CryptKi Glossary:
Understand what you’re reading

0–9

2FA [Two-Factor Authentication]
Extra verification step requiring a second method in addition to a password.

A

Account abstraction
Model where a wallet can behave like a programmable account, allowing custom rules for signing, recovery, fees, or transaction execution.

Address
Public identifier used to receive crypto, derived from a public key.

Address poisoning
Scam where attackers send small transactions from lookalike addresses to trick users when copying addresses.

Airdrop
Free distribution of tokens to wallet addresses.

Airdrop farming
Practice of using multiple wallets or repeated actions to maximize airdrop eligibility.

Air gap
Physical isolation between a device and any network. Air-gapped wallets sign transactions without being directly connected to the internet.

Algorithm
Set of rules or instructions used by software to process data or solve a task.

Allowance
Amount a smart contract is allowed to spend from your wallet.

Alpha
Information believed to give an advantage in the market.

Altcoin
Any cryptocurrency other than bitcoin.

AML [Anti-Money Laundering]
Rules and controls designed to prevent money laundering, terrorist financing, and other illicit financial activity.

AMM [Automated Market Maker]
Trading system that uses liquidity pools and pricing formulas instead of a traditional order book.

Approval
Permission that allows a smart contract to spend specific tokens from your wallet. This permission can persist over time and may allow future transactions without additional confirmation.

Approval scam
Malicious approval allowing a contract to access and drain your funds.

APR [Annual Percentage Rate]
Annual return shown without assuming that rewards are reinvested.

APY [Annual Percentage Yield]
Annual return shown with compounding, assuming rewards are reinvested.

Arbitrage
Buying and selling an asset to profit from price differences.

ART [Asset-Referenced Token]
Crypto-asset designed to maintain a stable value by referencing one or more assets, such as currencies, commodities, or other crypto-assets.

Asset
Any token, coin, or digital item held in a wallet and carrying value.

Asymmetric cryptography
Encryption system using a public key and a private key.

Atomic swap
Direct exchange of assets between two parties without an intermediary.

Authority
Ability to control or authorize actions on funds.

B

Backup
Copy of critical information kept so access can be restored after loss, damage, or failure.

Bagholder
Investor holding assets that have significantly lost value.

Bear market
Market with declining prices.

BIP-32 [Bitcoin Improvement Proposal 32]
Standard for hierarchical wallet key generation.

BIP-39 [Bitcoin Improvement Proposal 39]
Defines how seed phrases are generated from a list of words.

BIP-44 [Bitcoin Improvement Proposal 44]
Defines how wallets structure accounts and addresses.

bitcoin [BTC]
Native asset used on the Bitcoin network.

Bitcoin [network]
Blockchain network where bitcoin transactions are recorded.

Blacklist
List of blocked addresses or users.

Blind signature
Signature created without clearly revealing all the transaction details to the signer, increasing the risk of approving something unintended.

Block
Group of transactions added to the blockchain.

Block explorer
Tool used to view transactions, balances, and activity on a blockchain.

Blockchain
Shared ledger that records transactions in blocks linked together, making past records difficult to change.

Borrowing
Taking a loan, often by locking crypto as collateral.

Bridge
System used to move assets or data between blockchains, usually by locking, minting, or representing assets elsewhere. It introduces additional trust assumptions and risk.

Bridge exploit
Attack or failure affecting a bridge, often leading to loss, theft, or depegging of bridged assets.

Broadcast
Sending a transaction to the network.

Bug bounty
Program rewarding users for finding vulnerabilities.

Bull market
Market with rising prices.

Burn address
Address used to permanently remove tokens from circulation.

C

CASP [Crypto-Asset Service Provider]
Company authorized to provide crypto services such as custody, exchange, trading, or transfers under applicable regulations. In the European Union, CASPs may be regulated under MiCA.

CBDC [Central Bank Digital Currency]
Digital form of official money issued by a central bank, designed to represent a national currency in electronic form.

CDP [Collateralized Debt Position]
Position where assets are locked as collateral to borrow.

CEX [Centralized Exchange]
Platform where a company manages trading and custody of funds.

Chain
Another term for a blockchain network or its recorded history.

Clipboard hijacking
Malware that replaces copied wallet addresses.

Coin
Cryptocurrency native to its own blockchain.

Cold storage
Keeping private keys offline to reduce exposure to online attacks.

Cold wallet
Wallet that keeps private keys isolated from internet-connected systems, reducing exposure to online attacks.

Collateral
Assets used to secure a loan.

Compounding
Reinvesting earnings so they generate additional returns over time.

Compound interest
Interest calculated on both initial amount and accumulated interest.

Compromise
Loss of security of a wallet, device, or key.

Confirmation
Validation of a transaction by the network, making it increasingly irreversible.

Consensus
Process by which a blockchain network agrees on which transactions and blocks are valid.

Control
Ability to authorize actions on funds by using the relevant private keys.

Cryptography
Mathematical methods used to secure data, verify authenticity, and protect secrets.

Custodian
Entity that holds and controls assets on behalf of users or clients.

Custodial wallet
Wallet where a third party controls the keys and can restrict access to your funds.

Custody
Control over private keys, which determines who can move funds. If you do not control the keys, you do not control the assets.

D

DAO [Decentralized Autonomous Organization]
Organization governed by smart contracts and token holders.

Day trader
Trader opening and closing positions within the same day.

DCA [Dollar-Cost Averaging]
Strategy of investing a fixed amount at regular intervals instead of all at once.

Debt ceiling
Maximum amount that can be borrowed.

DeFi [Decentralized Finance]
Financial services built on blockchains and smart contracts, usually without a central intermediary controlling them.

Delegation
Assigning specific rights, such as voting power or staking power, to another party without necessarily giving up full ownership.

Depeg
Loss of a stable asset’s target value.

DePIN [Decentralized Physical Infrastructure Network]
Blockchain-based network that uses token incentives to coordinate real-world infrastructure such as wireless coverage, storage, compute, sensors, or energy.

Derivation path
Structure used to generate wallet addresses from a seed.

Derived addresses
Wallet addresses generated from the same seed or master key using a derivation path.

DEX [Decentralized Exchange]
Platform for trading directly from a wallet, without giving custody to a third party.

Digital signature
Cryptographic proof that a transaction was authorized using a private key.

Double spending
Attempt to spend the same funds twice.

Drainer
Malicious tool or script designed to quickly transfer assets out of a compromised wallet.

Dust
Very small amount of crypto that is often uneconomical to spend because fees can exceed its value.

Dusting attack
Sending very small amounts of crypto to many wallets to track activity or help identify users.

DYOR [Do Your Own Research]
Do your own research before making decisions.

E

EIP [Ethereum Improvement Proposal]
Design document describing standards or changes for Ethereum.

EMT [E-Money Token]
Crypto-asset designed to maintain a stable value by referencing a single official currency, such as EUR or USD.

Encryption
Process of securing data using cryptography.

ENS [Ethereum Name Service]
Naming system that maps human-readable names to Ethereum addresses and other on-chain data.

ERC-20 [Ethereum Request for Comments 20]
Standard for fungible tokens on Ethereum.

ERC-721 [Ethereum Request for Comments 721]
Standard for non-fungible tokens (NFTs).

ERC-1155 [Ethereum Request for Comments 1155]
Standard supporting both fungible and non-fungible tokens.

Escrow
Funds held until specific conditions are met.

ESMA [European Securities and Markets Authority]
European authority that supervises financial markets. Under MiCA, it is involved in technical standards, coordination between national authorities, and certain information related to crypto-asset service providers.

EVM [Ethereum Virtual Machine]
Execution environment used to run Ethereum smart contracts and compatible applications.

Exposure
Amount of value or authority currently at risk in a given setup or action.

F

Fake airdrop
Scam pretending to distribute free tokens.

Fees
Costs paid to use a service or execute a transaction.

Fiat
Government-issued currency (EUR, USD, CHF, etc.).

Fiat gateway
Service connecting banking systems and crypto, often requiring identity verification.

Finality
Point where a transaction is considered irreversible by the network.

Flash loan
Loan borrowed and repaid in a single transaction.

FOMO [Fear Of Missing Out]
Fear of missing out on an opportunity.

Fork
Change in blockchain rules or a split resulting from incompatible rules.

Front-running
Getting a transaction executed before another one to gain an advantage from it.

FUD [Fear, Uncertainty, Doubt]
Fear and uncertainty used to influence decisions.

Full node
Node that validates and stores the full blockchain.

Fungible
Interchangeable asset with identical value.

Futures
Contract to buy or sell an asset at a future date.

G

Gap
Price difference between a closing and opening price on traditional markets.

Gas
Unit used on some blockchains to measure the computational cost of executing a transaction or smart contract action.

Gas fee
Fee paid to execute a transaction, required for it to be processed.

Gas limit
Maximum gas allowed for a transaction.

Gas price
Cost per unit of gas.

Genesis block
First block of a blockchain.

Governance token
Token used to vote on protocol decisions.

Gwei
Unit of ether commonly used to express gas fees (1 ETH = 1,000,000,000 Gwei).

H

Hardware wallet
Physical device designed to keep private keys isolated from general-purpose connected systems and sign transactions securely.

Hash
Fixed-length output produced from input data by a hash function.

Hash function
Function that converts data into a fixed-length hash.

HODL [Hold On for Dear Life]
Slang for holding crypto instead of selling, especially during volatility.

Honeypot
Malicious token or contract setup that lets users buy or deposit, but prevents them from selling or withdrawing normally.

Hot wallet
Wallet connected to the internet where keys can be used directly, making it convenient but more exposed to attacks.

I

ICO [Initial Coin Offering]
Fundraising method where tokens are sold to investors before or during a project launch, often with high risk and limited guarantees.

Immutable
Data that cannot be changed once recorded, even if incorrect.

Impermanent loss
Loss occurring when the price ratio of two assets in a liquidity pool diverges, the greater the difference, the greater the loss compared to simply holding.

Indexer
Tool organizing blockchain data.

Inflation
Increase in the supply of a currency or token over time.

Intermediary
Third party involved in a transaction.

Interoperability
Ability of different systems or blockchains to work together or exchange data.

Investor
Person holding assets long term.

Irreversibility
Once confirmed, transactions cannot be reversed by the system, regardless of intent or error.

J

JSON-RPC
Standard format used by applications to communicate with blockchain nodes.

K

Key [cryptographic key]
Secret or public cryptographic value used to authorize actions or verify them.

Key pair
Combination of public and private keys.

Keylogger
Malware recording keystrokes.

KYC [Know Your Customer]
Identity verification process.

KYT [Know Your Transaction]
Monitoring and analysis of crypto transactions to detect suspicious activity or compliance risks.

L

Layer 1
Base blockchain network where transactions are ultimately recorded and secured.

Layer 2
Network or system built on top of a Layer 1 to improve speed, cost, or scalability while relying on the Layer 1 in some way.

Ledger
Record of transactions and balances.

Lending
Providing funds to earn interest.

Leverage
Using borrowed funds to increase exposure.

Liquidation
Automatic closing of a position.

Liquidation price
Price at which liquidation occurs.

Liquidity
Ease with which an asset can be bought or sold without strongly moving its price.

Liquidity pool
Funds locked in a smart contract to enable trading or lending.

Liquidity provider [LP]
User supplying liquidity.

Long
Bet that an asset's price will increase.

LP token [Liquidity Provider token]
Token representing a share of a pool.

LTV [Loan-To-Value]
Ratio between borrowed amount and collateral.

M

Mainnet
Live version of a blockchain network where real transactions and assets exist.

Malware
Software designed to harm systems.

Margin trading
Trading with borrowed funds.

Market cap
Total market value of a cryptocurrency, usually calculated as price multiplied by circulating supply.

Market order
Order to buy or sell immediately at the best available price.

Meme
Viral image, phrase or idea shared within a community.

Meme coin
Cryptocurrency based on a meme or internet trend, with no specific utility.

Mempool
Queue of pending transactions waiting to be included in a block.

MEV [Maximal Extractable Value]
Value extracted by reordering, inserting, or censoring transactions.

MFA [Multi-Factor Authentication]
Authentication using two or more independent verification methods.

MiCA [Markets in Crypto-Assets Regulation]
European Union regulatory framework for crypto-assets and crypto service providers, designed to create common rules on licensing, consumer protection, transparency, and market integrity.

Miner
Entity validating Proof of Work transactions.

Mining
Process used in Proof of Work systems to validate blocks and secure the network.

MITM [Man-in-the-middle]
Attack intercepting communication.

Mnemonic phrase
Another term for seed phrase, used to recover wallet access.

Multisig [Multisignature wallet]
Wallet requiring multiple approvals before funds can be moved.

N

Naming service
System that links human-readable names to blockchain addresses.

NFT [Non-Fungible Token]
Unique token recorded on a blockchain, often used to represent ownership of a specific digital item or asset.

NGMI [Not Gonna Make It]
Used to criticize poor decisions or weak projects.

Node
Computer or software instance that participates in a blockchain network by relaying, verifying, or storing data.

Non-custodial wallet
Wallet where you control the private keys and therefore the funds.

Nonce
Number used to order transactions from a given account on some blockchains.

O

Off-chain
Happening outside the blockchain itself.

Off-ramp
Service converting crypto to fiat.

On-chain
Recorded or happening directly on a blockchain.

On-ramp
Service converting fiat to crypto.

OpSec [Operational Security]
Practices that reduce what others can learn about you, your assets, and how you access them.

Optimistic rollup
A Layer 2 that assumes transactions are valid by default and only checks them if someone challenges them.

Oracle
Service providing external data to smart contracts, which they rely on.

Order book
A real-time list of buy and sell orders at different prices, showing where traders are willing to buy or sell.

Ordinals [Bitcoin Ordinals]
Method of attaching data to individual satoshis, allowing unique inscriptions or NFT-like assets directly on Bitcoin.

Overcollateralization
Providing more collateral than borrowed.

Ownership
In crypto, practical control over funds through possession of the relevant private keys.

P

Pair [trading pair]
Two assets quoted against each other on a market, such as BTC/EUR or ETH/USDC.

Passphrase
Additional secret word or sentence used with a seed phrase to create a separate wallet. Losing it means losing access to that wallet.

Peg
Target value an asset is meant to track, usually a fiat currency such as the US dollar or euro.

Peer-to-peer
Direct interaction without intermediary.

Permit
Signature-based approval allowing spending without a separate on-chain approval transaction.

Permission
Right granted to perform a specific action, often by a wallet signature or approval.

Permissionless
System that anyone can use without needing prior approval from a central authority.

Phishing
Fraud that tricks users into revealing sensitive information or signing malicious transactions or messages.

Pool
Shared funds locked in a smart contract, often used for trading, lending, or rewards.

Private key
Secret key that gives full control over funds and must never be shared.

PoS [Proof of Stake]
Validation system where participants lock assets to help secure the network.

PoW [Proof of Work]
Validation system where participants use computation to secure the network and create blocks.

PSBT [Partially Signed Bitcoin Transaction]
Standardized in BIP 174, it is a data format that allows a Bitcoin transaction to be created, passed around, signed by one or more parties, and finalized before it is broadcast to the network.

PSM [Peg Stability Module]
Mechanism used to maintain a stable asset’s peg.

Public key
Key used to generate addresses and verify signatures.

Q

R

RBF [Replace-By-Fee]
Mechanism that lets you replace a pending transaction with a new one carrying a higher fee, usually to speed up confirmation.

Redemption
Process of exchanging a token for its underlying value.

Replay attack
Reuse of a valid transaction or signature on another network or in another context.

Replay protection
Mechanism preventing a transaction or signature from being reused on another blockchain or incompatible context.

Retail
Individual investor.

Revoke
Action of cancelling or reducing a previously granted approval.

Rollup
A Layer 2 that processes transactions outside the main chain and posts compressed data or proofs back to it.

RPC [Remote Procedure Call]
Interface used by wallets or apps to communicate with a blockchain node.

RTFM [Read The F* Manual]
Slang telling someone to read the documentation first.

Rug
Short form of rug pull. Sudden collapse or abandonment of a project after attracting users or funds.

Rug pull
Project abandoned or manipulated by its developers, often after attracting funds or liquidity from users.

RWA [Real World Assets]
Tokenized representation of real-world assets.

S

SAFU
Crypto term meaning that funds are safe. It may refer to Binance's emergency reserve fund or be used informally to indicate that assets are secure.

Satoshi
Smallest unit of bitcoin (1 BTC = 100,000,000 satoshis). Also the pseudonym of Bitcoin's creator, Satoshi Nakamoto.

SBT [Soulbound Token]
Non-transferable token recorded on a blockchain, often used to represent identity, credentials, membership, or reputation.

Scalper
Trader making very short-term trades.

Security token
Token representing ownership, debt, or other financial rights, often subject to regulation.

Seed phrase [Recovery phrase]
List of words that allows full reconstruction of a wallet and its private keys. Anyone with it has complete control over the funds.

Self-custody
Holding your own private keys instead of relying on a third party.

SHA-256
Cryptographic hash function widely used in Bitcoin and other systems.

Shill
Aggressive promotion of an asset.

Short
Bet that an asset's price will decrease.

Sidechain
Separate blockchain connected to a main blockchain.

Signature
Proof that a transaction or message was approved with a private key.

Signature phishing
Tricking users into signing malicious messages or requests that can later grant access or trigger harmful actions.

Signature request
Prompt asking a wallet user to sign a message or transaction. It should never be treated as harmless by default.

Signing
Approving a transaction or message with a private key.

Simple interest
Interest calculated only on the initial amount.

SIM swap
Attack where someone takes control of a phone number to intercept codes, reset accounts, or bypass security steps.

Slashing
Penalty in Proof of Stake where part of a validator’s stake is lost.

Slippage
Difference between the expected price and the actual executed price of a trade.

Smart contract
Program on a blockchain that executes automatically when called. It does not interpret intent and will execute exactly as written.

Smart contract audit
Review of smart contract code by specialists to identify vulnerabilities or design flaws. An audit can reduce risk, but it does not guarantee safety.

Snapshot
Record of balances or blockchain state at a specific moment.

Social engineering
Manipulating users into revealing information, granting access, or approving harmful actions.

Social recovery
Recovery method where trusted people or devices help restore access to a wallet without relying only on a seed phrase.

Spear phishing
Targeted phishing attack.

Spot trading
Immediate buying or selling.

Stablecoin
Crypto asset designed to track a stable value, usually a fiat currency.

Staking
Locking or delegating assets to participate in network validation or earn rewards.

Swap
Exchange of one asset for another, often directly through a smart contract or trading platform.

Swing trader
Trader holding positions over days.

Synthetic asset
Token that tracks the value of another asset.

secp256k1
Elliptic curve standard used for key generation and signatures in many cryptocurrencies.

T

Taproot
Bitcoin upgrade improving privacy, efficiency, and flexibility by making different complex transaction types look more similar on-chain.

Testnet
Blockchain network used for testing with non-real assets.

Token
Asset created on an existing blockchain via a smart contract, as opposed to a coin which is native to its own blockchain.

Token burning
Permanent removal of tokens from circulation to reduce supply.

Trader
Person actively trading.

TradFi [Traditional Finance]
Traditional financial system, including banks, brokers, and regulated financial institutions.

Transaction
Signed instruction recorded on a blockchain, usually irreversible once confirmed.

Transaction fee
Cost of processing a transaction.

Trustless
System where rules are enforced by code rather than by trusting a central third party.

U

Unlimited approval
Approval that allows a contract to spend all tokens of a given type from your wallet until the permission is revoked.

UTXO [Unspent Transaction Output]
Unspent output from a previous transaction that can be used as an input in a new one.

Utility token
Token used to access a service.

V

Validator
Participant that helps validate blocks and secure a Proof of Stake network.

Validity
Compliance of a transaction with the protocol rules required for it to be accepted by the network.

Vault
Smart contract that holds and manages deposited assets according to predefined rules.

Verification
Process by which nodes check that a transaction follows the protocol rules before adding it to the blockchain.

Volatility
Degree of price variation over time.

W

WAGMI [We’re All Gonna Make It]
Expressing optimism in crypto.

Wallet
Tool that manages your private keys and allows you to sign transactions. A wallet does not store assets. It controls the ability to use them.

Wallet address
Public identifier derived from a public key, used to receive funds.

Wallet drainer
Malicious tool designed to empty a wallet by abusing approvals, signatures, or compromised access.

WalletConnect
Protocol used to connect a wallet to an application without entering private keys into the app.

Web3
Term commonly used for blockchain-based applications and services that interact directly with wallets and smart contracts.

Wei
Smallest unit of ether (1 ETH = 1,000,000,000,000,000,000 Wei). Used in technical contexts, while Gwei is preferred for gas fees.

Whale
Person or entity holding a very large amount of a cryptocurrency.

Whitelist
List of approved users or addresses.

Whitepaper
Foundational document describing a project and how it works.

Wrapped token
Token representing another asset in a different format or on another chain.

X

Y

Yield
Return generated by holding, lending, staking, or providing liquidity.

Yield farming
Seeking returns by moving assets between DeFi protocols, often through lending or liquidity provision.

Z

Zero-knowledge proof
Method of proving information is true without revealing the underlying information itself.

zk-rollup
A Layer 2 that proves transactions are valid using zero-knowledge proofs before or as they are finalized.

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