📖 Complete Plain-English Glossary
The Crypto Dictionary
Over 150 crypto words and phrases explained simply. Bookmark this page and come back whenever something confuses you.
Best Hardware Wallets UK
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123
Numbers
2 Factor Authentication 2FA
A double-layer security measure used by most crypto exchanges. To log in you need both a password and a code from a separate authentication app. Always use an authenticator app rather than SMS — SMS codes can be hijacked via SIM-swap attacks. See our security checklist for step-by-step guidance.
51% Attack
Happens when a single person or group controls more than half the computing power on a network. They can halt mining, alter transactions or double-spend coins. Bitcoin's enormous network makes this practically impossible to achieve.
A
14 terms
Abstract
A summary of a technical document, usually at the start of a whitepaper. Gives you a quick overview before reading the detail.
Address
A unique string of characters identifying where a cryptocurrency sits on the blockchain. Think of it like a bank account number — usually 30 or more characters long.
AES256 Advanced Encryption Standard
An encryption technique with a 256-bit key used in most modern security protocols. Bitcoin uses SHA-256, which is built on this standard.
Airdrop
A marketing event where a project distributes free tokens to holders or community members. Treat unsolicited airdrops with caution as they are frequently used in scam attempts.
Algorithm
A set of mathematical instructions coded into software to produce a specific outcome. In crypto, algorithms underpin everything from transaction validation to price feeds.
All-Time High ATH
The highest price ever recorded for a cryptocurrency.
All-Time Low ATL
The lowest price ever recorded for a cryptocurrency.
Altcoin
Any cryptocurrency that is not Bitcoin. Ethereum, Solana and XRP are all altcoins. Our exchange guide covers which platforms support the widest range for UK buyers.
Annual Percentage Yield APY
The total yearly return on a savings or staking product including compounding. A 5% APY on £100 gives you £105 after one year. Staking rewards on Kraken and Crypto.com are quoted as APY.
API Application Programming Interface
Arbitrage
Buying a cryptocurrency on one exchange where the price is lower and immediately selling it on another where it is higher. Requires fast execution and careful accounting of all fees.
ASIC Miner Application-Specific Integrated Circuit
Specialised hardware designed specifically to mine cryptocurrency. Bitcoin ASICs are so efficient that mining Bitcoin on a regular computer is no longer practical.
Atomic Swap
A method letting two parties exchange different cryptocurrencies directly without an exchange. The swap is coded so either both sides complete or neither does.
Audit
An independent examination of a project's code or finances. Smart contract audits identify security vulnerabilities before money flows through a protocol. All platforms in our DEX guide have been independently audited.
B
12 terms
Bear / Bearish
When prices are falling or expected to fall. A bear market refers to a sustained decline lasting months or longer.
Bear Trap
A manipulation tactic where a group sells heavily to fake a crash, causing others to panic-sell. The group then buys back at lower prices before the market recovers.
BECH32
A Bitcoin address format used with SegWit transactions. These always start with "bc1" and result in lower fees than older formats.
Bitcoin BTC
The first and most valuable cryptocurrency, created in 2008 by the pseudonymous Satoshi Nakamoto. Has a fixed supply of 21 million coins. Available on Coinbase, Kraken, Crypto.com and all major UK exchanges.
Bitcoin Improvement Proposal BIP
The community-driven process for proposing and voting on changes to Bitcoin. Because Bitcoin has no owner, this is how improvements get made.
Block
The individual unit of a blockchain. Each block holds a batch of verified transactions, a timestamp, and a cryptographic link to the previous block. Once added, it cannot be altered.
Block Explorer
An online tool for browsing a blockchain's history in real time. Etherscan.io covers Ethereum. Blockchain.com covers Bitcoin. You can look up any transaction or wallet address.
Block Reward
Cryptocurrency paid to miners or validators for adding a new block to the chain. For Bitcoin, this reward halves approximately every four years in an event called the halving.
Blockchain
A digital ledger of every transaction ever made, stored simultaneously on thousands of computers. No single copy is the master version, making it decentralised and practically impossible to alter.
Brute Force Attack BFA
An automated hack that tries thousands of password combinations per second. Using a strong, unique password on every exchange account is essential. See our security checklist.
Bull Market / Bullish
When prices are rising or expected to rise over a sustained period. "Bullish" describes a positive outlook on a specific asset.
Burned / Burning
When coins are permanently removed from circulation by being sent to an address from which they can never be retrieved. Used to reduce supply and increase scarcity.
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12 terms
CBDC Central Bank Digital Currency
A digital version of a country's fiat currency, issued by its central bank. Unlike Bitcoin, CBDCs are centralised and government-controlled. The Bank of England is exploring a digital pound.
Centralised
Circulating Supply
The number of coins from a cryptocurrency currently available and tradeable. Locked, reserved or burned coins are excluded.
Cold Storage
Storing cryptocurrency with the private key kept permanently offline. Hardware wallets are the most popular form and the recommended method for long-term holdings.
Cold Wallet
A wallet where the private key is stored entirely offline. Synonymous with cold storage. See our hardware wallet guide for a full UK comparison.
Collateral
An asset pledged as security for a loan or trading position. In DeFi, collateral-backed borrowing is common. GMX uses collateral-based margin for perpetuals trading.
Confirmation
When a transaction has been verified and permanently added to the blockchain. Most exchanges require a set number of confirmations before treating a deposit as available to trade.
Consensus
Agreement across a majority (typically 51% or more) of participants on a network. Required to validate transactions and approve any protocol changes.
Contract Address
The unique on-chain address for a smart contract or token. Always verify this when interacting with DeFi protocols to avoid scam tokens with similar names.
Cryptocurrency
A form of digital money existing as encrypted data on a decentralised network. Operates independently of any bank or government.
Cryptographic Hash Function
A one-way mathematical process converting any input into a fixed-length string of characters. You cannot reverse a hash to find the original input. This underpins blockchain security and immutability.
Cypherpunk
An activist advocating for cryptography and technology to protect privacy. Bitcoin's creator Satoshi Nakamoto is believed to have been part of or influenced by the cypherpunk movement.
D
9 terms
DAO Decentralised Autonomous Organisation
An organisation governed by code and community vote rather than traditional management. Members hold governance tokens to vote on proposals. Decisions execute automatically via smart contracts.
DApp Decentralised Application
DCA Dollar-Cost Averaging
Investing a fixed amount at regular intervals regardless of price. You never buy all at the top or all at the bottom. Jupiter on Solana has a built-in DCA tool that automates this process.
DeFi Decentralised Finance
Financial services built on blockchain: lending, borrowing, trading and yield-earning without banks or intermediaries. Platforms like GMX, Jupiter, Hyperliquid and Aster are all DeFi platforms.
DEX Decentralised Exchange
An exchange where you trade directly from your own wallet. Nobody holds your funds at any point. See our full DEX comparison guide.
Difficulty
How computationally hard it is to mine a new block. As more miners join, difficulty increases to keep block times consistent.
Distributed Ledger
A ledger stored simultaneously across many computers. Because it exists in thousands of places at once, no single party controls it and it is extremely difficult to manipulate.
Double Spend
An attempted fraud where someone tries to send the same cryptocurrency to two recipients simultaneously. The blockchain prevents this by confirming only the first transaction.
DYOR Do Your Own Research
A reminder that no one should invest based solely on tips or posts from others. Verify information independently before putting money into anything.
E
7 terms
EIP Ethereum Improvement Proposal
The formal process for proposing changes to Ethereum. Anyone in the community can submit one — similar to Bitcoin's BIP process.
ERC-20
The technical standard for tokens built on Ethereum. All ERC-20 tokens behave predictably and compatibly. Most DeFi tokens and stablecoins are ERC-20.
Escrow
Funds held by a neutral third party until conditions are met. Smart contracts can act as trustless escrow, releasing funds automatically without a human intermediary.
ETF Exchange-Traded Fund
A financial product listed on a stock exchange tracking an underlying asset. Bitcoin spot ETFs are now approved and trading in the US, giving investors exposure without holding crypto directly.
Ether ETH
The native cryptocurrency of Ethereum, used to pay transaction fees. Available on Coinbase, Kraken, Crypto.com and all major UK exchanges.
Ethereum
The second-largest cryptocurrency by market cap and the most widely used blockchain for DApps and smart contracts. Foundation for much of the DeFi ecosystem including GMX.
Exchange
A platform to buy, sell and trade cryptocurrencies. Centralised exchanges including Coinbase, Kraken, Bybit, OKX, Crypto.com, KuCoin and Binance hold your funds on your behalf. See our full UK exchange comparison.
F
5 terms
FA Fundamental Analysis
Evaluating a cryptocurrency by examining the project itself: team, technology, use case and market opportunity. Contrasted with technical analysis, which focuses on price charts.
Fiat
Government-issued currency maintained through trust rather than intrinsic value. GBP, USD and EUR are all fiat. UK exchanges accept GBP deposits via Faster Payments bank transfer.
FOMO Fear Of Missing Out
The anxiety of watching a coin rise and buying impulsively at the top. One of the most common causes of poor decisions in crypto. A DCA strategy is a practical way to manage this impulse.
Fork
When a blockchain splits into two versions. A soft fork is backward-compatible. A hard fork creates a permanent split that can result in two separate coins.
FUD Fear, Uncertainty and Doubt
Negative information or rumours spread about a cryptocurrency, often deliberately to push prices down. Recognising FUD helps you avoid emotional decisions based on unverified claims.
G
5 terms
Gas
The fee paid to process a transaction on Ethereum, paid in ETH. The more congested the network, the higher the fees. Platforms like GMX require ETH for gas.
Gas Limit
The maximum gas you are willing to spend on a transaction. If the transaction needs more, it fails and the gas already used is not refunded. Setting the limit too low is a common beginner mistake.
Gas Price
How much you are willing to pay per unit of gas. A higher price gets your transaction processed faster. Usually denominated in Gwei.
Genesis Block
The very first block in a blockchain. Bitcoin's genesis block was mined by Satoshi Nakamoto on 3 January 2009.
Gwei
The unit used to measure Ethereum gas prices. One Gwei equals 0.000000001 ETH. When gas is "30 Gwei", each unit of computation costs 30 Gwei.
Want to store your crypto safely? We compare every major hardware wallet available in the UK including prices and security ratings.
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6 terms
Halving
A built-in Bitcoin event where the block reward paid to miners is cut in half, happening roughly every four years. The most recent halving was April 2024, dropping the reward to 3.125 BTC.
Hard Fork
A major protocol change that is not backward-compatible. If part of the community refuses to upgrade, the blockchain permanently splits into two separate chains with two separate coins.
Hardware Wallet
A physical device storing your private keys completely offline. The gold standard for crypto security. Ranges from the beginner-friendly Tangem (~£43) to the advanced Coldcard Q. See our full hardware wallet guide.
Hash Rate
The number of hash calculations a mining device or network performs per second. Higher hash rate means a more secure network. Bitcoin's has reached record highs in recent years.
HODL
Originally a typo for "hold", now short for "Hold On for Dear Life". The strategy of holding cryptocurrency through market volatility rather than panic-selling.
Hopium
Irrational optimism about a coin's price, particularly when someone holds a losing position and convinces themselves things will turn around without evidence.
I
3 terms
ICO Initial Coin Offering
A fundraising method where a project sells tokens to early investors before public listing. Far less regulated than a traditional IPO. Always conduct thorough research before participating in any token sale.
Immutable
Cannot be changed. Once a transaction is buried under subsequent blocks it is effectively permanent. This is one of the key properties that makes blockchain records trustworthy.
Interoperability
The ability for different blockchains to communicate and share data. Interoperability solutions (often called bridges) allow assets to move between separate blockchain ecosystems.
J
1 term
JOMO Joy Of Missing Out
The satisfaction of having avoided a bad trade. The flip side of FOMO. Often used after a coin many people rushed into subsequently crashes in value.
K
2 terms
Key Pairs
The combination of a public key (your wallet address) and a private key (your secret password). Your public key can be shared freely to receive funds. Your private key must never be shared with anyone.
L
6 terms
Ledger
A record of financial transactions that cannot be edited, only appended. The blockchain is a distributed public ledger. Ledger is also the world's most popular hardware wallet brand — see the Ledger Flex in our hardware wallet guide.
Leverage
Borrowed capital letting you take a position larger than your deposit. Amplifies gains and losses equally. Available on Hyperliquid, GMX and Aster. Only suitable for experienced traders who fully understand liquidation risk.
Lightning Network
A payment layer built on Bitcoin enabling near-instant, very low-cost transactions settled off-chain. The Blockstream Jade Plus hardware wallet supports Lightning natively.
Limit Order
An instruction to buy or sell at a specific price rather than the current market price. Using limit orders on Kraken Pro and Coinbase Advanced also qualifies you for lower maker fees.
Liquidity
How easily a cryptocurrency can be bought or sold without moving its price significantly. Binance and Bybit have very deep liquidity. Hyperliquid has the deepest liquidity of any DEX.
Liquidity Provider
Someone who deposits assets into a DeFi pool to enable trading and earns a share of fees in return. On GMX, providers earn real yield in ETH or AVAX from trading fees. Be aware of "impermanent loss" before providing liquidity to any pool.
M
7 terms
Market Capitalisation Market Cap
The total value of all coins in circulation. Calculated as circulating supply multiplied by current price. A more useful measure of a coin's size than price alone — a coin at £0.001 with trillions in supply can have a larger market cap than one priced at £50 with limited supply.
Maximum Supply
The total number of coins that will ever exist. Bitcoin's maximum supply is 21 million. Once reached, no new coins can ever be created. This built-in scarcity is central to Bitcoin's value proposition.
MetaMask
A browser extension and mobile app functioning as an Ethereum-compatible wallet. Used to connect to DeFi platforms like GMX and Hyperliquid. For added security, pair MetaMask with a hardware wallet like Ledger or Trezor.
Miner
A person or organisation using computing power to validate transactions and add new blocks to a Proof of Work blockchain. Miners compete to solve a mathematical puzzle — the winner adds the next block and receives the block reward.
Mining
The process of validating transactions and adding new blocks to a Proof of Work blockchain. Requires significant computing power. Difficulty adjusts automatically to maintain a consistent block time regardless of how many miners participate.
Mining Pool
A group of miners combining computing power to increase the odds of finding the next block. Rewards are shared proportionally. Solo mining Bitcoin is statistically impractical for most individuals.
Multi-Signature Wallet Multi-Sig
A wallet requiring more than one private key to authorise a transaction. A 2-of-3 multi-sig requires two of three key holders to sign before any funds move. Common in business crypto setups and high-security personal storage.
N
3 terms
Network
All the nodes participating in a blockchain at any given moment. The combined computing power and number of nodes determines the network's security and resilience.
NFT Non-Fungible Token
A unique digital token representing ownership of a specific asset, either digital or physical. Unlike Bitcoin where each coin is identical, every NFT is one-of-a-kind and indivisible.
Node
Any computer connected to and participating in a blockchain network. The more nodes a network has, the more decentralised and resilient it becomes.
O
2 terms
Oracles
Services that bring real-world data onto the blockchain so smart contracts can act on it. For example, a DeFi lending protocol needs live price data. GMX uses Chainlink oracle pricing to determine trade prices and prevent manipulation.
Orphan Block
A valid block not incorporated into the main blockchain because another block at the same height was accepted first. Occasionally two miners find a valid block simultaneously — the network converges on one and the other becomes an orphan.
Curious about DeFi? Our DEX guide covers Hyperliquid, Jupiter, GMX and Aster in plain English, including how to get started safely from the UK.
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7 terms
Peer-to-Peer P2P
A direct connection between two parties without a central intermediary. Bitcoin was designed as a peer-to-peer electronic cash system. P2P trading is also available on Bybit, letting buyers and sellers transact directly.
Portfolio
The full collection of your cryptocurrency holdings across all wallets and exchanges. Good portfolio management includes tracking cost basis for HMRC, maintaining diversification and keeping long-term holdings in cold storage.
Privacy Coin
A cryptocurrency designed to make transactions untraceable. While Bitcoin transactions are pseudonymous and publicly visible, privacy coins use advanced cryptography to obscure sender, receiver and amount. HMRC still expects these to be declared for tax purposes.
Private Key
A secret alphanumeric string giving full control over the funds in a corresponding wallet. Anyone with your private key can take everything in your wallet. Never store it digitally, photograph it or share it with anyone. Hardware wallets are specifically designed to keep private keys offline. See our hardware wallet guide.
Proof of Stake PoS
Proof of Work PoW
The original blockchain consensus mechanism, used by Bitcoin. Miners compete to solve computationally intensive puzzles to earn the right to add the next block. Energy-intensive but proven over 15 years of Bitcoin operation.
Public Key
Your wallet address. A string of characters derived from your private key that you share with others so they can send cryptocurrency to you. Anyone can see the balance at a public key on the blockchain, but only the holder of the corresponding private key can spend it.
Q
1 term
QR Code
A square barcode encoding information like a wallet address in a scannable format. Eliminates the risk of typos when sharing addresses. Air-gapped hardware wallets like the Keystone 3 Pro and ELLIPAL Titan use QR codes as their only communication method, keeping them fully offline.
R
3 terms
Replay Attack
An attack that can occur after a blockchain hard fork. A transaction broadcast on one chain is rebroadcast on the other, potentially spending coins on both chains unintentionally. Not all forks implement replay protection.
Ring Signature
A cryptographic method allowing a transaction to be approved by a group without revealing which member signed it. Used by privacy-focused coins to make transactions untraceable.
ROI Return on Investment
Profit or loss relative to the original investment. Formula: current value minus original investment, divided by original investment, multiplied by 100. A £100 investment now worth £160 gives an ROI of 60%. Track this in GBP for HMRC reporting.
S
9 terms
Satoshi sat
The smallest unit of Bitcoin, equal to 0.00000001 BTC. Named after Bitcoin's creator. As Bitcoin's price rises, satoshis become more practical for everyday transactions, particularly via the Lightning Network.
Satoshi Nakamoto
The pseudonymous creator of Bitcoin. Their true identity remains unknown. They published the Bitcoin whitepaper in October 2008, mined the genesis block in January 2009, then went silent in 2011. Their wallet is estimated to contain over 1 million Bitcoin, never moved.
Seed Phrase
A sequence of 12 or 24 random words generated when you set up a crypto wallet. It is the master backup for your entire wallet. Anyone with your seed phrase has complete access to your funds. Store it offline on paper or stamped metal — never digitally. The Tangem wallet uniquely eliminates seed phrases by using physical card backups instead. See our security checklist for full backup guidance.
SegWit Segregated Witness
A Bitcoin protocol upgrade separating signature data from transaction data, allowing more transactions per block and reducing fees. Activated July 2017. Most modern Bitcoin wallets use SegWit by default.
SHA-256
The cryptographic hashing algorithm used by Bitcoin to secure transactions and mining. Each block in the Bitcoin blockchain is identified by its SHA-256 hash.
Smart Contract
A self-executing contract written in code that runs automatically when predetermined conditions are met, without human involvement. The foundation of DeFi. Platforms like GMX, Jupiter and Hyperliquid all run on smart contracts.
Stablecoin
A cryptocurrency designed to maintain a stable value, most commonly pegged to the US Dollar. USDC and USDT are the most widely used. Used extensively in DeFi as trading collateral and to hold value during market volatility without converting back to fiat.
Staking
Locking up cryptocurrency to support a Proof of Stake blockchain in exchange for rewards. Available on Kraken, Coinbase and Crypto.com. Staking rewards are generally treated as income by HMRC and must be declared.
Stock-to-Flow Model S2F
A valuation model created by the anonymous analyst PlanB that attempts to predict Bitcoin's price based on its scarcity. Widely discussed but also widely disputed. Useful for understanding Bitcoin's supply dynamics even if you treat price predictions with a degree of scepticism.
T
8 terms
TA Technical Analysis
Forecasting future price movements by analysing historical price charts, trading volumes and patterns. Most professional trading interfaces including Kraken Pro and Bybit include built-in charting tools.
Ticker
A short abbreviation identifying a cryptocurrency on an exchange. BTC for Bitcoin, ETH for Ethereum, SOL for Solana. Always verify both the ticker and the full name before placing any trade, as multiple coins can share the same ticker symbol.
Token
A digital unit of value on a blockchain. Broadly used to describe all cryptocurrencies, though technically coins are native to their own blockchain while tokens are built on an existing one (such as ERC-20 tokens on Ethereum).
Total Supply
All coins that currently exist for a cryptocurrency, including those in circulation and those that are locked or reserved. Different from maximum supply (which includes future coins not yet created) and circulating supply (which excludes locked coins).
TPS Transactions Per Second
How many transactions a blockchain can process each second. Bitcoin manages roughly 7 TPS. Solana (powering Jupiter) handles up to 65,000 TPS theoretically, contributing to its near-zero fees. Hyperliquid's custom L1 handles up to 200,000 TPS.
Transaction
Any movement of cryptocurrency from one address to another. Every transaction is permanently recorded and publicly visible. Many transaction types are taxable events under HMRC rules. See our security and tax checklist.
Transaction Fee
The cost paid to have a transaction processed on a blockchain. On Ethereum this is called gas. On Solana, fees are fractions of a penny. Exchange trading fees are separate and charged by the platform rather than the blockchain.
Transaction ID
A unique identifier assigned to every blockchain transaction. Enter it into a block explorer to see the full details: amount, sender address, recipient address, fee paid and confirmation status.
U
2 terms
Unconfirmed
A transaction that has been broadcast to the network but not yet included in a block. It sits in the "mempool" waiting to be picked up by a miner or validator. Exchanges will not credit your account until the required number of confirmations is reached.
UTXO Unspent Transaction Output
The fundamental unit of value in Bitcoin's accounting model. Your wallet balance is the sum of all unspent outputs previously sent to your addresses. When you spend Bitcoin, the wallet selects UTXOs to cover the amount and creates new UTXOs as change.
V
1 term
Volatility
The degree to which an asset's price fluctuates. Cryptocurrency is notoriously volatile compared to traditional assets. Bitcoin can move 10% to 20% in a single day. This creates opportunity but also significant risk, particularly on leveraged positions on platforms like Hyperliquid or GMX.
W
5 terms
Wallet
Software or hardware storing your private keys and letting you manage your cryptocurrency. Exchange wallets are custodial (held by the platform). Software wallets like MetaMask and Phantom are self-custody apps. Hardware wallets are physical offline devices. For long-term storage, a hardware wallet is always the recommended option. See our hardware wallet guide.
Web3
A vision of the internet built on blockchain technology, emphasising decentralisation, user ownership of data and token-based economies. Web1 was read-only. Web2 is the interactive internet we use today. Web3 aims to give users direct ownership and control.
Wei
The smallest denomination of Ether. One ETH equals 1,000,000,000,000,000,000 Wei. Gas prices are measured in Gwei (one billion Wei).
Whale
A holder with an extremely large position in a cryptocurrency. Whale activity (large buys or sells) can noticeably move the price of smaller coins. On-chain analytics tools allow anyone to monitor large wallet movements.
Whitepaper
A technical document published by a cryptocurrency project explaining the problem it solves, how it works and its roadmap. Bitcoin's whitepaper, published by Satoshi Nakamoto in 2008, is one of the most important financial documents ever written. Reading a project's whitepaper is a core part of doing your own research.
Y
1 term
Yield Farming
A DeFi strategy where you move cryptocurrency into different protocols to maximise returns. This can involve providing liquidity to trading pools, lending assets or staking governance tokens. GMX offers one of the most established yield mechanisms in DeFi, paying liquidity providers in real ETH and AVAX from trading fees rather than inflated token rewards. See our DEX guide for more on earning passive yield through DeFi.
Now you know the lingo, here is where to go next:
Best Hardware Wallets UK
Every major brand compared for UK buyers.
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Best Crypto Exchanges UK
FCA status, fees and GBP support compared.
Read the guide →
Best DEX Platforms UK
Hyperliquid, Jupiter, GMX and Aster reviewed.
Read the guide →
Crypto Security Checklist
25 steps to protect your holdings. Score yourself.
Take the checklist →
Affiliate Disclosure: This article contains affiliate links. If you purchase a product or open an account through our links, we may earn a commission at no additional cost to you. All definitions are provided for educational purposes only and do not constitute financial or investment advice. Always do your own research before making any investment decision. Cryptocurrency is a high-risk asset class and the value of your holdings can fall as well as rise.