Every crypto term, explained

The first and largest cryptocurrency, created in 2009 by the pseudonymous Satoshi Nakamoto. Has a fixed supply of 21 million coins and operates on a proof-of-work blockchain. Often compared to 'digita

A distributed database where new entries are added in 'blocks' and cryptographically linked to previous blocks, making the history tamper-evident. Thousands of computers each hold a full copy, and the

A programmable blockchain launched in 2015, enabling smart contracts and decentralized applications. ETH is its native currency. Switched from proof-of-work to proof-of-stake in 2022 (The Merge).

The cost to execute a transaction on a blockchain, paid to the network's validators. Ethereum gas fees vary with network demand — from cents during quiet hours to $50+ during peak congestion.

The process of validating new blocks of transactions on a proof-of-work blockchain. Miners compete to solve cryptographic puzzles; the winner adds the next block and receives the block reward. Consume

A large random number (256 bits) that mathematically proves ownership of a wallet address. Anyone with the private key controls the funds. Never share it with anyone, ever.

A sequence of 12 or 24 English words that encodes a wallet's private keys. The seed phrase IS the wallet — anyone who has it can access all funds. Store it offline, never on a phone or cloud.

Software or hardware that stores your private keys and lets you send/receive cryptocurrency. The wallet doesn't 'contain' coins — it contains the keys that control coins on the blockchain.

A public identifier for a wallet, derived from its public key. Anyone can send cryptocurrency to your address, but only you (with the private key) can send it out. Ethereum addresses start with '0x';

An exchange operated by a company that holds customer funds in its own wallets. Faster and easier to use than DEXes, but requires trusting the operator. KYC is standard.

Financial services (lending, trading, derivatives) built on smart contracts rather than traditional intermediaries like banks. Users keep custody of their assets; protocol rules execute via code.

An exchange running on smart contracts, where users trade peer-to-peer against liquidity pools or order books without a central custodian. No KYC, but no customer support either.

The loss liquidity providers experience when the price ratio of pooled assets changes. Not 'lost' until withdrawal — if prices return to deposit-time ratio, the loss disappears. In practice, it's ofte

A smart contract holding two or more tokens that users can swap between. Pool providers deposit equal values of each token and earn a share of trading fees. Exposes providers to 'impermanent loss'.

A cryptocurrency designed to maintain a 1:1 peg with a fiat currency (usually USD). Backed either by fiat reserves (USDT, USDC), crypto collateral (DAI), or algorithmic mechanisms (the failed UST).

Locking cryptocurrency to help validate a proof-of-stake blockchain, in exchange for rewards. Unlike mining, staking doesn't require specialized hardware. Ethereum staking requires 32 ETH minimum to r

The practice of moving capital between DeFi protocols to maximize returns, often by combining lending yields with governance token rewards. Popularized during 'DeFi Summer' 2020.

A wallet configuration requiring multiple private keys to authorize a transaction. Common setup: 2-of-3 (any 2 of 3 keys can sign), eliminating single-point-of-failure risks for high-value holdings.

An attack that tricks victims into revealing sensitive information (seed phrases, passwords, private keys) by impersonating legitimate services. Crypto phishing vectors include fake websites, fake wal

A scam where the founders of a project suddenly drain its liquidity or treasury and disappear, leaving holders with worthless tokens. The term comes from 'pulling the rug out from under you'.

A security layer requiring both a password AND a second proof of identity (usually a code from an app like Google Authenticator, or a hardware key like YubiKey). SMS 2FA is weak — use authenticator ap

A protocol that allows moving assets between different blockchains. Usually works by locking assets on the source chain and minting equivalents on the destination. The #1 source of major hacks — $2B+

A blockchain built on top of another blockchain (usually Ethereum) to provide faster and cheaper transactions. Transactions are settled in batches back to Layer 1, inheriting its security. Examples: A

A type of Layer 2 that bundles (rolls up) many transactions into one, then submits proof to Layer 1. Two variants: Optimistic Rollups (assume valid unless challenged) and ZK Rollups (cryptographic pro

Self-executing code stored on a blockchain. Once deployed, anyone can call its functions, and the execution is transparent and immutable. Ethereum introduced them; most blockchains now support them in

A computer participating in a proof-of-stake blockchain by proposing and attesting to new blocks. On Ethereum, running a validator requires 32 ETH locked as collateral; misbehavior can slash (reduce)

Using borrowed funds to amplify trading position size. 10x leverage means $1000 of your money controls $10,000 of position; a 10% adverse move wipes out your collateral (liquidation).

The forced closure of a leveraged position when collateral falls below the required threshold. The position is automatically sold to repay the borrowed funds, often at unfavorable prices. Common in bo

A crypto derivative similar to a futures contract but with no expiry date. Price is anchored to the underlying via a 'funding rate' paid between long and short holders. The dominant form of crypto der

The difference between the expected price of a trade and the actual executed price, caused by price movement between submission and execution. Larger trades in low-liquidity pools have more slippage.