Crypto Dictionary: 88 Terms Explained in Plain English

This crypto dictionary explains 88 common crypto terms in simple English, from 2FA to zero-knowledge proof. Each entry gives a short, direct definition, and the list covers old terms like mining and forks as well as newer ones like stablecoin, staking, rug pull and travel rule. Definitions are for learning, not financial advice. For a longer explanation of how it all fits together, read blockchain explained simply.

A

Airdrop: Free tokens sent to many wallets, often to reward early users. Scammers also use fake airdrops to trick people into connecting a wallet.

Altcoin: Any cryptocurrency other than Bitcoin.

AML: Anti-money laundering. Rules that make financial firms, including crypto platforms, check who their customers are and watch for suspicious activity.

AMM: Automated market maker. A smart contract that sets prices and swaps tokens using a pool of funds instead of a list of buyers and sellers.

ATH: All-time high. The highest price an asset has ever reached.

B

Bear market: A long period of falling prices and low confidence. A “bear” expects prices to drop.

Bit: The smallest unit of computer data, a 0 or a 1. It is also used informally for a small part of a Bitcoin.

Bitcoin: The first cryptocurrency, launched in 2009. It has a fixed limit of 21 million coins and runs without a central company.

Block: A batch of confirmed transactions. Each block points to the one before it, which forms the chain.

Blockchain: A shared record of transactions kept in linked blocks by many computers. Changing old records is very hard because every later block depends on them.

Bridge: A tool that moves tokens from one blockchain to another. Bridges have been targeted by hackers.

BTC: The ticker symbol for Bitcoin.

Bubble: A price rise driven by hype rather than real use, which often ends in a sharp fall.

Bull market: A long period of rising prices and strong confidence.

C

CASP: Crypto-asset service provider. This is the term used in the Philippines by the Securities and Exchange Commission (SEC), whose 2025 rules require a licence before offering crypto-asset services.

CBDC: Central bank digital currency. A digital form of a country’s own money, issued by its central bank. It is not a cryptocurrency.

Chain split: A point where one blockchain divides into two chains that follow different rules or histories.

Cold wallet: A wallet that is not connected to the internet, such as a hardware device. It is harder to hack than a wallet on a phone or computer.

Crypto: Short for cryptocurrency, or for the wider field of digital assets and blockchain technology.

Cryptocurrency: A digital asset that uses cryptography and a shared ledger to record who owns what, without a bank in the middle.

Cryptography: The science of keeping information secret and checking that it is real. It protects wallets and signs transactions.

Cryptojacking: Secretly using someone else’s device to mine crypto, usually through malware or a bad website.

Custodial wallet: A wallet where a company holds your private keys for you. If the company fails or is hacked, your access can be affected.

D

DAO: Decentralized autonomous organization. A group that makes decisions by voting with tokens, with rules written in smart contracts.

DeFi: Decentralized finance. Lending, trading and other money services run by smart contracts instead of banks.

DEX: Decentralized exchange. A platform where users trade tokens directly from their own wallets through smart contracts.

Distributed ledger: A record shared across many computers, with no single owner. A blockchain is one type.

Double spending: Spending the same digital money twice. Bitcoin’s design makes this extremely hard.

DYOR: Do your own research. A reminder to check a project yourself before you trust it.

E

Exchange: A platform where you can buy, sell or swap crypto. In the Philippines, a crypto exchange should be registered with the BSP as a VASP or licensed by the SEC as a CASP.

F

Faucet: A website that gives out tiny amounts of crypto for free. Today faucets mostly supply test tokens on test networks so developers can try their code.

FDV: Fully diluted valuation. The price of a token multiplied by its maximum supply, including coins not yet released. See market caps explained.

Fiat: Money issued by a government, such as the peso or the US dollar.

Fork: A change to a blockchain’s rules, or a copy of a blockchain’s code that starts a new chain.

FUD: Fear, uncertainty and doubt. Negative talk that may or may not be true, used to describe panic in the market.

G

Gas fee: The fee paid to have a transaction processed on a blockchain such as Ethereum. It rises when the network is busy.

H

Halving: A planned event on Bitcoin, roughly every four years, that cuts the reward for mining a block in half.

Hard fork: A rule change that is not compatible with old software, so nodes must upgrade or end up on a different chain.

Hash: The output of hashing. A short fixed-length code that stands for a piece of data.

Hash rate: The total computing power used to mine a proof-of-work network. A higher hash rate makes attacks more costly.

Hashing: Turning any data into a fixed-length code. Even a tiny change in the data gives a completely different result.

HODL: A famous misspelling of “hold”. It means keeping crypto instead of selling, even when prices fall.

I

ICO: Initial coin offering. A 2017-style sale of new tokens to the public. Some ICOs were scams or failed. Later variants include the IEO (run by an exchange) and the IDO (run on a decentralized exchange).

K

KYC: Know your customer. The identity checks a platform does before you can trade, often with an ID and a selfie.

L

Layer 2: A network built on top of a main blockchain to make transactions cheaper and faster, then settle back on the main chain.

Liquid staking: Staking your coins and getting a token back that shows your stake and can be used elsewhere.

Liquidity pool: A pot of tokens locked in a smart contract that lets people trade or lend. It is the base of most AMMs.

M

Market cap: Market capitalization. Price multiplied by circulating supply, used to compare the size of coins.

MEV: Maximal extractable value. Extra profit a block builder or bot makes by choosing or reordering transactions, often at the cost of ordinary users.

MiCA: The European Union’s Markets in Crypto-Assets rules for crypto firms and stablecoins.

Mining: Using computers to check transactions and add blocks on a proof-of-work chain, in return for newly created coins and fees.

Memecoin: A token based on a joke, a meme or a celebrity, often with no use beyond trading. Prices can collapse quickly.

N

NFT: Non-fungible token. A token that stands for one specific item, such as a piece of digital art, and is not interchangeable with another.

Node: A computer that stores a copy of the blockchain and checks that new transactions follow the rules.

Non-custodial wallet: A wallet where only you hold the private keys. You have full control and also full responsibility.

O

Oracle: A service that brings outside data, such as a price, into a smart contract.

P

Private key: A secret code that proves you own your coins and lets you spend them. Never share it.

Proof of stake: A way to run a blockchain where validators lock up coins as a guarantee of honest behavior. It uses far less energy than proof of work.

Proof of work: A way to run a blockchain where miners spend computing power to add blocks. Bitcoin uses it.

Public key: A code made from your private key that can be shared. Wallet addresses are based on it.

Pump and dump: A scheme where a group pushes a price up with hype, then sells to newcomers at the top.

R

Restaking: Reusing staked coins to help secure other services, in return for extra rewards and extra risk.

Rollup: A layer 2 method that bundles many transactions and posts a summary to the main chain.

Rug pull: A scam where creators attract money into a new token, then drain the funds and disappear. See how to spot fake cryptocurrency.

RWA: Real-world assets. Things like bonds, funds or property represented as tokens on a blockchain.

S

Satoshi: The smallest unit of Bitcoin, one hundred millionth of a coin (0.00000001 BTC).

Satoshi Nakamoto: The name used by the unknown person or group who created Bitcoin and published its whitepaper.

Seed phrase: A list of words, often 12 or 24, that can rebuild your wallet. Anyone who has it controls your funds.

SHA-256: A hashing method used in Bitcoin mining and in linking blocks. It produces a 256-bit code.

Smart contract: A program stored on a blockchain that runs automatically when its conditions are met.

Soft fork: A rule change that works with old software, so nodes that do not upgrade can still follow the chain.

Spot ETF: An exchange-traded fund that holds the actual crypto, so investors can get price exposure through a normal brokerage account.

Stablecoin: A token designed to hold a steady value, usually by tracking the US dollar. USDT is one example. See USDT to PHP.

Staking: Locking coins on a proof-of-stake network to help run it, in return for rewards. The rewards are not guaranteed.

T

Token: A digital asset created on an existing blockchain. See also coin.

Tokenization: Representing a real asset, such as a fund or a bond, as a token on a blockchain.

Travel rule: A rule that requires crypto firms to send sender and receiver details with transfers above a set size. The BSP FAQ for VASPs sets the amount at PHP 50,000 or more.

TVL: Total value locked. The value of the assets held in a DeFi protocol. It can be inflated when token prices rise.

U

UTXO: Unspent transaction output. The way Bitcoin tracks balances: your balance is the sum of the outputs you can still spend.

V

VASP: Virtual asset service provider. The BSP term for a business that exchanges, transfers or holds virtual assets for customers. The BSP publishes a list of registered VASPs.

Volatility: How quickly and how much a price moves up and down.

W

Wallet: Software or a device that stores your private keys and lets you send and receive crypto. It does not hold coins itself, the blockchain does.

Wallet drainer: Malicious code, often on a fake site, that tricks you into approving a transaction that empties your wallet.

Whale: A person or group holding a very large amount of a coin, enough to move its price.

Wash trading: Buying and selling with yourself to fake trading volume and make a token look popular.

X

XBT: A currency code for Bitcoin used in finance, alongside the more common BTC.

Y

Yield farming: Moving crypto between DeFi platforms to chase rewards. Returns change fast and losses are common.

Z

Zero-knowledge proof: A method to prove something is true without showing the underlying data. It is used for privacy and in some rollups.

Keep learning

Terms are easier to remember in context. Read how blockchain works, the guide to scams and the market cap guide. The Bitcoin and Ethereum glossaries, linked in the sources, are good references for technical readers.