Crypto Keywords & Definitions
A Layman’s Guide to Basic Crypto Terminology
We’ve done our best to find existing, easy-to-understand definitions for common words in the world of crypto. It’s been somewhat daunting.
Where we haven’t been able to find such definitions, we’ve created our own.
You’ll find our notations or adjustments to existing definitions in [brackets] or otherwise noted. Links to definition sources are also provided where they exist.
Keep in mind, however, that many (most) of these sources have numerous undefined and/or unclear definitions that may make it difficult for you to understand the full meaning or context. Feel free to explore them, but keep this in mind when/if you do.
The definitions below are provided in the logical sequence for understanding the meaning of all terms that follow.
We recommend reviewing them in the default order presented. If you run into a technical word that isn’t defined, it’s usually defined in previous definitions on the list.
That said, if you’re looking for a specific definition, you can use your computer’s CTRL+F keys to Find a specific word. This is done by pressing and holding the Control [or Command on Mac] button then pressing the F key.
When you press and hold these keys, your browser will open a small “find” window or bar wherein you can type the word you’re looking for. Obviously you can let go of the keys once the Find window opens. ;-)
Click On A Word To See Its Definition
Encryption is the method by which information is converted into secret code that hides the information's true meaning. The science of encrypting and decrypting information is called cryptography. - Tech Target
Editor's Note: ENcrypting is making the information secret. DEcrypting is making the information no longer secret.
Someone or something that provides a benefit, is useful and/or has value.
A shortened form of the word "Cryptocurrency."
It is also often used to refer to the industry itself. It can include any and all things related to the crypto currency and crypto assets industry.
"A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority." - Oxford Languages
Can also be written as the two words "crypto currency".
A series of instructions written in a computer language that a computer reads, understands and follows to do a given task. There are many computer languages. Most computers speak and understand most of them. If a computer does not understand a program's language, that program is "not compatible" with that computer.
As an example, Mac computers speak a different language than Windows computers. This is why you have to buy a program that is "compatible with Mac" or vice versa because the languages are different.
The words, sentences, etc. in a computer language are called "code." This "code" contains the various instructions the computer needs to execute to perform the tasks required.
As an example, when you click a button on a website, or on your computer, you are telling your computer, and the website's computer, what to do. You're telling them to execute the code that they should execute when that button is clicked. The computer(s) will then follow the instructions related to the action of clicking that button. Those instructions are written down in the program's code.
A computer program that allows a human-readable version of content on the internet to be viewed. Internet content, in its true and raw form, is not readable by humans (unless those humans speak computer code). The browser is a program that translates the computer language on the internet into a form that can be read by humans.
If you'd like to see an example of this, right-click on this page (click your mouse's RIGHT button - not the left button), and select View Page Source from the menu that appears. This will open a new tab or window that displays this web page's code.
"The fact of reaching, stretching, or continuing; the act of adding to something in order to make it bigger or longer" - Cambridge Dictionary
Here, we mean a computer program that will extend the functions of your web browser. Most popular crypto wallets have browser extensions to enable them to be used in your web browser without having to directly visit the wallet's website.
Abbreviation for "application." An application is basically a computer program. Initially, the term "app" was reserved for computer programs that ran on mobile devices. The term has since expanded to include any type of computer program.
If a "wallet" is a container for holding your money, then a "crypto wallet" is a container for holding your cryptocurrency.
It's basically a digital wallet specifically designed for holding cryptocurrency and other crypto assets like NFTs.
It is essentially a computer program built for holding and managing crypto.
A running list or record of incoming and outgoing transactions, usually involving money or similar assets. In accounting, a ledger will contain the dollar amounts in and out and the total amount of funds resulting from each transaction on each line of the ledger.
A perpetual running list of transactions in the form of a ledger. Each entry in the list is a "block." The blocks form a chain of transactions linking one to the next. Hence the term "blockchain."
These links create a running history that can be used to validate the authenticity of the transaction since if its origins are valid, it itself is most likely valid. In this way, blockchains do not require central authorities to authenticate. The valid history proves their authenticity.
Blockchain technology is also normally "distributed," meaning it is not stored in one central location. It is a "distributed ledger" with many copies on computers all over the world.
If one computer fails, the other copies are still in tact. If someone tries to hack and corrupt one or more computers in the blockchain's network of computers, the other computers will still contain all the correct data.
In order to "bring down the blockchain" one would have to eliminate all computers in the network.
One major benefit of blockchain technology is the ability to verify the lineage of a transaction to ensure it's history, sources, information and destination(s) are accurate and are what anyone says they are.
This allows for transaction verification without the need of a central authority. The design of the blockchain takes care of it.
Because the blockchain is distributed in identical copies over a wide number of computers all over the world, it is not possible for a single person or entity to alter it's data. This helps ensure the data it reports is the most accurate and trustworthy data possible since no one person can alter it.
There are many blockchains. The most popular at this time are Bitcoin, Ethereum, Polygon, Avalanche, Wax, and Solana.
DApps are "Decentralized Applications". These are computer programs (much like a digital app found on any smartphone or laptop) that run on the blockchain or other decentralized networks. Storing information this way, keep users’ data out of the hands of the organizations behind it. Just like cryptocurrency is decentralized money, dapps are decentralized apps.
keep users’ data out of the hands of the organizations behind it. Just like cryptocurrency is decentralized money, dapps are decentralized apps
Any service or website that does anything that runs on the blockchain can be a dapp. Crypto exchanges, video games, and the myriad of projects being built on the blockchain are all dapps.
DApp, Dapp and dapp all stand for "decentralized application" in the world of crypto. You will see it spelled in all 3 ways.
The world’s first widely-adopted cryptocurrency. With Bitcoin, people can securely and directly send each other digital money on the internet without the need of a third-party [editor addition]. https://www.coinbase.com/learn/crypto-basics/what-is-bitcoin
A unit of crypto currency. Crypto "coins" are often also called "tokens".
A token can also have additional uses or privileges attached to owning it or a certain quantity of it.
Crypto companies will sometimes issue tokens to make it possible to participate in their services, communities and blockchain software.
An abbreviation for "Non-Fungible Token."
A "token" is something that represents something. A "token," in the world of crypto, is a type of digital asset that represents some type of ownership.
If something is "fungible" it means that no one of the item is any different than any other of the item. Like corn, grains of sand, nickels, dollars, bitcoin, etc. Basically, when something is fungible, you don't care which one you have, as long as you know you have one and that it's real.
Non-fungible means that the item is unique. Each one is different from every other one. So the one that you have matters. This difference can be any unique characteristic. A unique color combination, a serial number, a one-of-a-kind item, a numbered print, etc., all would be non-fungible traits.
Non-fungible-tokens, or NFTs, are unique digital assets. No one is identical to any other one. The differences normally include things like unique serial numbers. Their uniqueness can also include a unique appearance for each item.
“Altcoin" is a combination of the two words "alternative" and "coin." It is generally used to include all cryptocurrencies and tokens that are not Bitcoin… However, some people consider altcoins to be all cryptocurrencies other than Bitcoin and Ethereum..." - Investopedia
"An online trading platform that is used to buy, sell and exchange cryptocurrencies. Exchanges convert fiat currency (dollars, Euros, etc.) to crypto (Bitcoin, Ethereum, etc.), and vice versa." – PCMag.com
“Coinbase is a secure online platform for buying, selling, transferring, and storing digital currency." - help.coinbase.com
Coinbase is a crypto exchange.
Access to data and permissions on the internet, computers, as well as many computer programs, is done using keys.
There are normally 2 keys – a Public Key and a Private Key. These two keys make a set that works together to send, receive and approve.
The Public Key is a key that is exposed and can be viewed by any computer program requesting access. It can be given or sent out so access can be requested like you'd give out a phone number or address.
A Private Key is secret and is only used to grant permission.
In the case of the crypto world, your Private Key is used to access your crypto wallet and give permission to execute transactions.
It is always important to keep any Private Keys that you have secret, as anyone with your Private Keys can act with your authority and permission.
Your Public Key is essentially your wallet address. It’s used to locate your wallet on the blockchain and send you assets or give your wallet permission to connect to applications that run on the blockchain.
“The wallet address is like the account number on a checking account but used only for receiving money (making a deposit) and not for making payments. The private key is used to make a crypto payment." - PcMag.com
“Coinbase Wallet is a self-custody wallet that gives you complete control of your crypto. This means that the private keys (that represent ownership of the cryptocurrency) for your Wallet are stored directly on your mobile device and not with a centralized exchange like Coinbase.com.” – help.coinbase.com
Unlike MetaMask, Coinbase Wallet works with hundreds of cryptocurrencies seamlessly including Bitcoin, Ethereum, Polygon [MATIC] and others.
The name of the Polygon cryptocurrency. When the Polygon Network first launched, it was called “Matic.” When it changed its name to Polygon, it retained its currency’s symbol MATIC.
A crypto wallet built to work with Ethereum. Since NFTs were initially primarily built on the Ethereum Network, many NFT collectors, websites and projects have Metamask as their default wallet connection.
"Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met." - IBM.com
"Fiat money (from Latin: fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically declared by a decree from the government to be legal tender. Throughout history, fiat money was sometimes issued by local banks and other institutions. In modern times, fiat money is generally established by government regulation." - Wikipedia
The definitions that follow are more advanced and are provided for those who wish to dive deeper into crypto terminology.
Web 1.0 ("one point o") or "Web1" is generally referred to as the "read" version or "read-only" version of the World Wide Web.
Toward the end of Web 1, online shopping emerged. But content on the web was primarily created by companies and individuals who could use the complex software and programming required to build a website.
A. The ability for anyone and everyone to build on the World Wide Web and communicate freely, and interact, with anyone in the world.
https://www.linkedin.com/pulse/read-write-own-evolution-web30-uthman-kamaldeen-ibrahim/?trk=articles_directory
To exchange one cryptocurrency for another cryptocurrency.
"...a template or format that other [software] developers agree to follow. Following the same standards makes writing code easier, more predictable, and reusable. These standards are completely voluntary, but following a widely used standard means compatibility with a wide variety of applications including exchanges, dapps [decentralized applications], and wallets." - Decrypt.co
These abbreviations and numbers represent different types of programs that run on the Ethereum blockchain. Each one has different features, standards and potential uses.
The standard one would use depends on the type of application one wants to build. What do you want it to do? Once you know this, you can decide which standard to use.
ERC stands for "Ethereum request for comment".
The "request for comment" is the program making a request for information or a response from another program on the network. The different programs on the network are basically talking to each other, sending and receiving information and instructions and doing the things they were created to do. - Editors
"ERC stands for "Ethereum request for comment," and the ERC20 standard was implemented in 2015."
"It is perhaps easiest to think of ERC20 as a set of basic guidelines and functions that any new token created in the Ethereum network must follow." - Investopedia
The "request for comment" is the program making a request for information on the network or a response from another program on the network. The different programs on the network are basically talking to each other, sending and receiving information and instructions and doing the things they were created to do. - Editors
"ERC-721 is a token standard on Ethereum for non-fungible tokens (NFTs)." - Decrypt.co
"ERC-1155 is a token standard that enables the efficient transfer of fungible and non-fungible tokens in a single transaction." - Decrypt.co