Crypto Glossary — Blockchain & Cryptocurrency Terms A-Z

Essential cryptocurrency and blockchain terms explained in plain English.

40 terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

AMM (Automated Market Maker)

A decentralized exchange protocol that uses liquidity pools instead of order books to facilitate trading.

Airdrop

Free distribution of cryptocurrency tokens to wallet addresses, usually to promote a new project or reward loyal users.

Altcoin

Any cryptocurrency other than Bitcoin. Examples include Ethereum, Solana, Kaspa, and thousands of others.

B

BlockDAG

Block Directed Acyclic Graph — an evolution of blockchain that allows multiple blocks to be processed simultaneously, increasing throughput. Used by Kaspa.

Blockchain

A distributed, immutable digital ledger that records transactions across a network of computers. The foundational technology behind all cryptocurrencies.

Bridge

A protocol that enables transferring assets between different blockchain networks (e.g., Ethereum to Polygon).

C

Consensus Mechanism

The method by which a blockchain network agrees on the current state of the ledger. Common types include Proof of Work and Proof of Stake.

DApp (Decentralized Application)

An application that runs on a blockchain network rather than centralized servers, offering censorship resistance and transparency.

DEX (Decentralized Exchange)

A cryptocurrency exchange that operates without a central authority, allowing peer-to-peer trading directly from user wallets.

DeFi (Decentralized Finance)

Financial services built on blockchain technology that operate without traditional intermediaries like banks or brokers.

ETF (Exchange-Traded Fund)

A regulated investment fund that tracks the price of an asset (like Bitcoin) and trades on traditional stock exchanges.

EVM (Ethereum Virtual Machine)

The runtime environment for smart contracts on Ethereum and compatible chains. Enables cross-chain compatibility.

Gas Fee

The transaction fee paid to validators/miners for processing operations on a blockchain. Varies by network congestion.

H

HODL

Crypto slang for "hold" — the strategy of holding cryptocurrency long-term regardless of price volatility. Originated from a typo on a Bitcoin forum.

I

Impermanent Loss

The temporary loss experienced when providing liquidity to a DEX pool, caused by price divergence between paired assets.

L

Layer 1

The base blockchain network (e.g., Bitcoin, Ethereum, Solana). Handles consensus, security, and transaction finality.

Layer 2

A scaling solution built on top of a Layer 1 blockchain to improve speed and reduce costs. Examples: Polygon, Arbitrum, Lightning Network.

Liquidity Pool

A collection of cryptocurrency funds locked in a smart contract, used to facilitate trading on decentralized exchanges.

M

Memecoin

A cryptocurrency created as a joke or meme with no inherent utility, driven primarily by community hype and speculation.

Mining

The process of using computational power to validate transactions and secure a Proof of Work blockchain, earning rewards in the process.

NFT (Non-Fungible Token)

A unique digital asset on a blockchain representing ownership of items like art, music, game items, or collectibles.

Node

A computer that maintains a copy of a blockchain ledger and helps validate and relay transactions across the network.

O

Oracle

A service that feeds real-world data (prices, weather, events) to smart contracts on the blockchain. Chainlink is the leading oracle network.

Play-to-Earn (P2E)

A gaming model where players earn cryptocurrency or NFTs through gameplay, enabling real economic value from time spent gaming.

Private Key

A secret cryptographic key that proves ownership of a wallet and authorizes transactions. Never share your private key.

Proof of Stake (PoS)

A consensus mechanism where validators stake cryptocurrency as collateral to verify transactions. More energy-efficient than Proof of Work.

Proof of Work (PoW)

A consensus mechanism where miners compete to solve computational puzzles to validate transactions and create new blocks.

RWA (Real-World Assets)

Physical assets (real estate, commodities, bonds) tokenized and represented on a blockchain for fractional ownership and trading.

Seed Phrase

A 12 or 24-word recovery phrase that can restore access to a cryptocurrency wallet. Store it securely offline — never digitally.

Sharding

A database scaling technique applied to blockchains where the network is split into smaller partitions (shards) that process transactions in parallel.

Smart Contract

Self-executing code deployed on a blockchain that automatically enforces the terms of an agreement when conditions are met.

Stablecoin

A cryptocurrency pegged to a stable asset (usually USD) to minimize volatility. Examples: USDT, USDC, DAI.

Staking

Locking up cryptocurrency in a wallet to support blockchain operations (validation) in exchange for rewards.

T

TVL (Total Value Locked)

The total amount of assets deposited in DeFi protocols. A key metric for measuring DeFi adoption and trust.

Token

A digital asset created on an existing blockchain (unlike coins, which have their own blockchain). ERC-20 tokens run on Ethereum.

W

Wallet

Software or hardware that stores your private keys and allows you to send, receive, and manage cryptocurrency.

Web3

The next evolution of the internet built on blockchain technology, emphasizing decentralization, user ownership, and token-based economics.

Whitepaper

A detailed technical document published by a crypto project explaining its technology, use case, tokenomics, and roadmap.

Y

Yield Farming

A DeFi strategy where users provide liquidity or stake assets across protocols to maximize returns through interest and token rewards.

Zero-Knowledge Proof (ZKP)

A cryptographic method where one party proves knowledge of information without revealing the information itself. Used in privacy and scaling solutions.

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