Crypto Glossary for Beginners (A to Z: Terms & Jargon)

This glossary covers essential terminology in the cryptocurrency, blockchain, Web3, and NFT ecosystems, arranged alphabetically for convenient reference.

A

• 51% Attack: When one entity controls over 50% of a blockchain’s mining power, potentially altering the blockchain or blocking transactions.
• ABI (Application Binary Interface): A standard for interacting with smart contracts, defining how to call functions and access data.
• Abstract: Refers to conceptual ideas or designs implemented in blockchain code.
• Account: A unique identifier on a blockchain holding cryptocurrency for transactions.
• Accounting Token: Tokens used for accounting within a blockchain, representing debts or credits.
• Accumulation/Distribution Indicator: A tool measuring money flow into or out of a cryptocurrency.
• ACTOR: A participant or node in a blockchain network.
• Adaptive State Sharding: A technique to improve blockchain scalability by dividing the network into smaller parts.
• Address: A unique identifier that functions like a bank account number in cryptocurrency networks, allowing users to send and receive digital assets.
• Adoption Curve: The rate at which new technologies like blockchain are adopted by the public.
• Aeternity Blockchain: A platform using a hybrid consensus of Proof of Work and Proof of Stake.
• Air-gapping: Isolating a device from the internet for security, often used in crypto storage.
• Airdrop: Distributing free cryptocurrency tokens to wallets, often for marketing.
• Airnode: A decentralized oracle providing data to smart contracts.
• Algo-Trading (Algorithmic Trading): Using algorithms to execute crypto trades automatically.
• Algorithm: Rules or steps for solving problems, like mining cryptocurrency.
• Algorithmic Market Operations (AMOs): Automated systems managing algorithmic stablecoin supply.
• Algorithmic Stablecoin: A stablecoin maintaining value through algorithms, not collateral.
• All-Time-High (ATH): The highest price a cryptocurrency has reached.
• All-Time-Low (ATL): The lowest price a cryptocurrency has reached.
• Allocation: Distributing cryptocurrency tokens to teams, investors, or institutions.
• Altcoin: Any cryptocurrency other than Bitcoin, like Ethereum or Litecoin.
• Amazon S3: Cloud storage service by Amazon, used in blockchain for data.
• Angel Investor: An individual funding startups, often in exchange for equity, including crypto projects.
• Anti-dump/Anti-Dumping Policy: Rules preventing rapid selling of crypto tokens to avoid price crashes.
• Anti-Money Laundering (AML): Regulations to prevent crypto use in money laundering.
• Apeing: Slang for investing in crypto without research, hoping for quick profits.
• Arbitrage: Profiting from price differences of the same asset across markets.
• Arbitrum: A layer 2 solution for Ethereum, reducing fees and congestion.
• Archival Nodes: Nodes storing the full blockchain history for data retrieval.
• Aroon Indicator: A tool to assess trend strength in cryptocurrency prices.
• ASIC (Application-Specific Integrated Circuit): Hardware designed for mining specific cryptocurrencies, like Bitcoin.
• Astroturfing: Fake grassroots support for crypto projects, often by paid individuals.
• Attestation Ledger: A record providing proof of transactions or states on a blockchain.
• Authentication: Verifying user or device identity on a blockchain network.
• Average Directional Index (ADX): A technical indicator measuring trend strength in crypto markets.

B

• Bag: Slang for holding a large amount of a specific cryptocurrency.
• Bakers: In Tezos, participants creating new blocks, similar to miners.
• Banking as a Service (BaaS): Banks providing services via APIs, used in fintech and blockchain.
• Basket: A collection of different cryptocurrencies held as one investment.
• Base Fee: Ethereum’s minimum transaction fee, introduced with EIP-1559.
• Beacon Chain: Part of Ethereum 2.0, managing consensus and network coordination.
• Bear: Someone believing crypto prices will fall.
• Bear Market: A market where prices drop significantly, with low investor confidence.
• Bear Trap: A false signal of rising prices, tricking bears into buying before a fall.
• Bearwhale: A large investor selling crypto to lower prices for profit.
• Benchmark: A standard to measure crypto or portfolio performance against similar assets.
• Benchmark Index: A standard index for comparing crypto fund performance.
• BEP-2: Token standard for Binance Chain.
• BEP-20: Token standard for Binance Smart Chain, like ERC-20 on Ethereum.
• BEP-721: NFT standard for Binance Smart Chain, like ERC-721 on Ethereum.
• BEP-95: A hard fork upgrade on Binance Smart Chain to burn BNB tokens.
• Big Tech: Large tech companies like Google, involved in blockchain and crypto.
• Binance Labs: Binance’s venture arm, investing in blockchain projects.
• Binance Launchpad: A platform for launching new crypto tokens via IEOs.
• Bitcoin (BTC): The first cryptocurrency, created by Satoshi Nakamoto in 2009.
• Bitcoin ATM (BTM): Machines for buying or selling Bitcoin with cash or cards.
• Block Gas Estimator Feed: A tool estimating gas prices for Ethereum transactions.
• Blockchain: A decentralized ledger recording transactions across computers, ensuring security.
• Bridge: A protocol transferring assets between different blockchains.
• Bulletproofs: Zero-knowledge proofs used in privacy-focused blockchains, short and trustless.

C

• Cancel Transactions: Replacing a transaction with a higher gas price to get it mined first.
• Censorship: Excluding certain transactions from blocks, often maliciously.
• Cold Wallet: A cryptocurrency wallet that is not connected to the internet, providing enhanced security against hacking.
• Confirmed Transaction: A transaction included in a block, part of the permanent blockchain.
• Consensus Mechanism: The protocol used by blockchain networks to achieve agreement on the state of the ledger among distributed participants.
• Cross-Chain Arbitrage: Profiting from price differences of the same asset across blockchains.
• Cryptocurrency: Digital or virtual currency that uses cryptography for security and operates on blockchain technology.

D

• DAO (Decentralized Autonomous Organization): An organization represented by rules encoded as a computer program that is transparent, controlled by organization members, and not influenced by a central authority.
• Dapp (Decentralized Application): An application running on a blockchain, using smart contracts, decentralized.
• DeFi (Decentralized Finance): Financial apps on blockchain, operating without central authorities.
• DEX (Decentralized Exchange): A crypto exchange on blockchain, enabling peer-to-peer trading.
• Dropped Transaction: A transaction not included in a block, removed from the mempool.

E

• EIP-1559: Ethereum proposal changing gas fee calculation, introducing base and tip fees.
• EOA Transaction: A transaction by a user account on Ethereum, not a smart contract.
• ERC-20: A technical standard used for smart contracts on the Ethereum blockchain for implementing tokens.
• ERC-721: The token standard used to create non-fungible tokens (NFTs) on the Ethereum blockchain.
• Ethereum: A blockchain for smart contracts and decentralized apps, launched in 2015.
• Ethereum 2.0: Ethereum’s upgrade to Proof of Stake from Proof of Work.
• Ethereum Virtual Machine (EVM): The runtime for executing smart contracts on Ethereum.

F

• Failed Transaction: A transaction that didn’t execute, often due to insufficient gas.
• Fiat Currency: Government-issued currency that is not backed by a physical commodity like gold but rather by the government that issued it.
• Flash Loan: Uncollateralized loans that are borrowed and repaid within a single blockchain transaction.
• Floor Price: The lowest price at which an NFT from a specific collection is available for purchase.
• Fork: A split in a blockchain network, creating two separate versions of the blockchain with a shared history.
• Front-running: Placing a trade before a large order to profit from its price impact.
• Fungible Token: A token where each unit is identical in value and can be exchanged with any other unit of the same token (e.g., Bitcoin, Ethereum).
• Full Nodes: Nodes validating all blockchain transactions and blocks, ensuring network integrity.

G

• Gas: A unit measuring computational effort for Ethereum transactions.
• Gas Estimator: A tool helping estimate gas prices for faster transaction processing.
• Gas Fees: Fees paid to miners for processing Ethereum transactions.
• Gas Limit: Maximum gas allowed for an Ethereum transaction.
• Gas Price: Amount of Ether (in Gwei) paid per gas unit for a transaction.
• Genesis Block: The first block of a blockchain, often hardcoded into the blockchain’s software.
• Governance Token: A token that gives holders voting rights over the future of a protocol or platform.
• Goerli: An Ethereum testnet for developers to test apps without real Ether.
• Gwei: A small Ether unit, 1 Gwei = 0.000000001 ETH, used for gas prices.

H

• Hash: A function that converts an input of any length into a fixed-size string of bytes, used extensively in blockchain technology for security.
• Hard Cap: The maximum amount of funds a cryptocurrency project aims to raise during its token sale.
• Hard Fork: A radical change to a blockchain protocol that makes previously invalid blocks/transactions valid (or vice-versa), requiring all users to upgrade to the latest version.
• Hot Wallet: A cryptocurrency wallet that is connected to the internet, allowing for quick transactions but with higher security risks compared to cold wallets.

I

• ICO (Initial Coin Offering): A fundraising method where new projects sell their underlying crypto tokens in exchange for established cryptocurrencies like Bitcoin or Ethereum.
• Immutable: Unchangeable; once data is recorded on a blockchain, it typically cannot be altered.
• Internal Transaction: A transaction between smart contracts on Ethereum, not user-initiated.
• Interoperability: The ability of different blockchain systems to communicate, share, and work with each other.

J

• JIT Arbitrage: “Just in Time” arbitrage, exploiting price discrepancies instantly.

K

• Kovan: An Ethereum testnet for testing before mainnet deployment.
• KYC (Know Your Customer): The process of verifying the identity of customers, often required by cryptocurrency exchanges to comply with regulations.

L

• Layer 1: The main blockchain layer, like Ethereum or Bitcoin.
• Layer 2: Scaling solutions on top of layer 1, improving speed and cost.
• Light Nodes: Nodes relying on full nodes for data, not storing the full blockchain.
• Liquidations: In DeFi, selling off positions when collateral falls below required levels.
• Liquidity: How easily an asset can be traded without affecting its price.
• Liquidity Pool: A collection of funds locked in a smart contract that facilitates trading, lending, and other functions in DeFi applications.
• Loopring: A layer 2 protocol for Ethereum, enabling fast, low-cost trades with zk-rollups.

M

• Market Cap: The total value of a cryptocurrency, calculated by multiplying the current price by the circulating supply.
• Max Fee Per Gas: Maximum amount a user will pay per gas unit on Ethereum.
• Max Priority Fee: Additional fee to incentivize miners to include a transaction sooner.
• Mempool: A waiting area for unconfirmed transactions before they are added to a block.
• Metadata: Additional information that describes NFTs or other blockchain assets, including properties, images, descriptions, and other attributes.
• Metaverse: A collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space.
• Mining: The process of validating transactions and creating new blocks in proof-of-work blockchains, requiring significant computational resources.
• Mint: The process of creating a new token or NFT and recording it on the blockchain.
• Moon: A colloquial term referring to a cryptocurrency significantly increasing in price in a short period.
• Multi-signature (Multisig): A security feature requiring multiple private keys to authorize a transaction.

N

• NFT (Non-Fungible Token): A unique digital asset stored on a blockchain, representing ownership of items like art, music, or collectibles.
• NFT domain names: Blockchain-based domain names that can serve as aliases for wallet addresses.
• NFT drop: The release of a new NFT collection where users can claim, purchase, or acquire the tokens.
• NFT Sniping: A practice where an MEV searcher front-runs or censors transactions to outbid others for specific NFT sales.
• Node: A computer connected to a blockchain network that participates in relaying information or maintaining a copy of the blockchain.
• Nonce: A number associated with Ethereum transactions that ensures each transaction from an address is unique and processed in order.
• Notify: A JavaScript library for real-time notifications of blockchain transactions on Ethereum and Polygon.

O

• Off-Chain: Transactions or data processed outside the blockchain, often for privacy or cost efficiency.
• On-Chain: Transactions or data recorded on the blockchain, visible to all network participants.
• Onboard: An open-source JavaScript library for simplifying user onboarding to Ethereum decentralized applications (Dapps).
• OP Stack: A software stack for creating layer 2 blockchains, managed by the Optimism Collective.
• Open editions: NFT sales allowing unlimited minting within a collection.
• Optimism: An Ethereum layer 2 scaling solution using optimistic rollups for faster, cheaper transactions.
• Optimistic Rollups: Layer 2 solutions that process transactions off the main chain and use fraud proofs for validation.
• Oracle: A service that provides external data to blockchain networks, allowing smart contracts to interact with real-world information.

P

• PFP (Profile Picture): An NFT used as a profile picture, often tied to community membership.
• Pending Pool: A group of transactions in the mempool ready for processing.
• Pending Simulation Transaction: A simulation of a pending transaction’s mempool data as if it were on-chain.
• Pending Transaction: A transaction in the mempool that has not yet been confirmed on the blockchain.
• Phygital: An NFT combining digital and physical components for enhanced utility.
• POAP (Proof of Attendance Protocol): NFTs issued to commemorate attendance at events or milestones.
• Pool Imbalance Sandwiching: A type of MEV where liquidity pools are manipulated to exploit price differences.
• Pre-Chain: Transactions currently in progress but not yet confirmed (also called pre-consensus).
• Pre-Consensus: Transactions in flight but not yet confirmed on the blockchain.
• Private key: A secret string of characters controlling access to a wallet and authorizing transactions.
• Proof of Stake (PoS): A consensus mechanism where validators stake cryptocurrency to secure the network and earn rewards.
• Proof of Work (PoW): A consensus mechanism requiring computational power to solve puzzles and validate transactions.

Q

• Queued Pool: Transactions in the mempool that are not yet ready for processing due to being out of order.

R

• Rebase Arbitrage: MEV exploiting price changes during oracle updates or rebases.
• Redeemable NFTs: NFTs allowing holders to claim physical or digital items, with options to exchange or keep.
• Replacement Transaction: A transaction that replaces a pending one, such as a “Speed Up” or “Cancel.”
• Rinkeby: A deprecated Ethereum testnet for testing smart contracts.
• Ropsten: A deprecated Ethereum testnet for live testing of smart contracts.
• Rug Pull: A scam where cryptocurrency developers abandon a project and run away with investors’ funds.

S

• Satoshi Nakamoto: The pseudonymous person or group who created Bitcoin and wrote the Bitcoin whitepaper.
• Sandwiching: A DeFi manipulation tactic where a trader front-runs and back-runs large orders to profit from price volatility.
• Scalability: The ability of a blockchain network to handle an increasing number of transactions.
• SDK (Software Development Kit): Tools for developers to build blockchain applications, including Blocknative’s Mempool Explorer.
• Searcher: An entity that identifies profitable transaction opportunities for miners or validators.
• Seed phrase: A set of words (e.g., 12, 18, or 24) used to recover or back up a crypto wallet.
• Sidechain: A separate blockchain linked to a main chain, enabling faster transactions (e.g., xDai).
• Simulation Platform: A tool simulating mempool transactions against the current block state for outcome predictions.
• Smart Contracts: Self-executing code on blockchains that enforce agreements without intermediaries.
• Software wallet: A digital wallet program for managing cryptocurrencies and NFTs (e.g., MetaMask).
• Solana: A high-performance layer 1 blockchain for dApps and smart contracts, with SOL as its native token.
• Solidity: The programming language for writing smart contracts on Ethereum.
• Speed Up Transactions: Replacement transactions used to prioritize processing by increasing gas fees.
• State Channel: A layer 2 solution for off-chain transactions, reducing blockchain congestion.
• Stuck Transactions: Transactions unable to be mined, often due to nonce gaps.

T

• Testnet: A testing network for blockchain projects before mainnet deployment.
• Tip: An additional fee paid to miners to prioritize transaction inclusion (introduced by EIP-1559).
• Token: A unit of value issued by a tech platform, company, or decentralized application, built on existing blockchains.
• Token standards: Rules governing token behavior on blockchains (e.g., ERC-20 for fungible tokens, ERC-721 for NFTs).
• Tokenomics: The economic model of a cryptocurrency, including supply, distribution, and utility.
• Total Value Locked (TVL): The total value of assets locked in a DeFi protocol.
• TPS (Transactions Per Second): A measure of a blockchain’s transaction processing speed.
• Transaction Event Stream: A real-time feed of mempool transaction events for monitoring.
• Transaction Settlement: The confirmation of a transaction when a block is added to the blockchain.
• Transaction Simulation: A tool to predict transaction outcomes before submission.
• Transaction Status: The current state of a transaction (e.g., pending, confirmed, failed).

U

• Uniswap: A popular decentralized exchange protocol built on Ethereum that uses an automated market maker system.
• Utility Token: A cryptocurrency token that provides users with access to a product or service rather than serving primarily as an investment.
• UTX0 (Unspent Transaction Output): An output from a blockchain transaction that can be used as an input in a new transaction, used in Bitcoin and similar cryptocurrencies.

V

• Validator: A participant in a proof-of-stake blockchain who is responsible for verifying transactions and maintaining consensus.
• Virtual land: NFTs representing ownership of virtual spaces in metaverses like Decentraland.
• Volatility: The degree of price fluctuation for an asset over time, with cryptocurrencies often exhibiting high volatility.

W

• Wallet address: A public identifier for sending and receiving cryptocurrencies or NFTs.
• WAGMI: An acronym for “We’re All Going to Make It,” symbolizing optimism in the crypto community.
• WETH (Wrapped Ether): An ERC-20 token representing ETH, used for compatibility with other protocols.
• Web3: The decentralized evolution of the internet, emphasizing user control and blockchain integration.
• Whale: A large investor or trader whose actions can significantly impact market prices.
• Whitelist: A pre-approved list of addresses allowed to participate in NFT sales or token launches.
• Whitepaper: A document issued by cryptocurrency developers explaining the technology, purpose, and mechanics of a blockchain project.
• Wrapped Token: A token pegged to the value of another cryptocurrency, allowing it to be used on different blockchain networks (e.g., Wrapped Bitcoin on Ethereum).

X

• XRP: The native cryptocurrency of the XRP Ledger, created by Ripple Labs for facilitating fast international money transfers and payments.
• xDai: A cryptocurrency that’s a stable version of DAI running on the xDai Chain, designed for faster and cheaper transactions.

Y

• Yield Farming: The practice of staking or lending crypto assets to generate returns or rewards in the form of additional cryptocurrency.
• YFI (Yearn Finance): A governance token for the Yearn Finance platform, which automates yield farming strategies.
• Ycombinator: While not exclusively a crypto term, it’s a prominent startup accelerator that has funded many successful blockchain and crypto companies.

Z

• Zora Network: An NFT-focused layer 2 blockchain built on Ethereum, launched in 2023.