The Crypto Dictionary: Common Terms You Should Know


Here’s a helpful list of common cryptocurrency terms and jargon that may be confusing:

Airdrop: a free distribution of cryptocurrency coins or tokens.

Altcoin: any cryptocurrency that is not Bitcoin is an ALTernative COIN.

ASIC (Application Specific Integrated Circuits): a computer chip specifically created to efficiently mine a particular cryptocurrency.

Blockchain: A record of transactions in which new transactions are continually grouped into “blocks” and then secured to a chain of past “blocks” with cryptography.

Cryptoasset: any digital asset secured by cryptography (encryption).

Cryptocurrency: a digital currency secured by cryptography. The term cryptocurrency also commonly refers to a broader class of cryptoassets (not all cryptoassets are actually currencies).

Digital currency: any currency that is only available in digital form. Digital currency does not have a physical form such as bills or coins.

Fiat currency: a currency that is backed by a sovereign state, such as the USD, Euro, or GBP. Fiat currency is not backed by a physical resource such as gold or silver; instead, it is backed by the trust of the state which issued it.

Fork: any time a blockchain splits into two different chains.

Fungibility: interchangeability. When a means of transaction (shells, dollars, bitcoins) can be freely exchanged for another asset of the same kind. Shells have differing attributes, and thus some may be valued higher than others; they are not fungible. On the other hand, it is easy to exchange one $20 bill for two $10 bills; dollars are highly fungible.

Hardware Wallet: a digital currency wallet that stores private keys on an external hardware device. Hardware wallets provide enhanced security as private keys never touch your computer. They often look like thumb drives, such as the Ledger Nano S.

ICO: similar to how an IPO (Initial Public Offering) raises funds through the issuance of stock, an Initial Coin Offering raises funds through the issuance of digital assets.

Mainnet: the main network where real transactions are carried out; in contrast, a Testnet is a side network used to test new functions or applications.

Node: any computer that is connected to a decentralized network such as a blockchain network.

Private Key: a keycode, often a string of numbers and letters, that provides access to a cryptocurrency wallet. Private keys should always be kept secret and never stored on a computer as anyone who knows your private key can use your cryptocurrency.

Public Address (or Public Key): the address you would provide in order to receive cryptocurrency. It is often a string of numbers and letters, such as 33khJq4N2jSSYXMU8719YgzB6KjZtEY2Ba.

Seed phrase (or pass phrase): A sequence of 12-24 words that act as a private key, but is more user-friendly than a long string of characters and numbers. Like private keys, seed phrases should always be kept secret and never stored on a computer.

Snapshot: a record of all accounts on a blockchain at a specific time, often used for the purposes of airdrops and hard forks.

Wallet: a program that stores public and private keys, and allows you to interact with blockchain networks.

Whale: an investor that holds a large amount of a certain cryptocurrency and is believed able to manipulate the market for that crypto, especially in circumstances of low volume.