Here is a quick reference terminology guide to help with some of the most common terms used when discussing cryptocurrency. At the bottom of this short list are links to sources that provide additional information.
Altcoin: Any coin that is not Bitcoin (BTC).
Bitcoin (BTC): The first and (currently) most valuable cryptocurrency. Sometimes referred to as digital gold.
Block: Groups of data within a blockchain.
Blockchain: A digital form of record keeping. A virtual ledger. The underlying technology behind cryptocurrencies. The blockchain is decentralized.
Coin: A representative store of digital value that lives on a given blockchain.
Cold Wallet/Cold Storage: A secure method of storing your cryptocurrency completely offline. Also called a hardware wallet, the cold wallet is a physical storage devices, like a USB drive.
Cryptocurrency: A type of currency that is digital and decentralized. A virtual currency. Cryptocurrency can be used as store of value, or to buy and sell things.
Cryptocurrency Address: A string of alphanumeric characters that represents a wallet, exchange, or similar blockchain-specific address. All wallet and exchange addresses are unique and denote the location of the sender and receiver on the blockchain network. Blockchain addresses can be pseudonymous, because they are not necessarily linked to their user’s real-world identity.
Decentralization: The principle of distributing power away from a central point. Blockchains are traditionally decentralized because they require majority approval from all uses to operate and make changes, rather than a central authority.
Decentralized Finance (DeFi): Financial activity conducted without the involvement of an intermediary, like a financial institution or government.
Digital Gold: Industry experts sometimes compare specific cryptocurrencies to real gold based on the way it can store and increase in value. See Bitcoin.
Ethereum: The second largest cryptocurrency by trade volume (currently), Ethereum is a crypto network and software platform that developer can use to create new applications. The associated currency is called ether.
Exchange: A cryptocurrency exchange is a digital marketplace where an entity can buy and sell cryptocurrency. To buy cryptocurrency you must have an exchange account. It is an online service that allows you to exchange your fiat for crypto or change crypto into fiat. Similar to a brokerage.
Fiat: Fiat money is government-issued currency.
HODL: Stands for “Hold On for Dear Life”. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency (rather than trading it) in the hopes that it increases in value.
Hot Wallet: A software based cryptocurrency wallet connected to the internet. More convenient to use than a Cold Wallet but more susceptible to hacking and cybersecurity attacks.
Non-fungible Tokens (NFTs): Units of value used to represent the ownership of unique digital items like art, music, GIFs, collectibles, etc. NFTs represent digital items that are ‘one of a kind and irreplaceable’. The only way to purchase an NFT is with cryptocurrency.
Public Key: Your wallet’s address, which is similar to your bank account number. You can share your public wallet key with people or institutions so they can send you money or take money from your account when you authorize it.
Private Key: The encrypted code that allows direct access to your cryptocurrency. Where a Public Key is similar to your bank account number a Private Key is similar to your password or PIN. It should never be shared.
Stablecoin: Also known as Digital Fiat. A stablecoin pegs its value to some other non-digital currency or commodity. A Digital Fiat represents a fiat, or government-backed currency on the blockchain.
Wallet: An app or a physical storage device that serves as a place to store and retrieve your cryptocurrency holdings. Many exchanges offer digital wallets. Wallets may be hot or cold. Wallets can hold multiple cryptocurrencies, i.e. bitcoin, ether, XRP, SOL etc.
For a more complete listing of cryptocurrency and blockchain terminology, check out these additional sources.
