Glossary

Address The string you send funds to. It is derived from a public key and is safe to share; the format differs by network, which is why an address that works on one chain is refused on another. Block A batch of transactions added to the chain at once. Networks differ enormously in how often one arrives — about ten minutes on Bitcoin, under a second on BNB Chain. Blockchain A shared record of transactions that many independent computers keep a copy of, where new entries reference the previous ones so that changing an old entry would mean redoing everything after it. Cold wallet A wallet whose keys have never touched an internet-connected device. Signing happens offline; only the finished signature travels. Custodial An arrangement where a platform holds the keys and your balance is a claim against that platform, much like a bank balance. Convenient, reversible by them, and dependent on their solvency. Hardware wallet A dedicated device that keeps private keys inside it and signs transactions internally, so the keys never reach the computer or phone it is plugged into. Hot wallet A wallet whose keys sit on an internet-connected device — a phone or browser extension. Convenient for spending, and exposed to whatever else that device is exposed to. Node A computer running the network's software and keeping its own copy of the chain. Nodes independently reject invalid transactions, which is what makes the rules hard to change quietly. Private key The secret that authorises spending from an address. Anyone who has it controls the funds, permanently and without recourse. It is never needed by support, an exchange or a wallet maker. Proof of stake A consensus method where the right to produce blocks depends on assets staked as collateral, which can be destroyed for misbehaviour. Ethereum and most newer networks use it. Proof of work A consensus method where producing a block requires spending real computation, and therefore real electricity. Bitcoin uses it. Public key The counterpart to a private key, from which an address is derived. It can verify that a signature came from the matching private key without revealing that key. Seed phrase Twelve or twenty-four ordinary words that regenerate every private key in a wallet. It is the wallet, not a password for it: whoever types those words into any compatible wallet has the funds. Self-custody Holding your own keys, so no company can freeze, lend or lose your funds — and no company can restore them if you lose the seed phrase. Validator A participant that proposes and attests to new blocks in a proof-of-stake network, putting up its own stake as collateral for behaving honestly. Wallet Software or a device that stores keys and signs transactions. It does not hold coins — the coins are entries on the network — which is why restoring a wallet elsewhere from the same seed phrase shows the same balance.

Block explorer A website that reads a network's data directly, letting anyone look up a transaction, address or contract. It is the source that settles arguments about whether a transfer actually happened. Bridge A service that lets value move between two networks, usually by locking an asset on one side and issuing a representation on the other. Bridges hold funds while they operate, which has made them a repeated target. Confirmation One block built on top of the block containing your transaction. More confirmations mean a reversal would be more expensive, which is why platforms set a threshold before crediting deposits. Finality The point past which a transaction cannot be reversed. Some networks reach it definitively — Ethereum after about thirteen minutes — while Bitcoin only ever approaches it, growing safer with each block. Gas The unit measuring how much computation a transaction requires on Ethereum-style networks. What you pay is gas used multiplied by the price per unit, settled in the network's native asset. Gwei A billionth of an ether, the unit gas prices are quoted in. A price of 20 gwei means twenty billionths of an ether per unit of gas. Layer 1 A base network that settles its own transactions — Bitcoin, Ethereum, Solana, Tron. Contrast with a layer 2, which relies on a layer 1 underneath it. Layer 2 A network that processes transactions itself and periodically posts the results to a layer 1, inheriting that chain's security while costing far less to use. Base and Arbitrum are examples. Mempool The waiting area of broadcast transactions that have not yet been included in a block. A transaction sitting there is pending, not lost. Native asset The coin a network charges its fees in — ETH on Ethereum, BNB on BNB Chain, SOL on Solana, TRX on Tron. Holding a token without any of the native asset means being unable to move that token. Nonce A counter attached to each transaction from an address, ensuring they execute in order and cannot be replayed. A stuck transaction blocks the ones behind it because of this. Rollup A layer 2 that compresses many transactions into one batch posted to the layer 1. Optimistic rollups assume batches are valid unless challenged; zero-knowledge rollups prove validity mathematically. Wrapped token A token on one network representing an asset that lives on another, backed by the original being held somewhere. Its value depends on that backing being real and redeemable. Wrong network Sending an asset over a network the recipient does not support. The transfer succeeds on-chain and the funds are simply somewhere the destination cannot see, which is why it is the most common self-inflicted loss in crypto.

Airdrop Distributing tokens to addresses without charge, usually to reward past use or attract attention. Also the pretext for a large family of scams, since "claim your airdrop" is an easy thing to fake. Burn Permanently removing tokens from circulation by sending them to an address nobody controls. Reduces supply; does not by itself create value. Coin The native asset of its own network — bitcoin on Bitcoin, ether on Ethereum. Nobody issues it; it exists because the network's rules create it. ERC-20 The token standard on Ethereum, and by extension on Base, Arbitrum and Polygon. BEP-20 on BNB Chain is the same standard under a different name. Fully diluted valuation Price multiplied by total eventual supply. The gap between FDV and market cap is the value of tokens not yet in circulation, which will have to be sold to someone. Issuer The entity that creates a token and stands behind whatever it promises. For a stablecoin the issuer holds the reserves and can usually freeze balances. Market cap Price multiplied by circulating supply. It describes what the last trade implies, not what could be realised — a large market cap over a small pool of liquidity is a number, not money. Mint Creating new units of a token. Whether anyone can still mint after launch is one of the contract settings worth checking before buying. Smart contract Code deployed to a network that runs exactly as written when called. "Trustless" refers to the execution, not to whether the code does something reasonable. SPL The token standard on Solana. Holding one requires a token account, which costs a small refundable deposit in SOL to create. Stablecoin A token whose issuer promises it can be redeemed for one unit of a currency, usually a dollar. The promise is only as good as the issuer and the reserves behind it. Supply How many units exist. Circulating supply counts what is actually in hands; total supply counts everything created, including what is locked or held by the team. Token An asset that lives on someone else's network and follows that network's rules, created by a contract that somebody wrote and often still controls. TRC-20 The token standard on Tron, where a very large share of real-world USDT transfers happen.

Dollar-cost averaging Buying a fixed amount at a fixed interval regardless of price, so the average entry follows the period rather than a decision. It removes timing from the process; it does not remove risk. Drawdown The fall from a peak to a subsequent low, as a percentage. A 50 per cent drawdown requires a 100 per cent gain to recover, which is why the number matters more than it looks. Funding rate A recurring payment between holders of long and short perpetual positions that pulls the contract price toward spot. When it is positive, longs pay shorts. Leverage Borrowing to hold a position larger than your capital. It multiplies gains and losses by the same factor, and shortens the distance between you and a liquidation. Limit order An instruction to trade only at a stated price or better. It may not fill at all, which is the price of controlling the price. Liquidation The forced closing of a leveraged position when margin falls below the required level. It happens automatically, at the platform's discretion, and you do not get to wait for a recovery. Long A position that gains when the price rises. Buying spot is a long position; so is a leveraged long, with the difference that the leveraged one can be closed against your will. Margin The capital you put up to support a leveraged position. When losses erode it past the maintenance level, the position is liquidated. Mark price A smoothed reference price used to decide liquidations, drawn from broader market data rather than the last trade on one venue. It exists so a brief wick cannot liquidate everybody. Market order An instruction to trade immediately at whatever price is available. It always fills, and what it fills at depends on the book. Open interest The total value of derivative positions currently open. Rising open interest means new money entering positions rather than existing ones changing hands. Order book The live list of buy and sell orders at each price. Its depth tells you how much can be traded before the price moves against you. Perpetual futures A derivative tracking an asset's price with no expiry date, kept close to spot by a periodic payment between longs and shorts called funding. Short A position that gains when the price falls. The loss on a short is not capped, because there is no ceiling on how high a price can go. Slippage The difference between the price you expected and the price you got, caused by your own order moving through the book. It grows with order size and shrinks with liquidity. Spot Buying or selling the asset itself, settled immediately. You own what you bought and nothing can be liquidated. Spread The gap between the best buy price and the best sell price. It is a cost you pay on entry and again on exit, whether or not the trade works. Stop-loss A resting instruction that becomes an order once a trigger price is reached. It limits how much a position can lose, assuming there is liquidity at that moment to fill it.

APR and APY APR is the simple annual rate; APY assumes the return is compounded. The same underlying yield produces a bigger APY number, which is why marketing prefers it. Automated market maker A contract that quotes prices from the ratio of assets in a pool rather than matching orders. It is what lets a decentralised exchange trade without an order book. DeFi Financial services built from smart contracts rather than companies — trading, lending and borrowing that run as code on a public network. Impermanent loss The shortfall a liquidity provider ends up with compared with simply holding the two assets, caused by the pool rebalancing as prices diverge. The name is optimistic: it becomes permanent when you withdraw. Lending Depositing assets for others to borrow against collateral, in return for interest. It fails when collateral falls faster than it can be liquidated, or when the borrower is the platform itself. Liquidity How much can be bought or sold without moving the price much. Thin liquidity is what turns a paper gain into an exit you cannot take. Liquidity pool A pot of two or more assets deposited by many people that traders swap against, with depositors earning a share of the fees. Staking Committing assets as collateral to help secure a proof-of-stake network, in return for a share of the rewards it issues. Distinct from lending your coins to a platform that promises a return. Total value locked The value of assets deposited in a protocol. It measures how much is there, not whether it is safe or where the yield comes from. Yield The return on a deposited asset. The only question that matters is who is paying it and why — network issuance, borrower interest and trading fees are real sources; a promise is not.

Address poisoning Sending you a worthless transaction from an address that resembles one you use, so that a later copy-paste from your history goes to the attacker instead. Advance fee A demand to pay something — tax, unlocking, verification — before a withdrawal can proceed. Legitimate platforms deduct fees from what they send. Paying produces another demand, never a withdrawal. Dusting Sending tiny amounts to many addresses, either to trace how they move afterwards or as a setup for address poisoning. Fake support Someone posing as a wallet, exchange or hardware maker, reaching out after you posted a problem publicly. Real support does not message first and never asks for a seed phrase. Honeypot A token whose contract permits buying but blocks selling for ordinary holders. The chart looks healthy precisely because nobody can exit. Long-con investment fraud A months-long relationship built by a stranger who eventually introduces a platform showing rising balances, where withdrawals require ever more payments. The platform is a display, not an account. Phishing Impersonating a service to obtain credentials, a seed phrase or a signature. In crypto it usually arrives as support that contacted you first. Proof of reserves A published attestation that a custodian holds assets matching customer balances. Its value depends on whether liabilities were audited too, and by whom. Rug pull A launch where the people behind a token remove the liquidity or dump their holdings, leaving buyers with something they cannot sell. Signature request A prompt from your wallet asking you to authorise something. Reading what it authorises, rather than what the website claims it is, is the entire defence. Token approval Permission you grant a contract to move a token from your wallet. Approvals persist until revoked, and an unlimited approval to a malicious contract is how wallets are emptied without any transfer being signed. Wallet drainer A kit that tricks a holder into signing an approval or transfer that hands over their assets, usually behind a fake mint, airdrop or support page.

AML The obligations placed on financial firms to detect and report suspicious activity. It is why platforms ask where funds came from and why accounts are sometimes frozen mid-transaction. CASP The MiCA term for an authorised provider of crypto-asset services in the EU. The register of them is kept at EU level, which is the list worth checking rather than any national one. KYC The identity checks a regulated platform runs before letting you trade or withdraw. Level and timing differ by country and by route. MiCA The EU regulation governing crypto-asset services, applying since December 2024 with a transitional period that ended on 1 July 2026. Firms serving EU clients need an authorisation from a member state. Travel rule A requirement that identifying information about sender and recipient accompany transfers above a threshold between regulated providers. Its practical effect is extra questions on withdrawals to self-custody. VASP The international term for a business handling crypto on customers' behalf. Registration as a VASP is usually supervision, not a licence — and the difference matters.