Cryptocurrency has become one of the hottest topics in the world of finance, but it can be difficult to navigate the complex jargon that comes with this new technology. To help you better understand the world of digital assets, we have compiled a glossary of key terms commonly used in the cryptocurrency industry.

Altcoins

Altcoins are cryptocurrencies other than Bitcoin that have their own unique properties and use cases. They can be new technologies or forks of existing cryptocurrencies.

ATH/ATL

All-time high or all-time low refers to the highest or lowest price an asset has ever reached.

Bull Market/Bear Market

In a bull market, market prices are generally trending upward, and public perception is positive. In contrast, a bear market is when market prices are on a downward trend, and outlooks are negative.

Blockchain

Blockchain is a decentralized way of storing data, where the data is duplicated and distributed across the network of computer systems. It is operated by a community of miners or validators and does not require a centralized intermediary to operate.

Block

A block is a group of transactions that are formatted into blocks in a blockchain. Each block contains a cryptographic reference to the last, making it impossible to change the history of the blockchain.

Block Rewards

Block rewards are issued as newly minted cryptocurrency to miners or validators who create new blocks, incentivizing them to keep the blockchain running.

Consensus

Consensus is the method by which blockchain participants agree on what should be included in the blockchain. The two most commonly used consensus mechanisms today are proof-of-work and proof-of-stake.

Cryptography

Cryptography is the science of keeping information secure and safe. It is used to secure blockchains and cryptocurrencies through one-way hashing algorithms and private-key/public-key cryptography.

dApps

Decentralized applications, or dApps, are programs that run on blockchain networks using smart contracts to provide trustless tools and services for end-users. DAO, or decentralized autonomous organizations, are business entities represented as transparent rules in smart contracts that reduce centralization as much as possible.

DeFi

DeFi, or Decentralized Finance, is the ecosystem of applications and services that leverage blockchain technology and cryptocurrencies to provide decentralized financial services to end-users. It typically exists on the Ethereum network.

DYOR

DYOR stands for Do Your Own Research and is a warning to cryptocurrency investors that there is no substitute for due diligence when it comes to investing in cryptocurrency.

ERC-20

ERC-20 is the most widely used crypto-token standard on the Ethereum network, allowing developers to easily create digital currencies that are immediately compatible with existing infrastructure. ERC-721 is the Ethereum network’s standard for non-fungible tokens, allowing the creation of unique, uncounterfeitable tokens.

EVM

The Ethereum Virtual Machine (EVM) is a global blockchain-based computer that provides a runtime environment for developers to create decentralized applications on the Ethereum network.

Fiat

Fiat refers to types of money in the traditional financial ecosystem, such as the US dollar and the euro. Forks occur when a blockchain experiences a change in protocol that produces two parallel chains. Hard forks break backward compatibility and cause a new currency to be issued, while soft forks update the ruleset and require support from a majority of the network’s participants.

FOMO

FOMO, or fear of missing out, is social anxiety arising from the notion that others are enjoying the benefits of an event while the person experiencing FOMO is not. In crypto markets, it usually refers to watching the tokens one does not own go through explosive upward price movements.

FUD

FUD, or fear, uncertainty, and doubt, usually refers to information that is likely to push people toward a pessimistic view of the market.

Fundamental Analysis

Fundamental analysis is a method of evaluating the value of an asset and estimating its future performance. In the context of crypto projects, it takes into account technological and innovative value, the team behind it, and token distribution models and use cases.

Gas Fee

Gas is a fee charged for performing operations on the Ethereum network, usually priced in Gwei, a small fraction of Ether.

NFT

An NFT, which stands for non-fungible token, is a type of Ethereum token that cannot be replicated or subdivided, and each unit is unique. They can be transferred between wallets and used in smart contracts, and have gained significant traction in the last year, particularly in the entertainment and art worlds, where digital collectibles have sold for millions of dollars on platforms such as OpenSea.

Network Fees

A network fee is a fee required to ensure that a Bitcoin or Ethereum transaction is processed on the network. The fee is used as an incentive to reward network participants, such as miners and validators, for processing transactions and helping to secure the network.

Node

A node is a type of participant in the blockchain network that stores data and contributes to the consensus process to ensure that all new transactions and blocks are valid. Miners act as full nodes, but anyone may operate a node to monitor the network without contributing computing resources.

Nonce

A nonce is a random whole number that miners in proof-of-work blockchains like Bitcoin iterate over to solve the cryptographic puzzle that allows them to add a new block and earn the block reward. The miner’s goal is to find a nonce where the SHA-256 hashed output begins with a certain number of zeros, allowing PoW networks to adjust the mining difficulty by requiring more zeros if blocks are being mined too fast.

Paper wallet

A paper wallet is a type of cryptocurrency wallet that is stored on paper. The purpose of these wallets is to reduce private key exposure to a minimum. This is a form of “cold storage,” in which private keys are not exposed to any internet-connected device that could be hacked or attacked. While paper wallets are largely seen as an unsafe option for storing crypto, a central website and GUI must be used to generate such a wallet, which are just as insecure and prone to attacks as any other centralized service.

Private key

A private key is used to identify the owner of a given cryptocurrency wallet. It acts much like a password, and anyone with a private key can access the funds from the associated wallet address.

Proof-of-stake

Proof-of-stake, or PoS, is a consensus mechanism used by blockchains to ensure correct data is stored on the blockchain. In PoS blockchains, participants who deposit an amount of cryptocurrency to the network (known as “staking”) are given the opportunity to help generate new blocks and earn block rewards.

Proof-of-work

Proof-of-work, or PoW, is another consensus mechanism that leverages a network of computers called miners that verify transactions in exchange for crypto rewards. Anyone can become a miner, competing to create new blocks by using computing resources to solve a cryptographic puzzle called a hash. The first to do this earns the right to append their new block to the blockchain.

Public key

Generated alongside your private key as a pair, your public key is a long string of characters that is run through an algorithm to produce your wallet address.

Sats or Satoshis

Sats, short for Satoshis, are the smallest possible unit of Bitcoin (BTC), at 0.00000001 BTC. One Sat is equivalent to one hundred millionth of a Bitcoin and is named after Bitcoin’s enigmatic creator, Satoshi Nakamoto.

SegWit

SegWit, short for segregated witness, was an update to the Bitcoin network in August 2017 that aimed to increase the number of transactions that are able to fit onto each block by removing signature data from transactions.

SHA-256

SHA-256 is a one-way cryptographic hashing algorithm that takes an input of any size and converts it to a random string of a fixed length. Many blockchain projects today make use of SHA-256 to enable proof-of-work mining for verifying transactions.

Smart Contracts

Smart contracts are programs that are stored and operated by a blockchain network. These contracts allow developers to create decentralized applications that can work with cryptocurrencies, providing transparent financial tools and services for end users. Ethereum is one of the leading smart contract platforms.

Solidity

Solidity is a high-level programming language used to write smart contracts. Created by Gavin Wood, co-founder of Ethereum, it allows developers to create immutable, unstoppable programs that anyone can interact with.

TA or Technical Analysis

Technical analysis is the process of studying price charts and using various market indicators to determine the state of the market. This is a complex area of study for expert traders who use technical analysis to predict future market movements.

Testnet

Smart contract platforms like Ethereum and Binance Smart Chain provide developers with a testing environment called a testnet. These testing environments allow developers to deploy and test smart contracts without risking actual value.

Token

Tokens are units of value issued by deploying a smart contract to the Ethereum blockchain. Many of the top 100 cryptocurrencies by market cap are actually Ethereum tokens.

UTXO

Wallet balances in cryptocurrency networks are calculated from several UTXOs, which are essentially units of unspent cryptocurrency left over from the sum of all transactions made on the wallet. The sum of an address’s UTXOs makes up that wallet’s available balance.

Validators

Validators are participants in a blockchain network who verify incoming transactions. Used in proof-of-stake platforms instead of miners, validators help maintain the integrity of a blockchain and keep it secure, receiving rewards for their work.

Volatility

Volatility refers to an asset’s tendency to vary in price. Bitcoin and other cryptocurrencies are notoriously volatile due to the young market and can be the main appeal for crypto traders.

Wallet

Wallets are tools used by crypto holders to control their private keys and provide an interface to make transactions. Wallets can be custodial or non-custodial, and both software and hardware wallets are available.

Whale

A “whale” is a term used to describe big players in the cryptocurrency markets, including institutional investors, hedge funds, or wealthy individuals.

Whitepaper

White papers are academic documents that outline the details of a new technology, its implementation, and its potential use case. New projects use white papers to help potential users or investors understand the product or service.