Crypto terms explained
Every word, phrase, and piece of slang you are likely to encounter in crypto, explained in plain English. No assumed knowledge. No jargon left unexplained.
This glossary explains every crypto term a beginner is likely to come across, organised into nine categories so you can find what you need quickly. Whether you have just read a word for the first time or want to understand something you keep seeing in the news, this is your reference.
Every entry follows the same format: a plain-English definition, a sentence of context, and a real example of how it is used. Where a term has its own full guide on OnlyCoin, there is a link to read more.
For the official Bitcoin whitepaper that started it all, you can read Satoshi Nakamoto’s original document at bitcoin.org.
How to use this crypto glossary
This crypto glossary covers 89 terms across nine categories, from the basics of Bitcoin and blockchain to DeFi, wallets, market terminology, scams, and community slang. Use the jump links below to navigate to the category you need, or read straight through for a complete crypto education in plain English.
Crypto glossary: Basic terminology
These are the foundational terms. If you are new to crypto, start here before anything else.
What is Bitcoin?
Bitcoin (ticker: BTC) is the world’s first cryptocurrency, a form of digital money that exists only online and is not controlled by any government, bank, or company.
Created in 2009 by the anonymous figure known as Satoshi Nakamoto, Bitcoin introduced the idea that two people could send money to each other anywhere in the world without needing a bank in the middle. It remains the largest and most widely recognised cryptocurrency by value.
What is Ethereum?
Ethereum (ticker: ETH) is a blockchain platform that lets developers build applications on top of it, using its own currency, called Ether, to power transactions and programs.
Where Bitcoin is primarily a digital currency, Ethereum is more like a programmable computer network. It is the foundation for much of the decentralised finance ecosystem, NFTs, and thousands of other projects. Ether is the second-largest cryptocurrency by market value after Bitcoin.
What is a blockchain?
A blockchain is a shared digital record book where every transaction is permanently stored across thousands of computers at once, making it nearly impossible to alter or delete.
Each batch of transactions is grouped into a “block” and added to the chain in sequence. Because thousands of computers all hold the same copy, no single person or company can change the record without the agreement of the others. This is what makes crypto transactions trustworthy without needing a bank to verify them.
What is cryptocurrency?
Cryptocurrency is digital money secured by cryptography, the mathematical code that makes it extremely difficult to counterfeit or double-spend.
Unlike traditional money issued by governments, most cryptocurrencies run on decentralised networks that no single authority controls. “Crypto” is simply the common shorthand. Bitcoin was the first, but there are now thousands of different cryptocurrencies, each with different purposes and levels of risk.
What is an altcoin?
An altcoin is any cryptocurrency that is not Bitcoin. The word comes from “alternative coin.”
Ethereum, Solana, Dogecoin, and thousands of others are all altcoins. Some were created to improve on Bitcoin’s limitations, others to serve completely different purposes. As a general rule, altcoins carry more risk than Bitcoin because they tend to be less established, less liquid, and more volatile.
What is the difference between a coin and a token?
A coin has its own dedicated blockchain, like Bitcoin or Ether, while a token is built on top of an existing blockchain, like most DeFi projects that run on Ethereum.
The distinction matters in practice because tokens depend on their host blockchain’s security and fees. Most of the thousands of crypto assets you will come across are tokens, not coins. When people say “coin” in casual conversation, they usually mean any cryptocurrency, but technically the difference is real.
What is a satoshi?
A satoshi is the smallest unit of Bitcoin, equal to one hundred-millionth of a single Bitcoin (0.00000001 BTC).
Named after Bitcoin’s creator, satoshis make it possible to buy a tiny fraction of Bitcoin without needing to purchase a whole coin. As Bitcoin’s price rises, more transactions are denominated in satoshis rather than whole BTC. The abbreviation is “sats.”
Who is Satoshi Nakamoto?
Satoshi Nakamoto is the anonymous person or group who created Bitcoin and published its foundational document, the Bitcoin whitepaper, in 2008.
Nobody knows who Satoshi Nakamoto really is. They communicated online for the first few years of Bitcoin’s existence, then disappeared in 2011. Satoshi is estimated to hold around one million Bitcoin in wallets that have never been touched. Their real identity remains one of the biggest unsolved mysteries in technology.
What is a decentralised network?
A decentralised network is one where no single company, government, or individual is in control. Instead, thousands of independent computers around the world run the system together.
This is the core idea behind most cryptocurrencies. Because there is no central point of control, the network is much harder to shut down, censor, or hack. The trade-off is that decentralised systems are often slower and harder to update than centralised ones.
What does “digital gold” mean?
“Digital gold” is a nickname for Bitcoin, reflecting the belief that it can store value over time in the same way physical gold does.
The comparison comes from shared properties: both are scarce (Bitcoin has a fixed supply of 21 million), both require effort to produce (mining), and neither is controlled by any government. Not everyone agrees with the comparison. Critics argue Bitcoin is far more volatile than gold. But it is widely used to describe how many long-term Bitcoin holders think about the asset.
What is Bitcoin halving?
Bitcoin halving is an event that happens approximately every four years where the reward given to Bitcoin miners for processing transactions is cut in half.
This is built into Bitcoin’s code and is one of the mechanisms that limits Bitcoin’s total supply to 21 million coins. Each halving reduces the rate at which new Bitcoin enters circulation. Historically, halvings have been followed by periods of significant price increases, though this is not guaranteed. The most recent halving was in April 2024.
What is crypto mining?
Crypto mining is the process of using powerful computers to validate and record transactions on a blockchain, in exchange for a reward in cryptocurrency.
Miners compete to solve complex mathematical puzzles. The first to solve one gets to add the next block to the chain and earn the reward. Mining requires significant electricity and specialist hardware. It is the mechanism behind Bitcoin’s proof of work system. Not all cryptocurrencies use mining. Ethereum, for example, switched away from it in 2022.
What is proof of work?
Proof of work is a method used by Bitcoin to verify transactions, where computers compete to solve complex puzzles, requiring real energy and computing power as proof that the work was done honestly.
The energy requirement is intentional. It makes cheating the system prohibitively expensive. Critics argue this makes proof of work bad for the environment. Supporters argue the energy expenditure is what gives Bitcoin its security and credibility.
What is proof of stake?
Proof of stake is an alternative to proof of work where participants stake, or lock up, their own cryptocurrency as collateral to earn the right to validate transactions, rather than mining.
Ethereum switched to proof of stake in 2022 in an event called “The Merge,” reducing its energy consumption by over 99%. Validators who behave dishonestly risk losing their staked crypto, a penalty called “slashing.” Proof of stake is now the dominant consensus method for newer blockchains.
Wallets and custody
Understanding wallets is one of the most important things a crypto beginner can do. These terms explain where your crypto actually lives and how you keep it safe.
What is a crypto wallet?
A crypto wallet is software or a physical device that stores the private keys needed to access and manage your cryptocurrency. It does not store the crypto itself, which always stays on the blockchain.
Think of a wallet less like a purse and more like a keychain. The keys are what give you access to your crypto. Lose the keys with no backup, and the crypto is gone. There are many types of wallets: apps on your phone, programs on your computer, and physical hardware devices.
What is a seed phrase?
A seed phrase, also called a recovery phrase, is a set of 12 or 24 randomly generated words that acts as the master key to your crypto wallet and the only way to recover your funds if you lose access.
Your seed phrase is the single most important thing to protect in all of crypto. Anyone who has it has complete access to everything in your wallet. Write it down on paper, store it somewhere physically safe, and never share it with anyone. Not even with someone claiming to be support staff. No legitimate person will ever need it.
What is a private key?
A private key is a long string of letters and numbers that proves you own a specific crypto wallet and authorises transactions from it. Think of it as a password you can never change.
Your private key should never be shared with anyone. If someone else gets it, they have full, permanent control of your wallet and everything in it. Most modern wallets manage private keys behind the scenes so users never need to handle them directly, but your seed phrase is effectively a way to reconstruct the private key if needed.
What is a public key or wallet address?
A public key, or wallet address, is the address you share with others so they can send crypto to you. It is safe to share, unlike your private key.
Think of it like an email address for receiving money. It is a long string of letters and numbers that uniquely identifies your wallet on the blockchain. You can share it freely. Knowing someone’s wallet address gives them no access to your funds.
What is a hardware wallet?
A hardware wallet is a small physical device, similar in size to a USB drive, that stores your crypto private keys completely offline and away from potential hackers.
Hardware wallets are considered the most secure way to store significant amounts of cryptocurrency long-term. Because they are not connected to the internet except when you plug them in to make a transaction, they are immune to the online attacks that affect software wallets. Popular brands include Ledger and Trezor.
What is a hot wallet?
A hot wallet is a crypto wallet that is connected to the internet, typically a mobile app or browser extension, making it convenient for regular transactions but more vulnerable to hacking.
Hot wallets are fine for small amounts you plan to use regularly, similar to the cash you carry in a physical wallet. For larger amounts you are not planning to move soon, a cold wallet is safer. Most exchanges provide hot wallets by default.
What is a cold wallet or cold storage?
A cold wallet, or cold storage, is any method of storing crypto private keys that is completely offline and disconnected from the internet, making it much harder for hackers to access.
Cold storage options include hardware wallets, paper wallets (physically printed keys), and encrypted USB drives kept in a safe. The trade-off is convenience. Accessing cold storage takes more steps than a hot wallet. Most serious long-term crypto holders use cold storage for the majority of their holdings.
What is a custodial wallet?
A custodial wallet is one where a company, usually an exchange, holds your private keys on your behalf, meaning they technically control your crypto, not you.
When you buy crypto on Coinbase, Kraken, or most other exchanges and leave it there, you have a custodial wallet. It is convenient and means you cannot lose access by forgetting a seed phrase. The risk is that if the exchange is hacked, goes bankrupt, or freezes withdrawals, you may not be able to access your funds.
What is a non-custodial wallet?
A non-custodial wallet is one where you, and only you, hold the private keys to your crypto, giving you full control and full responsibility.
With a non-custodial wallet, no company can freeze your funds, go bankrupt with your crypto, or restrict your access. The trade-off is that if you lose your seed phrase and have no backup, the crypto is gone permanently. There is no “forgot my password” option. Popular non-custodial wallets include MetaMask, Trust Wallet, and any hardware wallet.
What does “not your keys, not your coins” mean?
“Not your keys, not your coins” is a principle in crypto that means if you do not hold the private keys to your wallet, you do not truly own the crypto in it.
The phrase became well known after major exchange collapses, including FTX in 2022, where customers discovered they could not withdraw their funds because the exchange had misused them. It is a reminder that leaving crypto on an exchange means trusting that company with your assets. The phrase is a strong argument for moving significant holdings to a non-custodial wallet.
Buying, selling, and exchanges
These are the terms you will encounter when you first try to buy cryptocurrency. Understanding them before you open an account will save you a lot of confusion.
What is a crypto exchange?
A centralised exchange (CEX) is a company-run platform where you can buy, sell, and trade cryptocurrencies, similar in concept to a stock exchange but for crypto.
Exchanges are the most common starting point for beginners because they accept regular bank transfers and credit cards, have customer support, and are relatively straightforward to use. Examples include Coinbase, Kraken, and Binance. The trade-off is that you are trusting the company to hold your funds safely.
What is a DEX?
A decentralised exchange (DEX) is a platform that allows crypto trading directly between users via smart contracts, with no company or intermediary in the middle.
DEXs like Uniswap do not require identity verification and never hold your funds. Trades happen directly from your wallet. They offer more privacy and access to a wider range of tokens than centralised exchanges. The trade-off is that they are more technically complex and have no customer support if something goes wrong.
What is a fiat on-ramp?
A fiat on-ramp is any service that lets you convert regular government-issued money, such as dollars or pounds, into cryptocurrency.
“Fiat” is the term for traditional currency issued by governments. Most centralised exchanges act as fiat on-ramps, accepting bank transfers or card payments. The process usually requires identity verification to comply with financial regulations.
What is a trading pair?
A trading pair shows two assets that can be exchanged for each other on a platform. For example, BTC/USD means you are trading Bitcoin against US dollars.
Every trade on an exchange involves two assets. If you want to buy Ethereum using Bitcoin, you would look for the ETH/BTC pair. If you want to buy Bitcoin with dollars, you would look for BTC/USD. Understanding trading pairs helps you navigate exchange interfaces more confidently.
What is a market order?
A market order is an instruction to buy or sell cryptocurrency immediately at the best available current price.
Market orders are the simplest way to execute a trade. You get filled straight away, but the exact price may be slightly different from what you saw on screen, especially for less liquid assets. For beginners making small purchases on major exchanges, market orders are usually fine.
What is a limit order?
A limit order is an instruction to buy or sell cryptocurrency only when the price reaches a specific level that you set in advance.
Limit orders give you more control over the price you pay or receive, but there is no guarantee they will ever be filled if the market never reaches your target price. They are useful when you believe an asset is overpriced right now but would be worth buying at a lower level.
What is liquidity?
Liquidity refers to how easily a cryptocurrency can be bought or sold without significantly changing its price. The more liquid an asset, the easier it is to trade.
Bitcoin and Ethereum are highly liquid. You can buy or sell large amounts without much price impact. Smaller, obscure tokens may have very low liquidity, meaning even a modest trade can cause the price to spike or crash. Low liquidity is also a warning sign that a token may be difficult to sell when you want to exit.
What is slippage?
Slippage is the difference between the price you expected to pay for a trade and the price you actually got, caused by market movement between placing and executing the order.
Slippage is most common on decentralised exchanges and for less liquid assets. It can work in your favour or against you. On DEXs you can usually set a “slippage tolerance,” the maximum percentage difference you are willing to accept before the trade fails.
What is KYC?
KYC (Know Your Customer) is the identity verification process that regulated exchanges require before you can buy or withdraw crypto, typically a photo ID and a selfie.
KYC is a legal requirement in most countries, designed to prevent money laundering and financial crime. Most centralised exchanges will ask you to complete KYC before you can deposit meaningful amounts or withdraw funds. It is a standard part of using any reputable exchange.
What is AML?
AML (Anti-Money Laundering) refers to the laws and procedures that prevent cryptocurrency from being used to disguise the proceeds of criminal activity.
AML regulations require exchanges to monitor transactions, report suspicious activity, and verify customer identities via KYC. AML rules are one reason why crypto is not as anonymous as many people assume when using regulated platforms.
What is spot trading?
Spot trading is the most straightforward form of crypto trading. You buy or sell a cryptocurrency for immediate delivery at the current market price.
When most beginners buy crypto, they are spot trading. It contrasts with futures or derivatives trading, where you are trading contracts about the future price rather than the actual asset. For beginners, spot trading is the safest and most transparent option.
Transactions and fees
Every time you send, receive, or swap crypto, several things happen behind the scenes. These terms explain the mechanics.
What is a gas fee?
A gas fee is the charge you pay to have your transaction processed on the Ethereum blockchain, compensating the validators who do the work of confirming it.
Gas fees fluctuate based on how busy the Ethereum network is. When lots of people are transacting at the same time, fees rise. When it is quiet, they fall. Gas fees are paid in ETH regardless of which token you are transacting with. High gas fees have historically been one of Ethereum’s most criticised limitations.
What is a transaction fee?
A transaction fee is the cost charged for processing a crypto transaction, paid either to the blockchain’s validators or to an exchange as a service charge.
Every blockchain has some form of transaction fee, though the amounts vary enormously. Bitcoin fees depend on network congestion. Solana fees are typically a fraction of a cent. Exchange fees are separate from blockchain fees and are charged by the platform as a percentage of your trade. Always check the total fees before confirming a transaction.
What is a block confirmation?
A block confirmation is recorded each time a new block is added to the blockchain after the block containing your transaction. The more confirmations, the more permanent your transaction becomes.
Immediately after a transaction is broadcast, it is “unconfirmed.” Once it is included in a block, it has one confirmation. Each subsequent block adds another. Most exchanges wait for a set number of confirmations before considering a deposit complete, typically 3 to 6 for Bitcoin.
What is the mempool?
The mempool, short for memory pool, is the waiting room for crypto transactions that have been broadcast to the network but have not yet been included in a block.
Miners and validators pick transactions from the mempool, usually prioritising those with higher fees. When the network is congested, the mempool fills up and transactions can sit waiting for hours or even days. Paying a higher fee is the way to jump the queue.
What does on-chain mean?
On-chain refers to any transaction or activity that is recorded directly on the blockchain, permanently, publicly, and in a way that cannot be altered.
On-chain transactions are the gold standard of crypto transparency. Anyone can verify them on a blockchain explorer. The trade-off is that they cost fees and take time to confirm. Some activity is kept off-chain for speed and cost reasons.
What does off-chain mean?
Off-chain refers to transactions or activity that happen outside the main blockchain, typically recorded by a separate service and only settled on-chain periodically or when needed.
Off-chain solutions sacrifice some decentralisation for speed and cost. Bitcoin’s Lightning Network is an example. It lets users send Bitcoin back and forth instantly and cheaply, only recording the final settlement on the main blockchain. Many exchange transactions are also off-chain until you withdraw.
What is a Layer 2?
A Layer 2 is a secondary network built on top of an existing blockchain, known as Layer 1, that processes transactions faster and more cheaply, then periodically settles them on the main chain.
Layer 2 solutions were developed to address the scalability limitations of blockchains like Bitcoin and Ethereum, which can only process a limited number of transactions per second. Examples include Ethereum’s Layer 2 networks like Arbitrum and Optimism, and Bitcoin’s Lightning Network. Layer 2s inherit much of their parent chain’s security.
What is a transaction hash?
A transaction hash, also called a TXID or transaction ID, is a unique identifier assigned to every crypto transaction. It is like a receipt number that lets anyone look up and verify the transaction on the blockchain.
When you send crypto, the blockchain generates a transaction hash automatically. You can paste it into a blockchain explorer like Etherscan for Ethereum or Blockchain.com for Bitcoin to see the full details, including the amount sent, sender, recipient, fees paid, and confirmation status. If someone says they have sent you crypto, asking for the transaction hash is the way to verify it.
Stablecoins, DeFi, and specific assets
These terms cover the broader crypto ecosystem beyond Bitcoin, including the platforms, projects, and asset types that make up much of what people mean when they talk about “crypto.”
What is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a fixed value, usually pegged to one US dollar, so it does not rise and fall like Bitcoin or Ethereum.
Stablecoins are used for storing value without leaving the crypto ecosystem, making payments, and participating in DeFi without exposure to price volatility. They come in different forms: some are backed by real dollars held in a bank, others are backed by crypto reserves, and some use algorithms to maintain their peg with varying degrees of reliability.
What is USDC?
USDC (USD Coin) is a stablecoin where each token is backed by one US dollar held in reserve by regulated financial institutions, issued by a company called Circle.
USDC is one of the most trusted stablecoins because its reserves are regularly audited. It is widely used in DeFi, for cross-border payments, and as a safe harbour within crypto portfolios. One USDC is always intended to equal one US dollar, though extreme market events can briefly cause small deviations.
What is USDT (Tether)?
USDT (Tether) is the world’s largest stablecoin by trading volume, a dollar-pegged cryptocurrency issued by the company Tether Limited.
Tether has been controversial because of questions about whether its reserves are fully backed by dollars. Despite this, it remains the most widely traded stablecoin globally and is available on virtually every exchange. Most crypto trading pairs you will see on exchanges use USDT as the reference currency rather than actual dollars.
What is DeFi?
DeFi, short for decentralised finance, is a broad term for financial services including lending, borrowing, earning interest, and trading that run on blockchain networks via smart contracts, with no banks or financial institutions involved.
DeFi protocols allow anyone with a crypto wallet to access financial services without identity checks or geographic restrictions. Interest rates on DeFi lending can be significantly higher than traditional savings accounts, but the risks are also significantly higher. Smart contract bugs, hacks, and protocol collapses have caused major losses in DeFi.
What is a smart contract?
A smart contract is a self-executing program stored on a blockchain that automatically carries out the terms of an agreement when specific conditions are met, with no middleman required.
Smart contracts are the foundation of Ethereum’s ecosystem. They power DeFi protocols, NFT marketplaces, DAOs, and countless other applications. Once deployed, a smart contract runs exactly as coded. This is a strength because no one can change the rules, and a weakness because if there is a bug in the code, it can be exploited with no way to fix it.
What is an NFT?
An NFT (non-fungible token) is a unique digital asset whose ownership is recorded on a blockchain. Unlike regular cryptocurrencies where every unit is identical, an NFT cannot be replicated or copied.
“Non-fungible” means not interchangeable. One Bitcoin is identical to any other Bitcoin. An NFT is unique, like a one-of-a-kind trading card. NFTs became famous in 2021 for digital art sales worth millions of dollars. Their value has since declined significantly for most projects, though the underlying technology still has applications in gaming, music rights, and event tickets.
What is tokenisation?
Tokenisation is the process of representing ownership of a real-world asset, such as property, shares, or art, as a digital token on a blockchain.
Tokenisation could eventually allow people to own fractional shares of assets currently only accessible to wealthy investors, like a percentage of a commercial building or a fine wine collection. It is an emerging area with significant regulatory and practical hurdles still to overcome, but it is one of the most discussed potential applications of blockchain technology.
What is a crypto airdrop?
A crypto airdrop is when a blockchain project distributes free tokens to wallet addresses, usually as a marketing tactic, a reward for early users, or a way to distribute a new token widely.
Some airdrops have been genuinely valuable. Early users of platforms like Uniswap received thousands of dollars’ worth of tokens. Others are scam attempts. Fake airdrops are used to lure people into connecting their wallets to malicious sites or revealing their seed phrases. If you receive unexpected tokens in your wallet, do not interact with them without research first.
What is Solana?
Solana (ticker: SOL) is a fast, low-fee blockchain designed to handle thousands of transactions per second, positioned as a more scalable alternative to Ethereum.
Solana has become popular for gaming, NFTs, and DeFi because its transaction fees are typically a fraction of a cent compared to Ethereum’s gas fees. Its speed comes from a combination of proof of stake and a mechanism called proof of history. Solana has experienced notable network outages in the past, which some consider a reliability concern.
What is ERC-20?
ERC-20 is the technical standard that most tokens built on the Ethereum blockchain follow. It defines a common set of rules that makes tokens compatible with wallets, exchanges, and other applications.
When a new project launches a token on Ethereum, they almost always follow the ERC-20 standard so their token works automatically with Ethereum wallets and exchanges. Most of the thousands of tokens you will see on Ethereum-based DEXs are ERC-20 tokens.
What is a fork?
A fork is a change to a blockchain’s rules. A soft fork makes a backwards-compatible update, while a hard fork creates a permanent split that results in two separate blockchains.
Hard forks happen when a community cannot agree on proposed changes. Bitcoin Cash was created by a hard fork of Bitcoin in 2017 over a disagreement about block size. If you held Bitcoin at the time of that fork, you automatically received an equivalent amount of Bitcoin Cash. Forks can be contentious and their resulting chains often have very different values.
Market and price terms
These terms appear constantly in crypto news and conversation. Understanding them will help you make sense of what is happening in the market.
What is a bull market?
A bull market is a sustained period of rising prices across the crypto market, typically characterised by widespread optimism, increased buying, and media attention.
In crypto, bull markets can be dramatic. Prices can rise hundreds or thousands of percent over months. They often attract new investors who have never bought crypto before. Bull markets do not last forever, and buying at the peak is a common and costly mistake. The period from late 2020 to early 2022 is considered the most recent major crypto bull market.
What is a bear market?
A bear market is a sustained period of falling prices, typically defined as a drop of 20% or more from recent highs, often accompanied by low trading volume, negative sentiment, and reduced media interest.
Crypto bear markets can be severe. Bitcoin has dropped 80% or more from its peak in previous cycles. Bear markets are psychologically difficult but are also when many experienced investors accumulate assets at lower prices. The period from early 2022 to late 2023 is considered the most recent major crypto bear market.
What is market cap?
Market cap, or market capitalisation, is the total value of all coins or tokens of a cryptocurrency currently in circulation, calculated by multiplying the current price by the total supply.
Market cap is the standard way to rank and compare cryptocurrencies. Bitcoin typically has the largest market cap, followed by Ethereum. A high market cap generally indicates a more established and liquid asset. A very small market cap can mean an asset is easier to manipulate, where a single large buyer or seller can move the price dramatically.
What is ATH?
ATH stands for all-time high: the highest price a cryptocurrency has ever reached since it began trading.
ATHs are frequently referenced in crypto as benchmarks. When people say a coin is “down 70% from its ATH,” they mean it has fallen 70% from its highest ever price. Bitcoin’s all-time high at the time of writing is approximately $109,000, reached in January 2025. Not all cryptocurrencies ever recover to their previous ATHs after major price drops.
What is ATL?
ATL stands for all-time low: the lowest price a cryptocurrency has ever reached since it began trading.
ATLs are less discussed than ATHs but equally important as context. Many altcoins have never recovered from their ATLs after collapsing in bear markets. Knowing a coin’s ATL relative to its current price gives you a sense of historical volatility and what downside risk has looked like historically.
What is volatility in crypto?
Volatility describes how dramatically and quickly a cryptocurrency’s price can change. Crypto is generally considered one of the most volatile asset classes in existence.
Bitcoin can drop 10 to 20% in a single day and recover within a week, which would be extraordinary in traditional markets. Smaller cryptocurrencies can be even more extreme. High volatility means the potential for rapid gains but also rapid, severe losses. It is one of the most important factors to understand before investing any money in crypto.
What does “buying the dip” mean?
Buying the dip means purchasing a cryptocurrency after its price has fallen, on the assumption that the drop is temporary and the price will recover.
It is one of the most common strategies in crypto and can work well during bull markets. The risk is misjudging whether a dip is temporary or the beginning of a longer decline. The dip can always go lower. Experienced investors are cautious about catching a “falling knife,” buying too early into a sustained downtrend.
What is a pump and dump?
A pump and dump is a form of market manipulation where a group artificially inflates the price of a cryptocurrency through coordinated buying and hype, then sells their holdings at the peak, leaving other investors with losses.
Pump and dump schemes are especially common with low-market-cap altcoins and memecoins that can be moved by relatively small amounts of money. Warning signs include sudden large price spikes, aggressive social media promotion, and anonymous or unverifiable teams behind a project.
What is a crypto ETF?
A crypto ETF (exchange-traded fund) is a financial product that tracks the price of one or more cryptocurrencies and can be bought and sold on traditional stock exchanges, without needing to hold the crypto directly.
Crypto ETFs make it possible to gain exposure to Bitcoin or other cryptocurrencies through a standard brokerage account, with no need to set up a wallet or use a crypto exchange. Spot Bitcoin ETFs were approved in the US in January 2024 and attracted billions of dollars from institutional investors. They are regulated products, unlike crypto held directly.
What is a crypto treasury?
A crypto treasury is when a company holds cryptocurrency, typically Bitcoin, on its corporate balance sheet as a financial reserve, alongside or instead of traditional cash.
MicroStrategy pioneered this approach, accumulating hundreds of thousands of Bitcoin starting in 2020. Several other public companies have followed. Proponents argue it protects against currency debasement. Critics argue it introduces significant volatility risk into a company’s finances. The term is also used for the reserve funds held by crypto protocols themselves.
What is the quantum threat to crypto?
The quantum threat is the concern that sufficiently powerful quantum computers, if developed, could potentially break the cryptographic systems that protect crypto wallets and blockchain transactions.
Current quantum computers are nowhere near powerful enough to pose a real threat to Bitcoin or Ethereum. Most cryptographers believe we have many years before this becomes a practical concern, and blockchain developers are already working on quantum-resistant cryptography as a precaution. It is worth knowing about but is not a reason for immediate concern for everyday crypto users.
What is a node or validator?
A node is a computer that participates in a blockchain network by storing a copy of the blockchain and helping verify transactions. A validator is a node that actively proposes and confirms new blocks in proof of stake systems.
Nodes are what make blockchains decentralised. The more nodes, the more copies of the record exist and the harder it is to alter. Anyone can run a Bitcoin node with modest hardware. Validators in proof of stake systems stake their own crypto as collateral and earn rewards for honest participation.
Safety, scams, and red flags
This may be the most important category in the entire glossary. Knowing these terms could protect your money. Every entry here represents a real threat that has cost real people real losses.
What is a rug pull?
A rug pull is a scam where the developers of a crypto project suddenly abandon it, drain the funds from its liquidity pool, and disappear, leaving investors with worthless tokens.
The name comes from the phrase “pulling the rug out from under someone.” Rug pulls are especially common in DeFi and with new memecoins. Warning signs include anonymous teams, no security audit, and unrealistic promised returns. They can happen gradually, with developers selling their tokens over time, or suddenly, where everything disappears overnight.
What is phishing in crypto?
Phishing is a type of scam where criminals create fake websites, emails, or messages that impersonate legitimate crypto services in order to steal your login credentials, private keys, or seed phrase.
Crypto phishing attacks are sophisticated and common. You might receive an email that looks exactly like it came from your exchange, asking you to “verify your account,” but the link goes to a fake site. Always type exchange URLs directly into your browser rather than clicking links in emails. Check the URL carefully before entering any credentials.
What is social engineering in crypto?
Social engineering is the use of psychological manipulation rather than technical hacking to trick someone into giving up access to their crypto, their wallet, or their personal information.
Social engineering attacks often involve someone posing as a helpful support agent, a romantic partner, a crypto expert, or even a friend. They build trust before asking for your seed phrase, private key, or access to your screen. Legitimate crypto services will never ask for your seed phrase under any circumstances.
What is a recovery scam?
A recovery scam targets people who have already lost money to a crypto scam, fraudulently offering to help them recover their funds and then stealing more money in the process.
Recovery scammers monitor social media and forums for people sharing stories of crypto losses. They reach out claiming to be specialists who can recover stolen crypto for a fee. They cannot recover the funds. No one can in most cases. If you have lost crypto to a scam, report it to your local authorities and be extremely wary of anyone who approaches you offering recovery services.
What is pig butchering?
Pig butchering is a long-term romance or friendship scam where a criminal spends weeks or months building a relationship with a victim before introducing them to a fake crypto investment platform and encouraging them to deposit increasingly large sums.
The name comes from the idea of fattening a pig before slaughter. These scams are sophisticated, often run by organised criminal networks, and have cost victims tens of thousands or even hundreds of thousands of dollars. Any unsolicited approach from a stranger that eventually leads to a crypto investment opportunity should be treated with extreme suspicion.
What is a honeypot in crypto?
A honeypot is a malicious smart contract or token designed to allow purchases but prevent holders from ever selling, so you can buy in but cannot get your money out.
Honeypot tokens often look legitimate and may even show rising prices to attract buyers. The catch is buried in the smart contract code. Only the creators can execute sell transactions. Always check that a token can actually be sold before buying, especially on DEXs.
What is a dusting attack?
A dusting attack is when tiny amounts of cryptocurrency are sent to a large number of wallets in order to trace and identify their owners by tracking how those funds subsequently move.
If you receive a tiny, unexpected amount of an unfamiliar token in your wallet, it may be a dusting attack. Do not move, interact with, or try to spend the dust. This is what connects your wallet to your identity in the attacker’s analysis. Most modern wallets allow you to mark dust as “do not spend.”
What is 2FA?
Two-factor authentication (2FA) is a security measure that requires a second form of verification beyond your password, typically a code from an app on your phone, before allowing access to an account.
2FA is one of the most effective ways to protect your crypto exchange accounts. Even if someone steals your password, they cannot log in without also having access to your phone. Use an authenticator app like Google Authenticator or Authy rather than SMS 2FA where possible, as SIM-swap attacks can intercept SMS codes. Enable 2FA on every exchange account you have.
What does DYOR mean?
DYOR stands for “Do Your Own Research,” a reminder to verify claims and investigate an investment independently before putting money in, rather than acting on someone else’s recommendation.
DYOR is used both sincerely and cynically in crypto communities. When used sincerely, it is sound advice: never invest based solely on social media hype, a friend’s tip, or an influencer’s recommendation. When used cynically, it is sometimes added as a disclaimer after someone has promoted a speculative coin. Either way, the underlying advice is solid.
What does NFA mean?
NFA stands for “Not Financial Advice,” a disclaimer used in crypto communities to clarify that what someone is sharing is their personal opinion, not a professional recommendation.
NFA appears constantly in crypto social media and content. It exists because giving financial advice without a licence is regulated in most countries. In practice, it is sometimes used as a liability shield before making speculative claims. The presence of NFA does not mean information is accurate or well-researched.
What is FUD?
FUD stands for Fear, Uncertainty, and Doubt. In crypto, it refers to negative or misleading information spread to damage confidence in a cryptocurrency and drive its price down.
FUD can come from competitors, short sellers, hostile media coverage, or governments. Not all negative news is FUD. Some of it is legitimate concern. The term is sometimes used defensively by crypto communities to dismiss any criticism as FUD, which can lead to genuine problems being ignored. Part of being a careful crypto investor is learning to distinguish real concerns from manufactured panic.
Community slang and culture
Crypto has developed its own vocabulary of slang, humour, and in-jokes. You do not need to use any of these terms yourself, but you will encounter them and understanding them helps you read the room.
What does HODL mean?
HODL means holding onto a cryptocurrency long-term rather than selling during price drops. It originated as a typo of “hold” in a 2013 Bitcoin forum post that became legendary in crypto culture.
In December 2013, a forum user posted a rambling message titled “I AM HODLING” during a Bitcoin price crash, explaining why he was not selling despite the chaos. The typo caught on. HODLing has become a genuine investment philosophy for long-term Bitcoin believers. It is sometimes backronymed as “Hold On for Dear Life.”
What are diamond hands?
Diamond hands describes someone who holds their cryptocurrency through extreme volatility and price drops without selling, symbolising strength and a long-term perspective.
The diamond emoji is used to signal diamond hands in crypto communities. It contrasts with “paper hands.” While holding through volatility can be a sound strategy for long-term believers, the term is sometimes used to shame people out of selling when selling might actually be the right decision. Be cautious of communities that pressure you to hold.
What are paper hands?
Paper hands describes someone who sells their cryptocurrency quickly, especially during a dip. It is often used critically to imply weakness or lack of conviction.
The phrase implies your hands are so fragile that you cannot hold on when things get difficult. While it is used mockingly in crypto culture, selling at a loss is sometimes entirely rational. Be wary of communities that shame people for selling, as this can pressure individuals into holding losing positions beyond what makes sense for them.
What does mooning mean?
Mooning, or “going to the moon,” describes a cryptocurrency experiencing a dramatic, rapid price increase. It is often used excitedly by holders hoping for or witnessing such a rise.
“When moon?” is a phrase commonly asked in crypto communities by impatient holders wondering when their investment will rise significantly. The term is associated with speculative optimism and is sometimes a sign of a bubble forming. It appears constantly in bull markets and mostly disappears in bear markets.
What does “ape in” mean?
To ape in means to buy into a cryptocurrency quickly and in significant size, often without thorough research, acting on hype, instinct, or social proof rather than careful analysis.
The phrase captures the impulsive, FOMO-driven behaviour common in bull markets. Aping in can occasionally result in large gains if the hype is justified, but more often results in buying near the top of a pump. It is not generally recommended as a strategy, though it is very common behaviour.
What does rekt mean?
Rekt, from “wrecked,” means suffering heavy financial losses on a trade or investment. It is used to describe someone who has lost a significant amount of money.
Getting rekt is especially associated with leveraged trading, where borrowed money magnifies both gains and losses. Crypto social media regularly features stories of people who got rekt by taking too much risk. It is sometimes used with gallows humour by people sharing their own losses.
What is a whale?
A whale is someone who holds a very large amount of cryptocurrency, large enough that their buying or selling can noticeably move the price of an asset.
Whale activity is closely watched by traders because large buy or sell orders can signal the direction a price might move. On-chain analytics tools allow anyone to watch whale wallets. The line between a “whale” and a regular investor varies by context. In a small altcoin, $100,000 might make someone a whale. In Bitcoin, it might take hundreds of millions.
What is a bag holder?
A bag holder is someone who is stuck holding a cryptocurrency that has lost most of its value, often because they bought at the peak or refused to sell when they should have.
The “bag” refers to the heavy weight of a poorly performing investment. Bag holders sometimes hold on hoping for a recovery that never comes, especially with altcoins that boomed in a bull market and then collapsed. It is not always a permanent situation, but it is a painful one.
What does shill mean?
To shill a cryptocurrency means to promote it enthusiastically, often with a hidden financial interest in its success, such as already holding a large position.
Shilling is common on social media and in online communities. Some shillers are simply excited believers in a project. Others are paid promoters, influencers with undisclosed holdings, or project insiders trying to create buying pressure. The key question when you see enthusiastic promotion is whether the person benefits financially if you buy.
What does WAGMI mean?
WAGMI stands for “We’re All Gonna Make It,” an expression of collective optimism used in crypto communities, particularly during difficult market periods.
WAGMI is used as a rallying cry and expression of solidarity. Its counterpart is NGMI (“Not Gonna Make It”), used to describe someone making what the community considers a poor decision. Both are used with varying degrees of sincerity and irony depending on context.
What does GM mean in crypto?
GM stands for “Good Morning,” a daily greeting ritual in crypto communities on social media, particularly on Twitter/X, used to signal active participation and positive community spirit.
The GM phenomenon became widespread in crypto and NFT communities in 2021. Posting GM or replying to others’ GM posts is a way of acknowledging you are an active member of the community. It sounds simple, but the ritual has a real social bonding function and became one of the most recognisable markers of crypto culture.
What is a crypto bro?
Crypto bro is an informal term for a certain type of enthusiastic, often evangelical crypto investor, typically associated with aggressive promotion, conspicuous displays of wealth, and dismissing sceptics.
The term is used both affectionately within parts of the community and critically from outside it. Not everyone in crypto is a crypto bro, and the stereotype does not represent the diversity of people involved in the space. It is worth knowing because the behaviour associated with it, aggressive promotion and dismissal of legitimate concerns, is worth approaching with scepticism.
What is a memecoin?
A memecoin is a cryptocurrency that originated from internet culture, humour, or a meme rather than a specific technological purpose, typically highly speculative with value driven almost entirely by community sentiment and hype.
Dogecoin was the first major memecoin. Hundreds have followed. Some have created genuine wealth for early holders. The vast majority have lost almost all value. Memecoins are considered very high-risk investments with no fundamental value and can collapse as quickly as they rise. They are sometimes used in pump and dump schemes.
What are Dogecoin and Shiba Inu?
Dogecoin (DOGE) and Shiba Inu (SHIB) are the two most famous memecoins, both featuring the Shiba Inu dog breed from the “Doge” internet meme, and both originally created as jokes that became surprisingly valuable.
Dogecoin was created in 2013 by software engineers Billy Markus and Jackson Palmer as a parody of the crypto craze. Shiba Inu followed in 2020. Both reached enormous valuations during the 2021 bull market, largely driven by social media and celebrity endorsements. Both have since lost the vast majority of their peak value.
What is Bitcoin Pizza Day?
Bitcoin Pizza Day, observed on May 22, marks the first known real-world commercial transaction using Bitcoin. On May 22, 2010, programmer Laszlo Hanyecz paid 10,000 Bitcoin for two pizzas.
At the time, 10,000 Bitcoin was worth about $41. At Bitcoin’s peak in January 2025, those same coins were worth over $1 billion. Pizza Day is celebrated every year in the crypto community as a reminder of how far Bitcoin has come. Laszlo has said he does not regret the transaction, as it proved Bitcoin could work as real currency.
Regulation and institutional terms
As crypto has grown, governments and institutions have become more involved. These terms help you understand the regulatory and institutional landscape.
What is the difference between a spot ETF and a futures ETF?
A spot ETF holds the actual cryptocurrency, such as real Bitcoin, while a futures ETF holds contracts that track the expected future price. They are very different products despite similar names.
Spot Bitcoin ETFs, approved in the US in January 2024, are backed by real Bitcoin held by a custodian. Futures ETFs, which existed before, are backed by derivatives contracts and can deviate from the actual Bitcoin price over time due to a phenomenon called “contango.” For most investors, a spot ETF provides cleaner, more accurate exposure to the asset’s price.
What is a crypto custodian?
A crypto custodian is a regulated financial institution that holds cryptocurrency on behalf of investors, providing security, insurance, and regulatory compliance that individuals cannot easily provide for themselves.
Institutional investors like pension funds and hedge funds typically use custodians rather than managing their own wallets. Companies like Coinbase Custody and Fidelity Digital Assets operate in this space. Custodians are specifically regulated for the secure holding of large amounts of digital assets on behalf of others.
What is regulatory clarity?
Regulatory clarity refers to clear, consistent rules from governments about how cryptocurrencies are legally defined, taxed, and regulated, something the crypto industry has long sought and most countries have been slow to provide.
Without clear rules, businesses are uncertain whether a particular token is a security, a commodity, or something else entirely. Regulatory clarity is widely seen as a prerequisite for large-scale institutional adoption of crypto. The legal status of various tokens varies significantly by country.
What is the SEC and how does it relate to crypto?
The SEC (Securities and Exchange Commission) is the US government body that regulates securities, and it has been at the centre of crypto regulation debates because many tokens may legally qualify as securities.
The central question the SEC has pursued is whether tokens sold by crypto projects constitute investment contracts under a legal test called the Howey Test. If a token is a security, the company that issued it faces significant regulatory requirements. The SEC has brought enforcement actions against multiple major crypto companies and exchanges.
What is the difference between mainnet and testnet?
A mainnet is the live, real version of a blockchain where actual transactions happen with real value. A testnet is a separate environment where developers can test applications using worthless tokens without risking real money.
Before launching a new feature or smart contract on the mainnet, developers test it on a testnet first. Testnets mimic the mainnet’s behaviour but use fake cryptocurrency with no real-world value. Moving from testnet to mainnet is a significant moment for any crypto project, as it means the code is ready for the real world.
What is a whitepaper?
A whitepaper is a technical document published by a crypto project that explains its purpose, how it works, the problem it solves, and the economics of its token. It is the foundational document investors and developers use to evaluate a project.
Bitcoin’s whitepaper, published by Satoshi Nakamoto in 2008, is one of the most important documents in technology history. For any new crypto project, the whitepaper is the first thing a serious researcher reads. Poorly written, vague, or plagiarised whitepapers are red flags. A strong whitepaper does not guarantee a legitimate project, but the absence of one is a warning sign.
What is a DAO?
A DAO (decentralised autonomous organisation) is an organisation governed by its token holders through votes recorded on a blockchain, with rules encoded in smart contracts rather than enforced by management or legal structures.
DAOs can control significant treasuries and make decisions about how protocols are developed, how funds are spent, and how rules are changed, all through on-chain voting. The concept is appealing in theory but faces practical challenges including low voter participation, vulnerability to governance attacks by large token holders, and unclear legal status in most jurisdictions.
What is the most important crypto term for a beginner to know?
The most important term to understand before doing anything in crypto is seed phrase. Your seed phrase is the only way to recover your wallet if you lose access, and if anyone else gets it, they have complete control of your funds. Everything else you learn in crypto builds on understanding that your seed phrase must be protected at all costs.
What does HODL mean?
HODL means holding cryptocurrency long-term rather than selling during price drops. It started as a typo of “hold” in a famous 2013 Bitcoin forum post and became one of crypto’s most recognisable terms. It is sometimes backronymed as “Hold On for Dear Life.”
What is the difference between a coin and a token?
A coin has its own dedicated blockchain, like Bitcoin on the Bitcoin network or Ether on the Ethereum network. A token is built on top of an existing blockchain, like the thousands of ERC-20 tokens built on Ethereum. Most crypto assets you encounter are tokens, not coins, even though the words are often used interchangeably in everyday conversation
What does DYOR mean in crypto?
DYOR stands for “Do Your Own Research,” a reminder to investigate any crypto project independently before putting money into it, rather than relying on recommendations from social media, influencers, or friends. It is one of the most genuinely useful pieces of advice in crypto.
What is the safest way to store cryptocurrency?
The safest way to store significant amounts of cryptocurrency long-term is in a hardware wallet, which is cold storage that keeps your private keys offline and away from potential hackers. For smaller amounts used regularly, a reputable non-custodial software wallet is a reasonable option. The key principle is to never leave more on an exchange than you are prepared to lose.
What is the difference between FUD and legitimate concern?
FUD (Fear, Uncertainty, Doubt) refers to negative information spread to damage confidence in a cryptocurrency, often by competitors or short sellers. Legitimate concern is negative information backed by evidence and good-faith reasoning. Crypto communities sometimes label any criticism as FUD to avoid engaging with it. Being able to tell the difference helps you evaluate information more carefully.
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