Crypto glossary

Money, power,
and Bitcoin explained

Clear definitions for Bitcoin, money, inflation, custody, and the systems that shape modern finance. Written to be understood the first time. Precise enough to stand up to scrutiny.

  • Bitcoin as money, not speculation
  • Custody, private keys, and ownership
  • Fiat systems, inflation, and monetary control

Use the glossary below to understand how the system actually works.

Crypto glossary

Important crypto and money terms explained

Plain English definitions for Bitcoin, crypto, and money concepts. Built for beginners and experienced users. Use search or filter by letter to find terms quickly.

Address

A string of characters used to receive Bitcoin or other cryptocurrency. Always verify it before sending funds.

Allocation

How you divide money across assets such as cash, stocks, gold, and Bitcoin. It reflects risk tolerance and time horizon.

ASIC

Specialized mining hardware built for one job: hashing efficiently. Common in Bitcoin mining due to proof of work competition.

Bitcoin

A digital monetary network with a fixed supply schedule. It allows value to be transferred without requiring bank custody.

Blockchain

A ledger of transactions maintained by a network. In Bitcoin, blocks link together so history is difficult to alter.

Block reward

Bitcoin issued to miners when a block is added, plus transaction fees. It declines over time due to halvings.

Cold wallet

A wallet kept offline to reduce exposure to malware and online attacks. Often used for long term storage.

Custody

Who controls the private keys. Custodial services hold keys on your behalf. Non custodial means you control them.

Confirmation

When a Bitcoin transaction is included in a block. More confirmations generally means higher confidence it will not be reversed.

Demand

The desire to buy an asset at different prices. When demand rises faster than supply, price typically increases.

Difficulty

A Bitcoin network adjustment that keeps block timing steady by changing how hard it is to mine a block.

Dollar cost averaging

A strategy where you buy at regular intervals regardless of price. It reduces timing pressure but does not remove risk.

Exchange

A platform where crypto is bought and sold. Some exchanges custody assets, others route purchases directly to a wallet.

ETF

An exchange traded fund. Bitcoin ETFs can affect demand by making exposure easier for certain investors.

Encryption

A way to protect data by turning it into unreadable text without a key. Used across security systems and finance infrastructure.

Fiat

Government issued currency like USD. Fiat value is influenced by monetary policy, credit conditions, and demand for the currency.

Fees

Costs paid to process transactions or execute purchases. Fees can include network fees and service fees depending on the flow.

Federal Reserve

The central bank of the United States. It influences monetary conditions through policy tools such as interest rates and balance sheet operations.

Gas fees

Fees paid to process transactions on some networks, especially smart contract platforms. Bitcoin uses transaction fees, not gas.

Genesis block

The first block in the Bitcoin blockchain. It started the chain and is a permanent reference point for the network.

Gold bug

A person who prefers gold as a store of value. Many compare gold and Bitcoin as scarcity based assets.

Halving

A programmed event that cuts the Bitcoin block reward in half. It slows new supply and is part of the 21 million cap schedule.

Hash

A cryptographic function output used to secure blocks and transactions. Bitcoin uses hashing heavily in proof of work.

HODL

A slang term meaning hold through volatility. It reflects long term ownership rather than frequent trading.

Inflation

A general rise in prices over time. Inflation affects purchasing power, which is why many evaluate stores of value.

Interest rate

The cost of borrowing money. Rates influence investment behavior and can affect demand for risk assets and scarce assets.

Irreversible

Bitcoin transactions can be final once confirmed. Sending to the wrong address typically cannot be undone.

Jurisdiction

The legal authority governing a person or company. Rules for crypto can differ across states and countries.

Joint custody

An arrangement where multiple parties share control of keys or approvals. Often implemented with multisignature wallets.

Job number

A reference identifier used by support or operations teams to track a request or transaction in internal systems.

KYC

Know your customer. Identity verification processes used to reduce fraud and comply with financial regulations.

Keys

Cryptographic secrets that control spending. If someone has your private key, they can move your Bitcoin.

Key management

How private keys are generated, stored, backed up, and protected. Strong key management is core to self custody.

Liquidity

How easily an asset can be bought or sold without moving price significantly. Higher liquidity generally reduces slippage.

Limit

A maximum amount allowed per transaction or time period. Limits can vary by payment method, verification status, and risk controls.

Lightning Network

A Bitcoin payment layer designed for faster, lower fee transfers in certain use cases. It is separate from on chain settlement.

Market cap

Total value of a crypto asset, calculated as price times supply. It is a metric, not cash sitting in a vault.

Mining

The process of securing the Bitcoin network through proof of work and adding blocks to the chain.

Monopoly

When a single provider dominates a market. In finance, concentration can affect fees, access, and consumer options.

Node

A computer running Bitcoin software that validates blocks and transactions. Nodes help enforce network rules.

Not your keys not your coins

A reminder that custodial platforms control keys. If you want full control, you need control of the private keys.

Nonce

A number miners vary while hashing to find a valid block. It is part of how proof of work works in practice.

On chain

Activity that happens directly on the blockchain, such as sending Bitcoin from one address to another.

Off chain

Activity that happens outside the blockchain, such as internal bookkeeping or certain payment layers.

OTC

Over the counter. Large trades arranged directly between parties or desks rather than on public order books.

Private key

A secret that authorizes spending. Protect it like cash, because anyone who has it can control the funds.

Public key

A cryptographic component used to derive addresses. It can be shared, unlike a private key.

Price discovery

The process where markets determine price through buying and selling. Bitcoin has no single official price.

Quote

A stated buy or sell price at a moment in time. Quotes can change quickly during volatility.

Quick confirmation

A common phrase for early confirmations. For meaningful amounts, waiting for multiple confirmations is common practice.

Queue

A line of transactions waiting to be confirmed. Fees can influence priority in many networks.

Risk

Uncertainty in outcomes. In Bitcoin, risk includes volatility, mistakes in address entry, and security failures.

Reserve

Funds held to back obligations or balances. In stablecoins, reserves refer to assets intended to support redemptions.

Recovery phrase

A set of words used to restore a wallet. Anyone who has it can access the funds, so it must be stored securely offline.

Satoshi

The smallest unit of Bitcoin. One Bitcoin equals 100 million satoshis.

Savings

Money set aside for future use. Many people evaluate savings in terms of purchasing power over time.

Supply

How much of an asset exists and can be sold. Bitcoin supply follows a known issuance schedule with a hard cap.

Transaction

The movement of Bitcoin from one address to another. Transactions become final as they receive confirmations.

Treasury

A pool of funds held by a company or institution. Some firms hold Bitcoin in treasury as a long term asset.

Trading volume

Total amount traded over a period. Higher volume often means stronger liquidity and more active price discovery.

UTXO

Unspent transaction output. Bitcoin accounts balances through UTXOs rather than a single account balance model.

USD

United States dollar. It is the pricing currency for many Bitcoin markets and is influenced by macro conditions.

User error

Mistakes like sending to the wrong address or choosing the wrong network. Bitcoin finality makes careful review important.

Volatility

How quickly price changes. Bitcoin can move sharply in both directions, especially during major news or liquidity shifts.

Volume

The amount traded. Volume helps explain why price moves can be smooth or abrupt.

Verification

Identity checks required for many financial services. Verification helps prevent fraud and supports compliance obligations.

Wallet

A tool that stores keys and enables sending and receiving. Wallets can be hardware devices, apps, or software.

Wealth

Accumulated value over time. People often focus on preserving wealth by managing risk and protecting purchasing power.

Wire transfer

A bank to bank transfer method. Wires are often used for higher value transactions where confirmation and settlement matter.

XRP

A cryptocurrency associated with the XRP Ledger. It is often referenced in market data and pricing pages.

Exchange rate

The price of one asset in terms of another. Bitcoin is often quoted in USD, but can be quoted in many currencies.

X coordinate

A chart term describing the horizontal axis. Price charts typically show time on the horizontal axis.

Yield

Return on an investment or deposit. In crypto, yield products can add risk and should be evaluated carefully.

Yearly low

The lowest price over a year. Traders and investors often watch yearly ranges to understand market cycles.

Yield curve

A chart of interest rates across maturities. It can influence investor appetite for risk assets and scarce assets.

Zero confirmation

A transaction that has not been included in a block yet. It carries higher risk than confirmed transactions.

ZK proof

Zero knowledge proof. A cryptographic method to prove something is true without revealing the underlying data.

Z score

A statistical metric sometimes used in market analysis to compare current values to historical averages.

Definitions are educational and may be simplified. Bitcoin transactions are irreversible. Always verify wallet details before sending.
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