Glossary

AMLD5

The European Union’s 5thAnti-Money Laundering Directive (AMDL5) is an update to the union’s Anti-Money Laundering (AML) framework.

API

API stands for Application Programming Interface. It is a set of routines, protocols, and tools for building software applications. APIs specify how software components should interact, such as what data to use and what actions should be taken.

ASIC

An acronym for application-specific integrated circuit — a device designed for the sole purpose of mining cryptocurrencies.

ASIC-Resistant

This term usually applies to blockchains and mining algorithms, designed to give no benefit for ASICs over consumer grade hardware.

Abstract

Abstract is something that exists in thought as an idea.

Account

An account is essentially a whose purpose is to track the financial activities of a specific asset/

Accumulation / Distribution Indicator

The accumulation / distribution indicator determines the supply and demand level of a stock/asset/cryptocurrency by multiplying the closing price of a specific period with volume.

Adam Back

Adam Back is a world-renowned British cryptographer, cypherpunk and crypto industry figure from the United Kingdom.

Address

A place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers.

Adoption Curve

Adoption curve indicates the pace of adoption of a new technology by people. It may also involve segregation of the target audience to understand the market's willingness.

Air Gap

If data cannot be accessed, then it cannot be infected or corrupted — this is the concept of an air gap.

Airdrop

A marketing campaign that distributes a specific cryptocurrency or token to an audience.

Airnode

Airnode is an oracle node and API blockchain gateway that is readily deployed by API providers who want to engage in the API3 blockchain protocol and put their data feeds on-chain.

Algo-Trading (Algorithmic Trading)

Algo-trading is an automated trading system where buy and sell orders are placed according to the rules of a computer program or algorithm.

Algorithm

A process or set of rules to be followed in problem-solving or calculation operations, usually by a computer.

Algorithmic Market Operations (AMOs)

Algorithmic Market Operations (AMOs) automatically control the supply of algorithmic stablecoins while improving scalability, decentralization, and transparency.

Algorithmic Stablecoin

An algorithmic stablecoin actually uses an algorithm underneath, which can issue more coins when its price increases and buy them off the market when the price falls.

All-Time-High (ATH)

The highest point (in price, in market capitalization) that a cryptocurrency has been in history.

All-Time-Low (ATL)

The lowest point (in price, in market capitalization) that a cryptocurrency has been in history.

Allocation

Allocation is the allotment of equity or tokens that may be earned, bought, or reserved for a specific team, group, investor, institution, or another similar entity.

Alphanumeric

Alphanumeric phrases consist of both letters and numerals, or characters.

Altcoin

As Bitcoin is the first cryptocurrency that captured the world’s imagination, all other coins were subsequently termed “altcoins,” as in “alternative coins.”

Altcoin Trader

A person who trades cryptocurrencies alternative to Bitcoin.

Amazon S3

Amazon Simple Storage Service (S3) is a scalable, high-speed, and inexpensive web-based cloud storage service to store and retrieve data anytime and anywhere.

Anarcho-capitalism

A political philosophy originally conceived by American economist Murray Rothbard that has now been embraced by many members of the crypto community.

Angel Investor

A person who financially backs a new business venture or startup.

Annual Percentage Rate (APR)

The amount of interest a borrower must pay each year is known as the annual percentage rate (APR). The annual percentage rate (APR) is determined by multiplying the periodic interest rate by the number of periods in a year that the periodic rate is used.

Annual Percentage Yield (APY)

Annual percentage yield (APY) is the rate of return gained over the course of a year on a specific investment. Compounding interest, which is computed on a regular basis and applied to the amount, is factored into the APY.

Anonymous

Anonymity is when something is not known or named.

Anti-Fragile

A quality attached to an asset that means it performs better when exposed to volatility and shocks.

Anti-Money Laundering (AML)

A set of international laws enacted to curtail criminal organizations or individuals laundering money through cryptocurrencies into real-world cash.

Antivirus

A piece of software designed to protect against malicious software and cyber attacks in general.

Apeing

Apeing is when a cryptocurrency trader buys a token shortly after the token project launch without conducting thorough research.

Arbitrage

Arbitrage is the practice of quickly buying and selling the same asset in different markets to take advantage of price differences between the markets.

Aroon Indicator

Aroon Indicator is used to identify the existence, changes, and corrective retracements and gauge the strength of an ongoing trend in financial markets.

Ashdraked

The complete loss of a trader's total invested capital, specifically as a result of shorting Bitcoin.

Ask Price

The minimum price that a seller is willing to accept for an asset. The ask price is also sometimes referred to as the offer price.

Asset-Backed Tokens

Asset-backed tokens are digital claims on a physical asset and are backed by that asset.

Assets Under Management (AUM)

Assets under management measures the total market values of all the funds controlled by an individual or financial institution on behalf of their clients.

Astroturfing

The practice of disguising marketing campaigns or otherwise sponsored messaging as the unprompted views of genuine community members.

Asynchronous

Events that do not occur simultaneously or at the same rate are referred to as asynchronous.

Atomic Swap

The transfer of cryptocurrency from one party to another, without the use of an exchange or other intermediary.

AtomicDEX

AtomicDEX offers a cryptocurrency wallet and DEX in one application that is available for multiple platforms.

Attestation Ledger

An attestation ledger is an account book designed to provide evidence of individual transactions. It is generally used to “attest” that a financial transaction took place, or to prove authenticity of transactions or products.

Auction

An auction is a public sale through a bidding process where an asset is sold to the highest bidder.

Audit

An audit is a process where developers inspect the underlying code and/or algorithm that compose systems and applications.

Augmented Reality (AR)

Augmented Reality (AR) is an immersive experience that improves the value and usage of real-world items using computer-generated intuitive information sent through a variety of sensory modalities such as sound, touch, smell, and sight.

Authentication

Authentication is a process that confirms a user's identity using passwords, SMS codes, fingerprints, and other forms of ownership proofs before granting access to sensitive and/or personal information.

Automated Market Maker (AMM) [Updated]

An automated market maker (AMM) is a system that provides liquidity to the exchange it operates in through automated trading.

Average Directional Index (ADX)

The average directional index (ADX) is a technical indicator that measures how strong a market trend is by using price moving averages and is represented by figures ranging between 1 and 100, where a larger value suggesting a stronger trend.

BEP-2 (Binance Chain Tokenization Standard)

A technical standard for tokens on Binance Chain.

BEP-20

BEP-20 is a Binance Smart Chain token standard created with the intention of extending ERC-20.

BEP-721

BEP-721 is a Binance Smart Chain (BSC) token standard that enables the generation of non-fungible tokens (NFTs). It is considered to be an extension of ERC-721 that is one of the most popular NFT standards.

Bag

Crypto slang for a large quantity of a specific cryptocurrency. Alternatively (but less frequently) used to refer to the contents of an individual's crypto portfolio.

Bagholder

An investor who continues to hold large amounts of a specific coin or token, regardless of its performance.

Bakers

Baking is the process that Tezos uses in order to append new blocks of transactions to its blockchain.

Baking

Baking is a process that is used by Tezos in order to append new blocks of transactions onto its blockchain.

Bandwidth

The quantity of data capacity available for transactional activity on a network is known as bandwidth.

Bank for International Settlements (BIS)

The BIS is an international financial institution that promotes global monetary stability.

Banking Secrecy Act (BSA)

The Bank Secrecy Act (BSA) was implemented in the United States in 1970 to prevent criminals from concealing or laundering their illegal gains.

Banking as a Service (BaaS)

BaaS platforms provides a higher level of financial transparency options by letting banks open up their APIs for third parties in order to develop new services.

Basket

A basket, when used in the cryptocurrency space, refers to a collection of digital currencies managed as a single asset.

Batch Auctions

Batch auctions are a trading mechanism in which individual orders are grouped together and executed simultaneously.

Beacon Chain

A blockchain that coordinates shard chains, manages staking and the registry of validators in a PoS cryptocurrency, such as Ethereum 2.0.

Bear

Someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.”

Bear Trap

The attempted manipulation of a specific cryptocurrency’s price, based on the coordinated activity of a group of traders.

Bearwhale

A bearwhale is a person who has a high number of cryptocurrencies and uses their massive account to drive the price down and profit out of it.

Benchmark

Benchmarking is a method of comparing the performance of your asset or investment portfolio to that of similar assets to see whether there is a gap that can be bridged by increasing performance indicators.

Benchmark Index

A benchmark index is a popular index security that is used as a gauge or benchmark, against which the progress of the broader market may be tracked.

Beta (Release)

A software pre-release stage where its access is offered to a set number of users & third-party software testers for testing it under real-world settings.

Bid Price

The cost that someone is willing to pay for a security, asset, commodity, service, or contract is referred to as a bid price.

Bid-Ask Spread

Bid-ask spread is the difference between the highest price which a buyer is willing to pay for an asset as well as the lowest price that a seller is willing to accept.

Big Tech

The four or five biggest technological corporations, particularly Facebook, Apple, Google, and Amazon, are referred to as "Big Tech" as they enjoy the biggest shares in their respective industries.

Binance Labs

Binance Labs is a project to nurture, invest in, and develop blockchain and cryptocurrency businesses, initiatives, and communities, as well as a social impact fund.

Binance Launchpad

Binance Launchpad offers crypto-startups a platform to raise capital and market their projects to millions of crypto investors in the Binance ecosystem.

Binary Code

Binary code is a two-symbol system that is based on numbers, "0" and "1," to represent text, computer processor commands, or any other type of data.

Bit

A bit is a basic unit of information in computing.

BitLicense

A business license permitting regulated virtual currency activities, issued by the New York State Department of Financial Services.

BitPay

BitPay is a Bitcoin payment service provider.

Bitcoin ATM (BTM)

An automated teller machine (ATM or cashpoint) that allows the user to buy and sell Bitcoin.

Bitcoin Dominance (BTCD)

Bitcoin Dominance is a metric that determines how much share of the overall crypto market share is owned by Bitcoin.

Bitcoin Improvement Proposal (BIP)

The standard format for documents proposing changes to Bitcoin.

Bitcoin Pizza

Bitcoin Pizza refers to the infamous transaction where a guy, named Laszlo Hanyecz, paid 10,000 Bitcoins for two pizzas making it the first business transaction of Bitcoin in the real world.

Bitcoiner

A person who is bullish on Bitcoin.

Bitcointalk

Bitcointalk is the most popular online forum dedicated to Bitcoin, cryptocurrency and blockchain technology.

Bits

A commonly used unit, or subdivision, of a single Bitcoin.

Black Swan Event

A black swan event, also known as black swan occurrences, is a metaphor for an unexpected event that has a significant impact.

Block

A file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain.

Block Explorer

An application enabling a user to view details of blocks on a given blockchain. Also known as a blockchain browser.

Block Header

A block header is a unique identifier for a block on a blockchain that is hashed on a continuous basis to supply proof-of-work for mining incentives.

Block Height

A value describing the number of blocks preceding a given block in the blockchain.

Block Producer

A block producer (BP) is a person or group whose hardware is chosen to verify a block's transactions and begin the next block on most Proof-of-Stake (PoS) blockchains.

Block Reward

The coins awarded to a miner or group of miners for solving the cryptographic problem required to create a new block on a given blockchain.

Block Size

In blockchain technology, block size refers to the amount of data about transactions a single block in the chain can carry.

Block Time

Block time refers to the approximate time it takes for a blockchain-based system to produce a new block.

Block Trade

A block trade is a large-scale purchase or sale of securities that occur outside of an open market. It uses blockhouse as a financial intermediary to aid investors with risk management.

Blockchain

A distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies.

Blockchain 1.0

Blockchain 1.0 is the first generation of blockchain technology, which focuses on cryptocurrency and decentralization.

Blockchain 2.0

Blockchain 2.0 is an extension to blockchain 1.0 as it introduced the concept of decentralization of business and markets through smart contracts and improved security and transparency.

Blockchain 3.0

Blockchain 3.0 is the final developmental stage of blockchain technology, which predicts global, institutional and enterprise adoption.

Blockchain Explorer

A blockchain explorer is simply a search engine allowing users to browse through blockchain records.

Blockchain Trilemma

The blockchain trilemma is the set of three issues that plague blockchains: decentralization, security and scalability.

Bollinger Band

A tool developed by Bollinger to help in the recognition of systemic pattern recognition in prices; it is a band that is plotted two standard deviations away from the simple moving average, or exponential moving average in some cases.

Bonding Curve

A bonding curve is a mathematical curve that defines the relationship between the price and the supply of a given asset.

Bots

Automated software that can carry out tasks such as cryptocurrency trades.

Bounty

A cryptocurrency bounty is a reward users receive for performing tasks assigned by a given blockchain or project.

Breaking

In the world of cryptocurrencies, breaking the forward compatibility of cryptoassets is seen in hard forks of a cryptocurrency.

Bridges

A blockchain bridge allows the seamless transfer of data or tokens between two different blockchain projects.

Browser Extension

A browser extension is a plugin for an internet browser that adds additional features.

Brute Force Attack (BFA)

An attempt to crack a password or key through automated trial and error.

Bubble

When an asset is traded at a price exceeding that asset's intrinsic value.

Bug Bounty

A reward offered for the identification of vulnerabilities in software.

Bug Exploit

A bug exploit is an attack that take advantage of a system's vulnerabilities.

Bull

A person that is optimistic and confident that market prices will increase, this person is also known to be "bullish" about the market or price.

Bull Trap

A bull trap occurs when a steadily declining asset appears to reverse and go upward, but soon resumes its downward trend.

Burn/Burned

Cryptocurrency tokens or coins are considered “burned” when they have been purposely and permanently removed from circulation.

Buy Wall

A buy wall is a disproportionately large buy limit order placed on a cryptocurrency exchange.

Byzantine Fault Tolerance (BFT)

Byzantine Fault Tolerance (BFT) is the property of a computer system that allows it to reach consensus regardless of the failure of some of its components.

Byzantine Generals’ Problem

A situation where communication that requires consensus on a single strategy from all members within a group or party cannot be trusted or verified.

Byzantium Fork

The Byzantium hard fork was geared towards making Ethereum's smart contracts suitable for usage in the commercial space and to increase the speed of the transactions with an enhancement in the security on its blockchain

Call Auction

When buyers set a maximum acceptable price to buy, and sellers set the minimum satisfactory price to sell a security on an exchange. Matching buyers and sellers in this process increases liquidity and decreases volatility.

Call Option

The right, but not the obligation, to buy a security or cryptocurrency at a given price within a given time frame.

Candlestick Chart

A type of price chart used in technical analysis. Candlestick charts display the high, low, open, and closing prices of a security for a specific period, their shape resembling a candle.

Cash & Carry Trade

A trading strategy used to profit on discrepancy between the spot price of a crypto asset and its corresponding futures price, which usually happens when asset's value is increasing. For example, if a trader noticed an asset's spot price was £8 and its corresponding futures price was £10, they would purchase at £8 and short the future price at £10. The trader would then “carry” the asset purchased at £8 until delivery in the futures market at £10. The profit would then be £10-£8/£10 = 25% Premium on the spot price with only counter party risk, assuming no other transactional costs.

CBDC

Abbreviation for Central Bank Digital Currency. This term has been applied to a hybrid type of digital currency that has been issued by a nation’s central bank. Largely inspired by elements of Stablecoin design, CBDCs enable central banks to create digital versions of existing fiat money where they retain control. Most CBDCs are still in an R&D phase, with an estimated 80% of the world’s central banks researching the subject.

Censorship Resistance

The quality of being resistant to change forced by external pressure. Bitcoin is censorship resistant because of the extreme cost of trying to subvert the accuracy of transactions maintained within its blockchain.

Centralised Exchange (CEX)

A type of cryptocurrency exchange where the trading is facilitated at a central location and subject to the appropriate regulations. A CEX may operate across several jurisdictions complying with the regulations specific to each.

Centralised Finance (CEFI)

Offers new crypto focused loans/savings products, but within a traditional centralised framework, where users create accounts and provide credentials/KYC, as well as getting access to customer service. Compare to DEFI (Decentralised Finance).

Change Output

The remaining difference from a Bitcoin transaction where the output exceeded the required input. This extra output is returned to the original input node via a new address and is known as Change.

Circulating Supply

A measure of the supply of a cryptocurrency that is in general circulation. Given lost or burned coins, this figure is hard to accurately establish. Circulating supply will function as a proportion of Total Supply.

Cloud Mining

Mining for cryptocurrency using rented computer equipment managed through a Cloud System. This avoids all the problems of hardware maintenance and location logistics.

Coin

Slang term for a cryptocurrency making them more relatable. In reality cryptocurrencies are entirely virtual and have no physical representation. Often used to distinguish cryptocurrency functioning as money rather than tokens with narrow use cases on a specific blockchain.

Coin Burn

Permanently removing tokens or coins from the circulating supply. Coin burning is usually done to restrict total supply and thereby control inflation.

Cold Storage

A secure method for storing cryptocurrency that by default is offline (not connected to the internet) and therefore minimises the threat of hacking. Examples are Hard Wallets or Paper Wallets.

Cold Wallet

A cryptocurrency wallet that by default is offline (not connected to the internet) and therefore minimises the threat of hacking. Examples are Hard Wallets or Paper Wallets.

Collateral

Funds pledged as security against which a crypto loan can be made through a CEFI or DEFI platform. Crypto loans tend to be over-collateralised, meaning the value of the collateral is greater than the loan amount.

Collateralised Debt Position (CDP)

Locking cryptocurrency in a smart contract as collateral against the issue of a stablecoin. For example locking ETH in a MKR DAO smart contract to generate DAI. The ETH can be released once the DAI has been paid back plus interest and a stability fee paid in MKR.

Colored Coins

Methods for representing and transacting real world assets on the Bitcoin blockchain.

Composability

The chaining together of Defi primitives to create new services, building upon their codebase and combining it with a user-friendly interface.

Confirmation

The process by which new blocks are added to a blockchain, with all nodes confirming the transactions within the block as valid. Confirmations happen as set time intervals which vary depending on the Consensus Mechanism. One Bitcoin confirmation generally takes 10 minutes.

Confirmation Time

The time taken for a new block of transactions to be confirmed and added to the end of a blockchain. The time taken will depend on the Consensus Mechanism employed. A Bitcoin block confirmation takes roughly 10 minutes, while for Ethereum it is around 15 seconds.

Consensus Mechanism

Describes the process by which a blockchain reaches agreement on the validity of new data being added to the existing chain of information. Examples are Proof-of-Work, Proof-of-Stake and Delegated Proof-of-Stake.

Correction

The term given to a significant decrease in price that abruptly halts a period of prolonged price appreciation.

Counterparty Risk

Is the risk that one or more sides in any agreement won't fulfil their obligation. Counterparty risk specific to crypto increases with custodial storage, trading and DEFI, which all require interaction with at least one other party.

CPU Mining

The process of adding transactions to a blockchain by performing and solving algorithms using a Central Processing Unit (CPU).

Cryptocurrency

A new kind of internet money with no controlling central authority which is instead uses blockchains to record transactions and issue currency. Blockchains are secured by cryptography and consensus mechanisms, hence the term crypto-currency.

Cryptocurrency Exchange

An online service, usually website, mobile app or API, that facilitates for a fee, the exchange of fiat currencies for cryptocurrencies, or the exchange between different cryptocurrencies. There are two exchange models CEX (Centralised Exchange) or DEX (Decentralised Exchange).

Cryptography

The use of codes to ensure information is only accessible by a sender and an intended recipient. Cryptography is a central element of cryptocurrency design, providing security in the absence of a central authority.

Custody

The term used to describe who controls the Private Keys for a cryptocurrency wallet, giving them control over funds. Custodial - Controlled by a 3rd party; Non-custodial - controlled by the individual.

Day Trading

A type of trading strategy where all positions are closed before the market trading day to avoid unmanageable risks that can occur between one day’s price close and the next day’s price open. As crypto never closes Day Trading has a slightly different meaning, closer to Swing Trading, taking advantage of short term price fluctuation using Technical Analysis.

Decentralised

The characteristic of a network or organisation that has no central point of authority, decision making is instead delegated to smaller groups or shared across network points (aka nodes). The Bitcoin blockchain enables a money system to be decentralised, taking banks out of the picture, and enabling users to interact directly with each other (P2P).

Decentralised Application (Dapp)

An application built on a blockchain, using Smart Contracts to perform the business logic. They have no single point of authority or control, and rely on the consensus mechanism of the underlying blockchain to process transactions.

Decentralised Autonomous Organisation (DAO)

An organisation that uses the decentralised qualities of blockchains and smart contracts to provide governance (decision making) through aligned economic incentive. DAOs try to solve the Principal-Agent dilemma where agents (managers or politicians) within an organisation have decision-making power but don’t feel the consequences of their decisions because they have no skin in the game.

Decentralised Exchange (DEX)

A type of cryptocurrency exchange which has no central trading book but instead facilitates access to liquidity via smart contracts.

Decentralised Finance (Defi)

Offers new crypto-based financial products in a totally decentralised way. There is no bank or business, no formal account creation, just a protocol managed by smart contract, so all interaction is essentially dictated by code.

Deflation

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%. Generally, deflation is a term used to describe a fall in price levels.

Degen

A badge of honour usually specific to DEFI describing someone who approaches opportunities to earn yield with a mindset which blends trading, gaming and gambling.

Delegated Proof of Stake

A variant of the Proof of Stake consensus mechanism where providers of staked assets can delegate their voting rights to another user.

Depth Chart

The visual representation of the current Limit Orders from Buyers and Sellers, as part of a Trading Interface for a cryptocurrency exchange.

Diamond Hands

Describes someone with the strongest resolve to not sell their crypto even in the face of negative sentiment or declining prices, because of a belief in its fundamental value. Sometimes simply referred to as Strong Hands

Difficulty Level

Adjusting of the mining hashing algorithm for the Bitcoin blockchain to ensure that blocks are created at a consistent rate of one every 10 minutes. Every 2016 blocks the average time is compared to the previous 2016 blocks; if it faster the Difficulty Level for the algorithm is increased; if slower it is decreased.

Digital Signature

A unique alphanumeric string that identifies a specific piece of digital information.

Distributed Ledger Technology (DLT)

Distributed Ledger Technology describes a method for storing information across a network of users none of which have controlling authority. A blockchain is a form of DLT, with blocks of data connected cryptographically and maintained by a network of nodes who stay in sync via a consensus mechanisms - proof of work - that relies on expending CPU power (Mining).

Double Spend Problem

How to ensure that a balance within any money system cannot be spent twice. In centralised systems there are numerous checks and balances to try to minimise double spend, though it still occurs as charge-backs on credit cards. The biggest achievement of Bitcoin was solving double spend with no central authority.

Dumping

The sudden sell-off of a cryptocurrency causing an immediate and significant drop in its price.

Dust

A tiny amount of cryptocurrency which cannot be used because it is less than the cost of sending.

Dust Attack

An unmasking tactic used by both criminals and law enforcement agencies where trace amounts of a cryptocurrency are sent to large amounts of addresses with the purpose of de-anonymising them.

DYOR

Abbreviation for Do You Own Research, widely used in the crypto community to encourage newcomers to make decisions based on their research and understanding, rather than blindly following opinions of others.

ELI5

Explain it like I am five. Explaining something in such simple terms that a child of five would understand.

ERC-20

ERC-20 is the technical standard for smart contracts, token issuance and management on the Ethereum blockchain. It is one of the most common ways new cryptocurrencies are created. ERC stands for Ethereum Request for Comment. It is just one of many standards for interacting with the Ethereum Network.

Escrow

The contractual use of an intermediary to hold and distribute assets on behalf of the sender and receiver. The distribution of assets is usually dependent on conditions agreed to by the transacting parties being met.

Ether (ETH)

The native currency for the Ethereum Network. It functions both as a money (in a broad sense) and a token for paying for smart contracts execution.

Ethereum

The second most prominent cryptocurrency after Bitcoin. Created by Vitalik Buterin in 2013, Ethereum is a blockchain intended as a base layer for any application (or dApp) to run on top of using the Ethereum Virtual Machine, aka world computer. It also functions as a decentralised digital money.

Ethereum Classic

Ethereum was forked in 2015 in order to recover funds from a DAO hack. Both chains were maintained, the original Ethereum became Ethereum Classic alongside a new chain simply called Ethereum.

Ethereum Improvement Proposal (EIP)

The standardised development process for making updates to the Ethereum network.

Ethereum Virtual Machine (EVM)

Name given to the software that processes smart contracts built on the Ethereum Network. It is described as Turing Complete.

Exchange Traded Fund (ETF)

A fund that gives an investor exposure to a basket of securities or assets without actually owning them. ETFs can be bought and sold at any time during market trading hours. Approval of a Bitcoin ETF is seen as being a watershed moment bringing in more retail investors.

Exit Scam

Describes a cryptocurrency project that is abandoned without notice. Those behind the project disappear along with the funds, scamming the users.

Faucet

A software program that automatically dispenses small amounts of cryptocurrency at set intervals and usually after a specific criteria have been met e.g completing a capture, form submission or watching an advert.

Fiat Currency

The term to describe money created by governments which isn't backed by any asset like Gold. In Latin FIAT means 'let it be done', so Fiat Money is essentially money that functions and has value simply because the government says so.

Fiat Peg

Describes the connection between a cryptocurrency or token and the price of a fiat currency. Creating an automatic way to maintain the peg between a cryptocurrency and a fiat currency, enabled the development of Stablecoins.

Fill or Kill Order

An order to buy or sell a cryptocurrency that must be executed immediately or not at all.

First Mover Advantage

Game theory term used to describe the competitive advantage gained by being the first to take action. In reference to cryptocurrency applies to those coins developed first, such as Bitcoin and Ethereum.

Flippening

Slang term used to describe a pivotal change in price or perception of a cryptocurrency usually in reference to another coin/project e.g. Ethereum, growing to be more valuable and/or more important than Bitcoin.

FOMO

Fear of Missing Out; A description of a type of buying behaviour motivated solely by a desire not to miss out on anticipated further increases in price.

Fork

A change in the design of a blockchain creating two paths which nodes and miners need to choose, like meeting a fork in a road and deciding which route to take. Each path (fork) is a new blockchain.

FUD

Fear, Uncertainty, Denial. An acronym widely used to describe unsubstantiated criticism intending to create doubt or generate negative sentiment.

Full Node

A full node is responsible for verifying, authenticating, and storing all transactions occurring on a blockchain network and acts as a core server.

Fundamental Analysis (FA)

Establishing the long term potential for adoption of a cryptocurrency based on analysis of fundamental factors, such as the problem it solves, the size of opportunity, the team involved and any existing competition.

Fungible

A property of money, meaning that each unit is indistinguishable and interchangeable. Any Euro can be exchanged for any other Euro. Cryptocurrency has this property.

Futures

A type of trade that speculates on what the price of an asset will be at a specific point in the future, as opposed to Spot Trading, based on current prices.

Gas

The unit for measuring the cost of executing Smart Contracts on the Ethereum Network. Gas is paid for in Ether and denominated in Gwei, one Gwei being equal to 0.000000001 ETH (10-9 ETH) so instead of a Gas Fee being 0.000000001 Ether it would be written as 1 Gwei.

Gas Limit

The most a user is willing to pay as a processing fee when they make a transaction on the Ethereum network. The higher the limit, the more processing power available to process the transaction validation and the faster the task will be completed.

Genesis Block

The first block in a blockchain, with block height zero. Bitcoin’s Genesis Block had special significance had a signed message within it “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

Gold Standard

Refers to the backing of notes and coins in circulation with an equivalent of gold lodged with a central bank. Money supply can only grow if an equivalent amount of gold is added to bank reserves. The Gold Standard was finally abandoned in 1971 by the USA's decision to stop converting dollar reserves to gold at a fixed value.

Governance

A set of rules that defines how a system or organisation works. Within crypto, projects that issue governance tokens offer the ability to participate in the setting of its rules, with voting proportionate to the amount of tokens held.

GPU mining

Cryptocurrency mining using a Graphics Processing Unit (GPU) a graphics card commonly used in gaming, rather than an ASICs chip, which is designed solely for mining and nothing else.

Gwei

A unit of Ether equal to 10-9 ETH, so 1 Gwei equals 0.000000001 Ether.

Halving

Name given to the halving in the block reward paid to Miners for completing the Proof of Work and adding and a new block to the Bitcoin blockchain. It halves every four years and is currently set at 6.25 BTC

Hard Wallet

A physical device with USB connection that enables non-custodial management and storage of cryptocurrency. Hard wallets by default are offline making them a safe storage option. Common manufacturers are Ledger and Trezor.

Hash

The unique identifier given to every cryptocurrency transaction, which enables you to view all input details.

Hashed TimeLock Contract (HTLC)

A type of smart contract that requires the receiver of a payment to acknowledge their receipt within a certain time period. HTLC is the approach used by the Bitcoin Lightning Network.

Hash Function

A mathematical function designed to map an input of any length to a fixed size called a Hash. Bitcoin uses the SHA-256 Hash function for the proof-of-work part of the mining process.

Hierarchical Deterministic Wallet (HD Wallet)

A type of wallet that can derive all private keys from one point via a Seed, usually 12 or 24 unique words.

High Frequency Trading (HFT)

An automated trading method used to trade securities and crypto. HFT utilises powerful computer algorithms to transact large numbers of orders in fractions of seconds. HFT can take advantage of small market inefficiencies as well as front-running orders.

Hodl

A slang term used within the crypto community meaning to steadfastly hold on to your crypto assets especially through big price dips. Hodling is a mentality driven by belief in the underlying use case for crypto.

Hot Wallet

A cryptocurrency wallet that by default is online (connected to the internet). Hot Wallets are convenient for transacting and trading but are more susceptible to the threat of hacking. Examples are hot wallets are Mobile Wallets and Web Wallets.

Howey Test

A test that applies to any contract, scheme or transaction to assess if something qualifies as an “investment contract” and is thereby subject to disclosure and registration requirements. Has become the standard test to decide whether a cryptocurrency should be classified as a security.

Hyperinflation

Describes an economy where price increases become out-of-control. Most economies aspire to a modest increase in general prices (inflation) e.g 2% annually. Hyperinflation is characterised by inflation of more than 50% per month.

Immutabile

Something that cannot be changed; in relation to blockchains, data that has been verified by consensus and because of the way consensus is achieved cannot be changed, and is therefore immutable.

Initial Coin Offering (ICO)

When a cryptocurrency’s creator offers some of the tender at a discounted price or even for free as a means of raising funds and attempting to generate exposure to the market.

Input

In relation to bitcoin transactions an Input is the source of Unspent Funds used to enable a transaction, which become Spent when sent to a new address.

International Money Remittance

Describes the process of sending money abroad, one of the most common use cases being payments by migrants living abroad sending money to their family and friends in their home country.

Internet of Things (IoT)

The network of physical items that are connected via the internet. Physical objects that have software, sensors and other technologies can send and receive data over the internet - from door bells to thermostats. The network that these devices create is known as the Internet of Things.

InterPlanetary File System (IPFS)

A protocol and peer to peer network used to store and share data in a distributed file system. IPFS uses content addressing to allow data and files to be stored and served by anyone anywhere on the globe. Essentially a censorship resistant system for storing/serving web files.

Invoice

An invoice is a request for payment via the Lightning Network

IOU

Tokens representing any type of debt, not just currency, serving as a line-of-credit of sorts.

Issuance

In specific relation to cryptocurrency, issuance means the creation and distribution of new coins, in line with the economic rules governing the supply of the currency.

JOMO

Cryptocurrency lingo – joy of missing out.

KYC

Abbreviation for Know Your Customer, generally relates to the information new customers must provide to open an account with an exchange and prove their identity. A Centralised Exchanges (CEX) is required by local regulation to collect KYC whereas a DEX isn't bound by the law of any specific location.

KYT

An abbreviation for Know Your Transaction. A variant on KYC which refers to compliance guidelines for cryptocurrency businesses to understand where transactions have come from rather than you has made them and monitor their characteristics for common AML flags.

LAMBO

Abbreviation for Lamborghini, which is a popular meme associated with getting rich through crypto appreciation.

Latency

The delay between an instruction to transfer data and the actual transfer of the data, which is a crucial factor in cryptocurrency trading as may impact the ability to execute trades.

Layer Two

Describes the concept of building systems on top of a blockchain, such as Bitcoin, to leverage its functionality but avoid on-chain constraints.

Ledger

A record of financial transactions, such as used in accounting.

Leverage

A high-risk trading approach where exposure to a given trade can be multiplied by an agreed Margin - essentially on credit - thereby increasing both potential gains and losses. A 50x leveraged position will increase profits/losses by that amount e.g €200 price increase on €10,000 trade at 50x leverage will generate 100% profit, while a €200 decline will wipe out your entire investment.

Lightning Network

Described as a Layer Two Bitcoin application because it enables off-chain transactions via payment channels, that are only processed on-chain when those channels are closed. It therefore offers a solution to scaling transactions as off-chain transactions are almost instant and far cheaper than on -chain.

Lightweight Node

Also known as Simplified Payment Verification clients, Lightweight Nodes enable users to view the transactions within blocks of a blockchain e.g Bitcoin. They don’t require a user to download the whole copy of the blockchain. Essentially, lightweight nodes participate in the network as communication endpoints.

Limit Order

A type of trade that will only be executed once a cryptocurrency reaches a specified price.

Liquidation

The automated selling of collateral, against which a crypto loan is secured, when it falls below an agreed price. Can also describe a similar process in leveraged trading when the margin requirements are no longer met.

Liquidity

The measure of how much of a cryptocurrency is available for immediate buying or selling. The more liquid, the more efficient the price.

Litecoin

A cryptocurrency modelled closely on Bitcoin but with a faster block confirmation time of 2.5 minutes (instead of ten), bigger maximum supply and different Hashing Algorithm.

Loan To Value Ratio (LTV)

A term used to describe the relationship between the size of a loan and the value of the collateral required to obtain it. LTVs are generally below 100% because to minimise risk the lender requires the value of collateral to be greater than the money being borrowed.

Long

A trade that benefits from an increase in price e.g long position. The expectation that prices will rise “To be long bitcoin”.

Mainnet

A completely developed, launched and functioning blockchain network. In contrast to a Testnet that is working prototype of a blockchain used to test its function.

Margin Trading

Trading cryptocurrency with Margin, funds borrowed from a Broker or Exchange at a given ratio (Leverage) which can amplify both profits and losses.

Market Capitalisation (MCAP)

The number of coins in circulation multiplied by the current price.

Market Order

Executing a trade at whatever price the Market offers at that specific point.

Market Sentiment

An assessment of the prevailing attitude towards a financial market, such as cryptocurrency, from investors. The feeling or tone of a market that is revealed by news, trading activity and price movement.

Maximum Supply

The total amount of a cryptocurrency that will ever exist according to its issuance structure. Bitcoin, for example, has a fixed maximum supply of 21 million bitcoin, expected to be reached around 2140. New bitcoin are created through the Mining process, currently 6.25 BTC every 10minutes.

Medium of Exchange

One of the three main characteristics of money - along with Store of Value & Unit of Account. A Medium of Exchange is any item that is widely accepted in exchange for goods or services at an agreed rate.

Mempool

Collection of valid transactions waiting to be confirmed by a miner. As bitcoin is decentralised each node creates an instance of the mempool.

Merkle Root

The hash of all the individual transaction hashes contained in a block that is included in the block’s header and links to the previous and next block. Enables a simple way to validate and secure transactions within a blockchain.

Merkle Tree

Hierarchical structure of hashed blocks - resembling a tree - used within the Bitcoin blockchain given the efficiency of checking transaction integrity.

Metcalfe's Law

Describes the value of a network as the square of the amount of nodes connected to the network. For example if a network has 10 nodes, then its value is 10x10 = 100. Metcalfe's Law is used to mathematically describe network effects.

Microbitcoin (uBTC)

One millionth of a bitcoin or 0.000001. Read more in our guide on Sending & Receiving Crypto.

Microtasking

A way of earning cryptocurrency by completing small and often repetitive tasks.

Millibitcoin (mBTC)

One thousandth of a bitcoin or 0.001.

Mining

The name given to the process by which new cryptocurrency is issued. Miners use specific computer hardware - mining rigs - to run arbitrary hashing algorithms (SHA-256 for Bitcoin) with the aim of finding a specific output (like a lottery) which allows the Miner to add new transactions - grouped into a block - to the existing blockchain. In return, successful miners earn a mining reward. This process is known as proof-of-work, as it requires computing power to be committed. The cost of performing the work ensures only valid transactions are added to the blockchain and secures the bitcoin network in proportion to the total computing power of all active miners.

Mining Pool

A means of participating in a mining operation as a passive investor to share in any profits, in relation to investment, allowing the miner to diversify their risk.

Mining Rig

Computer hardware designed for the sole purpose of efficiently mining bitcoin.

Mixer/Mixing Service

A service designed to obfuscate the tracing of cryptocurrency transactions by breaking the link from address to the recipient. This is achieved by breaking down large transactions into random sizes, or aggregating then dividing, adding time delays and utilising a network of unrelated users to obfuscate each other’s funds.

Mnemonic Phrase

A list of random words used as a backup to restore Bitcoin wallets that may have been destroyed or otherwise locked. These are usually generated when a wallet is created, with the user being instructed to write it down on a piece of paper for a physical backup. Also known as a Seed Phrase.

Mobile Wallet

A cryptocurrency wallet functioning as an App on a mobile phone; can be either custodial or non-custodial.

Modern Monetary Theory (MMT)

An increasingly popular macroeconomic theory that sees money as a public monopoly and unemployment as evidence that the supply of that money is overly restricted. MMT expands the money supply to grow the economy and taxes to rein it in if inflation increases.

Moon

Slang term used as a rallying cry for the price of a cryptocurrency to reach new heights e.g. ‘Bitcoin price is going to the moon’ ‘Bitcoin price is mooning’

Moores Law

Prediction made by American engineer, Gordon Moore, in 1965 that the number of transistors per silicon chip doubles every year. To date, transistor technology development has kept pace with this prediction which has important implications for all industries that rely on computing power, such as crypto.

Multi Signature (Multi Sig)

Requiring more than private key to sign a transaction. Offers an extra layer of security, reducing the likelihood that a wallet could be compromised.

Network Effect

An expression of the exponential growth in the value of a network as new users join. Often used to describe inflection points in the adoption of new technologies like cryptocurrency as the network of users reaches a critical point.

Node

One of many computers on a network observing the same rules (aka protocol) and providing the same service. Bitcoin has two types of Node - Full and Lightweight.

Nonce

Numeric field that Miners adjust to create a Hash of a new block header, aiming for that to be lower than or equal to the current Target value.

Non Fungible Token (NFT)

A type of digital token that is verifiably unique and can therefore be used to assert rights to ownership of digital collectibles like art or in-game items. NFTs are generated on the Ethereum blockchain using the ERC-721 or ERC 1155 standards.

One Cancels The Other Order

A pair of conditional crypto trading orders where if one of the orders is executed the other is automatically cancelled.

Oracles

Off-chain data sources for smart contracts or blockchains.

Orphan Block

Aka Stale Block. Where two valid blocks are mined at a similar time and due to lags in the validation process by nodes lead to separate blockchains. Eventually a reorganisation takes place and the duplicate block is discarded. Given the nature of the mining/block validation process stale blocks will naturally occur.

OSINT

Abbreviation for Open Source Intelligence - the collection and analysis of information that is publicly available.

Output

In relation to bitcoin transactions an Output is the recipient of Spent Funds used to fund a transaction, which then become Unspent at the new address.

Overbought

Describes an asset, like cryptocurrency, as being overvalued due to excessive buying. There are technical indicators that are employed to try to establish Overbought or Oversold conditions.

Oversold

Describes an asset, like cryptocurrency, as being undervalued due to excessive selling. There are technical indicators that are employed to try to establish Oversold or Overbought conditions

Over-The-Counter (OTC)

Describes a tailored cryptocurrency brokerage service for large volume buyers or sellers who don't want to use an exchange usually because there isn't enough liquidity and they don't want their activity to trigger price changes.

P2P

Abbreviation for Peer-to-Peer, meaning communication between participants within a network without going through an intermediary or central point. Bitcoin is an example of a P2P network.

Paper Wallet

The most basic form of bitcoin cold storage. A piece of paper with both public and private keys printed on it.

Permissioned

Used in reference to a blockchain that is only accessible to nodes/validators that are invited or given specific permission. The opposite to Permissionless.

Permissionless

Used in reference to a public blockchain where no permission is required to participate, for example by downloading the relevant network software and running a node. Bitcoin is an example of a permissionless blockchain. The opposite to Permissioned.

Ponzi Scheme

A type of fraudulent investment scheme that lures investors in with high returns that are solely funded from the deposits of newer investors. Also known as a Pyramid Scheme, as that is the shape of investor growth over time, until the fraud is mathematically unsustainable and collapses.

Prediction Market

A platform enabling binary option bets on any discrete event. Some specialise in Politics and Economic indicators such as the IEM (Iowa Electronics Market). Contracts are purchased between 0 and 100, which respectively represent incorrect and correct predictions.

Premine

Describes the issuance of tokens or coins by a new cryptocurrency project prior to any mining activity. Premining is considered controversial as it disproportionately rewards founders/developers/early investors and dilutes the value of genuinely mined coins. In some early ICOs Premining was a characteristic of an Exit Scam.

Price Discovery

The process by which market participants - buyers and sellers - arrive at what they consider a fair price.

Primitive

A decentralised options market which allows users seeking yield on cryptocurrencies to provide liquidity for the options trading, receiving trading fees in return.

Privacy Coin

A type of cryptocurrency that is designed to maximise privacy of the user, examples being Monero or Zcash.

Private Key

A 64 character alphanumeric string which controls the movement of unspent funds associated with a cryptocurrency address. Modern HD Crypto Wallets use Seed Phrases rather than requiring the handling of private keys, but the term Private Key is widely used to underscore the importance of being in control of your funds.

Proof Of Keys

The idea that you can only truly own cryptocurrency by proving that you hold the Private Keys. The main proponent is Trace Mayer who advocates cryptocurrency investors withdraw their crypto from exchanges and hold them in hardware wallets. Celebrated on Proof Of Keys day, January 3rd.

Proof of Stake (PoS)

A blockchain consensus mechanism where the ability to mine or validate blocks is in proportion to funds staked.

Proof of Work (PoW)

A blockchain consensus mechanism where the ability to mine or validate blocks is in proportion to the amount of work committed, measured in CPU power.

Protocol

The set of rules that governs how a blockchain functions.

Public Blockchain

A blockchain that any member of the public with an internet connection can access by running a node.

Public Key

A 64 character alphanumeric address which allows view only access of unspent funds and used to receive funds. The equivalent of bank account details, the address to which crypto can be sent, and the balance seen by anyone.

Pump and Dump

Describes the coordinating buying of a cryptocurrency (Pump) to create a short term increase in price, followed by coordinated selling (Dump).

Put Option

The right, but not the obligation, to sell a security or cryptocurrency at a given price within a given time frame.

QR Code

A Quick Response code is a machine readable two-dimensional bar code with specific information about the product or service it is attached to. In crypto QR codes are used for addresses and within the Lightning Network, generating Invoices.

Raspberry Pi

A low cost credit card sized computer that plugs directly into a monitor or TV. Designed by the UK based charity Raspberry Pi Foundation to make computing low-cost and accessible to everyone. Often used for running a Bitcoin Node.

REKT

Short-hand for wrecked, meaning to make a significant, or even ruinous, crypto trading loss.

Relative Strength Index (RSI)

A leading indicator of price, using an index of 0-100 calculated by aggregating price gains/losses over a 20 day/week period.

Replay Protection

Protection against a replay attack, an attack on a blockchain that attempts to intercept and replay (double spend) transactions.

Resistance Level

A price point which proves difficult to cross and will halt upward or downward momentum.

Ring Signature

A feature of privacy coins that minimise the information associated with any transaction.

Ripple

A real-time money settlement system, currency exchange and remittance network that uses the token XRP as part of its function.

ROI

Return On Investment. Calculated by dividing Profit by Amount Invested. If you make a Profit of €100 from an Investment of €1,000 your ROI is 10%. e.g (€100/€1000)*100.

Satoshi Nakamoto

The pseudonym of Bitcoin’s creator. Their real identity is not known. Remaining anonymous enables Bitcoin to function without a controlling figure or someone that could be a point of weakness/attack.

Satoshi Nakamoto

The alias used by the creator of Bitcoin. The true identity behind Satoshi Nakamoto remains unknown - at least publicly. Many speculate that Satoshi could refer to a team of people that created Bitcoin. Some have attempted to claim to be Satoshi, but no one has provided concrete evidence to back their claims. For more on how Satoshi Nakamoto’s anonymity has contributed to Bitcoin’s security see: How Bitcoin Works.

Sats

Abbreviation for Satoshi, the smallest unit of Bitcoin i.e 0.00000001

Schnorr Signature

A type of digital signature invented in the 1980s that allows for signature aggregation whilst maintaining privacy standards. Schnorr Signatures were recently added to the Bitcoin Protocol allowing for more secure multi-signature transactions on the Bitcoin blockchain.

SEC

Abbreviation for the Securities and Exchanges Commission. One of the largest independent agencies of the US government responsible for protecting financial markets against manipulation, which include the trading of any cryptocurrencies considered as a Security.

Second Layer

The term used to describe applications built on top of a blockchain, e.g the Lightning Network built on Bitcoin.

Securities

Tradeable financial assets. The term is commonly used to refer to any form of financial instrument but this can vary depending on jurisdictions. In the United States securities fall into three broad categories: Debt, Equity and Derivatives.

Security

Tradable financial asset. The term is commonly used to refer to any form of financial instrument but this can vary depending on jurisdictions. In the United States securities fall into three broad categories: Debt, Equity and Derivatives. This definition is crucial to cryptocurrencies as being classified as a Security and used by US citizens, they would fall under the authority of the SEC.

Security Token

A type of crypto token that represents an asset, rather than providing utility within a blockchain system.

Seed

A collection of unique phrases that act as the security layer protecting a HD (hierarchical deterministic) crypto wallet and all associated addresses without needing to access individual private keys.

Seed Round

Early investment in a private company or project in exchange for equity (a share of ownership and future revenue).

Segregated Witness (SEGWIT)

A soft fork of the Bitcoin protocol intended to increase block space and transaction speed by splitting transactions and separating signature detail.

Seigniorage

The economic cost of producing a currency measured by the difference between a currency's worth and the cost it took to produce it. For example, the difference between $10 dollars and the cost it took to produce a $10 bill.

Selfish Mining

A mining strategy where a miner doesn't broadcast newly mined blocks, privately growing a rival chain in an attempt to eventually hijack the public chain with his longer private chain and claim block rewards.

Sell Wall

The name given to a significant volume of Asks (people wanting to sell) at a specific price that creates the impression of a wall on the Depth Chart for a given cryptocurrency.

SHA-256

The hashing algorithm used by Bitcoin’s proof-of-work mining software.

Sharding

Blockchain property that enables data to be partitioned into more easily manageable chunks or shards, which can be processed in parallel, thereby greatly increasing the efficiency of the entire blockchain.

Sharpe Ratio

A measure of risk adjusted returns for investment. The ratio calculates the average excess return earned in relation to an asset's price volatility.

Shilling

Promoting a project or service because you are being paid or are directly benefiting.

Shitcoin

Slang term for a cryptocurrency with no perceived real world use case.

Short

A trade that benefits from the price of a cryptocurrency falling e.g short position.

Shorting

A trading position which profits when an asset declines in price. A trader will short a cryptocurrency if they believe its price is going to fall. Their profit will be in proportion to the decline below a specified level, but they will lose in proportion to price increase.

Sidechain

A secondary blockchain running in parallel and linked to the main blockchain e.g the Liquid Network is a sidechain based settlement network for Bitcoin trades.

Simple Moving Average

A Technical Analysis technique that uses on ongoing average of price, based on a fixed period, to help predict future price. SMA’s are calculated by adding a range of recent prices and then dividing that figure by a fixed number of days, weeks or months. e.g 7 Day Simple Moving Average is the sum of the previous seven days closing prices divided by seven.

Simple Payment Verfication (SPV)

A system that employs Merkle Trees to allow for secure transactions on the Bitcoin blockchain without the need to run a full node of the network.

SIM Swap

A type of hacking achieved by social engineering access to a mobile network provider and ordering a new SIM which enables access to SMS based security codes.

Slippage

The difference between the expected price of a cryptocurrency trade and the actual price at execution. Slippage usually occurs when there is high volatility in the market or not enough liquidity to fulfil orders.

Smart Contracts

A set of rules defined in code that can be executed by an underlying blockchain for a fee e.g smart contracts on Ethereum or Binance Smart Chain.

Soft Cap

The minimum investment level a cryptocurrency project can receive from an investment round. If this minimum is not met, any money invested is returned to the relevant investors.

Soft Fork

A change to a blockchain protocol where only historic transactions become invalid after the update. Old nodes will recognise new transactions, described as backwards compatibility.

Solidity

The programming language for creating Smart Contracts on the Ethereum blockchain.

Sound Money

The idea that in order for money to be useful it should have specific characteristics: portable, divisible, fungible, durable, recognisable and most importantly, be scarce.

Spent Funds

Those cryptocurrency funds used to fund a new transaction. They appear as Spent in the Output and Unspent in the Input.

Spot Price

The Spot Price of a cryptocurrency is the price at which you can buy it 'on the spot' in other words right now. This is the simplest form a trade offered by cryptocurrency exchanges.

Spread

The difference between two price points. In cryptocurrency trading the Spread refers to the difference between the ‘Bid’ and the ‘Ask’ price and is an implied cost. The wider the spread the greater the cost of the trade.

Stablecoin

A type of cryptocurrency specifically designed to avoid volatility by pegging their value relative to an external asset or group of assets. For example USDT (Tether) retains a value pegged to the US Dollar.

Staking

Depositing a specific amount of cryptocurrency with a provider or protocol under specific conditions and in return for specific rights or rewards.

Staking Pool

When stakeholders group together and combine their staking resources (either computing power or currency) to increase their chances of validating blocks earning rewards.

Stock-to-flow

A measure of scarcity by comparing existing supplies of an asset to the flow of new production e.g existing stock of gold divided by the yearly production of new gold.

Stop Loss Order

A type of trade that will automatically close if losses reach a specific point. Used to protect a trader from excessive loss.

Store of Value (SOV)

Something that can be relied on to hold relative purchasing into the future. Gold has historically proven a good store of value, but Bitcoin has consistently outperformed it.

Strong Hands

Describes someone with a strong resolve to not sell their crypto even in the face of negative sentiment or declining prices, because of a belief in its fundamental value. Sometimes simply referred to as Diamond Hands.

Stuck

An unconfirmed transaction yet to be included in a block usually because the fee is too low relative to other transactions.

Swing Trading

A specific approach to trade where you attempt to profit from 'swings' i.e price changes that play out over the short to medium term.

Tank

Informal description of a large and/or sudden fall in the price of a cryptocurrency.

Technical Analysis (TA)

The analysis of future price direction based purely on historic price movement and volume, and through a range of interpretive indicators.

Technical Indicators

Interpretation of price movement and volume into pattern-based signals which can be used to predict future price direction.

Testnet

Name given for a trial version of a blockchain that doesn't include real transactions.

Ticker Symbol

A three letter abbreviation used as a unique identifier of a traded cryptocurrency.

Time Preference

Describes whether someone is focused on receiving benefits today (high time preference) or in the future (low time preference). Hodling Bitcoin is often described as low time preference, whereas Day Trading is high time preference.

Timestamp

A crucial element of blockchain design, it establishes the exact time/date that a block was mined and validated by a blockchain. A timestamp is hashed and includes the previous timestamp creating a chronological chain of record.

TLDR

Too Long Didn't Read. Refers to a short summary explanation of a subject for those that don't want to read the long version.

Token

A type of cryptocurrency that has a specific use case within a blockchain ecosystem, rather broader use as money.

Token

A type of cryptocurrency that is designed to provide specific utility within a blockchain ecosystem.

Token Distribution

The allocation of tokens specific to a new cryptocurrency project when it is launched. Usually dispersed among founders, investors, staff, the community and for operational/marketing requirements.

Token Velocity

As with measuring the velocity of money, token velocity will tell you have frequently tokens are being transacted. It is measured by dividing total transaction value by the market capitalisation. Token velocity is essentially measuring whether tokens are staying within the blockchain ecosystem or being sold/exchanged. A high velocity suggest lower utility and vice versa.

TOR

A browser designed to enhance anonymity by scrambling your location. Tor is often used to access the dark web.

Total Supply

A measure of the total amount of cryptocurrency in existence, minus coins that have been burned. Circulating Supply is a subset of Total Supply, while Total Supply is a subset of Maximum Supply.

Total Value Locked (TVL)

A useful measure of the amount of cryptocurrency currently staked with a Defi protocol.

Tradfi

Abbreviation for traditional finance. The existing range of financial products available through traditional financial businesses and institutions e,g. banks and credit cards.

Trading Fee

A charge applied by a cryptocurrency exchange for facilitating a trade, usually a percentage of the trade value.

Trading Pair

When trading cryptocurrency (or any other asset) you are looking to exchange one asset for another e.g Euros for Bitcoin. This is described as a Trading Pair and uses three letter ticker symbols, in this case EUR/BTC. Trading Pairs generally rely on base currencies against other trading options are offered, commonly major Fiat currencies, BTC and ETH.

Transaction Fee

The cost of sending a cryptocurrency transaction; Fees are collected by miners who validate transactions grouped into blocks. Fees are relative to the specific cryptocurrency, the data size of transaction and the network congestion at the time. As miners earn fees for the blocks they mine (in addition to the block reward) they prioritise transactions with higher fees.

Trezor

A popular brand of hard wallet, a device for securely storing cryptocurrency offline.

Trustless

Describes a system that does not require participants to know or trust each or a third party in order to function.

Tumbler

A service designed to obfuscate the tracing of cryptocurrency transactions by breaking the link from your address to the recipient. This is achieved by breaking down large transactions into random sizes, or aggregating then dividing, adding time delays and utilising a network of unrelated users to obfuscate each other’s funds.

Turing Completeness

The characteristic of a computer or computer language which means it is able to simulate any other computer/computer language and with enough time/resource solve any computational problem. The Ethereum Virtual Machine is an example and is described as the ‘world computer’ as it is intended to be able to support any computational problem, though it isn’t infinitely scalable.

Two-Factor Authentication (2FA)

An extra layer of protection for online accounts - in addition to username and password - requiring the input of code generated by SMS or ideally an authentication App like Google Authenticator or Authy.

Tx

Abbreviation for transaction, the collective term for all of the details associated with a specific movement of funds or information on a blockchain.

Unconfirmed

When a proposed transaction cannot be added to the blockchain, usually because it is yet to have the process of broadcasting to the blockchain network and verification from miners.

Unique Node List (UNL)

The most trusted validators on the Ripple network, trusted with confirming transactions using a voting system.

Unit Bias

Describes an irrational perception that owning whole units of cheaper cryptocurrencies is preferable to fractions of more expensive ones.

Unit of Account

A widely agreed measure of economic value. One the three major functions of money alongside Medium of Exchange or Store of Value.

Unspent Transaction Output (UTXO)

Abbreviation for unspent transaction output. Every bitcoin transaction originates from a UTXO, essentially balances of bitcoin capable of being spent. When spent a UTXO becomes two new separate UTXOs - one sent to the recipient address and one to the sending address containing any change that is left.

Utility Token

A type of crypto token that facilitates a specific function as opposed to representing an asset, like a Security Token. For example, a utility token might be issued within a blockhain-based video game to purchase in-game items or services.

Validator

Blockchains use specific mechanisms for ensuring new transactions are valid, the role of Validators is to use the required consensus mechanism to validate new transactions, often in exchange for rewards.

Vitalik Buterin

Russian-Canadian programmer and teen prodigy best known for proposing Ethereum and running the project as one of its co-founders

Volatility

The measurement of a cryptocurrency price’s fluctuation. The more fluctuation, the more volatile.

VPN

Virtual Private Network offers online privacy and anonymity by creating a private network from a public internet connection.

Wallet

A means of storing cryptocurrency balance ownership. Made visible on the blockchain by its unique code, or public key, a wallet’s function is to store private keys and is available in several different forms.

Wallet.dat

A file usually located on a hard drive containing a wallet’s public and private keys as well as any other useful information as a backup.

Weak Hands

Used to describe the behaviour of traders who have made an emotional and/or negative decision that has led to poor performance in the markets. Can also describe someone who doesn’t have faith in a particular position in a market as opposed to Strong Hands.

Web3.0

The development of new internet based services that are driven by machine-based understanding of data. Blockchain technology is a key example of web3.0 technology as are Artificial Intelligence, Augmented and Virtual Reality.

Web3.0 Wallet

Wallets designed with interoperable functionality across Web3.0 products/services. A web3.0 wallet can for example run from your browser, via a Chrome Extension, and connect you to DApps or Defi Platforms with one click. Metamask is a popular Web 3.0 wallet.

Whale

Individuals or entities that hold large amounts of a particular cryptocurrency - usually Bitcoin. Whales are so-called because they are large enough to ‘disturb the waters’ of the market with their transactions.

Whitelist

The function of an ICO before they became the marketing tool to generate hype around a new cryptocurrency. Interested buyers were placed on a Whitelist to gain access to cheaper cryptocurrency or have the chance to buy under special early bird conditions.

Whitepaper

Offers a thorough overview of a cryptocurrency, outlining details including an explanation on programmed purposes, technical information and its potential future to lure buyers.

Wrapped Bitcoin (wBTC)

A tokenised version of bitcoin that follows the ERC20 standard and is therefore interoperable with Ethereum services like Defi and dApps. One wrapped BTC is equivalent to one native BTC. wBTC can only be created from native BTC and supply is managed through a proof of reserve system managed by a dedicated DAO.

Wrapped Ether (wETH)

A tokenised version of Ether that follows the ERC20 standard and is therefore interoperable with Ethereum services like Defi and dApps. One wrapped ETH is equivalent to one native ETH. wETH can only be created from native ETH and supply is managed through a proof of reserve system managed by a dedicated DAO.

Year to Date (YTD)

Year to Date is a metric that examines how an asset has performed so far in a calendar year — spanning the period from January 1 to now.

Yield Farming

Yield farming is a broad term — and in its simplest form, it involves trying to get the biggest return possible from cryptocurrency.

Zero Confirmation Transaction

Alternative phrasing for an unconfirmed transaction.

Zero Confirmation / Unconfirmed Transaction

A zero confirmation or unconfirmed transaction is defined as an exchange that has not yet been recorded or verified on the blockchain

Zero Knowledge Proof

Proving certain information or data is true without revealing it.

Zero Knowledge Rollup

A zero knowledge rollup is a type of layer 2 scaling solution that relies on zero knowledge cryptography

Zero Knowledge Rollups

A zero-knowledge rollup is a Layer 2 blockchain solution that performs computations and storage off-chain while funds are held in a smart contract.

Zero-Knowledge Proof

In cryptography, a zero-knowledge proof enables one party to provide evidence that a transaction or event happened without revealing private details of that transaction or event.

Zk-SNARKs

A proof that allows one party to prove it owns certain information without revealing it.