Reference

Crypto glossary

Plain-language definitions of the terms used across Crypto Pro Network — the vocabulary of crypto, its finances, and its markets, without the jargon.

A

• Address

  A public identifier others send funds to on a blockchain.

• Airdrop

  A distribution of crypto tokens to many wallet addresses, often free or for simple tasks.

• Algorithmic stablecoin

  A stablecoin that seeks its target value mainly through automated supply rules rather than reserves.

• AML

  Anti-money laundering: the laws and controls designed to stop the disguising of illicit funds.

• Arbitrage

  Profiting from a price difference for the same asset across markets by buying low and selling high simultaneously.

• Ask

  The price at which a prospective seller is willing to sell an asset, sitting on the sell side of the order book.

• Automated market maker

  A formula-based system that prices and settles trades against a pooled reserve instead of an order book.

B

• Bid

  The price a prospective buyer is willing to pay for an asset, sitting on the buy side of the order book.

• Bid-ask spread

  The difference between the best bid and the best ask, reflecting the cost of transacting immediately.

• Block

  A batch of transactions added to the blockchain as one linked unit.

• Blockchain

  A shared, tamper-evident ledger of chained blocks maintained across many computers.

C

• Capital gain

  The profit realised when an asset is disposed of for more than its cost basis.

• CBDC

  A central bank digital currency: a digital form of official money issued by a central bank.

• Coin

  A blockchain''s native asset used for fees and network security.

• Cold wallet

  A wallet that keeps keys offline to reduce remote attack risk.

• Confirmation

  A block including a transaction, making it progressively harder to reverse.

• Consensus

  How a decentralised network agrees on one shared ledger.

• Cost basis

  The original value assigned to an asset, used to calculate gains or losses for tax.

• Custodial

  An arrangement where a third party holds and controls the private keys to a user's crypto.

D

• Depeg

  When an asset meant to track a reference value trades meaningfully away from that target.

• Derivative

  A contract whose value is derived from an underlying asset rather than being the asset itself.

E

• ERC-20

  A widely used technical standard for fungible tokens on Ethereum and compatible networks.

F

• Fiat

  Government-issued legal-tender currency whose value rests on public trust rather than a backing commodity.

• Fork

  A change or split in a blockchain''s rules or history.

• Full node

  A node that independently verifies the whole chain against all rules.

• Funding rate

  A periodic payment exchanged between long and short holders that keeps a perpetual contract near the spot price.

G

• Gas

  The unit measuring computational work a blockchain operation consumes.

• Gas fee

  The market-priced cost of getting a transaction processed on-chain.

• Gwei

  A small denomination of ether, equal to one-billionth of an ether, often used for fees.

H

• Hardware wallet

  A dedicated device that stores keys and signs transactions offline.

• Hash

  A one-way function that fingerprints any data as a fixed-length string.

• Hot wallet

  An internet-connected wallet that trades convenience for greater exposure.

• Howey test

  A US legal standard used to decide whether an arrangement is an investment contract, and thus a security.

I

• Impermanent loss

  The value gap a liquidity provider faces versus simply holding, caused by changes in the pooled assets prices.

K

• KYC

  Know Your Customer: the procedures firms use to verify a client's identity.

L

• Leverage

  The use of borrowed funds or collateral-backed contracts to control a position larger than the capital committed.

• Limit order

  An instruction to trade only at a specified price or better, giving price control at the cost of execution certainty.

• Liquidation

  The forced closing of a leveraged position when its margin falls below the required maintenance level.

• Liquidity

  The ease with which an asset can be traded quickly without causing a large change in its price.

• Liquidity pool

  A smart-contract reserve of assets that supplies the funds an automated market maker uses to settle trades.

• Long position

  A market stance that profits when the price of an asset rises.

M

• Maker-taker

  A fee model that distinguishes orders which add liquidity (makers) from those that remove it (takers).

• Market depth

  The volume of buy and sell orders resting at each price level, indicating how much can trade before the price moves.

• Market maker

  A participant that continuously quotes both buy and sell prices, supplying liquidity to a market.

• Market order

  An instruction to trade immediately at the best available prices, prioritising execution over price control.

• Mempool

  The waiting area for valid, unconfirmed transactions before they are mined.

• MiCA

  The European Union's harmonised regulatory framework for crypto-asset issuers and service providers.

• Miner

  A proof-of-work participant who spends computing power to add blocks.

N

• Network fee

  The amount paid to have a transaction processed and recorded on a blockchain.

• Node

  A computer that validates and relays blockchain data across the network.

• Non-custodial

  An arrangement where the user alone holds the private keys controlling their crypto.

• Nonce

  A number used once for mining search or transaction ordering.

O

• Off-ramp

  A service or process that converts cryptocurrency back into traditional money.

• On-ramp

  A service or process that converts traditional money into cryptocurrency.

• Order book

  A continuously updated, price-ranked list of outstanding buy and sell orders for an asset on a trading venue.

• Order matching engine

  The core software that pairs buy and sell orders by defined rules and executes the resulting trades.

P

• Peg

  A target value an asset aims to maintain relative to a reference such as a currency.

• Perpetual futures

  Futures-style contracts with no expiry, kept near spot by periodic funding payments between traders.

• Private key

  The secret that controls an address and signs its transactions.

• Proof of stake

  Consensus that selects block creators by staked collateral, not computation.

• Proof of work

  Consensus that ties block creation to costly computational effort.

• Public key

  A shareable cryptographic value used to receive funds and verify signatures.

R

• Reserve attestation

  An independent report stating that an issuer held specified backing assets at a point in time.

S

• Seed phrase

  A word list that backs up and restores an entire wallet.

• Settlement

  The process by which a transaction is finalised and ownership is conclusively transferred.

• Short position

  A market stance that profits when the price of an asset falls.

• Slippage

  The difference between the price expected when an order is placed and the price at which it actually executes.

• Smart contract

  Blockchain code that runs automatically when its conditions are met.

• Spot market

  A venue where assets are bought and sold for immediate delivery at the current price.

• Stablecoin

  A cryptocurrency designed to hold a steady value by tracking a reference asset such as a national currency.

• Staking

  Committing crypto assets to help operate and secure a proof-of-stake blockchain.

• Staking reward

  Compensation a participant may receive for staking tokens to help secure a network.

T

• Taxable event

  A transaction or occurrence that may trigger a tax reporting or payment obligation.

• Token

  A unit of value issued by a smart contract on an existing chain.

• Trading volume

  The total quantity of an asset traded over a given period, used as a gauge of market activity.

• Transaction

  A signed instruction to move value or trigger a contract on-chain.

• Travel Rule

  A rule requiring financial firms to share sender and recipient details on qualifying transfers.

V

• Validator

  A proof-of-stake participant who stakes collateral to propose and confirm blocks.

W

• Wallet

  Software or hardware that manages the keys controlling blockchain funds.

• Wash trading

  Trading with oneself to fake activity and inflate reported volume without real change in ownership.