What is blockchain? Crypto terms explained in plain English
Crypto has a vocabulary problem. Most explanations are written by people who already understand the thing they are explaining, so a beginner ends up looking up three more words per sentence. This glossary is the opposite: every term below is written for someone who has never bought crypto, using everyday comparisons instead of jargon.
You will find the words that appear in almost every headline — blockchain, wallet, seed phrase, stablecoin, DeFi, gas fees, staking, market cap — grouped alphabetically so you can jump straight to the letter you need. Each definition explains what the thing is, why it exists, and what it means for your money rather than for a developer. Where a term carries real risk, such as custody or token approvals, we say so plainly instead of glossing over it.
Use it two ways: read a few entries before you open your first account, then come back whenever a news story loses you. When you are comfortable with the words, the crypto news section puts them to work, and the free calculators help you test the numbers behind them. Definitions are educational only and are not financial advice.
A
- Airdrop
- A free distribution of tokens to wallets that meet some condition, often past usage of an app. Legitimate airdrops never ask for your seed phrase.
- Altcoin
- Any cryptocurrency that is not Bitcoin. The label covers everything from major networks to coins created last week.
- APY
- Annual percentage yield — the return on a deposit over a year including compounding. In crypto, a high APY signals high risk, not generosity.
B
- Blockchain
- A shared list of transactions maintained by many computers at once, where past entries cannot be quietly rewritten.
- Bear market
- A long stretch of falling prices and cautious sentiment, often lasting a year or more in crypto.
- Bull market
- An extended period of rising prices and optimism, when risk feels lower than it actually is.
C
- Cold wallet
- A wallet kept offline, usually on a dedicated hardware device, to reduce the risk of remote theft.
- Custody
- Who holds the keys to your coins. Self-custody means you do; an exchange holding them means you own a promise instead.
D
- DeFi
- Financial services such as lending or trading run by open software instead of a company.
- Depeg
- When a stablecoin trades meaningfully away from the value it is designed to track, usually because holders doubt its reserves.
- DeFi platform
- An app such as a lending market or decentralised exchange that runs on smart contracts instead of a company. Nobody approves your transaction, and nobody can reverse a mistake.
E
- Exchange
- A platform where you swap regular money for crypto, or one coin for another. Centralised ones hold your funds; decentralised ones do not.
F
- Fork
- A change to a network's rules. A soft fork stays compatible with older software; a hard fork splits the chain in two.
G
- Gas fee
- The payment that compensates a network for processing your transaction. Fees rise when the network is busy.
H
- Halving
- The scheduled event, roughly every four years, that cuts Bitcoin's mining reward in half and slows the creation of new coins.
- HODL
- Community slang for holding through volatility instead of selling in a panic. Born from a typo in 2013.
- Hot wallet
- An internet-connected wallet on your phone or browser. Convenient for small amounts, unsuitable for long-term savings.
K
- KYC
- Know Your Customer — the identity checks regulated platforms must run before letting you trade or withdraw.
L
- Layer 2
- A network built on top of a larger blockchain to make transactions faster and cheaper while still settling back to the main chain.
- Liquidity
- How easily an asset can be bought or sold without moving its price. Thin liquidity is why small coins swing so hard.
M
- Market cap
- Price multiplied by circulating supply — a rough measure of a coin's size, and easy to inflate with a tiny circulating float.
- Mining
- Competing with computing power to add the next block of transactions, in exchange for newly issued coins and fees.
N
- NFT
- A token that points to a unique item and records who owns it.
P
- Private key
- The secret that proves ownership of your coins. Whoever knows it controls the funds.
- Proof of stake
- A way of securing a network by having holders lock up coins as collateral instead of spending electricity on mining.
R
- Rug pull
- A scam where a project's team drains the funds or dumps their tokens, leaving buyers with something worthless.
S
- Seed phrase
- A list of twelve or twenty-four words that can restore your whole wallet. Treat it as the wallet itself and never type it into a website.
- Smart contract
- Code deployed on a blockchain that runs automatically when conditions are met, without a company in the middle.
- Stablecoin
- A coin designed to track a stable value, usually one US dollar, backed by reserves or collateral.
- Staking
- Locking coins to help secure a proof-of-stake network in return for rewards. Your coins may be unavailable for a set period.
V
- Volatility
- How sharply and often a price moves. Crypto is famously high on this scale.
W
- Wallet
- Software or hardware that stores the keys to your crypto. It holds keys, not coins.
- Whitepaper
- A document describing what a project intends to build and how its token works. Read it before the price chart.
Next step
Comfortable with the words? Start with our beginner explainer on Bitcoin.
Read the explainerReady to open an account? Learn how to choose a safe crypto exchange and then how to start investing with a crypto investment platform.