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The term “account” is used differently depending on what blockchain you’re working with. In Bitcoin wallets, accounts are a way to organize addresses and separate funds. You could have a personal account, business account, savings account, etc. each containing a infinite number of addresses. For example, if you have two bitcoin accounts each containing 1 address holding 1 BTC each, you can not send a transaction containing 2 BTC since the funds are spread across separate accounts. You would have to send two transactions. If if those addresses were in the same account, you could send one transaction containing 2 BTC. In Ethereum, the terms “account” and “address” are used interchangeably. An ETH account starts with 0x…. And there’s no higher level construct for organizing ETH accounts.
A crypto address (sometimes called a public key) is a unique identifier, consisting of a string of letters and numbers, that serves as a digital location from which users can send or receive cryptocurrency. Think of it like an email address for your crypto. Addresses are derived from your private key but are publicly shareable and appear on the blockchain. In order to interact with the funds held at an address, you need the private key.
Airdrops are a common way crypto projects distribute their initial tokens to worth crypto users. In the early days of crypto, airdrops went out to every user of a blockchain and were seen as “free money”, but in recent years airdrops are more targeted, being distributed only to users who interact with their project and help spread the word. For example, early users of the Arbitrum Network received ARB tokens and early Ethereum Name Service users received and ENS Airdrop.
Alternative Layer One’s or alt L1’s are typically used to describe any Layer One blockchain which is an alternative to Bitcoin or Ethereum.
A stage of the crypto cycle, typically after the larger projects have started increasing in value, where money flows to the smaller more speculative projects. Sometimes typed out as “alt szn”.
Sometimes simplified to “alts” for short, altcoins originally meant “any coin that’s not bitcoin”. Or anything thats an alternative to bitcoin. Today, altcoins are typically used to reference smaller projects with low market caps.
Short for “Automatic Market Maker”, an AMM is a type of decentralized exchange originally invented by Vitalik which uses a bonding curve to determine prices. Pupular AMMs include Uniswap, Curve and Kyberswap.
Short for Bitcoin Improvement Proposal. It’s the process by which changes are proposed, approved (or rejected) and eventually added to the bitcoin protocol. You can see all the BIPs here.
BIP39 was a BIP which standardized the way crypto wallets generate private keys. It introduced seed phrases, sometimes called mnemonic phrases, making it easier for users to write down and remember their private keys. It introduced the 2048 words that are used to create a mnemonic phrase (usually 12-24 words long). With each word having 2048 unique words which can be used multiple times, this creates (in a 24 word seed phrase) mnemonic possibilities. In other words, the chances of someone guessing your address are virtually impossible.
An event which occurs every four years in the Bitcoin network where the rewards for mining a block is cut in half. Originally set at 50 BTC per block, we’ve experienced 3 halvings since 2009 setting the current block reward at 6.25 BTC. For more details, see 
How Bitcoin Works
A blockchain is made up of individual blocks chained together. Each block contains data relating to recent transactions as well as a block reward given to the miner who mines the block. In bitcoin, a new block is mined roughly every 10 minutes and has a block size limit of roughly 1mb.
Originally set at 50 BTC per block, the block reward is the amount of BTC issued to the miner who mines a given block. Along with transaction fees, the block reward is the primary incentive for mining. Roughly every four years, the block reward is cut in half in an event known as the halving. For more details, see How Bitcoin Works
The maximum amount of data a block can contain. Originally set to 1mb by Satoshi as a spam prevention measure, the block size limit has been the source of a lot of controversy as it keeps the network operating efficiently however prevents the base layer from scaling beyond ~2k transactions per block. The debate to increase the block limit size resulted in a fork of both the bitcoin chain as well as the community which resulted in the creation of Bitcoin Cash which has a 32MB block size. In the 2017 SegWit update, some block data was moved outside of the block essentially increasing the number of transactions per block 4 fold without increasing the 1mb limit. For a detailed explination of this contriversial topic, be sure to read The Blocksize War: The battle over who controls Bitcoin’s protocol rules
Invented by Satoshi, a blockchain is a public record of all the transactions on a given cryptocurrency network organized into blocks. Each block contains a hash of the block proceeding it which chains the blocks together. This creates an immutable chain of data which can not be modified without modifying all the blocks which came before it.
Short for Centralized Finance. Typically a TradFi institution who holds it’s customers assets on their behalf in a centralized manner. The opposite of DeFi.
Not only the name of one of the largest crypto exchanges, a coinbase is actually the term for the first transaction in a blockchain where the initial coins are created.
The private key managed by your crypto wallet can be either created hot (on a device connected to the internet) or cold (manually, or on a device not connected to the internet.). If the private key is created and kept offline either through the use of a hardware wallet or words written on paper/metal it is considered cold storage.
A contentious fork is a hard fork stemming from a disagreement in how the blockchain should process blocks. The most famous example of a contentious fork is when Bitcoin Cash forked the chain over a disagreement of the block size limit. Contentious forks lead to an entirely separate blockchain with a new coin.
Your cost basis is the total amount paid for an asset minus any fees. It typically comes up when discussing dollar cost averaging or calculating your taxes. For example, if you bought 1 BTC at $20k, $25, $30k and $40k, and it cost $10 per transaction, you would have dollar cost averaged into 4 BTC with a cost basis of: 20,000+25,000+30,000+40,000-40=114,960/4= $28,740
A longgg stretch of time following Bitcoin’s all time high where price goes down for a year and then sideways for another year before the next halving.
A custodian is someone who holds something for you, so a custodial wallet is typically a wallet or exchange who holds your private key, and thus has control of your crypto. If you don’t know your private key, then you’re likely using a custodial wallet. Custodial wallets simplify crypto by offloading the security to your custodian, however this requires you to trust that the custodian won’t steal your crypto. Custodians are also targets of hacks since they hold lots of crypto on customer’s behalf. In most cases, you buy crypto from an exchange using fiat money and that crypto is then held in a custodial wallet managed by the exchange. It’s a good practice to then withdraw your crypto from that custodial wallet to a wallet where you control the private key - ideally cold storage.
Short for “Decentralized Autonomous Organization”, DAOs arose from the desire for teams to organize around the support and development of decentralized protocols without the need for centralized corporate structures. DAOs typically utilize governance tokens which can be held by both DAO members as well as users of the protocol to vote on important changes to the project.
Short for “Decentralized Application”. dApps are collections of smart contracts hosted on blockchains like Ethereum. For example, Uniswap is a dApp for exchanging crypto and Compound is a dApp for borrowing/lending crypto.
Short for “Dollar Cost Average”, DCAing is an investment strategy by where you make small purchases of an asset at various prices over a long period of time. DCAing enables the investor to avoid the stress of trying to “time the market” and instead produces a cost basis which is the average of all historical purchases. The best way to dollar cost average is to set an automatic recurring purchase for the same dollar amount on the same day of the week, or day of the month. Accepting crypto as payment is another way to dollar cost average into your position.
Short for “Decentralized Finance”, DeFi is a new industry of financial software being written as smart contracts hosted on blockchains like Ethereum.
During the Summer of 2020, in the heart of the COVID-19 pandemic, Compound launched it’s $COMP governance token to to users of the protocol. The more you borrow/lend using Compound, the more $COMP you earn. This lead to massive growth in $COMP token price and sparked a trend in liquidity mining. $COMP’s boom brought a much needed energy to the DeFi space causing other DeFi tokens to boom and projects like AAVE, Balancer and Rarible to quickly follow suite with their own tokens using similar issuance models. DeFi Summer also lead to the rise of odd meme coins taking off like $YAM, $PASTA, $SUSHI, $PIZZA, $HOTDOG, $KIMCHI.
Short for “Decentralized Exchange”, a DEX is an dApp written as smart contracts on a general purpose blockchain like Ethereum. Unlike centralized exchanges which use order books, DEX’s like Uniswap, Curve, etc. pair tokens together in liquidity pools to enable swapping between them. Arbitragers are incentivized to add/remove liquidity from the pools to peg the price to that of centralized exchanges.
Short for Ethereum’s 20th “Request For Comment”, ERC-20 is a standard for implementing tokens on the Ethereum blockchain. The standard lays out a set of functions and events a smart contract must include in order for the token to “play nice” with wallets and other smart contracts like DEXs and lending protocols which wish to interact with it. Officially recognized in September 2017, the rise of ERC-20 tokens was a key driver of ICO mania which took place during the 2018 Ethereum bull market. Most tokens you see today, whether they’re stable coins, meme coins, governance tokens, etc. all follow the ERC-20 token standard.
Unbacked government issued money. The word “fiat” literally means “a decree”. In order words, the government told you this is money, so it’s money.
A popular term in open source software development, a fork in the context of a blockchain is when nodes on the network disagree and continue processing different blocks from one another. There are different types of forks caused by different reasons: 1. Accidental Fork: when two nodes on the network produce a block at roughly the same time as one another. In bitcoin, the fork with the most hash power becomes the “official” blockchain and blocks on the other fork are orphaned. 2. Software Fork: when node software is forked and re-launched with a different configuration. 3. Soft Fork: a backwards compatible update to the node software 4. Hard Fork: a non-backwards compatible update to the node software 5. Contentious Fork: a disagreement between developers of the project leads to a hard fork with incompatible features and a new chain with a new coin all together
Fungibility is an important property of money, meaning any currency of the same denomination is interchangeable with one another. For example, $1 bill can always be swapped with another $1 bill, and one bitcoin is no different from another bitcoin.
A type of fork caused by a backwards incompatible update to the node software. Typically an expansion of the ruleset so old nodes are incapable of producing valid blocks on the new chain. Nodes are forced to upgrade immediately. While the Bitcoin community see hard forks as reckless behavior, almost all Ethereum upgrades are regularly scheduled hard forks.
A physical device designed to generate private keys, protect private keys, and sign messages and transactions. A hardware wallet should not capable of connecting to the internet. Often times utilized when putting crypto in cold storage. Popular hardware wallets include Trezor and Ledger devices.
A hash function takes any amount of data in and returns a fixed length amount of data back known as a hash. Changing even one character of input data will return an entirely unique hash. There are many different types of hash functions, however Bitcoin uses SHA-256 for it’s speed and efficiency. SHA-256 is used to generate bitcoin addresses, transaction id’s and block hashes. Since the output of a hash function can not be predetermined, bitcoin mining utilizes the SHA-256 hash function as a lottery to determine who will create the block and win the block reward.
In a proof-of-work network like Bitcoin, the “work” that gets done is hashing using SHA-256. The amount of energy used by the miners is considered it’s hash power, a measurement of how much “work” is being contributed to securing the network. Currently, the Bitcoin network generages 190 quintillion hashes per second.
A software wallet which creates, holds and utilizes private keys on hardware connected to the internet. Hot wallets are considered higher risk than cold storage or hardware wallets since they are more susceptible to hacks. MetaMask is a popular hot wallet which can also be used as an interface for a hardware wallet.
Short for “Initial Coin Offering”, likely a play on IPO which is an “Initial Public Offering” in traditional markets when a company goes public. ICOs were a primary driver of the Ethereum price and the bull market of 2017-2018. Projects would simply write a white paper asking for money in exchange for tokens which had little to no utility/value.
Short for “Layer One”, L1s refer to blockchains at the base layer. For example, Bitcoin is an L1 and the Lightning Network is an L2 built on top of Bitcoin. Ethereum is an L1 and Optimism is an L2 on top of Ethereum. Other popular L1s include Avalanche, Solana, Cardano, etc.
Short for “Layer Two”, L2s refer to blockchains and other modern scaling infrastructure which sits on top of slower more decentralized L1s. For example, the Lightning Network is an L2 on top of Bitcoin. Optimism is an L2 on top of Ethereum. Other popular L2s include Arbitrum, Polygon on Ethereum and Blockstream’s Liquid Network on Bitcoin.
Providing liquidity as an LP to decentralized exchanges in return for a share of the fees and token incentives.
AMMs are decentralized exchanges made up of pools of liquidity, typically pairs of two tokens containing 50% of the dollar value in one token and 50% in the other. LPs provide liquidity to these pools in exchange for a share of the fees and token rewards, which users can use the pools to swap tokens.
Short for “Liquidity Provider” or “Liquidity Provisioning”, an LP is someone who provides liquidity to a DEXs liquidity pool in exchange for a share of the fees and token incentives. Sometimes used as a verb to describe the process of LPing into a pool.
The circulating supply of a project’s tokens times it’s price is its market cap. Not to be confused with the total supply, which is how many tokens may exist in the future. For example, Bitcoin’s market cap is roughly 19.5M times today’s price, because not all 21 million bitcoins have been mined yet.
A token which exists for the sole purpose of spreading an idea. By attaching a dollar value to an idea, you can essentially invest in the growth and proliferation of said idea.
Short for “Miner Extracted Value” or “Maximal Extracted Value”, MEV is value above and beyond block rewards and transaction fees which can be collected by miners and validators of both proof-of work and proof-of-stake blockchains. For example, someone may pay a miner directly to include their transaction in a Bitcoin block, or an arbitrage bot might pay to front-run a transaction just before a DEX swap on Ethereum.
The process by which consensus is reached in proof-of-work blockchains. Miners hash transactions from the mempool millions of times per second in an attempt to generate a hash with a specific number of leading zeros. If they’re lucky enough to do this before any other miner, they are rewarded with the block reward as well as the transaction fees and any MEV included in the block.
Typically used in the context of NFTs, artists allow users to “mint” their NFTs as a way of releasing their collection or generating generative art NFTs. Users have no idea what NFT they will be minting, and may be lucky enough to mint an NFT containing high value properties. Once NFTs have been minted, they can be sold on the secondary market. NFT collections with a max quantity are minted until “minted out”.
Private keys are typically 100+ character long strings of upper/lower case characters and numbers - impossible for any human to remember, and likely to lead to error if attempted to be written down. Sometimes referred to as a seed phrase or recovery phrase, mnemonic phrases were introduced to Bitcoin in BIP-39 and adopted by most other blockchains as a way of generating private keys which are easier to remember and write down. Words are randomly selected from this list of 2048 words and hashed together to generate a private key. These words can be written down or stamped into metal to be protected, remembered and easily entered into other wallets which share the BIP-39 standard.
A computer running blockchain software on a network. Nodes verify transactions and keep a copy of the blockchain. A node can also be turned into a mining node as is the case with Bitcoin, or a validator can be added in the case of Ethereum. A goal of popular blockchains like Bitcoin and Ethereum is for anyone to be able to run a node on their home computer, however this is typically not a good idea.
If you don’t know your seed phrase, someone else does - and its not your crypto! For example, if you use an exchange to hold your crypto and log in with a username/password, the exchange holds your private key. As a result, you are subject to their whims (account deletion, migration, etc). This is why crypto veterans always say the same thing - use a hardware wallet and keep your seed phrase backup locked up in a safe place. Not your keys - not your coins!
In centralized exchanges like the NASDAQ or Coinbase, buy and sell orders are organized and held until counterparties can be matched together. These orders of various quantities and prices being held are referred to as an order book. The orders are, “sitting on the book”. DEXs on the other hand are AMMs allowing for instant swaps at the current price, but do not save orders or contain order books.
Sometimes referred to as the 13th or 25th word of your mnemonic phrase, a passphrase is an added layer of security which can be added to your BIP-39 compatible wallet. The passphrase can be anything you want, and your private key can utilize an infinite number of passphrases to generate an infinite number of unique wallets.
The private key is generated by your seed phrase and should never be shared with anyone. This key performs a handshake with your public key, allowing a transaction to occur safely and securely. A private key signifies true ownership over funds - as a result, if a user doesn’t have access to their private key, they do not truly have custody over their crypto. This is why using hot wallets and storing large sums on exchanges is a bad idea - not your keys, not your coins!
A consensus mechanism originally invented by Peercoin, proof-of-stake enables nodes on a network to agree with one another by putting value at risk. If another node determines that your node isn’t following the rules, your stake is slashed or taken from you. The most popular proof-of-stake network is Ethereum, which migrated from proof-of-work in an event called The Merge in September 2022.
The consensus mechanism utilized by Bitcoin, first implemented by Adam Back and later popularized by Satoshi in The Bitcoin White Paper. It was also used by Ethereum until The Merge in 2022 migrated Ethereum to proof-of-stake. Proof-of-work is a lottery whereby miners expense energy through hashing in an attempt to generate a hash with a specific number of leading zeros - known as the difficulty. The only way to generate a hash which can be verified by other nodes on the network is the do the work - spend the energy - which can be seen as proof that the hash was generated by following the rules of the network.
Similar to your mailing address, your public key is used as an address to receive cryptocurrency. Public keys are viewable on the blockchain, but the holder of the private key which created that public key is private. Since public keys are derived from private keys, public keys can be used to verify a signature was produced with a given private key without disclosing the private key.
A slang term used when a project creator promises something but doesn’t deliver, often times resulting in fraud and theft.
Short for Satoshi (Bitcoin’s creator), a sat is the smallest unit of bitcoin. 1 satoshi, or 1 sat = 0.00000001 BTC
A private key is a long string of numbers and letters that is extremely difficult (if not impossible) to remember. A seed phrase, or sometimes called a mnemonic phrase or recovery phrase, solves this problem by randomly selecting 12-24 words from the list of 2048 words proposed by BIP-39. These words act as a “seed” and are hashed together to generate a unique private key. Seed phrases ensure private keys are easier to remember and backup, making them more user friendly. This seed phrase should never be shared with anyone under any circumstances.
Short for “Segregated Witness”, SegWit was a major upgrade to the Bitcoin software which separated signatures and scripts (witness data) from the input/output data of a transaction. This change enabled more transactions to fit in a block and was a key feature required by the Lightning Network.
A hash function used by bitcoin to generate addresses, transaction id’s, block hashes and more. In a proof-of-work network like bitcoin, miners run the SHA-256 hashing function millions of times per second in an attempt to generate a hash with a specific number of zeros known as the current difficulty. When successful, they create a block and receive the block reward.
A slang term for a blockchain or token which serves no purpose. Before shitcoin, people said altcoin.
In private key/public key cryptography, a signature can be produced by hashing data with your private key. A public key, which is derived from the private key, can be used to verify that the signature was indeed signed by the key holder.
Software residing at an address on a general purpose blockchain like Ethereum. The software runs on the blockchain and is typically triggered when a transaction is sent to it.
A type of fork caused by a backwards compatible update to the node software. Typically a tightening of the ruleset so old nodes can continue to process blocks, however blocks created by nodes running the new software will be rejected by nodes running the old software. Over time, this leads to old nodes upgrading and their fork eventually become obsolete. The bitcoin community agrees that only soft forks are acceptable moving forward and there should never be a hard fork. A famous example of a soft fork is Bitcoin’s Segwit upgrade.
A token whos value is pegged to another assets value. There are different types of stablecoins including: custodial stablecoins, collateral backed stablecoins and algorithmic stablecoins. Examples of popular stablecoins include USDC & Tether, which are pegged to the US Dollar, and wBTC which is pegged to the price of Bitcoin.
A phrase used by bitcoiners to describe the process of slowly dollar cost averaging and acquiring small amounts of bitcoin (sats) over time.
The process of putting value at risk in order to participate in a network is called staking. Just like contributing your stake to participate in a poker game, the stake to run a validator on the Ethereum network is 32 ETH. Staking is also sometimes used within the context of DeFi to mean “depositing” value with someone else in exchange for a portion of the income they generate utilizing your assets.
Commonly shortened to S2F, stock-to-flow is a metric used to compare the value of commodities to one another. The “stock” refers to the current supply, and the “flow” refers to the annual growth of the supply. PlanB famously utilized the stock-to-flow method to predict the price of bitcoin and compare it to other assets like gold and diamonds.
A reference to crypto’s bull and bear market cycle though to be kicked off the Bitcoin’s halving every four years.
The DAO was the name of the first major DAO on Ethereum initially intended to invest in Ethereum ecosystem projects. In April and May of 2016, The DAO sold 12 million ETH in exchange for 1.15 billion DAO Tokens valued at approximately $150 million at the time. Before The DAO had a chance to invest the funds, The DAO was hacked and slowly drained of it’s treasury. A hard fork was initiated to roll back the Ethereum blockchain resulting in the Ethereum Classic chain where the hacked ETH still resides in the attacker’s wallet.
Every 210,000 blocks, or roughly every 4 years, the number of bitcoin rewarded to miners each block on the Bitcoin network gets cut in half in a planned event known as The Halving. See How Bitcoin Works
From 2015-2022 Ethereum was a proof-of-work network like Bitcoin, however in September 2022 Ethereum “merged” with it’s parallel proof-of-stake network in an event called The Shanghai upgrade.
Typically utilizing the ERC-20 standard, a token is an asset issued on a multipurpose blockchain like Ethereum. Most cryptocurrencies are in fact tokens as oppose to blockchains - a common misconception. Common types of tokens include stablecoins and governance tokens but they can essentially be used to represent any asset or basket of assets. Theres also lots of talk around “tokenizing” ownership of real world assets like cars and houses.
The economic study of a crypto projects price and value. Typically focused on token supply/issuance and how it relates to price over time.
A fee paid to the miner who includes your transaction in a block. When blockchains are under heavy load, transaction fees increase and an auction is held to determine which transactions will be included in the next block. In bitcoin, we call it a transaction fee however on Etherem we refer to it as gas.
Stands for Total Value Locked, TVL measures the amount of tokenized value on a blockchain or staked in a dApp. For example, stablecoins are typically the largest portion of TVL on a given chain. DeFiLlama is a popular tool for measuring TVL.
Proof-of-stake node operators can choose to also be a validator, which entails handling attestations and proposing blocks in exchange for rewards. In Ethereum, 32 ETH (minimum) must be staked in the staking contract in order to become a validator.
A crypto wallet is software for displaying and interacting with cryptocurrencies. A common misconception is that a wallet holds your crypto, but in reality a wallet holds the public keys which point to cryptos you hold on blockchains and the private keys to move and interact with those cryptos. Hot wallets generate private keys and can act as an interface for cold storage devices like Ledger and Trezor.
Web 1.0 was read only, Web 2.0 was read/write and Web3 enables read/write/own through the use of public key / private key cryptography and blockchains.
The smallest unit of Ether, 1,000,000,000,000,000,000 (10^18) wei makes up one Ether. Wei is named after Wei Dai, a cryptographer who invented b-cash and referenced by Satoshi in the Bitcoin Whitepaper.
A scientific paper used to describe the inner workings of a system. The most famous white paper in crypto was the Bitcoin White Paper ,written by Satoshi, which can famously be found at bitcoin.org/bitcoin.pdf. During the ICO craze, thousands of projects released white papers in hopes that they too could become as famous as Bitcoin.
A key generated from a bitcoin private key by which all addresses are derived from. Since an xpub key knows all your addresses, it is used by your wallet to obtain your bitcoin balance across all your addresses.
A strategy where DeFi investors chase opportunities offering the highest yields. Yield farming typically involves staking crypto assets in vaults which pay rewards in other tokens which need to be claimed on a regular basis. This process of tending to your investments and harvesting the rewards is why it’s often called farming.