New to cryptocurrency? This glossary covers the most important terms you will encounter in the crypto world. Bookmark this page as a handy reference guide.
Altcoin: Any cryptocurrency other than Bitcoin. Examples include Ethereum, Solana, and Cardano.
BUIDL: A crypto community term meaning to keep building products and services regardless of market conditions. A play on HODL.
Blockchain: A distributed, immutable ledger that records all transactions across a network of computers.
Cold Wallet: A crypto wallet that stores private keys offline, away from internet-connected devices. More secure than hot wallets.
Consensus Mechanism: The method a blockchain uses to agree on the validity of transactions. Examples include Proof of Work and Proof of Stake.
DeFi (Decentralised Finance): Financial services built on blockchain networks that operate without banks or other traditional intermediaries.
DEX (Decentralised Exchange): A peer-to-peer crypto trading platform powered by smart contracts, with no central authority.
DYOR (Do Your Own Research): A common phrase reminding crypto users to independently research before investing.
Fiat Currency: Government-issued currency such as the Australian Dollar (AUD) or US Dollar (USD).
Gas Fee: The transaction fee paid to network validators on Ethereum and other blockchains.
HODL: Originally a misspelling of hold, now used to mean holding cryptocurrency long-term regardless of price volatility.
Hot Wallet: A crypto wallet connected to the internet. Convenient but more vulnerable to hacks.
KYC (Know Your Customer): Identity verification process required by most centralised exchanges to comply with anti-money laundering laws.
Layer 1: The base layer blockchain protocol (e.g. Bitcoin, Ethereum, Solana).
Layer 2: A secondary framework built on top of a Layer 1 to improve scalability and reduce fees (e.g. Arbitrum, Lightning Network).
Liquidity Pool: A pool of tokens locked in a smart contract that enables decentralised trading on a DEX.
Market Cap: The total value of a cryptocurrency, calculated by multiplying the current price by the circulating supply.
NFT (Non-Fungible Token): A unique digital asset on the blockchain representing ownership of a specific item.
Private Key: A secret cryptographic key that gives you access to your crypto wallet. Never share it with anyone.
Proof of Stake (PoS): A consensus mechanism where validators are chosen based on the amount of crypto they have staked.
Proof of Work (PoW): A consensus mechanism where miners solve mathematical puzzles to validate transactions. Used by Bitcoin.
Rug Pull: A crypto scam where developers abandon a project and run away with investors funds.
Seed Phrase: A set of 12 to 24 words used to recover a crypto wallet. Must be kept offline and private.
Smart Contract: Self-executing code stored on the blockchain that automatically enforces agreements.
Stablecoin: A cryptocurrency pegged to a stable asset like the US Dollar (e.g. USDT, USDC, DAI).
Staking: Locking up cryptocurrency to support a blockchain network and earn rewards.
Token: A digital asset built on an existing blockchain (as opposed to a coin, which has its own native blockchain).
Wallet Address: A unique identifier (like a bank account number) used to send and receive cryptocurrency.
Whitepaper: A technical document published by a crypto project explaining its technology, use case, and tokenomics.
Disclaimer: This glossary is for educational purposes only. It does not constitute financial advice. Always conduct your own research before making any cryptocurrency-related decisions.
