Crypto Glossary

The crypto glossary provided by TheBitcoinDictionary.com is a collection of references and definitions related to the cryptocurrency world. The glossary helps users understand complex crypto concepts, including blockchain, wallets, tokens and DeFi, providing clarity on the terminology often used.

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0x: 0x Protocol is an open-source, decentralized exchange (DEX) protocol for peer-to-peer asset trading. It enables trustless, low-cost token swaps and liquidity sharing across Ethereum and other blockchains.

21 Million: 21 million refers to the Bitcoin maximum supply that can ever exist. This fixed limit is built into Bitcoin’s protocol to ensure scarcity, making it a deflationary asset.

51% Attack: A 51% attack occurs when a malicious actor gains control of more than 50% of a blockchain’s mining or staking power. This allows them to alter transactions, double-spend coins, or disrupt network consensus. It poses a significant threat to the security and integrity of a blockchain.

52 Week High/Low: The 52 week high/low refers to the highest and lowest price levels a stock or cryptocurrency has reached in the past 52 weeks. It’s used by traders to assess volatility and trends.

API: APIs (Application Programming Interface) allows developers to interact with blockchain networks and cryptocurrencies, enabling tasks like real-time price tracking, trading, and data retrieval.

APR: Annual Percentage Rate (APR) represents the yearly interest rate earned or paid on crypto investments or loans, expressed as a percentage, excluding compounding effects.

ASIC: ASIC (Application-Specific Integrated Circuit) are specialized hardware designed for mining cryptocurrencies, offering high efficiency and processing power tailored to specific algorithms.

Address: A crypto wallet address is a unique string of characters that identifies a destination for cryptocurrency transactions, allowing users to send and receive digital assets securely.

Airdrop: A crypto airdrop is a marketing strategy where free tokens or coins are distributed to holders of a specific cryptocurrency, often to promote new projects or reward loyal users.

Algorithmic Stablecoin: An algorithmic stablecoin is a type of cryptocurrency that uses algorithms and smart contracts to control its supply, aiming to maintain price stability without being backed by assets.

Altcoin: Altcoins are any cryptocurrencies other than Bitcoin, offering alternative features or innovations like faster transactions, decentralized applications, or improved security.

Anti-Money Laundering: Anti-Money Laundering (AML) refers to regulations and practices used by cryptocurrency platforms to prevent illegal activities like money laundering and fraud by monitoring transactions and identifying suspicious behavior.

AwakenTax: Awaken.tax is a cutting-edge tax software tailored for Web3 users. It simplifies tax calculations for staking, NFTs, DeFi, and token transactions, ensuring accuracy while saving time and money.

BNB: Binance (BNB) is the native cryptocurrency of the Binance exchange, used to pay for transaction fees, participate in token sales, and for various utilities within the Binance ecosystem.

BRC-20: BRC-20 is a token standard built on the Bitcoin blockchain, allowing for the creation and transfer of fungible tokens using the Ordinals protocol, expanding Bitcoin’s functionality beyond its native currency.

Betting: Crypto Betting refers to wagering on sports or casino games using cryptocurrency instead of traditional cash. Offers fast transactions, anonymity, and decentralized gaming options.

Binance: Binance (BNB) is one of the largest cryptocurrency exchanges globally, offering a platform for trading a wide range of digital assets, including Bitcoin, Ethereum, and altcoins, with various tools and services for both beginners and professionals.

BitStarz: BitStarz Casino is an award-winning online casino known for its extensive game selection, spanning slots, table games and live dealer options, while supporting both fiat and cryptocurrency transactions.

Bitcoin: Bitcoin is a decentralized digital currency enabling peer-to-peer transactions without intermediaries, secured by blockchain technology, and capped at 21 million coins.

Bitcoin Halving: Bitcoin halving is an event that occurs approximately every four years, reducing the block reward miners receive by half. This event helps control Bitcoin’s inflation rate, making it more scarce over time.

Bitcoin IRA: A BitcoinIRA is a self-directed retirement account that allows individuals to invest in cryptocurrencies like Bitcoin and Ethereum while enjoying tax advantages similar to traditional IRAs. It enables portfolio diversification with digital assets and is designed to offer a secure and accessible way to integrate cryptocurrency into long-term retirement planning.

Block: A block is a collection of transactions that are verified and added to the blockchain. Each block contains a list of transactions, a timestamp, and a reference to the previous block, ensuring the chain’s integrity and security.

Block Reward: A block reward is the incentive miners receive for adding a new block to the blockchain. It typically consists of newly minted coins (e.g., Bitcoin) and transaction fees, ensuring network security and encouraging mining.

Blockchain: Blockchain is a decentralized, immutable ledger that records transactions across a network of computers, ensuring transparency, security, and tamper resistance.

Bridges: Bridges are protocols that connect different blockchains, allowing for the transfer of assets and data between them, enhancing interoperability and enabling cross-chain interactions.

Bug Bounty: A bug bounty is a reward offered by companies or organizations to ethical hackers who identify and report security vulnerabilities in their software, systems, or applications.

Bull Market: A bull market is a financial market condition where prices are rising or expected to rise, driven by investor confidence, optimism, and strong economic indicators.

Burn: Burning tokens refers to the process of permanently removing a certain number of tokens from circulation by sending them to an address that can’t be accessed, reducing the total supply and potentially increasing scarcity and value.

Cardano: Cardano (ADA) is a blockchain platform focused on sustainability, security, and scalability, using a proof-of-stake consensus and supporting smart contracts and dApps.

Chainlink: Chainlink (LINK) is a decentralized oracle network that enables smart contracts to securely interact with real-world data, APIs, and payment systems, expanding the capabilities of blockchain technology.

Changelly: Changelly is a user-friendly crypto exchange offering fast, account-free swaps and fiat-to-crypto purchases. It ensures non-custodial, secure transactions at competitive rates.

CoinLedger: CoinLedger simplifies tax reporting by providing seamless crypto integration with wallets, exchanges, and blockchains. It generates accurate tax reports, supports various accounting methods, and caters to DeFi, NFT, and traditional crypto transactions.

CoinTracker: CoinTracker simplifies cryptocurrency management by providing tools for seamless portfolio tracking and accurate tax calculations. With integrations across 500+ exchanges, wallets, and 23,000+ DeFi smart contracts, it generates comprehensive tax reports that integrate directly with platforms like TurboTax or can be used by your CPA.

Coinbase: Coinbase (COIN) is a popular cryptocurrency exchange that allows users to buy, sell, and store various digital assets like Bitcoin, Ethereum, and Litecoin. It offers a user-friendly platform with advanced trading tools and secure storage options.

Cold Wallet: A cold wallet is a type of crypto wallet that stores digital assets offline, providing enhanced security against online hacks and cyber threats, making it ideal for long-term storage.

Crypto Lending: Crypto lending is a process where you lend or borrow cryptocurrency through decentralized platforms or crypto exchanges. Lenders earn interest by locking up their crypto assets in a lending pool, while borrowers use their crypto as collateral to secure loans. It’s like traditional lending but operates on blockchain technology, offering benefits like accessibility, faster transactions, and often higher yields.

DAOs: A DAO (Decentralized Autonomous Organization) is a digital organization governed by smart contracts and blockchain technology, where decisions are made by token holders through voting, without centralized control.

DOGE: Dogecoin is a popular memecoin that started as a joke based on the Doge meme, but has gained widespread attention due to its strong community and celebrity endorsements.

dApps: dApps, or decentralized applications, are apps running on blockchains, offering transparency, security, and autonomy without central authority control.

ERC-1155: ERC-1155 is a token standard on the Ethereum blockchain that enables the creation of both fungible and non-fungible tokens (NFTs) within a single contract, improving efficiency and reducing transaction costs for developers.

ERC-20: ERC-20 is a token standard on the Ethereum blockchain that defines a common set of rules for creating fungible tokens. It ensures compatibility across platforms, allowing tokens to be easily traded and used in decentralized applications.

ERC-721: ERC-721 is a token standard on the Ethereum blockchain used to create unique, non-fungible tokens (NFTs). Each token is distinct and can represent ownership of digital or physical assets, like art or collectibles.

ETH ETFs: Ethereum ETFs (Exchange-Traded Funds) are investment vehicles that allow individuals to gain exposure to Ethereum’s price movements without directly holding the cryptocurrency. These funds trade on traditional stock exchanges, offering a regulated and accessible way to invest in Ethereum through brokerage accounts.

Ethereum: Ethereum (ETH) is a blockchain platform enabling decentralized apps (dApps) and smart contracts, powered by its native cryptocurrency, Ether.

Ethereum Virtual Machine (EVM): The EVM (Ethereum Virtual Machine) is the runtime environment that processes and executes smart contracts on the Ethereum blockchain. It ensures that transactions and contract executions are secure, consistent, and decentralized.

Exchange: Crypto exchanges are platforms for buying, selling, and trading cryptocurrencies, offering features like market prices, trading pairs, and secure transaction options.

Flippening: The “Flippening” refers to the hypothetical event where Ethereum (ETH) surpasses Bitcoin (BTC) in market capitalization, becoming the leading cryptocurrency by value.

Fork: A fork in crypto refers to a change in a blockchain’s protocol, creating two separate chains. There are two types: hard forks (incompatible changes) and soft forks (backward-compatible changes), often leading to the creation of new coins or tokens.

Fully Diluted Value: Fully Diluted Value (FDV) refers to the total market value of a cryptocurrency if all of its tokens were mined or issued. It is calculated by multiplying the maximum supply by the current token price, offering insight into the project’s potential value at full issuance.

GameFi: GameFi combines gaming with decentralized finance (DeFi), allowing players to earn cryptocurrency or NFTs through gameplay. It integrates blockchain technology to create “play-to-earn” ecosystems, where in-game assets can be bought, sold, or traded for real-world value.

Gas: Crypto gas refers to the transaction fees paid to miners or validators for processing and confirming transactions on a blockchain network. These fees vary based on network congestion and transaction complexity, with higher gas prices prioritizing faster transactions. Gas is most commonly associated with Ethereum but can apply to other blockchains that use similar mechanisms.

Gemini: The Gemini crypto exchange offers a safe platform for buying, selling, and storing digital assets, designed with strict compliance to U.S. regulations. Their ecosystem includes the Gemini Mastercard, which rewards users with up to 3% back in crypto on purchases, and Gemini Earn, enabling users to grow their holdings by earning interest on select cryptocurrencies.

HODL: HODL is a term in crypto that originated from a misspelled word “hold.” It refers to holding onto your cryptocurrency rather than selling it, especially during market volatility, based on the belief that long-term value will increase.

Hard Cap: A hard cap in crypto refers to the maximum amount of a token or cryptocurrency that will ever be issued. It’s set to ensure scarcity and control inflation, often used in Initial Coin Offerings (ICOs) and token sales to limit the total supply of a project’s tokens.

Hardware Wallet: A hardware wallet is a physical device used to store cryptocurrency offline, providing enhanced security by keeping private keys away from online threats, making it ideal for long-term storage.

Hashrate: Bitcoin Hashrate measures the total computing power securing the network. A higher hashrate improves security, decentralization, and mining competition.

IRA: A Bitcoin IRA is a retirement account that allows you to invest in Bitcoin and other cryptocurrencies, providing tax advantages while diversifying your retirement portfolio with digital assets.

Impermanent Loss: Impermanent loss is a temporary loss of value that occurs when providing liquidity to a decentralized exchange (DEX). It happens when the price of the assets in a liquidity pool diverges, causing the value of your share to be less than if you had held the assets outside the pool.

Initial Coin Offering: An ICO – Initial Coin Offering is a fundraising method in the crypto space where new cryptocurrency projects sell tokens to investors, often in exchange for established cryptocurrencies like Bitcoin or Ethereum. ICOs are typically used to fund development and offer early access to a project’s tokens.

Isolated Margin: Isolated margin in crypto refers to a type of margin trading where a trader’s collateral is limited to a specific position, meaning only the funds in that position are at risk. If the position loses value, it can be liquidated, but the rest of the trader’s portfolio remains unaffected.

KYC: KYC – Know Your Customer in crypto refers to the process where exchanges or platforms verify the identity of users to comply with regulatory standards and prevent fraud, money laundering, and other illicit activities. It typically involves submitting personal information, documents, and sometimes even facial recognition to ensure a secure and trustworthy environment for trading.

Koinly: Koinly simplifies cryptocurrency tax reporting and portfolio management for investors worldwide. Offering automated tracking of transactions across wallets and exchanges, koinly generates accurate, country-specific tax reports.

Layer 0: Layer 0 in crypto refers to the foundational layer of blockchain technology, providing the underlying infrastructure for different blockchains to communicate and interoperate. It enables scalability and cross-chain compatibility by connecting various Layer 1 blockchains, making them more efficient and able to share data.

Layer 2: Layer-2 in crypto refers to secondary frameworks built on top of Layer-1 blockchains to enhance scalability and speed. By processing transactions off-chain and then settling them on the main chain, Layer-2 solutions like the Lightning Network for Bitcoin or Optimistic Rollups for Ethereum reduce congestion and lower transaction fees. These protocols aim to improve blockchain performance while maintaining security and decentralization.

Layer-1 Blockchain: A Layer-1 blockchain is a base-level blockchain that operates independently and directly handles transaction processing, consensus, and security. Examples include Bitcoin and Ethereum. These blockchains are designed to handle their own scalability and transaction needs without relying on another layer. Layer-1 solutions focus on optimizing core features like decentralization and security.

Ledger: Ledger is a leading brand of hardware wallets that securely store cryptocurrencies offline. It offers protection against hacks, ensuring that private keys remain safe in cold storage.

Lightning network: The Lightning Network is a Layer-2 solution for Bitcoin that enables fast, low-fee transactions by creating off-chain payment channels. It allows users to send Bitcoin instantly and securely, without congesting the main Bitcoin blockchain.

Litecoin: Litecoin is a peer-to-peer cryptocurrency, created by Charlie Lee in 2011 as a “lighter” version of Bitcoin. It offers faster transaction speeds and lower fees, making it a popular choice for everyday transactions.

Lolli: The Lolli rewards app allows users earn Bitcoin or cash back when shopping online at thousands of partner stores. By seamlessly integrating with your browser or mobile device, Lolli makes it easy to stack Bitcoin while shopping for everyday essentials.

Market Capitalization: Market Capitalization (MCAP) refers to the total value of a cryptocurrency, calculated by multiplying the current price per coin by its circulating supply. It helps investors assess a project’s size and potential. High MCAP typically suggests a more established and less volatile asset, while low MCAP could indicate higher risk and growth potential.

Max Supply: Max supply in refers to the maximum number of coins or tokens that will ever be created for a specific cryptocurrency. Once this limit is reached, no new coins can be mined or issued. This fixed supply can help control inflation and promote scarcity, similar to gold. Examples of cryptocurrencies with a fixed max supply include Bitcoin (21 million BTC) and Litecoin (84 million LTC).

Memecoin: A memecoin is a cryptocurrency created as a joke or meme, often with little to no utility, but driven by community interest and social media hype (e.g., Dogecoin, Shiba Inu).

Merkle Tree: A Merkle Tree is a cryptographic structure used to efficiently verify and store large amounts of data. It organizes data into a tree-like format with hash values at each branch, allowing for faster verification of transactions or blocks in blockchain systems. This structure is used to ensure data integrity and security, minimizing the need for large data transfers. Merkle Trees are integral to blockchains like Bitcoin and Ethereum for efficient proof of data.

MetaMask: MetaMask is a popular crypto wallet and browser extension that allows users to interact with Ethereum and other blockchains. It securely stores private keys and facilitates transactions and decentralized application (dApp) access directly from the browser.

Metaverse: The Metaverse is a virtual, interconnected universe where users can interact with digital environments and other participants through avatars. It blends augmented reality (AR), virtual reality (VR), and blockchain to create immersive, decentralized spaces for gaming, socializing, and commerce.

Mnemonic Phrase: A mnemonic phrase is a series of 12–24 words used to back up and recover cryptocurrency wallets. It’s a human-readable way to store the wallet’s private keys securely.

NFT: NFTs – Non-Fungible Tokens are unique digital assets stored on a blockchain, representing ownership or proof of authenticity for items like art, music, and collectibles. Unlike cryptocurrencies, each NFT is distinct, making it ideal for verifying the rarity or ownership of digital goods.

Network: A network refers to the interconnected infrastructure that enables transactions, data sharing, and consensus among decentralized participants. It includes blockchains, nodes, miners, and validators that ensure the system operates securely and transparently.

Node: A node in crypto refers to a device or computer that participates in a blockchain network, maintaining a copy of the blockchain’s ledger and validating transactions. Nodes help ensure decentralization, security, and consensus by verifying transactions and blocks.

Non-Custodial: A non-custodial crypto wallet allows users to retain full control over their private keys, meaning they manage their funds directly without relying on a third party, such as an exchange. This provides greater security and privacy, as the user is the sole custodian of their assets, rather than entrusting them to a service provider.

On-chain: On-chain refers to activities, transactions, or data recorded directly on a blockchain, ensuring transparency, security, and immutability. Every transaction or smart contract execution is verified and stored permanently on the blockchain, visible to all network participants.

Open Source: Open Source refers to software or projects whose source code is made publicly available for anyone to view, modify, and distribute. It promotes collaboration, transparency, and community-driven development, where developers contribute to improvements and innovation.

OpenSea: OpenSea is a leading decentralized marketplace for buying, selling, and trading NFTs (Non-Fungible Tokens). It supports digital assets such as art, collectibles, music, and virtual goods, built primarily on the Ethereum blockchain.

Optimistic Rollup: An Optimistic Rollup is a Layer 2 scaling solution for Ethereum, designed to increase transaction throughput by processing transactions off-chain. It assumes transactions are valid by default, only checking for fraud if disputed, improving speed and reducing costs. It helps alleviate network congestion, while still benefiting from Ethereum’s security model.

Oracles: Oracles are third-party services that provide external data to smart contracts on a blockchain, enabling them to interact with real-world information (like price feeds, weather, etc.). Oracles are crucial for decentralized applications (dApps) that need to access off-chain data, bridging the gap between blockchain and the outside world.

Over-the-Counter: Over-the-Counter (OTC) in crypto refers to private transactions between buyers and sellers, conducted directly without an exchange. OTC trades are typically used for large-volume trades, offering more privacy, flexibility, and sometimes better pricing than public exchanges.

PEPE: Pepecoin is a memecoin inspired by the popular internet meme character “Pepe the Frog.” It gained traction in the crypto space due to its community-driven hype and meme culture appeal.

Peer-to-Peer (P2P): Peer-to-Peer (P2P) in crypto enables users to trade cryptocurrencies directly without intermediaries, offering privacy, control, and flexibility on decentralized platforms.

Ponzi Scheme: A Ponzi scheme is a fraudulent investment scam where returns to earlier investors are paid using new investors’ money, rather than from profit or legitimate earnings.

Proof of Stake (PoS): Proof of Stake is a consensus mechanism where validators are chosen to validate transactions based on the amount of cryptocurrency they stake. It is energy-efficient and encourages long-term investment but can favor wealthier participants.

Proof of Work (PoW): Proof of Work is a consensus mechanism where miners solve complex mathematical problems to validate transactions and secure the blockchain. It requires significant computational power, making it energy-intensive but highly secure against attacks.

QR Code: A QR code in crypto is a scannable code that contains a cryptocurrency wallet address, allowing users to send or receive crypto easily without manually typing the address.

Rehypothecation: Crypto rehypothecation occurs when collateral pledged by one user is re-used by an intermediary, like a lender, to back its own obligations, increasing financial leverage.

SHIBA INU: Shiba Inu is a popular memecoin inspired by the Shiba Inu dog breed, often referred to as the “Doge killer.” It gained attention through its community-driven hype and meme culture.

Satoshi Nakamoto: Satoshi Nakamoto is the pseudonymous creator of Bitcoin, the first cryptocurrency. Their identity remains unknown, and they introduced Bitcoin in 2008 as a decentralized, peer-to-peer digital currency.

Seed Phrase: A seed phrase is a set of 12–24 words that serves as a backup for your cryptocurrency wallet. It allows you to recover access to your wallet and funds.

Shitcoin: A “shitcoin” refers to a cryptocurrency with little to no value or utility, often created without a solid purpose, backing, or use case, typically as a speculative asset.

Simple Swap: SimpleSwap is a cryptocurrency exchange that provides crypto-to-crypto and fiat-to-crypto trading without the need for registering an account and supports over 1500+ coins.

Solana: Solana is a high-performance blockchain known for fast transaction speeds, low fees, and scalability, supporting DeFi, NFTs, and decentralized apps (dApps).

Stablecoin: Stablecoins are digital currencies pegged to stable assets, like the US dollar, to reduce price volatility, making them ideal for transactions and as a store of value.

Staking: Staking in crypto is the process of holding and locking up a cryptocurrency in a wallet to support network operations, such as validating transactions, in exchange for rewards.

Taxes: Crypto Taxes refer to the tax obligations on cryptocurrency transactions, including buying, selling, trading, staking, mining, and earning crypto. In many countries, crypto is treated as property, meaning gains are subject to capital gains tax, while income from mining, staking, or payments in crypto may be taxed as regular income.

Token: A crypto token is a digital asset built on a blockchain, representing value or utility, often used for transactions, governance, or accessing specific services.

Token Tax: TokenTax simplifies tax reporting with features like automatic integration of exchanges and wallets, real-time tax loss tracking, and comprehensive reports. It supports global crypto users with tailored solutions for different jurisdictions while ensuring compliance with the latest tax laws.

Validator: A validator is a participant in proof-of-stake networks who validates transactions and secures the blockchain. Validators earn rewards for their work, helping maintain network integrity.

Wallet: Crypto wallets are digital tools for securely storing, sending, and receiving cryptocurrencies, using private keys to access blockchain assets and ensure security.

Web 2.0: Web 2.0 refers to the second generation of the internet, characterized by user-generated content, social media, and interactive platforms. It focuses on collaboration, sharing, and cloud computing.

Web 3.0: Web 3.0 is the next evolution of the internet, built on decentralized networks, blockchain technology, and AI. It empowers users with more control, privacy, and ownership of their data.

Whitelist: A whitelist in crypto refers to a list of approved participants, addresses, or entities granted access to specific opportunities, like token sales or airdrops, before general availability.

Whitepaper: A whitepaper is a detailed document that explains a project’s concept, technology, use case, and goals, often used in the crypto industry to present new tokens or protocols.

XRP: XRP – Ripple is a cryptocurrency designed for fast, low-cost international payments, used by Ripple for cross-border financial transactions and liquidity management.

Yield Curve: A yield curve in crypto represents the relationship between the return on staked tokens and their maturity periods. It shows how returns may vary based on the duration of staking or lending, often influencing decisions on yield farming or staking investments.

Zero Knowledge Proof: Zero-knowledge proof (ZKP) is a cryptographic method allowing one party to prove to another that a statement is true without revealing any details. It enhances privacy and security in transactions.