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Crypto jargon glossary
Lumen editorial team·44 entries
The first time you step into crypto, what puts most people off isn't the market — it's the screen full of words you don't understand: gas fees, liquidation, TRC20, pig butchering, PoR. Everyone else chats away while you don't even know where to look it up. That's what this glossary is for: each term explained in one plain sentence, with the risks flagged right where they matter. See an unfamiliar word, come back and look it up — no need to memorize anything.
How to use this page
It's grouped into six themes. You can use your browser's in-page find (Ctrl+F on Windows / ⌘+F on Mac) to jump straight to the word you ran into. Entries with a link go to a fuller explanation.
1. Wallets & keys (control these and you control your money)
Term
One-line explanation
Blockchain
A public, distributed ledger: transactions are recorded in "blocks," in order, and become very hard to alter. Crypto runs on top of it.
Wallet
A tool for managing crypto. What it holds isn't the coins themselves but the keys that let you move them (private key / seed phrase).
Hot wallet
A wallet used while connected to the internet (exchange app, browser-extension wallet) — convenient, but more exposed to online attacks.
Cold wallet
A wallet that keeps the private key offline (e.g. a hardware wallet), blocking most online theft and good for long-term storage. Note: offline ≠ absolutely safe — if your seed phrase is seen or you sign a bad approval, you can still lose coins.
Seed phrase
12 or 24 words — the ultimate key to recovering a wallet. Risk: a leak means the money is gone, with no way to get it back. How to store it →
Private key
The password-grade credential controlling an address's assets. Whoever holds it can move your coins — no one should ever ask you for it.
Public key / address
An address is like your receiving account number; you can share it so people can send you coins. It's a long string — check it character by character before transferring.
2. Transfers & networks (where beginners lose the most coins)
Term
One-line explanation
Network / chain
The same coin can run on different blockchains. When transferring you must pick the right network; choose wrong and you can lose the coins for good.
TRC20 / ERC20 / BEP20
Different chain standards a token lives on (Tron / Ethereum / BNB Chain). Risk: the addresses look alike but are not interchangeable — send across the wrong standard and you can't get it back. Explained →
Gas fee
The "toll" you pay the network to send an on-chain transaction; the busier the network, the higher it goes. Not the same as the fee an exchange charges.
Withdraw
Moving coins off an exchange to somewhere else. Irreversible — always check the network and address, and do a small test first. Don't-lose-it checklist →
Approve / sign
Agreeing on-chain to let a contract operate your assets. Risk: sign for a malicious contract and your wallet can be drained in one go.
Phishing
Using fake sites, fake support or fake airdrops to trick you into entering a password or signing — one of the main ways beginners get robbed.
3. Exchanges & orders (how to buy, and from whom)
Term
One-line explanation
CEX (centralized exchange)
A company-run platform that custodies your assets (e.g. Binance) — easy to start with, but the coins are in the platform's hands. How to choose →
DEX (decentralized exchange)
Trades directly on-chain via smart contracts; you manage your own wallet. Higher learning curve and phishing risk — not where a complete beginner should start.
Spot
Buying and holding the coin itself with your money, no leverage. The approach a beginner should learn first.
Market order
Fills immediately at the current market price. Fast, but you may buy at an unfavorable level — especially when liquidity is thin.
Limit order
You set a price and wait for it to fill. Gives you price control, but isn't guaranteed to execute.
Maker / taker
A maker provides liquidity to the market and usually pays a lower fee; a taker fills immediately and usually pays slightly more. Understanding fees →
Slippage
The gap between your expected price and the actual fill price. The more obscure the coin and the bigger the order, the larger it gets.
Liquidity
How easy it is to buy or sell a coin. Low liquidity leaves you exposed to slippage and "you can buy but can't sell" fake markets.
KYC (identity verification)
The exchange's compliance process for verifying your identity. Note: do it only through the exchange's official channels — never send your ID to any "agent."
2FA (two-factor authentication)
An extra one-time code when logging in or withdrawing. The first thing to turn on after signing up — use an authenticator app rather than SMS.
4. Futures & risk (perfectly legal, yet it takes people to zero)
Term
One-line explanation
Futures / contract
Derivatives trading that bets on price moves. Risk: it amplifies gains and losses equally — not a starting point for beginners.
Leverage
Borrowing to enlarge a position. The higher the multiple, the smaller the adverse move needed to wipe out your principal. The real math →
Liquidation
When a leveraged position loses enough that the margin runs short, the system force-closes it. Your principal can vanish in an instant.
Long / short
Long bets on a rise, short bets on a fall, usually in futures. Wrong direction + high leverage = fast liquidation.
Altcoin
Any of the many coins other than Bitcoin, of widely varying quality. Risk: small coins going to zero is the norm, not an accident.
Meme coin
A coin pumped up by community hype and emotion, with no value to back it — prone to sharp spikes and then going to zero.
Go to zero
When a coin loses its value and falls to near nothing. Common with altcoins and meme coins.
Market cap
Price × circulating supply, a common gauge of a coin's size. The smaller the cap, the easier it usually is to manipulate.
Candlestick
A bar chart showing the open/high/low/close over a period. Note: red/green meanings differ by regional convention — read the price, don't just go by color. Chart lesson one →
5. Stablecoins (they sound stable — with conditions)
Term
One-line explanation
Stablecoin
A coin that tries to peg to 1 US dollar, handy for pricing and hedging. Note: it has lost its peg before and is not absolutely safe. Really stable? →
USDT (Tether)
The largest US-dollar stablecoin by market cap and the most widely used, though the transparency of its reserves has long been debated.
USDC
Another major US-dollar stablecoin. In March 2023 it briefly fell to about $0.87 after its reserve bank (SVB) failed, then re-pegged within days.
Proof of Reserves (PoR)
An exchange publishing the assets it holds to show it can repay users. Note: most attestations prove assets but not liabilities — it's not a guarantee of safety.
6. Mindset & scams (more than half of all losses live here)
Term
One-line explanation
DCA (dollar-cost averaging)
Buying in fixed amounts at regular intervals to average out cost, without guessing tops and bottoms. Good for people who want long-term exposure but fear chasing rallies. DCA or all-in? →
All-in
Putting all your money in at once. It magnifies the damage from volatility — beginners should be cautious, and never use borrowed money.
FOMO (fear of missing out)
The urge to chase a rally for fear of missing it. Consequence: it often makes people buy at the very top and get stuck.
Pump / dump
Artificially driving a price up or down. Often used by manipulators to lure in, then harvest, retail traders chasing the move.
Airdrop
A project handing out free tokens. Trap: ones with a link asking you to "connect your wallet and sign to claim" are usually phishing. There's no free lunch.
Pig butchering
A long con that first earns your trust through romance, friendship or a "signal mentor," then lures you to keep depositing. Field guide →
P2P trading
Buyers and sellers trading crypto directly with fiat. Risk: receiving money of unknown origin can get your bank card frozen.
Frozen bank card
If you receive funds linked to crime (fraud or gambling) via P2P, your bank card may be frozen by authorities — a frequent risk in some regions.
This glossary keeps growing with reader feedback. We aim for plain language over piled-up jargon; if an entry isn't quite right, see the corrections page or contact us.