Crypto glossary

A login step that asks for something you have as well as your password, such as a security key or a code from an authenticator app.

An attempt to rewrite a proof-of-work blockchain's history. It takes more computing power than the rest of the network combined.

A code worked out from a public key. It is what you give people so they can pay you, and it is safe to share.

A scam in which an attacker sends you a tiny transaction from an address that looks like one you use, hoping you later copy it from your history.

Tokens or NFTs sent to wallets for free. Ones you did not sign up for are often bait that leads to a malicious site.

An exchange setting that lets withdrawals go only to addresses you have approved. It stops a thief who gets into your account.

Any cryptocurrency other than bitcoin. The word covers network coins, stablecoins, project tokens and memecoins.

Permission you sign that lets a smart contract move a token from your wallet. It lasts until you cancel it.

Buying something where it is cheap and selling it where it is dear. It is what keeps a pool's price in line with the wider market.

A review of a smart contract's code by outside specialists. It finds many flaws and does not prove there are none.

The design most decentralised exchanges use. You trade with a pool of tokens, and the price comes from the ratio of the tokens in the pool.

The part of an Ethereum transaction fee that the network sets. It changes with demand and is burned.

Bids are the prices buyers are willing to pay. Asks are the prices sellers will accept.

The standard from 2013 that most wallets follow for seed phrases. It uses a fixed list of 2,048 English words.

The first cryptocurrency, launched in 2009. It was designed so two people could pay each other online without a bank in the middle.

Approving a transaction you do not understand. It is a major risk when using smart contracts.

A batch of transactions with a timestamp and the hash of the block before it.

A website that lets you search a blockchain, so you can check any transaction or address yourself.

A record of transactions grouped into blocks, where each block is locked to the one before it.

A service that moves value between networks. Typically it locks your tokens on one chain and issues matching tokens on another.

To destroy coins permanently. Part of every Ethereum transaction fee is burned.

The profit when you dispose of crypto: what you received minus your cost basis. If the result is negative, it is a capital loss.

Malicious software that watches for a copied address and swaps in the attacker's own when you paste.

The built-in currency of its own blockchain. It is created by the network's rules and pays the network's transaction fees.

A wallet that keeps your keys on something that does not connect to the internet. The most common kind is a hardware wallet.

Tokens you deposit so that you can borrow against them. If their value falls too far, the loan can be liquidated.

A transaction has one confirmation when it is included in a block, and one more for each block added on top.

A file's address on IPFS, worked out from the file's contents. Change the file and the identifier changes.

The long code that identifies a token or smart contract. Names and symbols can be faked. The contract address cannot.

What your crypto cost you, including the fees of buying it. Gains and losses are measured from it.

Digital money that no bank or government issues or controls. A network of computers keeps a shared record of who owns what.

An arrangement where a company, such as an exchange, holds the private keys to your coins for you.

Financial services run by smart contracts on a public blockchain, not by a company. You use them from your own wallet.

An exchange that is a set of smart contracts, not a company. You trade from your own wallet with a pool of tokens.

Any event where crypto leaves your hands for tax purposes: selling it, swapping it for another crypto, or spending it.

Investing the same amount at regular intervals, whatever the price is doing.

The risk that digital money, being only data, could be copied and sent to two different people. Bitcoin solved it without a middleman.

A malicious site that poses as a project or claim page and gets you to sign an approval, then takes your tokens.

A service that lets you register a readable name ending in .eth and point it at your addresses. Names are rented by the year.

The shared standard most Ethereum tokens follow. Every unit of an ERC-20 token is identical to every other.

The Ethereum standard most NFTs follow. The contract keeps a list of which address owns each numbered token.

The coin of the Ethereum blockchain. It pays transaction fees and is staked to secure the network.

A blockchain that can run programs, not only record payments. It went live in 2015.

A company that matches buyers with sellers and holds customers' money and coins.

The line a validator waits in before its staked ETH is paid out. It lengthens when many validators leave at once.

The default US rule for which units you sold: the earliest ones you acquired in that wallet or account count as sold first.

A loan with no collateral that must be borrowed and repaid inside a single transaction. If repayment fails, the whole transaction is cancelled.

The lowest asking price in an NFT collection. It is an asking price, not an offer to buy.

The US form on which brokers such as exchanges report your digital asset sales to you and to the tax authority.

A coin's price multiplied by its maximum supply. A large gap between it and market cap means many coins are still to be released.

Interchangeable. Every unit of a fungible token is identical to every other, like coins of the same value.

The unit Ethereum uses to measure the work a transaction needs. The fee is the gas used multiplied by the price per unit.

The first block of a blockchain. Bitcoin's is dated 3 January 2009.

A token whose holders vote on changes to a service. These tokens are often concentrated among founders and early investors.

The unit Ethereum gas prices are quoted in. One gwei is a billionth of an ETH.

The event, about every four years, when the new bitcoin created per block is cut in half.

A split in a blockchain that creates a new coin.

A small device that keeps your private keys offline and signs transactions on its own screen.

A short code of fixed length, calculated from any piece of data. Change one character of the data and the hash is completely different.

The number a lending service uses to track a loan's safety. If it falls below 1, the loan can be liquidated.

How long you held crypto before disposing of it. Under US rules, more than one year makes a gain long-term.

A wallet that keeps your keys on a device that connects to the internet, such as a phone app or browser extension.

What a liquidity provider loses, compared with simply holding both tokens, when the price of one token in the pool moves.

A file-sharing network where a file's address is worked out from its contents. Many NFTs keep their images there.

The identity checks regulated exchanges must carry out on their customers.

A separate network built on top of Ethereum. It processes transactions more cheaply and records its data back on Ethereum.

A list of transactions: who paid whom, and how much.

Buying crypto with borrowed money. It multiplies gains and losses alike.

An order to buy or sell at a price you set, or better. It is not guaranteed to fill.

A token that stands for your staked ETH and can be traded at any time. Its market price can differ from the value of the ETH behind it.

When a loan's collateral falls too far, anyone can repay part of the debt and take that amount of collateral plus a bonus.

How easily you can buy or sell without moving the price much.

A pair of tokens held by a smart contract that anyone can swap against.

Someone who deposits both tokens into a pool and earns a share of the swap fees.

A maker's order adds to the order book and waits. A taker's order takes an existing offer. Many exchanges charge makers less.

The price of one coin multiplied by the number of coins in circulation.

An order to buy or sell straight away at the best price available. The price is not guaranteed.

A coin built around a joke, an image or a trend. Its value is driven mainly by demand and speculation.

The queue where Bitcoin transactions wait until a miner includes them in a block.

A small text file listing an NFT's name, description and traits, with a link to its image.

How Bitcoin decides who adds the next block and how new bitcoin enters circulation. Miners compete by spending computing power on a guessing puzzle.

Creating a new NFT by paying the project's contract. You are its first owner.

A wallet that needs more than one key to approve a transaction. In a 2-of-3 wallet, any two of three keys can spend.

A token that is one of a kind, recorded in a smart contract as belonging to one address.

A computer that keeps a copy of the ledger and checks every transaction and block against the rules.

The number a miner changes, over and over, to find a block hash below the network's target.

A system that brings outside information, such as prices, onto a blockchain for smart contracts to use.

An exchange's live list of offers to buy and sell.

Describes a loan that is always smaller than the collateral backing it. DeFi loans work this way.

An optional extra you choose and add to your seed phrase. A different passphrase gives a completely different wallet.

Tricking you with a fake site, app or message into revealing your seed phrase or signing something harmful.

Keeping a copy of a file on IPFS so that it stays available.

The change in price that your own trade causes. It is large when the trade is big compared with the pool.

A very large random number that signs transactions. Whoever has it can spend the coins, so it must stay secret.

A report some exchanges publish to show they hold customers' coins. It is not an audit and often leaves out what the company owes.

A way to secure a blockchain with locked-up coins instead of mining machines. Ethereum has used it since September 2022.

The method Bitcoin uses to secure its network. A valid block is hard to produce and easy to check.

A key calculated from the private key with one-way maths. It lets the network check your signatures and is safe to share.

A scheme in which a group promotes a token and then sells to those who arrive late.

Using ETH that is already staked as security for other services as well. It adds rewards and adds ways to lose the stake.

A percentage of an NFT resale meant for the creator. A smart contract cannot force a marketplace to pay it.

A scam in which a token's creators remove the funds that allow trading, so the token cannot be sold.

The smallest unit of bitcoin. One bitcoin divides into 100 million satoshis.

A physical device used for two-factor login. It checks the website's real address before it responds, so it resists phishing.

A list of 12 to 24 ordinary words that can rebuild every key in your wallet. Anyone who has it controls your coins.

Holding your own private keys in a wallet you control, with a seed phrase as the backup.

The approval that lets another contract move every NFT you hold in a collection. Marketplaces need it, and scammers imitate it.

An attack in which a criminal convinces your mobile provider to move your number to their SIM card, then receives your login codes.

The penalty for a validator that provably cheats. Part of its stake is destroyed and it is removed from the network.

The difference between the price you expected and the price your order fills at.

A program stored on a blockchain. It runs exactly as written whenever its conditions are met.

The gap between the highest price a buyer will pay and the lowest price a seller will accept.

A token designed to hold a fixed value, usually one US dollar. Stable is the goal, not a guarantee.

Locking up coins as collateral to help confirm transactions on a proof-of-stake network, and earning rewards for it.

An order that waits until the price reaches a level you choose, then becomes a market order.

An asset created by a smart contract on a blockchain that already exists. The contract keeps a list of who owns how many units.

Creating tokens that stand for assets from outside crypto, such as bonds, gold or property. The asset itself stays off the blockchain.

The unique code for one transaction. Paste it into a block explorer to see the transaction's status and details.

Software that holds staked ETH and helps run the network by proposing blocks and checking other validators' blocks.

How sharply a price moves. Crypto is far more volatile than shares or currencies.

The value traded over a period, usually 24 hours. Reported volume is not always real.

A tool that stores your private keys, shows your balance and signs transactions. It does not hold the coins themselves.

Selling at a loss and buying the same thing again within 30 days. US law limits the loss for stocks and securities.

Trading with yourself, using two wallets or accounts, to fake demand or set a high last sale price.

A document describing a crypto project. Treat it as the project's own sales document and check its facts elsewhere.

The address where a validator's staked ETH goes when it leaves. Each validator can be given only one.

A token issued on one network as a claim on an original that is locked somewhere else.

Money paid to you for letting someone use your tokens. Someone always pays it.