Crypto Glossary

Plain-English definitions of 70+ crypto and trading terms every beginner runs into

A

Airdrop

An airdrop is a free distribution of tokens sent directly to crypto wallets. Projects use them to market a new coin, reward early or loyal users, and spread ownership across a community. Some require simple tasks to qualify. Be cautious, though: fake airdrops are a common scam — learn more in our guide to crypto airdrops.

Altcoin

Altcoin is short for "alternative coin" and means any cryptocurrency other than Bitcoin. The label covers everything from major networks like Ethereum to thousands of smaller, riskier projects. It says nothing about quality — only that the coin is not Bitcoin. Read our beginner guide to altcoins to see how they differ.

AMM

AMM stands for automated market maker. It is a type of smart contract that prices and settles trades on a decentralized exchange using pooled deposits of tokens, called liquidity pools, instead of a traditional order book matching buyers and sellers. AMMs are what let you swap tokens instantly on a DEX without a middleman.

ATH

ATH stands for all-time high — the highest price an asset has ever reached. Traders watch it closely because a new ATH signals uncharted territory with no prior sellers "stuck" above the current price. It is one of the most-quoted milestones in a bull market. Read more →

ATL

ATL stands for all-time low — the lowest price an asset has ever traded at. It is the mirror image of an all-time high. Traders sometimes reference it to gauge how far a coin has fallen from earlier levels, though a low price alone tells you nothing about whether an asset is a bargain.

B

Bear market

A bear market is a prolonged stretch of falling prices and widespread pessimism, when most assets trend downward for weeks or months. In crypto these drawdowns can be steep. Understanding where one sits in the wider pattern of booms and busts helps — see our guide to crypto market cycles.

Bull market

A bull market is a prolonged stretch of rising prices and general optimism, when buyers outnumber sellers and assets trend upward. It is the opposite of a bear market. Bull runs can drive rapid gains but also fuel hype and FOMO, so context matters — see our guide to crypto market cycles.

Blockchain

A blockchain is a distributed digital ledger that records transactions in batches called blocks, each cryptographically linked to the one before it. Because copies are shared across many computers, the history is very hard to alter. It is the core technology behind every cryptocurrency — learn more in our guide to what a blockchain is.

Blue chip

In crypto, a blue chip is an established, relatively lower-risk coin with a large market capitalization and a long track record, such as Bitcoin or Ethereum. The term is borrowed from stock markets. "Lower risk" is relative, of course — even blue-chip crypto is far more volatile than traditional blue-chip stocks.

Burn

Burning tokens means permanently removing them from circulation by sending them to a special address that no one can spend from. Projects burn tokens to reduce the total supply, which can support scarcity. A burn is verifiable on-chain, so anyone can confirm the tokens are truly gone for good.

C

CEX

CEX stands for centralized exchange — a platform run by a company that takes custody of your funds and matches trades for you. CEXs are usually the easiest on-ramp for beginners, but you are trusting the company to safeguard your assets. See how they compare in our guide to CEX vs DEX.

Cold wallet

A cold wallet stores your crypto keys offline, often on a dedicated hardware device. Because it is not connected to the internet, it is far safer from remote hacks and malware than an online wallet. Cold storage is a common choice for holding larger amounts long-term — learn more in our guide to crypto wallets.

Consensus mechanism

A consensus mechanism is the method a blockchain network uses to agree on which transactions are valid and what the shared ledger should say. Proof of work and proof of stake are the two best-known examples. It is what lets thousands of independent computers stay in sync — more in our guide to what a blockchain is.

Custodial wallet

A custodial wallet is one where a third party, such as an exchange, holds your private keys on your behalf. It is convenient and easy to recover, but you are trusting that company with control of your funds. The common saying "not your keys, not your coins" refers to this trade-off — more in our guide to crypto wallets.

D

DAO

A DAO, or decentralized autonomous organization, is a group governed by its members through token-holder votes rather than by a traditional company hierarchy. Rules and treasury decisions are often enforced by smart contracts. DAOs coordinate shared funds and projects transparently — learn more in our guide to what a DAO is.

dApp

A dApp, short for decentralized application, is software that runs on smart contracts and a blockchain instead of a single company's servers. Because no central operator can quietly change or shut it down, users interact with it directly from their wallets. DeFi platforms, NFT marketplaces, and on-chain games are all dApps.

DCA

DCA stands for dollar-cost averaging — investing a fixed amount at regular intervals regardless of price, rather than trying to time the market. Buying steadily through ups and downs smooths out your average entry price and removes a lot of emotion from the process. See our guide to dollar-cost averaging in crypto.

DeFi

DeFi is short for decentralized finance: financial services like lending, borrowing, and trading that run on blockchains through smart contracts instead of banks or brokers. It can be powerful, but it carries real risks from bugs, scams, and volatility. Learn how it works in our guide to what DeFi is.

DEX

DEX stands for decentralized exchange — a platform where you trade tokens directly from your own wallet, with smart contracts handling the swaps and no company holding custody of your funds. You keep control, but you also bear full responsibility for security. Compare the two models in our guide to CEX vs DEX.

Diamond hands

"Diamond hands" is community slang for holding an asset through heavy volatility instead of panic-selling when the price drops. It signals conviction and a long-term mindset, and is the opposite of "paper hands." The phrase is playful, not a strategy — conviction should be grounded in research, not memes. Read more →

E

ETF

An ETF, or exchange-traded fund, is an investment fund that trades on a stock exchange and gives you price exposure to an asset through an ordinary brokerage account. A spot Bitcoin ETF, for example, lets investors track Bitcoin's price without holding the coin themselves. Learn more in our guide to Bitcoin ETFs.

F

Fear and Greed Index

The Fear and Greed Index is a sentiment gauge that scores the market's mood on a scale running from extreme fear to extreme greed. It blends signals like volatility, momentum, and volume into a single number. Contrarians watch it for extremes — see how mood drives markets in our guide to crypto market cycles.

Fiat

Fiat refers to government-issued currency such as the US dollar, euro, or yen. Its value comes from government backing and public trust rather than a physical commodity like gold. In crypto, "fiat" is the everyday money you convert into and out of when buying or selling coins.

FOMO

FOMO stands for fear of missing out — the urge to buy impulsively because a price is climbing fast and you do not want to be left behind. It is one of the most common ways beginners overpay near a peak. Recognizing it is the first step to trading calmly. Read more →

FUD

FUD stands for fear, uncertainty, and doubt — negative sentiment, sometimes exaggerated or deliberately spread, that can trigger panic selling. The term is often used to dismiss criticism, so treat it with care: not every concern is baseless FUD. Read more →

Futures

Futures are contracts to buy or sell an asset at a set price on a future date, and in crypto they are frequently traded with leverage. They let traders bet on price direction without holding the underlying coin, but leverage magnifies both gains and losses. See how they differ from spot in our guide to spot vs futures trading.

Fork

A fork is a change to a blockchain's rules. A soft fork is backward-compatible, while a hard fork is a bigger break that can split the chain into two separate versions, each with its own coin — as happened when Bitcoin Cash split from Bitcoin. Forks are how blockchains upgrade or diverge.

G

Gas fee

A gas fee is the payment you make to have a transaction processed or a smart contract run on a blockchain. It compensates the network for the computing work involved and rises when the network is busy. On Ethereum especially, gas fees can vary a lot from moment to moment. Read more →

Gwei

Gwei is a small denomination of Ether, equal to one billionth of an ETH, and it is the unit most commonly used to quote gas prices. Because a single transaction costs only a tiny fraction of an ETH, pricing gas in gwei is far more readable than writing out long decimals. Read more →

Genesis block

The genesis block is the very first block of a blockchain — the foundation every later block builds on. Bitcoin's genesis block, mined in January 2009, famously contained a hidden news headline in its data. Because nothing comes before it, the genesis block is hardcoded into the network's software.

H

Halving

The halving is a scheduled event, occurring roughly every four years, that cuts the reward miners earn for adding a new Bitcoin block by about 50%. By slowing the rate at which new coins are created, it enforces Bitcoin's capped supply. Learn how it fits Bitcoin's design in our guide to what Bitcoin is.

Hash rate

Hash rate is the total amount of computing power devoted to securing a proof-of-work network like Bitcoin. A higher hash rate generally means a more secure chain, because an attacker would need to out-compute an ever-larger share of the network. It is often cited as a health indicator for mining-based coins.

HODL

HODL is crypto slang for holding a coin long-term instead of selling, especially through periods of volatility. It began as a typo of "hold" in an old forum post and grew into a community mantra, sometimes backronymed to "hold on for dear life." It captures a patient, buy-and-hold mindset. Read more →

Hot wallet

A hot wallet is a crypto wallet connected to the internet, such as a mobile app or browser extension. It makes sending and trading quick and convenient, but that constant connectivity leaves it more exposed to hacks than offline storage. Many people keep small, spendable amounts in one — more in our guide to crypto wallets.

I

ICO

An ICO, or initial coin offering, is an early fundraising sale in which a project sells a brand-new token to raise money, often before the product exists. ICOs drove the 2017 crypto boom but were also rife with scams and failures, so they carry considerable risk and now face far more regulatory scrutiny.

IDO

An IDO, or initial DEX offering, is a token launch that takes place on a decentralized exchange rather than through a central platform. It lets a project list and sell its token permissionlessly, with trading beginning almost immediately. Like other early sales, IDOs can be highly speculative and risky for buyers.

K

KYC

KYC stands for know your customer — the identity-verification checks that regulated exchanges must run before letting you trade. Typically you submit an ID and personal details so the platform can comply with anti-money-laundering laws. Centralized exchanges require it; many decentralized ones do not.

L

Layer 1

A Layer 1 is a base blockchain that settles its own transactions and provides its own security, such as Bitcoin or Ethereum. It is the foundational layer everything else builds on. When people compare "L1s," they usually mean rival base networks competing on speed, cost, and decentralization.

Layer 2

A Layer 2 is a network built on top of a Layer 1 to make transactions faster and cheaper, then settling back to the main chain for security. Ethereum rollups are a common example. L2s aim to ease congestion and lower fees without giving up the underlying blockchain's trust.

Leverage

Leverage means borrowing funds to open a position larger than your own capital would allow, multiplying both potential gains and potential losses. A small adverse move can wipe out a leveraged position entirely. It is one of the fastest ways beginners lose money — understand the risks in our guide to leverage and margin.

Limit order

A limit order is an instruction to buy or sell only at a specific price or better, rather than at whatever the market offers right now. It gives you control over your entry or exit price, though it may not fill if the market never reaches your level. Compare it with a market order in our guide to crypto order types.

Liquidity

Liquidity describes how easily an asset can be bought or sold without significantly moving its price. Highly liquid markets have plenty of buyers and sellers, so trades fill quickly at expected prices. Thinly traded coins are illiquid, meaning even modest orders can cause large price swings and wider gaps between bids and asks.

Liquidity pool

A liquidity pool is a smart-contract reserve of two or more tokens that people deposit so others can trade against it on a decentralized exchange. In return, depositors earn a share of the trading fees. Pools are the engine that lets DEXs work without a traditional order book — more in our guide to what DeFi is.

M

Margin

Margin is the collateral you post to open and maintain a leveraged position. If the trade moves against you and your margin runs too low, the position can be liquidated to cover the borrowed funds. Trading on margin amplifies risk considerably — understand it fully in our guide to leverage and margin.

Market cap

Market capitalization is a coin's price multiplied by its circulating supply, giving a rough measure of its total value and relative size. A low unit price does not mean a coin is "cheap" — supply matters just as much. Learn why it is a better yardstick than price alone in our guide to crypto market cap.

Market order

A market order is an instruction to buy or sell immediately at the best available price. It prioritizes speed and near-certain execution over price control, so in fast-moving or thin markets the fill price may differ from what you expected. Compare it with a limit order in our guide to crypto order types.

Memecoin

A memecoin is a cryptocurrency driven mainly by internet memes, hype, and community enthusiasm rather than by underlying technology or fundamentals. Prices can spike and crash violently on sentiment alone, making them highly speculative. Understand what you are getting into first with our guide to what a memecoin is.

Mining

Mining is the process of validating transactions and adding new blocks to a proof-of-work blockchain by solving computationally hard puzzles, with miners earning newly minted coins and fees as a reward. It is how networks like Bitcoin stay secure without a central authority — more in our guide to what a blockchain is.

Mint

Minting is the act of creating new tokens or NFTs and recording them on a blockchain. For NFTs it usually means publishing a brand-new item for the first time; for tokens it means issuing new units according to the project's rules. Minting is the on-chain counterpart to burning.

N

NFT

An NFT, or non-fungible token, is a unique digital token recorded on a blockchain that represents ownership of a specific item, such as art, collectibles, or in-game assets. Unlike a coin, each NFT is one of a kind and not interchangeable. Learn how ownership works in our guide to what NFTs are.

Node

A node is a computer that runs a blockchain's software and keeps a copy of its ledger, helping relay transactions and verify that the network's rules are followed. The more independent nodes a network has, the more decentralized and resilient it tends to be — more in our guide to what a blockchain is.

O

Off-ramp

An off-ramp is any service that lets you convert crypto back into fiat currency, such as an exchange that sends dollars to your bank account. It is the exit path from crypto into traditional money. Reliable off-ramps matter because they determine how easily you can actually cash out.

On-ramp

An on-ramp is any service that lets you convert fiat currency into crypto, such as buying Bitcoin with a debit card or bank transfer. It is the entry path from traditional money into crypto. For most beginners, a centralized exchange is the first on-ramp they use.

Oracle

An oracle is a service that feeds real-world data, like asset prices or event outcomes, into smart contracts, which cannot access outside information on their own. Much of DeFi relies on oracles for accurate pricing. Because a faulty or manipulated feed can be exploited, oracle security is a serious concern.

P

Paper hands

"Paper hands" is community slang for selling quickly at the first sign of trouble, often out of fear rather than strategy. It is the opposite of "diamond hands" and is usually used teasingly. Like most crypto slang, it is a label, not advice — there are plenty of sound reasons to sell. Read more →

Private key

A private key is the secret code that gives control over the crypto in a wallet. Anyone who has it can move the funds, so it must never be shared or exposed. Losing your private key usually means losing access permanently. Keeping it safe is essential — more in our guide to crypto wallets.

Proof of Stake

Proof of Stake is a consensus method that secures a blockchain by having participants lock up, or "stake," their coins for the right to validate transactions, instead of solving energy-intensive puzzles. It is far more energy-efficient than proof of work, and staking earns rewards — learn more in our guide to crypto staking.

Proof of Work

Proof of Work is a consensus method that secures a blockchain by requiring miners to expend real computing power solving hard puzzles before they can add a block. This work makes attacks expensive, but it also uses a lot of energy. Bitcoin is the best-known example — more in our guide to what a blockchain is.

Public key

A public key is derived from your private key and forms the basis of the wallet address you share to receive funds. Unlike the private key, it is safe to give out. Think of the public key as your account number and the private key as the password that controls it — more in our guide to crypto wallets.

Pump and dump

A pump and dump is a manipulation scheme in which organizers hype a low-value coin to inflate its price, then sell their holdings at the top, leaving later buyers with steep losses when it crashes. These schemes are illegal in regulated markets. Learn to spot the red flags in our guide to avoiding crypto scams.

R

Rug pull

A rug pull is a scam in which a project's developers suddenly drain its liquidity or abandon it after attracting investor money, leaving holders with worthless tokens. It is especially common with anonymous teams and hyped new coins. Learn the warning signs in our guide to avoiding crypto scams.

RSI

RSI, the relative strength index, is a momentum indicator that moves between 0 and 100 to show whether an asset may be overbought or oversold based on recent price action. Many traders watch readings above 70 or below 30 as possible signals. See how to use it in our guide to crypto technical indicators.

S

Satoshi

A satoshi, or "sat," is the smallest unit of Bitcoin: one hundred-millionth of a single BTC. It is named after Bitcoin's pseudonymous creator, Satoshi Nakamoto. Because one whole Bitcoin can be expensive, prices and small transactions are often expressed in sats. Read more →

Seed phrase

A seed phrase is a list of typically 12 or 24 words that can restore your entire wallet if your device is lost. Anyone who obtains it gains full control of your funds, so it must be stored offline and never shared or typed into a website. Guard it carefully. Read more →

Shorting

Shorting is a strategy for profiting when a price falls: a trader borrows an asset, sells it, and aims to buy it back cheaper later. Losses can be large if the price rises instead, since there is no ceiling on how high it can go. Learn how it works in our guide to how to short crypto.

Slippage

Slippage is the difference between the price you expected on a trade and the price it actually executed at, usually caused by fast movement or thin liquidity between order and fill. It matters most for large orders and on low-liquidity pairs, where the gap can be significant. Read more →

Smart contract

A smart contract is self-executing code stored on a blockchain that automatically carries out an agreement when its conditions are met, with no middleman required. It is the building block behind DeFi, NFTs, and most dApps. Because the code is final once deployed, bugs can be costly — more in our guide to smart contracts.

Spot

Spot trading means buying or selling the actual asset right now at the current market price, and taking real ownership of it. It is the simplest, most direct form of trading, without leverage or expiry dates. Contrast it with futures in our guide to spot vs futures trading.

Stablecoin

A stablecoin is a cryptocurrency designed to hold a steady value, usually pegged one-to-one to a currency like the US dollar. Traders use them to park funds, move money, and avoid volatility without cashing out to a bank. Not all pegs are equally safe — learn the types in our guide to stablecoins.

Staking

Staking means locking up your coins to help secure a proof-of-stake blockchain, and in return you earn rewards, a bit like interest. It supports the network while putting idle holdings to work, though staked funds may be locked for a time. Learn the details in our guide to crypto staking.

T

Tokenomics

Tokenomics describes the economics of a crypto token: its total supply, how new units are issued, how they are distributed, and what incentives hold the system together. Studying tokenomics helps you judge whether a project's design is sustainable or likely to dilute holders. Learn what to look for in our guide to tokenomics.

TVL

TVL stands for total value locked — the combined value of all assets deposited in a DeFi protocol, such as those supplied to its lending pools or liquidity pools. It is a common yardstick for gauging how much capital a platform has attracted, though it can rise and fall sharply with prices.

V

Volatility

Volatility measures how sharply and quickly a price swings up and down over time. Crypto is known for high volatility, meaning big gains and losses can happen fast. It creates both opportunity and risk, which is why managing position sizes matters — see our guide to crypto risk management.

W

Wallet

A crypto wallet is software or hardware that stores the keys used to access and manage your crypto. Rather than holding coins directly, it holds the keys that prove ownership on the blockchain. Wallets come in hot (online) and cold (offline) varieties — learn the differences in our guide to crypto wallets.

Web3

Web3 is the vision of a user-owned internet built on blockchains, where people control their own data, identity, and digital assets instead of relying on big platforms. It is still early and much debated, but it drives a lot of crypto development. Explore the idea in our guide to what Web3 is.

Whale

A whale is an individual or entity holding enough of a cryptocurrency to move its price when they buy or sell. Traders watch large "whale wallets" for hints about market direction, since a single big order can ripple through a thinly traded coin. Read more →

Whitepaper

A whitepaper is a document a crypto project publishes to explain its technology, purpose, and goals, often including its design and tokenomics. It is a starting point for research, but a polished whitepaper alone is no guarantee of quality — plenty of failed or fraudulent projects had slick ones.

Wrapped token

A wrapped token is a token that represents another asset on a different blockchain, letting that asset be used where it otherwise could not. Wrapped Bitcoin, for example, lets Bitcoin's value be used within Ethereum-based DeFi. Each wrapped token is meant to be backed one-to-one by the original asset it mirrors.

Y

Yield farming

Yield farming is the practice of moving crypto between DeFi protocols to chase the highest available returns from lending, liquidity provision, or rewards. The potential yields can be high, but so are the risks from smart-contract bugs, volatile token prices, and impermanent loss. Read more →

Popular terms explained in depth