316 glossary definitions of common crypto terms
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The term given to a malicious attack on a blockchain network achieved by taking control of 51% (over half) of the mining nodes.
An address is an alphanumeric identifier providing a virtual location to where cryptocurrency transactions can be sent. They are intended to be single use and only refer to the destination of a transaction, not where it came from.
A marketing approach that incentivises anyone with a source of potential customers - such as a website or social media channel - to act as an Affiliate and refer visitors to a website in return for an agreed level of commission or fixed acquisition fee.
The free distribution of a specific cryptocurrency to a targeted group as a means of promoting its adoption or increasing its visibility.
Method for maintaining parity of a Stablecoin to a fiat equivalent.
Refers to the highest price a cryptocurrency has ever reached, commonly abbreviated to ATH. See also ATL.
Refers to the lowest price a cryptocurrency has ever reached, commonly abbreviated to ATL. See also ATH.
A commonly used term to refer to cryptocurrencies that came after Bitcoin; literally alternative coins, i.e coins that are designed to work differently from Bitcoin.
Legislation and best practice focused on preventing the laundering of the proceeds of crime.
A type of computer chip adapted to perform a very specific function, in the case of Bitcoin, ASIC chips are adapted solely for the mining process.
A technique in trading or betting whereby price inefficiencies for an asset or market quoted across different sources can be exploited to guarantee a profit e.g buying a cryptocurrency on exchange A and instantly selling on Exchange B where it is offered for a higher price. Arbitrage of bitcoin’s price will, for example, try to exploit price premium arising due to demand in specific countries because of currency controls, hyperinflation or anti-bitcoin legislation e.g Turkey, Venezuela or Nigeria.
An Application-Specific Integrated Circuit is a device that is designed for the sole purpose of mining a particular digital currency.
The lowest price that a seller is willing to accept for a cryptocurrency via an exchange; the opposite of the Bid Price. The difference between the Ask and Bid is known as the Spread.
The practice of hyping a product or service such as an ICO without disclosing personal interest. Famous celebrities such as Steven Seagal and Floyd Mayweather have been fined by the SEC for astroturfing ICOs in the past. Also, see Initial Coin Offering (ICO)
The name given to the exchange of cryptocurrencies across separate blockchains without the need for a centralised exchange or intermediary.
A method of pricing assets based on an algorithm rather than the traditional method of deriving price from the point where buyers and sellers meet.
Slang term for a large amount of cryptocurrency or referring to a portfolio in general e.g ‘what bags are you holding?’ meaning ‘what cryptocurrencies do you currently own?’ See also Stack.
The term given to a prolonged period of negative sentiment and falling prices in an asset market e.g 'Bitcoin is experiencing a bear market'. This was the case for BTC from January 2018 until March 2019. Can also be used as an adjective to describe sentiment e.g ‘The outlook for Ethereum’s price is bearish’. The opposite is Bull Market.
The term given to market behaviour which gives the impression that the price may be entering a long term downward (bearish) trend but is actually just a short term correction rather than a reversal.
The highest price that a buyer is willing to pay for a cryptocurrency via an exchange; the opposite of an Ask Price. The difference between the Bid and Ask is known as the Spread.
A fractional unit representing a 1,000,000th of a Bitcoin e.g 0.000001
A monetary system utilising a novel technology called blockchain. Bitcoin also refers to the cryptocurrency unit (small 'b') supported by the Bitcoin blockchain. Bitcoin's blockchain is maintained by a distributed network with no controlling central authority. It ensures accuracy of user balances (the 'double spend problem) through a process called Proof of Work (PoW). PoW incentivises network Nodes - called miners - to issue new bitcoin and validate transactions, in return for committing computing power to secure the blockchain. The idea for Bitcoin was published in October 2008 under the pseudonym Satoshi Nakamoto; the true identity of its creator is unknown.
Bitcoin ABC was the new name given to Bitcoin Cash when it forked in 2018 to also create Bitcoin SV. Bitcoin Cash was itself a fork (spin-off) of Bitcoin. The ABC refers to Adjustable Block Size, given the fork centred around how to handle block size.
An ATM (Automated Telling Machine) where you can buy Bitcoin using a credit/debit card. Funds can be sent to an account or dispensed as a QR code (effectively a paper wallet). Some Bitcoin ATMs allow you to scan a Bitcoin private address - as a QR code - and convert to Fiat for withdrawal.
The most significant Bitcoin hard fork, created in 2017 as part of the disagreement over whether to increase block size. Bitcoin Cash was itself forked in late 2018 to create Bitcoin SV.
Refers to the market capitalisation of Bitcoin in proportion to the whole of the cryptocurrency economy as measured by the sum of market capitalisation of listed coins on an aggregator such as Coinmarketcap.
The term given to a belief that Bitcoin is the only cryptocurrency with real value and that, through further development, will provide all the required functions of hard digital money leaving no need for alternatives.
A hard fork of Bitcoin Cash, created in late 2018 by a team led by Craig Wright, implementing a significantly larger block size (128mb). Bitcoin SV stands form, Bitcoin Satoshi’s Vision and purports to represent the true intention of Bitcoin's creator.
The term used to describe the way transactional information is organised within a blockchain - such as Bitcoin - grouped in so-called blocks, each referencing the previous to create a continuing chain of self-referential information. A block will usually be of fixed size, for the Bitcoin blockchain this is currently 1mb.
The name given to a decentralised system for storing data across a peer-to-peer network, without a central authority, the first example being Bitcoin.
A free online tool that enables you to explore the contents of a blockchain by entering an address, transaction id or block reference. Bitcoin’s open source nature enables complete transparency and data exploration. An example explorer for the Bitcoin blockchain is https://www.blockchain.com/explorer.
A numerical reference term describing a block’s sequential position within a blockchain. The first block (Genesis Block) is numbered zero, so the total height, or length of the blockchain, is the total number of blocks minus one.
The reward given to a Miner for successfully mining a block, containing a subsidy and fees for transactions contained within the block. For Bitcoin the subsidy halves every four year and is currently set at 6.25 BTC.
A unit of measurement used to compare the sizes of different blockchain transactions. Weight measurements are relative to the maximum size of a block. As of 2016, each weight unit for Bitcoin represents 1 / 4,000,000 of a block. Also, see Blockchain.
A technical analysis trading techniqie developed by John Bollinger. Bollinger Bands track price averages and volatility and display these in one graph. Traders use them to assess if a security is either overbought or oversold by the market. Also see Relative Strength Index.
A reward scheme often used by ICOs or other crypto projects to attract users, gain feedback and promote the project to wider audiences. See this article on earning crypto from Bounty Campaigns.
In investing, the breakeven point is achieved when the market price of an asset, or portfolio of assets, is the same as the trade entry price (or aggregate prices) accounting for any transaction fees.
Connect buyers with sellers to exchange cryptocurrency, charging a few for their service.
Trading abbreviation for Bitcoin. All traded cryptocurrencies have a three letter price ticker to make it more convenient to display on a trading screen or price tracker.
Abbreviation for ‘Buy the fucking dip’ often used by Bitcoin advocates who see a fall in price as temporary, and a good opportunity to increase their exposure with the expectation of longterm appreciation.
The term given to a prolonged period of positive sentiment and rising prices in an asset market e.g Bitcoin is experiencing a bull market. This was the case for Bitcoin from April 2017 until January 2018. Can also be used as an adjective to describe sentiment e.g ‘The outlook for Ethereum’s price is bullish’. The opposite is Bear Market.
The term given to price behaviour which gives the impression that the market may be entering a long term upward (bullish) trend but is actually just a short term correction, before resuming the downward trend.
Burning coins is a method for taking coins out of circulation, and thereby reducing the Circulating Supply. It acts as a deflationary tool.
The name given to a significant volume of Bids (buy orders) at a specific price that creates the impression of a wall on the Depth Chart for a given cryptocurrency. See also Sell Wall.
When components of a distributed computer system - such as a blockchain - may fail and there is imperfect information as to whether a component has failed or not. First described in a 1982 paper, that describe the problem of gaining consensus through the allegory of a distributed Byzantine Army failing to agree on a battle plan due to untrustworthy sources of information .
When buyers set a maximum acceptable price to buy, and sellers set the minimum satisfactory price to sell a security on an exchange. Matching buyers and sellers in this process increases liquidity and decreases volatility.
The right, but not the obligation, to buy a security or cryptocurrency at a given price within a given time frame. See also Put Option.
A trading strategy used to profit on discrepancy between the spot price of a crypto asset and its corresponding futures price, which usually happens when asset's value is increasing. For example, if a trader noticed an asset's spot price was £8 and its corresponding futures price was £10, they would purchase at £8 and short the future price at £10. The trader would then “carry” the asset purchased at £8 until delivery in the futures market at £10. The profit would then be £10-£8/£10 = 25% Premium on the spot price with only counter party risk, assuming no other transactional costs. See also Contango.
Abbreviation for Central Bank Digital Currency. This term has been applied to a hybrid type of digital currency that has been issued by a nation’s central bank. Largely inspired by elements of Stablecoin design, CBDCs enable central banks to create digital versions of existing fiat money where they retain control. Most CBDCs are still in an R&D phase, with an estimated 80% of the world’s central banks researching the subject. Read about CBDCs here.
The quality of being resistant to change forced by external pressure. Bitcoin is censorship resistant because of the extreme cost of trying to subvert the accuracy of transactions maintained within its blockchain.
A type of cryptocurrency exchange where the trading is facilitated at a central location and subject to the appropriate regulations. A CEX may operate across several jurisdictions complying with the regulations specific to each.
Offers new crypto focused loans/savings products, but within a traditional centralised framework, where users create accounts and provide credentials/KYC, as well as getting access to customer service. Compare to DEFI (Decentralised Finance).
The remaining difference from a Bitcoin transaction where the output exceeded the required input. This extra output is returned to the original input node via a new address and is known as Change.
A measure of the supply of a cryptocurrency that is in general circulation. Given lost or burned coins, this figure is hard to accurately establish. Circulating supply will function as a proportion of Total Supply.
Mining for cryptocurrency using rented computer equipment managed through a Cloud System. This avoids all the problems of hardware maintenance and location logisitics.
Slang term for a cryptocurrency making them more relatable. In reality cryptocurrencies are entirely virtual and have no physical representation. Often used to distinguish cryptocurrency functioning as money rather than tokens with narrow use cases on a specific blockchain.
An American cryptocurrency exchange founded in 2012 by Brian Armstrong and Fred Ehrsam. As of March 2021, Coinbase is the largest cryptocurrency exchange in the US by trading volume with over 41,000,000 users.
The first transaction in a new block created by a miner to receive the Proof of Work reward and fees for transactions included in the block.
Permanently removing tokens or coins from the circulating supply. Coin burning is usually done to restrict total supply and thereby control inflation.
A secure method for storing cryptocurrency that by default is offline (not connected to the internet) and therefore minimises the threat of hacking. Examples are Hard Wallets or Paper Wallets.
A cryptocurrency wallet that by default is offline (not connected to the internet) and therefore minimises the threat of hacking. Examples are Hard Wallets or Paper Wallets.
Funds pledged as security against which a crypto loan can be made through a CEFI or DEFI platform. Crypto loans tend to be over-collateralised, meaning the value of the collateral is greater than the loan amount.
Locking cryptocurrency in a smart contract as collateral against the issue of a stablecoin. For example locking ETH in a MKR DAO smart contract to generate DAI. The ETH can be released once the DAI has been paid back plus interest and a stability fee paid in MKR.
Methods for representing and transacting real world assets on the Bitcoin blockchain.
The chaining together of Defi primitives to create new services, building upon their codebase and combining it with a user-friendly interface.
The process by which new blocks are added to a blockchain, with all nodes confirming the transactions within the block as valid. Confirmations happen as set time intervals which vary depending on the Consensus Mechanism. One Bitcoin confirmation generally takes 10 minutes.
The time taken for a new block of transactions to be confirmed and added to the end of a blockchain. The time taken will depend on the Consensus Mechanism employed. A Bitcoin block confirmation takes roughly 10 minutes, while for Ethereum it is around 15 seconds.
Describes the process by which a blockchain reaches agreement on the validity of new data being added to the existing chain of information. Examples are Proof-of-Work, Proof-of-Stake and Delegated Proof-of-Stake.
The term given to a significant decrease in price that abruptly halts a period of prolonged price appreciation.
Is the risk that one or more sides in any agreement won't fulfil their obligation. Counterparty risk specific to crypto increases with custodial storage, trading and DEFI, which all require interaction with at least one other party.
The process of adding transactions to a blockchain by performing and solving algorithms using a Central Processing Unit (CPU).
A new kind of internet money with no controlling central authority which is instead uses blockchains to record transactions and issue currency. Blockchains are secured by cryptography and consensus mechanisms, hence the term crypto-currency
The use of codes to ensure information is only accessible by a sender and an intended recipient. Cryptography is a central element of cryptocurrency design, providing security in the absence of a central authority.
The term used to describe who controls the Private Keys for a cryptocurrency wallet., giving them control over funds. Custodial - Controlled by a 3rd party; Non-custodial - controlled by the individual.
A type of trading strategy where all positions are closed before the market trading day to avoid unmanageable risks that can occur between one day’s price close and the next day’s price open. As crypto never closes Day Trading has a slightly different meaning, closer to Swing Trading, taking advantage of short term price fluctuation using Technical Analysis.
The characteristic of a network or organisation that has no central point of authority, decision making is instead delegated to smaller groups or shared across network points (aka nodes). The Bitcoin blockchain enables a money system to be decentralised, taking banks out of the picture, and enabling users to interact directly with each other (P2P).
An application built on a blockchain, using Smart Contracts to perform the business logic. They have no single point of authority or control, and rely on the consensus mechanism of the underlying blockchain to process transactions.
An organisation that uses the decentralised qualities of blockchains and smart contracts to provide governance (decision making) through aligned economic incentive. DAOs try to solve the Principal-Agent dilemma where agents (managers or politicians) within an organisation have decision-making power but don’t feel the consequences of their decisions because they have no skin in the game.
A type of cryptocurrency exchange which has no central trading book but instead facilitates access to liquidity via smart contracts.
Offers new crypto-based financial products in a totally decentralised way. There is no bank or business, no formal account creation, just a protocol managed by smart contract, so all interaction is essentially dictated by code.
In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%. Generally, deflation is a term used to describe a fall in price levels.
A badge of honour usually specific to DEFI describing someone who approaches opportunities to earn yield with a mindset which blends trading, gaming and gambling.
A variant of the Proof of Stake consensus mechanism where providers of staked assets can delegate their voting rights to another user.
The visual representation of the current Limit Orders from Buyers and Sellers, as part of a Trading Interface for a cryptocurrency exchange.
Describes someone with the strongest resolve to not sell their crypto even in the face of negative sentiment or declining prices, because of a belief in its fundamental value. Sometimes simply referred to as Strong Hands
Adjusting of the mining hashing algorithm for the Bitcoin blockchain to ensure that blocks are created at a consistent rate of one every 10 minutes. Every 2016 blocks the average time is compared to the previous 2016 blocks; if it faster the Difficulty Level for the algorithm is increased; if slower it is decreased.
A unique alphanumeric string that identifies a specific piece of digital information.
Distributed Ledger Technology describes a method for storing information across a network of users none of which have controlling authority. A blockchain is a form of DLT, with blocks of data connected cryptographically and maintained by a network of nodes who stay in sync via a consensus mechanisms - proof of work - that relies on expending CPU power (Mining).
How to ensure that a balance within any money system cannot be spent twice. In centralised systems there are numerous checks and balances to try to minimise double spend, though it still occurs as charge-backs on credit cards. The biggest achievement of Bitcoin was solving double spend with no central authority.
The sudden sell-off of a cryptocurrency causing an immediate and significant drop in its price.
A tiny amount of cryptocurrency which cannot be used because it is less than the cost of sending.
An unmasking tactic used by both criminals and law enforcement agencies where trace amounts of a cryptocurrency are sent to large amounts of addresses with the purpose of de-anonymising them.
Abbreviation for Do You Own Research, widely used in the crypto community to encourage newcomers to make decisions based on their research and understanding, rather than blindly following opinions of others.
Explain it like I am five. Explaining something in such simple terms that a child of five would understand.
ERC-20 is the technical standard for smart contracts, token issuance and management on the Ethereum blockchain. It is one of the most common ways new cryptocurrencies are created. ERC stands for Ethereum Request for Comment. It is just one of many standards for interacting with the Ethereum Network.
The contractual use of an intermediary to hold and distribute assets on behalf of the sender and receiver. The distribution of assets is usually dependent on conditions agreed to by the transacting parties being met.
The native currency for the Ethereum Network. It functions both as a money (in a broad sense) and a token for paying for smart contracts execution.
The second most prominent cryptocurrency after Bitcoin. Created by Vitalik Buterin in 2013, Ethereum is a blockchain intended as a base layer for any application (or dApp) to run on top of using the Ethereum Virtual Machine, aka world computer. It also functions as a decentralised digital money.
Ethereum was forked in 2015 in order to recover funds from a DAO hack. Both chains were maintained, the original Ethereum became Ethereum Classic alongside a new chain simply called Ethereum.
The standardised development process for making updates to the Ethereum network.
Name given to the software that processes smart contracts built on the Ethereum Network. It is described as Turing Complete.
A fund that gives an investor exposure to a basket of securities or assets without actually owning them. ETFs can be bought and sold at any time during market trading hours. Approval of a Bitcoin ETF is seen as being a watershed moment bringing in more retail investors.
Describes a cryptocurrency project that is abandoned without notice. Those behind the project disappear along with the funds, scamming the users.
A software program that automatically dispenses small amounts of cryptocurrency at set intervals and usually after a specific criteria have been met e.g completing a capture, form submission or watching an advert.
The term to describe money created by governments which isn't backed by any asset like Gold. In Latin FIAT means 'let it be done', so Fiat Money is essentially money that functions and has value simply because the government says so.
Describes the connection between a cryptocurrency or token and the price of a fiat currency. Creating an automatic way to maintain the peg between a cryptocurrency and a fiat currency, enabled the development of Stablecoins.
An order to buy or sell a cryptocurrency that must be executed immediately or not at all.
Game theory term used to describe the competitive advantage gained by being the first to take action. In reference to cryptocurrency applies to those coins developed first, such as Bitcoin and Ethereum.
Slang term used to describe a pivotal change in price or perception of a cryptocurrency usually in reference to another coin/project e.g. Ethereum, growing to be more valuable and/or more important than Bitcoin.
Fear of Missing Out; A description of a type of buying behaviour motivated solely by a desire not to miss out on anticipated further increases in price.
A change in the design of a blockchain creating two paths which nodes and miners need to choose, like meeting a fork in a road and deciding which route to take. Each path (fork) is a new blockchain.
Fear, Uncertainty, Denial. An acronym widely used to describe unsubstantiated criticism intending to create doubt or generate negative sentiment.
A full node is responsible for verifying, authenticating, and storing all transactions occurring on a blockchain network and acts as a core server
Establishing the long term potential for adoption of a cryptocurrency based on analysis of fundamental factors, such as the problem it solves, the size of opportunity, the team involved and any existing competition. Compare to Technical Analysis.
A property of money, meaning that each unit is indistinguishable and interchangeable. Any Euro can be exchanged for any other Euro. Cryptocurrency has this property.
A type of trade that speculates on what the price of an asset will be at a specific point in the future, as opposed to Spot Trading, based on current prices.
The unit for measuring the cost of executing Smart Contracts on the Ethereum Network. Gas is paid for in Ether and denominated in Gwei, one Gwei being equal to 0.000000001 ETH (10-9 ETH) so instead of a Gas Fee being 0.000000001 Ether it would be written as 1 Gwei.
The most a user is willing to pay as a processing fee when they make a transaction on the Ethereum network. The higher the limit, the more processing power available to process the transaction validation and the faster the task will be completed.
The first block in a blockchain, with block height zero. Bitcoin’s Genesis Block had special significance as the coinbase transaction had a signed message within it “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
Refers to the backing of notes and coins in circulation with an equivalent of gold lodged with a central bank. Money supply can only grow if an equivalent amount of gold is added to bank reserves. The Gold Standard was finally abandoned in 1971 by the USA's decision to stop converting dollar reserves to gold at a fixed value.
A set of rules that defines how a system or organisation works. Within crypto, projects that issue governance tokens offer the ability to participate in the setting of its rules, with voting proportionate to the amount of tokens held.
Cryptocurrency mining using a Graphics Processing Unit (GPU) a graphics card commonly used in gaming, rather than an ASICs chip, which is designed solely for mining and nothing else.
A unit of Ether equal to 10-9 ETH, so 1 Gwei equals 0.000000001 Ether.
Name given to the halving in the block reward paid to Miners for completing the Proof of Work and adding and a new block to the Bitcoin blockchain. It halves every four years and is currently set at 6.25 BTC
A physical device with USB connection that enables non-custodial management and storage of cryptocurrency. Hard wallets by default are offline making them a safe storage option. Common manufacturers are Ledger and Trezor.
The unique identifier given to every cryptocurrency transaction, which enables you to view all input details.
A type of smart contract that requires the receiver of a payment to acknowledge their receipt within a certain time period. HTLC is the approach used by the Bitcoin Lightning Network.
A mathematical function designed to map an input of any length to a fixed size called a Hash. Bitcoin uses the SHA-256 Hash function for the proof-of-work part of the mining process.
A type of wallet that can derive all private keys from one point via a Seed, usually 12 or 24 unique words.
A automated trading method used to trade securities and crypto. HFT utilises powerful computer algorithms to transact large numbers of orders in fractions of seconds. HFT can take advantage of small market inefficiencies as well as front-running orders.
A slang term used within the crypto community meaning to steadfastly hold on to your crypto assets especially through big price dips. Hodling is a mentality driven by belief in the underlying use case for crypto. Read about the story of hodl and its origin in our blog.
A cryptocurrency wallet that by default is online (connected to the internet). Hot Wallets are convenient for transacting and trading but are more susceptible to the threat of hacking. Examples are hot wallets are Mobile Wallets and Web Wallets.
A test that applies to any contract, scheme or transaction to assess if something qualifies as an “investment contract” and is thereby subject to disclosure and registration requirements. Has become the standard test to decide whether a cryptocurrency should be classified as a security.
Describes an economy where price increases become out-of-control. Most economies aspire to a modest increase in general prices (inflation) e.g 2% annually. Hyperinflation is characterised by inflation of more than 50% per month.
Something that cannot be changed; in relation to blockchains, data that has been verified by consensus and because of the way consensus is achieved cannot be changed, and is therefore immutable.
When a cryptocurrency’s creator offers some of the tender at a discounted price or even for free as a means of raising funds and attempting to generate exposure to the market.
Describes the process of sending money abroad, one of the most common use cases being payments by migrants living abroad sending money to their family and friends in their home country.
The network of physical items that are connected via the internet. Physical objects that have software, sensors and other technologies can send and receive data over the internet - from door bells to thermostats. The network that these devices create is known as the Internet of Things.
A protocol and peer to peer network used to store and share data in a distributed file system. IPFS uses content addressing to allow data and files to be stored and served by anyone anywhere on the globe. Essentially a censorship resistant system for storing/serving web files.
An invoice is a request for payment via the Lightning Network
Tokens representing any type of debt, not just currency, serving as a line-of-credit of sorts.
In specific relation to cryptocurrency, issuance means the creation and distribution of new coins, in line with the economic rules governing the supply of the currency.
Cryptocurrency lingo – joy of missing out.
Abbreviation for Know Your Customer, generally relates to the information new customers must provide to open an account with an exchange and prove their identity. A Centralised Exchanges (CEX) is required by local regulation to collect KYC whereas a DEX isn't bound by the law of any specific location.
Abbreviation for Lamborghini, which is a popular meme associated with getting rich through crypto appreciation.
The delay between an instruction to transfer data and the actual transfer of the data, which is a crucial factor in cryptocurrency trading as may impact the ability to execute trades.
Describes the concept of building systems on top of a blockchain, such as Bitcoin, to leverage its functionality but avoid on-chain constraints. See our article on layer two, building on top of Bitcoin, to understand more.
A record of financial transactions, such as used in accounting.
A brand of cryptocurrency hard wallet.
A record of financial transactions.
A high-risk trading approach where exposure to a given trade can be multiplied by an agreed Margin - essentially on credit - thereby increasing both potential gains and losses. A 50x leveraged position will increase profits/losses by that amount e.g €200 price increase on €10,000 trade at 50x leverage will generate 100% profit, while a €200 decline will wipe out your entire investment.
Described as a Layer Two Bitcoin application because it enables off-chain transactions via payment channels, that are only processed on-chain when those channels are closed. It therefore offers a solution to scaling transactions as off-chain transactions are almost instant and far cheaper than on -chain.
Also known as Simplified Payment Verification clients, Lightweight Nodes enable users to view the transactions within blocks of a blockchain e.g Bitcoin. They don’t require a user to download the whole copy of the blockchain. Essentially, lightweight nodes participate in the network as communication endpoints.
A type of trade that will only be executed once a cryptocurrency reaches a specified price.
The automated selling of collateral, against which a crypto loan is secured, when it falls below an agreed price. Can also describe a similar process in leveraged trading when the margin requirements are no longer met.
The measure of how much of a cryptocurrency is available for immediate buying or selling. The more liquid, the more efficient the price.
A cryptocurrency modelled closely on Bitcoin but with a faster block confirmation time of 2.5 minutes (instead of ten), bigger maximum supply and different Hashing Algorithm.
A term used to describe the relationship between the size of a loan and the value of the collateral required to obtain it. LTVs are generally below 100% because to minimise risk the lender requires the value of collateral to be greater than the money being borrowed.
A trade that benefits from an increase in price e.g long position. The expectation that prices will rise “To be long bitcoin”.
A completely developed, launched and functioning blockchain network. In contrast to a Testnet that is working prototype of a blockchain used to test its function.
Trading cryptocurrency with Margin, funds borrowed from a Broker or Exchange at a given ratio (Leverage) which can amplify both profits and losses.
The number of coins in circulation multiplied by the current price.
Executing a trade at whatever price the Market offers at that specific point.
An assessment of the prevailing attitude towards a financial market, such as cryptocurrency, from investors. The feeling or tone of a market that is revealed by news, trading activity and price movement.
The total amount of a cryptocurrency that will ever exist according to its issuance structure. Bitcoin, for example, has a fixed maximum supply of 21 million bitcoin, expected to be reached around 2140. New bitcoin are created through the Mining process, currently 6.25 BTC every 10minutes.
Collection of valid transactions waiting to be confirmed by a miner. As bitcoin is decentralised each node creates an instance of the mempool.
The hash of all the individual transaction hashes contained in a block that is included in the block’s header and links to the previous and next block. Enables a simple way to validate and secure transactions within a blockchain. Read our What Is A Blockchain article to learn more.
Hierarchical structure of hashed blocks - resembling a tree - used within the Bitcoin blockchain given the efficiency of checking transaction integrity.
Describes the value of a network as the square of the amount of nodes connected to the network. For example if a network has 10 nodes, then its value is 10x10 = 100. Metcalfe's Law is used to mathematically describe network effects.
One millionth of a bitcoin or 0.000001. Read more in our guide on Sending & Receiving Crypto.
A way of earning cryptocurrency by completing small and often repetitive tasks.
One thousandth of a bitcoin or 0.001. Read more in our guide on Sending & Receiving Crypto.
The name given to the process by which new cryptocurrency is issued. Miners use specific computer hardware - mining rigs - to run arbitrary hashing algorithms (SHA-256 for Bitcoin) with the aim of finding a specific output (like a lottery) which allows the Miner to add new transactions - grouped into a block - to the existing blockchain. In return, successful miners earn a mining reward. This process is known as proof-of-work, as it requires computing power to be committed. The cost of performing the work ensures only valid transactions are added to the blockchain and secures the bitcoin network in proportion to the total computing power of all active miners.
A means of participating in a mining operation as a passive investor to share in any profits, in relation to investment, allowing the miner to diversify their risk.
Computer hardware designed for the sole purpose of efficiently mining bitcoin.
A service designed to obfuscate the tracing of cryptocurrency transactions by breaking the link from address to the recipient. This is achieved by breaking down large transactions into random sizes, or aggregating then dividing, adding time delays and utilising a network of unrelated users to obfuscate each other’s funds. Also see Tumbler.
A list of random words used as a backup to restore Bitcoin wallets that may have been destroyed or otherwise locked. These are usually generated when a wallet is created, with the user being instructed to write it down on a piece of paper for a physical backup. Also known as a Seed Phrase.
A cryptocurrency wallet functioning as an App on a mobile phone; can be either custodial or non-custodial.
An increasingly popular macroeconomic theory that sees money as a public monopoly and unemployment as evidence that the supply of that money is overly restricted. MMT expands the money supply to grow the economy and taxes to rein it in if inflation increases.
Slang term used as a rallying cry for the price of a cryptocurrency to reach new heights e.g. ‘Bitcoin price is going to the moon’ ‘Bitcoin price is mooning’
Prediction made by American engineer, Gordon Moore, in 1965, that the number of transistors per silicon chip doubles every year. To date, transistor technology development has kept apace with this prediction which has important implications for all industries that rely on computing power, such as crypto.
Requiring more than private key to sign a transaction. Offers an extra layer of security, reducing the likelihood that a wallet could be compromised.
An expression of the exponential growth in the value of a network as new users join. Often used to describe inflection points in the adoption of new technologies like cryptocurrency as the network of users reaches a critical point.
One of many computers on a network observing the same rules (aka protocol) and providing the same service. Bitcoin has two types of Node - Full and Lightweight.
Numeric field that Miners adjust to create a Hash of a new block header, aiming for that to be lower than or equal to the current Target value.
A type of digital token that is verifiably unique and can therefore be used to assert rights to ownership of digital collectibles like art or in-game items. NFTs are generated on the Ethereum blockchain using the ERC-721 or ERC 1155 standards.
A pair of conditional crypto trading orders where if one of the orders is executed the other is automatically cancelled.
Off-chain data sources for smart contracts or blockchains.
Aka Stale Block. Where two valid blocks are mined at a similar time and due to lags in the validation process by nodes lead to separate blockchains. Eventually a reorganisation takes place and the duplicate block is discarded. Given the nature of the mining/block validation process stale blocks will naturally occur.
Abbreviation for Open Source Intelligence - the collection and analysis of information that is publicly available.
Describes an asset, like cryptocurrency, as being overvalued due to excessive buying. There are technical indicators that are employed to try to establish Overbought or Oversold conditions, see Relative Strength Index.
Describes an asset, like cryptocurrency, as being undervalued due to excessive selling. There are technical indicators that are employed to try to establish Oversold or Overbought conditions. See Relative Strength Index.
Describes a tailored cryptocurrency brokerage service for large volume buyers or sellers who don't want to use an exchange usually because there isn't enough liquidity and they don't want their activity to trigger price changes.
Abbreviation for Peer-to-Peer, meaning communication between participants within a network without going through an intermediary or central point. Bitcoin is an example of a P2P network.
Used in reference to a blockchain that is only accessible to nodes/validators that are invited or given specific permission. The opposite to Permissionless.
Used in reference to a public blockchain where no permission is required to participate, for example by downloading the relevant network software and running a node. Bitcoin is an example of a permissionless blockchain. The opposite to Permissioned.
A type of fraudulent investment scheme that lures investors in with high returns that are solely funded from the deposits of newer investors. Also known as a Pyramid Scheme, as that is the shape of investor growth over time, until the fraud is mathematically unsustainable and collapses.
A platform enabling binary option bets on any discrete event. Some specialise in Politics and Economic indicators such as the IEM (Iowa Electronics Market). Contracts are purchased between 0 and 100, which respectively represent incorrect and correct predictions.
Describes the issuance of tokens or coins by a new cryptocurrency project prior to any mining activity. Premining is considered controversial as it disproportionately rewards founders/developers/early investors and dilutes the value of genuinely mined coins. In some early ICOs Premining was a characteristic of an Exit Scam.
The process by which market participants - buyers and sellers - arrive at what they consider a fair price.
A decentralised options market which allows users seeking yield on cryptocurrencies to provide liquidity for the options trading, receiving trading fees in return.
A type of cryptocurrency that is designed to maximise privacy of the user, examples being Monero or Zcash.
A 64 character alphanumeric string which controls the movement of unspent funds associated with a cryptocurrency address. Modern HD Crypto Wallets use Seed Phrases rather than requiring the handling of private keys, but the term Private Key is widely used to underscore the importance of being in control of your funds.
The idea that you can only truly own cryptocurrency by proving that you hold the Private Keys. The main proponent is Trace Mayer who advocates cryptocurrency investors withdraw their crypto from exchanges and hold them in hardware wallets. Celebrated on Proof Of Keys day, January 3rd.
A blockchain consensus mechanism where the ability to mine or validate blocks is in proportion to funds staked.
A blockchain consensus mechanism where the ability to mine or validate blocks is in proportion to the amount of work committed, measured in CPU power.
The set of rules that governs how a blockchain functions.
A blockchain that any member of the public with an internet connection can access by running a node.
A 64 character alphanumeric address which allows view only access of unspent funds and used to receive funds. The equivalent of bank account details, the address to which crypto can be sent, and the balance seen by anyone.
Describes the coordinating buying of a cryptocurrency (Pump) to create a short term increase in price, followed by coordinated selling (Dump).
The right, but not the obligation, to sell a security or cryptocurrency at a given price within a given time frame. See also Call Option.
A Quick Response code is a machine readable two-dimensional bar code with specific information about the product or service it is attached to. In crypto QR codes are used for addresses and within the Lightning Network, generating Invoices.
A low cost credit card sized computer that plugs directly into a monitor or TV. Designed by the UK based charity Raspberry Pi Foundation to make computing low-cost and accessible to everyone. Often used for running a Bitcoin Node.
Short-hand for wrecked, meaning to make a significant, or even ruinous, crypto trading loss.
A leading indicator of price, using an index of 0-100 calculated by aggregating price gains/losses over a 20 day/week period.
Protection against a replay attack, an attack on a blockchain that attempts to intercept and replay (double spend) transactions.
A price point which proves difficult to cross and will halt upward or downward momentum.
A feature of privacy coins that minimise the information associated with any transaction.
A real-time money settlement system, currency exchange and remittance network that uses the token XRP as part of its function.
Return On Investment. Calculated by dividing Profit by Amount Invested. If you make a Profit of €100 from an Investment of €1,000 your ROI is 10%. e.g (€100/€1000)*100.
The pseudonym of Bitcoin’s creator. Their real identity is not known. Remaining anonymous enables Bitcoin to function without a controlling figure or someone that could be a point of weakness/attack.
The alias used by the creator of Bitcoin. The true identity behind Satoshi Nakamoto remains unknown - at least publicly. Many speculate that Satoshi could refer to a team of people that created Bitcoin. Some have attempted to claim to be Satoshi, but no one has provided concrete evidence to back their claims. For more on how Satoshi Nakamoto’s anonymity has contributed to Bitcoin’s security see: How Bitcoin Works.
Abbreviation for Satoshi, the smallest unit of Bitcoin i.e 0.00000001
A type of digital signature invented in the 1980s that allows for signature aggregation whilst maintaining privacy standards. Schnorr Signatures were recently added to the Bitcoin Protocol allowing for more secure multi-signature transactions on the Bitcoin blockchain.
Abbreviation for the Securities and Exchanges Commission. One of the largest independent agencies of the US government responsible for protecting financial markets against manipulation, which include the trading of any cryptocurrencies considered as a Security.
The term used to describe applications built on top of a blockchain, e.g the Lightning Network built on Bitcoin.
Tradeable financial assets. The term is commonly used to refer to any form of financial instrument but this can vary depending on jurisdictions. In the United States securities fall into three broad categories: Debt, Equity and Derivatives.
Tradable financial asset. The term is commonly used to refer to any form of financial instrument but this can vary depending on jurisdictions. In the United States securities fall into three broad categories: Debt, Equity and Derivatives. This definition is crucial to cryptocurrencies as being classified as a Security and used by US citizens, they would fall under the authority of the SEC.
A type of crypto token that represents an asset, rather than providing utility within a blockchain system.
A collection of unique phrases that act as the security layer protecting a HD (hierarchical deterministic) crypto wallet and all associated addresses without needing to access individual private keys.
Early investment in a private company or project in exchange for equity (a share of ownership and future revenue).
A soft fork of the Bitcoin protocol intended to increase block space and transaction speed by splitting transactions and separating signature detail.
The economic cost of producing a currency measured by the difference between a currency's worth and the cost it took to produce it. For example, the difference between $10 dollars and the cost it took to produce a $10 bill.
A mining strategy where a miner doesn't broadcast newly mined blocks, privately growing a rival chain in an attempt to eventually hijack the public chain with his longer private chain and claim block rewards.
The name given to a significant volume of Asks (people wanting to sell) at a specific price that creates the impression of a wall on the Depth Chart for a given cryptocurrency. See also Buy Wall.
The hashing algorithm used by Bitcoin’s proof-of-work mining software.
Promoting a project or service because you are being paid or are directly benefiting.
Slang term for a cryptocurrency with no perceived real world use case.
A trade that benefits from the price of a cryptocurrency falling e.g short position.
A trading position which profits when an asset declines in price. A trader will short a cryptocurrency if they believe its price is going to fall. Their profit will be in proportion to the decline below a specified level, but they will lose in proportion to price increase.
A secondary blockchain running in parallel and linked to the main blockchain e.g the Liquid Network is a sidechain based settlement network for Bitcoin trades.
A Technical Analysis technique that uses on ongoing average of price, based on a fixed period, to help predict future price. SMA’s are calculated by adding a range of recent prices and then dividing that figure by a fixed number of days, weeks or months. e.g 7 Day Simple Moving Average is the sum of the previous seven days closing prices divided by seven. Read more about Moving Averages.
A system that employs Merkle Trees to allow for secure transactions on the Bitcoin blockchain without the need to run a full node of the network.
A type of hacking achieved by social engineering access to a mobile network provider and ordering a new SIM which enables access to SMS based security codes.
The difference between the expected price of a cryptocurrency trade and the actual price at execution. Slippage usually occurs when there is high volatility in the market or not enough liquidity to fulfil orders.
A set of rules defined in code that can be executed by an underlying blockchain for a fee e.g smart contracts on Ethereum or Binance Smart Chain.
The minimum investment level a cryptocurrency project can receive from an investment round. If this minimum is not met, any money invested is returned to the relevant investors.
A change to a blockchain protocol where only historic transactions become invalid after the update. Old nodes will recognise new transactions, described as backwards compatibility.
The programming language for creating Smart Contracts on the Ethereum blockchain.
The idea that in order for money to be useful it should have specific characteristics: portable, divisible, fungible, durable, recognisable and most importantly, be scarce.
Those cryptocurrency funds used to fund a new transaction. They appear as Spent in the Output and Unspent in the Input. See also Unspent Funds.
The Spot Price of a cryptocurrency is the price at which you can buy it 'on the spot' in other words right now. This is the simplest form a trade offered by cryptocurrency exchanges.
The difference between two price points. In cryptocurrency trading the Spread refers to the difference between the ‘Bid’ and the ‘Ask’ price and is an implied cost. The wider the spread the greater the cost of the trade.
A type of cryptocurrency specifically designed to avoid volatility by pegging their value relative to an external asset or group of assets. For example USDT (Tether) retains a value pegged to the US Dollar.
Depositing a specific amount of cryptocurrency with a provider or protocol under specific conditions and in return for specific rights or rewards.
When stakeholders group together and combine their staking resources (either computing power or currency) to increase their chances of validating blocks earning rewards.
A measure of scarcity by comparing existing supplies of an asset to the flow of new production e.g existing stock of gold divided by the yearly production of new gold.
A type of trade that will automatically close if losses reach a specific point. Used to protect a trader from excessive loss.
Something that can be relied on to hold relative purchasing into the future. Gold has historically proven a good store of value, but Bitcoin has consistently outperformed it.
Describes someone with a strong resolve to not sell their crypto even in the face of negative sentiment or declining prices, because of a belief in its fundamental value. Sometimes simply referred to as Diamond Hands.
An unconfirmed transaction yet to be included in a block usually because the fee is too low relative to other transactions.
A specific approach to trade where you attempt to profit from 'swings' i.e price changes that play out over the short to medium term.
Informal description of a large and/or sudden fall in the price of a cryptocurrency.
The analysis of future price direction based purely on historic price movement and volume, and through a range of interpretive indicators.
Interpretation of price movement and volume into pattern-based signals which can be used to predict future price direction.
Name given for a trial version of a blockchain that doesn't include real transactions.
A three letter abbreviation used as a unique identifier of a traded cryptocurrency.
Describes whether someone is focused on receiving benefits today (high time preference) or in the future (low time preference). Hodling Bitcoin is often described as low time preference, whereas Day Trading is high time preference.
A crucial element of blockchain design, it establishes the exact time/date that a block was mined and validated by a blockchain. A timestamp is hashed and includes the previous timestamp creating a chronological chain of record.
Too Lazy Didn't Read. Refers to a short summary explanation of a subject for those that don't want to read the long version
A type of cryptocurrency that has a specific use case within a blockchain ecosystem, rather broader use as money.
A type of cryptocurrency that is designed to provide specific utility within a blockchain ecosystem.
The allocation of tokens specific to a new cryptocurrency project when it is launched. Usually dispersed among founders, investors, staff, the community and for operational/marketing requirements.
As with measuring the velocity of money, token velocity will tell you have frequently tokens are being transacted. It is measured by dividing total transaction value by the market capitalisation. Token velocity is essentially measuring whether tokens are staying within the blockchain ecosystem or being sold/exchanged. A high velocity suggest lower utility and vice versa.
A browser designed to enhance anonymity by scrambling your location. Tor is often used to access the dark web.
A measure of the total amount of cryptocurrency in existence, minus coins that have been burned. Circulating Supply is a subset of Total Supply, while Total Supply is a subset of Maximum Supply.
A useful measure of the amount of cryptocurrency currently staked with a Defi protocol.
Abbreviation for traditional finance. The existing range of financial products available through traditional financial businesses and institutions e,g. banks and credit cards.
A charge applied by a cryptocurrency exchange for facilitating a trade, usually a percentage of the trade value.
When trading cryptocurrency (or any other asset) you are looking to exchange one asset for another e.g Euros for Bitcoin. This is described as a Trading Pair and uses three letter ticker symbols, in this case EUR/BTC. Trading Pairs generally rely on base currencies against other trading options are offered, commonly major Fiat currencies, BTC and ETH.
The cost of sending a cryptocurrency transaction; Fees are collected by miners who validate transactions grouped into blocks. Fees are relative to the specific cryptocurrency, the data size of transaction and the network congestion at the time. As miners earn fees for the blocks they mine (in addition to the block reward) they prioritise transactions with higher fees.
A popular brand of hard wallet, a device for securely storing cryptocurrency offline.
Describes a system that does not require participants to know or trust each or a third party in order to function.
A service designed to obfuscate the tracing of cryptocurrency transactions by breaking the link from your address to the recipient. This is achieved by breaking down large transactions into random sizes, or aggregating then dividing, adding time delays and utilising a network of unrelated users to obfuscate each other’s funds. Also see Mixer.
The characteristic of a computer or computer language which means it is able to simulate any other computer/computer language and with enough time/resource solve any computational problem. The Ethereum Virtual Machine is an example and is described as the ‘world computer’ as it is intended to be able to support any computational problem, though it isn’t infinitely scalable.
An extra layer of protection for online accounts - in addition to username and password - requiring the input of code generated by SMS or ideally an authentication App like Google Authenticator or Authy.
Abbreviation for transaction, the collective term for all of the details associated with a specific movement of funds or information on a blockchain.
When a proposed transaction cannot be added to the blockchain, usually because it is yet to have the process of broadcasting to the blockchain network and verification from miners.
The most trusted validators on the Ripple network, trusted with confirming transactions using a voting system.
Describes an irrational perception that owning whole units of cheaper cryptocurrencies is preferable to fractions of more expensive ones. See this article Do you suffer from Unit Bias.
Abbreviation for unspent transaction output. Every bitcoin transaction originates from a UTXO, essentially balances of bitcoin capable of being spent. When spent a UTXO becomes two new separate UTXOs - one sent to the recipient address and one to the sending address containing any change that is left.
A type of crypto token that facilitates a specific function as opposed to representing an asset, like a Security Token. For example, a utility token might be issued within a blockhain-based video game to purchase in-game items or services.
Blockchains use specific mechanisms for ensuring new transactions are valid, the role of Validators is to use the required consensus mechanism to validate new transactions, often in exchange for rewards.
Russian-Canadian programmer and teen prodigy best known for proposing Ethereum and running the project as one of its co-founders
The measurement of a cryptocurrency price’s fluctuation. The more fluctuation, the more volatile.
Virtual Private Network offers online privacy and anonymity by creating a private network from a public internet connection.
A means of storing cryptocurrency balance ownership. Made visible on the blockchain by its unique code, or public key, a wallet’s function is to store private keys and is available in several different forms.
A file usually located on a hard drive containing a wallet’s public and private keys as well as any other useful information as a backup.
Used to describe the behaviour of traders who have made an emotional and/or negative decision that has led to poor performance in the markets. Can also describe someone who doesn’t have faith in a particular position in a market as opposed to Strong Hands.
The development of new internet based services that are driven by machine-based understanding of data. Blockchain technology is a key example of web3.0 technology as are Artificial Intelligence, Augmented and Virtual Reality. See our Crypto Frontiers article for more on Web 3.0
Wallets designed with interoperable functionality across Web3.0 products/services. A web3.0 wallet can for example run from your browser, via a Chrome Extension, and connect you to DApps or Defi Platforms with one click. Metamask is a popular Web 3.0 wallet.
Investors with enough cryptocurrency to make large enough transactions to manipulate the market.
Individuals or entities that hold large amounts of a particular cryptocurrency - usually Bitcoin. Whales are so-called because they are large enough to ‘disturb the waters’ of the market with their transactions. For reliable Whale analysis see: https://whale-alert.io/
The function of an ICO before they became the marketing tool to generate hype around a new cryptocurrency. Interested buyers were placed on a Whitelist to gain access to cheaper cryptocurrency or have the chance to buy under special early bird conditions.
Offers a thorough overview of a cryptocurrency, outlining details including an explanation on programmed purposes, technical information and its potential future to lure buyers.
A tokenised version of bitcoin that follows the ERC20 standard and is therefore interoperable with Ethereum services like Defi and dApps. One wrapped BTC is equivalent to one native BTC. wBTC can only be created from native BTC and supply is managed through a proof of reserve system managed by a dedicated DAO.
A tokenised version of Ether that follows the ERC20 standard and is therefore interoperable with Ethereum services like Defi and dApps. One wrapped ETH is equivalent to one native ETH. wETH can only be created from native ETH and supply is managed through a proof of reserve system managed by a dedicated DAO.