Crypto Dictionary for Dummies: 50+ Terms You Really Need to Know

Are you overwhelmed by the amount of jargon in crypto? Blockchain, HODL, FOMO, DeFi, NFT… what does it all even mean?

Alright, let's get to the point. Here are 50+ most commonly used terms in the world of cryptocurrency — without scientific jargon, in simple terms:

Basic Concepts

Blockchain is a decentralized ledger where all transactions are recorded. Think of it like an Excel spreadsheet that is maintained simultaneously by millions of computers, rather than a single company.

Cryptocurrency - digital money secured by cryptography. BTC, ETH, LTC are the most well-known.

Wallet is a program for storing crypto. Like a bank account, but without a bank.

Keys, addresses, rights

Private key is your wallet's password. If it's stolen, all your coins are stolen. Guard it with your life.

Public key — the address that you can give to people for transferring coins to you. Similar to your bank card number.

Mining and Validation

Mining is the process where computers solve complex problems to validate transactions. In return, miners receive new coins as a reward.

Proof of Work (PoW) — this is how BTC works. Computational power + energy.

Proof of Stake (PoS) — an alternative to PoW. Validators hold coins as collateral — less energy, but different risks.

Trading and Exchanges

CEX ( centralized exchange ) — such as Coinbase, Kraken. They are regulated to some extent, KYC ( documents ) are required, but they are safer for beginners.

DEX ( decentralized exchange ) — trading without an intermediary. Anonymous, but the risks are higher.

Altcoin is any crypto other than BTC. Ethereum, Ripple, Litecoin - all of these are altcoins.

Market Patterns

FOMO — fear of missing out. When the price is skyrocketing and you're not in position. It looks painful.

HODL – a misspelling of “Hold,” but has become slang in the crypto community. It means – hold coins long-term, do not panic during a downturn.

Pump & Dump — manipulation: a group of investors pushes the price up, then sells everything. Other ugro- s.-h.

Bagholder - someone who holds coins that have dropped by 90%. Not cheerful.

Whale - a person/organization with a huge amount of crypto. When a whale buys or sells, the market fluctuates.

Prices and Metrics

Market Capitalization (Market Cap) = current price × number of coins in circulation. It shows the real value of the project.

ATH (All-Time High) — the highest price in history. People often say: “It was at ATH a year ago.”

ATL (All-Time Low) — the lowest price. If a coin has fallen to ATL — it is either a buying opportunity or a sign of the project's demise.

Technical Details

Gas is the transaction fee in Ethereum. The more congested the network is, the more expensive the gas.

Satoshis are the smallest unit of BTC. 1 BTC = 100 million satoshis.

Node — a computer that is part of the network and verifies transactions. Like a server, but decentralized.

Block-ridge - the number of blocks in a chain. It shows the length of the blockchain.

Fork - the splitting of the blockchain into two chains due to disagreements within the community. Sometimes the parent protocol remains, and sometimes a new coin is created.

Decentralized Finance (DeFi)

DeFi — financial applications on the blockchain without banks. Loans, debts, swaps — all of this is decentralized.

Yield Farming — you invest crypto in liquidity pools and earn interest. It's risky, but it provides good returns in a bull market.

Stablecoin - a crypto that is pegged to fiat (USDT, USDC). Its price does not soar like BTC.

Tokens and Projects

Token - a digital asset in the blockchain. It can be a vote ( for voting ), access to a service, or simply a security.

NFT (Non-Fungible Token) — a unique token, like a digital painting. Each NFT has its own value, unlike crypto.

ICO (Initial Coin Offering) - when a startup sells new tokens to raise funds. Often it is a lottery.

IEO (Initial Exchange Offering) - like an ICO, but through an exchange, safer.

Important Concepts

Consensus — all nodes in the network must agree on the state of the ledger. This is what makes the blockchain secure.

White Paper (Whitepaper) — a document where developers explain what their project does. If there is no white paper — red flag.

Cold storage - when you keep crypto offline, on a hardware wallet or on paper. Safe from hackers.

KYC (Know Your Customer) — verification with documents on exchanges. Not private, but allowed.

Scalability

Lightning Network - the second layer for BTC. It allows for transactions to be made instantly and cheaply.

Sharding — the division of the blockchain into parts (shards), so that it processes more transactions in parallel.

Scalability — the ability of a network to process many transactions without delay.

Market Signals

Oracles are external services that provide real data to the blockchain. Such as stock prices or weather.

FUD — fear, uncertainty, doubt. Negative news that affects the price.

Moon — when the price is flying up. “To the moon!” — the motto of traders.

So now you know 50+ terms that you constantly hear in the crypto community. This is not the entire vocabulary — there is much more in crypto, but this is the basis to get started. Moreover, the crypto world evolves every day, so don't be afraid to experiment and learn. The main thing is not to invest money that you will need.