Crypto Glossary

54+ essential crypto terms explained in plain English. If you're trading, investing, or just trying to make sense of a headline, this is your reference.

Basics

Altcoin: Any cryptocurrency that isn't Bitcoin. Ethereum, Solana, Cardano, and thousands of others are altcoins.
Bitcoin (BTC): The first and largest cryptocurrency by market capitalization, created in 2009.
Fiat: Government-issued currency like USD, EUR, GBP. Contrast with cryptocurrency.
Memecoin: A cryptocurrency launched primarily for humor or community (DOGE, SHIB, PEPE). Typically high-volatility and driven by social media sentiment.
Satoshi (sat): The smallest unit of Bitcoin. 1 BTC = 100,000,000 satoshis.
Stablecoin: A cryptocurrency pegged to a stable asset, usually USD (USDT, USDC, DAI). Used for trading and hedging.

Culture

HODL: Holding crypto long-term regardless of price swings. Originally a typo of 'hold' from a 2013 Bitcoin forum post.

DeFi

TVL: Total Value Locked. The total amount of assets deposited in a DeFi protocol. A rough measure of protocol adoption.
Yield Farming: Earning rewards by providing liquidity or staking in DeFi protocols. Yields can be high but come with smart contract and impermanent loss risk.

Earning

Staking: Locking up crypto to help secure a proof-of-stake blockchain in exchange for yield. Yields range from 2-15%+.

Ecosystem

DeFi: Decentralized Finance. Financial services (lending, trading, earning yield) built on smart contracts without traditional intermediaries.
NFT: Non-Fungible Token. A unique token representing ownership of a specific digital or physical item.

Exchanges

CEX: Centralized Exchange. A company-operated exchange like Coinbase, Kraken, or Binance. Custodial — the exchange holds your crypto.
DEX: Decentralized Exchange. Users trade directly from their wallets via smart contracts. Non-custodial. Examples: Uniswap, PancakeSwap.

Fees

Maker Fee: The fee charged when your order adds liquidity to the order book (limit orders that don't fill immediately). Usually lower than taker fees.
Taker Fee: The fee charged when your order removes liquidity from the order book (market orders or limit orders that fill immediately). Usually higher than maker fees.
Withdrawal Fee: The fee an exchange charges to send crypto to an external wallet. Varies by asset and network. Often larger than trading fees on small withdrawals.

Market

ATH: All-Time High. The highest price an asset has ever reached.
ATL: All-Time Low. The lowest price an asset has ever reached.
Bear Market: A prolonged period of declining prices, typically defined as a 20%+ drop from recent highs.
Bull Market: A prolonged period of rising prices. Characterized by optimism, new money flowing in, and rising asset values.
ETF: Exchange-Traded Fund. A tradable security that holds crypto on behalf of investors. Spot Bitcoin ETFs launched in the US in January 2024.
FOMO: Fear Of Missing Out. The emotional driver of buying at the top of a rally.
FUD: Fear, Uncertainty, and Doubt. Negative information, true or false, that depresses prices.
Market Cap: Total value of an asset. Calculated as current price × circulating supply.
Pump and Dump: Coordinated buying to inflate a coin's price, followed by rapid selling. Illegal in most jurisdictions; common on low-liquidity coins.
Rug Pull: When a project's creators abandon it and drain liquidity, leaving holders with worthless tokens. Most common in low-cap DeFi launches.
Whale: A wallet or individual holding a large amount of crypto, enough to move markets when they trade.

Regulation

KYC: Know Your Customer. Identity verification exchanges must perform. Typically requires government ID and a selfie. Required for all major regulated exchanges.

Security

Cold Storage: Keeping cryptocurrency offline, typically on a hardware wallet. The safest way to store long-term holdings.
Hardware Wallet: A physical device (Ledger, Trezor) that stores your private keys offline. The gold standard for self-custody.
Hot Wallet: A wallet connected to the internet. Convenient but less secure than cold storage.
Private Key: The secret key that controls a crypto wallet. Anyone with your private key has full access to your funds. Never share.
Proof of Reserves: Cryptographic proof that an exchange holds customer funds 1:1. Became standard after the FTX collapse in 2022.
Public Key: The address others use to send you crypto. Safe to share. Derived from your private key.
Seed Phrase: 12-24 words that generate and recover your wallet's private keys. Anyone with your seed phrase has full access to your funds. Never type it online. Write it down and store physically.
Wallet: Software or hardware that stores your private keys. Doesn't actually 'hold' crypto — the crypto lives on-chain; the wallet controls access to it.

🔒

Serious about cold storage?

Industry-standard hardware wallet. Keeps your private keys offline — safe from exchange hacks and phishing.

Shop Ledger wallets →

Technical

ERC-20: A token standard on the Ethereum blockchain. Most tokens you'll see on exchanges are ERC-20 unless they have their own blockchain.
Gas Fee: The transaction fee paid to process a transaction on a blockchain. Variable based on network congestion. Ethereum gas can range from $0.50 to $100+.
Layer 1: A base blockchain (Bitcoin, Ethereum, Solana). Layer 2 chains settle on top of Layer 1s.
Layer 2: A scaling solution built on top of a Layer 1. Examples: Arbitrum, Optimism, Base (on Ethereum); Lightning (on Bitcoin). Much cheaper than Layer 1.

Tokenomics

Burn: Permanently removing tokens from circulation by sending them to an inaccessible address. Reduces total supply.

Trading

API Key: A credential that lets apps or trading bots programmatically access your exchange account. Treat like a password. Never share. Use read-only keys where possible.
Derivative: A contract whose value is derived from an underlying asset. In crypto, typically futures or options on BTC, ETH, etc.
Futures: A derivative contract to buy or sell an asset at a set price on a future date. Used for hedging or leveraged speculation.
Leverage: Borrowed capital used to amplify a trade. 10x leverage means a 1% price move creates a 10% gain or loss. High-risk.
Liquidation: When a leveraged position is forcibly closed because losses exceed the collateral posted. Loss is typically 100% of the margin used.
Liquidity: How easy it is to buy or sell an asset without moving the price. Deep liquidity = tight spreads. Thin liquidity = slippage.
Margin Trading: Trading with borrowed funds from the exchange. Similar to leverage. Carries liquidation risk.
Order Book: The list of all current buy and sell orders for a trading pair. Shows bid/ask spread and market depth.
P2P: Peer-to-peer trading. Buying or selling crypto directly from another user, often through escrow services.
Slippage: The difference between expected and executed trade price. Occurs in low-liquidity markets or large orders.
Spot Trading: Trading with actual crypto you own. Contrast with derivatives/futures. Lower risk than leveraged trading.
Stop Loss: An order that automatically sells if the price drops to a set level. Used to limit downside on a trade.

Ready to start?

Compare exchanges with this vocabulary in hand.

See exchange rankings →