Glossary of Terms for Bitcoin & Crypto

0-9

51% Attack

A scenario in which a single entity controls more than 50% of the computational power on a blockchain network, allowing them to manipulate the ledger.

A

Address

A unique identifier used in blockchain networks to represent a user’s public key.

Altcoin

Any cryptocurrency that is not Bitcoin.

Atomic Swap

A peer-to-peer trade between two different cryptocurrencies without the need for an intermediary or centralized exchange.

B

Bitcoin

A decentralized digital currency that is based on a blockchain ledger system.

Blockchain

A digital ledger that records and verifies transactions in a decentralized and secure manner.

Block Reward

The amount of cryptocurrency that is awarded to a node on a blockchain network for successfully validating transactions and adding a new block to the chain.

Byzantine Fault Tolerance

A property of blockchain networks that allows them to function even in the presence of faulty or malicious nodes.

C

Centralized Exchange

A cryptocurrency exchange that is owned and operated by a centralized authority, often requiring users to provide personal information and follow KYC/AML regulations.

Consensus

The process by which a network of nodes on a blockchain network agrees on the validity of transactions and updates to the ledger.

Consensus Algorithm

A set of rules that govern the process by which a blockchain network reaches agreement on the validity of transactions and updates to the ledger.

Cold Storage

A method of storing cryptocurrency offline to protect it from hacking and theft.

Cryptocurrency

A digital or virtual currency that uses cryptography for security and operates independently of a central bank.

D

DAO – Decentralized Autonomous Organization

An organization that is run on a blockchain network and operates through a set of rules encoded in smart contracts, allowing members to govern the organization without the need for a central authority.

DApp – Decentralized Application

An application that is run on a blockchain network and operates through a set of rules encoded in smart contracts, allowing for greater security, transparency, and decentralization.

Decentralized

A system or network that is not controlled by a central authority.

Decentralized Exchange

A cryptocurrency exchange that operates on a blockchain network, typically allowing for greater privacy, security, and accessibility.

Decentralized Finance (DeFi)

A movement that aims to create financial systems and applications that are decentralized, open, and accessible to anyone, typically built on blockchain networks.

DeFi – Decentralized Finance

a movement that aims to create a decentralized financial system using blockchain technology, often involving the use of smart contracts.

DEX – Decentralized Exchange

A type of cryptocurrency exchange that operates on a blockchain network and does not require a central authority to facilitate trades.

E

Exchange

A platform that allows users to buy, sell, and trade cryptocurrencies.

F

Fiat Currency

A government-issued currency that is not backed by a physical commodity like gold, but rather by the trust in and stability of the issuing government. Its value is determined by supply and demand dynamics and managed through monetary policies set by the country’s central bank.

FOMO – Fear of Missing Out

The anxiety or apprehension that one might miss out on an opportunity or event.

Fork

A split in a blockchain network, resulting in two or more separate chains with different transaction histories.

FUD – Fear, Uncertainty, and Doubt

a tactic used to spread negative information or rumors about a cryptocurrency or blockchain project to create doubt and panic among investors.

G

Gas

The fee required to execute a transaction on the Ethereum blockchain.

Gas Fees

The fees charged for executing transactions on a blockchain network, typically paid in cryptocurrency.

Gas Limit

The maximum amount of gas that a user is willing to pay for a transaction on the Ethereum blockchain.

Gas Price

The amount of cryptocurrency that a user is willing to pay for each unit of gas used in a transaction on the Ethereum blockchain.

Gas Token

A type of cryptocurrency that is used to pay for transaction fees on the Ethereum blockchain, with the added benefit of being able to be traded on exchanges.

H

HODL

A misspelling of “hold,” which refers to the act of holding onto cryptocurrency rather than selling it, usually with the belief that its value will increase in the future.

Hard Fork

A type of fork in which a blockchain network is split irreversibly, resulting in a new and separate blockchain with different rules and transaction history.

Hash Rate

The speed at which a computer is able to solve complex mathematical equations on a blockchain network.

Hot Wallet

A digital storage space that is connected to the internet and used for frequent transactions.

I

ICO – Initial Coin Offering

A method of fundraising for new cryptocurrency projects.

Immutable

A property of blockchain networks that makes it virtually impossible to alter or delete data on the ledger once it has been recorded.

Initial Coin Offering (ICO)

A type of crowdfunding campaign in which a new cryptocurrency is offered for sale to investors in exchange for other cryptocurrencies or fiat currencies.

Initial Exchange Offering (IEO)

A type of crowdfunding campaign in which a new cryptocurrency is offered for sale through a cryptocurrency exchange.

L

Layer-2 Scaling

A solution that aims to improve the scalability of a blockchain network by moving some transactions off-chain to a secondary layer, reducing the burden on the main blockchain.

Lightning Network

A layer-2 scaling solution for the Bitcoin blockchain that enables faster and cheaper transactions by allowing users to create payment channels off-chain.

Liquidity Pool

A pool of funds provided by users that is used to facilitate trades on a decentralized exchange, often earning rewards in the form of trading fees or other incentives.

M

Merkle Tree

A data structure used in blockchain networks to efficiently store and verify large amounts of data.

Mining

The process of validating transactions and adding new blocks to the blockchain, typically done by nodes in exchange for block rewards and transaction fees.

Multi-signature

A security feature that requires multiple signatures or authorizations before a transaction can be executed, often used in high-value transactions on blockchain networks.

N

NFT – Non-Fungible Token

A unique digital asset that is stored on a blockchain and cannot be replicated or duplicated.

Node

A computer or device that is connected to a blockchain network and participates in the validation of transactions and updates to the ledger.

Non-Fungible Token (NFT)

A unique digital asset that is verified on a blockchain network, allowing for ownership and provenance to be established and easily transferable.

P

Permissioned Blockchain

A type of blockchain network that requires users to have permission to access and validate transactions on the network.

Privacy Coin

a type of cryptocurrency that prioritizes the privacy and anonymity of users, often using advanced cryptography techniques to obscure transaction data.

Private Blockchain

A type of blockchain network that is restricted to a specific group of users, often used for enterprise applications or internal business processes.

Private Key

A cryptographic code that allows users to send cryptocurrency.

Proof of Stake (PoS)

A consensus algorithm used in blockchain networks that requires users to hold a certain amount of cryptocurrency as collateral to validate transactions and create new blocks.

Proof of Work (PoW)

A consensus algorithm used in some blockchain networks, in which users must solve complex mathematical problems in order to validate transactions and add new blocks to the chain, typically using specialized hardware.

Public Blockchain

A type of blockchain network that is open and transparent, allowing anyone to join, validate transactions, and access the data on the network.

Public Key

A cryptographic code that allows users to receive cryptocurrency.

R

Roadmap

A plan or timeline for the development and implementation of a blockchain project or cryptocurrency.

S

Satoshi

The smallest unit of Bitcoin, equal to one hundred millionth of a Bitcoin.

SegWit – Segregated Witness

A protocol upgrade for the Bitcoin blockchain that increases the block size limit and improves the network’s scalability.

Security Token

A type of token that represents ownership in an asset, such as a company, real estate, or commodity, and is subject to securities regulations.

Smart Contracts

Self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.

Smart Oracle

A software program that allows blockchain networks to access and use data from external sources, often used in decentralized finance (DeFi) applications.

Soft Fork

A type of fork in which a blockchain network is updated with new rules that are backward-compatible with the previous version, resulting in a single chain with a shared transaction history.

Stablecoin

A type of cryptocurrency that is designed to maintain a stable value relative to a fiat currency or other asset, often achieved through pegging the value to an external asset or using algorithms to maintain stability.

T

Token

A digital asset that is created and managed on a blockchain network, often used to represent ownership of a specific asset or as a means of payment within a particular ecosystem.

W

Wallet

A digital storage space that holds your cryptocurrency.

Web3

a term used to describe the next evolution of the internet, in which decentralized blockchain networks and applications will play a larger role in the way we interact with technology and each other.

Whitepaper

A document that outlines the technical details and specifications of a blockchain project or cryptocurrency.

Y

Yield Farming

A strategy used in DeFi to earn cryptocurrency rewards by providing liquidity to a decentralized exchange or lending platform.