Image credit: The Byteline

From mainstream news outlets to niche internet forums, the language of cryptocurrency is everywhere. With its rapid rise as a global phenomenon, crypto has spawned a unique lexicon that can make an already complex subject even more daunting.

Whether you're a seasoned investor or just starting to explore cryptocurrencies, this glossary will help you decode the terminology and stay in the loop. Here’s everything you need to know:

A
Altcoin: Any cryptocurrency other than Bitcoin.
ASIC: Stands for application-specific integrated circuit, a powerful and costly device used for cryptocurrency mining.

B
Bitcoin (BTC): The original, largest, and most well-known cryptocurrency.
Buy the dip: An investment strategy of purchasing an asset after its price drops, aiming to profit when its value rises again.
Blockchain: The foundational technology for most cryptocurrencies; a distributed ledger of transactions maintained across multiple nodes in a network.

C
Coin: A general term for a cryptocurrency (see altcoin and meme coin).
Cold wallet: A physical storage device, like a flash drive or hard drive, used to securely store cryptocurrency offline.
Cryptocurrency: A digital asset serving as a store of value or medium of exchange, verified and recorded through cryptography on a decentralized network.
Cryptography: A method of encrypting information to ensure its security, allowing only those with a key to decode it.

D
dApp: Short for decentralized application, an app hosted on a blockchain that operates without a central authority.
DeFi: Decentralized finance, a system that enables direct financial transactions without intermediaries like banks.
DAO: Decentralized autonomous organization, a group governed by self-executing code to achieve shared goals, with Bitcoin as an early example.
Distributed ledger: A digital ledger maintained and synchronized across multiple nodes, as opposed to being held by a single entity.
Double spend: A potential problem in digital currency systems where the same coin is spent multiple times, prevented by blockchain technology.

E
Exchange: A platform for buying, selling, or trading cryptocurrency.
Ether (ETH): The native cryptocurrency of the Ethereum blockchain.
Ethereum: The second-largest cryptocurrency by market capitalization, known for enabling smart contracts.
Encryption: The process of securing digital information to prevent unauthorized access.

F
Fiat currency: Government-backed currencies like the U.S. dollar, euro, or British pound.
Fork: A change to a blockchain’s protocol that creates a divergence, with soft forks being backward-compatible and hard forks requiring all nodes to upgrade.

G
Gas: The fee paid in Ether for transactions on the Ethereum network, compensating validators for processing transactions.
Graphics card: A high-performance computer component used in mining cryptocurrencies that rely on proof-of-work algorithms.

H
Hash: A nearly unique string generated from data using a hashing algorithm, crucial for blockchain security.
Hot wallet: An online storage system for cryptocurrencies, accessible but vulnerable to hacking.

I
ICO: Initial coin offering, the crypto equivalent of an initial public offering (IPO).

J
Jager: The smallest unit of Binance Coin (BNB).

K
Know Your Customer (KYC): A compliance process requiring identity verification, often used by crypto exchanges.

L
Ledger: A detailed record of transactions, either centralized or decentralized.

M
Market capitalization: The total value of a cryptocurrency in the market.
Mining: The process of validating blockchain transactions using computational power.
Meme coin: A cryptocurrency based on internet memes, such as Dogecoin.

N
Node: A device or computer maintaining a copy of a blockchain and validating transactions.
NFT: Non-fungible token, a unique digital asset verified on a blockchain.

O
On-chain: A transaction recorded on the blockchain’s public ledger.
On-ledger currency: Cryptocurrency native to a blockchain, like Bitcoin.
Orphan block: A block excluded from the blockchain due to being invalid or redundant.

P
P2P: Peer-to-peer transactions conducted without intermediaries.
Private key: A secure key used to authorize and manage crypto assets.
Public key: A wallet’s public-facing address for receiving cryptocurrency.
Proof of work (PoW): A consensus mechanism requiring computational effort to validate blockchain transactions.
Proof of stake (PoS): A consensus mechanism where validators stake cryptocurrency to add new blocks to a blockchain.

Q
Quantum computing: Advanced computing that processes data at unprecedented speeds using quantum physics principles.

R
Regulated: A market adhering to rules enforced by penalties or licensing requirements.

S
Satoshi Nakamoto: The pseudonym of Bitcoin’s creator(s).
Satoshi: The smallest unit of Bitcoin, equivalent to 0.00000001 BTC.
Smart contract: Self-executing code on a blockchain that automates agreements.
SHA-256: A secure hashing algorithm used by Bitcoin to ensure data integrity.
Seed: A series of words used to recover access to a crypto wallet.
Stablecoin: A cryptocurrency pegged to a stable asset, like the U.S. dollar.

T
Tether (USDT): A stablecoin pegged to the U.S. dollar.
Terahash: A measure of computational speed in mining, equal to one trillion hashes per second.
Token: A digital asset operating on a specific blockchain.

U
USD Coin (USDC): A stablecoin pegged 1-to-1 with the U.S. dollar.

V
Volume: The total trading activity of a cryptocurrency over a given period.
Validator: A participant in proof-of-stake blockchains who stakes assets to confirm transactions.
Volatility: Frequent and unpredictable price fluctuations in a market.

W
Wallet: A digital tool for securely storing cryptocurrency.
Wei: The smallest unit of Ether, where 1 ETH equals 1 quintillion wei.
Whitepaper: A technical document outlining a new crypto project’s design and functionality.

X
XRP: The native cryptocurrency of the Ripple blockchain.

Y
Yield: Investment returns, expressed as a percentage.

Z
Zero confirmation: A transaction pending verification on the blockchain.

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