Crypto Glossary
A - Z Terms for Bitcoin and Cryptocurrency
The World of Crypto Terms
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A - Address, Altcoin, ATH
Address
- Definition: A unique string of characters (like a bank account number) used to send or receive cryptocurrency on a blockchain.
- Relevance: Essential for transactions; ensures funds go to the right wallet. Public but anonymous unless linked to identity.
- Example: A Bitcoin address like 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa receives BTC from an exchange.
Altcoin
- Definition: Any cryptocurrency other than Bitcoin (BTC), such as Ethereum (ETH), Solana (SOL), or Ripple (XRP).
- Relevance: Offers diverse use cases (e.g., smart contracts, payments) but often riskier than BTC due to lower market cap.
- Example: ETH ($3,600) is an altcoin powering DeFi, while BTC ($85,000) focuses on store of value.
ATH (All-Time High)
- Definition: The highest price a cryptocurrency has ever reached.
- Relevance: Helps gauge market sentiment and avoid buying at peaks, critical for timing investments.
- Example: Bitcoin’s ATH was ~$90,000 in March 2025; buying near ATH risks losses if prices dip.
B - Bitcoin, Blockchain
Bitcoin (BTC)
- Definition: The first and largest cryptocurrency, created in 2009 by Satoshi Nakamoto, designed as a decentralized digital currency.
- Relevance: A store of value and hedge against inflation, with a $1.7 trillion market cap and ETF adoption in 2025.
- Example: You buy $100 of BTC at $85,000 to hold long-term, betting on its 21M supply cap driving value.
Blockchain
- Definition: A decentralized digital ledger recording all cryptocurrency transactions across a network of computers.
- Relevance: Underpins crypto’s security and transparency; evaluate a coin’s blockchain for speed (TPS) and hacks.
- Example: Ethereum’s blockchain logs ETH transfers and smart contracts, verified by thousands of nodes.
C - Cold Wallet, Consensus Mechanism, Cryptocurrency
Cold Wallet
- Definition: A secure, offline device or paper storing crypto private keys, like a USB drive or written seed phrase.
- Relevance: Protects against hacks ($3B lost in 2024); vital for long-term investors holding BTC or ETH.
- Example: A Ledger Nano ($80) stores your BTC offline, safe from exchange breaches.
Consensus Mechanism
- Definition: A system blockchains use to agree on valid transactions, like Proof-of-Work (PoW) or Proof-of-Stake (PoS).
- Relevance: Impacts a coin’s security, speed, and energy use; PoS (e.g., ETH) is faster and greener than PoW (BTC).
- Example: Bitcoin’s PoW requires mining, while Cardano’s PoS lets users stake ADA for rewards.
Cryptocurrency
- Definition: A digital or virtual currency secured by cryptography, operating on a blockchain, like BTC, ETH, or XRP.
- Relevance: Offers decentralized alternatives to fiat; assess use cases (e.g., payments, DeFi) for investment potential.
- Example: You use ETH to pay for an NFT or BTC to send $100 overseas without a bank.
D - DApp, DeFi
DApp (Decentralized Application)
- Definition: An app running on a blockchain, like a game or financial tool, powered by smart contracts.
- Relevance: Drives demand for coins like ETH or SOL, as DApps need their tokens for fees; signals adoption.
- Example: Uniswap, a DApp on Ethereum, lets you swap ETH for USDC, boosting ETH’s utility.
DeFi (Decentralized Finance)
- Definition: Financial services (lending, trading) on blockchains without banks, using smart contracts.
- Relevance: Fuels altcoin growth (e.g., $200B locked in DeFi 2025); high yields but risky (hacks, rug pulls).
- Example: Stake $1,000 in Aave (on ETH) for 5% APY, but smart contract bugs could cause losses.
E - Exchange
Exchange
- Definition: A platform to buy, sell, or trade cryptocurrencies, like Coinbase, Binance.US, or Kraken.
- Relevance: Entry point for investing; compare fees (0.1%–2%) and security (e.g., 2FA) to avoid FTX-like collapses.
- Example: You buy $500 of BTC on Coinbase, paying a 1% fee ($5).
F - Fiat, Fork
Fiat Currency
- Definition: Government-issued money like USD or EUR, not backed by gold but legal tender.
- Relevance: Crypto’s alternative; BTC’s rise often tied to fiat inflation fears (e.g., 3% inflation in 2025).
- Example: You convert $100 USD (fiat) to 0.0012 BTC on an exchange.
Fork
- Definition: A change in a blockchain’s rules, creating two versions: a soft fork (backward-compatible) or hard fork (new chain).
- Relevance: Impacts a coin’s community and value; hard forks (e.g., Bitcoin Cash) can split investors, affecting price.
- Example: Ethereum’s 2016 hard fork split into ETH and ETC after a hack, with ETH dominating.
G - Gas
Gas Fees
- Definition: Fees paid to process transactions or run smart contracts on blockchains like Ethereum.
- Relevance: High fees deter users, impacting adoption; low-fee chains (Solana, ~$0.01) gain traction.
- Example: Sending $100 ETH costs $5–$20 in gas, higher during network congestion.
H - Halving, Hash Rate, HODL, Hot Wallet
Halving
- Definition: Bitcoin’s programmed event every ~4 years, cutting mining rewards in half to reduce new BTC supply.
- Relevance: Historically boosts BTC price (e.g., 80% gain post-2024 halving); next in 2028.
- Example: The 2024 halving dropped rewards from 6.25 to 3.125 BTC/block, tightening supply.
Hash Rate
- Definition: The computing power securing a blockchain, especially PoW coins like Bitcoin.
- Relevance: Higher hash rate = stronger security, reducing hack risks; critical for BTC’s $1.7T market cap trust.
- Example: Bitcoin’s hash rate hit 600 EH/s in 2025, deterring 51% attacks.
HODL
- Definition: A slang term meaning to hold crypto long-term despite price swings, from a 2013 typo (“I am hodling”).
- Relevance: Encourages patience, key for BTC/ETH investors aiming for gains over years (e.g., BTC $10,000 to $85,000, 2020–2025).
- Example: You HODL 0.1 BTC ($8,500) through a 30% dip, expecting $100,000 by 2026.
Hot Wallet
- Definition: An online or app-based wallet connected to the internet, like MetaMask or Coinbase Wallet.
- Relevance: Convenient for trading but riskier than cold wallets; balance ease vs. security ($3B hacked in 2024).
- Example: You store 0.01 ETH ($36) in MetaMask to trade on Uniswap, risking phishing attacks.
I - ICO
ICO (Initial Coin Offering)
- Definition: A fundraising method where new tokens are sold to investors, like a crypto IPO.
- Relevance: High reward but risky; many 2017 ICOs (e.g., EOS) failed or faced SEC fines for unregistered securities.
- Example: A new DeFi token raises $10M via ICO, but 20% of 2024 ICOs were scams.
K - KYC
KYC (Know Your Customer)
- Definition: Verification process (ID, address) required by exchanges to comply with anti-money laundering (AML) laws.
- Relevance: Ensures legal trading but reduces anonymity; non-KYC platforms (e.g., some DEXs) risk bans.
- Example: Coinbase asks for your driver’s license to buy BTC, aligning with 2025 IRS rules.
L - Layer
Layer-1 vs. Layer-2
- Definition: Layer-1 is a base blockchain (e.g., Ethereum); Layer-2 is a scaling solution on top (e.g., Polygon).
- Relevance: Layer-1 drives core value (ETH); Layer-2 boosts speed, lowering fees (MATIC up 50% in 2024).
- Example: You use Polygon’s Layer-2 to swap ETH for $0.10 vs. $10 on Ethereum’s Layer-1.
M - Market Cap, Mining
Market Cap
- Definition: Total value of a crypto’s circulating supply (price × coins in circulation).
- Relevance: Gauges size and stability; top coins (BTC: $1.7T, ETH: $400B) are safer than low-cap alts ($10M).
- Example: Solana’s $70B market cap (2025) reflects trust vs. a $50M token prone to 90% drops.
Mining
- Definition: Using computers to solve math problems to validate PoW blockchain transactions, earning rewards (e.g., BTC).
- Relevance: Secures Bitcoin but energyRelevance: High energy cost (BTC uses ~150 TWh/year) impacts sustainability; PoS coins like ETH avoid it.
- Example: Miners earn 3.125 BTC/block post-2024 halving, but costs ($10,000/rig) limit profits.
N - NFT
NFT (Non-Fungible Token)
- Definition: A unique digital asset on a blockchain, often art or collectibles, tied to ownership records.
- Relevance: Drives blockchain use (e.g., ETH’s $10B NFT market), but speculative (90% of NFTs lost value post-2021).
- Example: You buy a Bored Ape NFT for 1 ETH ($3,600), hoping it rises like 2021’s $100K sales.
P - Private key, Public Key
Private Key
- Definition: A secret code giving access to your crypto wallet’s funds, like a password.
- Relevance: Losing it means losing your crypto; never share it (2024 phishing scams stole $1B).
- Example: Your Ledger’s private key (24-word seed) unlocks 0.05 BTC; store it offline in a safe.
Public Key
- Definition: A wallet’s address or code shared to receive crypto, paired with a private key.
- Relevance: Enables safe transactions; public keys are visible but secure unless linked to identity.
- Example: You share a public key like 0x123…abc to receive 0.1 ETH from a friend.
R - Rug Pull
Rug Pull
- Definition: A scam where developers abandon a project after raising funds, crashing the token’s value.
- Relevance: 20% of 2024’s new tokens were rug pulls; check teams to avoid losses.
- Example: A hyped DeFi token drops 99% after its anonymous team vanishes with $5M.
S - Seed Phrase, Smart Contract, Stable Coin, Staking
Seed Phrase
- Definition: A 12–24-word code to recover a crypto wallet, essentially its master key.
- Relevance: Critical for restoring funds if a device fails; store physically, as hacks target digital copies.
- Example: Your Trezor’s seed phrase (“cat tree moon…”) recovers 0.2 BTC after a crash.
Smart Contract
- Definition: Self-executing code on a blockchain (e.g., ETH) that automates agreements without intermediaries.
- Relevance: Powers DeFi, NFTs; strong smart contracts (e.g., Solana’s) drive coin demand but bugs risk losses ($1B in 2024).
- Example: A smart contract pays you 5% interest for staking $1,000 in ETH on Aave.
Stablecoin
- Definition: A cryptocurrency pegged to an asset (e.g., USD), like USDT or USDC, for price stability.
- Relevance: Used for trading or DeFi; assess reserves (USDC audited, USDT questioned) to avoid depegging risks.
- Example: You hold $1,000 in USDC (1:1 with USD) to trade BTC without volatility.
Staking
- Definition: Locking crypto in a PoS blockchain (e.g., ETH, ADA) to earn rewards for validating transactions.
- Relevance: Passive income (5–10% APY) but locks funds; boosts coin utility.
- Example: Stake 10 ETH ($36,000) for 6% APY, earning $2,160/year, but can’t sell for 30 days.
T - Token, TPS
Token
- Definition: A crypto asset built on another blockchain (e.g., UNI on Ethereum), unlike coins with their own chain (BTC).
- Relevance: Tokens tie to DApps (e.g., Chainlink’s LINK); riskier if the parent chain fails.
- Example: You buy 100 LINK ($1,500) to use Oracle services, reliant on ETH’s stability.
TPS (Transactions Per Second)
- Definition: A blockchain’s speed in processing transactions.
- Relevance: Higher TPS (Solana: 65,000 vs. BTC: 7) means scalability, attracting users; low TPS raises fees.
- Example: Ethereum’s 15 TPS causes $20 gas fees during NFT mints, pushing users to Polygon.
V - Volatility
Volatility
- Definition: The degree of price swings in a cryptocurrency, often 30–100% annually.
- Relevance: High volatility (BTC: 40%, alts: 100%+) offers gains but risks losses; critical for risk tolerance.
- Example: BTC drops 20% from $85,000 to $68,000 in a week, scaring short-term traders.
W - Wallet, White Paper
Wallet
- Definition: Software or hardware storing crypto keys to send/receive funds, like MetaMask (hot) or Ledger (cold).
- Relevance: Core to owning crypto; choose based on security vs. ease (cold for HODLing, hot for trading).
- Example: You store 0.01 BTC ($850) in a Ledger to HODL, avoiding exchange hacks.
Whitepaper
- Definition: A document outlining a crypto’s purpose, tech, and roadmap, like Bitcoin’s 2008 paper.
- Relevance: Key to assessing use case and credibility; vague or missing whitepapers signal scams.
- Example: Ethereum’s whitepaper details smart contracts, driving its $400B market cap in 2025.