Crypto jargon: Ten terms in blockchain you need to know

There are many complicated ideas in the world of cryptocurrency and blockchain technology and to fuel the fires of complexity the industry and market comes up with niche jargon. While some ideas may remain complex at heart, we can help you understand the world of crypto a little easier by delving into the terminology used in everyone’s crypto life.


Also known as a distributed ledger, a blockchain is basically a fully digital database that collects and records information in a way that cannot be changed or reversed. All cryptocurrency transactions are processed, verified and recorded on the blockchain by a timestamp, and due to the way the technology works, every transaction is encrypted, meaning no one can alter the transaction once it has been verified.

The blockchain is decentralized, meaning there is no central entity (like a government or bank) in control of the network, and no one stores the database. Rather, it is distributed across many networks and computers (called nodes) around the world. Everyone involved in transactions involving a cryptocurrency becomes part of the blockchain and the database is shared among all individuals. This makes the network more secure from hacking and it means that neither party can control the data on the blockchain, resulting in a level of privacy not seen in centralized networks.


An altcoin is any cryptocurrency that is not bitcoin. It comes from Alternative Coin and there are thousands of cryptocurrency and digital currency projects in the market.


Fiat currency is traditional government-issued money. It is the main government-backed currency that a country will use. For example, the United States has the US dollar as its fiat currency.

crypto exchange

A cryptocurrency exchange is a platform that allows people to buy, sell, and trade their cryptocurrencies. Some exchanges allow users to trade fiat-to-crypto, crypto-to-fiat, or just crypto-to-crypto. There are different types of exchanges, from centralized exchanges (which often store your cryptocurrency funds for you) and decentralized exchanges (aka DExs).


“HODL” looks like a typo of “hold” and some say that’s how it originated as a term in cryptography. Being “HODL” means “to hold on for dear life”; means buy and store and not trade and trade. A HODLer is someone who has bought a token and will not sell it.

cryptocurrency key

When you start buying crypto, you are given two keys: the public keys and the private keys.

Your public key is something like your email address that you can share with anyone. Anyone who wants to send you crypto will use your public key as their address.

A private key, which must be kept safe at all costs, is like a password to get into your bank. Consisting of a unique string of different letters and numbers, it allows you to access and manage your cryptocurrency. Just like you don’t want to leave your banking password insecure, securing your private key means your cryptocurrency funds are safe.

Wallet for cryptocurrencies

A cryptocurrency wallet is what you use to store your private keys – you use the wallet to protect access to your cryptocurrency funds.

There are two ways of storing cryptocurrencies using a wallet:

  • Hot storagewho is online and connected to the internet. This is convenient as it allows you to quickly connect to your money and automatically transact online, but it is less secure and at risk of being hacked.
  • cold store, which is completely offline. Usually this is a paper device or wallet that stores your keys without touching the internet. This means that crypto transactions are more of a process but much safer from hacking risks.

A wallet is typically a combination of hot and cold storage, adding layers of security to both methods.

Bitcoin mining

When bitcoin tokens are created, we say they have been “mined”. Bitcoin mining is the process of generating new coins on the market and is done by using powerful, specialized computers to solve complex puzzles and algorithmically create new coins. When it first launched, bitcoin could be mined on a PC, but as more tokens were created, it became more difficult and energy-intensive – a system to ensure all tokens weren’t mined too quickly. Each time a miner mines a new coin, they receive a reward. The mining process is labor intensive, but the incentive of receiving bitcoin for the reward means a fresh supply of new bitcoin is circulating. Bitcoin is capped at 21 million BTC, so once the last coin has been mined, none can exist after that.

Decentralized Finance (DeFi)

DeFi is currently taking the crypto world by storm, with new DeFi projects and platforms emerging in the industry. The term decentralized finance refers to any finance that can occur without an intermediary, such as a central exchange, bank, or financial firm. It relies on blockchain technology, which distributes control across networks rather than storing funds or data in a central location.


An NFT stands for a non-fungible token. “Fungible” means that one unit is worth the same as another unit, like a BTC or a dollar. “Non-fungible” means each unit is unique and does not have the same value as a work of art. NFTs play a prominent role in digital assets and billions of dollars have poured into the market in the last two years as collectors and dealers buy NFTs to add to their collections or to buy and sell for a profit.

The post Crypto Jargon: Ten Blockchain Terms You Need to Know appeared first on Coin Insider.

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