ADA

ADA is the cryptocurrency that runs on the Cardano network.

airdrop

When crypto tokens are handed out for free as an alternative to requiring them to be mined.

ASICs

Application-Specific Integrated Circuit - a type of computer specifically designed to mine a cryptocurrency.

ATH

All-Time-High, most commonly referring to a cryptocurrency’s fiat value.

atomic swaps

Atomic swaps enable crypto asset holders to directly exchange coins between different blockchains. Atomic swaps use smart contracts that are designed to execute only when all the conditions of the trade are met.

altcoin

A catch-all term for any cryptocurrency outside the mainstream. What constitutes an altcoin varies from place to place and changes over time.

algorithm

A set of instructions a computer or computer program follows.

BAT

Basic Attention Token, a blockchain-based digital advertising platform built on Ethereum. Was created by the creator of JavaScript and the co-founder of Mozilla and Firefox.

blockchain-agnostic

A system that is not designed to run on just one blockchain in mind but can be applied to many.

Byzantine fault tolerant

Ensuring that computers on a decentralized network can agree on the same data.

bot

Programs designed to make automatic trades or carry out computer-based tasks.

beta

When a piece of software is in testing-phase and developers are checking it for bugs.

burn

hen a coin is deleted or removed from current supply by sending it to an incompatible address.

Bollinger Band

A margin around the price of a cryptocurrency that helps indicate when a coin is overbought or oversold.

block explorer

A website which shows the transaction history of a cryptocurrency. It may also provide charts and statistics.

bagholder

A colloquial term for someone holding a cryptocurrency after a pump and dump crash. Can also just refer to someone holding a cryptocurrency that is sinking in value with few future prospects.

blockchain

Blockchains are distributed ledgers, secured by cryptography. They are databases that multiple people can access and read, but can only be updated by the data owners. Instead of the data residing on a single centralised server, the data is copied and stored on multiple computers.

bullish/bull market

An expectation that the price of a crypto token is going to increase.

bearish/bear market

An expectation that the price of a market, cryptocurrency, commodity, or security is going to decrease. A bearish view is in contrast with a bullish one, in which an investor expects that the price will increase. Bear markets have multiple definitions, with one common measure being a situation in which the market experiences a decline of at least 20% from its high over a sustained period of time. Another definition of a bear market is one in which investors tend to be more risk-averse, leading less speculative assets to become more desirable. Investors may be bearish on an individual asset, a broader asset class, or on the whole market. Reasons for being bearish may include macroeconomic factors, pandemics, geopolitical issues, industry-specific events, and more. An example in the cryptocurrency space is the downfall of FTX, which led many crypto investors to adopt a bearish outlook on the digital token market.

Bitcoin

Bitcoin is cryptocurrency and blockchain network created by Satoshi Nakamoto in 2008.

clearinghouse

An institution that facilitates the buying and selling of financial instruments.

cryptocurrency

A catch-all term for tokens used by networks as either a store of value, resources or information.

centralized

When the data for a product or service is controlled and managed by one entity.

consensus

Within blockchain technology, consensus is where the network is in agreement on the validity of a transaction.

consensus protocol

A set of rules governing how a cryptocurrency verifies transactions.

cryptography

The art of writing (encrypting) and solving (decrypting) information for security purposes.

crypto

Short for cryptocurrency(ies)

cryptographers

A cryptographer is someone that analyzes and deciphers encrypted messages. Often associated with the technology involved with cryptocurrencies.

cold storage

Cold storage is the process of storing cryptocurrencies offline. Any crypto wallet which is not connected to the internet can be considered a form of cold storage. This process is in contrast to a hot wallet, which refers to a method of storing cryptocurrencies online. There are a wide variety of cold wallets, including hard drives, offline computers, USB drives, and even pieces of paper. There are many benefits to utilizing cold storage methods to keep crypto tokens. Perhaps most importantly, cold wallets are not susceptible to cyber hacks, unauthorized access, and other security issues that can arise when using digital wallets that are online. Because it can be difficult or even impossible to recover stolen cryptocurrency, cold storage tools provide a crucial layer of security that isn’t matched even by the most sophisticated online security protocols. The way that cold wallets provide top-notch security is by keeping private keys offline. A hacker that gains access to a private key can unlock and send crypto tokens to another address with minimal effort. Cold wallets complete cryptocurrency transactions offline, so private keys are not exposed.   Cold wallets have disadvantages compared with hot wallets as well. For one, they tend to make the process of completing a transaction more burdensome, as a cold wallet will need to be connected to an internet-enabled device at certain points in order to facilitate receiving or sending tokens. Because of these added steps, cold wallets make tokens more difficult to access for transactions, so investors looking to make quick trades may be at a disadvantage. Additionally, some methods of cold storage cost money, while there are a variety of hot wallets available for free to crypto investors. Finally, and perhaps most importantly, cold wallets don’t guarantee that an investor will never lose her crypto holdings. If the cold wallet is misplaced, broken, or stolen, the tokens are likely gone for good. Even with these disadvantages, though, cold wallets are highly popular. Both individual crypto investors and exchanges or other companies involved in the digital token space make use of cold storage. Many users find that using a combination of cold wallets for long-term storage and hot wallets for ease of access to cryptocurrency holdings provides the ideal balance of security and flexibility.  

crypto miner

A machine, person, or entity that is actively trying to crack the puzzle that verifies transactions on blockchain.

crypto collectible

A digital collectible item stored on the blockchain. Popularised by CryptoKitties.

dapp

A decentralized application built on a blockchain platform using smart contracts.

dust

Small amounts of cryptocurrency leftover when a portion of an indivisible coin is required as a trading fee.

DAO

Decentralized Autonomous Organization. The original DAO was a VC fund built on the Ethereum network. It was hacked in June 2016 which subsequently led to Ethereum splitting into two different networks. The DAO is often cited as an example of the unpredictability of cryptocurrency networks.

Decentralized

A system which has moved away from a single point of control, towards many points of control.

Distributed Ledger Technology

DLT means distributed ledger technology. It’s a catch-all term for a database that’s constantly shared and synchronised across a network.

double spending

When a digital currency is spent more than once. Historically this was a problem with early versions of cryptocurrencies. Bitcoin was the first cryptocurrency to solve this problem.

derivative

A term used to describe a financial product that takes its value from another asset, like a currency, stocks and other securities, or commodities such as oil.

DLT

See distributed ledger technology. DLT is creating an internet movement away from centralised databases to a decentralised distributed model.

distributed ledger

A database that is shared and synchronized across network spread across multiple points.

digital signature

Like a signature in real life, it's used to verify a transaction on the blockchain via public and private keys.

digital asset

A digital asset in the world of crypto is a scarce resource deemed to have value and existing purely in digital form.

delegated proof-of-stake

A type of consensus protocol. Its a way for a community to decide who gets to verify transactions and is regarded as an evolution in the way cryptocurrency networks are run.

digest number

A summation of all the information in a block on the blockchain. This is typically a series of letters and numbers of a fixed length.

distributed

In the context of blockchain technology, the term “distributed” refers to a network in which there is not a single central hub. As an example, a manufacturing company operating out of a single factory is not distributed, but if it expands and opens other factories in different locations then it becomes distributed. Distributed networks can have many advantages over non-distributed networks, including being more efficient or scalable. Some distributed networks are also decentralized, meaning that control of the network is divided among multiple participants. However, a distributed network is not necessarily a decentralized one. In the example above, the same company owns all of the factors and oversees them, so there is still one central authority. Blockchain technology represents a distributed ledger. This refers to a database which is maintained and shared by all of the participants in the network. In the case of blockchain, the ledger is also decentralized, with no single participant in control of the ledger. What this means for a blockchain is that no one person can independently verify or change records within the ledger. The fact that blockchains are distributed means that participants within the network must reach a consensus about how and when to update the records in the ledger. In the case of cryptocurrencies, consensus is achieved through a variety of different systems, including proof of work, proof of stake, and so on. Whatever the mechanism, once consensus is reached, the record of a transaction is completed and added to the ledger, which is then updated across all participants in the network. The ledger is protected through a special cryptographic signature, meaning that it cannot be falsified after the fact. Distributed networks such as blockchains offer a variety of benefits over non-distributed networks. If a single node within a broader blockchain ecosystem should fail or go offline, the broader ecosystem would not be significantly impacted. In the initial example about a manufacturing company, if one of many factories is shut down the remainder can continue to operate, but if the sole factory closes that effectively ends productivity for the company. Distributed ledgers like blockchain also offer advantages over their counterparts. For instance, traditional ledgers tend to be costly in both time and resources to maintain and update. A lack of transparency with regard to the way that a traditional ledger is updated can lead to disputes and opens up the possibility of fraud. Furthermore, if multiple copies of a traditional ledger exist in different locations and one copy is more up-to-date than others, it can lead to confusion. The fact that blockchains are distributed ledgers means that there is a clear path to making updates. They are transparent, resistant to fraud or tampering, and automatically update across all participants in the network, eliminating the possibility of misaligned copies of the same ledger.

decentralization

The movement of away from a single point of control, towards many points of control.

decentralized finance

DeFi, short for decentralized finance, is a catch-all term for a group of companies and technologies that aim to provide open, permissionless, and interlocking financial services such as borrowing, lending, and banking services—all without third-party intermediaries.

decentralized exchange

A 'DEX' is an exchange for trading tokens that doesn't involve a third party or custodial service. It uses smart contracts (automatically-executed protocols) to facilitate trading between individuals, but doesn’t take control of their coins.

DeFi

DeFi, short for decentralized finance, is a catch-all term for a group of companies and technologies that aim to provide open, permissionless, and interlocking financial services such as borrowing, lending, and banking services—all without third-party intermediaries.

Ethash

Ethash is an Ethereum mining Proof-of-Work algorithm. Ethash has been designed to prevent ASIC mining machines from dominating and controlling the network.

Ether

The digital currency running on the Ethereum Network. Ether can be used to pay other users or power Ethereum smart contracts.

Ethereum Virtual Machine

The Ethereum Virtual Machine is an environment where the network's smart contracts live and interact with each other. It takes all the transactions your computer could do: send and receive things like cash, documents, and contracts and transforms them on a global scale.

EEA

Enterprise Ethereum Alliance. A coalition of startups and corporations trying to figure out the best way to use this dang thing.

ERC-721

A type of Ethereum token where each token is unique.

elliptic curve

A complex piece of cryptography using advanced mathematics represented by graphs.

ERC-20 Token

The majority of tokens on the Ethereum network are built to this standard, which has eight functions.

exchange

Online markets where you can buy and sell cryptocurrencies.

Ethereum

Ethereum is a cryptocurrency and blockchain project conceived by Vitalik Buterin that allows developers to build decentralized applications using smart contracts.

Frontier, Homestead, Metropolis, Serenity

The four planned stages of the Ethereum development roadmap. We are currently in the Homestead phase. The Metropolis update is likely to be available sometime in the next year.

full node

A computer keeping a record of past blockchain transactions and checking they are valid.

FUD

Fear, Uncertainty, and Doubt. Baseless negativity spread intentionally by someone that wants the price of something to drop.

FOMO

Fear Of Missing Out.

fungible

An economic term for a good or commodity that is interchangeable. For example, since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots, or in other states, gold is fungible.

FUDster

Someone who is spreading FUD (Fear, Uncertainty, Doubt)

fungibility

See fungible. An economic term for a good or commodity that is interchangeable. For example, since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots, or in other states, gold is fungible.

forger

The equivalent of a miner on a proof of stake network.

fork

A situation where a blockchain splits into two separate chains.

fiat

Government-issued currency, such as the US dollar.

Gwei

A denomination of ether. Gas prices are most often measured in Gwei. 1 Ether = 1000000000 Gwei.

GNT

An abbreviation for the unit or token used on the Golem network.

genesis block

The first block in a blockchain.

going long

A financial term used to describe a strategy of buying a stock or commodity with expectation its price will rise over time.

going short

A financial term used to describe a strategy of selling a stock or commodity with expectation its price will decline.

gas price

The unit of calculation that Ethereum and other smart-contract networks charge in order to process a transaction. It is also referred to as a transaction fee.

gas

A measurement of how much processing is required by Ethereum or other blockchain networks to execute a transaction.

hardcap

A maximum on the number of issued or created coins.

HODLER

One who HODLs - a misspelling of the word 'hold', used to refer to someone who refuses to sell a cryptocurrency with a declining price.

Hodl

A deliberate spelling mistake of the term 'hold' to mean someone who does not sell their cryptocurrency holdings.

hashing algorithm

It's a set of instructions used to create the hash number - a long, complex number that represents a transaction but doesn't reveal what that transaction is.

hash rate

A hash rate is the speed at which a given mining machine operates. On a given crypto network, the hash rate is the total capacity of all miners mining on the network. The more miners mining, the higher the hash rate.

hot wallet

A wallet that is connected to the internet. It makes it easier to carry out transactions quickly but it is also seen as vulnerable to being hacked.

hard fork

When a blockchain splits into two separate chains. Hard forks are changes to the blockchain that are not backwards compatible, and it forces everyone on the network to upgrade to the newest software in order to keep participating. Those who don’t upgrade, don’t get to participate. If there are enough members left in the previous version of the blockchain, two versions now exist. Further reading: Hard Forks vs Soft Forks

hardware wallet

A physical device that stores the private keys used to access cryptocurrency.

IOTA

IOTA is a cryptocurrency designed for the Internet of Things.

ICN

An abbreviation of Iconomi, a digital assets management platform.

IPFS

IPFS is a distributed system for storing and accessing files, websites, applications, and data. Decrypt provides a snapshot of each article on IPFS for archival purposes, to be used as a citation reference.

ICO

Initial Coin Offering. Similar to how a company would engage in an Initial Public Offering (IPO) to raise funds, an ICO is a fundraising tool used to help build or scale a project.

IOU

A token that can be swapped for a fungible asset, like USD, gold or oil.

Internet of Everything

A future where almost all everyday devices are connected to the internet and communicate with one another.

Internet of Things

The connection and communication of devices and or appliances via the internet. Typical examples include fridges, lightbulbs and cars.

immutable

Unable to be changed. In the context of blockchain, records can only be added - never edited.

James

Co-founder, developer and the design and product lead at LitePaper.

Keys

A collective term used for the public and private keys needed to send and receive cryptocurrency via a cryptocurrency wallet.

KYC

KYC is short for Know Your Customer - and is a requirement that a new customer provides details of their identity, be it a passport or driving license, proving they are who they say they are, before they can use a service.

key

Keys are long sequences of letters and numbers used to send and receive cryptocurrency.

liquidity

Liquidity describes the degree to which an asset can be quickly bought or sold.

LitePaper

On online learning platform that makes learning about cryptocurrencies, blockchain and distributed ledger technology simple.

Libra

Libra is an upcoming global and blockchain-based financial system helmed by Facebook and supported by 27 collaborators drawn from big tech, the charity sector and the financial services industry. It is an attempt to rebuild the global banking industry from scratch—and empower 'billions' in the process.

Ledger Nano S / Trezor

A type of hardware wallet used to store public and private keys.

limit order / limit buy / limit sell

Orders placed by traders to buy or sell a cryptocurrency when the price meets a certain amount. They can be thought of as 'for-sale’ signs.

mainnet

When a cryptocurrency runs on its own blockchain.

Mooning

The expression used when referring to a price going up quickly.

meta-protocol

A protocol built on top of a network that was not designed for such activity.

mnemonic phrase

A list of words used to back up and restore a cryptocurrency wallet.

MEW

MyEtherWallet. A free site that can generate ethereum software wallets for you.

masternode

Masternodes are more powerful nodes that help to keep a cryptocurrency running. They may have greater responsibilities, such as governing the network.

mining

The process of trying to solve the next block in blockchains like Bitcoin.

market cap

The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit.

mining pool

When a collective of miners decide to combine their resources to increase their chances of solving the puzzle at the heart of proof-of-work blockchains like Bitcoin.

multisig

Refers to a type of wallet that requires multiple signatures in order to transfer cryptocurrencies.

mining rig

A computer especially designed for processing proof-of-work blockchains.

miner

Someone who solves cryptographic puzzles to verify transactions on a blockchain. They are rewarded for their efforts.

Network Effect

A network effect is the effect described in economics and business that an additional user of a good or service has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.

node

A computer that possesses a copy of the blockchain and acts as a record of the blockchain.

off-chain

Data that is not held on a blockchain.

oracle

A program that connects a blockchain to real-world data or a non-blockchain database.

Open-source

Software with a source code that can be inspected, modified, and enhanced by anyone.

obfuscate

Using fake transactions and addresses to hide details usually available on a public blockchain

obfuscates

Using fake transactions and addresses to hide details usually available on a public blockchain

on chain

Where a transaction is made on a blockchain

Ouroboros

The consensus protocol used by the Cardano network. Also, a snake that is biting its own tail.

plasma protocol

An upgrade to the Ethereum network designed to help it scale.

private key

A string of text that is used to sign a transaction on a blockchain

Proof of stake

A type of consensus protocol. It uses a number of criteria based on how invested a miner or node is in the network to decide whether they are allowed to process transactions.

peer to peer

A network of computers that send information directly to one another without a centralized server.

pre-mined

When crypto tokens or coins are created in one go by the token issuer instead of being mined by other individuals.

ProgPoW

ProgPoW is short-hand form for ‘Programmatic Proof-of-Work’ a proposal to make changes to Ethereum. In particular, ProgPoW suggest improving Ethereum's hashing algorithm, Ethash, allowing more generalized mining hardware to compete with more specialized rigs.

private blockchain

A distributed ledger where nodes require permission to maintain it. Transaction data is not publicly accessible.

Proof of work

A type of consensus protocol. It uses a cryptographic puzzle to verify transactions on the blockchain.

public blockchain

A distributed ledger that anybody can maintain. All transaction data is publicly accessible. Read more here.

Proof-of-work

A type of consensus protocol. a cryptographic puzzle to verify transactions on the blockchain.

Pseudo-anonymity

When a network is only partially anonymous.

Pump and Dump

The artificial inflation of a cryptocurrency’s value, followed by a sudden drop after a rapid selling of the currency.

Proof-of-stake

A type of consensus protocol. It uses a number of criteria based on how invested a miner or node is in the network to decide whether they are allowed to process transactions.

peer-to-peer

A network that doesn’t rely on a middleman or intermediary.

Quantum resistant

Normally used in reference to whether a cryptocurrency is able to withstand attacks from quantum computers, a new type of computer with greater computing power.

Raiden Network

An update to Ethereum that will enable high-speed transfers across the network via pay channels. It is similar to the Lightning Network.

REP

The cryptocurrency of Augur.

ROI

Return on Investment. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money).

Satoshi Nakamoto

The mysterious person or group who created bitcoin and its white paper in 2008.

Segwit

A process designed to allow the Bitcoin blockchain to handle more transactions.

STO

A security token offering (STO) is similar to an initial coin offering (ICO.) Both provide investors with coins or tokens, but a security token also typically represents a share in the company issuing it.

Security Token Offering

A new type of ICO, in which a company issues a security token, which is regulated by a financial authority and designed specifically for institutional investors.

state channels

A system where records, in particular, the details of smart contracts are kept off-chain and only the final version of the contract is uploaded, to minimize the load on the network.

stake

Choosing to have tokens locked in order to maintain the network and/or receive benefits.

securitized

The process by which a token, asset, or share is converted into a security, which is a heavily regulated asset.

security

An asset that meets the definition of a security by the SEC and is highly regulated.

stablecoin

A coin pegged to an underlying asset which is designed to keep its price stable.

securities

Assets that meet the definition of a security by the SEC and are highly regulated.

Solidity

One of the most popular languages developers use to write smart contracts on the Ethereum network.

smart device

An object connected to a network usually through the internet but also via Bluetooth, NFC and many others. Smart devices can communicate with one another and interact.

scalability

The ability for a network or cryptocurrency to handle more transactions and or data.

smart contract

A smart-contract is a contract written in computer code on a cryptocurrency platform, such as Ethereum. When certain conditions are met, the contract carries out a set piece of tasks as defined in the contract. They can also interact with other smart contracts without human intervention.

sharding

A scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance.

sidechains

A sidechain is a separate blockchain that is used to carry out transactions without recording them on the main chain. Sidechains are designed to free up main blockchains from having to process dozens of smaller transactions and is often described as a 'scaling solution'.

software wallet

Storage for cryptocurrency that exists purely as software on a computer.

Tron

A smart contracts platform that runs decentralized applications, largely gambling-based. The platform also bills itself as an Ethereum competitor and a decentralized alternative to Netflix.

Token Generation Event

A type of token sale. Token Generation Events are typically used to refer to utility tokens.

trading pair

The relationship between two coins when trading between them on an exchange.

The Flippening

A potential future event wherein Ethereum’s market cap surpasses Bitcoin’s, making Ethereum the most valuable cryptocurrency.

Tangle

The IOTA network's alternative to recording and verifying transactions.

ticker symbol

An abbreviation used to identify a cryptocurrency, such as BTC for Bitcoin.

testnet

An alternative blockchain to be used for testing.

trustless

A system that works without relying on a single entity or third party.

tokenization

Tokenization is the process of replacing sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.

token

Refers to a currency built on a blockchain network like Ethereum or Solana.

Unique Address

Address which is only used once to protect privacy and increase security.

Unsolicited block push

When a miner sends a block message without sending an inv message first.

Unconfirmed Transaction

An unconfirmed transaction is a transaction which is not yet part of a block. A confirmation is when a transaction is put into a block to permanently become part of the blockchain. “6 confirmations” means that the transaction is in a block and there are 5 blocks after it in the chain, which provides added assurance that the transaction is legitimate.

UTXO (Unspent Transaction Output)

The output of a blockchain transaction that has not been spent or used as an input in a new transaction. In Bitcoin, only unspent outputs can be used to initiate transactions.

UTXO Set

The collection of all addresses with unspent transaction outputs (UTXOs), the sum of which represents every existing bitcoin. The set allows all nodes to verify the total supply of bitcoin at any time and to detect and prevent double spending.

URI qr code

A QR code containing a bitcoin: URI

Vitalik Buterin

One of the co-founders of Ethereum.

volatile

When the price of a currency rapidly changes from one day to another.

Wei

The smallest denomination of ether on the Ethereum network. 1 Ether = 1000000000000000000 Wei.

whitepaper

A document outlining the design for a cryptocurrency or blockchain-based system.

Whale

Someone that owns absurd amounts of crypto-currency.

witness

The people on the EOS network who process transactions. They are elected by the community, and their roles can be revoked if they misbehave.

wallet

A piece of software that stores your public and private keys. Wallets allow people to send and receive cryptocurrency.

web3

Web3 is the catch-all term for blockchain and decentralized technologies being built across the world.

xPub (Extended Public Key)

Used by Hierarchical Deterministic (HD) wallets to derive a set of public keys, enabling users to receive bitcoin directly to a cold storage wallet as they maintain an xpub online to generate new addresses while maintaining their private keys offline.

XBT

The International Standards Organization’s abbreviation for bitcoin (as opposed to BTC), with “X” denoting currencies that are not associated with any particular country.

zero-knowledge proofs

A cryptographic tool used to sign a transaction without revealing personal details.

zk-SNARK

A zk-SNARK is a way of proving that you can make a transaction without revealing how much money you are sending.