Crypto and web3 dictionary. Every word and term you need to know, from technical definitions to degen slang.
The trickiest part of entering a new field is learning all its jargon. You can use this dictionary as your personal learning assistant to guide you through your crypto and web3 journey.
Each entry is a brief explanation and overview of a crypto term. Think of it as your go-to guide for all the words you need to know to understand bigger concepts in blockchain, crypto, and web3.
Contents:
A | Crypto and web3 dictionary
Address
Also known as a receive address, or a crypto, an address is a long string of letters and numbers where you can receive crypto.
Most addresses are public, so anyone with your address can look it up on a block explorer and see what you’re doing with your crypto.
However, just having an address won’t give anyone access to the funds on it.
Another term for an address is a public key. In order to spend the crypto on the public key, you’ll need the address’s corresponding private key.
Airdrop
An airdrop is free crypto! Companies give out airdropped tokens as a marketing tactic to get you interested in their new token.
Each airdrop will have different rules. Airdrops are often sent to addresses that hold another type of crypto. For example, Flare airdropped Flare (FLR) tokens to holders of XRP.
Some airdrops are also possibly a scam out to steal your money. Never give out your secret recovery phrase or private keys to participate in an airdrop. If you need to provide your secret recovery phrase, private key, or any other personal information to receive an airdrop, it’s a scam.
Alpha
Alpha is early investment information.
Examples of alpha are seeing company reports before anyone else, or having a source at the fed tell you how many bps they’re going to raise. Ever wonder why congress-people are so good at selling tops and buying bottoms? That’s right. It’s because they’re so much smarter than us. Jk that’s totally their access to insider information. Also known as alpha!
Apeing in
You can ape into a lot of things – apeing in is just another term for yolo-ing – but most often you’re apeing into shitcoins or NFTs.
Apeing in means buying something without a lot of thought or research. Which sometimes works out in your favour, at least in the short term (looking at you BAYC).
B | Crypto and web3 dictionary
Bear market
A bear market is when the price of crypto is going down, and everyone has lost faith and hope in the crypto market.
Historically, bear markets have been the best time to buy crypto.
Bitcoin
Bitcoin was the very first cryptocurrency, launched on January 3, 2009. It is an open-source decentralized peer-to-peer digital currency. Open-source means that anyone can see the code it’s built on, and peer-to-peer means that in order to use it, you don’t have to go through a central authority like a bank. The Bitcoin white paper was published on October 31, 2008, by Satoshi Nakamoto, a person or group whose identity has never been revealed.
Blockchain
Blockchain is the technology that underpins Bitcoin and other crypto.
A blockchain is a digital record of data (like an Excel sheet) in a decentralized network. It uses peer-to-peer consensus (miners or validators) to confirm transactions, and a hashing algorithm to link them cryptographically in a chronological chain of records, also known as blocks.
For an extensive guide, visit: What is blockchain technology?
Block explorer
A block explorer is like a search engine for transactions on a blockchain.
Block explorers let you look up transaction hashes to see details about your transaction. These details usually include date, time, amount, transaction fee, status or confirmations, the send and receive addresses, and the block number.
BTFD
Stands for ‘buy the f@#$ing dip’.
This is enthusiastic encouragement to buy more crypto when the price goes down (rather than panic sell).
How do you know whether to BTFD or sell? Not financial advice, but BTFD is probably not great advice in a bear market.
The trend is always your friend.
Bull market
A bull market is when the price of crypto is going up, and more people are apeing into the crypto market.
Historically, bull markets have been the best time to sell crypto.
C | Crypto and web3 dictionary
Capital
In crypto, capital usually refers to the amount of liquid assets you have to invest.
Capitulation
Capitulation is when you sell your crypto for a loss.
Why would anyone do that? Because they need the money, or they’ve lost hope, or maybe both.
Generally quite a bit of market capitulation is needed before the trend can reverse from bear to bull and crypto can once again go to the moon.
Cash
Cash, also known as fiat, is legal tender currency, such as USD, EUR, or GBP. Cash can be bills or coins.
Censorship resistant
If a platform or protocol is censorship resistant, it means it’s that no one can prevent you from participating in it.
Because there are no central authorities or gatekeepers, blockchain networks and other decentralized platforms are naturally censorship resistant.
Centralized
A centralized system is controlled by a central authority, like a government, corporation, or an institution like a bank.
In crypto, centralized exchanges control your private keys, so you don’t have true ownership over your crypto.
Cold wallet
A cold wallet is one that isn’t connected to the internet.
Hardware wallets and paper wallets are both examples of cold wallets.
You can read more about hardware wallets here, and find our recommendations here.
Confirmations
Confirmations refers to the number of blocks a transaction has been included in. If your transaction has 8 confirmations, it has been included in 8 blocks.
Some platforms require a minimum number of confirmations before you can see your crypto.
You can see how many confirmations your transaction has on a block explorer.
Crypto
Crypto, short for cryptocurrency, refers to cryptocurrencies like Bitcoin (BTC) and Solana (SOL).
It also acts as a general term for the entire crypto ecosystem. Wave your hand around and say ah, crypto.
Find out more here: What is crypto?
D | Crypto and web3 dictionary
DAO
Stands for decentralized autonomous organization.
A DAO is an entity with no central leadership. The community votes on proposals to make decisions.
Smart contracts enforce a specific set of rules that organize voting and implementation. Anyone can publicly audit proposals, voting, and the code.
Dapp
Stands for decentralized application.
True dapps are open-source and decentralized, which means free from control or censorship by any central authority.
However, most dapps are not actually open-source or decentralized. Instead, the term dapp usually refers to an app you sign into and interact with via a crypto wallet.
DCA
Stands for dollar cost averaging.
In crypto, DCA is when you buy an amount of an asset at regularly timed intervals regardless of price. This takes out the guesswork of trying to time the market while you build a position.
Not financial advice, but DCAing in crypto seems like a smarter strategy in bear markets, and a questionable strategy in bull markets.
Decentralized
You’ll hear decentralized a lot in crypto and web3. It’s one of the basic founding principles, and means not controlled by a single central authority.
You can visualize this like nodes in a network. Instead of top down, like one big glowing node that controls all the other nodes, each node is around the same size and each one is connected to each other.
Decentralized networks are stronger because there’s no single point of failure.
Degen
Short for degenerate, or degenerate gambler.
An affectionate term for anyone who is passionate about crypto, DeFi, or NFTs.
DEX
Stands for decentralized exchange.
A DEX is a peer-to-peer marketplace that allows crypto holders to trade directly without the need for a middleman or centralized authority.
Instead, smart contracts hold trades in escrow, and release funds when specified conditions are met.
Diamond hands
Diamond hands means that you will never sell your crypto.
While an honourable aspiration, this might not the best trading strategy.
Instead, it might be a better idea to buy low and sell high (not financial advice).
E | Crypto and web3 dictionary
EIP
Stands for Ethereum Improvement Proposal.
Like BIPs for the Bitcoin network, EIPs outline proposed changes to the Ethereum network.
Anyone can submit an EIP. However, before doing so, you should read EIP-1, which is an overview of the EIP process and guidelines for writing an EIP.
Additionally, you should post your EIP in the Ethereum Magicians forum for feedback before submitting it as a draft.
ELI5
Stands for explain it to me like I’m 5.
Just what it sounds like, a request to explain complex concepts and processes as simply as possible.
Ethereum
Ethereum is the second largest network after Bitcoin.
It’s primary cryptocurrency is ETH. Tokens that run on Ethereum are known as ERC-20 tokens.
It also offers financial services, games, apps, and is a popular network for NFTs.
Ethereum was the first protocol to introduce smart contracts, making it the first programmable blockchain.
EVM
EVM stands for Ethereum Virtual Machine.
The Ethereum Virtual Machine is the runtime environment for all smart contract code, and is Turing-complete.
What does that mean? Turing-completeness means that a programming language, or system (like EVM), is powerful enough to solve any computational problem that is theoretically solvable by a computer.
EVM-compatible
EVM-compatible networks have the same address format as Ethereum (they start with 0x).
They also have the ability to run smart contract code that can be recognized by Ethereum nodes. This makes it easy to migrate smart contracts across EVM-compatible networks without needing to write a bunch of new code.
Exchange
A crypto exchange is an online marketplace where you can buy, sell, and trade cryptocurrencies.
There are two types of exchanges in crypto, centralized and decentralized.
Exit scam
This is a type of scam where scammers, typically people running an online crypto exchange or investment platform, start by offering a legitimate service. They build a good reputation and develop a sense of trust with customers over time. Then they suddenly disappear with all the funds.
Victims of exit scams usually have no way to recover their lost funds. The businesses are often run offshore, and the scammers have covered their tracks to become untraceable.
F | Crypto and web3 dictionary
Fiat
Fiat currency is a fancy way of saying cash.
All government-issued legal tender, such as USD, CAD, EUR, GBP, etc., is fiat.
Flash loans
Flash loans are a type of loan in DeFi.
Unlike traditional lending, flash loans allow borrowers to access a loan without the need for collateral.
Flash loans work by providing borrowers with a temporary, unsecured loan that must be repaid in full within the block.
This means that the borrower must borrow and then repay the loan usually within seconds.
Smart contracts automatically execute the terms of flash loans once the specified conditions are met.
Flippening
The so-far mythical and hypothetical event of Ethereum’s market cap overtaking Bitcoin’s market cap.
Keep dreaming, ETH fans.
Floor price
The lowest priced NFT in a collection.
FOMO
Stands for fear of missing out.
FOMO is when you buy a coin after the price has rocketed up because you’re scared that you’ll miss out on an opportunity to make bank.
This can be dangerous, but historically, it can also be extremely profitable. The trick is knowing when.
FUD
Stands for fear, uncertainty, and doubt.
FUD is an attempt to influence the market.
The strategy is to spread negative, misleading, or false information, in order to crash the price of a coin, or destabilize a platform.
Often FUD is initially seen as just rumours, until the rumours turn out to be true (looking at you, FTX).
Full node
A full node downloads the entire history of the data on a blockchain network.
It verifies the validity of the blockchain data, as well as enforces consensus rules.
Running a full node is resource-intensive, but it helps keep the blockchain decentralized and contributes to the security of the network.
Fungible
In crypto, fungible means that a coin or token can be exchanged for an identical coin or token.
BTC is fungible: 1 BTC = 1 BTC.
G | Crypto and web3 dictionary
Gains
Gains is another word for profit.
So any funds you make after your initial investment are gains.
GameFi
GameFi refers to games you play to earn crypto.
Also known as play-to-earn, or P2E, some famous examples are Star Atlas and DeFi Kingdoms.
Gas
Also known as a network fee, or a transaction fee, gas is the fee you pay on the Ethereum network and other EVM networks to send a transaction or execute a smart contract.
Gems
Gems, or low-cap gems, are coins that have not yet been discovered by a large number of investors, but have the potential to become valuable.
Genesis block
A genesis block, also called block 0 or block 1, is the first block produced by a blockchain network that is processed and validated.
Satoshi mined the Bitcoin genesis block on Jan. 3, 2009, so Jan. 3 is now known as “Genesis Block Day.”
The only transaction in the Bitcoin genesis block was the distribution of the 50 BTC mining reward.
But Satoshi also included a message in the data attached to the block, a headline from the Jan. 3 edition of The Times, a British newspaper:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.
No one knows what it means, but it’s provocative. It gets the people going.
Governance token
A governance token is a token that represents voting power or decision-making rights in a decentralized network or platform.
DAOs often issue members governance tokens to represent their stake in the DAO.
Examples of governance tokens include MakerDAO’s MKR token, which is used to govern the MakerDAO protocol, and Compound’s COMP token, which is used to govern the Compound protocol.
Usually the more governance tokens you have, the more weight your vote carries. So if you own 10% of governance tokens for a protocol, and there is a vote on a proposal, you can influence 10% of the vote.
H | Crypto and web3 dictionary
Halving
A halving refers to mining rewards per block being cut in half.
The Bitcoin halving happens every 210,000 blocks, which is about every four years.
The upcoming Bitcoin halving in 2024 will reduce the per block reward from 6.25 BTC to 3.125 BTC.
Halvings cut the rate of inflation in half, and have historically had a positive effect on the Bitcoin price.
Hard cap
The hard cap is the most amount of a cryptocurrency that can ever exist.
For example, the hard cap for Bitcoin is 21,000,000, so there will never be more than 21 million BTC.
Hardware wallet
A hardware wallet is a type of cold wallet.
It’s a small handheld device that is a safer option to store large amounts of crypto because it’s not connected to the internet.
You can read all about hardware wallets here, and find recommendations for the best hardware wallets here.
HODL
Sometimes mistakenly described as Hold On for Dear Life, this is actually a drunken misspelling of ‘hold’ on a Bitcoin forum in 2013.
I AM HODLING. The man’s girlfriend was out at a lesbian bar while Bitcoin was crashing, but despite the storm, he refused to sell.
Why? His stated reason was that he was a bad trader, and he knew he was a bad trader, so instead of trying to sell high and buy back lower, and risk losing his BTC, instead he was going to hold through the rollercoaster.
No one knows what happened to the girlfriend but the term hodl became a Bitcoin philosophy, a strategy of holding (rather than trading) Bitcoin in order to realize the highest possible gains.
Now anyone who does this is known as a hodler.
Hot wallet
A hot wallet, also known as a software wallet, is a crypto wallet that is connected to the internet.
I | Crypto and web3 dictionary
ICO
ICO stands for Initial Coin Offering.
ICOs are similar to IPOs, and were super popular in 2017 as a way for crypto companies to raise capital by offering tokens, also known as coins.
However, ICOs were unregulated and super scammy and a lot of people lost a lot of money. So the popularity of ICOs quickly declined.
Immutable
Immutable means that something is not able to be changed, and it’s one of the core features of blockchain technology.
Once data is written to a blockchain, it can’t be changed or edited. This is why you need to double- and triple-check addresses before you send crypto.
Impermanent loss
Impermanent loss can happen if the price of your deposited crypto goes down when you’re providing it as liquidity in DeFi.
In a liquidity pool-based automated market maker (AMM), impermanent loss is the net difference between the value of two assets.
From a practical perspective, this means that you lose money if you withdraw your asset from the liquidity pool. However, if you leave your asset in the pool, maybe the price will go back up, making the loss (possibly) impermanent.
Interoperability
Interoperability is the ability to see and share information across different blockchain networks.
In general, most blockchains are not interoperable.
EVM-compatible networks are more interoperable than others, because they share a common programming language and execution environment.
However, different EVM-compatible networks may have different transaction speeds, gas fees, and other technical parameters that inhibit interoperability.
IPFS
Stands for InterPlanetary File System.
IPFS is one of the earliest fully decentralized and distributed systems for storing and sharing files.
Unlike traditional data storage, where data is kept on centralized servers, IPFS uses a blockchain-inspired approach to store and distribute information.
For example, if you access a web page through an IPFS gateway, its data will be sent to you from the nearest computer that has already accessed that page from IPFS, rather than retrieved from a centralized database.
J | Crypto and web3 dictionary
Jager
A jager is the smallest unit of BNB. 1 Jager = 0.00000001 BNB
JOMO
JOMO stands for joy of missing out. The opposite of fear of missing out, it’s the joy you feel when the coin you didn’t buy starts crashing.
K | Crypto and web3 dictionary
Keylogger
A keylogger is malware that records your keystrokes. It’s often deployed by hackers to collect sensitive information like passwords.
Kimchi premium
The kimchi premium refers to when cryptocurrencies trade at a higher price on exchanges in South Korea than exchanges in other countries.
Bitcoin prices in South Korea (land of the morning sun and also the best kimchi in the whole damn world) can be higher in bull markets, so at a… premium.
However, in bear markets, Bitcoin can trade at a discount.
KYC
Stands for Know Your Customer.
KYC is a component of anti-money laundering (AML) regulations, and refers to custodial platforms collecting your personal information in order to verify your identity.
L | Crypto and web3 dictionary
Lambo
Short for Lamborghini, the official car of the crypto nouveau riche.
What you are – morally, if not legally – obligated to buy when your coin moons.
Laser eyes
For a time on crypto Twitter (CT) everyone who was into Bitcoin photoshopped laser eyes into their profile picture.
Why? As the hashtag #LaserRayUntil100 explained, they were determined to have laser eyes until the price of Bitcoin reached 100k.
Did it? Not yet. Did everyone remove the lasers shooting out from their eyes? Yeah, pretty much.
Ledger
Can refer to a record of financial transactions.
Or it could refer to the popular hardware wallet.
Leverage
Having the unfortunate tendency to blow up in your face, leverage is money that traders borrow to allow them greater exposure to a position than their capital allows.
If you hear someone talk about trading at 10x, or 100x, they are using leverage.
Lightning Network
Lightning Network, or LN, is a second layer protocol that makes transactions on Bitcoin cheaper and faster.
Bitcoin transactions are processed on-chain, which can be slow and expensive due to limited capacity.
On the other hand, Lightning Network allows you to create a payment channel that you can use for multiple transactions, without the need for each transaction to be recorded on the blockchain.
You can set up payment channels yourself, or use a custodial solution like Wallet of Satoshi.
Liquidation
Liquidation happens when you owe more than you’re worth because you’ve borrowed too much. You get liquidated by trading with high leverage.
If you get liquidated, your trading position will be dissolved and your capital will be absorbed by our market overlords.
Liquidity
Liquidity is how much of an asset there is floating around on the open market.
If liquidity is low, the price will spike or dump whenever you buy or sell a token. But if liquidity is high, there is less impact on price, so less volatility.
You can also provide liquidity in DeFi by depositing equal amounts of both sides of a trading pair to a liquidity pool.
Long
A trade that expects the price will go up.
M | Crypto and web3 dictionary
Mainnet
A mainnet is an independent blockchain with it’s own network and protocol.
Some tokens (such as BNB) ran on other networks like Ethereum before launching their own mainnets.
Malware
Malware is malicious software used by bad actors out to steal your personal information or funds. Or both!
Different forms of malware include viruses, worms, trojan horses, ransomware, spyware, and adware.
Following good security practices can help you guard against malware.
Margin trading
Margin trading is when traders use borrowed funds to leverage their positions.
The initial deposit, or capital, required to open a position is known as margin, whereas the borrowed funds are known as leverage.
The main danger of margin trading is getting margin called. This is when you either have to add more capital to your initial deposit or risk getting liquidated.
Market cap
Market cap, or market capitalization, is the total value (in fiat) of the circulating supply of a cryptocurrency. For example, the market cap of Bitcoin is the dollar value of all the BTC that has been mined so far. Market caps fluctuate depending on price.
Memecoin
Memecoins are joke tokens that promise (and sometimes deliver) giant gains.
Mempool
A mempool is like a hotel lounge for transactions that are waiting to confirm. Mempools store and sort transactions before they get added to a block.
Merge
The Merge refers to Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS). Ethereum’s mainnet merged with its Beacon Chain network without a hitch in September 2022.
Metaverse
A metaverse is a digital universe that exists online, with digital economies.
MEV
Stands for miner extractable value, MEV is how much profit a miner can make by including, excluding, or rearranging transactions in a block.
Moon
Wen moon? Probably not until after the next halving. Moon refers to when the price is so high it has reached the moon.
N | Crypto and web3 dictionary
Network
A network is all the active nodes that have a copy of blockchain data at that point in time.
NFT
NFTs, or non-fungible tokens, are digital objects such as images, music, and GIFs, that are stored on the blockchain.
Non-fungible means that each NFT is unique and cannot be replaced. You can read more about NFTs here: NFTs.
Non-custodial
A non-custodial wallet, also known as a self-custody wallet, is one where you have full custody of your secret recovery phrase and private keys.
It’s important you keep your crypto in a non-custodial wallet because of the history of custodial platforms getting hacked, going bankrupt, or outright stealing your funds.
Not your keys, not your coins
NYK, NYC, or not your keys, not your coins, refers to the fact that you only own your coins if they’re in a self-custody wallet.
Historically keeping crypto on custodial platforms hasn’t been a super safe move. If you have access to your keys (and your secret recovery phrase), you’ll always have access to your crypto.
Nonce
In Ethereum, every transaction has a nonce. Transactions are numbered consecutively, and the nonce is the transaction number.
Transactions start at 0, so the first transaction will have the nonce 0, the second transaction will have the nonce 1, and so on.
O | Crypto and web3 dictionary
Off-chain
Not to be confused with the popular expression ‘off the chain’, in crypto, off-chain means a transaction is not immediately recorded on the main blockchain.
Off-chain transactions are processed off the main blockchain, usually on another layer.
The main benefits of off-chain transactions are that they’re faster and they cost less.
Offline storage
Another term for cold storage, offline storage refers to crypto that is stored on a device or system that is not connected to the internet.
A hardware wallet is the most popular option for offline storage.
On-chain
On-chain refers to anything that is recorded on the main blockchain. On-chain transactions are written directly to the main blockchain.
Open source
Usually referring to code, open source means that it is publicly viewable and auditable.
OpenSea
OpenSea is the largest NFT marketplace.
OpenSea supports Ethereum, Polygon, Klaytn, Solana, Arbitrum, Optimism, Avalanche, and BNB networks.
Optimistic rollup
Optimistic rollups are an Ethereum scaling solution that run parallel to the main blockchain on a layer 2 chain.
Rollups are smart contracts that serve as the relay between the main chain and the layer 2, where the computations take place.
Rollups receive the transaction data, send it to layer 2, and receive the results of the layer 2 computations.
Optimistic rollups ease congestion, increase throughput, and make transactions significantly cheaper.
P | Crypto and web3 dictionary
Paper wallet
What if I told you that you could write down a million dollars on a piece of paper? It’s true, as long as you have a million dollars in Bitcoin (always a catch).
A wallet is basically a public key and a private key, so if you have both keys, you can send a million dollars in BTC to your public key, (address), and write down both keys on a piece of paper.
While this is possible, it’s not recommended. A hardware wallet is much safer than a paper wallet.
Pair
A pair, aka a trading pair, refers to two currencies and their value in relation to each other.
Common pairs are BTC/USD and BTC/ETH.
Peer-to-peer (P2P)
Peer-to-peer, or P2P, is an important concept in decentralization. Instead of going through a central authority, two parties can transact directly with each other.
A real-world example is sending Bitcoin to your friend without having to go through a centralized institution like a bank.
Permissionless
Another core feature of blockchain technology, permissionless means that there is no centralized authority who can regulate an action. So no entity can give permission as to how to use, or who can use, the system.
Phishing
Phishing is a type of scam where the scammer tries to get money or information out of you.
Of particular note are phone calls, emails, or text messages that ask you to click on a link or give away your secret recovery phrase.
Don’t do it! Links will install malware on your device that will steal your information so the hacker can steal your money. And if you give out your secret recovery phrase, that’s the same as giving away all your crypto.
Pico top
The pico top is the highest price an asset reaches during a market cycle.
For example, the pico top of BTC during the 2018-2022 market cycle was 69k.
Ponzi
A Ponzi scheme, also known as a pyramid scheme, is one that pays previous investors returns with the money from new investors.
Be careful of anything in crypto that’s too good to be true, especially when you don’t know where the money is coming from. It’s usually a Ponzi in one form or another.
Private key
A private key is a long string of letters and numbers.
Your private key is the secret counterpart to your public key, or address. The private key controls access to funds held at the address.
Q | Crypto and web3 dictionary
QR code
A QR code is a machine-readable square that has information encoded inside, like an address or a website.
Quantum computing
Quantum computing is an emerging technology that harnesses quantum states to perform calculations. It’s expected that quantum computers will be much faster than current computers.
R | Crypto and web3 dictionary
Regulated
Regulated means governed by a set of rules. Crypto regulations depend on where you’re located and your local laws.
REKT
REKT is an alternative spelling of wrecked. It’s slang for when you lose a lot of money on a trade.
Just say “I longed the pico top and got rekt.”
ROI
ROI stands for return on investment. It refers to profit you make on an investment or trade.
Rug pull
A rug pull is a specific type of crypto scam where developers of a project sell all their coins to make a profit. This makes the token price crash, and leaves investors holding the bag.
S | Crypto and web3 dictionary
Satoshi Nakamoto
Satoshi Nakomoto is the pseudonym of the person or group of people who invented Bitcoin and published the Bitcoin white paper in 2008.
Sats
Sats, short for Satoshis, are the smallest unit of Bitcoin. 1 sat is 0.00000001 BTC.
Secret recovery phrase
A secret recovery phrase is usually 12, 18, or 24 words, and it’s the more important information from your self-custody wallet.
All private keys of your wallet are derived from your wallet’s seed phrase.
It’s incredibly important to write down your secret recovery phrase and keep it safe. Write down a few copies so you always have access. Store the copies offline to keep them safe from hackers. Keep them hidden! Anyone with your seed phrase can steal all your wallet’s funds.
For more information, visit: What’s a secret recovery phrase?
Shilling
Shilling is shameless promotion of something, whether it’s a coin or an NFT. Careful of shillers! Sometimes they are sincere, but often they are trying to sell you their bags.
Shitcoin
Someone (couldn’t be me) once defined shitcoins as any coin that isn’t Bitcoin. Maybe a better definition is a coin with no apparent value or use case.
Short
A trade that expects the price to go down.
Stablecoin
A cryptocurrency that is meant to stay the same price, i.e. stable. Stablecoins are usually pegged to a fiat currency. For example, 1 Tether (USDT) = 1 USD.
Stacking sats
Stacking sats is DCA-ing into Bitcoin specifically.
Staking
Staking is when you pledge or lock up some of your crypto to earn passive income on it.
You can stake some, but not all cryptocurrencies to earn rewards.
Blockchain networks have to use the proof-of-stake consensus mechanism to offer staking.
You usually have to lock up your tokens to help validate transactions. The more crypto you stake, the more rewards you get (usually paid out of transaction fees).
You can read more about staking here: Staking.
T | Crypto and web3 dictionary
Throughput
Throughput is the number of actions (like transactions) that can be completed in a given amount of time.
Ticker
The ticker of a crypto is its short form. For example, the ticker of Bitcoin is BTC, and the ticker for Ethereum is ETH.
Tokens
Tokens, also known as coins, are cryptocurrencies that have some kind of use in an ecosystem. For example, in the Ethereum ecosystem, there are several types of tokens, ERC20 being the most common. Tokens generally run on another blockchain.
Token migration
Token migrations can take place for several reasons. One of the most common is that a token moves from its current blockchain to its own mainnet, or main network.
This means instead of being a token hosted on another network, it becomes the primary asset of its own network.
You can think of it like a young adult finally moving out and into a place of their very own.
Token swap
After a token has gone through a token migration, you’ll probably need to do a token swap. This is when you swap the old token for the new token. Protocols usually offer a gateway for token swaps for a limited time.
TVL
TVL stands for total value locked.
This is the amount of crypto is locked in a staking or DeFi protocol. This is a good indicator of how popular a protocol is, and can be a measure of its health and success.
TradFi
Short for traditional finance, TradFi refers to the legacy financial system of banks, credit card companies, and other traditional financial institutions.
TradingView
TradingView is a website (and an app) where you can look at charts (both stocks and cryptocurrencies) and play with technical indicators. TradingView offers a free version and several tiers of paid versions.
Transaction
A transaction occurs when you send a cryptocurrency.
Transactions are immutable, which means they can’t be canceled or reversed.
Each transaction has a unique identifier, known as a transaction ID, or a hash (sometimes styled as tx hash).
Transaction fee
99.9% of the time your transaction will cost a transaction fee.
This fee goes either to the miners on proof-of-work blockchains or the validators (stakers) on proof-of-stake blockchains.
The exception is when you send a transaction from a centralized platform like an exchange, in which case they often take care of the fee, or you pay a reduced fee. Or when you use Nano, which has no transaction fees (but don’t use Nano. Really. You’ll thank me later).
You can read more here: What are transaction fees?
Trustless
Trustless means there is no centralized authority to trust to make decisions. Instead, decisions are usually made by blockchain protocols or smart contracts.
U | Crypto and web3 dictionary
Unbanked
The unbanked refers to everyone who doesn’t have access to traditional banking services. This is a population that can benefit greatly from crypto and the benefits it offers.
Unconfirmed
An unconfirmed transaction is one that hasn’t yet been included in a block.
Often you won’t see unconfirmed transactions in your wallet, but you can check on a block explorer to monitor your transaction.
Unregulated
Unregulated means something isn’t under the jurisdiction of laws and regulations.
For a long time most of crypto was unregulated. This is beginning to change, as more governments make laws about crypto.
UTXO
UTXO stands for unspent transaction output.
UTXO-based assets like Bitcoin (BTC) and Dogecoin (DOGE) are similar to cash, in that there is a set amount in each UTXO.
You can think of it like breaking a ten dollar bill to pay for a five dollar coffee. The ten dollar bill is like one UTXO, while the five dollar bill is the new UTXO that is created after you spend the other five dollars.
Any unspent portion of a UTXO will become a new UTXO. The new UTXO gets sent to your change address.
Use case
A use case is how you’re actually going to use something.
For example, the use case for BTC is to be both a medium of exchange and a store of value.
Different cryptocurrencies will have different use cases.
V | Crypto and web3 dictionary
Validator
A validator, also known as a staker, is a participant in a blockchain network that uses a proof-of-stake consensus mechanism.
Validators compete to validate transactions and, in return, receive rewards.
Vaporware
Vaporware is a crypto project that never actually gets built.
Often a vaporware project is lead by a team of scammers who talk the project up with no intention of delivering. But sometimes it’s just because teams fall apart.
Volatility
Volatility is how much the price of an asset fluctuates.
Crypto generally has pretty high volatility, except for stablecoins, which are supposed to have no volatility (because they are pegged to a fiat currency’s price).
Volume
Volume is much crypto has been traded (bought and sold) over a set period of time.
W | Crypto and web3 dictionary
Wallet
A crypto wallet can store, receive, and send crypto.
Many wallets also do a lot more, including connecting exchanging, staking, and connecting to dapps.
You can read more here: Wallets
Weak hands
Weak hands is a derogatory term for investors who sell their crypto at a loss. This usually happens at or near the bottom, when they lose faith that crypto will go up again.
Web3
Web3 is the next evolution of the World Wide Web, as well as being a catchall term for the world of crypto, NFTs, DeFi, and dApps. Similar to the internet you know and love, but built on the blockchain.
Wen lambo / wen moon
Both are questions asking when the price of crypto will go up.
Lambos, short for lamborghinis, are the meme car of anyone who has made it in crypto.
Moon refers to a price so high it’s out of this world.
Whale
A whale is someone who has a lot of one kind of crypto – maybe even enough to move the price.
White hat
White hat hackers are the good guys, working to find bugs in code and other vulnerabilities before they can be exploited by the black hats, who are out to steal your money.
Whitelist
Whitelist has become a term of controversy in the NFT community, but if your address is on the whitelist, also known as an allowlist, it means it’s allowed to mint an NFT.
White paper
A white paper is an informational document about a crypto project that outlines technical information and sometimes a roadmap. The Bitcoin whitepaper is a masterpiece of the genre.
X | Crypto and web3 dictionary
Xpub
An xpub stands for extended public key.
Extended public keys can be used to derive all child public keys from a parent address.
An xpub is read-only, and can be used to search every address derived from it. It’s helpful to find information across all addresses used in a wallet, including receive and change addresses.
Y | Crypto and web3 dictionary
Yield
Yield is the interest you earn on an investment.
Keep in mind that if you can’t explain or understand where the yield is coming from, chances are the yield is you.
Yield farming
Yield farming is when you lend out your crypto in DeFi protocols to earn yield, also known as interest.
Z | Crypto and web3 dictionary
Zero knowledge proof
A zero knowledge proof is when you can prove information is true without revealing what the information is.
Zk-snark
Zk-snark stands for zero knowledge succinct non-interactive argument of knowledge, and is a type of zero knowledge proof.
It enables cryptographic proof that you possess information (e.g. a password) without revealing the information.
There are privacy and security benefits to zero-knowledge proofs. For example, if a network does not have a password stored somewhere, the password cannot be stolen.
Zpub
A zpub is an extended public key (xpub) for deriving SegWit addresses.
A zpub is read-only, and can be used to search every address derived from it. It’s helpful to find information across all Segwit addresses used in a wallet, including receive and change addresses.
# | Crypto and web3 dictionary
0x
0x is at the beginning of every Ethereum address, and tells machines (and humans) that the number is in hex.
It’s also at the beginning of every address on EVM-compatible blockchains.
2FA
2FA stands for two-factor authentication, also known as multifactor authentication.
It’s an extra security measure for account verification. After you enter your username or email and password, you’ll be asked to provide another piece of information like a code.
SMS can be used for weak 2FA, but a stronger choice is a 2FA app like Google Authenticator or Authy. There are also 2FA hardware devices, like YubiKey.
51% attack
A 51% attack is when a malicious person or group of people takes over more than half the computer power or mining hash rate on a network.
If a bad actor controls more than 50% of the network, they can prevent transactions from being confirmed, or double spend.