Crypto Glossary

In address poisoning, an attacker sends a tiny or worthless transaction from an address that closely resembles one you use often — same start, same end.

An airdrop is free token distribution — as marketing, early-user reward or initial allocation.

The all-time high is the highest price ever reached.

Altcoin ("alternative coin") means any cryptocurrency other than Bitcoin — from Ethereum down to the smallest niche project.

A backtest checks a trading strategy against historical prices: would the rule have worked in the past? It is the first filter — and the biggest self-deception trap..

A bear market is a long phase of falling prices — in crypto often 70-90% off the high.

Bitcoin is the first decentralized digital currency: a global payment network without banks, where thousands of computers jointly confirm transactions and store them on the blockchain.

A blockchain is a digital ledger stored on many computers at once.

A bridge transfers assets between blockchains: coins are locked on chain A and issued as a mirror on chain B.

A bull market is a phase of rising prices and rising confidence.

A CBDC is central bank digital currency — the digital euro or dollar, issued by the state.

CEX = centralized exchange with account, custody and KYC; DEX = smart-contract trading straight from your wallet.

A clipboard hijacker is malware that monitors your clipboard and secretly swaps a copied crypto address for the attacker's address.

A cold wallet keeps your keys permanently offline — usually on a hardware device.

Dollar-cost averaging means investing a fixed amount regularly, regardless of price.

Decentralization means no single party controls the system — not the rules, not the data, not access.

DeFi ("decentralized finance") means financial services built from smart contracts instead of banks: swap, lend, earn interest — around the clock, no account opening..

A DEX (decentralized exchange) is a trading venue as a smart contract: you swap directly from your wallet, with no account and no one custodying your coins..

Drawdown measures the decline from the account's last peak — the most honest risk metric, because it shows what you actually have to live through..

In a dusting attack, someone sends tiny amounts of crypto ("dust") to many wallets.

Ethereum is the second-largest cryptocurrency and a platform for programmable money: it runs smart contracts — agreements that execute themselves..

A crypto exchange is a marketplace matching buyers and sellers.

The Fear & Greed Index condenses market sentiment into one number from 0 (extreme fear) to 100 (extreme greed) — from volatility, momentum, social media and surveys..

Fiat is government-issued money like euros or dollars — backed not by gold but by trust in state and central bank.

FOMO ("fear of missing out") is the anxiety of missing a rally — the urge to jump in after strong rises.

FUD ("fear, uncertainty, doubt") means spread fear and doubt — from legitimate criticism to targeted panic-mongering to push prices down..

The funding rate is a periodic payment between long and short positions in perpetual futures.

Crypto futures are bets on price movement without owning the coins — mostly "perpetuals" with no expiry, tradable with leverage in both directions (long/short)..

Gas is the fee for computation on Ethereum and similar networks.

The halving cuts the number of new bitcoins miners earn per block in half roughly every four years.

A hardware wallet is a dedicated device that keeps your private keys permanently offline and signs transactions without ever exposing them.

A hash is data's digital fingerprint: every input produces a unique, fixed string.

HODL is crypto slang for uncompromising holding through all swings — born in 2013 from a legendary typo ("I AM HODLING") on a Bitcoin forum..

A hot wallet is connected to the internet — as an app, browser extension or exchange account.

KYC ("Know Your Customer") is identity verification at financial services: ID document, proof of address, sometimes a selfie.

Layer-2 networks batch transactions off the main blockchain and anchor only the result there.

Leverage means moving a larger position with borrowed capital: at 10x your stake controls only one tenth of the position — gains and losses act tenfold..

A limit order buys or sells only at your specified price or better.

Liquidation is the forced closing of a leveraged position when losses threaten to consume the posted collateral.

Liquidity describes how easily a coin can be bought or sold without moving the price.

Makers provide order-book liquidity (resting limit orders); takers consume it instantly (market orders).

Margin is the collateral you post for a leveraged position.

Market cap is price times circulating coins — the standard yardstick for comparing cryptocurrencies.

A market order buys or sells immediately at the best available price.

Mining secures Bitcoin: specialized computers compete to solve puzzles; the winner writes the next block and earns new bitcoin plus fees as a reward..

Multisig splits control of a wallet across several keys: a transaction then needs, say, two of three signatures.

An NFT (non-fungible token) is a unique blockchain entry certifying ownership of a digital object — art, collectibles or game items..

A node is a computer storing the full blockchain and verifying every transaction itself.

The order book lists all open buy and sell orders on an exchange, sorted by price.

Order flow is the stream of actually executed buys and sells.

Out-of-sample testing validates a strategy on data left untouched during development.

Overfitting means a strategy was tuned to historical data until it explains the past perfectly — and fails the future..

Paper trading means trading with play money under real market conditions.

A passphrase is a self-chosen extra word added to the seed phrase.

Phishing means fake websites, emails or messages designed to make you enter credentials or your seed phrase — the most common cause of stolen crypto..

Pig butchering is investment fraud with a long relationship build-up: over weeks trust or romance develops, then comes the tip toward a fake investment platform.

Position size determines how much capital sits in one trade.

The private key is the secret number your wallet uses to sign transactions.

In proof of stake, owners rather than computing power secure the network: those who lock coins as collateral ("stake") may confirm blocks — and lose the collateral if they cheat..

Proof of work is Bitcoin's security scheme: writing blocks requires measurable computational work, making fraud more expensive than honesty..

The public key derives from the private key; your receiving address derives from it.

Rebalancing regularly restores a portfolio's planned weights: what rose gets trimmed, what fell gets topped up — systematic instead of emotional..

Risk management answers the only question that matters long-term: how much do you lose when you are wrong? Position size, stop-loss and diversification are the tools..

A rug pull is an exit scam: developers drain a token's liquidity or dump their holdings at once — the price goes to zero, buyers are stuck..

Crypto scams range from fake exchanges and "doubling" offers to romance fraud with fake trading apps.

A seed phrase is a list of 12 or 24 words from which all your wallet keys derive.

In seed-phrase phishing, an attacker poses as support from an exchange or wallet maker and, under a pretext, demands your seed phrase — via chat, email, call or a fake website.

Self-custody means you control your own private keys — not an exchange or service.

In SIM swapping, an attacker takes over your phone number by deceiving the mobile carrier.

Slippage is the difference between expected and actual execution price.

A smart contract is a program on the blockchain that executes agreements automatically: if condition X occurs, Y happens — no middleman, immutable once deployed..

Social engineering is manipulation instead of technology: the attacker uses trust, fear, greed or time pressure to get you to act — such as sending money or handing over keys.

Spot trading is direct buying or selling: you pay, the coins are yours immediately.

The spread is the gap between the best buy and best sell price.

A stablecoin is a cryptocurrency designed to hold a fixed value — usually 1 US dollar.

Staking means locking coins in a proof-of-stake network to earn rewards — comparable to interest, but with price and protocol risk..

A stop-loss is an order that automatically closes your position when price hits a defined loss level.

A take-profit closes your position automatically at a defined profit target.

A token is an asset living on someone else's blockchain — usually via smart contract on Ethereum and co.

A token approval lets a smart contract act on your behalf over certain tokens — needed, for example, to trade on a DEX.

Tokenomics describes a token's economic mechanics: total supply, distribution, unlock schedules, purpose.

Trading volume is the total value of all trades in a period.

Volatility measures how strongly a price swings.

A wallet manages the keys to your crypto.

A wallet drainer is malware or a scam site that lures you into a malicious signature or approval — and then clears out your tokens.

Whales are addresses or actors with very large holdings.

Yield is the umbrella term for DeFi earnings: from lending, liquidity provision or staking.