer be reversed by the network.
financial promotion: A regulated communication inviting or inducing someone to engage in investment activity, which in the United Kingdom must be issued or approved by an authorized firm and carry prescribed risk warnings.
flash loan: An uncollateralized loan that must be borrowed and repaid inside a single transaction, which the protocol enforces by reverting everything if repayment fails.
float: The portion of a token's supply actually available to trade, as distinct from total supply locked in vesting, treasuries, or staking contracts.
fork: A change to a blockchain's rules.
Form 1099-DA: The United States tax form on which custodial brokers, including centralized exchanges, report a customer's digital asset sales to the Internal Revenue Service and to the customer.
Form 8949: The United States form on which individuals list each sale of a capital asset, including crypto, with dates, proceeds, and basis, before the totals carry to Schedule D.
fraud proof: A challenge submitted to a base chain demonstrating that a rollup's posted state transition was wrong, causing the network to reject it.
front-running: Placing a transaction ahead of a known pending one in order to profit from the price move it will cause.
full node: A node that downloads every block and independently checks every rule, keeping the current state without trusting anyone else's summary of it.
funding rate: A recurring payment exchanged between the long and short sides of a perpetual futures contract that pulls its price back toward spot.
futures: A contract to buy or sell an asset at a set price on a future date.
gas: The fee paid to a blockchain network to process a transaction.
gas limit: The maximum amount of computation you authorize a transaction to use, counted in gas units and set separately from the price paid per unit.
genesis block: The first block of a chain, written into the software rather than mined, from which every later block descends.
geoblocking: Blocking users in particular countries or states from a service, typically by internet address, registered residence, or the documents accepted at signup.
good til canceled (GTC): A time-in-force instruction that leaves an order resting on the book until it fills or you cancel it.
governance token: A token that gives holders a vote on changes to a protocol, such as fee levels or how a treasury is spent.
gwei: The unit Ethereum fees are quoted in, equal to one billionth of one ETH.
hard cap: A fixed maximum supply written into a protocol's rules, such as the 21 million coins of Bitcoin.
hard fork: A rule change that makes previously invalid blocks valid, so nodes that do not upgrade reject the new chain and stop following it.
hardware security module (HSM): A tamper-resistant device that generates and stores private keys and signs with them without ever exporting the key.
hardware wallet: A physical device that stores private keys offline and signs transactions without exposing the keys to a connected computer.
hash: A fixed-length string produced by running data through a one-way function, used to identify blocks and transactions.
hash rate: The combined speed at which miners try candidate block hashes, measured in hashes per second and usually quoted in exahashes per second.
HD wallet (hierarchical deterministic): A wallet that derives every address it will ever use from a single seed, so one backup restores the whole set.
HIFO (highest in, first out): A cost basis method that disposes of the highest-cost units first, minimizing the reported gain on each sale.
HODL: Crypto slang for holding an asset rather than selling it, from a misspelling of "hold" in a 2013 Bitcoin forum post.
honeypot token: A token whose contract is written so that buyers can acquire it but cannot sell, trapping funds while the chart shows a rising price.
hot wallet: A wallet whose private keys are stored on an internet-connected device such as a phone or browser extension.
Howey test: The United States legal standard for deciding whether an arrangement is an investment contract and therefore a security, taken from the Supreme Court's decision in SEC v.
HTLC (hashed timelock contract): A conditional payment that releases funds to whoever reveals a secret before a deadline, and refunds the sender afterwards.
IBAN (international bank account number): The standard account identifier used for bank transfers across Europe and many other countries, made up of a country code, check digits, and the domestic account number.
iceberg order: A large order that shows only a small slice on the public order book and refills that slice automatically as it fills.
ICO (initial coin offering): A fundraising method in which a project sells a new token to the public at or before launch.
impermanent loss: The shortfall a liquidity provider takes when the prices of the two assets they deposited move apart, measured against simply holding them.
implied volatility: The amount of future price movement an option's market price implies, quoted as an annualized percentage.
index price: The blended spot price, drawn from several outside exchanges, that a derivatives venue uses as the base for its mark price and its settlement.
indexer: Software that reads a chain block by block and writes the results into a database that can be queried quickly.
initial margin: The collateral you must post to open a leveraged position, expressed as a fraction of the position's notional value.
instant buy: The one-click purchase flow that sells you crypto at a quoted price instead of placing an order on the exchange's book.
insurance fund: A pool of capital a derivatives exchange keeps to absorb the shortfall when a liquidated position closes at a worse price than its bankruptcy price.
intent: A signed statement of the outcome a user wants, such as a specific amount of one asset for another, left to competing parties to fulfill however they can.
IPFS (InterPlanetary File System): A peer-to-peer protocol that stores and addresses files by their content rather than by their location.
isolated margin: A margin mode that ring-fences a fixed amount of collateral to one position, capping the loss at the amount assigned.
KYC (know your customer): The identity verification process exchanges must complete before allowing deposits or trading, typically requiring government ID and proof of address.
KYT (know your transaction): Blockchain analytics screening that exchanges run on deposits and withdrawals to see whether an address is linked to sanctions, ransomware, darknet markets, or a known hack.
layer 0: The network layer beneath individual blockchains that lets separate chains share security or pass messages, as in the Cosmos and Polkadot designs.
layer 2: A network built on top of a base blockchain to process transactions faster and cheaper, settling periodically to the main chain.
leverage: Borrowing in order to trade a position larger than your account balance.
LIFO (last in, first out): A cost basis method that treats the most recently acquired units as the first ones sold.
light client: A wallet or node that verifies block headers and requests proofs for the few transactions it cares about, rather than downloading the whole chain.
Lightning Network: A payment network built on top of Bitcoin in which two parties open a channel, exchange signed balance updates off-chain, and settle to the blockchain only when the channel closes.
like-kind exchange: A tax provision allowing gain to be deferred when one property is swapped for similar property rather than sold for cash.
limit order: An instruction to buy or sell at a specified price or better.
liquid restaking token (LRT): A token representing assets that are staked and then restaked to secure additional services, layering a second yield source and a second set of risks on top of the first.
liquid staking token (LST): A token representing staked coins plus their accumulated rewards, issued so the holder keeps a tradable claim while the underlying stays locked with a validator.
liquidation: The forced closing of a leveraged position when its collateral falls below the level the platform requires.
liquidation threshold: The collateralization ratio at which a lending protocol allows anyone to repay part of your debt and seize your collateral at a discount.
liquidity: How easily an asset can be bought or sold without moving its price.
liquidity pool: A smart contract holding a pair of assets that traders buy from and sell into, funded by depositors who earn a share of the trading fees.
lockup / vesting: A schedule that prevents tokens allocated to a team, early investors, or a treasury from being sold until set dates.
LP token: A token issued to a liquidity provider representing their share of a pool and the fees it has earned.
mainnet: The live network where transactions move real assets, as opposed to any test network running the same software.
maintenance margin: The minimum equity you must keep in a leveraged position before the exchange starts closing it.
maintenance window: A scheduled period when an exchange suspends some or all services to upgrade systems.
maker / taker fee: The two-tier fee structure used by most exchanges.
maker rebate: A negative trading fee, paid to the trader rather than charged, offered by some exchanges to high-volume accounts that add liquidity.
margin: The collateral you post to open and maintain a leveraged position.
mark price: The reference price an exchange uses to value open derivatives positions and trigger liquidations, calculated from outside spot markets rather than from its own order book.
market cap (market capitalization): The total value of an asset's circulating supply: price multiplied by number of coins in circulation.
market depth: The quantity of buy and sell orders resting near the current price, which decides how far a large order moves the market.
market maker: A firm or program that continuously quotes both a buy and a sell price on a pair, earning the difference in return for keeping the book filled.
market order: An instruction to buy or sell immediately at the best available price.
memecoin: A token created around a joke, meme, or online community rather than a technical purpose.
memo / destination tag: An extra identifier some networks require alongside the address, so a shared exchange wallet knows which customer a deposit belongs to.
mempool: The waiting room where a broadcast transaction sits before a miner or validator includes it in a block.
Merkle tree: A structure that hashes transactions in pairs, then hashes those hashes, until a single root hash summarizes the whole block.
MEV (maximal extractable value): The profit available from choosing which transactions go into a block and in what order.
MEV-Boost: Software that lets an Ethereum validator outsource block building to a competitive market of builders and take the highest bid, rather than assembling a block itself.
MiCA (markets in crypto-assets regulation): The European Union regulation creating one licensing regime for crypto asset service providers and token issuers across all member states.
minimum deposit: The smallest amount an exchange or payment method will accept, set separately for each currency and each network.
mining: The process by which some blockchains, including Bitcoin, validate transactions and issue new coins, using computers to solve computational puzzles.
mining pool: A service that combines many miners' hash rate, submits work as one participant, and splits the reward according to shares of work contributed.
mixer: A service that pools deposits from many users and pays out to fresh addresses, breaking the on-chain link between source and destination.
modular blockchain: A network design that separates execution, settlement, consensus, and data availability into distinct layers rather than doing all four in one chain.
money transmitter license: The state-level license a business needs in the United States to move customer money, which most crypto exchanges hold in every state where they operate.
Move language: A programming language for blockchains in which digital assets are first-class values that cannot be copied or accidentally discarded, enforced by the type system rather than by contract logic.
MPC wallet: A wallet whose private key is never assembled in one place, split instead into shares held on separate devices that sign jointly using multi-party computation.
multisig: A wallet setup that requires more than one private key to authorize a transaction, such as two signatures out of three keys.
negative balance protection: A guarantee that a leveraged account cannot end up owing more than was deposited, with the shortfall absorbed by the venue.
network fee: See gas.
NFT (non-fungible token): A token that represents a unique item rather than an interchangeable unit, used for digital art, collectibles, and in-game assets.
node: A computer running blockchain software that keeps a copy of the ledger and relays transactions to other computers.
nonce: A number used only once, which on an account-based chain counts your transactions in order and in mining is the value changed while searching for a valid block.
OFAC screening: The check a United States exchange runs against sanctions lists published by the Office of Foreign Assets Control, which name specific blockchain addresses as well as people and companies.
on-chain / off-chain: On-chain activity is recorded in a blockchain transaction anyone can verify, while off-chain activity happens in a company's database or a payment channel and is not.
on-ramp / off-ramp: The point where fiat money enters crypto (on-ramp, buying) or leaves it (off-ramp, selling to a bank account).
open interest: The total value of derivative contracts currently open and not yet closed or settled.
optimistic rollup: A layer-2 design that assumes posted transaction batches are valid and allows anyone to challenge them during a dispute window.
options contract: A derivative giving the buyer the right, but not the obligation, to buy or sell an asset at a set price before or at a set date.
oracle: A service that supplies external data, such as asset prices, to a smart contract.
order book: The list of open buy and sell orders on an exchange at various prices.
order book imbalance: The gap between the amount of resting buy interest and resting sell interest near the current price.
Ordinals: A numbering scheme that gives every satoshi a serial number by mint order, allowing individual satoshis to be tracked and to carry arbitrary data inscribed in a Taproot witness.
OTC desk: A service that fills large orders by negotiating one price directly with the client instead of routing the trade through a public order book.
over-collateralization: Backing a loan or a token with collateral worth more than the amount issued, so a price fall can be absorbed before the debt is under water.
P2P trading: Buying or selling crypto directly with another person, with the platform holding the asset in escrow until payment clears.
paper wallet: A private key or recovery phrase printed on paper, once promoted as a simple way to hold Bitcoin offline.
parallel execution: Running transactions at the same time when they touch different state, rather than one after another in list order.
passkey: A login credential stored on your phone, computer, or security key that signs a challenge from the site instead of sending a password.
passphrase (25th word): An extra secret added to a recovery phrase that produces an entirely different set of wallets, so the written phrase alone does not reach the funds.
paymaster: A smart contract that pays a user's transaction fees, so someone can act on chain without holding the network's native coin.
payment channel: A two-party arrangement in which a funding transaction is published on chain, then any number of balance updates are exchanged privately and only the final state is settled.
PDA (program derived address): A Solana address that has no private key and can only be signed for by the program it derives from.
peg: The value a stablecoin or wrapped asset is meant to hold, usually one unit of a currency.
perpetuals: Futures contracts with no expiry date, held near the spot price by a periodic funding payment between long and short holders.
phishing: A scam that tricks you into revealing keys or approving a transaction by impersonating an exchange, a wallet, or a support agent.
pig butchering scam: A long-running fraud in which an attacker builds a relationship over weeks through messaging or dating apps, then steers the victim to a fake trading platform that shows fabricated profits and blocks withdrawals.
points program: A pre-token loyalty scheme in which a protocol awards non-transferable points for deposits, trading, or referrals, widely understood as a signal of a future airdrop without any promise of one.
post-only order: A limit order instruction that cancels the order rather than filling it if it would trade immediately against the book.
price impact: The difference between the quoted price and the price you actually get, caused by your own order consuming the liquidity available.
prime broker: A firm that gives large trading clients a single account for financing, custody, and access to many exchanges at once, netting exposure across them instead of requiring collateral at each.
priority fee: The tip a user adds to an Ethereum transaction, on top of the mandatory base fee, to give a block builder a reason to include it sooner.
privacy coin: An asset whose protocol hides transaction details by default or by option, rather than leaving them readable on a public ledger.
private key: A secret string that proves ownership of a wallet and authorizes transactions.
private sale: A token sale to selected investors before any public round, usually at a lower price and with a lock-up attached.
program (Solana): Solana's name for deployed on-chain code, the equivalent of a smart contract, except that programs are stateless and all their data lives in separate accounts.
proof of address: A document showing where you live, such as a utility bill or a bank statement, that exchanges request to confirm your jurisdiction.
Proof of History: Solana's ordering mechanism, a continuously hashed sequence that produces a verifiable record of time passing between events.
proof of liabilities: The half of a solvency claim that shows what a custodian owes customers, without which a proof of reserves shows only that an entity controls some assets.
proof of reserves: A public attestation, usually by a third-party auditor, that an exchange holds customer assets in full.
proof of stake: A consensus mechanism in which validators are selected to propose blocks in proportion to the tokens they lock up, and forfeit part of that stake if they misbehave.
proof of work: A consensus mechanism in which participants compete to solve a computational puzzle for the right to add the next block, and are paid in newly issued coins for doing so.
protocol: The set of rules that governs how a blockchain, or an application built on one, operates.
proxy contract: A contract that holds the state and forwards every call to a separate implementation contract, so the logic can be replaced while the address and balances stay put.
PSBT (partially signed Bitcoin transaction): A standard file format for a transaction that is passed between devices to collect signatures before broadcast.
public key: A cryptographic value derived from a private key that can be shared to receive funds.
pump and dump: A scheme in which organizers accumulate a thinly traded token, promote it to create buying, then sell into the demand they manufactured.
qualified custodian: A regulated entity, such as a bank or a broker-dealer, that an investment adviser is required to use for holding client assets under custody rules.
real yield: Returns paid out of a protocol's actual revenue rather than from newly minted tokens.
real-world asset (RWA): A claim on something off chain, such as government debt, credit, property, or a commodity, represented as a token.
rebase token: A token whose supply is adjusted automatically across every holder, so the number of tokens in your wallet changes without any transaction you made.
redemption: Exchanging a token for the asset it represents directly with the issuer, rather than selling it on a market.
reduce-only order: An order flag that permits an order to shrink or close an existing position but never to open or enlarge one.
reentrancy: A bug in which a contract calls another address before finishing its own bookkeeping, letting the called code call back in and repeat an action.
rehypothecation: The reuse of assets a customer pledged as collateral, most often by lending them out again.
rent (Solana): A minimum SOL balance an account must hold to stay in Solana's state, sized to cover roughly two years of storage cost and refundable when the account is closed.
replace-by-fee (RBF): A rule that lets an unconfirmed Bitcoin transaction be replaced by a version of itself paying a higher fee, so a stuck payment can be resent rather than abandoned.
restaking: Reusing tokens that are already staked as security for additional services, in exchange for additional rewards.
reverse solicitation: A narrow exemption allowing a firm outside a jurisdiction to serve a customer there when the customer approached the firm entirely on their own initiative.
ring signature: A signature that proves one member of a group signed, without revealing which.
rollup: A blockchain that executes transactions away from a main chain in batches, then posts the data and a proof back to it, inheriting that chain's security.
RPC provider: A company that runs nodes and sells access to them, so applications can read chain data and broadcast transactions without operating infrastructure.
rug pull: A scam in which a project's creators raise funds or attract liquidity and then abandon the project, taking the money.
Runes: A fungible token protocol for Bitcoin that records balances in transaction outputs rather than in inscriptions, launched at the fourth halving in April 2024.
safe harbor allocation: A one-time procedure under which a United States taxpayer assigned their unused digital asset basis to specific wallets and accounts as of January 1, 2025, so later disposals could be tracked account by account.
sandwich attack: A form of value extraction in which a bot spots your pending swap, buys the same asset just before it, and sells just after, leaving you a worse price and the bot a profit.
sat/vB (satoshis per virtual byte): The unit Bitcoin fees are quoted in: satoshis paid per virtual byte of transaction size, not per coin sent.
satoshi: The smallest unit of Bitcoin, one hundred-millionth of a coin (0.00000001 BTC).
Schnorr signature: A signature scheme added to Bitcoin by Taproot, whose main property is that several signatures can be combined into one that verifies against a combined key.
secure element: A tamper-resistant chip that stores secrets and performs cryptographic operations without ever exposing the key material to the rest of the device.
seed phrase (recovery phrase): A list of 12 or 24 words that can regenerate all the private keys in a wallet.
segregated accounts: Holding customer money or crypto in accounts kept apart from the company's own funds so the two cannot be mixed.
SegWit (segregated witness): The 2017 Bitcoin upgrade that moved signature data out of the main transaction body, fixing transaction malleability and effectively raising block capacity.
self-custody: Holding crypto in a wallet where you alone control the private keys, rather than on an exchange.
self-directed IRA: A United States retirement account whose custodian permits assets beyond listed stocks and funds, including crypto held through an approved provider.
SEPA (single euro payments area): The scheme that makes euro bank transfers between participating countries work like domestic ones, and usually the cheapest way to fund a euro exchange account.
sequencer: The component of a rollup that receives transactions, orders them, and publishes the result, giving users near-instant confirmations before the batch settles on the base chain.
settlement: The point at which a trade or transfer is final and the asset has actually changed hands.
Shamir backup: A method of splitting a wallet recovery secret into several shares, of which a chosen number are required to rebuild it.
shielded transaction: A transaction whose sender, recipient, and amount are encrypted, with a zero-knowledge proof standing in for the public checks a node would otherwise perform.
sidechain: A separate blockchain that runs alongside a main chain with its own consensus, linked to it by a bridge.
SIM swap: An attack in which someone takes over your phone number by persuading or bribing the carrier to move it to their own card, then uses text message codes to reset your accounts.
slashing: A protocol penalty that destroys part of a validator's staked coins for provable misbehavior such as signing two conflicting blocks or going offline past a threshold.
slippage: The difference between the price you expected and the price your order actually filled at.
slippage tolerance: The maximum price movement you will accept between submitting a trade and it executing, set as a percentage on decentralized exchange screens.
slot: A twelve-second window on Ethereum in which one selected validator may propose a block.
smart contract: A program stored on a blockchain that executes automatically when its conditions are met.
smart contract audit: A paid review in which a security firm reads a protocol's code and reports the flaws it finds, usually before deployment.
social recovery: A wallet design in which a set of trusted people or devices, chosen in advance, can collectively restore your access if you lose your key.
soft fork: A rule change that only tightens what is valid, so blocks made under the new rules are still accepted by nodes running the old software.
solver: A competing participant in an intent-based system that finds a way to satisfy a user's stated outcome and is paid for doing it.
specific identification: Choosing exactly which units of an asset you are disposing of, rather than accepting a default ordering, so you control the gain or loss reported.
SPL token: A token on Solana issued by the shared token program rather than by a contract of its own, which is the structural difference from an Ethereum token.
spot market: The market for buying an asset itself for immediate delivery, as opposed to a contract that tracks its price.
spread: The difference between the price at which you can buy an asset and the price at which you can sell it at the same moment.
stablecoin: A token designed to hold a fixed value, usually one US dollar, by being backed by reserves or by algorithmic mechanisms.
staking: Locking up tokens to help secure a proof-of-stake blockchain in return for rewards.
staking income: Rewards received for staking, treated in many jurisdictions as ordinary income at the moment you can control them.
stealth address: A one-time destination address generated from a recipient's published keys, so payments to the same person never share an address on chain.
stop order: An instruction that stays dormant until the market reaches a trigger price, then submits a market or limit order.
stop-limit order: An order that places a limit order on the book once the market reaches your trigger price, so you control both when it activates and the worst price you accept.
strike price: The fixed price at which an options contract can be exercised.
sub-account: A separate balance and trading area inside one exchange account, used to isolate strategies, keys, or funds.
subgraph: A published indexing definition that says which contract events to read and how to shape them for querying, used by The Graph and compatible tooling.
suspicious activity report (SAR): A confidential filing a regulated financial firm submits to its national authority when a transaction has indicators of possible criminal activity.
Sybil attack: Creating many identities to gain influence a single participant should not have, whether to farm a token distribution across hundreds of wallets or to sway a vote.
sync committee: A group of 512 validators, chosen at random for 256 epochs at a time, that signs recent block headers so light clients can follow the chain cheaply.
synthetic dollar: A token that targets a dollar value using a hedged position rather than by holding dollars.
take-profit order: A resting order that closes a position once price reaches a target in your favor.
taker: A trader whose order fills immediately against an order already resting on the book, removing liquidity from it.
Taproot: The 2021 Bitcoin upgrade that added Schnorr signatures and a new script layout, letting complex spending conditions look like ordinary single-key payments on chain.
tax lot: One purchase of an asset, with its own date, quantity, and cost, tracked separately so a gain can be calculated when part of a holding is sold.
tax-loss harvesting: Selling an asset at a loss to offset realized gains, then deciding separately whether to re-establish the position.
taxable event: A transaction that creates a gain, loss, or income to report, which in the United States and many other countries includes selling crypto for cash, swapping one coin for another, and spending it.
testnet: A copy of a blockchain used for testing, where coins have no value and are handed out free by a faucet.
the Merge: The September 2022 upgrade in which Ethereum stopped using mining and adopted proof-of-stake, joining the existing beacon chain to the transaction layer.
ticker: The short symbol an asset trades under, such as BTC or ETH, chosen by convention and not unique.
time in force: The instruction saying how long an order stays live: good till cancelled, immediate or cancel, or fill or kill.
token: A digital asset issued on an existing blockchain rather than having its own.
token approval: A permission you grant a smart contract to spend a specific token from your wallet, required before most decentralized applications can move funds on your behalf.
token generation event (TGE): The moment a project's token is first created and distributed, usually alongside the start of trading and the beginning of every vesting clock.
tokenized fund: A fund whose shares are recorded on a blockchain instead of, or alongside, a traditional register.
tokenized treasury: A token representing a share in a fund or vehicle that holds short-term government debt, so the holder earns the underlying yield on chain.
TOTP (time-based one-time password): The six-digit code an authenticator app generates from a shared secret and the current time, refreshing every 30 seconds.
Tower BFT: Solana's consensus rule, in which validators vote on blocks and each vote doubles the time they are committed to that branch, making it progressively costly to abandon.
trading halt: A suspension of trading in one market, imposed by the exchange, while normal service continues elsewhere on the venue.
trading pair: The two assets quoted against each other in a market, written base first, so BTC/USDT prices Bitcoin in Tether.
trading volume: The total value traded on a market over a period, usually 24 hours, used as a rough measure of liquidity.
trailing stop: A stop instruction whose trigger price follows the market by a fixed distance or percentage, moving in your favor and staying put when the market reverses.
transaction ID (TXID): The unique hash identifying a transaction on a blockchain, which is what you paste into an explorer to check whether a withdrawal has been sent and confirmed.
transaction receipt: The record a chain produces after executing a transaction, holding whether it succeeded, how much gas it used, and the logs it emitted.
transaction simulation: A preview that runs a transaction against current chain state and reports the balance changes it would produce before you sign.
travel rule: The requirement that businesses transferring crypto pass identifying information about sender and recipient to the receiving business, mirroring long-standing bank rules.
Treasury bill backing: Holding short-dated government debt as the reserve behind a stablecoin or tokenized fund, in place of bank deposits.
TVL (total value locked): The total value of assets deposited in a DeFi protocol at a given moment.
TWAP (time-weighted average price): The average price of an asset over a period, weighted only by time, and by extension the execution strategy that slices a large order evenly across that period to track it.
two-factor authentication (2FA): A second credential required at login or withdrawal in addition to your password, such as an app-generated code, a physical security key, or a device credential.
unbonding period: The waiting time between requesting your staked coins back and being able to move them, during which they earn nothing and cannot be sold.
uncle block: A valid block that arrived too late to become part of the main chain, which Ethereum's proof-of-work design rewarded partially instead of discarding.
unhosted wallet: The regulatory term for a wallet you control yourself, with no company holding the keys, called a self-hosted wallet in European Union rules.
unlock: The scheduled date on which previously locked tokens become transferable and can be sold.
upgradeable contract: A deployed contract whose behavior can be changed after launch by whoever holds the upgrade key.
UTXO (unspent transaction output): The accounting model Bitcoin uses, in which a balance is the sum of discrete unspent outputs rather than a single number in an account.
validator: A participant in a proof of stake network that proposes and attests to blocks and is paid for doing so honestly.
validity proof: A cryptographic proof that a batch of transactions was executed correctly, verified by the base chain before the resulting state is accepted.
VASP (virtual asset service provider): The international term for a business that exchanges, transfers, or holds crypto for other people, used to decide who must apply anti-money-laundering rules.
verification tier: The level of identity checks you have completed on an exchange, which sets your deposit, trading, and withdrawal limits.
vesting cliff: A date before which no tokens from an allocation can be claimed, after which the first tranche unlocks at once.
veToken (vote-escrowed token): A token you receive by locking a governance token for a fixed term, granting voting power and a share of rewards that scale with how long you locked.
view key: A secret that lets a holder see a wallet's incoming transactions without being able to spend them.
volatility: The degree to which an asset's price moves over a given period.
VWAP (volume-weighted average price): The average price of an asset over a period weighted by the volume traded at each price, and the execution strategy that tries to match it.
wallet: Software or hardware that stores the keys controlling your crypto and lets you send and receive it.
wallet drainer: Malicious software, usually sold as a kit, that tricks a user into signing a transaction or approval that transfers their assets to the attacker.
wallet-by-wallet accounting: Tracking cost basis separately within each wallet or account rather than pooling every holding of an asset together.
wash sale rule: A United States tax rule that disallows a loss when you buy back substantially identical property within 30 days of selling it.
wash trading: Trading with yourself, or with a coordinated counterparty, to create the appearance of volume.
watch-only wallet: A wallet loaded with an address or public key but no private key, so it can display balances and history and cannot sign anything.
whale: A holder large enough that their buying or selling can move an asset's price.
white paper: The document in which a project sets out what it is building, how its token works, and how supply is distributed.
wire transfer: A bank-to-bank transfer that usually settles the same day and cannot normally be reversed once sent, which is why exchanges release crypto bought with it quickly.
withdrawal credentials: The field on a validator that says where its staked ETH and rewards may be sent, fixed when the validator is created.
withdrawal fee: A flat charge an exchange applies when you move crypto out, set per asset and per network rather than as a percentage.
withdrawal limit: The maximum you can move out of an exchange in a day or a month, set by asset, by network, and by how far you have taken identity verification.
withdrawal whitelist: A list of pre-approved addresses that are the only destinations your account can send to, sometimes presented as an address book.
wrapped token: A token on one blockchain that represents an asset held on another, such as wrapped Bitcoin issued on Ethereum.
xpub (extended public key): A key that can generate every receiving address in a wallet branch without being able to spend from any of them.
yield aggregator: A protocol that pools deposits and moves them between yield sources automatically, harvesting and reinventing rewards on behalf of depositors.
yield farming: Moving deposits between DeFi protocols to capture the highest available rewards, usually paid in a protocol's own token.
yield-bearing stablecoin: A token pegged to a currency that also passes through the return earned on its reserves, either by paying out or by rising in redemption value.
zero-knowledge proof (zk-proof): A cryptographic proof that a statement is true without revealing the data behind it, such as proving a batch of transactions is valid without publishing every one.
zk-rollup: A layer-2 design that posts a cryptographic proof with every batch, so the base chain verifies correctness mathematically rather than waiting for someone to object.
zk-SNARK: A proof that a computation was performed correctly, small enough to check quickly and revealing nothing about the inputs.
zk-STARK: A zero-knowledge proof system that needs no trusted setup and relies only on hash functions, at the cost of larger proofs than a zk-SNARK.