Navigating the blockchain industry can be daunting for beginners due to complex jargon. This comprehensive glossary simplifies key terms to help you understand industry news and make informed decisions.
A
Account
A public/private key pair that "holds" your funds. Unlike traditional accounts, funds reside on the blockchain, not in wallets.
Address (Public Key)
An alphanumeric string (e.g., 0x06A853...) or QR code used to send/receive transactions on a blockchain. Ethereum addresses start with 0x.
Air-gapping
A security method where devices are disconnected from the internet to prevent hacking.
Airdrop
Free distribution of tokens to wallet addresses, often for marketing purposes (e.g., promoting a new project).
Altcoin
Any cryptocurrency other than Bitcoin (e.g., Litecoin). Now commonly refers to non-mainstream coins.
AMM (Automated Market Maker)
A decentralized exchange protocol that uses algorithms to price assets automatically, replacing traditional order books.
All-time High (ATH) / All-time Low (ATL)
The highest or lowest price a cryptocurrency has ever reached.
AML (Anti-Money Laundering)
Regulations preventing illicit financial activities in crypto.
API (Application Programming Interface)
Software enabling communication between applications (e.g., trading bots).
ASIC (Application-Specific Integrated Circuit)
Specialized hardware for efficient cryptocurrency mining.
Attestation
In Proof-of-Stake (PoS), validators vote to confirm blocks and transactions.
B
Bear Market / Bull Market
Periods of declining (bear) or rising (bull) crypto prices.
Bear Trap
A manipulative tactic where traders artificially lower prices to buy back at a discount.
Beacon Chain
Ethereum’s PoS foundation, enabling scalability and consensus transitions.
Bitcoin (BTC)
The first PoW-based cryptocurrency, created by Satoshi Nakamoto in 2009.
Block
A bundle of transactions added to the blockchain after validation.
Block Height
The number of blocks in a chain (e.g., "height 0" = genesis block).
Block Reward
Miner/validator compensation for adding new blocks (e.g., Bitcoin’s current reward: 6.25 BTC per block).
Blockchain
A decentralized, immutable digital ledger recording transactions across networked computers.
Burn
Permanently removing tokens from circulation (e.g., to increase scarcity).
C
Cold Wallet
Offline storage (e.g., Ledger) for enhanced security against hacks.
Confirmation
Blockchain validation of a transaction, preventing reversals.
Cryptocurrency
Digital money secured by cryptography and decentralized networks (e.g., Bitcoin, Ethereum).
D
DAO (Decentralized Autonomous Organization)
Community-governed entities with no central leadership.
DeFi (Decentralized Finance)
Financial services (lending, trading) without intermediaries.
Diamond Hands / Paper Hands
Holding assets long-term vs. selling prematurely due to fear.
E
ERC-20
Ethereum’s token standard for predictable transaction behavior.
Ethereum (ETH)
A blockchain supporting smart contracts and dApps.
F
FOMO (Fear of Missing Out)
Investor anxiety about missing profitable opportunities.
Fork
A blockchain split (e.g., Bitcoin Cash from Bitcoin).
H
HODL
Slang for "hold," encouraging long-term investment.
Hot Wallet
Internet-connected wallets (e.g., MetaMask) for convenient access.
N
NFT (Non-Fungible Token)
Unique digital assets representing ownership (e.g., art, collectibles).
S
Smart Contract
Self-executing code automating agreements (e.g., Ethereum’s dApps).
Stablecoin
Cryptocurrencies pegged to stable assets (e.g., USDT, USDC).
T
Token Burn
Destroying tokens to reduce supply and increase value.
W
Web3
The decentralized internet powered by blockchain technology.
FAQ
Q: What’s the difference between a cold and hot wallet?
A: Cold wallets are offline (more secure), while hot wallets are online (more convenient).
Q: How do I participate in an airdrop?
A: Complete tasks like sharing social media posts or holding specific tokens.
Q: Why are stablecoins important?
A: They minimize volatility, acting as a bridge between crypto and traditional finance.
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