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Crypto glossary

Plain-English definitions of the terms you meet most often. Not financial advice.

38 terms

Address
A string derived from a public key that others send funds to. Safe to share. Different networks use different address formats.
Airdrop
A distribution of tokens to many wallets, often as a promotion or reward. Outcomes are decided by the project running it and are never guaranteed.
AMM (Automated Market Maker)
A smart contract that prices trades against pooled tokens instead of matching buyers and sellers on an order book. The pricing model behind most DEXs.
Bitcoin
A decentralised digital currency and the peer-to-peer network that records its transactions. Supply is capped at 21 million BTC.
Block
A batch of transactions added to a blockchain, cryptographically linked to the block before it.
Blockchain
A shared, append-only ledger kept in identical copies across many computers, so no single party controls it.
Bridge (cross-chain)
A service that moves value between separate blockchains, usually by locking an asset on one chain and releasing or minting an equivalent on another.
Cold wallet
A wallet that keeps keys offline (a hardware device or paper). Best for larger, long-term holdings.
Confirmation
A transaction has one confirmation when it is included in a block; each later block adds another and makes reversal exponentially less likely.
Custodial
A setup where a third party (such as an exchange) holds your private keys, and therefore controls your funds, on your behalf.
DeFi
Decentralised finance: trading, lending and borrowing services built as smart contracts on public blockchains instead of run by banks.
DEX (Decentralised Exchange)
A smart-contract app that lets you swap tokens directly from your own wallet, with no account and no custody.
Faucet
A site that pays out tiny amounts of cryptocurrency, historically for testing or promotion. Payouts are set by the operator and can change or stop.
Fee (network)
A payment to the miners or validators who include your transaction in a block. You set it; it is not refundable once confirmed.
Gas
Ethereum’s unit for measuring computational work. Your fee is gas used multiplied by the gas price you are willing to pay.
Gwei
One billionth of an ETH (0.000000001 ETH). Gas prices are usually quoted in gwei.
Hash
A short fixed-length fingerprint of some data. Changing the data changes the hash, which is how blocks are chained together.
Hot wallet
A wallet whose keys are on an internet-connected device. Convenient for small amounts; larger attack surface.
KYC
“Know Your Customer” identity verification, required by most centralised exchanges.
Liquidity pool
A pot of two or more tokens supplied by users that a DEX or bridge draws on to fill trades or transfers.
Mempool
The waiting area of unconfirmed transactions that nodes hold before they are mined into a block.
Mining
The proof-of-work process by which a miner assembles a block, solves a computational puzzle, and earns newly issued coins plus fees.
Node
A computer running a blockchain’s software that validates transactions and keeps its own copy of the ledger.
Non-custodial
A setup where you hold your own private keys, so no third party can move or freeze your funds — and no one can recover them for you.
Private key
The secret number that authorises spending from an address. Anyone who has it controls the funds.
Proof of stake
A consensus method where validators are chosen to produce blocks based on the amount of cryptocurrency they lock up.
Proof of work
A consensus method where miners compete to solve a computational puzzle to add the next block. Used by Bitcoin.
RBF (Replace-by-fee)
A Bitcoin feature that lets the original sender rebroadcast a stuck transaction with a higher fee.
Satoshi
The smallest unit of Bitcoin: 0.00000001 BTC. There are 100 million satoshis in one BTC.
Seed phrase
12 or 24 words that can regenerate every key in a wallet. Anyone with the words controls the funds; never share or type it into a website.
Slippage
The difference between a quoted price and the executed price on a swap, caused by the market moving or by limited liquidity.
Smart contract
Code stored on a blockchain that runs automatically when called. The chain guarantees it ran, not that it is bug-free.
Stablecoin
A token designed to track the value of a reference asset, usually a fiat currency such as the US dollar.
Swap
Exchanging one cryptocurrency directly for another in a single transaction, without converting to cash first.
TXID
Transaction ID: the unique identifier of a blockchain transaction, used to look it up in a block explorer.
Wallet
Software or a device that stores the private keys controlling your crypto and signs transactions. The coins live on the blockchain, not in the wallet.
Wei
The smallest unit of ETH: 0.000000000000000001 ETH (10^-18).
Wrapped token
A token on one chain that represents an asset held or locked on another. Only as sound as the reserves and code backing it.

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