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This blockchain glossary is an essential guide to navigate the blockchain & web3 space. Whether you’re a beginner taking your first steps into the crypto world or a web3 degen looking for terms, this glossary is tailored for you.
Blockchain Glossary
A#
| Address | A unique string of characters identifying a cryptocurrency wallet, varying in format across different blockchains. For Ethereum, it starts with 0x… |
| Address Poisoning | A scam involving creating a wallet address similar to a user’s, then tricking them into sending funds to it. |
| Airdrop | Distribution of cryptocurrency tokens or assets like NFTs, often free, to multiple wallet addresses for promotion or user-base expansion. |
| Algorithmic Stablecoin | Stablecoins that maintain their value using market incentives and mint/burn techniques, as opposed to asset-backed stablecoins. |
| Allowlist (Whitelist) | A list granting guaranteed opportunity to mint specific NFTs, preventing bot interference in minting. |
| Altcoin | Cryptocurrencies other than Bitcoin, offering alternative digital currency solutions. |
| Annual Percentage Rate (APR) | The return rate on an investment, excluding the effects of compounding interest. |
| Annual Percentage Yield (APY) | The return rate on an investment, including the effects of compounding interest. |
| Apes | Referring to the Bored Apes Yacht Club NFT project and a slang term for NFTs in general. |
| Artificial Intelligence (AI) | Encompassing technologies like machine learning and natural language processing, including large language models like GPT. |
| Audit | The examination of a blockchain project for code flaws and legitimacy factors such as creator identity. |
| Augmented Reality (AR) | An interactive experience blending real-world and computer-generated content. |
B#
| Bad Debt | Debt that is deemed irrecoverable. |
| Bitcoin Maximalist | Individuals who believe Bitcoin is the sole necessary digital asset, deeming others inferior. |
| Blockchain | A distributed database (public ledger), often decentralized, where entries can be added but not easily altered or erased. |
| Bridge | A method allowing interoperability between different blockchains. |
| Bug Bounty | Rewards for ethical hackers for disclosing software bugs, also used as ransom for returning stolen funds in crypto. |
| Burning | The process of permanently removing tokens from circulation, applicable to cryptocurrencies and NFTs. |
C#
| Coin | A specific type of cryptocurrency, like Bitcoin or Ethereum. |
| Cold Wallet | A non-Internet-connected cryptocurrency wallet, contrary to a “hot wallet.” |
D#
| DAO (Decentralized Autonomous Organization) | An organization governed by computer programs and controlled by its members, free from central authority. |
| DApp (Decentralized App) | An application running on a decentralized computing system. |
| Decentralized Exchange (DEX) | Cryptocurrency exchanges facilitating direct peer-to-peer asset exchanges. |
| DeFi (Decentralized Finance) | Financial services on blockchains, operating without central financial intermediaries, using smart contracts. |
| Degen | Refers to both a high-risk investment strategy and those who employ it. |
| Deployer | The wallet address responsible for creating a smart contract, often a dedicated wallet for a project. |
| Derivative | Trades based on the price behavior of an underlying asset, like a crypto token, without owning it. |
| Disgorgement | Legal compulsion to give up profits gained through illegal means. |
| Double-Spending | A flaw where a digital token is spent more than once. |
| Double-Your-Money Scam | An online scam promising to double sent money, often impersonating prominent figures. |
| Doxing | Revealing the identity of pseudonymous crypto traders or project runners, sometimes self-disclosed for legitimacy. |
| Dutch Auction | An auction starting high and lowering over time, used in NFT sales. |
| DYOR (Do Your Own Research) | Advice to independently verify information in the crypto community. |
E#
| Exchange-Traded Fund (ETF) | Investment funds on traditional exchanges, offering exposure to crypto assets without direct trading. |
F#
| Flash Loan | Unsecured, collateral-free loans used within a single transaction, often for arbitrage. |
| Floor Price | The minimum price at which an NFT in a collection can be purchased. |
| FOMO (Fear Of Missing Out) | Anxiety over missing potential gains in crypto investments. |
| Forced Liquidation | Occurs when a leveraged position is lost due to failure to meet margin requirements, leading to sudden capital loss |
| Fork | The creation of a new blockchain version from an existing one, either for new projects or for updates and bug fixes. |
| Freezing | Preventing an asset from being traded on exchanges, often due to association with illicit activities. |
| Front-Running | A strategy where bots use information from pending transactions to execute profitable trades beforehand. |
| FUD (Fear, Uncertainty, Doubt) | A strategy of spreading negative and misleading information, often to manipulate perceptions in crypto markets. |
G#
| Gas | Transaction fees on the Ethereum blockchain for operations like minting or buying NFTs. |
| Gm (Good Morning) | A greeting turned into crypto slang, symbolizing community and camaraderie. |
| Governance Token | Tokens granting voting powers in the governance of a crypto project. |
H#
| Hardware Wallet | A physical, non-Internet-connected device for storing cryptocurrency. |
| Hashrate | The total computational power used for mining and processing transactions on a blockchain. |
| HODL | A misspelled term for holding crypto assets, often used as a strategy despite market fluctuations. |
| Hot Wallet | An Internet-connected cryptocurrency wallet for quick access to funds for trading and spending. |
I#
| ICO (Initial Coin Offering) | A fundraising method where new cryptocurrencies are sold for cash or other established cryptocurrencies. |
| Impairment Charge | An accounting term for a significant reduction in the recoverable value of an asset. |
K#
| KYC (Know Your Customer) | Identity verification procedures in the crypto space for wallet owners or project runners. |
L#
| Layer 2 (L2) | Protocols built on top of an existing blockchain to enhance transaction speed and scalability. |
| Liquidity Pool | Funds in a smart contract enabling trading and lending on an exchange. |
| Long | Investing with the expectation of asset value increase. |
M#
| Market Capitalization | The total value of all mined coins in a cryptocurrency. |
| Maximal Extractable Value (MEV) | Profits earned by miners by structuring blocks to include, exclude, or reorder transactions. |
| Memecoin | Cryptocurrencies originating from internet memes, like Dogecoin or Shiba Inu. |
| Metaverse | A collective term for technologies like MMO worlds and virtual reality, often integrating cryptocurrencies and NFTs. |
| Mining / Validating | The process of validating transactions on a blockchain and earning cryptocurrency rewards. |
| Mining Pool | A group of miners who combine resources to mine more effectively and share rewards. |
| Minting | The creation of new tokens on a blockchain, including NFTs and cryptocurrency tokens. |
| Multi-Signature Wallet (Multisig) | A crypto wallet requiring multiple private keys for certain operations. |
N#
| NFT (Non-Fungible Token) | A unique digital token on a blockchain representing ownership of specific items. |
| Ngmi (Not Going [to] Make It) | Slang suggesting failure in crypto due to poor decisions or judgment. |
O#
| Oracle | A service providing off-chain data to smart contracts on a blockchain. |
| Oracle Manipulation Attack | An attack where data from an external source is manipulated to affect smart contract behavior. |
| Oracle Problem | The challenge of ensuring accurate and reliable off-chain data for blockchain systems. |
| Orange Pill | A metaphor for understanding Bitcoin’s potential as the future of currency. |
P#
| Peg | A specified rate of exchange between two assets, common with stablecoins pegged to fiat currencies. |
| Permit Phishing | A scam where victims are tricked into signing malicious crypto transactions, leading to fund loss. |
| Phishing | A fraud technique where attackers pose as legitimate entities to steal sensitive information or funds. |
| Pig Butchering (Shāzhūpán) | A scam where trust is built before convincing victims to invest in fraudulent schemes. |
| Play-to-Earn (P2E) | A game mechanic where players earn cryptocurrency or blockchain-based items. |
| Ponzi Scheme | A fraudulent investment scam promising high returns with funds from new investors. |
| Privacycoin | Cryptocurrencies that maintain anonymity by obscuring transaction details. |
| Private Key | A secure code granting access to cryptocurrency assets, crucial for asset security. |
| Proof of Stake | A consensus mechanism where validators are chosen based on their cryptocurrency holdings. |
| Proof of Work | A consensus mechanism requiring computational effort to validate transactions and mine new |
| Pumping (and Dumping) | A tactic involving artificially inflating the price of a token or project for profit, followed by selling off the asset. |
R#
| Re-entrancy Attack | An attack that repeatedly withdraws funds from a smart contract, transferring them to an unauthorized address. |
| Remittance | The process of transferring money by someone working abroad back to their family in their home country. |
| Remote Procedure Call Gateway (RPC Gateway) | Interfaces allowing communication between web clients and blockchain nodes. |
| Right-Clicker | A term for those skeptical of NFTs, referring to the action of saving digital art via right-click. |
| Rug Pull | When a crypto project team abandons the project and absconds with the invested funds. |
S#
| Safu | A crypto meme term for ‘safe’, assuring the security of funds in a humorous way. |
| Sats (Satoshis) | The smallest unit of Bitcoin, representing one hundred millionth of a Bitcoin. |
| Seed Phrase | A series of words that act as a backup password for accessing a cryptocurrency wallet. |
| Short | Investing with the expectation of profit from a decrease in an asset’s value. |
| Sidechain | A blockchain that operates parallel to a main chain, often for scalability and transaction speed. |
| Signing | The act of cryptographically verifying the operation of a cryptocurrency wallet in a transaction. |
| Slippage | The difference between the expected price of a trade and the executed price. |
| Smart Contract | A computer protocol intended to digitally facilitate, verify, or enforce a contract’s negotiation or performance. |
| Spot Market | A market where assets are traded for immediate delivery, contrasted with futures markets. |
| Stablecoin | A type of cryptocurrency with a value pegged to another asset, like fiat money or commodities. |
| Staking | The process of locking up crypto assets to support network operations, often earning rewards. |
| Sybil Attack | An attack where numerous fake identities are created to manipulate or control a network. |
T#
| Tax Loss Harvesting | The strategy of selling underperforming investments to offset taxes on other gains. |
| Token Swap / Migration / Fork | Migrating from one token to another for various reasons, such as after a hack or for upgrades. |
| Total Value Locked (TVL) | The estimated value of assets deposited in a DeFi protocol. |
| Transaction | An operation on the blockchain, often involving the transfer of cryptocurrency assets. |
| Tumbler / Mixer | Services that mix different cryptocurrency funds to obscure their original source. |
W#
| Wallet | A tool for storing, sending, and receiving cryptocurrencies and NFTs. |
| Wallet Drainer | Scam services that create phishing sites and contracts to steal funds from wallets. |
| Wash Trading | The act of trading assets between wallets owned by the same person to manipulate asset value. |
| Web3 / Web 3.0 | An idea for a new World Wide Web iteration based on blockchain, emphasizing decentralization. |
| Whale | An individual with a substantial investment in cryptocurrencies or significant asset holdings in a project. |
| Whitehat | A security researcher who ethically identifies and reports vulnerabilities in crypto projects. |
| Wrapped Token | A token representing another currency’s value, usable on different blockchains. |
Y#
| Yield Aggregator | Projects that combine multiple yield farms to maximize returns from various sources. |
| Yield Farming | The practice of lending or staking cryptocurrency for interest and rewards. |
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