A to Z Blockchain Terms

Cryptocurrency can seem confusing at first, especially with all the unique words and phrases used in the crypto world. If you’ve ever read about bitcoin, ethereum, or blockchain, you’ve probably seen terms like “wallet”, “gas fees”, “HODL”, or “staking”. These cryptocurrency words might sound complicated, but they are actually easy to understand once broken down.

crypto terms are special words used to talk about digital currencies and blockchain technology. Just like learning new slang when using social media, understanding crypto terms will help you feel more confident when investing in the space.

We’re going to explain some of the most popular cryptocurrency terms in simple and easy words. No confusing tech talk: just clear definitions that help you understand how crypto works.

crypto Glossary A to Z: Common Terms and Definitions

Address

This is a specific unique string of characters, used in sending or receiving crypto. Unlike the bank account number, it sometimes appears as an alphanumeric and QR code. Each address is linked with one particular wallet and needs to be produced for a specific transaction.

Airdrop

This refers to a no-cost distribution of cryptocurrency tokens to wallet addresses, normally to have publicity for a new project or to thank loyal users. The recipients of the airdrops will either be random or targeted and the recipients must qualify for specific conditions before they receive the tokens, for instance, holding a token of a specific type.

Altcoins

Altcoins are any cryptocurrency aside from bitcoin, such as ethereum, Litecoin, or Solana. It is usually something that tries to improve on a shortcoming of bitcoin or offers unique features such as smart contracts or faster transactions.

All-time high (ATH)

An all-time high is the highest price a cryptocurrency has ever reached in its lifetime. It is one of the metrics that are most important to both investors and traders, typically used to track the performance of a coin over time.

All-time low (ATL)

An all-time low is the lowest price that has ever been reached by a cryptocurrency. Normally, it is utilized in risk assessment and hunting for the best time to purchase when there are market downturns.

Assets Under Management (AUM)

This refers to the net value of all assets managed by a crypto fund, exchange, or platform. AUM is considered one of the most essential metrics when measuring the scale of success for financial institutions in the crypto space.

Bear Market

A bear market is a period where the prices continue going down. The market signals negativity. Prolonged downtrends, low trading volumes, and a sense of pessimism characterized this period for investors.

Block

A block is a collection of transactions recorded on a blockchain. Every block contains a cryptographic reference called hash to the prior block, creating a chain of linked data that makes the information secure and immutable.

Block Height

The block height is the number of blocks in a blockchain from the genesis block (block 0). It is used to measure the progress and length of a blockchain.

Block Reward

A block reward is a type of incentive that is provided to miners or validators to mine a block. The reward usually consists of newly minted cryptocurrencies and the fees earned by transactions.

Blockchain

A blockchain is a decentralized, unalterable ledger of transactions, recorded on a network of computers. It is not centralized and runs on a consensus mechanism like proof of work or proof of stake to validate transactions.

Bull Market

A bull market is when prices rise. The sentiment in the crypto market is usually positive, and there’s increased trading activity, optimism among investors, and an overall increase in the market.

Burn

This is the process of permanently removing tokens from circulation by sending them to an irretrievable (null) address. This process reduces the total supply, which often increases the value of the remaining tokens.

Centralized

A centralized system is controlled by a single authority, such as a company or government. In crypto, centralized exchanges (CEXs) are platforms where a central entity manages user funds and transactions.

Circulating Supply

The number of coins or tokens circulating in the market at a given time. Locked or reserved tokens are excluded and used to determine the market cap of a cryptocurrency.

Cold Wallet

A wallet that does not connect to the internet; this makes it secure from hacks. Examples include hardware wallets and paper wallets.

Consensus

It is how the network agrees to validate transactions. There are PoW and PoS in consensus mechanisms among others.

Cryptographic

A form of mathematical technique securing information and a transaction in crypto for privacy, integrity, and authenticity.

Cross-Chain

Cross-chain technology allows for the interaction of different blockchains, thus allowing assets and data to be moved seamlessly across networks. It is very important in improving interoperability in the crypto ecosystem.

Custodial Wallet

A custodial wallet is a wallet where a third party holds the user’s private keys. Though convenient, it is less secure than non-custodial wallets because the user does not have full control over their funds.

crypto Exchange

A crypto exchange is a web portal where a user can buy, sell, or trade cryptocurrency. Most exchanges are centralized (CEX) and others are decentralized (DEX).

crypto Winter

crypto winter is a long term of declining prices and low market activity. It’s generally characterized by decreased investor interest and slow project progress.

dApp

A dApp is an application that runs on a blockchain instead of a single company’s server. This means no person or group controls it. Examples include platforms for borrowing money, trading digital assets, and buying or selling unique digital items.

DAO (Decentralized Autonomous Organization)

A DAO is an online community that decides together by digital voting. Its members do not have a leader in charge; instead, they observe a set of rules embedded as code, and those who possess these special tokens can vote on changes.

Decentralized

When something is decentralized, it is not controlled by one person or company. But instead, many people or we can say computers share control, making it more open and secure. Blockchains are a well-known example of decentralized technology.

DeFi (Decentralized Finance)

DeFi is a new way of accessing financial services such as saving, lending, or trading without going through banks and other traditional institutions. It uses blockchain technology and provides the power of control over money.

Derivatives

Derivatives are financial agreements based on the value of another asset, like bitcoin. They help traders manage risk or try to make a profit by guessing how prices will change in the future.

Difficulty

In blockchain systems, the difficulty is a number that shows how hard for miners it is to add a new block of data, and it generally changes over time to keep the system running smoothly and prevent new blocks from appearing too quickly or too slowly.

Distributed Ledger

A distributed ledger is a digital record that is shared through various computers rather than being stored in one place. This makes it difficult to alter and fake information, making it much safer and more transparent.

DEX (Decentralized Exchange)

A DEX is an online platform where people can trade digital currencies without using a bank or company as a middleman.

Double Spending

Double spending happens when someone tries to spend the same digital currency more than once. Blockchain technology prevents this by keeping a secure and public record of all transactions.

DYOR

It is a common term in cryptocurrency investing. It tells people to study a project well before investing their money instead of depending on advice from others.

ethereum Improvement Proposal (EIP)

An EIP is an official proposal to enhance the technology of ethereum. Developers post such ideas, and the community discusses and votes on them.

ERC-20

ERC-20 is a standard that guarantees that digital tokens on ethereum will work correctly on different platforms like apps, wallets, and exchanges.

ERC-721

ERC-721 is a set of rules for making one-of-a-kind digital tokens, known as nfts. These tokens can represent digital art, collectibles, or virtual assets.

ethereum Virtual Machine (EVM)

The EVM is the processing system of ethereum that runs smart contracts. All transactions being run on the EVM have to follow the same rules and be secure.

Exchange Rate

The exchange rate is the value of one cryptocurrency in comparison to another or traditional money, such as dollars. It is subject to supply and demand.

Exit Scam

An exit scam occurs when the creators of a crypto project take investors’ money and disappear. This is one of the most common risks in the industry.

Explorer

A website to check any transaction, a balance in someone’s wallet, and even details regarding the blocks on the blockchain – all this through an explorer on a blockchain site.

ethereum

ethereum is a blockchain technology platform that allows users to design applications and make smart contracts on its network. Notably, ethereum is another big cryptocurrency ranking next after bitcoin.

Encryption

Encryption is a technique that encodes information in a secret code so that data cannot be accessed by hackers.

Fiat Currency

Fiat money is a traditional currency, such as the US dollar or the euro, which governments create and maintain. It’s not made of gold or silver; it is valued because people believe in it.

FOMO (Fear of Missing Out)

FOMO occurs when people rush into buying a cryptocurrency because its price is increasing rapidly. This is fear that one might miss out on a massive opportunity and, as a result, leads to impulse buying.

Fork

This is when a blockchain splits into two versions. Sometimes it’s just a small update, but sometimes it creates an entirely new and separate currency.

FUD (Fear, Uncertainty, Doubt)

FUD occurs when negative news or rumors circulate to cause panic, forcing people to sell their crypto. It is most often used as a market manipulation tool.

Fundamental Analysis

This is one way to analyze a cryptocurrency by investigating its technology, team, and real-world usage. Investors use this analysis to determine whether it has long-term potential.

Futures Contract

A futures contract is an agreement to buy or sell crypto at a predetermined price on a specified date. A trader uses it to take benefit of price variations or cap against loss.

Faucet

A crypto faucet is essentially a website or app that gives out free small amounts of cryptocurrency. They are often used to introduce new people to the world of crypto or to advertise a new project.

Flash Loan

A flash loan is a DeFi loan that does not require collateral but rather should be borrowed and then repaid all in the same transaction.

Fungible

Something is fungible if each unit is exactly the same and can be exchanged for another. In the case of cryptocurrencies like bitcoin, one bitcoin is always equal to another. Hence, bitcoin is fungible.

Full Node

A full node is a computer that keeps a complete copy of a blockchain and checks every transaction to keep the network secure and fair.

Gas

Gas is the cost that has to be paid to execute a transaction or even a smart contract on the ethereum network. It is a compensation for the miners’ usage of the computing resources.

Gas Limit

This is the maximum amount a user is willing to spend on a certain transaction. If it is too low, the transaction may fail.

Gas Price

It is the number of cryptocurrencies charged per unit of gas. In short, it incentivizes the miner to process any transaction over the others if a high gas price is attached.

Genesis Block

This is the very first block that contains all subsequent blocks in a blockchain. Genesis is hardcoded in a network.

Governance Token

A governance token is a kind of token, which gives rights to vote on project or protocol decisions. It’s one of the most important features of decentralized organizations.

GPU Mining

GPU mining involves using graphics processing units to solve complex mathematical problems, which validate the transactions on the blockchain. In comparison, GPU mining is not as efficient as ASIC mining, but it is more versatile.

Gwei

Gwei is the smallest denomination of Ether, used for measuring gas prices. One Gwei is 0.000000001 eth.

Green Address

A green address is a trusted bitcoin address. It is given by reputable services to reduce double-spending risk during instant transactions.

Halving

Halving means the compensation provided to the miners for mining new blocks and adding them to the blockchain is cut in half. The time interval in which this event occurs is usually fixed four years in the case of bitcoin. It helps control inflation through the rate of new coin creations.

Hard Cap

A hard cap is the maximum amount of money a project intends to raise in an initial coin offering, after which no more tokens are sold.

Hard Fork

A permanent split in a blockchain results in a new version that isn’t compatible with the previous version, often ending up in two cryptocurrencies, like bitcoin and bitcoin Cash.

Hash

A hash is a unique string of characters created by processing data through a cryptographic function. You can call it a digital fingerprint and is often used to secure and verify transactions on the blockchain.

Hash Rate

The hash rate measures how much computing power is being used to mine and process transactions on a blockchain. A higher hash rate means the crypto or bitcoin network is more secure.

HODL

HODL is a short form of “hold” and a misspelling started in a bitcoin forum. Nowadays, it has been widely known in the crypto community as not selling or trading your cryptos, even though the market is unstable.

Hot Wallet

A hot wallet is a type of wallet that is directly connected to the internet. While it is great for frequent use, it lacks security compared to a cold wallet.

Hybrid

Hybrid blockchain models utilize both PoS and PoW systems in an attempt to maintain security, scalability, and efficiency in terms of energy usage.

Hash Function

A hash function is a mathematical process that converts input data into a fixed-size string of characters. It is a key part of blockchain technology, helping to keep data secure and unchangeable.

Hash Power

Hash power refers to the total computing power used for mining on a blockchain. More hash power increases a miner’s chances of solving a block and earning rewards.

ICO (Initial Coin Offering)

An ICO is a fundraising method where new cryptocurrencies are sold to investors. It is the same as an IPO but for crypto projects.

IDO (Initial DEX Offering)

An IDO is a token sale that is conducted on a decentralized exchange (DEX). It allows projects to raise funds directly from the community without intermediaries.

Immutable

It is the synonym for unchangeable blockchain data, the feature by which once a transaction is recorded, it cannot change or be deleted to ensure transparency and trust.

Impermanent Loss

Impermanent loss refers to the loss in terms of reduced value of the assets held in a liquidity pool than the ones they individually own or have apart. This brings risks for DeFi liquidity providers.

Inflationary

Such crypto assets have an increasing supply with each passing time because of their token generation.

Interoperability

Interoperability is the ability of different blockchains to communicate and share data. It is crucial in making a connected and efficient crypto ecosystem.

IPFS (InterPlanetary File System)

IPFS is a decentralized file storage system that enables users to store and share data across a distributed network. It is often used with blockchain projects.

Issuance Rate

It is the rate at which the new coins are created and are distributed. In other words, it is an important factor concerning the inflation and supply dynamics in a cryptocurrency.

JOMO (Joy of Missing Out)

JOMO is the opposite of FOMO and is defined as being happy with not joining the crowd or taking advantage of something. It points toward patience and long-term thinking.

Jager

A Jager is the smallest unit of a Binance coin, similar to that of a Satoshi in bitcoin. It is 0.00000001 BNB.

Joint Consensus

Joint consensus is the type where more than one party agrees on validating transactions. It is part of some hybrid blockchain models for more security.

Junk Coins

Junk coins are those low-valued and fraudulent coins, providing little or no utility or potential. It’s often done just to take advantage of naive investors.

JIT (Just-In-Time)

JIT is a trading strategy where orders are executed at the last possible moment to minimize risk and maximize efficiency. It is often used in high-frequency trading.

KYC (Know Your Customer)

The process used by exchanges as well as institutions to verify one’s identity. This is often intended for anti-fraudulent measures. This is against money laundering and other unlawful transactions.

Key Pair

It is made up of a public and a private key. While the former is used in receiving funds, the latter is used more important and used to access and authorize transactions.

Keccak-256

This is a cryptographic hash function used in ethereum. It provides the integrity and security of data on the blockchain.

KYC/AML Compliance

KYC/AML compliance is following rules that prevent money laundering and verify user identities. These are a requirement for most cryptocurrency exchanges.

KYC-Free Exchange

A KYC-free exchange is an account where the user can trade cryptocurrencies without verifying their identity. MEXC is one of the top no-KYC crypto exchanges.

KYC Whitelist

A KYC whitelist refers to a verified list of users who are allowed to participate in token sales or other restricted activities. It ensures compliance with regulatory requirements.

KYC Verification

KYC verification is the process of submitting personal documents, such as a passport or driver’s license, to prove identity. It is a standard requirement for accessing many crypto services.

Ledger

It is a record of all transactions on a blockchain. It is decentralized and immutable, which ensures transparency and security.

Liquidity

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity ensures easy trading and market stability.

Limit Order

This is an order that will purchase or sell a cryptocurrency at a given price or better. This enables the trader to have control over the entry and exit points.

Leverage

It gives traders a way to borrow money so as to amplify the position size. Though this will amplify profit, it will increase the risk of massive losses.

Layer 1

It refers to the basic blockchain protocol like bitcoin or ethereum. This will handle core functionalities such as validation of transactions and consensus.

Layer 2

These solutions are built on top of Layer 1 blockchains, improving scalability and efficiency. Examples are the Lightning Network for bitcoin and rollups for ethereum.

Liquidity Pool

A liquidity pool means funds locked in a smart contract to perform trading on decentralized exchanges. Here, those who provide liquidity can earn fees for contributing to the pool.

Long Position

A long position is when a trader buys an asset with the expectation that its price will rise. It is a common strategy in bullish markets.

Lending Protocol

It is a borrowing and lending of cryptocurrencies in an entirely decentralized nature, with such examples including Aave and Compound.

Market Cap

It is the overall value of a cryptocurrency, found by multiplying its current price with the total circulating supply. The metric is very important in the assessment of the size and popularity of a coin.

Mining

This process verifies the transactions and includes them in the blockchain. The mining efforts are compensated by the issuance of newly generated coins and also transaction fees.

Mining Pool

In this, one or more groups of miners together pool their processing powers to try and solve blocks with higher opportunities. The returns are shared by each miner from the pool directly proportional to every miner’s efforts.

Mainnet

A mainnet is the operational version of a blockchain where actual transactions take place. It is different from a testnet, which is generally used for testing and development purposes.

Margin Trading

In margin trading, a trader borrows money to make bigger trades than his or her balance would otherwise support.

Merkle Tree

A Merkle tree is an efficient data structure used in blockchains to validate the integrity of long data sets. Without a Merkle tree, all the transactions would not be processed safely.

Mempool

Mempool is an area where all unconfirmed transactions are temporarily stored. Miners select some and add them to the next block.

Metaverse

The metaverse is a virtual space for users to interact, trade, and create content. Blockchain technology ensures ownership of digital assets in such a space.

Multi-signature wallet

A multi-signature wallet demands more than one private key for the authorization of a transaction, which means it is secure without the risk of a single point of failure.

Masternode

A masternode is a specialized node on the blockchain network and can be employed for specific actions, such as transaction validation or offering privacy. Masternode operators are compensated for their service.

nft (Non-Fungible Token)

An nft proves ownership of digital items, such as digital art, music, or a piece of virtual land. Because each nft is unique, they differ from regular digital coins, which all are identical.

Node

In simple words, a node is just a computer that aids the functioning of a blockchain. Nodes check and exchange transactions. However, some nodes keep the complete blockchain history; others only refer to parts.

Nonce

A nonce is a random number miners use to solve puzzles when adding new blocks to a blockchain. It helps keep the system safe.

Network Fees

These are small payments you make when sending crypto. The money goes to miners or validators, who help process transactions. Fees go up when the network is busy.

Nakamoto Consensus

This is how bitcoin guarantees that all computers (nodes) agree on the same data. It uses mining and follows the longest chain in order to make the network safe.

Non-Custodial Wallet

A non-custodial wallet allows users to have full control over their cryptocurrencies. No company or third party holds your keys, but this means you have to be responsible for keeping your keys safe.

nft Marketplace

This is a website where people buy, sell, or trade nfts. Some popular ones are OpenSea and Rarible.

Network Hashrate

This is a measure of the amount of computing power working to secure a blockchain. The more the hashrate, the stronger and safer the network is.

Nested Blockchain

A nested blockchain is built inside another blockchain. It makes use of the security of the main blockchain but works independently in processing more transactions.

Oracle

An oracle is like a bridge that bridges blockchain with the real world, helping smart contracts get outside info, such as weather data or stock prices.

Off-Chain

Off-chain means stuff happens outside the blockchain. It is faster and cheaper but not so secure or transparent as on-chain stuff.

On-Chain

On-chain means everything is recorded on the blockchain. It’s super secure and can’t be changed, but it’s slower and more expensive.

Open Source

This means the blockchain’s source code is public. Anyone can go there and see. Most of the blockchain projects are open-source so people can work together and keep things fair.

Order Book

An order book is a list of buy and sell offers for crypto on an exchange. It shows who wants to buy, who wants to sell, and at what price. Traders use it to decide when to make a move.

Over-the-counter (OTC)

OTC trading is when people buy or sell crypto directly instead of using an exchange. Generally, high-volume investors do this to avoid messing up market prices.

Optimistic Rollup

Optimistic rollup is a method of accelerating transactions on the blockchain. It pools together many transactions and assumes that they are all good unless someone proves otherwise.

Oraclize

Oraclize is a service that helps smart contracts get real-world data. It is an oracle type used in blockchain applications.

Offline Transactions

An offline transaction takes place without internet, often using either a hardware wallet or paper wallet. The reason why one is considered safer is that hackers cannot steal one’s money because one is not connected to the internet.

On-ramp

An on-ramp is essentially how one buys crypto with regular fiat money. crypto exchanges and apps like Coinbase and Binance use this to deposit funds.

Private Key

This is a private key that functions as a secret password for your crypto. When someone gets this, they can take your money, so you have to keep it safe.

Public Key

A public key is like your crypto address. People can send you money using it, but they can’t take anything from you. It’s created from your private key.

Proof-of-Stake (PoS)

PoS is a way blockchains decide who gets to add new transactions. People lock up their coins (stake them), and the more they stake, the higher their chances of getting chosen. It’s faster and uses less energy than proof-of-work.

Proof-of-Work (PoW)

PoW is the method behind bitcoin and some other blockchains. One miner solves complex mathematical problems to add new transactions. It’s very secure but requires a great amount of energy.

Paper Wallet

A paper wallet is just your private key and public key written on paper. It’s safe from hackers but easy to lose, so you have to be careful with it.

Peer-to-Peer (P2P)

P2P means people trade directly with each other instead of using a middleman. crypto makes this safe and easy.

Protocol

A protocol is just a set of rules followed by blockchains. It determines how data moves and how the confirmations of the transactions happen.

Plasma

Plasma is a method of making ethereum faster. It constructs small extra blockchains that help process transactions so the main network does not get overcrowded.

Permissioned Blockchain

A permissioned blockchain is private and only lets certain people in. Companies use these when they want more control over their data.

Permissionless Blockchain

A permissionless blockchain is open to everyone. Anyone can join, make transactions, or help run the network. bitcoin and ethereum work this way.

QR Code

A QR code is a special barcode that contains information, like a crypto address. Instead of typing long wallet addresses, you will just scan the code to transfer or take out crypto easily.

Quantum Computing

Quantum computers are super powerful machines that might break today’s encryption. crypto experts are working on new ways to protect blockchains from these future computers.

Quantum Resistance

It indicates that crypto security is made strong enough that even quantum computers cannot hack it. The developers are finding ways to protect blockchains for the future.

Rug Pull

The scammers hype up a crypto project and convince people to invest in it. Later, they simply disappear with all the money. This is usually what happens in DeFi when projects don’t have appropriate checks.

Ripple (XRP)

Ripple is a system for moving money between countries super-fast and cheap by using blockchain. XRP is the currency on it.

Rollup

The way to make blockchains fast and cheap. It takes a batch of transactions, bundles them, and processes all of them as a single group rather than one by one.

Rehypothecation

This is where a person uses the same collateral for different loans. That is risky in DeFi since if things go wrong, a lot of people can lose money.

Rebase Token

A rebase token is a crypto that automatically adjusts its supply to keep a stable price. Ampleforth is one example.

Rekt

Slang for when someone loses a ton of money in crypto. Usually used as a joke when a bad investment goes horribly wrong.

Rug Proof

A project is “rug proof” if it has safety measures to stop scams, like locking funds or getting audited. This helps investors feel safer.

RPC (Remote Procedure Call)

A way for programs to talk to a blockchain without running a full node. It helps apps and wallets get blockchain data easily.

Regulatory Compliance

This means following the legal rules for crypto. Exchanges and projects have to do this to avoid getting shut down.

Rug Pull Index

A score that measures how risky a project is. This includes aspects like whether there is locked liquidity and if the team is public and trustworthy.

Satoshi (Sats)

The smallest unit of bitcoin equivalent to cents in dollars. One satoshi is the same as 0.00000001 btc, meaning you don’t necessarily need to buy a whole bitcoin to have some. It’s named after bitcoin’s mysterious creator, Satoshi Nakamoto.

SegWit (Segregated Witness)

This is an enhancement of bitcoin that reduces the size of a transaction by separating additional information. More transactions fit in every block and contribute to a faster network with lower fees for transactions. It also improves the security and scalability of bitcoin.

SHA-256

It is a highly secure coding system to keep Bitcoins safe. Data gets converted into fixed-length codes so that the data cannot be hacked easily. bitcoin transactions and mining are secure and trustworthy for the same reason.

Smart Contract

It is more or less a self-running program on the blockchain which follows a set of rules. It is automatically working in nature, which means there is no need for a bank or a middleman. People are using it to create digital agreements, payments, and even games.

Solidity

Solidity is a programming language used to create smart contracts on ethereum. It works a bit like JavaScript but is made specifically for blockchain apps. If you want to build apps on ethereum, you’ll need to learn Solidity.

Stablecoin

A stablecoin is a cryptocurrency that keeps a steady price. It’s usually tied to real money, like the US dollar, so it doesn’t jump up and down in value like bitcoin. People use stablecoins for trading, payments, and avoiding crypto market crashes.

Staking

It is when you lock up your crypto to help run a blockchain network and earn rewards for that. You’re essentially helping to keep the network secure by staking, and in return, you’re going to earn more rewards based on how much you stake.

Sharding

Sharding is a way to make blockchains faster by splitting them into smaller parts. Then every part can execute transactions alone; the overall system doesn’t decelerate for that purpose, making them allow the blockchain to perform several transactions simultaneously.

Sidechain

This is an alternate blockchain running parallel to the main one. It helps the transactions to process faster and cheaper without messing with the main blockchain. Sidechains are fantastic for testing new features and improving scalability.

Soft Fork

It is a small update to a blockchain that won’t cause a split. It offers new rules but will remain compatible with the old system, so people can keep using the same blockchain without problems. This will be like updating software with improvements without breaking it.

Token

A token is a kind of digital money or an item on a blockchain. Thus, a token can represent a currency or ownership of some other thing.

Tokenomics

Tokenomics is the description of how crypto works with their money stuff, including how many tokens exist and how they are shared along with for what purposes. It is used to help people make a judgment about whether a crypto project is good or not.

Testnet

A testnet is like a practice version of a blockchain. Developers use it to test things before launching them on the real blockchain. The tokens here are fake, so no one loses real money.

Trading Pair

A trading pair is two different cryptocurrencies that you can swap for each other, like bitcoin and ethereum (btc/eth). It’s how people trade crypto on exchanges.

Turing Complete

If something is Turing-complete, it means it can solve any problem if it has enough time and power. ethereum’s smart contracts are like this, so they can handle really complex tasks.

Transaction Fee

A transaction fee is the small amount of money you pay when sending crypto. This fee goes to miners or validators who process the transaction. The price changes depending on how busy the network is.

Trustless

A trustless system means that people do not need to rely on each other for things to work. This is made possible by blockchain by using math and rules that cannot be cheated against.

Token Burn

Token burn is when a few tokens are destroyed forever, making the rest of the tokens rarer. This can cause them to have a higher value.

Two-Factor Authentication (2FA)

This is an added security measure in logging into accounts. In addition to a password, you require a code from an app or text message to gain access.

Unspent Transaction Output (UTXO)

UTXO is the crypto that is left over when you make a transaction. It’s like getting change after buying something with cash. The leftover amount stays in your wallet until you spend it again.

Utility Token

This is the kind of cryptocurrency that gives you access to some kind of product or service on a project. Not meant as money, the token can only be used in the system to which it relates; for instance, a ticket for an event.

Validator

The validator refers to the party verifying and endorsing transactions on the blockchain. Provided you stake cryptocurrencies on some network, now you have a chance of becoming a validator where you earn from doing so.

Vesting

Vesting refers to when the flow of crypto tokens is locked, released, and then given out gradually. This prevents the dumping of a lot of tokens at once, thereby causing a crash in the price.

Volatility

Volatility is how much the price of crypto changes. Cryptocurrencies change a lot in a short period of time. This tends to make them high-risk while giving a good chance of major profits.

Wallet

A wallet is where you store your bitcoin and other digital currencies. It can be online (hot wallet) or offline (cold wallet) to keep your coins safe.

Wash Trading

Wash trading is when someone is buying and selling the same crypto to make it look like there is a lot of activity. It tricks people into thinking a coin is more popular than it is.

Web3

Web3 is sort of the idea of a new internet that’s built on blockchain. Instead of big companies controlling everything, you own your data and can use crypto to interact online.

Whale

A whale is an investor who holds large amounts of cryptos. As such, his buying or selling can easily alter the entire trend of the market.

Whitepaper

A whitepaper is like a paper explanation of what exactly a crypto project is. What it does is explain how something works, why it solves those problems, and why it will be valuable to you.

Wrapped Token

A wrapped token is a crypto that represents another coin on a different blockchain. For example, Wrapped bitcoin (WBTC) lets you use bitcoin on the ethereum network.

XRP

XRP is a cryptocurrency made by Ripple. It’s mainly used for fast and cheap international payments between banks.

Yield Farming

This is a way of getting more crypto through lending or staking of your tokens. The more you put in, the more you benefit from it; however, there are risks attached.

Zero-Knowledge Proof (ZKP)

This refers to the verifiability of the fact that something is true without showing all the details. It is used in crypto for privacy purposes, so you can confirm a transaction without revealing your data.

Zk-Rollup

Zk-Rollup is a method of making blockchain transactions faster and cheaper. It processes many transactions off-chain and then adds them to the main blockchain in one batch.