Crypto glossary
Thirty essential crypto terms, each in plain language — bookmark this page for reference.
Blockchain
A public, append-only database copied across thousands of computers. Once a transaction is written, no single party can change it without the network noticing. It is the foundation that makes cryptocurrency possible.
Wallet
A program or device that holds your private keys and lets you sign transactions. The wallet does not store coins themselves — the coins live on the blockchain. The wallet is more like a keychain than a piggy bank.
Private key
A secret number that proves you own the funds at a given address. Anyone with the private key can spend the money, so it must never be shared, screenshot, or stored online.
Public key
A mathematically derived number that can be safely shared. It produces your wallet address — the string people send funds to. Sharing it does not put your funds at risk.
Seed phrase
Twelve or twenty-four English words that mathematically generate every private key in a wallet. It is the master backup. Treat it like a bearer instrument: whoever holds it controls the money.
DeFi
Short for 'decentralized finance'. Smart-contract apps that let you lend, borrow, swap, or earn yield on crypto without a bank in the middle. It is powerful but carries smart-contract and protocol risk.
NFT
A 'non-fungible token' — a unique entry on a blockchain that points to a piece of art, an in-game item, or a digital certificate. Two NFTs are not interchangeable, unlike two units of a regular coin.
Gas fee
The cost of using a blockchain. It pays the network for the computing work needed to confirm your transaction. Fees rise when the network is busy and fall when it is quiet.
Staking
Locking your coins to help secure a proof-of-stake network in exchange for periodic rewards. Your coins remain yours but are temporarily restricted, and a faulty validator can be penalized.
Yield farming
A DeFi strategy of moving funds between protocols to capture the highest interest rate or token incentive. Returns can be high but so can the risk of bugs, scams, and impermanent loss.
DEX
A 'decentralized exchange' — an app where users swap tokens directly against pools of liquidity instead of through a central order book. Trades settle on-chain and you keep custody of your assets.
CEX
A 'centralized exchange' such as Coinbase or Binance. The company holds your funds, runs an order book and offers fiat on-ramps. Easy to use but you depend on the exchange's solvency and security.
Smart contract
A small program stored on a blockchain that runs automatically when its conditions are met. Smart contracts power DeFi, NFTs, DAOs and most non-Bitcoin applications. Bugs cannot easily be patched.
Consensus mechanism
The set of rules a blockchain uses to agree on which transactions are valid. It is what stops anyone from rewriting history. Proof of work and proof of stake are the two main families.
Proof of work
A consensus mechanism in which miners spend electricity solving puzzles to add the next block. The cost of cheating is the cost of the electricity, which is what keeps the chain honest.
Proof of stake
A consensus mechanism where validators lock coins as a deposit. Behave honestly and you earn rewards; cheat and your deposit is slashed. Much more energy-efficient than proof of work.
Halving
A scheduled event on Bitcoin where the reward miners receive per block is cut in half. It happens roughly every four years and gradually slows new supply until 21 million is reached.
Airdrop
Free tokens distributed to wallet addresses, usually to bootstrap a community or reward early users. Many airdrops are also scams that try to lure you into approving malicious contracts.
Mining
Running specialized hardware to validate proof-of-work transactions and earn block rewards. Today it is industrial-scale: solo home mining is no longer profitable for Bitcoin.
Node
A computer running the blockchain's software and storing a full copy of its history. Nodes verify every transaction independently and are what make the network decentralized.
Cold storage
Storing private keys on a device that never touches the internet, such as a hardware wallet or a paper backup. It dramatically reduces phishing and malware risk for long-term holdings.
Bull market
A period of sustained price increases and rising optimism. Crypto bull markets are usually short, intense and end suddenly. New entrants almost always arrive near the top.
Bear market
A long stretch of falling prices and falling interest. Crypto bear markets typically last 12–24 months and wipe out most of the previous bull's gains. They are also when most building happens.
HODL
A misspelling of 'hold' that became crypto slang for keeping your coins through volatility instead of trading them. Originally from a 2013 forum post, now a whole investing philosophy.
Whale
A wallet that holds enough of a coin to move its price by buying or selling. Tracking whale wallets has become a popular way to look for hints about market moves.
Altcoin
Any cryptocurrency other than Bitcoin. The term covers everything from serious projects like Ethereum to memecoins and outright scams, so it tells you almost nothing about quality.
Market cap
Current price multiplied by circulating supply. It approximates how big the project is in dollar terms. Two coins can have very different prices but identical market caps.
Liquidity
How easily you can buy or sell a coin without moving its price. High liquidity means you get a fair price even on large orders; low liquidity means even small orders can cause big swings.
Volatility
How much a price moves up and down over time. Crypto is famously volatile — even large coins routinely swing 10% in a day. It is the source of both gains and big losses.
Stablecoin
A token designed to track the price of a real-world asset, usually the US dollar. Stablecoins like USDC and USDT are used as 'cash' inside the crypto economy and as a way to escape volatility.
Educational content. Not financial advice.